microsoft word ijsepm titelblad vol 9-.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    skibbrogade 5, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, and emd international microsoft word ijsepm titelblad vol 12-.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    skibbrogade 5, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands  dr tao ma, shanghai jiao tong university, china    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, and emd international microsoft word ijsepm titelblad vol 13-.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    rendsburggade 14, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands  dr tao ma, shanghai jiao tong university, china    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, and emd international microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university microsoft word ijsepm titelblad vol 9-.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    skibbrogade 5, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, and emd international advances in structural engineering 5•4 abstract this editorial introduces the 11th volume of the international journal of sustainable energy planning and management. the volume addresses smart energy systems and the optimal ways of integrating renewable energy into these. two of the contributions are from the perspective of energy storage with one arguing that other storage options are preferable to designated electricity storage. this includes thermal storages for house heating and gas and liquid fuel storage for e.g. the transportation sector. secondly, a paper investigates more narrowly communal vs individual electricity storage in residential pv systems with a view to lowering grid dependency. lastly, an analysis investigates the role of flexible electricity demand as a means to integrate fluctuating renewable energy sources such as wind and pv. 1. smart energy systems and electricity storage smart energy systems are becoming well-established in the scientific literature [1–6] as a supplement or maybe a wider application of what other researchers refer to as smart grids [7]. analyses have already demonstrated the benefits and possibilities when observing the energy system from a wider perspective than simply from an electric perspective. in this volume, lund et al. [8] explore storage systems in smart energy systems with a view to identifying the optimal storage solutions from an economic perspective both with respect to size and part of the energy system to include storage in. they observe storage costs in the electricity system that are significantly higher than storage costs in heating or for transportation fuels; costs are several orders of magnitude higher. at the same time, storage has a strong economy of scale quality, meaning communal solutions are preferable to individual solutions – or vice international journal of sustainable energy planning and management vol. 11 2016 1 versa; for the same investment, significantly more storage may be introduced via communal systems. tomc and vassallo expand on previous work on community renewable energy networks (cren) [9] investigating in this issue crens with different combinations of individual or communal photo voltaic production and individual or communal electricity storage systems [10]. a combination of individual and communal pv and storage can reduce grid dependency significantly – however not remove it entirely with the modelled system configurations. 2. flexible demand where lund et al. and tomc and vassallo focus on storage in energy systems as a means for integrating renewable energy into the energy system, tveten et al. [11] investigate the effects of demand side flexibility on the integration of fluctuating renewable energy. this is * corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 11 2016 1-2 editorial international journal of sustainable energy planning and management vol 11 poul alberg østergaarda* & neven duicb a department of development and planning, aalborg university, aalborg, denmark b department of energy, power engineering and environment, university of zagreb, zagreb, croatia keywords: smart energy systems; demand flexibility; community renewable energy networks url: dx.doi.org/10.5278/ijsepm.2016.11.1 2 international journal of sustainable energy planning and management vol. 11 2016 editorial international journal of sustainable energy planning and management vol 11 done both from an economic perspective – i.e. effects on income and expenditure for production unit and demand unit owners – as well as in terms of the ability of the system to integrate renewable power production measured in terms of greenhouse gas emission reductions. demand flexibility is assessed to cause only minor reductions in electricity expenses and revenue for production equipment owners. likewise, greenhouse gas emission reductions are minor. this supports previous findings by kwon stating that “results from [an analyses of the level of flexible demand which makes a significant impact on the future energy system] the other analysis indicate that in order to have a significant impact on the energy system performance, more than a quarter of the classic electricity demand would need to be flexible within a month, which is highly unlikely to happen. the value of flexible demand in the energy system is thus limited.” [12] irrespective of the small impacts, tveten et al. conclude “that increased [demand side flexibility.] is a promising measure for improving [variable renewable.] integration”. references [1] lund h, andersen an, østergaard pa, mathiesen bv, connolly d. from electricity smart grids to smart energy systems a market operation based approach and understanding. energy 2012;42:96–102. http://dx.doi.org/ 10.1016/j.energy.2012.04.003. [2] mathiesen bv, lund h, connolly d, wenzel h, østergaard pa, möller b, et al. smart energy systems for coherent 100% renewable energy and transport solutions. appl energy 2015;145:139–54. http://dx.doi.org/10.1016/j.apenergy.2015. 01.075. [3] lund h, werner s, wiltshire r, svendsen s, thorsen je, hvelplund f, et al. 4th generation district heating (4gdh). integrating smart thermal grids into future sustainable energy systems. energy 2014;68:1–11. http://dx.doi.org/10.1016/ j.energy.2014.02.089. [4] lund h, thellufsen jz, aggerholm s, wichtten kb, nielsen s, mathiesen bv, et al. heat saving strategies in sustainable smart energy systems. int j sustain energy plan manage 2014;4:3–16. http://dx.doi.org/10.5278/ijsepm.2014.4.2. [5] hvelplund f, möller b, sperling k. local ownership, smart energy systems and better wind power economy. energy strateg rev 2013;1:164–70. http://dx.doi.org/10.1016 /j.esr. 2013.02.001. [6] lund h, mathiesen bv, connolly d, østergaard pa. renewable energy systems a smart energy systems approach to the choice and modelling of 100 % renewable solutions. chem eng trans 2014;39:1–6. http://dx.doi.org/ 10.3303/cet1439001. [7] lindley d. smart grids: the energy storage problem. nat news 2010;463:18–20. http://dx.doi.org/10.1038/463018a. [8] lund h, østergaard pa, connolly d, ridjan i, mathiesen bv, hvelplund f, et al. energy storage and smart energy systems. int j sustain energy plan manage 2016;11:3-. http://dx.doi.org/10.5278/ijsepm.2016.11.2. [9] tomc e, vassallo am. community renewable energy networks in urban contexts: the need for a holistic approach. int j sustain energy plan manage 2015;8:31–42. http://dx.doi.org/10.5278/ijsepm.2015.8.3. [10] tomc e, vassallo am. the effect of individual and communal electricity generation, consumption and storage on urban community renewable energy networks (cren): an australian case. int j sustain energy plan manage 2016;11. http://dx.doi.org/dx.doi.org/10.5278/ijsepm.2016.11.3. [11] tveten åg, bolkesjø tf, ilieva i. increased demand-side flexibility: market effects and impacts on variable renewable energy integration. int j sustain energy plan manage 2016;11. http://dx.doi.org/10.5278/ijsepm.2016.11.4. [12] kwon ps, østergaard p. assessment and evaluation of flexible demand in a danish future energy scenario. appl energy 2014;134:309–20. http://dx.doi.org/10.1016/j. apenergy.2014.08.044. http://dx.doi.org/10.1016/j.energy.2012.04.003 http://dx.doi.org/10.1016/j.apenergy.2015.01.075 http://dx.doi.org/10.1016/j.energy.2014.02.089 http://dx.doi.org/10.5278/ijsepm.2014.4.2 http://dx.doi.org/10.1016/j.esr.2013.02.001 http://dx.doi.org/10.3303/cet1439001 http://dx.doi.org/10.3303/cet1439001 http://dx.doi.org/10.5278/ijsepm.2016.11.2 http://dx.doi.org/10.5278/ijsepm.2015.8.3 http://dx.doi.org/10.5278/ijsepm.2015.8.3 http://dx.doi.org/10.5278/ijsepm.2016.11.4 http://dx.doi.org/10.1016/j.apenergy.2014.08.044 01. 2298-7628-1-le_editorial.qxd:1953-6976-1-le international journal of sustainable energy planning and management vol. 15 2018 1 abstract this editorial introduces the 15th volume of the international journal of sustainable energy planning and management. the volume is a special issue from the 2017 international conference on energy & environment, porto, portugal and it presents work on energy markets, energy financing and accounting of energy projects 1. energy and environment bringing together economics and engineering the 2017 international conference on energy & environment organized by the school of economics and management, university of porto (fep), the economics and finance research centre, university of porto (cef.up) and the algoritmi research centre, university of minho (cgit) took place at fep on 29-30 june 2017. the conference follows a previous conference also having a special issue in this journal [1]. this year, the main challenge was to grasp new issues in the frontier of energy economics and engineering. among the papers presented in the conference, the international journal of sustainable energy planning and management have selected one main topic: energy prices and financing. large shares of renewable energy sources are decreasing energy prices in spot markets due to the merit order effect. this is good news for the consumer welfare. notwithstanding, it is widely recognised that marginal markets are compromising conventional generators’ financial sustainability and, in the long term, that of renewable generators as well. 2. financing models new financing models, among them crowdfunding, have also become an important tool for energy planning particularly adequate to deal with renewable energy challenges in the aftermath of the 2008 financial crisis as de broeck [2] demonstrates. out of 23 active platforms, seven are german (30.4%), five are dutch (21.7%), four are french (17.4%) and two are austrian (8.7%). the united kingdom, sweden, belgium and finland each has one platform (4.3%). germany and the netherlands have the eldest active platforms. stable market premium schemes emerge, according to the author, as the policy instrument that most favours platform activity. from his empirical analysis it is clear that credit risk exposure for investors ca be considered 1 corresponding author e-mail: isoares@fep.up.pt international journal of sustainable energy planning and management vol. 15 2018 01–02 energy markets, financing and accounting — special issue from 2017 international conference on energy & environment isabel soares1*, paula ferreira and poul alberg østergaard# *faculty of economics, university of porto, r. dr roberto frias, 4200­464, porto, portugal research centre, university of minho, campus azurem, 4800­058 guimaraes, portugal # department of development and planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords: crowdfunding; accounting requirements; energy markets; url: dx.doi.org/10.5278/ijsepm.2018.15.1 2 international journal of sustainable energy planning and management vol. 15 2018 energy markets, financing and accounting – special issue from 2017 international conference on energy & environment high, making platforms on their mitigation policy to reduce risk. 3. accounting requirements rigot and demaria [3] focus on the role of accounting requirements for financial intermediaries to be aware of their limitations and to underscore the need for reform in order long term and low carbon capital spending in europe. the paper concludes that accounting standards affect different financial intermediaries in different ways. as accounting standards do not take into account environmental risks this remains a crucial, urgent factor for the development of a sustainable economy. 4. energy markets figueiredo and silva [4] conducted an analysis considering the iberian market. the article is a longerterm analysis than those currently available in the literature. it is a very important topic to consider as res-e incentives promote producers’ investments with long-term contracts having implications to the electricity market. they demonstrate that the wholesale consumer surplus increase is higher than the financial incentives provided to wind power generation. acknowledgements we would like to express our appreciation to all the presenters and authors as well as the organisers of the international conference on energy & environment: bringing together economics and engineering. moreover, we would like to thank all the reviewers for their many helpful comments. references [1] østergaard pa, soares i, ferreira p. energy efficiency and renewable energy systems in portugal and brazil. int j sustain energy plan manag 2014;2. http://dx.doi.org/10.5278/ ijsepm.2014.2.1. [2] de broeck w. crowdfunding platforms for renewable energy investments: an overview of best practices in the eu. int j sustain energy plan manag 2018;15. http://dx.doi.org/ 10.5278/ijsepm. 2018.15.2. [3] rigot s, demaria s. potential impediments to long-term and low-carbon investment: the international accounting standards at stake. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ijsepm.2017.15.3. [4] figueiredo nc, da silva pp. the price of wind power generation in iberia and the merit-order effect. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ijsepm. 2018.15.4. http://dx.doi.org/10.5278/ijsepm.2014.2.1 http://dx.doi.org/10.5278/ijsepm.2014.2.1 http://dx.doi.org/10.5278/ijsepm.2018.15.2 http://dx.doi.org/10.5278/ijsepm.2018.15.2 http://dx.doi.org/10.5278/ijsepm.2017.15.3 http://dx.doi.org/10.5278/ijsepm.2018.15.4 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1413-4861-1-le.qxd 1. biodiesel potential from waste oil and fat in the first article of this volume, melo-espinosa et al. [1] look into the emulsification of waste cooking oils and fat with the view to providing a renewable transportation fuel while at the same time solving a potential environmental problem in terms of dealing with a waste product. they reference a yearly quantity of 20 million tonnes of oils and fats that are used for cooking each year, and while this does not necessarily correspond to the potential waste of these products, it does indicate a potential worth investigating as well as a potential worth harvesting. for comparison, denmark has an energy demand for road transport of 156.5 pj [2] corresponding to approximately 3.7 million ton of diesel, if it was all diesel. in their findings, the authors conclude that “emulsification method applied to wco [waste cooking oils] and fad [fatty acid distillates] is a suitable alternative to diesel fuel without modifying the diesel engine”. international journal of sustainable energy planning and management vol. 09 2016 1 international journal of sustainable energy planning and management vol. 09 2016 1-2 editorial international journal of sustainable energy planning and management vol 9 �������� ��� � ��� ��������� ������� � �������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� abstract this editorial introduces the ninth volume of the international journal of sustainable energy planning and management. the volume addresses alternative ways of providing diesel fuel through emulsification of waste cooking oil and fat, estimation of global solar energy potentials based on publically available data, and a large review of global grid connected electricity storage systems. finally, an article applies stochastic programming to analyse optimal district heating expansion scenarios with particular focus on the phasing issue of investments in district heating grids. keywords: biodiesel; solar energy potential; electricity storage; district heating expansion; url: dx.doi.org/10.5278/ijsepm.2016.9.1 1 corresponding author e-mail: poul@plan.aau.dk 2. solar potential korfi at al. [3] seek to estimate the potential for another renewable energy source; solar energy. in their work, they apply publically available data to try to assess solar potentials on a global scale. apart from solar influx, they also assess temperature, which lowers the efficiency of photo voltaic panels. in addition to these more geographic factors, they also seek to assess potential surface areas for implementing photo voltaic panels. based on their work, the authors established a web platform presenting data for each country in the world at http://solarpotential.ethz.ch/ 3. electricity storage systems increasing amounts of fluctuating renewable energy sources into the energy system creates potential imbalances, that need to be handled through flexible demand, interconnections to other areas with other 2 international journal of sustainable energy planning and management vol. 09 2016 editorial international journal of sustainable energy planning and management vol 9 demand variations, through flexibility in the conversion system or through actual energy storages. flexible demand has shown limited capacity for integrating renewables[4], interconnections are costly and do not necessarily provide the required flexibility or are at odds with smart grids [5]. smart energy systems utilizing the flexibility across sectors are being considered, and shape some visions of energy systems [6,7], however looking at it historically, there has been a large focus on electricity storage systems in e.g. mountainous countries like norway and switzerland to assist in the integration of either fluctuating power or base-load production. thus, there is a large present stock of electricity storage systems worldwide and also a strong development in the field. in this volume, buß et al. [8] review all gridconnected electricity storage systems world-wide, finding systems with a total capacity of 154 mw (power – not storage contents). the largest fraction of this is in the form of pumped hydro storage, however over the more recent decades, the strongest growth has been in electro-chemical storages. 4. district heating expansion analyses as zhang & lucia [9] states it based on experience from china, “unlike the electricity and transportation sectors, the heating sector has received little attention from policy makers and researchers”, but that situation is changing at least in europe. district heating is becoming a core element of many analyses of the transition to renewable energy systems [10,11], however there is always the issue of when to apply district heating and when to apply individual solutions, as well as the extent to which savings should be carried out versus the extent to which the supply systems should be optimised [12]. in this volume, lambert et al. [13] address the “sequential problem faced by a decision-maker in the phasing of long-term investments into district heating networks and their expansions”. this they do through analyses based on stochastic programming. the article is mainly about development of a modelling approach to address this relevant issue. references [1] melo-espinosa ea, piloto-rodríguez r, sierens r, verhelst s. emulsification of waste cooking oils and fatty acid distillates as diesel engine fuels: an attractive alternative. int j sustain energy plan manage 2016;9: pages 3–16. http://doi.dx.org/10.5278/ijsepm.2016.9.2. [2] danish energy agency. energistatistik 2014. 2015. [3] korfiati a, gkonos c, veronesi f, gak a, grassi s, schenkel r, et al. estimation of the global solar energy potential and photovoltaic cost with the use of open data. int j sustain energy plan manage 2016;9: pages 17–30. http://doi.dx.org/ 10.5278/ijsepm.2016.9.3. [4] kwon ps, østergaard p. assessment and evaluation of flexible demand in a danish future energy scenario. appl energy 2014;134:309–20. http://doi.dx.org/10.1016/j. apenergy.2014.08.044. [5] blarke mb, jenkins bm. supergrid or smartgrid: competing strategies for large-scale integration of intermittent renewables? energy policy 2013;58:381–90. http://doi.dx. org/10.1016/j.enpol.2013.03.039. [6] mathiesen bv, lund h, connolly d, wenzel h, østergaard pa, möller b, et al. smart energy systems for coherent 100% renewable energy and transport solutions. appl energy 2015;145:139–54. http://doi.dx.org/10.1016/j.apenergy.2015. 01.075. [7] lund h, andersen an, østergaard pa, mathiesen bv, connolly d. from electricity smart grids to smart energy systems a market operation based approach and understanding. energy 2012;42:96–102. http://doi.dx.org/ 10.1016/j.energy.2012.04.003. [8] buß k, wrobel p, doetsch c. global distribution of gridconnected electrical energy storage systems. int j sustain energy plan manage 2016;9: pages 31–56. http://doi.dx.org/ 10.5278/ijsepm.2016.9.4. [9] zhang j, lucia l di. a transition perspective on alternatives to coal in chinese district heating. int j sustain energy plan manage 2015;6:49–69. http://doi.dx.org/10.5278/ijsepm. 2015.6.5. [10] connolly d, lund h, mathiesen b v., werner s, möller b, persson u, et al. heat roadmap europe: combining district heating with heat savings to decarbonise the eu energy system. energy policy 2014;65:475–89. http://doi.dx.org/ 10.1016/j.enpol.2013.10.035. [11] persson u, möller b, werner s. heat roadmap europe: identifying strategic heat synergy regions. energy policy 2014;74:663–81. http://doi.dx.org/10.1016/j.enpol. 2014.07.0 15. [12] lund h, thellufsen jz, aggerholm s, wichtten kb, nielsen s, mathiesen bv, et al. heat saving strategies in sustainable smart energy systems. int j sustain energy plan manage 2014;04:3–16. http://dx.doi.org/10.5278/ijsepm.2014.4.2 [13] lambert rsc, maier s, polak jw, shah n. optimal phasing of district heating network investments using multi-stage stochastic programming. int j sustain energy plan manage 2016;9: pages 57–74. http://doi.dx.org/10.5278/ ijsepm.2016.9.5. http://doi.dx.org/10.5278/ijsepm.2016.9.2 http://doi.dx.org/10.5278/ijsepm.2016.9.3 http://doi.dx.org/10.1016/j.apenergy.2014.08.044 http://doi.dx.org/10.1016/j.enpol.2013.03.039 http://doi.dx.org/10.1016/j.apenergy.2015.01.075 http://doi.dx.org/10.1016/j.energy.2012.04.003 http://doi.dx.org/10.5278/ijsepm.2016.9.4 http://doi.dx.org/10.5278/ijsepm.2015.6.5 http://doi.dx.org/10.1016/j.enpol.2013.10.035 http://doi.dx.org/10.1016/j.enpol.2014.07.015 http://dx.doi.org/10.5278/ijsepm.2014.4.2 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 01.1233-4065-1-le.qxd 1. editorial this volume of the international journal of sustainable energy planning and management presents part of the outcome of the project energy systems modelling research and analysis (ensymora) funded by the danish innovation fond. liberalization of the electricity marked, increased deployment of volatile only partly predictable renewable energy sources and internationalization imply that market players and regulators face increased uncertainty, investment risks and requirements for flexibility. in addition, ambitious environmental targets increasing the share of renewables points to further challenges in the future energy system. with focus on the danish/nordic energy system the aim of the ensymora project has been to improve methods and models used for energy system analysis and energy planning and to use the models to analyse technical options, economic incentives and policies related to the demand and supply of electricity. major research topics in ensymora have been: international journal of sustainable energy planning and management vol. 07 2015 1 1. analysis of electricity demand with an hourly resolution. 2. description of uncertainties and how individual agents may operate in a volatile and uncertain market, and 3. analysis of the entire energy system and national policy. these topics and more have been targeted by the partners in the ensymora project; four danish university partners, universities in england, norway and germany and industry partners in denmark. a total of 11 partners contributed, as listed below: • dtu management engineering, technical university of denmark • dtu informatics, technical university of denmark • department of development and planning, aalborg university • department of mathematical sciences, university of copenhagen • ram-løse edb * corresponding author e-mail: ������� �� international journal of sustainable energy planning and management vol. 07 2015 1-4 energy systems modelling research and analysis ������� ���� ����� ��� ����� �� ������������������ ��������� � ��� � �� ��� ��� ������������ ���������� ���������������������� ��������� ��� ���!""�# �$�%�� &���� �����$ &� '���� ������� � ��'� �������������� ��(��&�� ����� �������) ��� �*��� '��� ��� �+��+"""�(��&�� ��� �����$ � �����,��,-�� ���.�� ����������/����������0�������&� � � � ��������� ��������� � ��$ abstract this editorial introduces the seventh volume of the international journal of sustainable energy planning and management. the volume presents part of the outcome of the project energy systems modelling research and analysis (ensymora) funded by the danish innovation fund. the project carried out by 11 university and industry partners has improved the basis for decision-making within energy planning and energy scenario making by providing new and improved tools and methods for energy systems analyses. keywords: electricity demand analyses; agents in volatile markets; systems analyses and policy url: dx.doi.org/10.5278.ijsepm.2015.7.1 dx.doi.org/10.5278.ijsepm.2015.7.1 2 international journal of sustainable energy planning and management vol. 07 2015 energy systems modelling research and analysis • ea energy analyses • chair for management science and energy economics, university of duisburg-essen • department of industrial economics and technology management, norwegian university of technology and science • college of life and environmental sciences, university of exeter • energinet.dk • danish energy association 2. electricity demand analyses looking at electricity demand with an hourly resolution, in this volume møller & andersen [1] analyse if industrial customers in denmark react to variations in the hourly price of electricity. looking both at the aggregate industry and at a specific industrial customer, the general conclusion is that at present danish customers do not react to hourly prices. to get customers to react to hourly prices either hourly price variations have to increase considerable or demand response technologies should be installed. other research within the project shows that hourly consumption profiles vary considerably between both individual and categories of customers, and although this is the case incentives for reacting to hourly electricity prices are quite limited [2 and 3]. 3. agents in volatile and uncertain markets related to uncertainties and the operation of individual agents this volume contains four papers. in the first paper zugno et al. [4] present a general mathematical framework for optimization under uncertainty that is directly applicable to problems of decision-making under uncertainty in the energy market. in addition, the paper reviews a few applications where trading-/decision-strategies are evaluated taking into account uncertainties in the energy market. compared to deterministic solutions, in the cases analysed, the inclusion of uncertainties in decision strategies improves the financial performance of the agents. the second paper on uncertainty and the operation of individual agents, alnaes et al. [5], analyse actual bidding behaviour of three norwegian hydro power producers in the nord pool day-ahead market and compares the actual bidding to a calculated optimal bidding. the optimal bidding is modelled by a two-stage mixed-integer linear programme model presented in fleten & kristoffersen [6]. the overall conclusion of the paper is that quite often hydro power producers come close to the optimal bid calculated from the model. however, their performance correlates with the variation in prices meaning that optimal bidding becomes more difficult when price variations are high. there is room for improved bidding e.g. through optimization approaches, however the potential gains are evaluated to be quite modest. the third and fourth papers on uncertainties and individual agents focus on demand flexibility and how different technologies may contribute to balance the varying supply from renewable technologies. thavlov & madsen [7] model heat in an office building with air infiltration and juul et al. [8] analyse different charging strategies for electrical vehicles, both technologies showing a potential for demand flexibility. juul et al. [8] compare the costs of uncontrolled charging of electrical vehicles with charging at night and alternatives where vehicle owners or an aggregator are engaged in the regulating market. the main conclusion is that all vehicle owners gain from acting intelligently in the market. the simplest strategy of just delaying the charging to night hours considerably decreases the charging costs and engaging in the regulating market further increases the benefit of acting intelligently. 4. holistic energy systems analyses and policy looking at the entire energy system and national policy this volume includes three papers: henningsen et al. [9] look at the environmental productivity of danish power plants, østergaard et al. [10] analyse how changes in the profile of hourly electricity consumption affect alternative scenarios for the future danish energy system, and kitzing & weber [11] analyse how different support schemes for investments in renewable technologies have different risk implications affecting the incentive to invest. henningsen et al. [9] analyse a panel of virtually all fuel-fired power generation units in denmark over the years 1998 to 2011 and show that the environmental productivity for this group of power producers has been fairly unchanged over the fourteen years. that is, the main increase in the environmental productivity of the danish power sector comes from the introduction of renewable technologies, while efficiency improvements for conventional producers have been limited. østergaard et al. [10] look at hourly electricity consumption profiles for categories of customers, forecast the aggregate profile to 2030 and 2050 and analyse how changes in the aggregate profile affect the energy system using methodology from [11]. in the medium term (year 2030), comparing fixed and flexible profiles for individual heat pumps and electrical vehicles, although the number of heat pumps and electrical vehicles is assumed to be moderate, their flexibility has significant effects improving the integration of wind power. in the long term (year 2050), where all private vehicles and most heating is electric and flexible, a main conclusion is that additional flexibility from conventional consumption by households and sectors will have a limited effect on the energy system. kitzing and weber [12] compare how the different risk exposure in a feed-in-tariff and a feed-in-premium support system affects the investment incentive for a private investor. looking at a wind power project, under a feed-in-tariff the private investor face uncertainty related to the production from the wind turbine, while under a feed-in-premium the investor face an additional uncertainty related to the market price of electricity. looking at a specific german offshore wind park the analysis concludes that under a feed-in-premium, the required support level has to be 4-10% higher than under a feed-in-tariff, implying that the difference in risk has a significant effect on the required support level and should be included when policy makers decide support systems and levels. finally, further information on the ensymora project and a complete list of publications from the project is found in the final report from the project – see http://www.ensymora.dk/deliverables/ final%20report.pdf references [1] møller nf, andersen fm. an econometric model for analyzing electricity demand response to price changes at the intra-day horizon. int j sustain energy plan manage (2015) pages 4–16. url:dx.doi.org/10.5278/ijsepm.2015.7.2 [2] andersen fm, larsen hv, boomsma tk. long-term forecasting of hourly electricity load: identification of consumption profiles and segmentation of customers. energy conversion and management 68(2013) pages 244-252. url: dx.doi.org/10.1016/j.enconman.2013.01.018 [3] andersen fm, larsen h v, kitzing l, morthorst pe. who gains from hourly time-of-use retail prices on electricity? analysis of consumption profiles for categories of danish electricity customers. wires energy environ. 3 (2014) pages 582–593.url: doi:10.1002/wene.120 [4] zugno m, morales jm, madsen h. decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts. int j sustain energy plan manage 7(2015) pages 17–33. url: dx.doi.org/10.5278/ijsepm. 2015.7.3 [5] alnaes en, grøndahl rb, fleten se boomsma tk. insights from actual day-ahead bidding of hydropower. int j sustain energy plan manage 7(2015) pages 34–54. url: dx.doi.org/10.5278/ijsepm.2015.7.4 [6] fleten se, kristoffersen t. stochastic programming for optimizing bidding strategies of a nordic hydropowet producer. eur. j. oper. res., 181(2) (2007) pages 916-928. url: dx.doi.org/10.1016/j.ejor.2006.08.023 [7] thavlov a, madsen h. a nonlinear stochastic model for an office building with air infiltration. int j sustain energy plan manage 7(2015) pages 55–66. url: dx.doi.org /10.5278/ijsepm.2015.7.5 [8] juul n, pantuso g, iversen jeb , boomsma tk. strategies for charging electric vehicles in the electricity market. int j sustain energy plan manage 7(2015) pages 67–74. url: dx.doi.org/10.5278/ijsepm.2015.7.6 [9] henningsen g, henningsen a, schröder st, bolwig s. the development of environmental productivity: the case of danish energy plants. int j sustain energy plan manage 7(2015) pages75–93.url:dx.doi.org/10.5278/ijsepm. 2015 .7.7 [10] østergaard pa, andersen fm, kwon ps. energy systems scenario modelling and long term forecasting of hourly electricity demand. system effects of electrical vehicles and individual heat pumps being flexible or not. int j sustain energy plan manage 7(2015) pages 95–112. url: dx.doi.org/10.5278/ijsepm.2015.7.8 [11] østergaard pa. reviewing optimisation criteria for energy systems analyses of renewable energy integration. energy 34(9)(2009) pages 1236–45. url: dx.doi.org/10.1016/ j.energy.2009.05.004 [12] kitzing l, weber c. support mechanisms for renewables: how risk exposure influences investment incentives. int j sustain energy plan manage 7(2015) pages 113–130. url: dx.doi.org/10.5278/ijsepm.2015.7.9 international journal of sustainable energy planning and management vol. 07 2015 3 frits møller andersen & poul alberg østergaard dx.doi.org/10.5278/ijsepm.2015.7.2 dx.doi.org/10.1016/j.enconman.2013.01.018 doi:10.1002/wene.120 dx.doi.org/10.5278/ijsepm.2015.7.3 dx.doi.org/10.5278/ijsepm.2015.7.4 dx.doi.org/10.1016/j.ejor.2006.08.023 dx.doi.org/10.5278/ijsepm.2015.7.5 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1633-5902-1-le.qxd abstract an innovative low temperature district heating (ltdh) local network is developed in nottingham, supported by the remourban project, part of the h2020 smart city and community lighthouse scheme. it was proposed that a branch emanating from the return pipe of the existing district heating system in nottingham would be created to use low temperature heating for the first time on such scale in the uk. the development is aimed to extract unused heat from existing district heating system and to make it more efficient and profitable. the 94 low-raised flats in four maisonette blocks in nottingham demo site have been selected to be connected to this new ltdh system. the scheme will provide a primary supply of space heating and hot water at approximately 50°c to 60°c. innovated solutions have been put forward to overcome certain barriers, such as legionella related risks and peak loads during extreme heating seasons and occasional maintenance. abbreviations: chp combined heat and power dhw domestic hot water ee enviroenergy ltd. efw energy from waste he heat exchanger hiu heat interface unit lrhs london road heat station ltdh low temperature district heating ncc nottingham city council nch nottingham city homes scada supervisory control and data acquisition system trvs thermostatic radiator valves international journal of sustainable energy planning and management vol. 12 2017 19 create a citywide heat network that will further enable nottingham to cope with climate change and build resilience to external energy price pressures. to speed up the process toward 20 per cent energy efficiency improvement, the huge energy-saving potential in the building sector and the expansion of existing district heating network with more energy efficient ones should be 1 corresponding author e-mail: anton.ianakiev@ntu.ac.uk international journal of sustainable energy planning and management vol. 12 2017 19–28 innovative system for delivery of low temperature district heating ���������� ��� ��� ��� ��������� ����������������� ������������ ���� � �������� � �� ������������������������������������������������������� !�"#$���������������% & ������������'�()��!*�'��(���+��(��� *�, ����������������% keywords: low temperature district heating; district heating expansion; energy efficiency waste (unused) energy; renewable energy; url: dx.doi.org/10.5278/ijsepm.2017.12.3 1. existing district heating network at nottingham nottingham’s ambition as a smart city is to reduce carbon emissions by 26 per cent and generate 20 per cent of its energy requirements from renewable and low carbon sources by 2020 [1]. the nottingham city council aims to 20 international journal of sustainable energy planning and management vol. 12 2017 innovative system for delivery of low temperature district heating exploited [2]. the nottingham district energy network is comprised of approximate 68 km of insulated pipework carrying pressurised hot water around nottingham city centre and st. ann’s, a residential suburb to the north of the city. this has been used to satisfy the space heating and hot water requirements of circa 4,900 dwellings that represent a domestic market share of 42 per cent among the around 11,500 occupied dwellings in the area. in terms of commercial connections, it has previously been estimated that the district heating network represents around 20 per cent of the city’s non-domestic gas consumption; the market share of commercial heat sales is around 25 per cent. over 100 commercial premises are connected to district heating network, including the city’s two main shopping centres, the national ice centre/nottingham arena, nottingham trent university, office developments, theatres, and various other large local developments. nottingham’s extensive district heating network derives from the tradition of using incinerators to provide heat supply. the first incinerator or “destructor” was built in nottingham in 1874 by manlove, alliott & co. ltd. to the design of albert fryer. the city is currently served by a district heating system via london road heat station (lrhs) combined heat and power (chp) plant operated by enviroenergy ltd., which is supplied primarily by steam generated by energy from waste incarnation facility. lrhs supplies steam and medium pressure hot water and electricity to private customers; surplus electricity is sold to the grid. the heat energy mainly comes from the annual incineration of around 170,000 tonnes of municipal waste at eastcroft incinerator (figure 1), which is used to create a supply of high-pressure steam, pumped directly into the lrhs. to ensure a reliable supply, back-up is provided by gas boilers, which are only operational over five to ten per cent of the time. as it is a chp plant, the steam is also run through a generator turbine to produce 60 gwh of electricity annually. this is supplied to large commercial customers through a privately wired network, with the excess spilled to the uk national grid. heating mains are rated for temperature up to 140 °c at 11 bar, although normal operating temperatures range seasonally from around 85°c to 120 °c and return temperature around 70 °c. a brief energy balance is established from the 170,000 tons waste burned per year by assuming a relative low heating value between 2.6 and 2.8 kwh per kg waste. between 442 and 476 gwh heat energy are produce annually. since 375 gwh are converted to pressure steam, the remaining 67 to 101 gwh heat energy is lost to the environment by the flue gases (no flue gas condensation is applied). from the 375 gwh heat passed to lrhs, 144 gwh are used for heat distribution and 60 gwh for electricity production. this means that 171 gwh of valuable heat energy resource is unused and can be potentially recovered by various schemes like the present ltdh scheme for annual heat sales to improve the efficiency and profitability. the key environmental benefits of the low carbon fuel source using energy from waste (efw), which is energy recovered from the incineration of waste, are as follows: • efw largely removes the requirement for nottingham and surrounding boroughs to landfill refuse, removing the associated emissions; • waste analysis data for the efw plant indicates that around 61 per cent by weight, arises from renewable biomass media; • heat customers receive a far more efficient energy supply than those with gas boiler systems, as they only receive ‘useful energy’; • the chp plant integrates the production of both usable heat and power (electricity) into one single, highly efficient process. in contrast, the heat produced as a by product of generating electricity at a traditional power station is mostly wasted; • enviroenergy ltd. participates in triad avoidance, helping the national grid meet periods of high demand; • the district energy scheme offsets approximately 27,000 tonnes of co2 emissions annually that would otherwise be produced by alternative use of gas. figure 1: eastcroft incinerator in nottingham international journal of sustainable energy planning and management vol. 12 2017 21 anton ianakiev, jia michelle cui, steve garbett and andrew filer nottingham’s existing district heating network using efw is close to the remourban demo site at sneinton. enviroenergy ltd. has been managing the established heat network and production for a number of decades with wide range of experiences. therefore, the existing district heating system has the capacity to facilitate the extension and transformation of existing network to meet the requirement of low temperature district heating (ltdh). 2. description of the ltdh interventions the opportunity to use the return flow from the existing high temperature network rather than extending high temperature supply has presented nottingham with a cheaper and effective proposition for heating residential homes without the need for high pressure, high temperature resilient infrastructure. due to the lower flow temperature, the network heat loss will be reduced by 75 per cent compared to the present district heating systems. this makes the ltdh systems economically more sustainable and competitive for modern wellinsulated, low energy buildings or significantly improved, retrofitted properties [3, 4]. the area around sneinton road, sneinton of nottingham, was considered as the most appropriate for the development of the remourban demo site as the site is very close to the existing district heating network. the network has been extended to three high-rise blocks of flats that are in the proximity of the demo area [5]. the vast majority of the residential buildings are owned by nottingham city council (ncc) and managed by nottingham city homes (nch), the main social housing provider in the city. this makes the selection of the site for a new plant room and the associated access issues much easier. various studies have been conducted to help identify potential new customers. heat mapping exercises have taken place to show properties with a viable heat demand in proximity to the dh network. the ltdh intervention is planned to be implemented in the maisonettes at the byron, haywood, morley and keswick courts (figure 2). these four low-rise blocks of maisonettes have also been included in the remourban project refurbishment programme. most of these properties have an individual gas boiler connected to the gas grid. gas is used for central heating and domestic hot water (dhw), although a minority of properties are still using electric heaters. there are a minority of very poorly rated gas boilers amongst the private properties, whereas most of the nch homes will have gas boilers rated at c or above, including one room thermostat and a programmer. most will also have thermostatic radiator valves (trvs). the properties of four courts have brick cavity walls; but the front of each flat is made from infill panels with timber studs covered with tiles. the floor slabs are poured concrete. windows in nch properties are generally double glazed due to the uk decent homes investment programme. due to the building design, the top floor windows are currently shaded by the roof overhang, whilst the bottom floor of each maisonette is situated further forward on the building line and these are therefore not shaded. the ltdh flow will be drawn from the return pipe of the district heating mains with the medium-temperature water travelling back to the lrhs for reuse. figure 3 shows the approximate planned route of high to low temperatures infrastructure to connect the four maisonette blocks with a total of 94 properties in the demo site to meet the demand of space heating and dhw. the ltdh will provide a primary flow temperature at approximately 50 °c to 60 °c and return temperature approximately at 30 °c, which are much lower than usual and result in lower transmission losses. enviroenergy ltd. will provide a central connection point to the district heating scheme within a specially figure 2: maisonettes at morley court 22 international journal of sustainable energy planning and management vol. 12 2017 innovative system for delivery of low temperature district heating constructed central plant-room. the new pipework will form a closed loop, from / back to the primary and return mains on sneinton road, into a brazed plate heat exchanger within the plant-room with a virtual 100 per cent efficiency rating. the plant room will also contain additional pumping provision. four umbilical lines, one to each maisonette block, will be run from the plant room to supply individual dwellings. the central plant-room among the blocks will reduce the transmission heat losses resulting from transporting the heated water to each block as well as simplifying the ground works and connections. the heat supplied to the ltdh scheme will be accurately metered at this central point to record heat delivered to the individual blocks and then to record accurately any losses through the internal distribution the individual dwellings. this metering will also enable enviroenergy ltd. to bill the scheme based on the heat supplied by the district heating network. the individual properties will have energy meters installed in each flat and will be billed separately for the heat used within each property. the transmission or storage losses will be billed to the housing provider in an additional format; these additional charges may need to be in the format of a maintenance or facilities charge. the layout of the ltdh connection is demonstrated in diagram in figure 4. the aim is to achieve the safe operation and optimum performance of the plant and equipment. due to barriers such as legionella issues, it is proposed to include a shortcut connection / thermostatic injection valve from the primary flow pipe that can act as a ‘top-up’ for the system, should the temperature of the primary return falls below the design figure and / or the figure 3: ltdh network planning map in remourban project figure 4: schematic layout of ltdh connection to existing district heating system international journal of sustainable energy planning and management vol. 12 2017 23 anton ianakiev, jia michelle cui, steve garbett and andrew filer the flow connections to the top of the radiator rather than to the bottom as in the uk conventional connection approach will provide a more efficient system for the consumer. this will also minimise disruptions to the consumer during the works. the heating system will be connected to the hiu via a manifold allowing each building storey to be individually controlled, further reducing energy usage. the radiator in each room in a flat will be equipped with wireless trv, to control the load and the flow to be at certain design level in order to obtain low return temperature. in conjunction with a temperature sensor in each room an intelligent controller in each flat (developed by sasie a local company in nottingham) will provide individually set temperature control of each room. individual control of the rooms on different storey will give better control and more efficient use of energy than the conventional control with a single central room thermostat. the main barrier of ltdh is the increased risk of legionella growth in stored water at low hot-water temperatures, close to 50 °c. if the water volume in each dhw supply line heat exchanger (he) can be limited to three litres, including the water content on the secondary side of the he, then the system can be operated below 50 °c without using external treatment or recirculation [13–15]. the existing radiators in each building where the ltdh will be implemented are generally over-designed to provide sufficient heat in very cold winter days. the buildings where the ltdh will be developed in nottingham will undergo a retrofitting intervention. with the appropriate retrofit and improved building energy performance, the post-retrofit heat demand will be reduced and can be provided with the same size radiators heated at the new lower temperature. high heat demands under extremely cold weather conditions is in general not typical for the uk, but in such cases a gradual increase of the feeding temperature of the secondary site up to 70 °c is planned to satisfy the heating demand. industry standard was used to assume the number of occupants, their likely water usage in the proposed system. each building was then modelled using design builder simulation software for heat losses, taking into account orientation, annual monthly average outdoor temperatures as well as the lowest temperatures, standard internal comfort temperatures, u values, exposed perimeters, air changes, hot water use and diversity factors. after the detailed simulations regarding the heating and dhw flow rate in the primary return falls below that of the low temperature connection. under certain conditions, the primary return pipework may be raised to a temperature higher than 110 °c for the utilisation of the primary return pipework as a thermal store. this situation is generally very rare (only at very cold winter period with lots of demand on the heating system) and should be avoided as it will cause low cycle fatigue of the steel pipes. the dhw will be supplied using the same flow and return that will go through a high efficiency plate heat exchanger (caleffi satk20305) that will convert main cold water (mcw) into instantaneous hot water without the requirement for stored hot water within the individual properties thus mitigating any risk of legionella. the local distribution into each property, from the central buffer vessel in each block, is proposed as follows. within the individual blocks, the intervention would supply a low temperature flow (approximately 50 °c to 60 °c) that would go through class two heat meters into the individual properties and deliver low temperature heating that would be supplied into the individual rooms by zone activated control valves. each property will be connected to a dedicated pair of flow and return pipes. the pipework will be routed where possible within the heated envelope of the building in such a way that access to the pipework is possible for future work. once within the property the pipework will connect to the heating and hot water distribution system via a self-contained heat interface unit (hiu) within each property. the hiu consists of a pair of plate heat exchangers and control systems along with integrated energy meters supplied by enviroenergy ltd. this unit will provide low temperature hot water (lthw) to the heat distribution system and a pressurised dhw supply to the outlets within the property. the hiu provides the same functionality as the current gas boiler systems but without the need for a gas supply or flue. in the plant room, a buffer tank of 1,600 litre will be installed to deal with the peak load in the system. the current heating distribution system will utilise the existing district heating pipework inside the building. original thoughts on heating distribution for this project were to replace the existing standard radiators with a new innovative skirting heating system. following a research visit to copenhagen, denmark and speaking with specialists from the technical university of denmark and sav ltd., it has now been decided to adapt the existing standard radiators [6–12]. changing 24 international journal of sustainable energy planning and management vol. 12 2017 innovative system for delivery of low temperature district heating demand in each maisonette court, the estimate of heating load is 291.4 kw (3.1kw per property with diversity factor of 1) and the supply of dhw is 286.1 kw (diversity factor of 0.088). the estimated total annual energy requirement after the retrofitting intervention is 998.7 mwh, which include 727 mwh for space heating and 271.7 mwh for dhw. the heating distribution system is configured to provide 100 per cent of the heating and dwh requirements of each property from the district heating. a proposed photovoltaic array would further generate approximately 82 mwh/year of electricity. 3. expected results this intervention will give clarity on the feasibility to connect to existing district heating network and to use lower grade materials on the secondary connection at a reduced cost. if proved, this could allow enviroenergy ltd. to implement more connections using this connection method, based on the current hydraulic capacity of the existing infrastructure. in this new ltdh development, the primary side of the heat exchanger (he) is expected to have feeding and return temperatures of 70 °c and 40 °c respectively; and the secondary side of the he, 60 °c and 30 °c respectively. there was a debate to have 55 °c feeding temperature on the secondary side of the he. however, the decision was to stick with a more conservative 60 °c, which was considered as lower risk. based on current working practices, if low temperature technology were to be implemented, more energy may be extracted from the current network, subject to risk evaluation of available stand-by plant capacity of up to 13.5 mw. this is based on the energy available during winter period from the average primary return temperature of 70 °c and the design heating input temperatures of 60 °c at the flow rate of 1200 m3/hr. this intervention technique could be replicated for a larger scale of retrofit on existing domestic housing estates such as the meadows area of nottingham, and for the planning of new developments that are in discussions to the east of the eastcroft incinerator along the bank of the river trent. a 3d hydraulic model on the dh network efficiency is also currently being developed to clearly show the technical feasibility of new connections. householders can expect to benefit from an improved internal climate with a faster heating response time, higher comfort levels (due to the more even temperature distribution) and reduced maintenance. the increased control levels will provide a better interface with the heating system allowing the user to have more control and feedback from the system to enable better utilisation of the system. billing will be simpler for both user and provider. energy use will be accessible remotely in real time. users will be able to see what is being used in their property and will be able to tailor their use accordingly. locally, installers and the district heating network operator will be able to assess the ability to increase the efficiency of district heating by utilising the lower temperatures available on the return legs. the performance of the scheme will also be able to provide evidence for the utilisation of ltdh with the potential increases in efficiency due to a lower distribution temperature. the learning on the development of the project will prove useful; and this may lead to an implementation of buffer storage and solar thermal systems to reduce temperatures for existing properties on the district heating scheme for future extensions and the refurbishment of other non-traditional housing of the local region and beyond. 4. data collection, mapping, monitoring, and metering a new supervisory control and data acquisition (scada) system will be installed at the exiting heat station to connect with the sub-station for the project. the improved reports and dashboards will give relevant engineers access to real-time data. the reporting system has the following features: • view, edit and create trends • real-time data dashboards • plant start-up and shutdown analysis • diurnal demand – plant performance analysis • xy plots for performance envelope analysis • ability to calculate efficiencies, data mining for best performance • aggregation of flows, run hours etc. • predictive maintenance analysis the key advantages of the new reporting system reside in its flexibility and the speed in which reports can be generated so that appropriate controls can be adjusted more quickly. the dashboards are also available through a web interface meaning that engineers can monitor systems remotely or on site as necessary. alarms for the system can be configured and categorised more effectively. international journal of sustainable energy planning and management vol. 12 2017 25 anton ianakiev, jia michelle cui, steve garbett and andrew filer within each dwelling, the domestic hiu will include a heat meter connected to a user-friendly monitor – the ee monitor (figure 5) that is a smart and adaptable multi-functional device for use inside the home to show how much energy is being used and what it costs. developed by enviroenergy ltd., the ee monitor provides landlords and tenants with effective management, cost-benefit control over energy bills and co2 usage the monitor gives control to the user ensuring they have the information they need to budget for and manage their energy consumption. as a prepayment device, it protects people from fuel debt as they pay for their energy usage upfront. the device has been developed with flexibility for the user as a key feature. there are multiple payment and emergency credit options to suit the needs of the household. heat can be paid online, on the monitor itself with a credit card, over the phone, in pay-point outlets; and there is also a standing order facility. the monitoring and credit control services have been developed with the needs of landlords in mind. the monitor is simple to install and easy to retrofit, with an ethernet and a gsm solution available. with the ee monitor landlords can have peace of mind since debt exposure is minimised; and where there is existing debt this can be recovered gradually through a debt recovery service. the data hub of the aforementioned intelligent controller, which will be developed by sasie in nottingham, will be installed in some flats served by ltdh to handle the data collection and transmittal of the property data. the data hub is based on a linux based mini-computer that will act as the interface between the component parts of the system. the linux os was chosen on the basis of the open source nature and the facility to use peripherals from various manufacturers that are designed to work with this platform. the data collection and monitoring peripherals will use a variety of wireless standards to allow communication between the individual components and the controller. wireless communication was proposed based on the retrofit nature of the work. the installation of hardwired connections between the individual components was determined to be more expensive and disruptive. the data hub will be fitted with modules to allow connections using wi-fi, zigbee and lo-ra. this will allow the peripherals to be sourced from a large range. the data that will be collected from the property for monitoring and control purposes are as follows. • room temperature and relative humidity: the sensors within the room-based unit will convert the readings into a signal that is readable and transmittable by the controller. a sensor will be placed within each habitable room. the recorded actual temperatures allow the controller to regulate the performance of the system. this will allow monitoring of heat loss relative to the local weather and can be used to monitor the heating usage in the property. • heat energy: data will be collected from the heat meters installed on the heating and hot water systems that will allow billing and also determine the temperature and flow rate of ltdh water used within the property. • electricity consumption: the electrical usage within the property will be monitored using a combination of electricity meters and ct clamp before a local smart metering scheme is rolled out. the data hub will also be fitted with ethernet and wifi connections to allow it to communicate with the nottingham trent university monitoring server. the data centralised at the server side will be utilised in the proposed energy mapping and third-part mobile app and gaming development to further enable energy savings and citizen engagement. 5. innovation in community engagement nch and ncc will run a targeted engagement process for the tenants in the four low-rise blocks of maisonettes courts. the aim of the communications is to: figure 5: ee monitor 26 international journal of sustainable energy planning and management vol. 12 2017 innovative system for delivery of low temperature district heating • increase awareness, understanding and good will towards the works to the tenants; • increase awareness and understanding of the project to the tenants; • ensure that tenants can efficiently use new heat system; • increase awareness of sneinton being part of a wider project with regards to low carbon housing and transport. before the works start, a research on tenant demographic will be conducted to produce appropriate direct mails materials and to develop an informing pack. direct mails to households and a series of letters to tenants are expected to inform them about the works and to work with them to secure convenient dates. the local influencers, including councillors, member of parliament, tenant groups, community groups, neighbourhood development officers, need to be informed. citizen engagement will be much improved by the visits to assess customer services and to disseminate information pack. open days will be organised for the tenants who are to receive the works to meet contractors. posters will be developed for communal places to advertise the scheme. nch local area newsletters will be issued to celebrate the project for the tenants and to help increase awareness and goodwill. phone calls will be conducted the day before to remind tenant of the works plan agreed. during the works, it is essential to conduct nch liaisons with tenants and the contractors to ensure smooth channels of communication and to deal with any issues that may arise, to disseminate user guides for tenants on how to use the new technology and on how to be more energy efficient, and to collect marketing collateral – photos, case studies. after the works, it is important to conduct customer satisfaction survey, to follow up customer care visits to ensure people know how to use the new technology, and to organise event to celebrate the project completions. before, during and after the ltdh implement and commissioning, street advertising and tours of the incinerator / heat station for the new customers will be organised to see the full waste joinery in nottingham. a series of dates will be set depending on demand. 6. conclusions the ltdh development in nottingham supported by remourban h2020 project utilises a heat supply from the return pipe of the existing dh system in nottingham. it is aimed to extract unused heat from existing systems and to make it more efficient and profitable. the nottingham district heating system has extra thermal capacity that can be extracted without affecting the hydraulic capacity by using the return pipe option. the ltdh development will prioritise the end users’ demand, such as what thermal comfort they need. it aims to find the most economical way to satisfy these needs through efficient distribution networks and energy sourced from the wasted heat. intelligent control will be embedded in all ltdh associated stages, from the generation and distribution to the substation and enduser metering. in order to maintain high efficiency of the network, it is important to achieve consistently low return temperature and high δt, which will reduce the volume flow rates leading to smaller pipes and lower costs. maintaining low return temperatures under part-load conditions is important to keep heat losses and pumping energy low. achieving low return temperatures starts with correct adapting and balancing radiators. the implementation of ltdh requires more precise system design and has to be accompanied with interventions aiming to improve the building fabric in order to reduce the building heating demand. a ‘top-up’ shortcut from the primary flow mains of the existing district heating connection will be included to act as a temperature boost for the supply water in this project. this will mitigate the risk of flow water temperature being below the required temperature. the design of the secondary system within each dwelling will have minimal stored water capacity limited to three litres. this means the system can be operated below 50°c without the requirement of external treatment or recirculation. in addition, a renewable microgeneration from photovoltaic arrays is proposed to generate approximately 82 mwh/year of electricity to sustain power demand of the four maisonette courts (byron, keswick, haywood, and morley courts). the remourban project provides the opportunity to set up the first substantial ltdh scheme in the uk with an innovative community and citizen engagement scheme throughout the project span. the collected data regarding the system performance will be potentially used for the energy mapping services and third-party mobile app and gaming development. the application of the 4th generation district heating in nottingham is expected to achieve the technical, economical and sociological impact in a long run. international journal of sustainable energy planning and management vol. 12 2017 27 anton ianakiev, jia michelle cui, steve garbett and andrew filer acknowledgements the authors would like to acknowledge the financial support of this research provided under the remourban project that is supported by the eu horizon 2020 research and innovation programme under grant agreement no 646511. references [1] public sector energy, project showcase: 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[15] health and safety executive (hse), legionnaires’ disease. part 2: the control of legionella bacteria in hot and cold water systems 2014. http://www. hse.gov. uk/pubns/priced/ hsg274 part2.pdf http://www.publicsectorenergy.co.uk/projectshowcase/ 150-articles/project-showcase/465-projectshowcasenottingham-city-council https://ec.europa.eu/ energy/en/topics/ energy-efficiency/energy-efficiency-directive http://www.cibse.org/knowledge/knowledge-items/ detail?id=a0q200000090myhaa2 http://energia.fi/sites/default/files/iea_annex_x_final_re port_2014_-_toward_4th_generation_district_heating.pdf http://dx.doi.org/10.1016/j.energy.2013.09.027 http://dx.doi.org/10.1016/j.energy.2014.02.089 http://heating.danfoss.com/pcmpdf/vfhzc102_resultsandexperiences_lores.pdf http://dx.doi.org/10.1016/j.energy.2011.12.002 http://dx.doi.org/10.1016/j.enconman. 2012.04.022 http://dx.doi.org/10.1016/ j.energy.2012.02.061 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1224-5262-1-le.qxd abstract the technical and economic evaluation of heat storage layout and configuration in a district heating (dh) network are on the one hand parts of important aspects to optimize the heat production from the heat supplier’s point of view. on the other hand, their roles to meet the demand of heat consumers are acknowledged. generally, the state of the art technique has considered three optional planning layouts for dh networks. a classical network with centralized heat storage at the combined heat and power (chp) plant, decentralized storages in the middle of the network, and decentralized small storages at the substations or in the customer building. in this paper, through the use of genetic algorithm technique, a comparison of three different scenarios is presented to evaluate the optimal planning of heat storage layout in chp-based dh supply systems according to economic and technical aspects of the network. abbreviations: chp = combined heat and ower dh = district heating dhs = district heating system ga = genetic algorithm dhn = district heating network dsm = demand side management 1. introduction various techniques and methodologies are proposed and presented in the recent years to manage the potential of the heat demand in district heating system (dhs), in order to determine the optimal heat production of the heat plant and reduce the overcapacity of heat in the costumer side. one of the important issues to be noticed is that there are at least international journal of sustainable energy planning and management vol. 10 2016 21 two approaches to be mentioned related to this issue, namely statistical and numerical approaches. the statistical approaches generally exploit extensive large data sets. furthermore, the accuracy of the results relies on the quality of the statistical data set. the statistical method developed to minimize the supply temperature is performed e.g. in [1]. on the other side, the numerical approaches utilize calculation steps and mathematical operations to be performed. this will * corresponding author e-mail: razani@fernwaerme.de international journal of sustainable energy planning and management vol. 10 2016 21-32 a genetic algorithm technique to optimize the configuration of heat storage in district heating networks ������� ��� �� � ���������������� ��������� � ��� �������������������� ��������������� ��� � � ���� ���� ��!"��"#$%%����� �����&�����' keywords: genetic algorithm; heat storage; dh network; url: dx.doi.org/10.5278/ijsepm.2016.10.3 22 international journal of sustainable energy planning and management vol. 10 2016 a genetic algorithm technique to optimize the configuration of heat storage in district heating networks require extensive calculation time. some examples for the dynamic optimization to determine the optimum supply temperatures and the optimum load distribution are found in [2]. the genetic algorithm technique tries to cover the advantages offered by both aforementioned approaches since it exploits heuristic data and compute those data to approximate the optimal solution, as we would like to apply this method mainly in this paper. the method is furthermore used to evaluate the benefit of different size of storages for the chp system. several works are mentioned regarding the configuration of district heating network, some of them implemented genetic algorithm method. in [3] the configuration of the peak boiler related to its capacity and location is evaluated. sakawa et al. applied the genetic algorithm to solve the operational planning problem of district heating and cooling units at a single location. this problem is formulated as a mixed 0–1 linear programming problem and approximately solved using ga. other researcher such li and svendsen [4] optimized the dhn configuration using genetic algorithm which connect a single heat generation plant and the end users. fang and risto [5] optimized the supply temperatures of multiple heat plants (chp) at different locations of the network and calculated optimal load allocation between the plants to minimize the combined production and distribution costs based on a static dh system model using ga. samira et al. [6] used evolutionary algorithm to optimize the layout, the operation schedule and the temperatures of energy distribution pipelines. in [7] molyneauxa et al. applied multi-objective and multimodal evolutionary algorithm to facilitate the design and planning of a district heating network based on a combination of centralized and decentralized heat pumps combined with on-site cogeneration. sakamoto et al. [8] optimized the operation schedule for on-line processing in the electric type district heating and cooling plant based on genetic algorithm. in the recent paper [9] fang and risto has developed chp optimization model with heat storages to minimize the production cost and to maximize the revenue from power sales based on a sliding time window method. as a matter of consideration, heat producers always want to initially start the production plant with lower operational cost. by estimating the heat demand, heat producers can avoid overproduction of heat. the advantages of heat demand management will enable the heat producers to schedule which production plant to be activated and coordinate the heat consumption at the customer side. this could be performed by utilizing the heat storages in the dh network. the novelty of this study is that we implement a ga based method to analyse and compare the different layout of dh network with single chp and heat storages in the network. heat storage is very useful to manage the heat demand as it collects heat for later use and can be integrated into a chp system to enhance the energy efficiency [10]. on the one hand, the storages can be charged or discharged when the heat demand is low or high. on the other hand the heat storages are beneficial to operate when the spot price is low and the chp can produce less power. bachmaier et al. [11] has shown that the installation of a decentralized thermal energy storage is nearly as efficient as operating a central thermal storage. therefore in this work we will investigate the characteristics of three different layout of heat storage in the district heating network to get better benefit of each alternative according to the available factors in the real condition. meanwhile, the heat load has exhibited non-linear, stochastic and dynamic behaviours, which needs an adaptive, robust and heuristic model to be developed. genetic algorithm is part of metaheuristic algorithm to find a good near optimal feasible solution with a reduced computational time [12]. therefore, in this paper a heuristic technique which utilizes genetic algorithm will be introduced as a new option for calculating the optimal configuration in the operational planning of the heat storage in the district heating network (dhn). furthermore, three scenarios of heat storage configuration in the dhn including chp will give more insights for the comparison of dhs performance. 2. setting up three layout models of district heating network with heat storages according to several discussions mentioning the typical dh network configurations which combine heat storages and chp plant, mainly the centralized and decentralized network structure (see [9, 11, 13]), we could make three general assumptions for the network model, namely centralized, semi decentralized and full decentralized type of network. to provide a clear description of the aforementioned planning layout of district heating network with heat storages and chp, we set up a virtual district heating network model. there are three scenarios regarding the configuration of district heating network with heat storages as follows: 1. centralized heat storage (see figure 1) 2. semi decentralized heat storages (see figure 2) 3. full decentralized heat storages (see figure 3) the topology of district heating network is represented by a graph model which provides the thermo-hydraulic computation to be performed within two consecutive steps. the first (central) step is the hydraulic modelling of the mass flows within the network, by inserting several boundary flow conditions at the customer side as well as the pressure and temperature constraints at the heat producer site. this step determines all currents flowing through the pipes of the network. simultaneously, determining the mass flow distribution in the district heating network gives the foundation of the thermal losses calculation within the network (see [14]). 2.1. dimensioning the network parameters (pipe length, pipe diameter, consumer heat load) the calculation of the hydraulic state in the district heating network has been treated within several papers and dissertations, for example [15, 16, 17, 18, 19]. combining the hydraulic calculation of the pipe network and heat transfer theories enables the determination of the pipe dimensions according to the amount of the heat load entering the pipe. the resulting pipe diameter calculation will be further transferred into the cost function for the optimization procedure in the next step. by applying the techniques provided by genetic algorithm, the cost function in the dhn will be minimized. 2.2. thermo-hydraulic simulation (heat loss, temperature loss) in order to determine the volume of heat storages as well as the heat distribution, a thermo-hydraulic simulation is performed to calculate the static pressure and heat distribution in the network. the friction factor f generally has to be calculated as well, e.g. by the darcy-weißbach or swamee-jain correlation (see [17, 20]). the conversion of the heat demand into a mass-flow boundary condition can be done by applying the first principle of thermodynamics, see again [17, 20]. 2.3. coupling of the thermal model the thermal model is calculated by assuming a constant heat capacity cp of the medium (water). after calculating temperature loss distribution in the network, it is very crucial to identify temperature drop in every single pipe. the temperature drop inside each pipe is calculated by an exponential equation, see [21, 22]. results of the thermal calculation is then combined with all heat demands to generate a yearly heat energy load in the network. international journal of sustainable energy planning and management vol. 10 2016 23 amru rizal razani, ingo weidlich p2 p4 p9 p3 p7 p8 p5 p10 p11 p6 p1 wa-1 to= –10°c dt=30k 6 1 2 4 5 3 0 7 8 9 10 11 wa-2 wa-3 wa-4 wa-5 public service buildingappartment building supermarket office school food & resto chp figure 1: virtual dh network with centralized heat storage. p2 p1 p6 p4 p3 p9 p7 p8 p10 r21 p5 p11 wa-1 6 1 2 4 5 3 0 7 8 9 10 11 wa-2 wa-3 wa-4 wa-5 wa-6 public service building supermarket officeschool food & resto chp appartment building figure 2: virtual dh network with semi decentralized heat storages. p2 p1 p6 p4 p3 p9 p7 p8 p10 r21 p5 p11 wa-1 6 1 2 4 5 3 0 7 8 9 10 11 wa-2 wa-3 wa-4 wa-5 wa-6 public service building supermarket office school food & resto chp appartment building figure 3: virtual dh network with full decentralized heat storages. 3. calculation of heat customer load profile heat customer load profile is calculated according to the following steps: 1. basic resources for the representation of heat consumer profile are taken from the consumer standard heat load profile given by bgw p2007/13 suggested by tu münchen, see [23]. 2. values of heat load data are computed for every hour for the whole year using the outer temperature data samples from deutscher wetterdienst (germany’s national meteorological service). the collected values are then scaled according to the type of the building with corresponding week factors and hour factors (see figure 4) to generate the variation of costumer heat load in the network during a year (in the total of 8760 hours). 3. the chosen heat consumers are classified according to the heat profile given by above resources, which yield the values shown in table 1. 24 international journal of sustainable energy planning and management vol. 10 2016 a genetic algorithm technique to optimize the configuration of heat storage in district heating networks gko label: public building, organization, etc. char. gko05 gko04 gko03 gko02 gko01 f-factor mo 1,0354 0,94350,88600,98851,04941,04491,0523 weekdays tu we th fr sa su a b c d 4,362++ + − − − o –38,7 7,60 0,0083 –36,7 7,61 0,07473,443 –35,1 7,13 0,14182,717 –33,6 6,68 0,23092,066 –30,8 6,35 0,32121,416 0,0 –20°c h -v a lu e s –10°c 0°c 10°c 20°c 30°c 1,0 2,0 3,0 4,0 5,0 temperature regression function sigmoid daily mean temperature θ reference hef03 to hmf03 gko01 gko02 gko03 gko04 gko05 weekdays factors susafrthwetumo 0,00 0,25 0,50 0,75 1,00 1,25 figure 4: example of parameters and factors according to the chosen building categories (translated from the german page). arithmatical mean average area total heat building nr consumer type of building [kwh/m2a] [m2] consumption [kwh] classification 1 apartment privat 159 3,025 480,619 hmf residential building, 2 supermarket retails, wholesale, 75 4,198 311,845 gha shopping center 3 public building public service 141 2,375 333,785 gko building 4 school school in general 154 4,406 676,372 gko (without swimming pool) 5 resto public house, 130 2,300 299,512 gga restaurant 6 office normal administrative 120 3,716 446,654 gbd building table 1: heat load for each type of the building calculated in a year. shows the amount of heat loads should be covered. the region under the green line shows the amount of based heat load normally covered by the chp and the rest of the region between the green line and the curves are the heat load that should be covered by the heat storages or combined with heat boiler. after performing the calculation of heat load, it is now possible to determine the configuration and the volume of heat storages in the network. 4. determining the heat storage layout and volumes according to the day observation and the pressure loss distribution in the network, determination of the location and the volume of heat storage could be performed (see again figure 1–3). during winter, the heat consumption of the network is at maximal level as described in figure 6. therefore the characteristic of the heat consumption line in a winter type day is very crucial as the basic calculation of the heat storage volume. in figure 7 a typical daily heat loads in the dh network for aforementioned heat consumers are reordered, which is represented by the black curved. the green area describes the base heat load supplied by chp. in this case, the integral of the heat consumption pattern in a day is calculated and summed up as the maximum load of the heat storage (see figure 7). based on the amount of heat required to load and unload in the storage, in combination with the following equation (3)q = m cp dt = v cp (t t )sp sp sp sp sp sp sp 1sp 2spρ international journal of sustainable energy planning and management vol. 10 2016 25 amru rizal razani, ingo weidlich annual calculated heat load duration profile max: 950,55 kw min: 26,00 kw heat load w/o heat loss heat load incl. heat loss base heat load hour 80 00 70 00 60 00 50 00 40 00 30 00 20 00 10 000 0 1200 l o a d ( kw ) 1000 800 600 400 200 figure 5: profile of the heat load duration calculated in a year. 4. calculation of the hourly based heat load follows the equation: (1) where qhour : hourly value of the heat consumptions kw : customer individual value of the heat consumptions h(ϕ) : a value that depend on coefficient of the sigmoid function and daily average temperature f : week factor (depends on the building categories) sf : hour factor (depends on the building category, the daily average temperature and the time) parameters of the sigmoid function are given according to the building categories and calculated under the following equation: (2) the results of the total heat load duration in a year calculated for the network are given in the table 1 and figure 5. yearly energy heat load is applied to determine the strategies or scenarios to fulfil the heat demand. the purple curve describes the profile of heat load duration including heat losses. the heat loads are ordered according to the amount of load in an hour-based, while the red curve describes the heat load duration without heat loss. the integral of the region under the curves h c ( ) 1 ϑ ϑ ϑ == ++ −− ++ 00 a b d ⎛ ⎝⎜ ⎞ ⎠⎟ q kw * h( ) * f * sfhour = ϕϕ qsp[kj] : heat capacity of the storage msp [kg] : mass of the storage cpsp[kj/kg·k] : specific heat of storage media (water) dtsp[k] : temperature difference in the storage vsp[m 3] : volume of the storage ρsp[kg/m3] : density of the storage media t1sp[°c] : temperature of loaded storage t2sp[°c] : temperature of unloaded storage, the heat capacity of heat storages in the network could be estimated. 5. generating nonlinear cost function the cost function consists of three main components in the network, the heat production component which is represented in this case by the chp, the heat distribution in the network, and the heat storages. the cost function for chp is derived by calculating the function of chp performance toward its price for every kilowatt performance (f(performance)). this dependency is described in figure 9. meanwhile, the cost function for the heat storage is determined by the function of the storage volume toward its price (f(volume))(see figure 8). for the heat distribution network, there are many references that can be referred for calculation of the cost 26 international journal of sustainable energy planning and management vol. 10 2016 a genetic algorithm technique to optimize the configuration of heat storage in district heating networks 00 :0 0 01 :0 0 02 :0 0 03 :0 0 04 :0 0 05 :0 0 06 :0 0 07 :0 0 08 :0 0 09 :0 0 10 :0 0 11 :0 0 12 :0 0 13 :0 0 14 :0 0 15 :0 0 16 :0 0 17 :0 0 18 :0 0 19 :0 0 20 :0 0 21 :0 0 22 :0 0 23 :0 0 1000,00 max: 950,5 kw min: 563,7 kw mean: 739,0 kw l o a d ( kw ) 900,00 800,00 700,00 600,00 500,00 400,00 300,00 200,00 100,00 0,00 time network heat heat consumption line in a winter type day chp load 900,00 1000,00 800,00 700,00 600,00 500,00 400,00 300,00 200,00 100,00 0,00 hour chp load day load profile at the lowest temperature storage unloading storage loading h e a t lo a d ( k w ) max: 950,5 kw min: 563,7 kw mean: 739,0 kw 0: 00 1: 00 2: 00 3: 00 4: 00 5: 00 6: 00 7: 00 8: 00 10 :0 0 9: 00 11 :0 0 12 :0 0 13 :0 0 14 :0 0 15 :0 0 16 :0 0 17 :0 0 18 :0 0 19 :0 0 20 :0 0 21 :0 0 22 :0 0 23 :0 0 figure 6: characteristics of heat consumptions in the network during a winter day. figure 7: the heat loads are reordered according to the duration of heat consumptions. 170001600015000140001300012000 volume (liter) 110001000090008000 7000 8000 9000 10000 p ri c e ( e u r ) 11000 12000 13000 14000 figure 8: linear cost function of heat storage, see [25]. international journal of sustainable energy planning and management vol. 10 2016 27 amru rizal razani, ingo weidlich function in the heat distribution component. one of these references is described in [24], where all of the components in the network (pipe diameter, pump, investment cost, etc.) are being considered. in a general equation, the cost function is represented by the following term: (4) the generated nonlinear cost function model would be minimized in the optimization process by utilizing the genetic algorithm technique. each element of the cost function is the following: 1. fcost (chp) is the function of the electrical power of chp f1(pel) = 4361 * pel−0.33, pel: electrical power (5) 2. fcost(dhs) is the function of the pipe inner diameter d f2(d) = [i1/ln((4hp)y(d–y +(2δxi)1–yd–1))] +i3d–(5+b+c)+a9d (6) where δxi : insulation thickness (m) d : pipe inner diameter (m) a,b and c : coefficients determined by curve fitting (dimensionless) hp : burial depth to pipe centerline (m) while i1 represents the cost of heat loss, i3 and a9 represent the maintenance cost and capital cost of the supply and return pipe respectively. 3. fcost(heat storage) is the function of the heat storage volume (m3) ∑ + +f chp f dhs fcos cos cos( ) ( ) ( )t t t heat storage f3(vol)= 0.375*vol + 3538.7 (7) the sum of those equations yields a nonlinear equation which is then applied in the genetic algorithm as the objective function. 6. optimization with genetic algorithm genetic algorithm is a meta-heuristic algorithm mimics the evolution strategy from nature which is adapted into computational steps to find a solution in a more natural way. this method has been introduced by goldberg [12]. one of the genetic algorithm applications is to get an optimal solution of an optimal combinatorial problem which has many possibilities of solution. a solution generated in the genetic algorithm is defined as chromosome and a group of the chromosomes are called a population. a chromosome is generated from components which so-called a gene. its value could be a numeric, binary, symbols or character, depends on the problem being solved. the chromosomes will experience the evolution simultaneously. this step is defined as a generation. in every generation, the value of chromosomes are evaluated to determine their level of success toward the proposed problem (objective function) using a measure which so-called a fitness. to choose the good chromosomes for the next generation, a process called selection is performed. the chromosomes which have a high value of fitness have bigger chance to be chosen in the next generation. new chromosomes called offspring are reproduced by performing a mating between chromosomes in the same generation. this process is called crossover. the other mechanism which is called a 2000 0 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 400 600 800 1.000 r e f e r e n c e p r ic e ( € /k w ) 1.200 1.400 1.600 1.800 2.000 f (x) = 4361 × pel−0,33 (€/kwel) figure 9: cost function for chp, see [26]. 28 international journal of sustainable energy planning and management vol. 10 2016 a genetic algorithm technique to optimize the configuration of heat storage in district heating networks mutation is represented by changing of the gene in the chromosome with random values. in this work, the function implements the classical genetic algorithm and the nonlinear cost function mentioned in the previous section (the summation of equation (5) – (7)) is set up as the objective function. the generated components or variables are represented with binary and integer encoding. the fitness of the generated chromosomes is determined by calculating the values which minimize the total cost function of the network. the objective function is subjected to the constraints according to the thermo-hydraulic conditions for the three network layouts. in this method we define the range of values for a decision variable by setting the lower bound and upper bound of the variable. it is important to pick meaningful bounds for the decision variables so that the calculation doesn’t waste time exploring solutions that are not meaningful. the defined ranges of values are the following: • the capacity performance of chp (in kw) pmin < pj < pmax, for j in each layout (7) • the volume of heat storage (in m3) vmin < vj < vmax, for j in each layout (8) • the available pipe diameter (m) subjected to the commercial pipeline dmin < dj < dmax, for j in each layout (9) • the network maximum allowable pressure drop δpi < δpcritical, for j in each layout (10) • the pipeline maximum allowable velocity vj < vlimit, for j in each layout (11) the parameters and the range of values used in this method during the calculation are the following: • population size: 100 • crossover probability: 0.7 • mutation probability: 0.03 • number of generation: 1000 • pmin = 50 kw; pmax=500 kw • vmin = 1 m 3; vmax= 100 m 3 • dmin = 0.06 m (dn 20); dmax= 0.508 m (dn 50) • δpcritical = 200 kpa • vlimit = 2 m/s summary of the genetic algorithm method used in this work is illustrated in figure 10, as follows: 1. the initial population can be generated by randomizing the genes for each chromosome of the initial population. in this step we generate chromosomes from the genes which represented by the parameters in the objective functions, e.g. a, b, c, etc. according to the range of parameters defined previously. 2. fitness evaluation is performed by calculating the objective function of the chromosome generated earlier. the fitness is evaluated according to the formula fitness= (1/(1+objective_func)) and the initial population individual selection fitness evaluation by taking the min. of the objective function reproduction crossover & mutation new population figure 10: genetic algorithm procedures to minimize the cost function. international journal of sustainable energy planning and management vol. 10 2016 29 amru rizal razani, ingo weidlich probability of the chromosome is calculated by p[i]=fitness[i]/total_fitness, for every chromosome[i]. the fitness of the chromosome shows that the chromosome has higher probability value to be chosen in the next generation. 3. the selection process is performed such that the chromosome which has a small value of the objective function has higher probability to be chosen. this could be done by calculating cumulative probability and comparing it with a random value for choosing the best chromosome in the new population. 4. the next steps are the reproduction of random value to choose a position from the parent chromosome for exchanging the gene. number of chromosomes which experience the crossover are influenced by the crossover probability. mutation process is done by replacing a chosen gene randomly with a new randomized value. the numbers of mutated gene in a population are determined by mutation probability. the results of crossover and mutation process are then given to the new population. 5. after performing the previous steps we have finish the first iteration for generating a new generation. this process will be repeated until the maximum generation is reached. 7. result and discussion to get the result as proposed in the section 1, the main step to be performed in the calculation is to find the optimal chp capacity, the pipe diameter and the volume of heat storage which minimize the cost function. this will be performed for each scenario of the network, namely the network with centralized, semi decentralized and full decentralized heat storages. the constraint values are obtained from the thermo-hydraulic calculation in each of the scenarios, which will give the range of possible values for the chp capacity, pipe diameters and heat storage volumes in the network. minimizing the cost function with respect to those three variables is equivalent to minimizing the total cost function. therefore, after obtaining the best values for those variables we can proceed to solve equations (5) – (7) as well as to get the minimal sum of the cost function in every network layout. by considering simultaneity factor of one, several points are to be mentioned according to the result described in the figure 11: • network type 1 (centralized heat storage) has overall the lowest investment cost, but it requires more heat energy production. it means that more excess heat is produced within the network. consequently, more losses caused by the waste of heat energy are unavoidable. • network of type 2 has medium efficiency of cost and energy, but it depends on the installation, the volume of the heat storage and its location as well. there are still open questions, whether this type of network could be optimized more intensively in order to perform the same energy efficiency as the network type 3. one of the possibilities is by integrating intelligent control in the heat producer 70.0 (t€)/(m3) 60.0 50.0 40.0 30.0 20.0 10.0 0.0 type 1 0 150 50 100 200 (kw) type 2 comparison of the calculated dh network variations type 3 chp load (kw) cost (t€) heat storage (m3) figure 11: comparison of three different scenarios of dh network with heat storages. side and utilizing heat demand’s forecasting and adaptive controlling in the consumer side. • the energy efficiency is improved by network type 3 (decentralized heat storage), although it needs higher initial investment. on the other side, the heat production could be minimized along with the time. the higher cost invested in the initial phase will be paid off by low operation of the heat production. • although network type 3 requires higher initial cost, but one of its advantage is to improving more security of heat supply for the heat customer. by unexpected accident, (e.g. sudden damage at the pipe network, extreme temperature drop etc.) the heat storages will provide a quick solution to handle the heat demand required by the customer. 8. conclusions and prospects this work is focused mainly on the comparative study of three different layout of dhn with combining heat storage and chp plant using the genetic algorithm technique. as the real experiment data is not available, three virtual networks are setup and the calculation is performed using standard profile taken from references and the comparison of qualitative analysis for every type of network is carried out. therefore, this study is intended to give a first overview about the choice of suitable dh network layout according to the conditions given by the location of the network as well as the related financial factors. as prospective, there are some points needed to be underlined for the future works: • this paper provided some procedures and considerations regarding the optimization of district heating network using chp with integration of the heat storages in three different layouts. • detail calculation of the storage volume could be optimized by utilizing genetic algorithm method. • improving degree of control on the heat customer side (demand side management) increases efficiency of the heat production. this could be achieved effectively through implementation of the decentralized heat storages (network type 3). • combination of heat resources (solar cell, geothermal, etc.) and heat storages in the network is possible and could be optimized by applying the same technique. • other layout combinations (close loop, more renewable heat sources extension) should be investigated for further research as well. • comparing the result with operational data of the heat production plant is recommended to improve optimization level, data integration and performance testing. furthermore, a validation of the simulation result regarding the combination of heat sources and customers from real data for the next step is foreseen. references [1] madsen h., palsson o. p., sejling k. and sogaard h. t., models and methods for optimization of district heating systems. the energy research program of the danish ministry of energy (1990). 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[9] fang t., risto lahdelma r., optimization of combined heat and power production with heat storage based on sliding time window method. applied energy, volume 162, 15 january 2016, pages 723-732. http://dx.doi.org/10.1016/j.apenergy.2015.10.135 30 international journal of sustainable energy planning and management vol. 10 2016 a genetic algorithm technique to optimize the configuration of heat storage in district heating networks http://dx.doi.org/10.1016/s0377-2217(01)00095-9 [10] majic l., krzelj i., delimar m., optimal scheduling of a chp system with energy storage, 36th international convention on information & communication technology electronics & microelectronics (mipro), ieee (2013), pp. 1253–1257. http://ieeexplore.ieee.org/xpl/articledetails.jsp?tp=&arnumber= 6596449 [11] bachmaier a. et al. spatial distribution of thermal energy storage systems in urban areas connected to district heating for grid balancing, energy procedia volume 73, june 2015, pages 3–11, 9th international renewable energy storage conference, ires 2015. 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[26] asue (arbeitsgemeinschaft für sparsamen und umweltfreundlichen energieverbrauch e.v.), bhkwkenndaten; 2005. international journal of sustainable energy planning and management vol. 10 2016 31 amru rizal razani, ingo weidlich http://ieeexplore.ieee.org/xpl/articledetails.jsp?tp=&arnumber=6596449 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 18 2018 69 1corresponding author e-mail: t.kurbatova@macro.sumdu.edu.ua international journal of sustainable energy planning and management vol. 18 2018 69–80 sumy state university, 2, rimsky-korsakov street, ua-40007, sumy, ukraine abstract the paper deals with animal manure usage in order to produce biogas for energy generation in ukraine. although there are favorable conditions to develop the biogas sector based on animal manure, the share energy, which is produced from it, is extremely low (about 0.2% as of 2016). the paper analyzes energy potential of agricultural biomass in ukraine, economic tools, aimed at stimulating electricity generation from biogas based on animal manure, the results of their impact on biogas plants deployment. among a number of barriers, which slow down development of this sector in ukraine, the main ones are the need for significant initial investments to construct profitable biogas plants and a large amount of raw materials for their uninterrupted operation. given the fact that 48.2% of farm animals are concentrated in small-scale farms and households, which cannot individually implement biogas projects, it is proposed to combine their financial and raw material resources within energy co-operatives. economic benefits, which may be gained by small-scale farms owners within energy co-operative through the sale of electricity, generated from biogas, by feed-in tariff are calculated. the results of research show that at the current level of feed-in tariff, the payback period of the biogas plant based on cattle manure, built within energy co-operative, is 4.6 years which is quite attractive for investors. it is discussed that in addition to economic benefits for small-scale farms owners, realization of the co-operative model in the bio-energy sector will create a number of ecological and social benefits both for local communities, and the state as a whole. 1. introduction nowadays the growing demand for renewable energy sources (res) in energy production is observed, that actualizes the issue of increasing their share in the total energy mix of each country. substitution of energy generation conventional technologies by renewable energy (re) ones helps to solve many problems, related to the increase of countries’ energy independence level [1, 2], the decrease of anthropogenic impact on the environment [3, 4], the creation of new jobs etc. [5, 6]. ukraine urgently needs to solve a number of the aforementioned problems through res potential development. firstly, although ukraine has reserves of all fossil fuels (oil, natural gas, uranium, coal), at present, they provide about 47–50% of the country’s energy raw materials, the rest is imported [7]. secondly, beginning from 1991 till today ukraine leads the world in co2 emissions per gdp unit and is among the top-30 countries in the world, which are the largest polluters of co2 emissions as a result of the fossil fuel use [8, 9]. thirdly, re development is caused by the necessity to fulfill obligations, taken within the country’s membership in the european energy community, where ukraine has obligations to reach 11%-level of energy, generated by res, in the country’s final energy consumption till 2020 [10]. economic benefits for producers of biogas from cattle manure within energy co-operatives in ukraine tetiana kurbatova1 key words: biogas; animal manure; energy co-operative; renewable energy; ukraine; url: http://dx.doi.org/10.5278/ijsepm.2018.18.5 http://dx.doi.org/10.5278/ijsepm.2018.18.5 70 international journal of sustainable energy planning and management vol. 18 2018 economic benefits for producers of biogas from cattle manure within energy co-operatives in ukraine it should be noted that re share in the world energy mix as of late 2015 was 19.3%, 14.1% of which was accounted for biomass [11], i.e. this energy resource provides the biggest share of energy from res in the world. in its turn, biogas production technology through anaerobic digestion is widely used among a number of biogas technologies. so, for instance, in the european union in 2015 total production of biogas from sewage sludge gas amounted to 17%, from landfill gas – 9%, whereas biogas from anaerobic digestion (decentralised agricultural plants, centralised co-digestion plants, and municipal solid waste methanisation plants) made up 74% [12]. dynamic development of this sector is caused firstly, by the flexibility of biogas as an energy product, particularly because of the possibility of production on its basis both thermal energy and electricity, and fuel for internal combustion engines. secondly, as regards animal manure, it belongs to substrates, which are most reasonable to be used for biogas production (as a separate substrate, or mainly in combination with other substrates), since they are formed as secondary waste and have to be utilized in an ecologically safe way [13]. another benefit of biogas technologies is the high coefficient of the installed capacity use by biogas plants and absence of energy generation amounts dependence on climate conditions. it beneficially distinguishes biogas plants from other re generating capacities, particularly solar and wind power plants. although biogas production based on animal manure is dynamically growing in some countries of the world (china, the usa, india, canada, un-28 countries) [14], in ukraine, where agriculture is a leading sector in the economy (it ranks the largest share in the structure of gdp among all sectors –17% of gdp in 2017) [15, 16], the bioenergy sector is being developed extremely slowly. as of the end of 2016, electricity share, generated from biogas from animal manure, in the country’s final energy consumption was about 0.2% [17]. it should be noted that such tendencies in the development of the domestic biogas sector are observed despite the functioning of economic mechanisms aimed at encouraging the electricity generation from res [18]. the last fact proves that there are many barriers in successful development of ukrainian biogas sector, which cannot be compensated by high feed-in tariffs, tax and customs privileges etc. the most significant obstacles, which slow down development of the domestic biogas sector based on animals manure and byproducts include the need for substantial initial investment to construct profitable biogas plants and a large volume of animal manure for their uninterrupted operation [19]. to our minds, one of the variants to eliminate these barriers is to improve the current legislation with regard to energy cooperatives formation. it will create favorable organization and economic conditions to unite financial and raw material resources for joint implementation of biogas projects. the main aim of this research is to assess economic benefits for owners of small-scale farms, which produce biogas from animal manure within energy cooperative in ukraine. 2. potential of biogas production from animal manure in ukraine the agricultural sector of ukraine is a leading field of the national economy. a large area 603628 km2, 70.9% of which are agricultural lands, fertile soil and good climate conditions provide favorable preconditions for animal husbandry and crop production development. the production of a large amount of agricultural waste provides good opportunities to the domestic bioenergy sector development. the theoretical potential of agricultural waste in ukraine is demonstrated in table 1 [20]. however, among various types of agricultural waste the utilization of animal manure through the biogas production is of particular interest, since in addition to energy benefits, it has certain ecological value. a peculiarity of most ukrainian agricultural enterprises, private farms and households is to accumulate and to keep manure or droppings in the open-air lagoons [13]. then they are put on fields as an organic fertilizer. accumulation of manure and droppings in this way causes land and water pollution. besides, in case of fertilization above the norm, soil is over-enriched with nutrients [13]. it leads to reduction of soils fertility and decreasing lands, which may be used in agriculture. moreover, manure and droppings is a source of ammonia, methane, nitrous oxide and other gases emissions to the table 1: the energy potential of agricultural waste in ukraine theoretical potential per type of agricultural waste year, pj straw of crops 1281.16 waste of corn production for grain 1683.09 waste from sunflower production 879.23 biogas from manure (or droppings) 59.2 international journal of sustainable energy planning and management vol. 18 2018 71 tetiana kurbatova atmosphere, which contribute to global warming and climate change of the planet [13]. thus, anaerobic digestion of manure and droppings enables not only to gain some economic benefits by means of decentralized production of electricity and thermal energy, but also to prevent some ecological problems. it should be noted that in 2016, the agricultural sector accounted for 10.4% of the gdp of ukraine. in 2016 ukraine took the third place in europe and was among the top ten exporters of agricultural goods to the european union countries by this indicator [16]. it is worth noting that the animal husbandry share in the structure of ukraine’s agricultural production was about 50% as of the end of 2016 [16]. one of the absolute indicators of animal husbandry development is the current number of farm animals, the quantity of which in ukraine as of the end of 2016 is shown in table 2 [16]. a peculiarity of the ukrainian animal husbandry is the fact that almost half of the above number of farm animals is concentrated in small-scale farms and households (figure. 1). today a lack of financial and raw material resources for individual implementation of biogas projects by such economic entities makes impossible to use the existing animal manure for energy production. the great driver for this direction development could be state support tools (feed-in tariff, tax and customs privileges); however, although they have been introduced, they do not take into account peculiarities of energy production from bioenergy resources, therefore their efficiency in this field leaves much to be desired. 3. economic tools to stimulate electricity generation from biogas based on animal manure and effect of their introduction since 2009 a number of state strategy programs in the re field have been introduced, particularly energy strategy of ukraine till 2030 and national action plan for renewable energy for the period until 2020 [10, 21], where re development is defined as a key vector to reform domestic energy sector. in order to achieve strategic goals regarding re deployment, the country’s government formed re regulatory basis and introduced motivating mechanisms, oriented to promote electricity generation from res. it should be mentioned that mechanisms to stimulate re development in ukraine are unique for all re technologies. let us consider main ones from the standpoint of electricity generation from biogas based on animal manure and byproducts: feed-in tariff. according to the law of ukraine “on electric power industry” [22], feed-in tariff is a special tariff, by which electricity, generated from res, including from biomass, is purchased. according to [22] biomass is non-fossil biologically renewable organic substance, which is able to biological decompose. it includes waste of forestry and agriculture (crops farming and animal husbandry), fish farming, the industrial and domestic waste, which is able to biological decompose. minimum feed-in tariff rate is fixed and is calculated according to the algorithm, given in [22]. minimum feed-in tariff rate is reviewed by national commission for state regulation of energy and public utilities of ukraine (ncsrepu) every month and is converted in eur by an official currency rate of national bank of ukraine with the purpose to protect economic entities, generating electricity from res, from possible inflation. the law of ukraine [22] provides the fixed allowance to feed-in tariff for the use of domestically made equipment in re power plants construction, including biogas plants based on animal manure. while using equipment of the ukrainian production at the level of 48,2 51,8 small scale farms and households agricaltural enterprises figure 1: structure of the farm animals placement in ukraine [16] table 2: number of farm animals as of the end of 2016 type of farm animals million head per year cattle 3.68 pigs 6.67 horses 0.31 poultry 201.67 sheep and goats 1.31 72 international journal of sustainable energy planning and management vol. 18 2018 economic benefits for producers of biogas from cattle manure within energy co-operatives in ukraine in its turn, there was the least share of the bioenergy sector (bioenergy power plants based on landfill gas, agricultural biomass, solid biomass) in the structure of electricity, generated from res, among all re technologies and was 6.6% at the end of 2016 (fig. 3). and finally, the electricity share, generated from agricultural biogas, as of the end of 2016 was 1.6% (animal and crop biomass), and, relatively, took the least ratio in the structure of electricity generation from res (figure. 3). based on the above data, we can conclude that current economic mechanisms lead to certain re development, but unfortunately they were not able to provide their large-scale growth. uneven development of various re technologies, of which, biomass took the lowest position, perhaps, due to the fact that the above support mechanisms do not to take into account peculiarities of electricity generation, based on various res. as for biogas plants based on animal manure, today there are only 6 (pig farm of the enterprise zaporizhstal, zaporizhya, number of farm animals – 12000, raw type – pigs’ manure; pig farm of corporation agro-oven, olenivka, dnipropetrovsk region, number of farm animals – 15000, raw type – pigs’ manure; agricultural company elita, terezyne, kyiv region, number of farm animals – 1000, raw type – manure of cattle and pigs; cattle farm umk, v.krupil, kyiv region, number of 30% and 50% for power plants, put into operation since july, 1, 2015 till december 21, 2024, the rate of additional allowance to feed-in tariff is 5% and 10% relatively. terms of economic stimulation scheme with the help of feed-in tariff is established from 2009 to 2030. state guarantees to purchase the whole amount of electricity during the above period. tax and customs privileges. according to p. 197.16 and p. 213.2.8 of tax code of ukraine [23] and pp. 14 and 16 article 282 of customs code of ukraine [24] there are following privileges: – exemption from paying value added tax for equipment, supplements, used to o generate energy from res, including from biogas based on animal manure. – exemption from paying customs duties for import of material, raw, equipment and supplements, used in production of alternative fuels or energy generation from res, including from biogas based on animal manure. one may use the above tax and customs privileges only if identical goods with analogical qualitative features are not produced in ukraine. however, although, there are many motivating mechanisms for re development, the res share in total electricity mix of ukraine is low, and as of the end of 2016 it was only 1.3% (figure. 2). 38,9 5,8 6,8 1,3 47,2 nuclear power plants thermal power plants large hydropower plants combined heat and power plants renewable energy power plants figure 2: total electricity mix in ukraine as of the end of 2016 [17] 55,2 11,8 3,1 1,6 1,9 26,4 solar power plants wind power plants small hydropower plants bioenergy power plants (landfill gas) bioenergy power plants (agricultural biomass) bioenergy power plants (solid biomass) figure 3: total mix of electricity from res in ukraine as of the end of 2016 [17] international journal of sustainable energy planning and management vol. 18 2018 73 tetiana kurbatova this field, particularly regarding feed-in tariff coefficient changing, requirements to the local content in the re projects realization, terms regarding re power plants connecting to electricity network, lands allocation for re plants construction etc. [22]. such actions undermine investors’ confidence and may cause investors’ activity closing in ukraine. • state’s subsidization of prices for natural gas, electricity and thermal energy for citizens makes the transition to use biogas unprofitable within the decentralized energy and heat supply. thus, 3.7 billion us dollars are included to the budget of ukraine for 2018 for specific subsidies to pay for utilities [25]. • absence of strict ecological requirements, which would encourage effective utilization of manure through its anaerobic digestion at biogas plants in order to reduce environmental risks, caused by them [13]. • absence of feed-in tariff to produce thermal energy and fuel from biogas for internal combustion engines; • absence of the state program promoting organic fertilizers use to improve soil structure and to increase its fertility. thus, summing up the above, we can conclude that it is necessary to improve regulatory base for more dynamic development of the agricultural biogas sector. it will allow to create better frame conditions for biogas projects implementation. 5. energy co-operatives as a driver for development domestic biogas sector based on animal manure imperfection of biogas sector state regulation requires looking for new decisions, which are able to increase investment activity in this field. taking into account the fact that today, main barriers in successful development of biogas sector based on animal manure are high capital cost for biogas plants construction and need for large amounts of animal manure for their uninterrupted operation, one of the variants to solve the above problems is self-organization of small-scale farms into energy co-operatives. in general formation of the co-operative movement in the ukrainian bioenergy sector may lead to: – the mastering of farms’ bioenergy resources potential and their rapid involvement into the total energy mix of the country; farm animals – 6000, raw type – cattle manure; poultry farm oril – leader, yelizavetovka, dnipropetrovsk region, number of poultry – 42154326 per year, raw type poultry’s droppings and silage; pig complex danosha, kopanky, ivano-frankivsk region, number of farm animals – 5800, raw type – pigs’ manure) and also some projects of biogas plants are being constructed now [13]. the above data prove that all active biogas plants run on animal manure of large agricultural enterprises, which indicates to the fact that small-scale farms and households potential is not developed. 4. barriers for successful implementation of biogas projects based on animal manure the main reason, which caused great lagging of biogas sector based on animal manure in particular in comparison with other re technologies, was the absence of a feed-in tariff for bioenergy power plants during the long run. if feed-in tariff for other re technologies was introduced in 2009, for bioenergy power plants it has been implemented only since april, 1, 2013. however, in addition to this fact, it is possible to identify a number of other barriers that hinder the large-scale deployment of biogas power plants based on animal manure. let us consider them in more detail: • need for significant initial investment to build biogas plants [19]. in spite of the technological progress, which has resulted in a gradual reduction of cost for energy generation from biogas, nowadays construction of biogas plants based on animal manure requires great financial resources. the absence of state programs, which allow to involve credits resources by farms on favorable terms and at preferential interest rate, aggravates this problem. • lack of large-scale farms, which are capable of producing necessary volumes of animal manure for profitable biogas plants exploitation. as mentioned above most farm animals in ukraine are concentrated in the individual households and small agricultural farms [16], that is why construction of the profitable biogas plants is possible, provided that they cooperate; • absence of the stable legislative basis in the re field in general and bioenergy in particular. since economic mechanisms to stimulate re development have been introduced, the parliament has made a number of changes in laws, which control activity of the economic entities in 74 international journal of sustainable energy planning and management vol. 18 2018 economic benefits for producers of biogas from cattle manure within energy co-operatives in ukraine – consumer co-operative provides an ability to unite either individuals or legal entities, and its goal is not to gain profit. thus, absence of the concept “energy co-operative” in current legislation makes it impossible to get financial support by energy associations within state and local support programs on energy saving, energy efficiency and alternative energy development. besides, there are some difficulties to select the co-operative type, because the above legislatively approved co-operative types do not completely show abilities to operate in the field of energy production and supply. a barrier in the large scale-farms’ energy co-operatives deployment is a requirement regarding the obligatory licensing of the activity energy production from bioenergy resources, even if it is performed entirely to satisfy energy co-operatives members’ needs. today energy production from bioenergy resources is subject to licensing, if total installed capacity of bioenergy plant exceeds 5 mw [30]. another norm of the current legislation in the energy co-operation field, which does not encourage the intensive deployment of bioenergy plants, is taxation of activity on the sale of electricity and thermal energy selling, including those cases, when it is produced for energy co-operative members’ consumption [31] an essential disadvantage of the current legislation is the regulation of tariff for electricity and thermal energy production and supply even if such activity is performed to fulfill energy co-operative members’ needs. for instance, the tariff for the supply of heat by the energy co-operative to its members is established by local authorities [31]. thus, nowadays, the full-fledged activity of energy co-operatives in ukraine is limited by the imperfection of legislation in this field. in order to realize the co-operative model successfully in the bioenergy sector in ukraine, it is necessary to create an effective legal and regulatory framework to control decentralized production and consumption of energy from bioenergy resources, to form regular state and regional programs, which will combine informing of local communities regarding economic, social and ecological benefits from energy co-operatives formation with methodic and financial support of initiative groups. in order to prove that joint implementation of biogas projects can bring significant economic benefits for investors, we will carry out approbation on the example of the union of small-scale farms in the energy cooperative to construct and operate a biogas plant based on cattle manure in one of the regions of ukraine. – the formation of the decentralized energy supply, which provides construction of re plants with small capacity and distribution networks in close proximity to consumers, what is more effective from the viewpoint of cost reduction for energy transportation; – the increase of competitiveness level in the energy field, since the ukrainian energy market peculiarity is the fact that enterprises, which generate energy and provide its supply service, take a monopoly position [26]. as a result, monopoly power abuse is often a reason to fix an economically unjustified tariff for electricity and thermal energy, provision of low-quality service regarding electricity and thermal supply; – the revival of ukrainian villages, at present most of them suffer from social and economic decline, resulting from the lack of jobs and rapid reduction of the rural population, caused by its migration to cities in order to find better quality of life. that is why the, co-operation of the population in the rural area with the purpose of joint bioenergy projects realization may have a positive impact on the unemployment problem solving in the rural area, on localities infrastructure development, quality and welfare of rural population on the whole. although ukraine has huge potential for co-operative models in the bioenergy sectors, the absence of the holistic legislative base to create energy co-operatives does not allow to develop this sector with desired rates. nowadays activity of co-operatives in ukraine is regulated by a number of laws, particularly “on co-operation” [27], “on agricultural co-operation” [28], “on consumer co-operation” [29], norms of which essentially limit energy co-operatives activity. one of the disadvantages of the above laws is the absence of the concept “energy co-operative”, and consequently the absence of permission or prohibition for its creation. that is why, today conditions of energy co-operatives formation are regulated by the general rules, related to consumer, production or service co-operatives: – production co-operative provides an ability to unite only individuals with purpose to gain profit; – service co-operative enables to unite either individuals or legal entities, and its goal is not to gain profit; international journal of sustainable energy planning and management vol. 18 2018 75 tetiana kurbatova that is why, lcoes can be calculated by the formula: 0 0 (( ) (1 ) ) , ( (1 ) ) n t t t tt n t tt i q d r lcoe e r − = − = + + ⋅ + = ⋅ + ∑ ∑ the feed-in tariff rate to purchase electricity, generated from biogas based on animal manure in ukraine, will be calculated according to algorithm, given in the law of ukraine “on electric power industry”. according to [22] minimum feed-in tariff is calculated by the formula: min ,ft rp k= ⋅ where ftmin – minimum feed-in tariff for electricity, generated from biogas based on animal manure; rp – retail price for electricity for the second-classvoltage consumers as of january 2009 (0.5846 uah/ kwh); k – feed-in tariff coefficient according to [22]. dynamics of feed-in tariff coefficients changing forbiogas plants, based on animal manure,is demonstrated in table 3 [22]. every month the minimum feed-in tariff is reviewed by ncsrepu through their recalculation according to eur exchange rate as of 01.01.2009 by the following algorithms: ≥ = × uan (uan if 1, 01.01.2019 uan 01.01.2019 uan 01.01.2019), ft ft ≤ = uan if 1, 01.01.2019, uan 01.01.2019 ft ft where ft – feed-in tariff as for date revision, uah/ kwh; ft 01.01.2009 – feed-in tariff as of january, 1, 2009, uah/kwh; uah – official uah exchange rate according to eur exchange rate, set by national bank of ukraine for date of feed-in tariff revision, uah; uah (2) (3) (4) (5) 6. methodology in order to calculate economic benefits from construction and exploitation of the biogas plant based on cattle manure within the energy co-operative, we will calculate cost of electricity generation and assess payback period of the investment project if electricity excess is sold (amount, which exceeds needs in electricity of the energy cooperative) by feed-in tariff according to the current legislation. the electricity cost will be calculated by the levelised cost of energy (lcoe) method, which is widely used by international energy agency and international renewable energy agency to assess cost for electricity generation from renewable and non-renewable energy resources [32, 33]. the lcoe presents fixed electricity tariff at which total discounted revenue from electricity selling to final consumers is equal to the total discounted cost during the lifetime of the power plant [34]. in other words, it is a minimal price, at which electricity, generated during the lifetime of the biogas plant, has to be realized to achieve its break-even point (net present value, npv = 0). if the price for electricity is higher than lcoe, it will provide larger profitability for invested capital (npv > 0), than discount rate, which was taken for calculation. at the same time, lower price will not let the project to be paid back with the given discount rate (npv < 0). the following constituents will be considered to calculate cost of electricity from biogas based on animal manure within energy co-operative, created by farms: capital and operating cost, amount of the generated electricity, decommissioning cost of biogas plant and discount rate. fuel component cost in the structure of operating cost for electricity generation from biogas will be taken as zero, because animal manure can be considered as free for farms owner. taking into account the above constituents, above condition of equity of total discounted incomes and cost can be shown in the following way: − − = = ⋅ ⋅ + = + + ⋅ +∑ ∑ 0 0 ( ) (1 ) ( ) (1 ), n n t t t t t t t t e lcoe r i o d r where lcoe is fixed cost of electricity generation during the whole lifecycle of the biogas plant, eur/ mwh; dt – decommissioning cost of biogas plant in t-year, eur/mwh; et – amount of generated electricity in t-year, mwh; it – investment cost in t-year, euro mwh; qt – operating cost in t-year, euro mwh; n – duration of the biogas plant’s lifecycle, years; r – discount rate; t – year of the project implementation. (1) table 3: dynamics of feed-in tariff coefficients changing for biogas plants, which use animal manure for electricity generation in ukraine during 2017–2030 feed-in tariff coefficients for biogas plants, which use animal manure for electricity generation, put into operation: from 01.01.2017 from 01.01.2020 from 01.01.2025 till 31.12.2019 till 31.12.2024 31.12.2029 2.30 2.07 1.84 76 international journal of sustainable energy planning and management vol. 18 2018 economic benefits for producers of biogas from cattle manure within energy co-operatives in ukraine – amount of substrate according to the present head of cattle per day – 130 t [35]; – average biogas production according to the chosen substrate per day – 34 m3/t [35]. thus, the annual amount of biogas according to cattle manure volume in the proposed energy co-operative will be 1.59 mln m3; – the average amount of electricity from 1 m3 of biogas is 1.9 kwh [36]. that is why the predicted annual amount of electricity generation (gross production) will be 3.02 gwh; – the annual amount of electricity, which is required for technological needs of biogas plant, is at the level of 5% from gross production [19] – 151.2 mwh; – the amount of additionally consumed electricity by the above agricultural co-operatives in 2016 was 441.7 mwh. thus, the predicted annual electricity excess, which will be sold by feed-in tariff, having covered energy co-operative’s own needs in electricity, will be 2.43 gwh. – total installed capacity of the biogas plant, taking into account the above features, will be 643 kw. – duration of the biogas plant construction – 1 year. – duration of the biogas plant lifecycle – 20 years [19]. 2. predicted investment cost. nowadays, an average cost of 1 kw of the biogas plant installed capacity in ukraine is 2000 eur [19]. distribution of investment cost by items was fulfilled on the basis of implemented biogas projects in ukraine in 2012–2016 and recommendations of international organizations in the energy sector [19, 34], and may be demonstrated in the following way: – technical and economic justification of the biogas plant project – 68500 eur; – construction and installation works – 364000 eur; – cost for equipment and supplements – 722000 eur; – cost to connect biogas plant to electric network – 80000 eur; – other unplanned cost – 51500 eur. thus, total investment cost will be – 1.29 mln eur. 3. operation and maintenance cost: – cost for salary – 6000 eur/year; – cost of substrate (manure of cattle) is taken as zero; – cost for technical service – 20600 eur/year; – other cost (land lease, insurance, transport cost etc.) – 30700 eur/year; 01.01.2009 – official uah exchange rate according to eur exchange rate, set by national bank of ukraine as of january, 1, 2009, uah (10.85546 uah for 1 eur). the payback period of the biogas plant, built within the energy co-operative, will be calculated by the formula: 0, 1 n t t pp cf ic = = ≥∑ where pp – payback period of the investment project; ic0 – initial investment during zero period (year), eur; cft – net cash flow in t-year, eur; n – duration of the project lifecycle, years; t – year of the project implementation. 7. result and discussion formation of the energy co-operatives requires a meaningful approach to study technical and economic peculiarities regarding bioenergy projects implementation in ukraine. it should be noted that nowadays it is economically reasonable to build biogas plants in ukraine, total installed capacity of which is 500 kw and more [19]. that is why, it is rationally to create energy co-operative, which will be able to provide necessary amount of raw material for a profitable biogas plant. in order to provide work of the biogas plant with such capacity, 100 tons of manure per day, provided by 2000 head of cattle, are required. one of variants to produce such amount of manure for biogas plant uninterrupted work is to unite several farms. let us consider an opportunity to create energy co-operative for joint construction and exploitation of the biogas plant, based on cattle manure as substrate, through example of the agricultural co-operatives (kolyadynets, beyevo, voropayi, moskovske) of sumy district, lypovodolynsky region. the above-mentioned agricultural cooperatives possess 740, 660, 580 and 620 head of cattle respectively, which together makes up 2600 head of cattle. let us consider real technical and economic indicators of the biogas plant and assumptions, on the basis of which cost of electricity generation from biogas within energy co-operative will be calculated, in more detail: 1. general data and technical features of biogas plant: – head of cattle in the proposed energy co-operative – 2600; – type of the substrate – cattle manure; (6) international journal of sustainable energy planning and management vol. 18 2018 77 tetiana kurbatova when electric generator is cooled. thermal energy may be used for agriculture premises heating, greenhouses, for seeds drying and district heating in the village. it should be mentioned that one of the advantages of biogas plants is production of organic fertilizers during the biomass anaerobic digestion process at the biogas plant. besides financial effect from funds saving to purchase mineral fertilizers, using of such organic fertilizers for farms needs will allow to get positive agrotechnical effect, caused by their advantages, namely: maximum storage and accumulation of nitrogen, high level of organic substance humification, absence of weed seeds and pathogenic microflora, resistance to the soil washout etc. thus, their use will let not only to improve physical and mechanical properties of the soil, to increase yield of crops, and in future it may help to produce competitive environmentally friendly products both at the domestic markets and markets of other countries. it should be noted that joint exploitation of the biogas plant within the energy co-operative, besides above benefits, can have positive impact on environment. the anaerobic digestion of manure will let partially to solve problems concerning manure, namely to reduce risk to pollute soils and water, to decrease methane and other greenhouse gases emissions to the atmosphere. that is why rational use of the animal manure is an essential argument for biogas technologies development with purpose to decrease processes of the global warming and climate changes. in addition to the economic and ecological benefits, the implementation of the biogas projects within energy co-operatives can have a certain social effect. construction and exploitation of biogas plants may assist creating new jobs and partially solve the employment problem in the rural areas. payment of taxes to the rural budgets may help to develop settlements infrastructure, which will have positive impact on quality and welfare of the rural population. 8. conclusion today the potential of agriculture in ukraine is of great interest to provide not only supply of food and food security, but also country’s energy independence. one of the key directions in the bioenergy sector development is the use of animal manure for biogas production. perspectives to develop this technology are caused by the wide net of animal complexes in ukraine which annually produce large amounts of manure. however, today, absence of the thus, total and maintenance cost will be – 57300 eur/year. 4. decommission cost of biogas plant – 25720 eur (at 2% of investment cost). discount rate in eur to implement projects in the energy field in ukraine in 2016 was 12% [17], this index will be used for lcoe calculation. it should be mentioned that discount rate in ukraine is high enough in comparison with other countries. it is related to high risks to do business in ukraine, caused by the russian military intervention and armed conflict in the east of the country. based on the above data and assumptions, calculated lcoe in 1 mwh of electricity by the formula (2) is 37.5 eur/mwh. in order to calculate the main economic effect, we found the minimum feed-in tariff for of 1 kwh of electricity from biogas within the proposed energy co-operative. the calculated minimum feed-in tariff by formula (3) and taking into account feed-in tariff coefficient for biogas power plants, put into operation since 01.01.2017 till 31.12.2019 (see table 3), is 0.04 eur/kwh. as mentioned above this feed-in tariff value is reviewed through its calculation according to eur exchange rate as of 01.01.2009. having compered official exchange rates of uah according to eur exchange rate, fixed by national bank of ukraine as of 05.04.2018 (32.47 uah/ eur) and 01.01.2009 (10.85 uah/eur) according to algorithms (4, 5), the calculated feed-in tariff for 1 kwh of electricity, generated from biogas as of 05.04.18 was 0.12 eur/kwh. thus, feed-in tariff by which electricity, generated from biogas based on cattle manure within proposed energy co-operative, will be sold, is more than three times higher than cost for electricity generation, calculated by lcoe with a 12% discount rate. taking into account the fact that the annual predicted amount of electricity, which will be sold by the proposed energy co-operative after covering own energy needs is 2.43 gwh, annual revenue from electricity sale by feed-in tariff will be 300145 eur. based on the above data and formula (6), the calculated payback period of this investment project is 4.6 years which is quite attractive for investors, because it can guarantee fast return of initial investment. in addition to the profit from sale of electricity by feed-in tariff, members of the energy co-operative may get good benefits from thermal energy consumption, which is produced without additional burning of biogas, 78 international journal of sustainable energy planning and management vol. 18 2018 economic benefits for producers of biogas from cattle manure within energy co-operatives in ukraine [6] t. bulavskaya, f. 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[18] t. kurbatova, i. sotnyk, h. khlyap, economical mechanisms for renewable energy stimulation in ukraine, renewable and sustainable energy reviews. – 2014. – № 31. – p. 486–491. 31 (2014) 486–491. https://doi.org/10.1016/j.rser.2013.12.004 effective legislation to regulate decentralized production and consumption of electricity from biogas based on animal manure slow down growth of this direction. the conducted analysis confirms that one of the variants to improve the situation in the ukrainian bioenergy sector is development of regulatory framework in part of energy co-operatives formation with purpose to unite financial and raw material resources of smallscale farms for biogas projects joint implementation. the results of research show that at the current level of feed-in tariff, the payback period of biogas plant, which generates electricity based on the cattle manure, and built within energy co-operative, is 4.6 years. it makes economic sense and guarantees rapid return of initial investment. besides, when payback period is finished, members of the energy co-operative will be able to continue to sell electricity from biogas by feed-in tariff till 2030 (the term of the end of the state support scheme of re development by means of feed-in tariff). it means that farms owners will be able to receive significant profits after the end of the investment project payback period. in addition to economic benefits for farms owners, the realization of co-operative model in the bioenergy sector can bring substantial social and ecological benefits both territorial communities and state on the whole. references [1] k. chalvatzis, a. ioannidis, energy supply security in the eu: benchmarking diversity and dependence of primary energy, applied energy. 207.1 (2017). https://doi.org/10.1016/j. apenergy.2017.07.010 [2] a. waenn, d. connolly, brian ó gallachóir. investigating 100% renewable energy supply at regional level using scenario analysis, international journal of sustainable energy planning and management. 3 (2014) 21-32. https://doi.org/10.5278/ ijsepm.2014.3.3 [3] r. dhillon, g. wuehlisch, mitigation of global warming through renewable biomass, biomass and bioenergy. 48 (2013) 75–89. https://doi.org/10.1016/j.biombioe.2012.11.005 [4] t.uhorakeye, b. möller. assessment of a climate-resilient and low-carbon power supply scenario for rwanda, international journal of sustainable energy planning and management. 17 (2018) 45–60. https://doi.org/10.5278/ijsepm.2018.17.5 [5] m. yaqian, c. wenjia, s. evans, c. wang, d. roland-holst, employment impacts of renewable energy policies in china: a decomposition analysis based on a cge modeling framework, applied energy. 210 (2018) 256–267. https://doi.org/10.1016/j. apenergy.2017.10.086 https://doi.org/10.1016/j.renene.2017.09.039 https://doi.org/10.1016/j.rser.2015.07.093 https://doi.org/10.1016/j.rser.2015.07.093 http://edgar.jrc.ec.europa.eu/news_docs/jrc-2016-trends-in-global-co2-emissions-2016-report-103425.pdf http://edgar.jrc.ec.europa.eu/news_docs/jrc-2016-trends-in-global-co2-emissions-2016-report-103425.pdf http://edgar.jrc.ec.europa.eu/news_docs/jrc-2016-trends-in-global-co2-emissions-2016-report-103425.pdf https://doi.org/10.1080/17583004.2015.1065376 http://zakon5.rada.gov.ua/laws/show/902-2014-%d1%80 http://zakon5.rada.gov.ua/laws/show/902-2014-%d1%80 https://doi.org/10.1016/j.biombioe.2017.05.013 https://doi.org/10.1016/j.biombioe.2017.05.013 http://www.uabio.org/img/files/docs/biogas-necu-report-2015.pdf http://www.uabio.org/img/files/docs/biogas-necu-report-2015.pdf http://worldbioenergy.org/uploads/wba%20gbs%202017_hq.pdf http://worldbioenergy.org/uploads/wba%20gbs%202017_hq.pdf https://doi.org/10.1016/j.ecolecon.2014.04.026 https://doi.org/10.1016/j.ecolecon.2014.04.026 http://www.ukrstat.gov.ua http://www.nerc.gov.ua/?id=24476,(accessed 15 may 2018).(in ukrainian) https://doi.org/10.1016/j.rser.2013.12.004 https://doi.org/10.1016/j.apenergy.2017.07.010 https://doi.org/10.1016/j.apenergy.2017.07.010 https://doi.org/10.5278/ijsepm.2014.3.3 https://doi.org/10.5278/ijsepm.2014.3.3 https://doi.org/10.1016/j.biombioe.2012.11.005 https://doi.org/10.5278/ijsepm.2018.17.5 https://doi.org/10.1016/j.apenergy.2017.10.086 https://doi.org/10.1016/j.apenergy.2017.10.086 content cross-out content cross-out http://www.ren21.net/wp-content/uploads/2017/06/17-8399_gsr_2017_full_report_0621_opt.pdf http://www.ren21.net/wp-content/uploads/2017/06/17-8399_gsr_2017_full_report_0621_opt.pdf international journal of sustainable energy planning and management vol. 18 2018 79 tetiana kurbatova [28] law of ukraine “on agricultural co-operation” no. 469/97çê, 17.07.1997, http://zakon3.rada. gov.ua/laws/show/469/97%d0%b2%d1%80 (accessed 6 may 2018). 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(in ukrainian). http://zakon3.rada.gov.ua/laws/show/469/97-%d0%b2%d1%80 http://zakon3.rada.gov.ua/laws/show/469/97-%d0%b2%d1%80 http://zakon3.rada.gov.ua/laws/show/2265-12 http://zakon2.rada.gov.ua/laws/show/v0309874-17 http://www.kas.de/ukraine/ukr/publications/48094 https://www.iea.org https://www.iea.org (accessed 2 may 2018) http://www.irena.org/documentdownloads/publications/renewable_power_generation_costs.pdf http://www.irena.org/documentdownloads/publications/renewable_power_generation_costs.pdf http://www.iea.org/publications/freepublications/publication/projected_costs.pdf http://www.iea.org/publications/freepublications/publication/projected_costs.pdf http://www.iea.org/publications/freepublications/publication/projected_costs.pdf http://www.rosbiogas.ru http://zorg.ua http://uabio.org/img/files/news/pdf/uself-re-developers-manual-ua.pdf http://uabio.org/img/files/news/pdf/uself-re-developers-manual-ua.pdf http://uabio.org/img/files/docs/position-paper-uabio-9-en.pdf http://zakon5.rada.gov.ua/laws/show/n0002120-13/paran3#n3 http://zakon5.rada.gov.ua/laws/show/n0002120-13/paran3#n3 http://zakon3.rada.gov.ua/laws/show/575/97-%d0%b2%d1%80 http://zakon3.rada.gov.ua/laws/show/575/97-%d0%b2%d1%80 http://zakon3.rada.gov.ua/laws/show/2755-17 http://zakon3.rada.gov.ua/laws/show/2755-17 http://sfs.gov.ua/mk http://www.bbc.com/ukrainian/features-42241172 http://www.bbc.com/ukrainian/features-42241172 http://www.amc.gov.ua/amku/control/main/uk/doccatalog/list?currdir=94801 http://www.amc.gov.ua/amku/control/main/uk/doccatalog/list?currdir=94801 https://ips.ligazakon.net/document/view/t031087 1125-3985-1-le.qxd 1. introduction despite the interest in ‘community energy’ from industry, activists, policy makers, and concerned citizens across the globe, there is limited academic literature addressing the different aspects of this complex entity as a whole. academic research has paid abundant attention to the technology, and some attention to the social aspects of these implementations but in a fragmented way. starting in the 1970s, researchers – like lovins [1] and then courrier [2] – were already arguing that the transition to renewable energy was a matter of systematically addressing social and situational problems whilst also solving technology issues; it was clear to them that the “so-called soft issues” were just as determinant for the success of a renewable energy project as its technical feasibility. even today, almost forty years later, researchers are still arguing that the international journal of sustainable energy planning and management vol. 08 2015 31 energy transition is more than just a techno-economic problem [3–8], but the approach remains fragmented. the aim of this paper is to define an urban cren as a holistic socio-energy [4] entity and review the literature that deals with the different aspects that an interdisciplinary approach to such implementation would need to address for project success in a greenfield setting. the context for this analysis is based in australia but we believe it is applicable to other jurisdictions as well. 2. community renewable energy network (cren) for the purpose of this research, community renewable energy network (cren) refers to an electricity smart microgrid, with mostly renewable electricity generation, owned and operated by a community for its supply of electricity and potential trading benefit. in this context: * corresponding author e-mail: elizabeth.tomc@sydney.edu.au international journal of sustainable energy planning and management vol. 08 2015 31-42 community renewable energy networks in urban contexts: the need for a holistic approach ������� �� ��� ������ ������ ����������� ���������� � ��� �� ��������� ��� ������� �������� ����� ������������� ��� �� ����������� !!"��#���� �� abstract despite a ubiquitous interest in community energy, a review of the literature reveals a fragmented approach in which the technology elements that need to be considered for the effective existence of cren are well understood but the social aspects have not yet been addressed to the same degree. thus, while technology is no longer the limiting factor it used to be and there are mechanisms that can be used to deal with the social requirements, the fragmentation remains a challenge. the next necessary step in the exploration of community renewable energy lies in crafting a holistic approach that brings it all together to foster successful implementations. the aim of this paper is to define an urban cren within this holistic outlook and review the literature that refers to the different aspects that need to be considered for project success in a greenfield setting. in conclusion, the authors suggest the reconceptualisation of cren as an organisation to create a business model in which the technology and social aspects are approached in a transdisciplinary manner to achieve the effective creation and ongoing operation of such networks. keywords community energy renewable urban microgrid url: dx.doi.org/10.5278.ijsepm.20158.4 dx.doi.org/10.5278.ijsepm.20158.4 32 international journal of sustainable energy planning and management vol. 08 2015 community renewable energy networks in urban contexts: the need for a holistic approach – community refers to: • inhabitants of a specific, well-defined geographic location in an urban setting • working as an entity to implement a renewable energy system as primary source of electrical for their community • owner of the generation, distribution and consumption of the system • responsible, directly or indirectly (if outsourcing), for: • management of generation, distribution and control assets • operation of the system • governance • responsible for costs and realisation of benefits related to the system and its operation – smart microgrid refers to a power network that: • uses mostly renewable sources for the generation of electricity and thermal energy • uses energy storage to manage the intermittency of renewable energy sources • could, if required, use some on-site thermal generation • uses smart technology -like smart meters and controllersto allow active participation and optimal utilisation of resources • aims to work islanded but can be connected, on demand, to the grid for the purpose of: • trading electricity with the grid bidirectionally -e.g. during emergency peaks • participating in a local energy market (lem) -e.g. trading with other cren in the same locality 2.1. why the innovation in the community energy concept community is a concept with many and varied meanings that are selectively exploited within many and varied fields for, again, many and varied purposes. within the context of energy, as walker et al [9–11] described, ‘community’ is a term that applies fairly loosely to actors networked in just about any way with the purpose of advancing the implementation of renewable energy. for areas like woking [12] in the uk, bornholm in denmark, and freiamt [13], wildpoldsried [14] and feldheim [15] in germany, to name a few notable examples, community renewable energy has meant local governments – suburban in the case of woking, insular in the case of bornholm and small regional towns in the german contextmanaging to provide for their power needs by a combination of re technologies and fuels that range from pv and wind to biomass and biogas. in cost structure & revenue strems financing systems charging for service outcomes private policy public policy articles of association bylaws pcc smart microgrid loads tcl smart metering load control load control load control load control load control charge control charge control charge control charge control dc dc dc ac ac ac charge control regulation existing distribution networks business models legislation requirements collaboration social technology electric subsystem thermal subsystem external governance internal governance economics human infrastructure figure 1: elements in a holistic approach to cren the australian renewable energy setting, community, in terms of implementations, has generally implied the more universally occurring community-owned re initiative where either a group of residents in a remote location not serviced by existing electrical infrastructure or a group of grassroots investors join resources to install generators -usually wind turbines and some solarin mostly rural environments, to sell electricity by connecting to the grid [16–19]. lately -within the past four years“goal-oriented virtual communities” have been proposed by some researchers who see utilising the smart grid as a way to bring together prosumers and consumers into a prosumer consumer group (pcg) [20–22] for which the understanding of the modes of association is still work in progress [23–25]. crens, just as all of these re community arrangements, fulfil the goal of advancing the penetration of re technologies necessary to curtail co2 emissions and -as in the case of the local government areasto provide a certain level of energy autonomy. however, for cren, as opposed to cre installing generation to sell to the grid, the main objective of the association is to coordinate supply and demand in a way that takes advantage of the collective to optimise the use of resources within the localised community. for urban cren, the electricity is actually generated and consumed locally, resulting in minimal or no interaction with the larger electricity grid. thus, a well-designed cren keeps behind the meter at its single point of connection what grid operators at all levels claim are some of the problems with quality of supply of highly distributed re -namely unpredictability which affects dispatch capacity and harmonic distortion as well as electromagnetic interference resulting from the vast number of supply connections. in addition to the technical advantage of internal consumption and single point connection, crens also offer the benefit -over those systems implemented by local governmentsof having the community actually own the assets directly, without abrogation of ownership rights to a public entity which then represents those rights by delegation within timeframes and parameters that do not necessarily meet the specific needs of the community at any given point in time; it is an accepted truism that shareholders are always better served than voters. furthermore, in contrast to a pcg, a cren as an autonomous entity offers the benefits explained later in this article derived from what some social researches define as ‘community’ [26] which an aggregation of autonomous prosumers with tenuous links fundamentally based on financial self-interest is unlikely to provide. finally, crens provide incentives for developers to implement this re networks to derive a couple of potential benefits: a point of differentiation in terms of environmental responsibility and shared value and as an additional asset for sale within the developments. even though industry claims that buyers are not at all concerned about electricity sources when making purchasing decisions that include double garages or luxury finishes, the proliferation of rooftop solar does denote a level of interest that could easily be exploited by marketeers selling autonomy and protection from price increases along with the garages and granite bench tops. 2.2. why an approach at this collective level the essence of the answer lies on the folk wisdom enunciated by two thinkers: jonathan kozol’s “pick battles big enough to matter, small enough to win” and aristotle’s idea, when describing his concept of emergence, that the whole is greater than the sum of the parts. starting with kozol’s folk wisdom legacy. the evidence of anthropogenic induced global warming has long existed [27] and clearly indicated that the reduction of greenhouse gas emissions is a challenge that needs worldwide action. it is, therefore, no surprise that climate change has been discussed at a global level since the first world climate conference in 1979 and has remained an issue on the international policy agenda ever since [28]. however, despite the efforts by the united nations to globalise action, the struggle to reach multilateral agreements considering conflicting interests from diverse countries across five continents has been slow and at times has even halted any progress towards action. clearly more a war than just a battle, so since the last decade of the past century, there have been calls [29–31] for more regional approaches that consider incorporating the larger concerns into more localised issues and policy implementations that more closely suit the people to which they apply. elinor ostrom, nobel prize in economic sciences 2009, while not discounting the contribution of global efforts, demonstrated through her work over more than three decades that common resources can be successfully managed by associations comprised by the people using those resources rather than by government intervention or privatisation [32]. furthermore, given that large scale problems such as global warming are the result of the aggregation of actions taken by individuals at different levels of international journal of sustainable energy planning and management vol. 08 2015 33 elizabeth tomc and anthony michael vassallo organisation, she also argued that focussing on encouraging polycentric approaches, rather than just worldwide efforts, can produce considerable benefits at multiple scales as well as foster experimentation which leads to important learning [33]. the inherently distributed character of renewable energy sources and technologies offers communities the scale flexibility and localisation that provides concrete benefits like autonomy and cost-free fuel for power generation, while achieving the goal of lowering co2 emissions from electricity generation. this re localisation which contradicts the traditional fossilfuelled business models inspired by insull’s “massing of consumption” [34], on the other hand, suits the selfinterest of individuals and communities, thus providing the ground for winnable battles. finishing with the folk wisdom legacy of aristotle, it is to be noted that a community is not just a sum of individuals but an aggregation of multiple resources that, when combined, provide much more than greater purchasing power and better negotiating position [35–39]. 2.3. why urban similarly to other countries implementing community renewable microgrids [40–44], australia is focussing on this type of system as a means of providing electricity service to remote or rural communities. these communities are characterised by accessibility constraints, and cannot easily or cost-effectively be provided electricity services by the existing transmission and distribution networks. the obvious fit of renewable energy systems to sites that by their very isolation provide ideal conditions for solar and wind harvesting makes them the evident choice for rural and remote settings. there is no arguing that this scarcity of viable alternatives and abundance of renewable resources must make these rural and remote communities a necessary part of the end game for these technologies. however, as researchers [45, 46] argue and walker [47] concludes after his study on barriers and incentives for community-owned generation and use, the implementation of cren in urban settings is crucial for the proliferation of distributed renewable energy systems, particularly pv as is unfolding in the australian context now. these systems cannot only be seen as means of supplying electricity services when fossil-fuelled alternatives are not commercially viable, but as an effective way of achieving carbon reductions at the very large scale that the aggregation of individual efforts at grassroots level can provide. in australia’s context, this is particularly relevant given that 89.5% of its inhabitants live in urban areas [48], and the population of its capital cities has an annual growth on average double that of other regional areas [49]. this disproportion between rural and urban populations makes the magnifying property of density an important consideration when applying effort. for example, a modest 5% increase in penetration of solar electricity generation in urban environments would require an uptake of the same technology by almost half (43%) of all rural population to achieve an equivalent result in terms of installed capacity. however, it is to be noted that the density that makes urban environments an ideal focus for renewable penetration is also what ensures that established fossil-fuelled technologies have a strong presence making incumbent suppliers the default option for most urban end users. it is argued as common knowledge that the density of urban environments provides disincentives to community energy due to quality of space constraints and the ubiquitous presence of the grid which makes access to reliable electricity very easy and cost competitive when compared to renewable energy system implementation. however, as prices of technologies like pv and batteries fall, the cost parity with the grid is already being achieved by individual re systems that incorporate all the necessary elements [50], and this favourable position is further enhanced by the increased purchasing power and operational efficiency that derives from the aggregation of re elements in a community setting. australia provides a good example of how the apparent urban challenges are mitigated resulting in pv implementations thriving in metropolitan areas. 3. technology aspect 3.1. smart microgrid and energy management systems (ems) the grid that underlies the traditional electricity networks resulted from the need to transport electricity from remote generators to end users in urban centres or mostly clustered rural populations whose only concern about the electricity system was that it made supply reliably available at all times and did so at the lowest cost for consumers. in this traditional suppliercontrolled grid, all decisions are made by a centralised 34 international journal of sustainable energy planning and management vol. 08 2015 community renewable energy networks in urban contexts: the need for a holistic approach operator who ‘owns’ all the unidirectional flows of both electrons and communications. the shortcomings of this arrangement -electricity losses during transmission, inefficient provision of capacity to meet sporadic peak demand, vulnerability to vast area blackouts resulting from localised faults, energy conversion inefficiency of base load generators, and limitation of end-user contribution to both their own and overall system functioning, to name a fewmade a rethink of the old system a necessity that is addressed by a more modern approach that has come to be known as the “smart” grid. in the smart grid, distribution can replace centralised generation, the unidirectional, hierarchical communication is replaced by two-way communication between all the nodes in the network, mechanisms like demand side response (dsr) to deal with peak demand are supported by the flow of information and the pervasiveness of control, fault vulnerability is replaced by resilience, multiple generation technologies can supply electricity to the network simultaneously in a localised manner, and a ‘choiceless’ end-user becomes an empowered customer. from a national perspective, or even just from the point of view of the existing networks, this kind of new approach requires vast financial outlay to replace existing assets on which large amounts of both pecuniary and valued technology capital has been invested for the past seven decades. complex and power-valuable organisational and management structures intrinsic to the old system will also need to be overhauled in ways that many incumbents will resist. thus, the smart grid will come to be as a result of smaller considered implementations within the traditional grid, bringing about the change as an evolution rather than a revolution [51]. the creation of a community microgrid, therefore, seems the ideal building block for a smart grid as at its inception it is not tethered by old paradigms and infrastructures, thus allowing for new approaches as a matter of fact. however, some researchers [52] conclude in their study on smart grids for community energy delivery, communities do not have the economic critical mass that large utilities can achieve when implementing sophisticated technology, hence making the allimportant financial aspect the make-or-break pivot point of these implementations. on the other hand, the clustering potential inherent to network configurations, can provide these community microgrids the capability to overcome the pitfalls of small scale when creating their smart grids as part of the bigger one [22, 53–55]. this ‘molecular’ approach not only facilitates the building of the whole but also provides to the communities themselves multiple benefits like autonomy, flexibility, efficiency and scalability [56]. furthermore, due to their technology agnostic character, the smart microgrids also offer communities a broad choice of technologies for energy generation from diverse sources, storage options, system and energy flows management, to control mechanisms for varied implementation strategies, and growth [57–71]. thus smart microgrids provide communities the ideal means of implementing the renewable energy systems required to contribute to the greenhouse gas abatement at a local level. 3.2. solar, wind and hybrid generation with energy storage in the past three decades, rapidly advancing renewable energy technologies have gone from struggling attempts [72] to viable alternatives [73] that allow a return to the localised generation and consumption configuration of the original electricity networks. the growing body of research on the established and new solar technologies [74–77] relevant to urban cren and the consequent understanding and advancement in their production and implementation have resulted in easy accessibility and falling prices that make them increasingly an attractive option to consumers desiring energy autonomy. at present, the main drawback for these systems is the intermittency of their sources, making storage a necessary component of a cren aiming to optimise the use of re resources. as it happens, energy storage of all types and at all scales has also been the subject of intense and rapidly advancing research [78–81], which is having the same effect on this type of technology as it did on the generation technologies. this abundance of technically detailed literature about the different technologies might seem overwhelming for cren planners who in the ‘real’ world just need a solution that optimises the use of resources. albeit there being various, relatively userfriendly, publicly available tools that have resulted from the detailed research [82–86], there is very limited academic literature [87–91] on how to use models to plan community systems that make optimal use of the contribution potential of each of the available generation and storage technologies. international journal of sustainable energy planning and management vol. 08 2015 35 elizabeth tomc and anthony michael vassallo 3.3. plug-in electric vehicles although not strictly a necessary part of a cren, plugin electric vehicles are likely to become itinerant components that can be either a load or a charge that has a considerable effect on a system that intends to rely principally on re energy sources and storage. pevs, regardless of the technology -hybrid or full electricpresent benefits and challenges to any electric system to which they attach -be it a large regional grid or a neighbourhood microgrid [92–94]. albeit there being a growing body of technical literature aimed at dealing with ways of addressing the challenges and harnessing benefits of pevs [95–99] from a technical point of view, there is a lack of academic literature on the governance and strategic management of pevs in a cren. research is needed into the social aspects of the connection -like driver convenience, financial incentives and internal governanceand their impact on behaviours that could yield a relevant contribution to making the batteries of those vehicles provide additional storage when needed while reducing the likelihood of creating excessive load on the system at any given point in time. 3.4. geothermal and solar systems for temperature management direct geothermal, although widely used in other parts of the world, in australia is an emerging technology [100] that is having its potential for cooling and heating buildings researched at present [101]. for the purpose of this cren research, geothermal is only considered as a means of reducing cooling and heating requirements; ergo, more a contributor to dwelling efficiency rather than to the general energy generation pool of the system. solar hot water systems for generating thermal energy is a mature technology that has wide acceptance within the general community because of its proven effectiveness in reducing ghg emissions while achieving cost reductions in electricity expenditure. in australia, these systems are generally used by individual dwellings as means of providing a large proportion of the hot water needs for that dwelling, and there is no research into the contribution that these systems could make to a cren -not only as providers of hot water for direct use but as providers of thermal storage for the general system or as providers of heat for absorption chillers to deliver cooling services either at communal or individual level. 4. social aspect even though the social aspects of community renewable energy have not been the subject of the same level of attention as the technical factors, there is a sizable body of literature on the subject. community engagement [36, 37, 102–105], financial participation models [106], trust [10], equity issues [107], different degrees of individual involvement [108], community attitudes [109] and perceptions [110], the use of social and economic instruments to positively modify attitudes and behaviours to energy generation and use [111] as make-or-break elements for the successful implementation of cren have been considered as on par with the technology solution by the literature. nevertheless, this research has suffered the same fragmentation as the technology research; there is a paucity of research integrating all the different elements that need to be brought together to make a cren a feasible possibility from either a community or a developer perspective. considering the governance requirements, given the industrialised nations’ ‘carbon lock-in’ [112], which in australia is exacerbated by the vast mining interests and incumbents in the energy industry influencing the perception of fossil fuels as economic pillars of the national economy [113], the legislative and regulatory backing necessary for the transition to renewables at national level is going to require disruptive change. due to the fact that governments come and go, and with them the pushes for or against renewable energy utilisation, the implementation of the initiatives necessary for this change becomes a sisyphean task when it relies on topdown approaches guided by the policies of the government of the day. a bottom-up approach like the one implied by cren is more likely to provide the required change on a more stable basis, for a longer time horizon than an average electoral cycle. 5. conclusions and future work this review of the literature that deals with the discrete elements of a cren reveals that there is abundant information about its components, but it seems that the complexity entailed in connecting those disciplines at the level of specialisation and depth that traditional academic research requires stands in the way of the needed integration. 36 international journal of sustainable energy planning and management vol. 08 2015 community renewable energy networks in urban contexts: the need for a holistic approach existing research suggests that for the successful implementation of cren: • re technology is no longer the limiting factor it used to be before steady advances in generation and storage, coupled with efficiency gains in consumption, made autonomy for these systems an attainable reality • the smart grid approach -allowing bidirectional flow of information and electricity as well as flexibility, scalability and technology agnosticismprovides the necessary underlying distribution and control infrastructure • the social aspects -at high level, namely collaboration, economics and governanceneed to be considered on par with technology and intrinsically incorporated into any working solution • the lack of a holistic perspective on these complex systems makes a transdisciplinary approach the next necessary step in the exploration of community renewable energy it is the contention of the authors that, instead of attempting to connect the elements from either the technical or social science perspectives, it would be helpful to seize all the contributions from those disciplines and concentrate on how to bring them together. the next step of this research focusses on reconceptualising cren as an organisation providing a service -either for or not for profitthus offering that ‘outside’ standpoint that brings together all the elements into a business model aimed at making a cren work. the research will delve into suitable business models considering things like: • mix of technologies for optimal system implementation • cost structures and revenue streams to optimise funding and ongoing operation • clearly defined management structures and governance to ensure collaboration and equity • necessary relationships and partnerships to provide a convincing value proposition that underpins 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standards do not differentiate between low and carbon intensive investment and do not take into account climate risks beforehand. to tackle these issues, we make some recommendations to promote long-term and low-carbon investment. 1. introduction while capital investment, both private and public, is supposed to have a powerful knock-on effect on economic growth, we observe a falloff in the global rate of investment (gross fixed capital formation) during these past three decades. this rate dropped from 26.1% of world gdp (gross domestic product) in 1974 to 21.8% in 2009, representing a cumulative decline of roughly $20 trillion [1]. the decline, which was concentrated in developed countries, has accelerated since the 2007 crisis. for example, investment in the euro zone decreased from 26% of gdp in 1970 to 18% in 2013. the european commission estimates that between 2010 and 2020 the european union will need to invest approximately €1.6 trillion in infrastructure for cross-border transport of goods, people and energy. the energy transition will likewise involve spending from 2% to 3% of gdp international journal of sustainable energy planning and management vol. 15 2018 11 over a ten-year period. in the case of europe, that will mean spending roughly €3 trillion in the course of a decade [roadmap, 2050]. this decline in investment has proven to be a drag on economic growth. from 2000 to 2008, output grew 2% in the developed countries against 5.3% in the years from 1960 to 1970 [1]. both the oecd (organization for economic cooperation and development) and the imf (international monetary fund) have in fact stressed the sluggish pace of investment recovery in europe. capital investment and low-carbon investment in particular can be considered a prerequisite to a return to strong, sustainable, job-rich growth [2]. indeed, climate change is one of the most important issues facing developed and emerging countries. according to the intergovernmental panel on climate change (ipcc) report (2014) each of the last three decades has been successively warmer at the earth’s surface than 1 corresponding author e-mail: sandra.rigot@univ-paris13.fr international journal of sustainable energy planning and management vol. 15 2018 11–20 potential impediments to long-term and low-carbon investment: the international accounting standards at stake sandra rigot*1 and samira demaria** * department of economics, university paris 13, cepn, paris sorbonne cité, 99 boulevard jean baptiste clément, 93230 villetaneuse, france ** department of management, university côte d’azur, gredeg, 250, rue albert einstein, 0650 valbonne, france keywords: long-term investment; low-carbon investment; accounting standards; banks; insurance companies; url: dx.doi.org/10.5278/ijsepm.2018.15.3 12 international journal of sustainable energy planning and management vol. 15 2018 potential impediments to long-term and low-carbon investment: the international accounting standards at stake any preceding decade since 1850. the increased energy stored in our warming atmosphere has the potential to have enduring economic, social, and financial consequences. the ipcc also states that some regions will experience more extreme heat while others may cool slightly. this could result in flooding, drought and intense summer heat, violent storms and other extreme weather events. moreover, our current understanding of the potential financial risks posed by climate change to companies, investors, and the financial system is still at an early stage. the large-scale and long-term nature of the problem makes it challenging, especially in the context of long-term economic decisions. there is a need for define long-term investing beforehand. what makes defining long-term investment such a crucial issue is that there is no legal, much less universal, definition of the term. the definition we will retain for long-term investing is based on three complementary facets of the concept of long-term investing [3]. a definition of long-term investing based on these three complementary facetsi will form the analytical framework for identifying potential shortterm bias in the accounting rules that apply to banks and insurance companies. the first facet related to the nature of the investment project rests on the assumption that long-term investment involves investing in capital assets (carbon and low-carbon investment) to be distinguished from financial capital. the second facet can be apprehended through the nature of savings and nature of long-term financing instrument. long-term savings should rank highest, as they involve lower liquidity constraints for providers of funds. long-term vehicles should be promoted for financing long-term investment projects. the third facet focused on defining long-term behaviour and how it differs from short-term behaviour via countercyclical investment strategies (as opposed to momentum management) and low portfolio turnover and via the promotion of partnership-based governance, both for asset management purposes of the companies in which they invest their own funds (instead of shareholder value governance). this decrease in investment can be attributed to changes in the demand and supply of capital. long-term investment and low-carbon investment depend on both available funding and corporate decisions. in terms of capital demand, the key challenge today is to achieve the kind of innovation (radical and incremental) that will contribute to a successful energy transition (above all to a low-carbon economy). in terms of capital supply, the contrast between weak investment and plentiful savings can be analysed as inefficient allocation of savings, resulting from the short-term bias of market participants and the most important financial intermediaries. on this point, there has been a rough consensus for some time in academic literature, along with growing awareness among finance professionals (like larry fink, the chairman and chief executive of blackrockii), regulators (paul volcker, former chairman of the us federal reserve or lord adair turner, former chairman of the uk’s financial services authorityiii) and academics. the latter questioned the economic usefulness of financial innovations [4] or the positive correlation between the size of the financial services sector and economic growth [5–9]. among the explanations advanced for shorttermismiv is that regulatory requirements may encourage financial intermediaries (banks, insurers…) who might otherwise finance long-term investments, to adopt a short-term bias. indeed, they are submitted to a regulatory framework that imposes varying degrees of requirements that evolve over time. among these requirements, there are ifrs accounting standards (international financial reporting standards). if they are supposed to enhance transparency needed to improve the resilience of the financial system, the question is the following: could the accounting requirements be in danger of hindering long-term investment and low-carbon financing? the aim of this paper is to offer a different slant on this issue by seeking to identify short-term bias in the accounting standards that apply to banks and insurance companies – the primary providers of corporate funding. because it is particularly hard to quantify the impact of i the european commission seems to have endorsed a number of these conditions for investing under the european long-term investment fund (eltif) regulation, which entered into force in december 2015. examples include a five-year investment period, which amounts to introducing a certain amount of illiquidity into asset management, and the specification that long-term financing through such funds should go to real-economy assets, not to mention the prohibition of certain financial innovations. ii american global investment management manager. iii uk financial watchdog. iv another possible explanation has to do with the growing number of management mandates given to competing external asset managers, who have an incentive to seek short-term rather than long-term returns. by making the investment chain longer and more complex, the expanding role for asset managers has not only contributed to lower investor involvement with business management; it has also raised the cost to agents in need of funding and led to asymmetric risk taking. a given accounting requirement, we have opted for a qualitative approach to identify the direct and indirect impact of those reforms on the intermediation activity of banks and insurance companies (lending and asset allocation). section 2 presents the international accounting requirements of financial intermediaries. section 3 introduces the various research methods used in the paper and the nature of qualitative data collected. section 4 presents the main negative effects of ifrs on long-term investment funding by banks and insurance companies. section 5 concludes. 2. international accounting requirements and theoretical framework 2.1. international accounting requirements since 2005, all quoted european firms must apply ifrs standards to present their financial statements. these standards replace national accounting rules (which stay in application for unquoted and small firms). ifrs standards are based on a conceptual framework that encompasses all the major principles that must guide the development of accounting standards. this framework stipulates that the financial statements must comply with the information needs of current and potential investors [10]. in order to produce financial statements that are in line with investors’ needs, the iasb (international accounting standard boardinternational standard setter) promotes accounting combining valuations at cost and fair value, but it is this second model that appears to be preferential. this predominance of fair value accounting in the ifrs model is particularly significant in terms of both short and long-term investment valuations. the ifrs standards are intended to be applied by all companies regardless of their sector of activity in order to provide the reader relevant and comparable information for economic decision-making. the valuation and accounting of long-term investments is primarily governed by the financial instruments standards. ias 39 is applicable for financial years beginning before january 1, 2018, but after this date ifrs 9 applies, except for the insurance sector which obtained an exemption until 2021, given the importance of investment portfolios. generally speaking, these two standards propose a mixed approach of accounting valuation: namely the historical cost and the fair value. however, in practice, they have an approach that favours valuation at fair value in order to disseminate relevant information for investors. the main difference between these two standards is based on the conditions of application of one or the other method. while ias 39 allows a very restrictive use of the historical cost method, ifrs 9 allows more flexibility in the choice of the valuation model. it should be noted that, whatever the standard, the standard setter considers that only assets with a defined maturity (such as bonds) can be considered in the medium or long term; other assets (listed shares, private equity, infrastructure shares) are considered as short-term assets in connection with the fair value measurement. regarding loans granted by banks, ias 39 allows for their exclusive recognition at historical cost, whereas ifrs 9 requires that the characteristics of the loan (duration and type of interest rate) be taken into account in order to determine the valuation method. but this standard do not differentiate between lowcarbon and carbon investment concerning assessment of assets. indeed actually, ifrs does not regulate the accounting of environmental risks or the disclosure of information relating to responsible investment. while some environmental or societal issues may indirectly appear in the ifrs accounts through some standards (ias 1, ias 37 for example), there are no specific rules in this area. moreover, it can be noticed that the iasb texts often refer to the environment in an economic or technological context but never in the sense of natural risks. the measurement and recognition of low-carbon investment is mainly affected by ias 36 impairment of assets and ias 37provisions, contingent liabilities and contingent assets. these last ones are a rarity because they outlines the accounting for provisions (liabilities of uncertain timing or amount), together with contingent assets (possible assets) and contingent liabilities (possible obligations and present obligations that are not probable or not reliably measurable), for example the cost of cleanup in case of offending environmental damages or the dismantling of polluting installation (nuclear or oil). our study emphasizes that climate risk which can be divided into physical risk and transition risk is only considered afterwards (once assets are stranded) and not beforehand (that is to say there is no specific accounting treatment not to penalize low-carbon investments). 2.2. theoretical framework ifrs standards are in line with the agency theory, which advocates reducing information asymmetry between international journal of sustainable energy planning and management vol. 15 2018 13 sandra rigot and samira demaria firms’ shareholders and managers. in fact ifrs standards aim to provide the best information to current and potential investors in order that they take economic decisions (purchase/sale of securities). ifrs standards are also in line with the efficient market hypothesis which postulate that market prices always reflect all available information instantaneously [11]. the use of fair value measurement, based on current market price, as the primary approach to measurement assumes that market prices provide accurate information enabling the best allocation of resources. that approach is supposed to convey a transparent, verifiable information that is relevant to decision-making. some empirical researchv shows that fair value accounting increases the relevance of accounting information for investors, as compared with amortised cost accounting. to assess the quality of fair value information, these researches have specifically examined its impact on either a company’s share price or the market value of its equity (using a statistical regression model). most of the results, however, have only limited validity, as they are based only on portfolios of quoted equity instruments (there has been little or no research on other products such as bonds and alternative asset classes). more consequentially, the authors have been unable to prove indisputably that fair value measurement is superior to measurement at cost. furthermore, the results are not statistically significant and explanatory variables may have been omitted. some studies also point out negative effects of fair value accounting, such as higher volatility. detractors of fair value accounting emphasise its effect on financial statements and on the behaviour of both investors and managers [18–24]. they show that fair value accounting introduces more volatility into financial statements (through the valuation of portfolios and equity, where fair value re-measurements are recognised). this effect is particularly important for mediumand long-term investments that should normally remain on the company’s books for a long period. moreover, fair value accounting seems to induce procyclical and short-termist strategies. faced with volatile financial information, market participants react instantly (with momentum strategies) and abandon their initial long-term strategies. we can notice that to our knowledge there is no academic research on the impact of ifrs standards or fair value accounting on lowcarbon or responsible investment, certainly due to the fact that these standards ignore those issues. 3. data and methodology our research is based on qualitative analysis. first, we conducted 60 semi-structured interviewsvi at financial institutions from april 2013 to september 2015. the diversity of the respondents led to the collection of a sufficient amount of empirical information to identify if ifrs standards are an incentive or a constraint for longterm investment. all the interviews were conducted under a confidentiality agreement on the information retained and on the identity of the interviewee; this allows a more open debate. the interviews were conducted using an interview guide. the principle of the semi-structured interview allows researchers to ask additional questions based on the progress of each conversation. the interviews ranged from 40 to 160 minutes. they were fully recorded, transcribed and then validated by the interviewees. the transcripts were coded by researchers with the n’vivo 10 software. this tool helps to organize and rationalize the coding process. it enables us to easily compare and find data theme in our corpus. at first, in accordance with the recommendations of [25], we made an open coding based on the themes of the interview guide, and then in the second step we made an axial coding to identify relationships between different levels of coding and link them to the problem of long-term investment. the coding scheme was conducted jointly by researchers. the findings synthesis corresponds to the most frequently raised theme by respondents to characterize accounting rules for longterm investment in the insurance industry context. in addition, we have established a qualitative database from responses to the public consultation launched by the european commission on its green paper on the longterm financing of the european economy, made public in march 2013. green papers typically present a range of ideas with the aim of initiating europe-wide consultation on a specific issue. interested parties, organisations and individuals are encouraged to submit their views in writing before a given deadline. the green paper raised 30 questions, among them the definition of long-term investment, the role of banks and institutional investors in long-term financing, the impact on long-term investment of prudential and accounting regulation for financial intermediaries. we have consolidated the 11 categories identified by the european commission into 5 large groups of respondents: financial intermediaries (banks, insurance companies, pension funds and other investment 14 international journal of sustainable energy planning and management vol. 15 2018 potential impediments to long-term and low-carbon investment: the international accounting standards at stake v [12–17]. vi banks (23), insurance companies (18), pension funds (11), regulators and standard-setting bodies (9), consulting and other firms (13). funds), market intermediaries (auditors, accountants, consultants, financial market participants, regulatory and oversight bodies, civil society, and non-financial companies. given the number of respondents, the range of sectors in which they operate and their diverse national backgrounds, our database can be considered a representative as european sample. in this paper, we focus on the question related to the impact of fair value accounting on long-term investment (question 20). during the study period, ias 39 was still in force and ifrs 9 under discussion. the latter was published in july 2014 before the end of the research. our study is therefore able to understand all the issues of these two standards in terms of long-term investment for stakeholders (banks and insurance companies). we have examined the responses of the full range of stakeholders (e.g., investors, banks, insurance companies, and regulators), clearly rendering their opinions and analysing them against the findings in the academic literature. while there is a body of theoretical and empirical research that seeks to demonstrate the beneficial effects of fair-value accounting on transparency or of prudential standards on financial stability, very few studies have focused on the connection to investment and low-carbon investment. 4. the impact of accounting standards on longterm and low-carbon investment we find broad consensus on the idea that long-term investing and financing are primarily affected by fair value accounting promoted by ifrs. indeed, both responses to the green paper and semi-structured interviews have brought to light the common impacts to both sectors, as well as those that are specific to banking and to insurance sectors. international journal of sustainable energy planning and management vol. 15 2018 15 sandra rigot and samira demaria table 1: firms and interviewees firms and number of interviewees bnpp group (4) swisslife (1) acpr (2) cabinet ricol et lasterie (3) bnpp cbi (1) bnpp cardif (3) anc (2) pwc (1) bnp investment solutions (1) générali (1) iasb (1) deloite (1) bpce (1) smabtp (1) ifric (1) premium consulting (1) bpi france (2) ag2r la mondiale (1) european commission (3) fixage (1) bsi bank (1) crédit agricole predica (2) efrag (1) insti7 (2) caisse des dépôts et consignations (4) axa private equity (1) af2i (1) crédit agricole (1) cnp(2) 2pm asset management (1) european bank of investment (1) french insurer association (1) allen & overy (1) fédération bancaire française (1) macif (1) ocde (1) la banque postale (1) axa (2) paris 10 university (1) scor (1) groupama asset management (1) positions of interviewees general directors (4)/ professional association presidents (2) risks directors (3) professors (2) financial directors (2) project managers (6) members of standard setter (3) accounting directors (7) portfolio managers (1) other functions (10) accounting standards directors (8) consultants (7) auditors (2) accounting and prudential standards directors (2) lawyers (1) total duration of interviews: 137h table 2: descriptive statistics of the qualitative database question 20 of the green paper: to what extent do you consider that the use of fair value accounting principles has led to short-termism in investor behaviour? what alternatives or other ways to compensate for such effects could be suggested? (number of respondents) received by the european commission 292 treated (available in english or french) 257 that answered to question 20 144 – from financial intermediaries (bank, insurance…) 66 – from market intermediaries 26 – from european institutions 31 – from french institutions 28 – from british institutions 24 – from german institutions 13 on the one hand, among financial intermediaries (banking, insurance, pension and other investors), nonfinancial corporations and non-professional account readers, the majority believe that fair value is short-term. on the other hand, the position of market intermediaries (regulators and consultants/analysts/auditors/accountants) is more divided with those who consider non-short-term fair value having a slight advantage. the support of the standard setters and accounting regulators can be understood in terms of relevant objectives and transparency of information, the latter considering that the reference to an observable market value is more difficult to manipulate and more useful for the decision-making than value at amortized cost that may be influenced by managerial decisions. this point of view is also consistent with the theoretical anchoring of current accounting standards that favour the investor as a recipient of accounting information in their conceptual framework, and that are based on the supposed efficiency of the markets. the attractiveness of fair value for business accounts readers, understood as the market value, can be explained by their desire to have comparable and reliable financial information between companies, and the use of a single reference for all companies can meet this requirement. as for the preparers of accounts, their opposition to fair value accounting can be explained by the difficulty of valuing certain assets and especially the inadequate representation of their performance. 4.1. general negative impacts on long-term investment to begin with, we find that ias 39 (financial instruments) has not affected long-term financing activity by banks. the standard calls for measuring loans and receivables at amortised cost (similarly to french gaap), which makes possible long-term management of such portfolios. ο “regarding the accounting of loans according to ias 39: there is no subject” (member of the french standard setter). in the case of long-term investing by banks and insurance companies, we observe a number of effects, some reflecting the low suitability of ifrs in their current form to the insurance business, and others pertaining to financial statements and the behaviour of insurance fund managers. for example we identify impacts of accounting rules on the behaviour of market and investment managers. indeed ifrs standards driven by fair value accounting have three negative effects, which is particularly emphasize by the professionals interviewed: first the introduction of higher volatility in the financial statement (balance sheet and income statement) due to the variation of investment measured by fair value that reflect market variations. this volatility is detrimental for the ownership of long-term assets, indeed their price vary at each closing date without reflecting their long term value. those re-measurements reflect changes in the market rather than in the actual performance of long-term investments. 16 international journal of sustainable energy planning and management vol. 15 2018 potential impediments to long-term and low-carbon investment: the international accounting standards at stake table 3: descriptive statistics related to the accounting question 20 of the green paper to what extent do you consider that the use of fair value accounting principles has led to short-termism in fair value is fair value is investor behaviour? short-termist not short-termist no response total financial intermediaries (banks, insurance, investors, pension funds) 42 11 13 66 market intermediaries 10 12 4 26 regulator and standard setter 4 9 2 15 other sectors 22 4 11 37 total 78 37 29 144 table 4: short-termism of fv accounting: the arguments of respondents why fair value (fv) accounting is % of respondents short-termist? to the question 20 fv increases volatility 55% fv reduces attractiveness for investors/managers 55% fv increases procyclicality effect 32% fv increases difficulties for fv measurement 27% fv does not suit for long-term asset/backed to long term liabilities 26% fv is correct for short-term business 18% fv does not suit for infrastructure/real estate assets 6% ο “when the iasb only proposes fair value as an evaluation method, we are against it, because we consider that, as we have a long-term activity, we cannot take into account in our income statement, the impact of real-time market valuation, as it does not reflect our activity; to the extent that we manage contracts over the long term, we do not have to be subject to these market fluctuations” (insurance, accounting manager) ο “completely fair value and therefore volatile performance measures leads, would lead, and will lead insurers to reduce the amount of risky investments (especially stocks), so as not to be subject to stock market fluctuations” (insurance, association professional). ο “we must be positioned on assets where we control volatility, we must reposition ourselves on assets whose market value may ultimately be better controlled” (insurance, deputy chief accounting officer). the increase in volatility is particularly detrimental for long-term environmental investments because they have particularly long deadlines (dismantling power station). an annual assessment of their instantaneous value does not make sense and on the contrary could lead readers of the accounts to misunderstand the quality of the investment. then investors and managers adopt a short-term behaviour: confronted with fluctuations in long-term investments, insurance fund managers adopt momentum strategies and review their asset allocation more frequently, with the result that the holding period for long-term assets has become shorter. ο “the philosophy of ifrs, is based on the following question: “if i scrap the business today, how much is it worth?” so it’s instantaneous value. it’s not taking into account future events, what’s going to happen in the future, it’s really today’s scrap value, and they do not take time into account. (insurance, director general) ο “we have an asset realization schedule that takes time into account and this vision of fair value in the very short term narrows our horizon and constrains us” (bank-insurance, head of accounting and prudential standards) ο “fair value accounting leads to a considerably shorter time horizon” (insurance, investment director). shortening investment horizons for institutional investors may have implications for financial investments where physical and low-carbon investments may be longer-term and riskier than traditional investments. at last fair value accounting create a procyclicalvii effect that conduct to bubble phenomenon: fund managers adopt procyclical behaviour in that they adjust their investment strategies to reflect changes in the market value of assets. bull and bear market cycles become more pronounced as a consequence. ο “the biggest problem with fair value accounting standards is clearly the risk of procyclicality. having accounting standards without buffering leads to a lot of procyclicality, that is, as soon as there is an imbalance between assets and liabilities, this leads the actors to take immediate action “(insurance, director of investments). ο “a good system of financial regulation should be counter-cyclical, transactions ought to be registered with even more care so that the measures would be euphoric” (consultant). interviewees and respondents of the green paper consider that this valuation model reduces overall attractiveness for investors that is to say decreases their willingness to invest in long-term assets. indeed investors, having information biased by instantaneous market fluctuations, are led to adopt momentum decisions that disregard the initial holding horizon and the real performances of the firms. moreover they adopt a behaviour related to market variations that leads to procyclicality. ο “the issue now is that financial security should be guaranteed and that there is a need to develop mechanisms which avoid aggravating the amplification of the system. but if you support sustain fair value liabilities, then they have to live within the time: there, you add to the procyclicality” (assurance, director general). it appears that, for green paper respondents and interviewees, fair value accounting is aimed at current and potential investors in order to enable them to make relevant economic decisions in the immediate future, which does not correspond to the needs of long-term investors. these results support earlier researches to demonstrate the negative impacts of fair value accounting on financial statements and manager’s behaviour [20–22, 24]. international journal of sustainable energy planning and management vol. 15 2018 17 sandra rigot and samira demaria vii procyclicality refers to the tendency of financial variables to fluctuate around a trend during the economic cycle. increased procyclicality thus simply means fluctuations with broader amplitude. our study also put in evidence that ifrs standards have different effects on financial instruments which support long-term investments. what emerges from our analysis is that ifrs standards tend: – to put stable, countercyclical investments in stocks and alternative assets at a disadvantage ο “besides, it is still critical that strategic investments in equity are disadvantaged as the gains/losses being realized at sale cannot be recognised in net income; thus the so called recycling is prohibited. the adjustment of this inappropriate accounting treatment in ifrs 9 would encourage insurers to enlarge their investments in equity instruments. thus, we suggest moving towards the iasb allowing recycling at derecognition” (extract of the answer of standard life to the green paper). ο “in fact, we are going to find a strong impact of fair value on so-called diversification categories. that is to say, especially the equity part, but also on alternatives, infrastructure, etc., and derivative instruments that for accounting purposes are significantly less profitable “(insurance, director of investments). – to put plain vanillaviii and bond investments at an advantage ο “80% of our bond portfolio will move to cost under ifrs 9, while it was valued in fair value under ias 39” (chief accountant bank). – to have a neutral effect on the majority of loan portfolios and an adverse effect on non-plain vanilla loans ο “according to ifrs 9, the banking book is at cost, so there is no subject for us.” (accounting director). it appears that ifrs regulation can nevertheless favour the investment in green bonds since these can be evaluated at cost according to their business model. the drive for transparency and neutrality that predominates in these standards contributes to a snapshot view of portfolios that conflicts with the kind of long-term financing required by long-term investment projects. this analysis is in line with the report issued by the european commission in july 2017. according to this report, ifrs standards may have detrimental impact on responsible investment (referring to the potential impacts of ifrs 9). in concluding that it is important for the international standard-setter to take environmental issues into account in its framework [26]. 4.2. recommendations: the creation of a long-term accounting category our results highlight the difficulties created by ifrs for those managing assets held for the long-term and sustainable growth. based on these points and our review of the literature, we put forward proposals for how the ifrs standard-setting process can take the special features of long-term investing more adequately into account. underpinning our proposals is the asymmetric prudence principle, which calls for recognising unrealised losses only, but not unrealised gains. that outlook stands in contrast to the view of prudence upheld by the iasb, which can be equated with a neutrality principle that leads to recognition of both unrealised gains and losses. we propose to create a new accounting category for long-term and low-carbon investment. the idea of adapting ifrs standards to take greater account of long-term investment is cited by 21 respondents. they believe that taking into account long-holding periods is a prerequisite for accounting standards to convey a coherent representation of the economic reality. however, they do not offer solutions for doing this. it was during the interview phase that we were able to identify the key features of such an accounting category. this new category could be applied to all investors but a number of conditions relating to actual investor behaviour (facet 3 of long-term investing definition) and the nature of investment could be included (facet 1). • measurement at cost accompanied by a provisioning model that permits recognition of unrealised losses. • choice of a 5-year minimum holding period. • priority to low-carbon investments or investments in innovative companies. • mandatory disclosures of the following information in the notes to the financial statements: the composition of the portfolio, the exposures in carbon investment and low-carbon investment, changes in that composition with justification provided for rebalancing and the fair value of the assets held. this new long-term accounting category must provide an increase of long-term investment and lowcarbon investment by relaxing the accounting constraints on investment. 18 international journal of sustainable energy planning and management vol. 15 2018 potential impediments to long-term and low-carbon investment: the international accounting standards at stake viii simple instrument that only corresponds to refund of principal and interest. 5. conclusion our research into the impact of ifrs on longterm/low-carbon investment and financing by banks and insurance companies shows that those accounting standards affect different financial intermediaries in different ways. we would accordingly argue that the effect of those standards is not neutral (higher volatility, short-termism behaviour and procyclicality), and can even be adverse in the case of certain investments (particularly equities and alternative asset classes). moreover the fact that accounting standards do not take into account environmental risks is a critical issue for the development of a sustainable economy. as noticed by the european commission, it is important that accounting framework evolves to reflect all financial and environmental information needed by investors [26]. to address these factors and make accounting standards more supportive of long-term and low-carbon investment, we propose using the asymmetric prudence principle and creating an accounting category that allows certain types of investments with a long time horizon (stocks, private equity and infrastructure investments, low-carbon investments) to be measured at cost. the question of low carbon investments is a crucial issue because the environmental issue and its impact on the financial statements is no longer an ecological question. by the way, the financial stability board (fsb) published a set of recommendations aimed at all companies in order to improve the disclosures of financial information on the impacts of climate risks and opportunities [27]. acknowledgements we would like to acknowledge « energie et prospérité, financements et evaluations de la transition energétique » de la fondation du risque. references [1] mackinsey. farewell to cheap capital: the implications of longterm shift in global investment and saving. 2010; available from: https://www.mckinsey.com/~/media/ mckinsey/ global%20 themes/global%20capital%20markets/ farewell% 20cheap%20ca pital/mgi_farewell_to_cheap_capital_ full_ report.ashx [2] connoly d, vad mathiesen b. a technical and economic analysis of one potential pathway to a 100% renewable energy system, vol. 01 2014 7-28. international journal of sustainable energy planning and management 2014; 1:7–28. available 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 18 2018 53international journal of sustainable energy planning and management vol. 18 2018 53 1corresponding author e-mail: marta.guerra@ismai.pt international journal of sustainable energy planning and management vol. 18 2018 53–68 abstact during the 2008–2016 period, europe experienced successive crises, namely the 2008–2009 global financial crisis, the 2010-2012 sovereign debt crisis and the 2014–2016 commodity prices crisis. the year 2010 therefore signalled the beginning of recovery in the financial markets, as well as the outset of significant economic and social changes. having to deal with an increasingly challenging scenario driven by eu policies, european electric utilities (eeu) were heavily affected. this article intends to characterize the effects of financial crisis on eeu’ business performance. it is assumed that corporate indicators may reflect the impact of the financial crisis on businesses. they can also help characterize the economic and social scenario that preceded the sovereign debt crisis. an analysis of the environmental, social, economic and financial data was performed, as generally reported by eeu in 2010. using the principal components analysis technique, a set of indicators was identified to represent the drivers and challenges of a particular period of time that was determining in upcoming developments. the results obtained made it possible to identify the most significant issues and the indicators with greater explanatory power that represent the concerns and priorities of the companies under study at the threshold between two successive crises. 1. introduction “the last decade has been punctuated by a series of broad-based economic crises and negative shocks, starting with the global financial crisis of 2008–2009, followed by the european sovereign debt crisis of 2010– 2012 and the global commodity price realignments of 2014–2016” (united nations 2018). several economists consider the global financial crisis of 2008–2009 as the worst economic crisis since great depression of the 1930s [1]; [2]; [3]; [4]) due to its economic and social impacts. this “unprecedented event”, given its “severity, speed and international scope lead to deep and protracted recessions in both developed and developing countries” ([4]; [1]; [5]). in fact, some authors also regard the global financial crisis as a determining contributor to the ensuing sovereign debt crisis in europe [1]; [3]. others, such as geels [6], have presented a different perspective, proposing that the financial–economic crisis could involve the positive or negative impact on boosting sustainability transitions. the author concluded, “the early crisis years (2008– 2010) created a window of opportunity for positive solutions” in order to promote sustainable development in the eu countries. the year 2010 marked the beginning of recovery from the global financial crisis. it also marked the emergence of the sovereign debt crisis, which mainly affected peripheral eu countries. nonetheless, financial crisis: understanding the effects on european electric utilities’ performance marta guerra-motaa*; thereza aquinob and isabel soaresc adepartment of business sciences, ismai university institute of maia and unices, maia, portugal bdepartment of industrial engineering, ufrj universidade federal do rio de janeiro, rio de janeiro, brasil cfaculty of economics, university of porto and cefup, porto, portugal keywords: european electric utilities; financial crisis; corporate indicators; principal components analysis; url: http://dx.doi.org/10.5278/ijsepm.2018.18.4 http://dx.doi.org/10.5278/ijsepm.2018.18.4 54 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance demand, decreasing spreads for generation and funnelling of production subsidies towards renewable to the detriment of fossil fired generation [16]. in fact, the increase in the renewable share has helped lower the wholesale price of electricity, reducing the margins of thermal generation [17]. the prices for consumers remained the same due to renewable production subsidies. thanks to incentives for decentralized production at household level, alternatives to centralized power generation and distribution emerged during the last years of the twentieth century and the first decade of the present century. the previous points may lead to questions about how companies in the electricity sector have reacted to these changes and how they have affected corporate performance. electric utilities are a good example as they have to handle challenges emerging on a global scale and by their own nature and scope they are intended to be accountable to various stakeholders. because they provide a public service and have largescale impacts, electricity companies have accrued responsibility for reporting to their stakeholders. a current challenge for companies is measuring social, environmental and economic performance, which, in the corporate scene, is considered fundamental for business success. furthermore, corporations are recognized as significant actors of environmental disturbance due to direct and indirect action by producing social and economic effects. therefore, the disclosed information is subject to careful scrutiny and analysis. the objective of the present work is to understand the crisis’ effect on the performance of electric utilities by identifying the indicators that are most representative of their situation in 2010, the year of the end of financial crisis and assumed to be a key year in the transition process in the european electricity sector. the analysis performed was based on an extensive set of data collected from the financial and non-financial reports published by selected companies, which brought together a selection of companies with the greatest representation at european level. an attempt was made to obtain a heterogeneous sample in terms of size, shareholder structure, business area and territorial coverage, which was comprehensive of the diversity of the european energy business community. the use of comparable, relevant and representative indicators for industry critical issues was taken as a suitable way of characterizing sector dynamics in a challenging context and to understand the moves and strategies of individual companies. significant economic and social impacts propagated through the entire eurozone. in 2010, the world economy showed timid signs of recovery, which presented different uneven patterns across countries. western europe’s economies showed the first signs of emerging from the recession as early as the third quarter of 2009 [7], but economic activity was almost stagnant in most developed economies, while some developing countries presented better growth prospects [8], [7]. the recession brought a reduction in global demand, containment of financing, credit supplies and consequently an excess of unused productive capacity [7]. the banking crisis has forced the largest institutions in the banking sector to reduce access to credit, devaluate and clear their balance sheets [14], [6] and [3]. in this phase, the eu countries are generally characterized by weak labour markets with a reduction in employment and domestic demand [7],[3]. from a microeconomic perspective, the turbulence generated by the crisis has impacted the energy sector at two levels. it has affected the policy framework and it has brought new challenges for the agents operating in production, trading and distribution of energy. by 2010, several trends were happening in the european energy sector, namely: liberalization and integration of the electricity and gas markets; concentration of private capital into mega clusters with a large diversification of activities; vertical integration and privatization of public companies. from 2010 onwards, there was: some stabilization of concentration movements; private financing of companies or groups with significant public shareholding; increased participation of citizens in corporate management; increased mobility of customers between electricity suppliers; arrival of new energy retailers with no connection with production assets on the market; increasing importance of asian investment in the eu. however, in 2011, the eu remained quite dependent on fossil fuels for electricity production, with 51% of electricity generation coming from fossil fuels [15]. other apparently abundant energy sources have been discovered worldwide in recent years. the exploitation of new sources of conventional and unconventional fossil fuels, namely shale gas and oil shale, has launched new players into the raw materials markets, changing the trade flows of primary energy and reorganizing the energy landscape. until 2012, the european economic scenario for electric utilities was characterized by some steadiness in trends. electricity producers have to deal with decreasing international journal of sustainable energy planning and management vol. 18 2018 55 marta guerra-mota; thereza aquino and isabel soares in order to condense a large amount of data into a set of indicators representative of the electricity industry with the least loss of information possible, multivariate techniques were used. the use of the principal components analysis (pca) technique identified, from a large set of indicators, those with the greatest explanatory power, which act as representatives of all the others. the methodology proved to be adequate and provided valuable outputs, making it possible to identify the most representative industry indicators in 2010. the structure of the article comprises several sections. the first presents a brief literature review and presents the electric utilities scenario. in the second, following the previous explanation, a characterization of the panel is given. next there is a brief presentation of the analysis method, its application to the panel, and a short discussion of the results. we conclude the article by signalling limitations and presenting avenues for future research. 2. literature review according to jin et al [8], the treatment of company performance during the crisis and recovery has still not been adequately dealt with in the literature, and, in particular, firm-level treatment is lacking [2]. however, given the importance of the theme, a considerable body of literature has already been produced. jin et al [8] have performed a firm-level analysis to “define the recovery of firms’ performance after the 2007–2008 global financial crisis”, focusing “in particular on the relationship between firms’ recovery and their financial constraints”. using a probit model, the authors found that companies with weaker financial constraints usually see faster recovery from the financial crisis than those with stronger constraints. zhao et al [1] have investigated the impact of the economic crisis, focusing on the financial performance of multinational corporations. they found that firms adopted aggressive commercial strategies and redirected their sales to asian countries were less affected by crisis than other domestic counterparts. jin et al [8] have explored the recovery in the market value added (mva) of european companies after the global economic crisis in 2008–2009. using a panel dataset, they aimed to “introduce empirical evidence that intangible-intensive strategy in human and relational capital reinforces speed of the after-crisis correction for companies”. “the study demonstrates that intangibleintensive strategy did not always enable faster recovery speed, but provided year-on-year acceleration of mva growth after the crisis.” andriosopoulos et al [9] have researched the influence of events in financially troubled eu markets (greece, ireland and portugal) on energy prices. they tested for contagion effects of bond prices on energy/commodity prices during the eu financial crisis, which was confirmed by the results. sidhoum et al [10] have investigated the relationships among performance dimensions associated with corporate social responsibility (environmental, social and economic) regarding the u.s. electric utility sector. using a statistical copula approach, they concluded utilities’ economic performance is compatible with environmental, social, and governance performance. as far as we know, references to the recovery of electric utilities have not been found in the available literature. however, guerra-mota et al [11] have performed an analysis using anova to identify significant differences in corporate performance indicators during the pre-crisis period, crisis period and post-crisis period using a sample of european electric utilities. the kruskal-wallis test showed that variables relating financial and operational issues were the ones with the greatest differences during the period under analysis, which may be due to the very nature of the financial crisis. from a methodological perspective, jiang et al [12] have proposed a three-dimensional (economic, environmental, and social) sustainability assessment model to analyse corporate sustainable performance based on pca. they concluded that the proposed method could assess a company’s overall sustainability performance, and “that the method is theoretically sound and practically applicable”. it was also suitable for uncovering strengths and weaknesses in order to define adequate strategies for improvement. mota & soares [13] have proposed the use of pca to identify key performance indicators to assess the sustainability performance of european electric utilities. they concluded that the technique provided a valuable output when used to address environmental, social, economic and financial information generally reported by european electric utilities in order to “concentrate that information on a limited set of indicators, suitable for widespread application”. 56 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance a considerable number of mergers and acquisitions also contributed to restructuring and reshaping the european electricity and gas sector to face finance needs. companies’ main strategies consisted of concentrating assets in electricity and gas and focusing on vertical integration (generation, transmission and distribution), while continuing to control firms in other sectors [21]. therefore, by 2010, several trends had been designed for european energy sector: • liberalization and integration of electricity and gas markets. • concentration of private capital in mega clusters with a large diversification of activities. • vertical integration – targeting activities in different areas of business in different companies, although they may belong to the same group (production, distribution and marketing). enhanced productive capacity for most companies and the linking of several business areas in the same group. • privatization of national groups. some reforming countries have sold their public companies or admitted new players into national energy markets. these actions were supported by the view that increasing diversity in ownership could facilitate competition, provide comparability of performance and boost regulation [22]. privatization can also provide significant immediate revenue for the government and reduce its future liabilities. on the other hand, they lose a strategic asset and a source of revenue. privatization is not a necessary requirement for market liberalization and it is also questionable whether it is a condition needed to achieve better performance. some companies in 2010 maintained a share of public ownership above 80%, such as eesti (estonia), edf (france), electricity supply board (ireland), eneco (netherlands), stratkraft (norway), and vattenfall (sweden) (see table 1). however, some authors, such as castro et al [21], expressed their concerns about this: “authorities are more cautious and more aware of companies’ market power and their consequences for social welfare”. since energy markets were deregulated, the european union “has not given emphasis to putting mechanisms in place to control moves towards concentration”, considering that legislation and institutions did not follow the pace of market power concentration. this situation was particularly dramatic in the 2008–2012 crisis scenario, when decision-making and concerted strategies at eu level were urgently needed. 3. context of the european electricity sector in 2010 the european electricity sector has always been very dynamic, in particular in the performance of mergers and acquisitions, and it also has a remarkable ability to adapt to increasing economic, social and environmental demands. between 2000 and 2012, the european electrical sector underwent a period of mergers and acquisitions, mainly by consolidating large groups, trying to expand their markets, improving performances and achieving economies of scale in the generation, transmission and distribution segments. the european union (eu) regulatory frameworks for the electricity sector, which stimulate both the operational efficiency and the increasingly complex new generation and transmission projects, helped consolidate these negotiations among domestic companies and allowing new players into national energy markets. in the context of the 2008–2011 crisis, the eu’s economic objectives were: creating an integrated energy market (for electricity and gas); reducing the carbon footprint associated with the production of electricity; increasing energy efficiency; promoting energy independence and providing affordability of electricity. these needed well-defined political support to provide security to investors and businesses so they could correctly implement the measures [18,19]. to attain the defined objectives, the european regulatory framework’s demand long-term investments relating to the decommission of the most polluting power plants, targets for renewable sources, and defined goals for gas emissions. this means that the electricity industry, which was a very capital-intensive sector, needed to maintain, increase or modernize its production capacity, investing in some cases in new technologies or markets [20]. the crises in the capital markets displaced private funds from the periphery to central european countries [16]. this brought about both difficult financing and credit access for economic agents, namely electricity players, and a change in the perception of the risk level in the electricity industry. having to deal with increasing regulatory risk, high debts and narrow operating margins, electric utilities encountered increasing difficulties in financing themselves in the markets. however, electricity companies maintained the same level of investment in tangible assets while reducing financial investment [16]. in a fragile context for financing, most of the investment needs were covered by corporate debt. international journal of sustainable energy planning and management vol. 18 2018 57 marta guerra-mota; thereza aquino and isabel soares 4. generation utilities in eu scenario the present study is mainly focused on european union member countries, since they fall under an umbrella of global policies and goals for energy and under a common energy regulatory framework. however, some companies based in other european countries but outside the union were also included in the study because the scope of their activities with eu member states means they are also subject to eu rules. the selected energy firms included both public and private entities, but also investor owned companies and cooperatives. the selection criteria were: • companies with headquarters in europe, in order to limit the study to firms with a greater role in european territory. • companies with core business related to electricity production, although they could distribute their activities over a variable range of business areas (e.g., electricity production, distribution and transportation of gas and/or electricity, oil and gas exploration and production, sanitation and water supply, environmental services and others). • availability of non-financial information disclosed in published corporate reports (sustainability, citizenship, corporate respon sibility or annual reports) or posted on the companies’ websites. companies with unpublished non-financial information were excluded. other exclusions were due table 1: eu generation utilities (corporate, production, financial and labour indicators) installed share of generation renewables in revenue share of capacity electricity (106 public name headquarters (mw) generation euros) employees ownership acciona spain 7 587 97.26% 6 263 31 687 0.00% bkw fmb energy ltd. switzerland 2 532 37.24% 2 586 2 914 52.54% centrica uk 4 672 1.50% 25 114 34 969 0.00% cez group czech republic 15 018 3.68% 7 954 32 627 69.78% dansk olie og naturgas a/s denmark 6 654 19.80% 7 331 5 874 75.00% drax uk 4 000 0.00% 1 887 1 150 0.00% edison italia 12 586 0.00% 9 685 3 939 0.00% eesti estonia n.a. 0.00% 796 2 608 100.00% electrabel belgium 11 233 3.13% n.a. 7 213 0.00% edp energias de portugal sa portugal 21 990 64.43% 14 171 12 096 25.00% electricite de france sa france 140 100 1.65% 65 200 158 842 84.48% electricity supply board ireland 5 600 0.00% 2 740 6 980 95.00% enbw energie baden-wür ag germany 15 489 10.50% 17 509 20 952 46.55% endesa sa spain 40 141 35.48% 31 177 24 732 0.00% eneco netherlands 2 200 44.00% 4 922 6 545 100.00% enel societa per azioni italy 97 281 31.74% 73 377 78 313 31.20% eon ag germany 68 475 10.00% 92 863 85 105 (*) essent netherlands 4 048 12.10% 6 120 5 872 0.00% evn austria 1 787 39.02% 2 752 8 536 51.00% fortum corporation finland 14 113 41.28% 6 296 10 585 50.76% gas natural fenosa sa spain 17 305 17.79% 19 919 18 778 0.00% hafslund norway na 100.00% 2 018 1 123 53.73% iberdrola sa spain 44 991 30.12% 32 926 29 641 0.00% international power plc uk 70 196 0.00% 3 745 3 520 0.15% nuon netherlands 3 645 8.44% 5 458 2 750 51.00% rwe ag germany 52 214 3.95% 47 741 70 856 (**) 5.1% scottish southern energy plc uk 11 330 15.71% 25 097 20 177 0.00% statkraft norway 16 010 88.50% 3 680 3 301 100.00% vattenfall ab sweden 39 923 22.72% 23 725 40 363 100.00% verbund ag austria 8 638 81.88% 3 308 3 096 51.00% (data referring to 31 december 2010) key: n.a. – data not available; (*) information disclosed did not show the direct involvement of public entities; (**) treasury shares 58 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance about 20% of companies show a public shareholding of more than 80%, and 47% of the panel had a public contribution of more than 50% (figure 1). these holdings are concentrated in northern and central europe, since the energy business is considered a strategic investment and a structuring asset for the country and should be safeguarded from foreign interests. the countries in southern europe and the united kingdom have been withdrawing public shareholdings in their energy firms, leaving the energy business increasingly handed over to private initiative under the supervision of regulatory authorities. electricity companies play a very important role in society since, besides the products and services they provide, they are also responsible for creating a large number of jobs. in 2010, 50% of the selected companies were individually responsible for more than 10,000 jobs each. a single company is responsible for over 100,000 jobs. about 27% of the panel is responsible for ensuring between 10,000 and 50,000 jobs. these numbers demonstrate a particular responsibility from the industry to society. as previously mentioned, the production of electricity has a significant impact on the level of greenhouse gas emissions and on the consumption of natural resources. the use of renewable energy sources has been promoted in a bid to help minimize these effects and to reduce the negative contribution of electricity production in environmental terms. however, despite all the efforts made at eu level to promote renewable energies, in 2010, 34% of the selected companies still produced less than 5% of their electricity using renewable energy sources. the panel comprises the largest and most representative producers of electricity in europe and 60% of them still use less than 20% of renewable sources in their electricity production. only 13% of the to factors such as poorly quantified data in non-financial published reports or recent company integration into a group. in this last case, information on the company was usually reported in the consolidated group report. the application of selection criteria for the end of the year 2010 resulted on the following list (table 1). in the 2010 european setting, it is difficult to identify energy sector companies engaged in a single key activity because they generally have vertically integrated businesses. integrated businesses may include some or all processes from extraction of resources to product delivery to the customer, including processing, distribution and provision of support services. alongside vertical integration, a strong trend has been seen towards a horizontal integration in the sector via the creation of partnerships and/or acquisition within the same market/ sector, both seeking an increase in size (market share) and taking advantage of possible economies of scale. only 27% of the panel is devoted exclusively to activities related to production, trading or distribution of electricity, or perhaps associated with the production and distribution of heat. the remaining 73% combine the general electricity business with the trade, transportation and distribution of natural gas. on a smaller scale, some companies carry out fossil fuel extraction, provide environmental services, as well as construction and engineering activities, water supply, wastewater treatment and waste management services. occasionally, selected companies may include telecommunications services (e.g., evn, hafslund and scottish and southern energy). about 40% of the selected companies carry out their activities in other continents beyond europe, with significant participation in latin american countries, especially by companies based in italy, spain and portugal, which play a key role in the expansion of intercontinental energy businesses. companies based in the northern and central european countries show a greater tendency for internationalization within europe, expanding their business into neighbouring countries. there is still a non-negligible investment in electricity production in the u.s., particularly in the renewable sector, which, besides the southern europe companies, also receives some contributions from the uk companies. the selected panel comprises companies with diverse legal forms and ownership structure. the proportion of public shareholding is still relevant in the broader panel. public ownership means the state or other public entities such as central, regional or local public authorities holding the company’s share capital. regarding 2010, share of public ownership (spo) 43% 20% 27% 10% 80%<spo 50%<spo=<80% 20%<spo=<50% spo=<20% figure 1: share of public ownership (spo) international journal of sustainable energy planning and management vol. 18 2018 59 marta guerra-mota; thereza aquino and isabel soares selected companies produce more than 80% of their electricity from renewable sources (figure 3). in late 2010, about 70% of the selected companies had an installed capacity under 20,000 mw, of which more than half had less than 10,000 mw. the analysis of company or group reports showed that companies with more than a 30% share of renewables in their energy mix represent 55% of companies with an installed capacity of less than 20,000 mw and of these 66% had an installed capacity of less than 10,000 mw (figure 2). production using renewable sources is more valued in smaller companies. however, the same table reveals that all the larger companies with shares of renewable higher than 30% are concentrated in southern europe. portugal, spain and italy lead the investment in renewable sources in terms of large-scale production, which might indicate a closer alignment of corporate strategies with global environmental concerns. 5. pca application and results the main goal of this research is to contribute for understanding the position of electric utilities in 2010 that conditioned their subsequent development path up to now. based on available data and key industry issues, a panel of mixed physical and monetary indicators was drawn up, covering the environmental, social, economic and financial dimensions of electric utilities’ corporate performance. the use of absolute indicators makes it difficult to make comparisons between companies with very different scales and may induce distortions in the results. the relativization of indicators made it possible to control several problems that could arise during data analysis. the authors proposed the use of a set of 52 composite indicators, relativized according to dimension (size and production capacity), referring to environmental, economic, social and financial issues. it was intended for them to provide adequate benchmarking for the companies under study regardless of their differences. the variables were selected bearing in mind the concern for all variables to be independent and metric [23]. thus, dummy variables and those with an explanatory relationship between them were excluded. relative indicators are presented in annex a. a very wide set of variables, although providing a large amount of information, usually ends up being difficult and complex to interpret by users. however, some variables are naturally linked, presenting similar behaviour. for example, it is expected that increases in production capacity will be accompanied by a change in revenue in the same direction. the overlapping of some variables is more likely to occur in a large set of variables than in a set with few variables, which may remain distinct and different. so a large number of variables that expresses a particular situation can be replaced by a smaller group that maximizes the explanation of the entire data set. factor analysis (fa) techniques make it possible to understand the structure and interrelationships of a wide number of variables addressed in multivariate techniques [24]. in the present research, fa is used within an exploratory perspective to search for a structure among a set of variables. there are not any constraints or preconceived thoughts defined a priori relating to an expected structure, number of components, or any hypothesis to test. when dealing with fa, it is desirable for there to be a relevant degree of multicollinearity to assure the production of representative factors. multicollinearity broadly means that variables are intercorrelated through the existence of one or several linear relationships among them. multicollinearity is perfect if the variable can be derived through a linear combination of other variables with a stochastic error term of zero. imperfect multicollinearity means that one variable may be partly explained through a linear combination of other variables and a stochastic error term different from installed generation capacity (igc) (in mw) 100,000<igc 50,000<igc=<100,000 20,000<igc=<50,000 10,000<igc=<20,000 igc=<10,000 39% 4 % 14% 14% 29% figure 2: installed generation capacity (icg) share of renewables in electricity generation (sreg) 80%<sreg 50%<sreg=<80% 20%<sreg=<50% 5%<sreg=<20% sreg=<5% 34% 3% 13% 23% 27% figure 3: share of renewables in generation (sreg) 60 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance assets and the creation of a financing structure that enables an adequate return on the capital. the remaining components relate to other themes such as financial coverage and reliance. the joint vision of the four principal components fundamentally refers to the issues connected to return on capital, such as indebtedness, return on assets (reflecting the company’s management with respect to its productive capacity), results generation and the balance of financial structure. volatility appears as a sign of instability and risk associated with business strategy and profitability. other financial issues that are also relevant to the sector were not included due to insufficient workable data. for example, some matters pertinent to the electricity industry, such as the financial assistance received from government, fit into this category. as for social issues (table 3), of the five extracted components, the variables related to the stability of employment contracts and the proportional distribution of the factors of production (capital and labour) remuneration were identified as the most representative. individuals’ professional development, fairness in leadership positions, and occupational safety and health, job stability, career development and motivation are also relevant. women in business have taken an interesting role when related to staff turnover, absenteeism, seniority and health at work, appearing with three high loadings in five components. the electricity generation sector has demonstrated a trend over the past six years to reduce its headcount. increased female employment may generate more revenue, but with fewer social charges. this zero [25]. principal components analysis (pca) is a descriptive procedure used to reduce a vast data set into a small number of components. implementation of the technique passes through several phases: intercorrelation testing, selection of variables and interpretation of components. in this research, eviews software was used to estimate pca for each dimension of corporate performance. the use of the eigenvalue criteria makes it possible to select the first principal components (pcs), which apprehend 80% of the total variance. the contribution to explaining total variance assumes a decreasing importance from component one (pc1) to component n (pc n). as regards financial issues (table 2), of the four extracted components, there is a valuation of the issues related to returns on assets, which explains almost 48% of variance. in the first component (pc1), the most relevant issues are those relating to business profitability, mainly return on assets, but also the profitability of investments, revenues and equity. pc1 provides information about the use of assets and indirectly makes it possible to assess whether the investment in assets is appropriate to the needs of the company and whether it is being properly monetized. the demand for a balanced financing structure represents almost 22% of the explained variance of pc2. the sum of the two first components accounts for approximately 60% of the total variance of financial issues. this means that the two first components are characterized for issues related both to proper use of table 2: principal component analysis (pca) for financial indicators variable pc1 pc2 pc3 pc4 dv_yld 0.104055 0.047782 0.460426 0.521596 e_ps −0.022930 −0.153716 −0.454015 0.601025 iebit 0.318156 −0.465089 0.211888 −0.112725 iebitda 0.326580 −0.463464 0.071086 −0.123937 idbt −0.005324 0.206430 0.601325 −0.206721 it_lbl_eqt −0.086072 0.071273 −0.216304 −0.279466 roa 0.518207 −0.024538 −0.043558 0.009318 roe 0.325750 0.493832 −0.095708 −0.070607 roi 0.402074 0.481925 −0.130173 0.024646 ror 0.486326 −0.085263 −0.106423 0.060073 vol −0.022472 0.106277 0.290209 0.456636 proportion (of total variance) 0.359400 0.162200 0.122000 0.095700 0.739300 corrected proportion 0.486136 0.219397 0.165021 0.129447 1.000000 international journal of sustainable energy planning and management vol. 18 2018 61 marta guerra-mota; thereza aquino and isabel soares environmental area with enough information in the panel to be considered in the analysis. other environmental issues also relevant to the sector were not included due to insufficient workable data. for example, this situation includes some matters pertinent to the electricity industry, such as the impact on biodiversity, nuclear waste production, water contamination, the impact of dams and reservoirs on ecosystems and the flooding of agricultural land, water sources significantly affected by withdrawal of water, habitats protected or restored, total water discharge by quality and destination, monetary value of significant fines for non-compliance with environmental laws and regulations. regarding economic issues (table 5), of the five extracted components, issues related to the social distribution of economic value (among stakeholders) were valued, which explains almost 23% variance. efficiency issues of thermal processes are presented in two different views. on the one hand, efficiency is envisaged through the market’s valuation of heat as a commercial product and on the other efficiency stems from fuel use and technological solutions. efficiency issues represent a total of 35% of the explained variance for economic factors. the sum of the first three components accounts for approximately 58% of the total variance of economic issues. the remainder relate to other themes such as labour productivity, market, earnings linked to technological options, externalities and the ability to ensure loan compliance. the identified component also reflects the interest of the organization in retaining skilled labour and talent. the identified components fundamentally relate to employment issues, given that this was the only social area with enough information in the panel to be considered in the analysis. other social issues also relevant to the sector were not included due to insufficient workable data. for this reason, some relevant matters were not included in the analysis: those regarding wage variability in different geographical areas, basic salary ratio between men to women, local hiring, integration of local senior managers, union conflicts, contributions to communities, wages compared to local minimum wage at significant locations of operation, people’s displacement resulting from setting up or expanding production facilities, contributions to political parties and politics, policy positions. as regards environmental issues (table 4), of the four extracted components, there is a valuation of issues related to air pollution and production mix, which explains almost 37% of the corrected variance. generation sources and gas emissions represent almost 27% of the explained variance. the rest relates to others themes such as environmental expenditure (costs and nature of investment) and treatment of hazardous waste. air emissions take an important role when related to production structure and environmental investments, appearing with two high loadings in four of five components. the identified components relate essentially to production issues, given that this was the only table 3: principal component analysis (pca) for social indicators variable pc1 pc2 pc3 pc4 pc5 iemp_abs −0.047369 −0.133604 0.174939 0.057930 0.738848 iemp_acc −0.193375 0.371412 −0.451646 0.206549 −0.015907 iemp_ftc 0.464692 −0.146493 0.297068 0.066184 −0.003379 iemp_pc 0.464557 −0.114754 0.226856 0.147853 −0.066541 iemp_sen 0.351480 −0.206607 −0.337809 0.159632 0.209068 iemp_trg 0.248666 0.481574 −0.052267 0.355860 −0.094145 iemp_turn −0.180157 −0.105132 0.299558 0.520551 0.144272 iemp_womb 0.043686 0.505113 0.168746 −0.167609 0.297280 iemp_womt −0.241147 0.212659 0.342033 0.480689 −0.103930 iemp_wonm 0.175158 0.278708 −0.149331 −0.022954 0.475829 iemp_fat 0.158741 −0.117058 −0.425560 0.172957 0.074805 itax 0.155732 0.322130 0.264139 −0.439815 −0.053363 iwage −0.413024 −0.168554 0.022035 −0.147024 0.204916 proportion (of total variance) 0.291600 0.197100 0.136800 0.107900 0.101200 0.834600 corrected proportion 0.349389 0.236161 0.163911 0.129283 0.121256 1.000000 62 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance table 4: principal component analysis (pca) for environmental indicators variable pc1 pc2 pc3 pc4 iexpenv_rvn 0.080602 −0.058676 0.536090 0.256541 igennu_t −0.178032 −0.053694 0.431875 −0.236145 igenre_t −0.251426 0.401488 −0.274671 0.225782 igenrenu_t −0.397648 0.354087 0.043605 −0.001312 iwst_rec_nz −0.317179 −0.127024 0.126759 0.242954 ico_teq 0.254598 −0.300943 −0.205307 0.264481 ico_th −0.009158 0.035758 −0.542528 0.223726 iso_t 0.373536 0.396999 0.108425 0.019317 inox_t 0.348679 0.399944 0.111517 0.089253 ipart_t 0.369000 0.376072 0.066866 0.021929 iwst_zrec −0.086061 −0.012488 0.249739 0.724909 iwst_z −0.155089 0.164389 0.071631 −0.328721 igenth_t 0.382409 −0.336082 −0.005204 −0.077727 proportion (of total variance) 0.297300 0.217900 0.157500 0.138000 0.810700 corrected proportion 0.366720 0.268780 0.194277 0.170223 1.000000 table 5: principal component analysis (pca) for economic indicators variable pc1 pc2 pc3 pc4 pc5 pc6 it_rvn −0.221070 −0.216369 −0.401619 0.019459 0.283615 0.397800 icapex 0.058502 −0.034764 0.043592 −0.299543 0.215709 0.233684 ipec_cn −0.202241 0.070976 −0.297382 0.173520 0.294828 −0.329827 ipdtv −0.176197 0.237134 0.113678 0.449820 −0.160478 −0.099222 iwa 0.072015 0.224946 0.044014 −0.148229 0.621431 −0.063197 ih_genth 0.078440 0.605835 −0.207644 −0.285086 −0.265194 0.020087 isal_elcos 0.346051 0.487464 0.067682 0.021955 0.142154 0.363307 igent_sal 0.194209 0.131126 0.198777 0.474156 0.078127 −0.210189 ievd_emp 0.418139 −0.026043 0.165711 0.224950 −0.029473 0.245152 ievd_len 0.270949 −0.094055 −0.143741 0.187648 −0.055777 0.487821 ievd_own 0.304693 0.244096 −0.019119 −0.003724 0.401365 −0.146893 ievd_tax 0.477387 0.243208 −0.007375 0.193080 0.012471 0.097317 iself_t −0.032166 0.188172 0.490842 −0.267809 −0.134590 0.188840 ibypro −0.187049 −0.192718 0.583119 0.077690 0.305075 0.111096 irvn_emp −0.387715 0.132088 −0.129621 0.384748 0.033544 0.332908 proportion (of total variance) 0.178400 0.143500 0.129200 0.125100 0.109200 0.093200 0.778600 corrected proportion 0.229129 0.184305 0.165939 0.160673 0.140252 0.119702 1,000000 components essentially relate to those relevant issues with enough information in the panel to be considered in the analysis. other economic matters also relevant to the electricity production sector were not included due to insufficient workable data. for example, this situation includes some matters pertinent to the electricity industry, such as the proportion of spending on locally based suppliers and the energy saved due to conservation and efficiency improvements. of the initial 52 indicators used in former pca, the 19 with the highest loadings are then presented (see table 6) 6. conclusions and further research the global financial crisis had a direct impact on business financing, access to credit and investment, demanding the appropriate definition of corporate international journal of sustainable energy planning and management vol. 18 2018 63 marta guerra-mota; thereza aquino and isabel soares electricity generation; weight of electricity generation in total electricity sales; share of renewable sources in electricity production. efficient uses of resources characterize economic and financial dimensions. these concerns are expressed though the leading role of the following indicators: cooling water used per unit of electricity generated; proportion of recovered by-products (gypsum and ash); co2 relative emissions from electricity generation. equity in the distribution of economic value generated by the stakeholders characterizes economic and social dimensions. these concerns are expressed though the leading role of the following indicators: weight of payments to lenders in the economic value distributed, weight of taxes (income and others) in the economic value distributed, earnings per share. working conditions, relating to employment contracts and health and safety, characterize the social dimension. these concerns are expressed though the leading role of the following indicators: employee absenteeism rate; average accidents per one hundred employees; proportion of employees with full-time contracts. contribution of women to production and management also characterizes economic and social dimensions and this concern is expressed though the leading role of the strategies and action plans [26]. in this way, the effects of crisis also influenced the companies at economic, social and environmenl level, having repercussions on their global performance. the article assumes that the identification and analysis of the most important corporate indicators of electric utilities allows apprehending the effects of a complex scenario in their performance. a heterogeneous sample, referring installed generation capacity, share of renewables in electricity generation, revenue, number of employees and share of public ownership, was used in the study. after the methodology was applied, the dimensions of corporate performance were characterized in terms of the established indicators. in the case of european electricity production, these dimensions are highlighted comprehensively by: return on assets, equity and debt capital concerns characterize economic and financial dimensions. these concerns are expressed though the leading role of the following indicators: roa (return on assets); roe (return on equity); weight of net debt in total assets. efficiency of production technologies characterizes economic and environmental dimensions. these concerns are expressed though the leading role of the following indicators: weight of heat generation in total table 6: summary of aggregated variables from pca dimension variables dimension variables economic cooling water used per unit of electricity generated financial earnings per share economic weight of heat generation in total electricity generation financial weight of net debt in total assets economic weight of electricity generation in total electricity sales financial roa return on assets economic weight of payments to lenders in economic value distributed financial roe return on equity economic weight of taxes (income and others) in the economic value distributed social employee absenteeism rate environmental proportion of recovered by-products (gypsum and ash) social average accidents per one hundred employees environmental share of renewable sources in electricity production social proportion of employees with full-time contracts environmental proportion of co2-free electricity production social proportion of women on the management board environmental co2 relative emissions from electricity generation (kg per kwh) social proportion of employees replaced within the company, excluding retirements environmental proportion of recovered hazardous waste ----- --------- -----64 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance economics, volume 143 (2015), pages 36-47, issn 21107017. https://doi.org/10.1016/j.inteco.2015.04.003. [5] lungu, camelia iuliana; caraiani, chirata; dascalu, cornelia; guse, raluca gina. exploratory study on social and environmental reporting of european companies in crises period," journal of accounting and management information systems, faculty of accounting and management information systems, the bucharest university of economic studies, vol. 10(4), pages 459-478, (2011). december. [6] geels, frank w. the impact of the financial–economic crisis on sustainability transitions: financial investment, governance and public discourse. environmental innovation and societal transitions 6 (2013) 67–95. http://dx.doi.org/10.1016/j. eist.2012.11.004 [7] united nations (2010b). world economic situation and prospects 2010. update as of mid-2010(united nations publication, sales no. e.10.ii.c.2), [8] jin, yuying; luo, mingjin; wan, chao. financial constraints, macro-financing environment and post-crisis recovery of firms. international review of economics and finance 55 (2018) 54–67. http://dx.doi.org/10.1016/j.iref.2018.01.007 [9] andriosopoulos, kostas; galariotis, emilios; spyrou, spyros. contagion, volatility persistence and volatility spill-overs: the case of energy markets during the european financial crisis. energy economics 66 (2017) 217–227. http://dx.doi. org/10.1016/j.eneco.2017.06.023 [10] sidhoum, amer ait; serra, teresa. corporate social responsibility and dimensions of performance: an application to u.s. electric utilities. utilities policy 48 (2017) 1-11 http:// dx.doi.org/10.1016/j.jup.2017.06.011 [11] guerra-mota, marta; soares, isabel; aquino, thereza. “european electricity utilities managing energy transition challenges" (book of proceedings of icee 3rd international conference on energy & environment: bringing together economics and engineering). faculty of economics, university of porto. (2017) [12] jiang, qiuhong; liu, zhichao; liu, weiwei; li, tao; cong, weilong; zhang, hongchao; shi, junli. a principal component analysis based three-dimensional sustainability assessment model to evaluate corporate sustainable performance. journal of cleaner production 187 (2018) 625-637. https://doi. org/10.1016/j.jclepro.2018.03.255 [13] mota, marta; soares, isabel. “sustainability indicators for electric utilities: a proposal using pca”. book of proceedings of 1st international conference on energy & environment, faculty of economics, university of porto (2013) [14] united nations (2010a). world economic situation and prospects 2010 (united nations publication, sales no. e.10. ii.c.2), released in january 2010. following indicator: proportion of women on the management board. pollution concerns characterize the environmental dimension. these concerns are expressed though the leading role of following the indicators: proportion of co2-free electricity production; proportion of recovered hazardous waste. other industry critical issues were not considered due to the lack of a minimum number of observations required to implement the factor analysis (fa) technique or because they simply were not reported by a representative group of companies (e.g., nuclear waste, liquid water use, impacts on biodiversity, links to local communities). the context of the energy sector was by itself, in 2010, a scenario of change. that makes difficult to differentiate the impact of the crisis on the performance of companies from the impact of other external factors. however, the purpose of the article is to understand the situation of electric utilities at the end of the financial crisis. the analysis identified the most representative indicators of business performance in 2010 and the relationships between them, at a particular moment of time that coincides with the end of the financial crisis. obtained results are aligned with the concerns and trends exposed in former sections. further research is important to determine if the results persisted in subsequent years or if, in the course of the ongoing challenges posed to electric utilities, they significantly changed. references [1] zhao, xin; jiang, xianling; li, zhaoyang the impact of the economic crisis on the financial performance of multinational corporations, international review of economics & finance, volume 37, 2015, pages 55–68, issn 1059-0560, https://doi. org/10.1016/j.iref.2014.11.013. [2] barajas, angel; shakina, elena; fernández-jardón, carlos. acceleration effect of intangibles in the recovery of corporate performance after-crisis. research in international business and finance 42 (2017) 1115–1122. http://dx.doi.org/10.1016/j. ribaf.2017.07.046 [3] moro, beniamino. lessons from the european economic and financial great crisis: a survey. european journal of political economy 34 (2014) s9–s24, http://dx.doi.org/10.1016/j. ejpoleco.2013.08.005 [4] pentecôte, jean-sébastien; rondeau, fabien. trade spillovers on output growth during the 2008 financial crisis, international https://doi.org/10.1016/j.iref.2014.11.013 http://dx.doi.org/10.1016/j.ribaf.2017.07.046 http://dx.doi.org/10.1016/j.ejpoleco.2013.08.005 http://dx.doi.org/10.1016/j.eist.2012.11.004 http://dx.doi.org/10.1016/j.eneco.2017.06.023 https://doi.org/10.1016/j.inteco.2015.04.003 http://dx.doi.org/10.1016/j.iref.2018.01.007 http://dx.doi.org/10.1016/j.jup.2017.06.011 https://doi.org/10.1016/j.jclepro.2018.03.255 international journal of sustainable energy planning and management vol. 18 2018 65 marta guerra-mota; thereza aquino and isabel soares [15] eurelectric. power statistics & trends 2012 edition (2012). http://www.eurelectric.org/powerstats2012 [16] eurelectric. the financial situation of the electricity industry – economic and financial update. june (2013) http://www. eurelectric.org/media/81890/fg_fe_paper__final-2013-5400004-01-e.pdf [17] verbruggen, a. et al. europe’s electricity regime: restoration or thorough transition. international journal of sustainable energy planning and management vol. 05 (2015) pages 57–68. http://dx.doi.org/10.5278/ijsepm.2015.5.6 [18] ec european commission’s communication. energy roadmap 2050. com(2011) 885 final of 15 december (2011) http:// eur-lex.europa.eu/legal-content/pt/txt/pdf/?uri=celex: 52011dc0885&from=en [19] vasconcelos, jorge. política europeia de energia. conferência sobre energia eléctrica de fontes renováveis eefor, feup (2013) [20] genoese f,; egenhofer c. reforming the market design of eu electricity markets – addressing the challenges of a low-carbon power sector. ceps task force report, july (2015). https:// www.ceps.eu/publications/reforming-market-design-eu-electricity-markets-addressing-challenges-low-carbon-power [21] castro, nivalde j.; leite, andré luís da silva; soares, maria isabel. electric sector mergers and acquisitions: lessons from the european union. fep working paper (2008) [22] jamasb, tooraj; pollitt, michael. electricity market reform in the european union: review of progress toward liberalization & integration. energy journal. 11-41, apr. 2, (2005). http://web.a.ebscohost.com/ehost/detail/detail? vid=0&sid=bb46dbb2-f0a7-40ec-8f63-83d2bd7c2efd%40sessionmgr4008&bdata=jnnpdgu9zwhvc3qtbgl2zszz y29wzt1zaxrl#db=a9h&an=19750395 [23] guerra-mota, marta. on corporate sustainability reporting case of electric utilities. phd thesis. faculty of engineering, university of porto. (2013) available on: http://hdl.handle. net/10216/723152013 [24] hair, joseph f. multivariate data analysis. prentice hall; 7th edition (2009) [25] gujarati, damodar n. “basic econometrics”. second edition. new york: mcgraw-hill. (1998) [26] aras, güler; crowther, david. (2009), “the durable corporation in a time of financial and economic crisis”, journal of economics & management, vol. 14, no 3, pp. 211–217. 25049 http://www.eurelectric.org/media/81890/fg_fe_paper__final-2013-540-0004-01-e.pdf http://eur-lex.europa.eu/legal-content/pt/txt/pdf/?uri=celex:52011dc0885&from=en http://web.a.ebscohost.com/ehost/detail/detail?vid=0&sid=bb46dbb2-f0a7-40ec-8f63-83d2bd7c2efd%-40sessionmgr4008&bdata=jnnpdgu9zwhvc3qtbgl2zszzy29wzt1zaxrl#db=a9h&an=19750395 http://hdl.handle.net/10216/723152013 http://www.eurelectric.org/powerstats2012 http://dx.doi.org/10.5278/ijsepm.2015.5.6 https://www.ceps.eu/publications/reforming-market-design-eu-elec-ricity-markets-addressing-challenges-low-carbon-power 66 international journal of sustainable energy planning and management vol. 18 2018 financial crisis: understanding the effects on european electric utilities’ performance annex a relative financial indicators symbol unit formulation name financial iebit ratio iebit = ebit/t_ass weight of ebit in total assets iebitda ratio i_ebitda = ebitda/t_ass weight of ebitda in total assets idbt ratio i_dbt = n_dbt/t_ass weight of net debt in total assets it_lbl_eqt ratio it_lbl_eqt = t_lbl/t_eqt weight of total liabilities in total equities dv_yld* euro dv_yld = dividend per share/price dividend yield per share e_ps* euro e_ps = income to equity shareholders/no. of common shares earning per share outstanding roa* ratio roa = net income/t_ass return on assets roe* ratio roe = income to equity shareholders/average return on equity shareholder equity roi* ratio roi = operational results/t_assets return on investment ror* ratio ror = net income/t_rvn return on revenue vol ratio (see formula) annualized volatility relative economic indicators symbol unit formulation name economic ipec_cn tj/gwh ipec_cn = pec_cn/el_gent primary energy consumption per unit of electricity generated iself_t % iself_t = el_self/el_gent proportion of produced electricity used for self-consumption iwa 103 m3/gwh iwa = wa_coo/el_gent cooling water used per unit of electricity generated ibypro % ibypro = bypro_rec/bypro proportion of recovered by-products (gypsum and ash) ih_genth % ih_genth = h_gen/nel_genth weight of heat generation in total electricity generation ipdtv gwh/employee ipdtv = el_gent/emp_t electricity generation per employee igent_sal % igent_sal = el_gent/elt_sal weight of electricity generation in total electricity sales isal_elcos gwh/costumer isal_elcos = elt_sal/el_cos electricity sales per costumer irvn_emp 106 €/employee irvn_emp = t_rvn/emp_t revenue per employee it_rvn % it_rvn = t_rvn/t_ass weight of total revenues in total assets icapex % icapex = capex/t_ass weight of capital expenditures in total assets ievd_emp % ievd_emp = evd_emp/dev_d weight of wages, salaries and benefits in evd1 ievd_len % ievd_len = evd_len/dev_d weight of payments to lenders in evd ievd_own % ievd_own = evd_own/dev_d weight of payments to owners in evd ievd_tax % ievd_tax = evd_tax/dev_d weight of taxes (income and others) in evd 1economic value distributed (evd) international journal of sustainable energy planning and management vol. 18 2018 67 marta guerra-mota; thereza aquino and isabel soares relative environmental indicators symbol unit formulation name environmental iexpenv_rev % iexpenv_rev = env_exp/t_rvn weight of environmental expenditure in revenues igenth_t % igenth_t = nel_genth/nel_gent share of thermal sources production in electricity production igennu_t % igennu_t = nel_gennu/nel_gent share of nuclear sources in electricity production igenre_t % igenre_t = nel_genre/nel_gent share of renewables sources in electricity production igenrenu_t % igenrenu_t = (nel_genre+nel_ share of co2 free electricity production gennu)/nel_gent ico_teq kg/kwh ico_teq = co_teq/el_gent co2 equivalent relative emissions from electricity generation ico_th kg/kwh ico_th = co_th/el_gent co2 relative emissions from electricity generation inox_t g/kwh inox_t = nox_t/el_gent particles relative emissions from electricity generation ipart_t g/kwh ipart_t = part_t/el_gent nox relative emissions from electricity generation iso_t g/kwh iso_t = so_t/el_gent so2 relative emissions from electricity generation iwst_rec_nz % iwst_rec_nz = wst_nzrec/wst_nz proportion of recovered non hazardous waste iwst_zrec % iwst_zrec = wst_zrec/wst_z proportion of recovered hazardous waste iwst_z % iwst_z = wst_z/wst_t proportion of hazardous waste in total waste relative social indicators symbol unit name social iemp_acc %o iemp_acc = 1000*emp_acc/emp_t average accidents per one hundred employees iemp_fat %o iemp_fat = 1000*emp_fat/emp_t average fatalities per one hundred employees iemp_ftc % iemp_ftc = emp_ftc/emp_t proportion of employees with full-time contract iemp_pc % iemp_pc = emp_pc/emp_t proportion of employees with permanent contract iemp_trg hours iemp_trg = emp_trg/emp_t hours of training per employee iemp_abs* % iemp_abs = number of absent days /the number of available workdays absenteeism rate iemp_sen* years iemp_sen = sum of years of employees average seniority (permanence in the permanence in the company/emp_t company) iemp_turn* % iemp_turn = number of employee proportion of employees replaced within leaves/ average number of the company, excluding retirements (staff employees turnover) iemp_womt % iemp_womt = emp_womt/emp_t proportion of women in total workforce iemp_wonm % iemp_wonm = emp_wonm/emp_t proportion of women in management iemp_womb % iemp_womb = emp_womb/emp_t proportion of women on the board itax % itax = evd_tax/t_rvn weight of tax in revenues iwage % iwage = evd_emp/evd_own weight of wages, salaries and benefits in payments to owners 1010-3552-1-le.qxd abbreviations: mdir: miljødirektoratet, mdir [norwegian environmental agency] (before 2013, direktoratet for naturforvaltning, dn [directorate for nature management]). epi: environmental policy integration. ia: impact assessment. moce: ministry of climate and environment (before 2013; ministry of environment) mope: ministry of petroleum and energy. nve: norges vassdragsog energidirektorat [norwegian water resources and energy directorate]. tca: thematic conflict assessments. international journal of sustainable energy planning and management vol. 05 2015 15 1. introduction 1.1. problems to be addressed wind power is an important renewable energy source; however, wind power investments in norway have so far been limited. to obtain investments, two basic conditions must be in place: 1) investors must consider the profitability and the risk to be acceptable, and 2) they need a project-licence from the government. the argument put forward in this article is that there is a lack of predictability in the norwegian licencing system for wind power, which introduces an extra risk element for investors, in addition to the ordinary financial risk, and thus dampens investors’ engagement in the norwegian wind power market. 1corresponding author e-mail: bernt.blindheim@ae.no internationaljournal of sustainable energy planning and management vol. 05 2015 15–26 gone with the wind? the norwegian licencing process for wind power: does it support investments and the realisation of political goals? �������� � �� � ������� � � � �� �� ����� �� ���� �� � ���������� ���� ���������� � ���� abstract the ministry of petroleum and energy (mope) manages the licencing system for norwegian wind power. balancing relevant concerns in this process could be considered as environmental policy integration (epi) in practical wind power policy. wind power investments have been limited in norway, investors have left the market and those remaining are jittery towards making investments. this article argues that the licencing system is partially responsible for this situation; the system has, over time, introduced an extra risk element for investors, challenged their patience and hampered investments. especially mope’s handling of appeals has been time consuming and difficult to predict regarding final outcome. the problem is probably lack of common understanding between mope and ministry of climate and environment (moce) on how epi works in practical wind power policy. to speed up investments the pace in the licencing process must be increased and the criteria for balancing relevant interest must be clarified. keywords: wind power, licencing processes, environmental policy integration, predictability for investors url: dx.doi.org/10.5278/ijsepm.2015.5.3 16 international journal of sustainable energy planning and management vol. 05 2015 gone with the wind? the norwegian licencing process for wind power: does it support investments and the realisation of political goals? the licencing process for wind power—in norway managed mope—could be linked to the concept of environmental policy integration, epi. the basic idea of epi is that it should lead to sustainable development by putting environmental objectives on par with existing economic and social sector objectives [1, p28]. the norwegian licencing process for wind power could be regarded as the practical exercise of accomplishing epi in wind power policy— economic and political benefits from diffusion of wind power should be balanced against negative impact on the environment. however, environmental policy is managed by moce, and thus the coordination between two separated policy sectors and ministries could create epi challenges. therefore, epi is used as a reference for the discussion in this article. investors entering into wind power in norway face an endurance test. the time consumed from the first field studies to realised projects, is in most cases more than ten years. the licencing process has been particularly time-consuming, taking five years in averages [2, p53]. additionally, the outcome of some of the governmental resolutions has by some stakeholders been described as unexpected—for instance, mope’s decision to reject the moifjellet project, which will be discussed below. for investors, unexpected use of time and uncertainty about the final governmental resolutions (yes or no) increase spending and the number of projects investors must develop and put into the licencing process. hence, experiences with the efficiency and predictability in the licencing process could influence on the investors willingness to go into, remain and invest in the norwegian wind power market. in this context two claims are put forward: first, the environmental policy integration (epi) in the norwegian licencing system for wind power has been inconsistent and leads to an inefficient and unpredictable licencing system. second, this system has negatively impacted investors’ willingness to invest in the norwegian wind power market. moreover, if not revised, it will have a negative impact on future investments in wind power in norway. the article builds on data from the public administrations and the governmental documents dealing with the final resolution and interviews with investors, representatives from the central directorates, local authorities and ngos. news coverage and press statements from the government are also included. 1.2. wind power’s role in norway in 2011, approximately 96% of norway’s electricity production was generated from hydropower [3, p24]. though, the government still promotes increased production of electricity from renewable sources, among other things motivated by an expressed ambitious climateand renewable energy policy. moreover, the hydropower system is vulnerable to shortages in rainfall and the protection of river systems has become an important political issue. therefore, the government has been looking for alternative renewable sources, and already in 1999 adopted a 3 twh onshore wind power production target to be reached within 2010 [4, section 4.1]. the norwegian west coast offers wind speeds above 8 m/s, and nve has calculated the onshore wind power potential in norway, all outside factors excluded, to be 250 twh [5]. in 2001, the norwegian government established enova (enova.no), and one of the purposes was to subsidise wind power through investment grants. the enova scheme was running up to 2010. in spite of extensive wind resources, the support scheme and the government’s stated 3 twh policy target by 2010. norway’s wind power capacity is still limited: 704 mw were running and 1.6 twh was produced in 2012 [6]. norway is not a member of the eu, however, because of the agreement of the european economic area (eea agreement), still committed to the eu’s directive on promoting the use of energy from renewable sources (the res directive) [7] and has agreed to increase its renewable share in the energy consumption from 58% in 2005 to 67.5% by 2020 [8]. the directive and the commitment comprise the heating and cooling sector, the electricity sector and the transportation sector. the norwegian res plan, i.e., how to fulfil this 2020 obligation, includes an ambition to increase wind power production to approximately 8.4 twh [9, table 10.b]; hence, the pace in wind power investments must grow rapidly. to promote renewable electricity, a common green certificate market together with sweden was set into operation in 2012 [10]. the goal is to increase renewable electricity production in the two countries together by 26.4 twh by 2020 and thus contribute to the fulfilment of the two countries’ national res obligations. the swedish res obligation is a 49 % renewable share in the consumption by 2020. the consumer’s certificate obligations are equally shared between the two countries (13.2 twh), and 50% of the common increase in renewable electricity production could be booked on each country’s res account. the market for new production is technology-neutral, and in contrast to the consumer obligation, independent of country borders. 2. theoretical approach: environmental policy integration 2.1. environmental policy integration although the principle of epi (environmental policy integration) was not used explicitly in the brundtland report, merging environment and economics in decision making was seen as one of the critical objectives of sustainable development [11, p49 and p62−65]. according to jordan and lenschow’s interpretation [12, p147], there was a strong emphasis on “systematically connecting the seemingly incompatible goals of economic competitiveness, social development and environmental protection, and hence to ensure sustainable development.” the concept of epi stems from these concerns. the definition presented by hovden and lafferty [13, p15]) provides a practical approach to the concept: “environmental policy integration implies the incorporation of environmental objectives into all stages of policymaking in nonenvironmental policy sectors, with a specific recognition of this goal as a guiding principle for the planning and execution of policy”. norway has been considered a front-runner in epi and has given epi constitutional status [14]. however, in 2013, norway was only ranked tenth in the world on the overall “environmental performance index”, tenth on the sub-index on energy and climate and 65th on the sub-index for biodiversity and habitat [15]. the indexes rank how well 178 countries perform on high-priority environmental issues in two broad policy areas: protection of human health from environmental harm and protection of ecosystems. norwegian policy implementation is based on the principle of sectorial responsibility: separate ministries have the duty to accomplish decisions made by the parliament within the ministries policy sector and appurtenant bureaucratic institutions. thus, the practical exercise is carried out through numerous “sub-regimes” and procedures that involve a multiplicity of actors and levels of responsibility; hence, the trade-offs between separate political bodies and interests could be a challenge. in 1996, the government stated that environmental concerns should be implemented in decision making in all policy sectors [16, section 3]. however, the implications for the energy sector are not described explicitly. establishing new wind power plants creates epi challenges; political goals regarding renewable energy and emissions reductions must be balanced against their impact on biodiversity, landscape and the local communities’ interests. the legal framework for realisation of renewable energy projects in norway has been stable over decades; regarding wind power the challenge is to balance different concerns related to relative new technology, by using existing and wellestablished laws, planning tools and regulatory procedures. a key element in performing epi in concrete cases is the execution of impact assessments (ias), and in norway, there have been provisions for ias since 1990 [17]. the ias shall bring about relevant knowledge needed to balance the relevant concerns. the government has also launched a set of supplementary management tools specially designed for wind power, which will be discussed below. 2.2. the licencing procedure for wind power in norway, projects could only be realised if a licence (concession) is given in accordance with the energy act [18] enforced by mope. still, the authority to govern the process and assign licences is delegated to nve. however, every party in the process could appeal nve’s resolution to mope. wind power has become controversial in norway, especially local acceptance has been a challenge, and most cases are appealed [19]. mope is governed by the cabinet minister; thus, the final resolution is a political decision. this is in contrast to for instance sweden, where appeals are handled by a court of law (vindlov.se). municipalities have no legal power in the process; still, the government would in most cases not approve projects that lack local support. the governmental institutions in charge of environmental matters, managed by moce, have a somewhat diffuse role in the decision-making process; they have no legal power but serve in an advisory role. moce is consulted when nve works out the ia programs; additionally, the mdir, one of moce’s directorates, works out “thematic conflict assessments” (see explanation below). additionally, before mope makes a final resolution, there are consultations with moce; yet, documents from these consultations are not publicly accessible [20]. the licencing process is illustrated stepwise in figure 1. planning tools especially designed for the licencing process for wind power: international journal of sustainable energy planning and management vol. 05 2015 17 bernt blindheim in 2005, the government launched the “thematic conflict assessments”, the tcas [22]. when the investor has announced that a new project is under review (by submitting a notification to nve), mdir, the defence interests, the reindeer management and the cultural heritage management should give grades in the range a to e, describing the project’s impact on national and sectorial interests [23]. grade a represents no conflict, while grade e represents severe conflict and is by many considered as a showstopper. the tcas are based on the directorates’ professional knowledge; however, before the nve makes a conclusion, the tcas are reconsidered on the basis of the information identified in the ias. the tcas could be considered as a tool to highlight issues of national importance when exercising epi in the wind power sector. additionally, in 2007, mope and moce introduced guidelines for planning and localisation of wind power schemes. the intention was to arrange for the expansion of wind power within a long-term context, to contribute to the efficiency of the licencing process and to improve the predictability for investors and for the communities [24, chapter 1]. the guidelines triggered county plans for wind power in some counties—for instance, in rogaland [25], where the example cases in this article are located. 3. the efficiency and predictability in the licencing system 3.1. efficiency and predictability in general calculations based on information from nve, on all clarified projects by august 2013 [26], indicate that the average time from the applications being submitted to nve until the final decisions in mope was 3.7 years; nve used 2.1 years, and mope used 1.6 years though, in extreme cases the total case-handling time has been more than eight years (e.g. the project sleneset in nordland). according to the office of the auditor general of norway [riksrevisjonen], which has investigated the licensing process in nve and mope for projects handled in the period 2010 to 2013, the time consumed in nve was three years on average, and the average time consumed in mope was two years— a total of five years from application to final resolution [2]. these data, compared with the data above, indicate that the case-handling time has increased somewhat during the last years. comparable data from time consumed in the licencing process from other countries is not easily available, but a report from swedish energy agency [energimyndigheten] concluded that the average casehandling time for renewable energy projects in sweden was 2.7 years and that appeals increased this time by 39 weeks [27, p14]. though, not fully comparable, the handling of applications, and especially the handling of appeals, seems to be more time consuming in norway than in sweden. regarding status in the licencing process, table 1 illustrates the situation in august 2013. perhaps the most interesting observation from table 1 2 is the comprehensive number of projects waiting for clarification in mope; approximately 9 500 gwh. table 1 also illustrates the predictability as regards the final outcome. 22 of the proposed projects have been turned down, and 50 projects have been approved. however, regarding energy volume, approximately 50% have been approved and 50% have been rejected. in eight of the cases, mope has overruled nve, and turned yes to no. 3.2. an example from the bjerkreim cluster: the gravdal and moifjellet projects the bjerkreim region in the county of rogaland, in the south-western part of norway, offers wind speeds above 8 m/s, capacity in the national transmission grid, and municipalities, landowners and local inhabitants generally in favour of wind power. development of projects in bjerkreim region began in 2003, and in 2007, investors applied for licences for a total of seven projects, gravdal and moifjellet included. the seven projects constitute the bjerkreim cluster. the nve coordinated the licencing process for the projects and the most controversial issues were the impact on birds of prey and the eagle owl. in 2009, six of the projects, among them gravdal and moifjellet, were approved by 18 international journal of sustainable energy planning and management vol. 05 2015 gone with the wind? the norwegian licencing process for wind power: does it support investments and the realisation of political goals? moce (consultation) notification (investor) ia program (nve) ia /application (investor) nve’s evaluations yes / no mope’s evaluation final resolution appealstcas (mdir). public inquiry tcas (mdir). public inquiry moce (consultation) figure 1: the licencing process and the involved figures (authors own based on [21]). nve. however, the nve’s decisions were appealed to mope, and in 2012 mope made the final decision and assigned licences for five of the projects. gravdal was among the approved projects, while the decision for moifjellet was reversed the project was rejected by mope [29]. a total of 426 mw with an expected annual energy production of approximately 1.3 twh could now be realised. the basic information for gravdal and moifjellet is provided in table 2. the final resolution for the two projects reads as follows (abbreviated): ”the ministry emphasizes that gravdal could contribute with a substantial amount of renewable energy. based on an overall evaluation the ministry concludes that the advantages exceed the negative impact the project could cause. the project is therefore approved. realization of moifjellet could cause severe negative impact on biodiversity. even if the level of conflict is uncertain the ministry states that the potential negative impact on bird of prey is not in accordance with the precautionary principle in the biodiversity act (...). despite of the good wind recourses mope’s evaluation is that the advantages do not exceed the negative impacts the project could cause on biodiversity, especially on birds of prey. the application for moifjellet is therefore refused” ([29, p35, p36 and p40], authors translation). 4. the licencing system and epi in wind power policy—balancing of environmental concerns 4.1. what happened in bjerkreim? the intention of the discussion below is not to argue against mope’s decisions, but with epi in mind, to discuss the political consistency in the process. according to table 2, the governmental handling of the cases for the entire cluster took five years: 2.5 years in nve and 2.5 years in mope. time consumed in nve is understandable; the work to coordinate the ias, the design of internal transmission grid in the cluster and arrange for meetings with stakeholders was comprehensive. however, it is more difficult to international journal of sustainable energy planning and management vol. 05 2015 19 bernt blindheim table 1. status in august 2013. includes projects with capacity >10 mw (authors calculations based on [26, 28]). capacity energy a number (mw) (gwh) of projects running 704 2 110 23 approved by nve/mope (running included) 2 995 8 985 50 applied but not clarified by nve 4 015 12 040 43 approved by nve, but not clarified by mope 3 190 9 570 25 rejected by nve/mope 2 755 8 265 22 nve’s approval turned down by mope 345 1 035 8 a = indicative figures, capacity factor assumed to be 0.34. table 2. basic information for gravdal and moifjellet projects. (based on [26, 29 and 30]). gravdal moifjellet owner/applicant fred olsen renewables statkraft agder energi vind da capacity (mw) 90 150 expected energy production (gwh) 270 450 area (km2 ) 9 15 notification 19 dec. 2003 7 june 2005 tca, biodiversity d e d tca, landscape b c c applied 8 aug. 2007 28 june 2007 resolution (nve) 16 dec. 2009 outcome (nve) concession concession final resolution (mope) 5 july 2012 outcome (mope) concession refused case handling time nve: 2.5 years, mope years: 2.5. total: 5 years understand why mope needed 2.5 years clarify the appeals—the basic information was in place, and mope could concentrate on the most controversial issues. an article in teknisk ukeblad (tu) [technology weekly], refers to a meeting between moce and several investors some months before the final decision in bjerkreim was made [31], and here, the minister, at that time erik solheim, representing the socialist party [sosialistisk venstreparti, sv], admitted that the case-handling time was too long. however, he also noted that the investors could not expect shortcuts and that it was important to find criteria to separate good projects from bad projects. he also expressed that actions to speed up the process would be taken in both moce and mope. the article illustrates moce’s somewhat diffuse role in wind power matters; the minister who gives the statement has no legal power, but it is seemingly an important player. moreover, the statement confirms that the government struggles to find criteria for balancing interests managed by two different ministries; i.e., epi is a challenge. mope’s resolution for moifjellet was controversial, and by many of the involved parties described as unexpected and difficult to understand. nve had approved both projects and the resolutions were equally formulated for moifjellet and for gravdal [30, p219 and p228]. additionally, the tcas did not indicate that moifjellet was more controversial than gravdal. moreover, the hosting municipality bjerkreim, had been in favour of both projects during the entire development process. the county manager [fylkesmannen] and some ngo’s had been sceptical; however, compared with other projects in norway, the projects had not been exceptionally controversial. regarding mope’s evaluations, the most interesting observation is what was not included in mope’s argument [29]. first, mope did not comment on the tcas. the tcas stated that the mdir was more sceptical towards gravdal (table 2) regarding the impact on biodiversity (d-e) than it was towards moifjellet (d), and less negative towards gravdal under the landscape category (b-c versus c). thus, the tcas indicate that realisation of gravdal could really be questioned; grade e is by some regarded as a showstopper. regardless of the conclusion that can be drawn from the tcas, it is interesting to observe that they were not examined by mope. the observation is particularly interesting because moce probably provided considerable influence on mope’s decision; thus, moce seemed to ignore the evaluations performed by its own sectorial directorate (mdir). second, nve instructed the developers to optimise the cluster’s internal transmission grid and the connections to the national transmission grid. moifjellet was the hub in the cluster’s internal grid structure and when mope refused moifjellet, the cluster’s internal grid had to be redesigned. the extent of the internal grid in the cluster expanded, resulted in appurtenant increased impact on the environment and increased construction costs. and finally, mope neither discussed nor opposed to the ias worked out by the developers. thus, it could be stated that mope did not comment on the information brought about from the most central planning tools regarding epi; the tcas and the ias. several of the involved actors stated in interviews that the final decision was based on old-fashioned political “horse-trading”. the “red-green coalition”, a coalition between the labour party [arbeiderpartiet, ap], the socialist party [sosialistisk venstreparti, sv] and the centre party [senterpartiet, sp] was in power— the cabinet minister in moce was held by sv, and the cabinet minister in mope by the sp. sv could be claimed to be more focused on biodiversity than on renewable energy, and the opposite as regards sp. possibly, to make a political solution feasible, sv had to get a triumph; to highlight that biodiversity concerns was important, one of the projects had to be turned down. in an article in teknisk ukeblad after the decision was made, the minister in moce, at that time bård vegar solhjel (who had recently replaced erik solheim), stated that profitability was a secondary issue when environmental values are threatened [32]. the minister in mope, then ola borten moe, who was in charge of the official resolution, did not publicly commented on these trade-offs. the final resolutions were in place in 2012, and assuming three years planning and construction time, the first turbines could be running in 2015, approximately 10 years after the development process started. nevertheless, realisation of the projects is still not clarified; the investors have so far (by autumn 2014) not signed contracts with wind turbine suppliers. thus, starting up power production is at least postponed to 2016 or 2017. 4.2. epi and predictability in the licencing process dalen et al. [33] have examined projects clarified by nve. they state that out of projects that had required tca grade d, 10 projects granted a concession by nve 20 international journal of sustainable energy planning and management vol. 05 2015 gone with the wind? the norwegian licencing process for wind power: does it support investments and the realisation of political goals? and only three had been rejected. of the projects that received e classification, four were granted and three rejected. in a letter to the moce in 2013, mdir evaluated the efficiency of the tca instrument. they claimed that the tcas do not work as a tool to separate projects with huge negative impacts on the environment from projects with less negative impacts, and additionally, introduction of tcas has not improved the predictability for investors [34]. the ngo bellona has drawn the same conclusion, and proposed to rearrange the tcas [35]. regarding moce’s guidelines for regional planning, and the plan for wind power in rogaland, which also could be regarded as an epi tool, the bjerkreim cases illustrate lack of consistency; neither nve’s or mope’s resolutions are in accordance with the county plan; the majority of the approved project areas are situated in areas not recommended for wind power [29]. as a consequence of this, the county council has decided to roll the county plan [36]. however, this observation could not be generalised; outcomes have been different in other counties; e.g., in sør-trøndelag, where approved projects [37] and the county plan [38] are largely in accordance with each other. riksrevisjonen [2] has examined the licencing process for renewable energy, and has concluded that there is an evident need to improve the process. it is stated that the case-handling time could be reduced and mope should work out an overall strategy for promotion of renewable energy and update the guidelines for wind power to clarify the requirements for the ia works and methodology. however, riksrevisjonen does not comment on the efficiency of the tcas or on the coordination between mope and moce. literature on planning (licencing) processes for wind power are comprehensive, especially evaluations linked to the social acceptance of wind power (e.g., aitken [39] and devine-wright [40]). however, concrete discussions on the connection between epi, licencing processes for renewable energy and investments are not traceable in academic debate. still, some scholars have contributed more generally to the norwegian discussion. buen j. [41] has compared long-term technological change in wind power in norway and denmark and has concluded that policies and measures have been weaker and less stable in norway than in denmark. blindheim [42] claims that the long lasting political debate wind power’s role in the norwegian energy system has led to lack of focus and priority in mope and thus projects have accumulated in the licencing process. ek et al. [43] has compared historical, institutional and policy-related differences for wind power development in denmark, sweden and norway. they claim that the danish and norwegian planning system provides greater scope for implementing national wind power policy than does the swedish system. petterson and söderholm [44] support ek et al.’s conclusions. however, in contrast to norway, the swedish wind power production has grown rapidly during recent years (8.7 twh by 2012 [45]. the european environmental agency (eea) [46, p17] states that environmental action plans have been introduced in mope in connection with the 2000 budget but adds that there appears to be no system for conducting reviews or audits on the plans. regarding epi and the norwegian renewable electricity policy, knudsen [14, p124] concludes that “denmark and sweden—though differing on their choice of governing mechanisms and policy instruments—are clearly more advanced with respect to res-e/epi than norway” (“res-e” representing electricity from renewable sources). the data and discussion in this article expands on the conclusions above; the norwegian licensing system has not, so far, pushed the introduction of wind power in norway. on the contrary, the pace in the process has been slow and the outcomes to a certain degree unpredictable. the tools introduced to separate “god” projects from “bad” has not worked; it is simply unclear how epi works in the norwegian wind power policy. 4.3. investor risk investors do not share internal risk evaluations with the public. nevertheless, there are many indications on how investors evaluate opportunities in the norwegian wind power market. shell renewables sold its wind power projects in norway (moifjellet) to statkraft already in 2008 [47], and statoil sold off its onshore wind power projects to zephyr in 2010 [48] and left the joint venture company sarepta in 2011 [49]. the remaining actors are mainly the norwegian publicly owned utilities: statkraft, which is owned by the government, and the regional companies, which, in general are owned by counties and municipalities. however, statkraft is at the moment investing heavily in sweden through the company statkraft sca vind (vindkraftnorr.se) and in united kingdom through a joint venture with statoil (scira.co.uk). statkraft’s initiatives in sweden are interesting owing to the fact that swedish and norwegian projects are exposed to almost the same international journal of sustainable energy planning and management vol. 05 2015 21 bernt blindheim market terms a common exchange for electric power and a common electrical certificate market. the regional utilities bkk (bkk.no) and sognekraft (sognekraft.no), which are cooperating through the company vestavind, have expressed reduced interest in further development of wind power in norway [50]. more than two years after mope’s approval of the projects in bjerkreim, agder energi, lyse, norsk vind energi, statskog and fred olsen renewables (e.g. the players behind the projects), still hesitates to realise the projects. a couple of the utilities in troms and nordland, which own the joint venture nord-norsk vindkraft, have decided to wind up the companies ambitious wind power activities after mope’s refusal for the project sleneset [51]. the project had then been in the governmental pipeline for eight years [19]. however, the developers could obviously have been more critical regarding environmental concerns in their project development. there are lot of examples where severe conflicts with biodiversity have been revealed in the early stages of the project, and consequently never should have been put into the governmental pipeline. this type of opportunistic behaviour, however, can also be seen as an effect of the licencing system; if others investors get projects approved despite the tca grade e, why not try? as such, investors face a rather uncertain decision system, where it is unclear how epi—among other factors through tcas—actually works in wind power projects. additionally, the lack of insight in the trade-offs between the two involved ministries prevents an open learning process—a process needed for adjustments in the investors’ development practise. nilsson [52] states that shaping institutions for learning are an important element in epi, and the eea [46] calls attention to that “existing weaknesses in the system should be addressed in what is a learning by doing process”. moreover, a slow, reluctant decisionmaking process behind closed doors does not contribute to an open debate, which is an important element for social acceptance of wind power. still, it could not be claimed that the licencing process is the only reason for the investors’ reduced focus on the norwegian wind power market. as an example buan et al. [53] have investigated factors that motivate investments in renewable energy in norway, sweden and scotland and claim that variations in national support schemes appear to have the most significant effect on investment rates. however, based on the findings in this article this conclusion could be questioned; as mentioned above, norwegian and swedish investors have, since 2011, faced the same support system. moreover, the power prices have been equal in the two countries since the late 1990-ies. despite this, wind power is still expanding rapidly in sweden, while investments in norway continue to be modest. investors in sweden have, in the third quarter 2014 only, decided to order 220 mw of new capacity [54], while the prognoses for new installed capacity in norway in 2015 is only 10 mw [55] (figures for ordered capacity in norway are not available). an interesting subject for further research is to question if changes in the norwegian regional utilities’ financial situation, because of high demand for share dividend from the public owners during the last years, has impacted on the utilities engagement in wind power. another question to ask is if a potential conservatism, a path dependency, in the norwegian energy market, dominated by traditional hydro power producers, could be an explanatory factor behind lack of investments in wind power in norway. 5. conclusions, and what about the future? data from nve and mope demonstrates that the casehandling time for applications in general is long and somewhat unpredictable. the example from bjerkreim supports this conclusion. the duration of the licensing process for most projects, the cue of appeals in the mope, and the somewhat unexpected outcomes in the final decisions indicates that there are wide-ranging discussions between moce and mope and not a common understanding of how epi should work in wind power policy. statements to the press from the minister in charge of moce in 2012 illustrate that the government realises the problem regarding casehandling time and lack of clear criteria how to balance different issues [31]. political controversy, i.e., departments fighting for separate interests, seems also to be a challenge, and the coordination is probably even more challenging when a coalition between different political parties is in position. the bjerkreim case demonstrates that evaluations performed by the sectorial directorates are not central when the final resolution is made. additionally, the bjerkreim case demonstrates moce’s somewhat diffuse role in the licencing process for wind power: the minister in charge has no legal power but makes clear statements to the press regarding the process and final resolution. 22 international journal of sustainable energy planning and management vol. 05 2015 gone with the wind? the norwegian licencing process for wind power: does it support investments and the realisation of political goals? from the investors’ point of view, the emphasizing of environmental concerns, epi in practise, in the norwegian licencing process is not easy to understand tcas, ias, county plans and so on—what are seen as epi tools – are not discussed or opposed in the final governmental resolutions. thus, it is likely that the norwegian government’s somehow indistinct effecting of epi in the licencing processes, has challenged the investors patience, introduced an extra risk element in the market and contributed to reduced interest for investments in norwegian wind power. these findings from norway might be interesting for policymakers in other countries that want to push wind power investments. hopefully it could also widen the scientific understanding of important factors for investments in renewable energy. so far – support systems have got the attention, while the significance of streamlined administrative procedures has been a partly underrated subject. however, a number of scientists have contributed, for instance lüthi and prässler which report interesting results from a survey among 102 international investors in europe and the us. the survey verifies that the quality and duration of administrative processes are important factors when investors are evaluating the attractiveness of different markets for investments in renewable energy. among other things they express that 7 years in the administrative pipeline could be a knock-out criterion [56, p4883]. the learning from norway seems to support the results from this survey. bringing the wind power investors back to business could be a challenge. an important issue is to clarify how environmental concerns are emphasised in the decisionmaking. investors require a predictable licensing system regarding time consumed and final conclusion; the governmental balancing between the conflicting interests in wind power, or epi in practice, should be more traceable. additionally, there is a need for better guidelines and better routines to separate “good” projects from “bad” projects in an early stage of the process. a proposal could be to strengthen and clarify the tcas’ role in the process. the ngo bellona [35], among others, promotes this idea. a more controversial proposal could be to limit mope’s role to a control of the legality in the process; and hand over the responsibility for the professional judgment and balancing of interests to sectorial departments. handling of appeals could also be performed by court of law, like in the swedish system (vindlov.no). such a change would possibly increase predictability for the investors; a professional or legal process is, by its character, easier to foresee than a political process. political preferences could be altered after elections, negotiations between the political parties or by rearrangements in the government, while legal processes are more transparent and establish precedent for future cases. another improvement could be to limit the access to appeal nve’s resolutions; the existing arrangement, under which anybody could appeal nve’s resolutions to mope, creates a bottleneck in the process. references [1] persson, å., 2007. different perspectives on epi. in eckerberg, k., and nilsson, m. environmental policy integration in practice. shaping institutions for learning. earthscan from routledge, 2007. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1661-6200-1-le.qxd abstract district heating (dh) systems are important components in an energy efficient heat supply. with increasing amounts of renewable energy, the foundation for dh is changing and the approach to its planning will have to change. reduced temperatures of dh are proposed as a solution to adapt it to future renewable energy systems. this study compares three alternative concepts for dh temperature level: low temperature (55/25 °c), ultra-low temperature with electric boosting (45/25 °c), and ultra-low temperature with heat pump boosting (35/20 °c) taking into account the grid losses, production efficiencies and building requirements. the scenarios are modelled and analysed in the analysis tool energyplan and compared on primary energy supply and socioeconomic costs. the results show that the low temperature solution (55/25°c) has the lowest costs, reducing the total costs by about 100 m€ /year in 2050. abbreviations: cop coefficient of performance dea danish energy agency dh district heating dhw domestic hot water hp(s) heat pump(s) ida the danish society of engineers ltdh low-temperature district heating pes primary energy supply re renewable energy sh space heating international journal of sustainable energy planning and management vol. 12 2017 5 industry etc.), and a holistic approach including all sectors is needed to develop an efficient energy supply in the context of 100% re [2]. at the same time heat savings are implemented in the building stock and new buildings are of much better energy standards that the old ones, which will reduce the heat demand density and thereby further challenge the existing dh supply. also the economic framework for dh * corresponding author e-mail: rlund@plan.aau.dk international journal of sustainable energy planning and management vol. 12 2017 5–18 comparison of low-temperature district heating concepts in a long-term energy system perspective ��������� �* �� ���������������������� ���������� ��� �� � ����� ��� ��������� � ������� ��� �� � �������� �������������� � ������������ ����� ������� �!������"� ��������� # ��$�%"� %����� �� � ����������� #������ ���������� � ��&� ��� � ��' ���(�') �* � ���+���+!!�, ���-�� ��������� # keywords: energy system analysis; socioeconomic costs; fuel consumption; energy efficiency; energyplan simulations; url: dx.doi.org/10.5278/ijsepm.2017.12.2 1. introduction existing district heating (dh) systems and organisations are challenged by the transition towards 100% renewable energy (re) supply [1]. the re sources are variable in time which is different from the conventional heat supply based on fossil fuels that can be combusted according to the demand. this is not only the case for dh, but for all energy sectors (electricity, transport, 6 international journal of sustainable energy planning and management vol. 12 2017 comparison of low-temperature district heating concepts in a long-term energy system perspective production will change, as re to a larger extent is based on investment costs rather than fuel consumption [3]. the 4th generation of dh (4dh) is a framework in which solutions for these challenges can be developed. 4dh emphasises the need to integrate dh more with other energy sectors, by introducing new heat sources and conversion technologies that utilise synergies between the sectors. it is also a key element that the temperature levels of dh supply generally should be reduced to improve production efficiencies and reduce grid losses [1]. 1.1. low-temperature district heating a number of studies have investigated the concept of low-temperature district heating (ltdh) and aspects of this including benefits, challenges, costs and possible future technological solutions. in [4] dalla rosa et al. model a dh system in canada in detail comparing different temperature sets, concluding that supply temperatures reduced towards 70 °c from above 100 °c is a feasible solution, whereas lower temperature sets (below 60 °c) depend on the achievable system benefits because of increased costs. similar tendencies are found by ommen et al. [5] for the heat and electricity systems of greater copenhagen. here, supply temperatures below a level where electric boosting of domestic hot water (dhw) become necessary, are found not to be feasible in terms of consumer costs. baldvinsson and nakata compare in [6] medium temperature dh with ltdh, ltdh with low heat demand and a combination of medium temperature dh and ltdh in a cascading system, for a specific mixed urban area in japan. it is found that in a system with normal heat demand ltdh is not feasible, compared to ltdh combined with low heat demand which is feasible. for the latter, the optimal plant supply temperature level is found to be around 52 °c in general with temperature boosting up to 65°c in the winter. in another study on ltdh for some very different case areas in austria, the energy, economy and ecology are assessed for scenarios with different temperature configurations, some with electric dhw temperature boosting and some without [7]. the results show to be different for the different cases, but generally conclude that the availability of low temperature heat sources to the dh system is important. among the challenges of implementing ltdh is the need for reduced return temperature to maintain a good temperature difference between supply and return. gadd and werner present in [8] a method for fault detection in dh substations to avoid high return temperature using the temperature difference as indicator. if the return temperature cannot be sufficiently reduced, the pipe dimensions or pumping costs will increase to cover the same heating demand. tol and svendsen describe in [9] a method to dimension the pipe system in ltdh systems in an optimal way introducing temperature boosting in peak demand times, and thereby keeping pipe dimensions and heat losses to a minimum. another challenge is the sufficiency of the supply temperature to meet heat demands in the buildings. østergaard and svendsen indicate in [10], based on simulation of typical building types, that it is feasible to provide space heating (sh) to even old buildings, that have been energy refurbished, using dh supply temperatures below 50 °c. the dhw is more complicated because of the risk of legionella infection. yang et al. present in [11] a number of solutions for prevention of legionella infection in the dhw supply. these include temperature boosting using electricity, limitation of dhw volume using instantaneous heat exchangers and different sterilization methods. furthermore, yang et al. [12] assess different dhw preparation methods for supply temperatures below 45 °c using direct electric heating or hp boosting to a sufficient temperature level. østergaard and andersen [13] even consider a supply temperature as low as around 35 °c, using a booster hp, which is also indicated on the basis of the demonstration project in [14]. electricity consumption for heating is generally not an efficient solution in a system perspective [15] which is also found in [16], but might provide a new picture when combined with temperature reductions in dh. no studies have so far analysed the temperature level on a large scale energy system level from a societal point of view, which is necessary to provide more general recommendations. 1.2. long-term energy system analysis in this study five scenarios describing five concepts of dh with a focus on different temperature levels are chosen and the costs and benefits of each of these are assessed. the study will have its point of departure in a danish context analysing the scenarios implemented into holistic energy models of denmark for 2035 and 2050 developed in the ida energy vision project where scenarios from the danish energy agency (dea) are used as reference. here, the “wind” scenario is most similar to the ida scenario [17]. this study indicates, by socioeconomy and fuel consumption, which dh concept generally fits best international journal of sustainable energy planning and management vol. 12 2017 7 rasmus lund, dorte skaarup østergaard, xiaochen yang and brian vad mathiesen into a future re system in denmark, and thereby contributes to how dh can be seen in the overall strategy and planning for the danish energy sector. for this study, a number of concepts within ltdh is identified on characteristics of the temperature set and means for dhw preparation with a conventional temperature set as reference. these are presented in table 1. these concepts are further defined and put into an energy system context in chapter 2. in this paper the analysis and results are presented in the three following chapters. in chapter 1 an introduction, literature review and background for the area is presented. in chapter 2 the materials and methods are presented, first describing the purposes of the different scenarios followed by details on the assumed differences between the scenarios. the results of the analyses are presented in chapter 3 and in chapter 4 results and the implications of these are discussed comparing them with previous findings. 2. materials and methods the scenarios, characterising different dh concepts, use existing models of the energy system in denmark for 2035 and 2050, implementing changes in these consequent to the change of temperature assumption. the changes include grid losses, energy production and conversion efficiencies, potential utilisation of heat sources and investment costs in buildings and the supply system. 2.1. analysed scenarios the analysed scenarios are based on the scenarios designed in the project ida energy vision [17] for 2035 and 2050. these scenarios assume some degree of reduced temperature in the dh systems, but no specific temperatures are mentioned. here, it is assumed that the ida scenarios are equivalent to the low temperature scenario (55/25) of the present study, and the dependent parameters are calculated for the other scenarios based on this. the analysed scenarios can be seen as a stepwise progression in reduction of temperatures and interventions in the buildings. they are briefly described below: • heat savings (save) serves as a reference for the other scenarios and represents a situation where savings in space heating have been implemented (as for all the five scenarios) but the dh temperatures are kept at a conventional level. this is done because savings in heat demand is a prerequisite for reducing the temperatures in a feasible way. • low return temperature (return) represents a situation where implementation of building improvements to reduce the return temperature is performed while keeping the conventional supply temperature. the purpose of the scenario is to show the relevance of reducing the return temperature. • low temperature (low) represents a situation where both supply and return temperatures are reduced to the lowest possible level where no electric boosting of dhw in the buildings is necessary. • ultra-low temperature using direct electric boosting (ultra) represents a situation where the supply temperature is further reduced, making temperature boosting of the dhw necessary, here done using direct electric heaters. • ultra-low temperature using heat pump boosting (hp) represents a situation where the supply and return temperatures are further reduced, here using micro hps to boost the dhw temperature as needed. this scenario is based on more assumptions and simulated data compared to the others for which better data is available. 2.1.1. domestic hot water preparation in the three first scenarios it is assumed that the preparation of dhw is solely done with an table 1: main characteristics of considered concepts for district heating in future energy systems low ultra-low return low temp. ultra-low conventional temp. temp. (elec.) temp. (hp) nominal supply temperature [°c] 80 80 55 45 35 nominal return temperature [°c] 40 25 25 25 20 additional dhw preparation method – – – direct booster electric heat pump 8 international journal of sustainable energy planning and management vol. 12 2017 comparison of low-temperature district heating concepts in a long-term energy system perspective instantaneous heat exchanger, whereas in the scenarios ultra and hp, electric boosting is needed to provide a comfortable dhw supply limiting the risk for legionella. all scenarios are designed to be able to meet the same comfort and hygienic requirements [12]. in the ultra scenario electricity is consumed in an electric heater in the dhw system of the building. here, the water is heated according to the official comfort requirements of 45°c, after preheat by dh. the hygienic requirements, to avoid legionella are not compromised in this way because the water is heated instantaneously. in cases with long internal pipe systems it may be needed to use electric tracing [18]. the electricity consumption is assumed to be 14% of the dhw demand [12], and since this electricity is heating the dhw it is assumed to replace an equivalent amount of the heat supply from dh. in the hp scenario the electricity consumption is for the compressor in the hp. the heat pump is placed in a separate circuit with a storage tank and a heat exchanger connected to cold usage water. the water is stored at 50°c to be able to meet comfort requirements after the heat exchanger. this is done to reduce the needed capacity of the booster heat pump and the frequency of on/off switches. here, as well, the hygienic requirements are not compromised because the dhw is produced instantaneously on demand. the temperature has to be raised more than in the ultra scenario because of the lower supply temperature and storage requirement, but because of the cop of the hp the electricity consumption is at the same level. it is here assumed to be 16% of the dhw demand, based on data from [13] provided by the authors, in which the used booster hps are presented and discussed. the cop of these varies from 5.5 to 7.5 during the year. the electricity demands in the ultra and hp scenarios are distributed according to the variations in dhw demand. in the hp scenario, where individual thermal storages are integrated, it may be possible to use the hps intelligently, but compared to the household hps for heating, these booster hps are small in capacity and the effect will be small [19]. 2.1.2. additional costs when comparing the scenarios, a number of cost assumption related to the differences in the scenarios are made. the three categories and the specific cost assumptions made can be seen in table 2. to reduce the return temperature from the majority of buildings, some replacements of valves and radiators will be required, which is estimated in [20] to be approximately 10,000 dkk (1,300 €) per building. for the calculation of the total additional costs it is assumed that the replacement of valves and radiators will be done on average 10% before the end of their technical lifetime or have equally higher investment costs than standard devices. the electric heater is today available in retail, but as an independent unit supplementary to the dh substation. the model used in [12] can be purchased for approximately 900 € [21]. if the ultra scenario is implemented in a larger scale, it can be assumed that the unit will be sold in larger numbers and be an integrated part of the dh substation, reducing the costs. it is here assumed that the unit cost can be reduced to 220 € (one third of the cost for the micro hp). the micro booster hp is not available today in retail, but the units have been developed for a demonstration project in single family houses, where the additional cost for the hp unit is 15,000 dkk (2,000 €) [14]. the hp is here an integrated part of a dh substation, but it is assumed that the cost can be reduced to 670 € (one third of the demonstration unit cost) accounting for the potential benefit in multifamily buildings and the economy of scale in the production of larger quantities. the sensitivity of the results to these assumptions are discussed in section 4.3. table 2: assumptions on additional costs for the different scenarios category parameter save return low ultra hp 1. valves and radiators replacement [€/building] 0 130 130 130 130 total annualised cost [m€/year] 0 19 19 19 19 2. dhw heater / investment [€/building] – – – 220 670 micro booster hp total annualised cost [m€/year] – – – 37 112 3. dh grid costs total dh grid costs [b€] 20.1 20.0 20.3 20.5 20.7 change in grid costs [%] –1.0 –1.5 – 1.0 2.0 total annualised cost [m€/year] 869 865 878 887 896 international journal of sustainable energy planning and management vol. 12 2017 9 rasmus lund, dorte skaarup østergaard, xiaochen yang and brian vad mathiesen for this analysis, a modified version of energyplan has been developed where version 12.4 has been used as a starting point. the modification changes the input type of the cop for hps in dh from a fixed value to an hourly time-dependent input. this is done to reflect the changes in cop when the supply and return temperatures and the temperature of the heat source are changed. 2.3. socioeconomic cost calculation the socioeconomic costs are calculated as total annual costs for the given energy system including annualised investments costs, fuel costs, variable and fixed operation and maintenance costs and co2-emission costs. the investments are annualised using a discount rate of 3%. public economic measurements as taxes, levies, subsidies etc. are not included in the socioeconomic costs. 2.4. application of temperature profiles the temperature levels of dh systems are not constant from hour to hour or month to month, e.g. due to compensation for demand fluctuation. these changes may have an influence on the system benefits of low temperature dh. therefore, parameters sensitive to dh temperature changes have been calculated with an hourly time resolution based on temperature profiles. temperature measurements from the danish rindum dh plant from 2015, provided by the plant manager, have been used to calculate temperature profiles for heat savings, low return, low temperature and ultralow temperature scenarios. for the hp scenario, simulated data from [13] have been used to calculate the hourly profiles. table 3 shows the assumed average temperature levels in the dh systems for the high heating season (november-april), and low heating season (mayoctober). the temperatures are not calculated dynamically, but the measured profiles are scaled to meet the level seen in the table. this means that the return temperatures are not depending on the supply temperatures. the different scenarios have different average temperature differences between supply and return, which means that a different flow rate is required to deliver the same amount of heat. on the short term, this will mean different flow and cost for pumping, but on the long term it is assumed that these changes will be evened out by using more appropriate pipe dimensions. this is also indicated in [7] and [4]. it is in general assumed that the dh grid is replaced gradually and the differences in costs will therefore only be related to the dimensions of the pipe networks, because the replacement will be done at some point anyway. therefore, based on the relative changes in temperature difference, the total pipe costs are assumed to change according to the rates seen in table 2. the total dh grid costs are estimated based on the method presented in [22]. it is assumed that the insulation standard in 2035 is an average of series 2 and 3 whereas in 2050 it assumed to be an average of series 3 and 4 due to gradual improvement of pipe insulation standard towards 2050. the values of total annualised costs in table 2 are calculated based on the total investment cost, the technical lifetime of investments and a discount rate (see section 2.3). valves, radiators, electric heater and micro hps are assumed to have technical lifetimes of 20 years, whereas the dh grid is assumed to have a technical life time of 40 years [23]. 2.2. the energyplan analysis tool energyplan is an advanced energy system analysis tool developed for analysis of large scale energy system dynamics which allows for modelling of 100% re. it is a simulation tool that calculates one full year on an hourly time resolution. special focus is on the integration of the different energy sectors: electricity, heating, transport, and industry and the dynamics between these on an hourly basis. energyplan has also been applied in [3], [17], [22] and [24] for modelling of 100% re systems. a complete documentation of this can be found in [25]. table 3: average temperature levels in the scenarios for the highand low heating seasons [°c] save. return low ultra hp supply temperature – heating season 80 80 58 45 35 return temperature – heating season 40 25 25 25 20 supply temperature – low heating season 73 73 54 41 30 return temperature – low heating season 42 26 26 26 18 10 international journal of sustainable energy planning and management vol. 12 2017 comparison of low-temperature district heating concepts in a long-term energy system perspective the resulting temperature profiles are shown in figure 1 and figure 2 shows the profile of the 20 °c return temperature has a different tendency than the two others. this is caused by the ability of the booster hp in this scenario to decrease the return temperature in the nonheating season further than the output of the sh system. the temperature profiles have been used to calculate hourly heat losses, cop of hps and efficiency of solar thermal production. the details of how the temperatures have been applied to calculate these inputs are described further in sections 2.5 and 2.6. 2.5. district heating demands and losses the heat demand in dh describes the total demand for heat input to the buildings supplied with dh. this includes sh, dhw and internal heat losses from the hps in the hp scenario. the heat demands for the scenarios are calculated based on the figures presented in the future green buildings project [26] for the building stock and potential heat savings. it is assumed that 66% of the total heat demand will be covered by dh in 2035 and 2050. here the total savings in sh in existing buildings are 45% towards 2050. the demand 100 90 80 70 60 50 40 30 20 10 0 s u p p ly t e m p e ra tu re ( °c ) hour 878480527320658858565124439236602928219614647320 80°c 45°c 55°c 35°c figure 1: hourly supply temperature profiles applied in the analyses. for 80, 55 and 45 °c a 24-hour moving average is added (black lines) to show the general trends figure 2: hourly return temperature profiles applied in the analyses 60 0 hour r e tu rn t e m p e ra tu re ( °c ) 878480527320658858565124439236602928219614647320 10 20 30 40 50 40°c 20°c25°c international journal of sustainable energy planning and management vol. 12 2017 11 rasmus lund, dorte skaarup østergaard, xiaochen yang and brian vad mathiesen in new buildings are 41.3 kwh/m2 for sh and 13.7 kwh/m2 for dhw. in table 4 the components of the heat demands are presented. sh and dhw are fixed through all five scenarios, but different between 2035 and 2050 because of continued implementation of heat savings and a general change in the building stock and use. based on [12] it is assumed that 14% of the dhw demand in the ultra scenario is covered by electricity. for the hp scenario it is assumed that it has a thermal storage [13,14] with a heat loss of 10% of the dhw. 50% of the electricity consumption in the pump (16% of the dhw based on data from [13]) is considered a loss that can be utilised for sh, corresponding to 50% utilisation of the electricity for the thermodynamic cycle. this is not counted in the total demand because it is from electricity and therefore in brackets in the table. for the heat losses from thermal storage and electricity consumption in the hps, it is assumed that 30% can be utilised in the building as sh and the rest is lost as increased heat loss from the building, due to location of the hp and operation during low heating season. the grid losses are calculate based on results from modelling and analysing the flows in a dh network using the dhm-model applying different pipe insulation series and dh temperature levels [27], [22]. the grid loss (see table 4) is distributed to an hourly profile using the supply and return temperatures at plant level. 2.6. efficiency of energy conversion units most energy conversion units in dh systems depend on the supply and/or return temperatures in the network. in the following, the included production units whose efficiency are affected by the dh temperatures are presented and it is explained how their relation to the dh temperatures is included in the analysis. 2.6.1. condensing boilers fuel boilers in dh can improve their efficiency by condensing the flue gas from the combustion. the lower the return temperature received from the grid, the more heat can be extracted from the flue gas. how much the efficiency can be improved depends on the fuel type and moisture content. based on [28] it is assumed that reduced return temperature from 40 °c to 25 °c and 20 °c will improve the average efficiency of fuel boilers from 0.95 to 1.00 and 1.02 respectively. 2.6.2. chp plants chp plants mainly benefit from a reduction in the supply temperature. as the supply temperature from a chp plant is lower, the electric efficiency will improve because of a higher total temperature difference. a carnot efficiency equation has been used. see equation 1. (1) here, η is the carnot efficiency, tlow [k] is the supply temperature and thigh [k] is the high temperature in the combustion [29]. thigh is here assumed to be 500 °c. the found efficiencies are used to scale the chp electric efficiencies from the ida models. the thermal efficiencies of the chp are reduced corresponding to the increase of the electric efficiency to keep the same overall efficiency. η = −1 t t low high table 4: district heating demand and production composition for the scenarios in 2035 and 2050 2035 2050 [twh] save ret low ultra hp save ret low ultra hp space heating 21.4 21.4 21.4 21.4 21.4 18.4 18.4 18.4 18.4 18.4 domestic hot water 3.8 3.8 3.8 3.8 3.8 4.3 4.3 4.3 4.3 4.3 heat from electricity – – – –0.5 – – – – –0.6 – thermal storage loss – – – – 0.4 – – – – 0.4 hp heat loss – – – – (0.3) – – – – (0.3) internally utilised loss – – – – –0.2 – – – – –0.2 total demand 25.2 25.2 25.2 24.7 25.4 22.7 22.7 22.7 22.1 22.8 total grid loss 5.0 4.7 4.2 3.8 3.6 3.9 3.7 3.2 2.9 2.7 grid loss / production [%] 16.5 15.8 14.1 13.2 12.3 14.7 14.1 12.4 11.4 10.5 total production 30.2 29.9 29.4 28.4 28.9 26.5 26.3 25.8 24.9 25.5 12 international journal of sustainable energy planning and management vol. 12 2017 comparison of low-temperature district heating concepts in a long-term energy system perspective 2.6.3. heat pumps the coefficient of performance (cop) of a hp improves with both supply and return temperature reductions. the calculation of the hp cop is based on a lorenz cycle. see equation 2. (2) here, η is the system efficiency of the hp, assumed to be 0.4 (including losses in heat exchangers between hp refrigerant and dh and heat source fluid), thigh is the logarithmic mean high temperature in the direct and tlow is the logarithmic mean low temperature of the hp evaporator [13,30]. thigh and tlow are defined in equation 3. (3) here, tin and tout are the inlet and outlet temperatures of the condenser and the evaporator in the hp. it is assumed that the heat source for the hps can be cooled 5k. the cop is calculated for every hour, based on the dh temperature profiles described in section 2.2 and a heat source profile. the heat source temperature (see equation 4), should resemble an average of all the utilised heat sources. the seasonal variations are defined by measurements of sea water temperatures from [31]. other heat sources, such as low-temperature industrial waste heat or sewage water, often have higher temperatures than sea water. therefore, a constant temperature addition (kaddition) is added to the sea water temperature (tseawater) to calculate an estimate heat source temperature (theat source). theat source = tsea water + kaddition (4) the constant temperature addition (kaddition) is different for central dh in the bigger cities compared to the decentral dh in the smaller towns. in the bigger cities, the amount of good heat sources relative to the heat demandis lower than in the smaller towns [32]. the better heat sources with higher temperatures are assumed to be utilised before those with lower temperatures. at some point, a dh company will run out of good heat sources, and they will have to use less efficient heat sources to further expand the heat pump capacity. this point will occur earlier in the bigger cities (central dh) than in the t or t t t ln t ln t high low in out in out = − −( ) ( ) cop t t t high high low = − η * small towns (decentral dh) because of the lower amount of heat sources per demand. this is taken into account by defining kaddition to 10k for the decentral dh, but only 5k in the central dh. 2.6.4. solar thermal the output of solar thermal plants depends on the supply and return temperatures but also the ambient temperature of the solar thermal panels. the bigger the temperature difference between the temperature of the working fluid in the solar panel and the surrounding air, the larger the heat loss and thereby lower efficiency [33]. the relation is shown in figure 3. 2.6.5. geothermal in the danish context, geothermal resources are only utilised for dh in three locations, and all using absorption hps. the benefits of lower dh temperatures to the production from geothermal plants are mentioned in several studies, including [1,35]. no quantitative assessment of the potential has been found, though. here, it has been assumed that a reduced return temperature improves the annual production, as the temperature difference thereby increases by 5% and 7% when reduced to 25 °c and 20 °c respectively. reduced supply temperature is assumed to reduce the need for hps and thereby the costs for geothermal plants. the hp accounts for 29% of a geothermal plant costs [36], and it is assumed that 50%, 75% and 100% of this can be s o la r p a n e l e ff ic ie n c y [ % ] (tm-ta) [k] 0 10080604020 0 10 20 30 40 50 60 70 80 90 100 figure 3: efficiency of a solar panel as a function of the temperature difference between the medium panel temperature (tm) and the ambient air temperature (ta). derived from [34] international journal of sustainable energy planning and management vol. 12 2017 13 rasmus lund, dorte skaarup østergaard, xiaochen yang and brian vad mathiesen saved at 55 °c, 45 °c and 35 °c respectively. this is assuming that the geothermal heat source is above 35 °c, which is the case for all plants in denmark [37]. 2.6.6. industrial excess heat excess heat from industrial processes can be used for dh supply either using hps or via direct heat exchange. direct heat exchange requires the dh supply temperature to be lower than the one for the excess heat. in [38] it has been assessed that 4 pj of low temperature excess heat can be recovered using hp at today’s temperature sets. following this, it is in this study assumed that 25%, 50% and 75% of this can be recovered for dh supply in direct heat exchange, as the supply temperature is reduced to 55 °c, 45 °c and 35 °c respectively. 2.7. required production capacity an indirect effect of improved efficiencies and reduced demand in the dh system is the change in the required production capacity, due to changes in peak demand and utilisation time of the conversion units. this is done to include the potential change in investment costs related to production facilities and thereby making the scenarios economically comparable. the changes are performed iteratively to make all parameters match the requirements in the results of the final simulation. the following list presents all capacities that have been updated and how these have been updated. • fuel boilers in dh systems have been adjusted in capacity relative to the change in peak heat demand. • condensing power plants have been adjusted relative to peak electricity demand. this is only relevant in the ultra and hp scenarios, where there is an increase in electricity demand. • chp plants have been adjusted in capacity relative to the number of full load hours of the plants. • hps have been adjusted in capacity relative to the number of full load hours of the plants. • offshore wind power capacity has been adjusted to generate the same amount of excess electricity as in the low scenario. 3. results an overview of the analysed scenarios and the main results are presented in table 5. the results will be further elaborated in the following. in figure 4 it is shown how the dh production mix is changing between the scenarios. it can be seen that excess heat production is increasing, due to improved efficiencies, and at the same time chp and hp production is decreasing as a consequence of this. it can also be seen that the surplus production (the production above the dh supply markers) is increasing with reduced temperatures, which is caused by the increase of inflexible heat production in the low heating season from waste, excess heat, geothermal and solar thermal heat production. the surplus heat will materialise in a reduced supply of excess heat from industries or cooling via sea water, cooling tower or similar. the increasing surplus heat may indicate a potential for optimisation of the heat table 5: overview of central scenario parameters and results. 2035 2050 save ret low ultra hp save ret low ultra hp temperature set [°c] 80/40 80/25 55/25 45/25 35/20 80/40 80/25 55/25 45/25 35/20 additional dhw – – – direct booster – – – direct booster preparation method elec. hp elec. hp electricity consumption in dhw preparation [twh] 0 0 0 0.5 0.6 0 0 0 0.6 0.7 grid loss share [%] 16.5 15.8 14.1 13.2 12.3 14.7 14.1 12.4 11.4 10.5 total dh supply [twh] 30.2 29.9 29.4 28.4 28.9 26.5 26.3 25.8 24.9 25.5 total energy system costs [b€] 13.27 13.25 13.23 13.25 13.36 13.93 13.88 13.84 13.86 13.96 – reduction in energy system costs [m€] – 19 46 27 –88 – 53 98 76 –25 total pes [twh] 138.94 138.76 138.17 138.38 138.18 133.59 133.33 132.79 133.05 133.64 – reduction in pes [twh] – 0.18 0.77 0.56 0.76 – 0.26 0.80 0.54 –0.05 14 international journal of sustainable energy planning and management vol. 12 2017 comparison of low-temperature district heating concepts in a long-term energy system perspective source mix. in the scenarios with low temperatures, the boiler, hp and chp operates very few hours during the summer, but there is still an overproduction of heat. the primary energy supply (pes) seen in figure 5, shows the total changes as a result of all changes in the scenarios. it can be seen that reduction of supply and return temperatures does not influence the pes or fuel consumption significantly. the reduction in pes is in all scenarios less than 0.8 twh, with the lowest total fuel consumption and pes in the low scenario compared to the heat savings scenario. when the pes of these five scenarios are compared to the dea wind scenario, it can be seen that a significant saving is obtained. this is due to the applied measures in the ida figure 6: savings in total costs, divided on variable costs, operation and maintenance costs and investment costs, for the four alternative scenarios relative to the heat savings scenario for 2035 and 2050. the sensitivity of the results to high (+50%) and low (-50%) fuel costs is shown compared to the total costs r e tu rn l o w u ltr a h p r e tu rn l o w u ltr a h p 2035 2050 -200 -150 -100 -50 0 50 100 150 200 s a vi n g s in c o st s (m € /y e a r) capacity investments additional investments total low total high operation variable total figure 4: distribution of district heating production between production units for the five analysed scenarios, in 2035 and 2050 35 30 25 20 0 hpultralowreturnsave d is tr ic t h e a tin g p ro d u ct io n ( t w h /y e a r) hpultralowreturnsave 5 10 15 2035 2050 solar geothermal dh supply excess heat waste incineration chp hp boiler electric d e a w in d s a ve r e tu rn l o w u ltr a h p d e a w in d s a ve r e tu rn l o w u ltr a h p biomass renewables fossil fuels 20 40 60 80 100 120 140 160 180 0 p ri m a ry e n e rg y c o n su m p tio n ( t w h ) 2035 2050 figure 5: primary energy supplyin the five analysed scenarios and the dea wind scenario, for 2035 and 2050, divided on biomass, fluctuating renewables and fossil fuels scenarios that make use of synergies in the integration of energy sectors. figure 6 shows the overall economic results of the scenarios where a breakdown of the costs into variable costs (fuel and variable operation costs), operation costs (fixed operation costs) and investment costs. the results show that the scenarios return, low and ultra all are economically feasible compared to the heat savings scenario, and that the low scenario has the lowest costs in both 2035 and 2050. the hp scenario has higher costs than the heat savings scenario under the given assumptions. this is mainly due to the investment costs in the individual hps. as a sensitivity analysis, different fuel cost levels are included in the analysis, as seen in the figure. 4. discussion and conclusion the feasibility found in this analysis is based on socioeconomy, but this does not mean that these solutions are also business economically feasible to a dh company. the results should be seen as guidelines to policymakers designing the concrete economic international journal of sustainable energy planning and management vol. 12 2017 15 rasmus lund, dorte skaarup østergaard, xiaochen yang and brian vad mathiesen framework for dh development. the results apply on a general level for denmark, but there will most likely be dh areas that make exceptions from the general conclusions, given specific conditions making them different from a typical case. 4.1. reduction of temperature set the results show that reducing temperatures in dh is a feasible strategy on the medium and even more on the longer term, in a transition towards more re in denmark. the results indicate that a reduction of return temperatures alone, considering the required investments, is a feasible strategy already today and increasingly with more re penetration. in the 2050 model the savings are seven times larger than the additional investments. this is at the same time a prerequisite for a substantial reduction of the supply temperature. as the supply temperature is reduced towards the level where electric boosting of the dhw temperature is required, the costs keeps decreasing. from here, through the ultra and hp scenarios, the costs increase because the additional investments surpass the savings. 4.2. significance of investment costs it can be noticed in the results that a reduction in fuel consumption, which might intuitively be the reason to introduce ltdh, is not actually the main benefit on the system level. in all scenarios, except the return scenario for 2035, the reductions in capacity investments are larger than the variable and operational costs together. as seen in figure 6, the reductions in capacity investments are increasing until they peak in the ultra scenario and are lower in the hp scenario, whereas the additional investments have an exponentially increasing tendency through the scenarios. this indicates that a theoretical optimum exists in how low the temperature should be. this is also what can be seen in the trend of the reduction in total cost which peaks in the low scenario under the given assumptions. 4.3. electricity for domestic hot water boosting the two scenarios that use electricity for boosting of the temperature of the dhw show lower reduction in socioeconomic costs, and the low scenario without electricity use for dhw therefore seems like the most feasible strategy. as mentioned, the investment costs are of great importance to the results. the total socioeconomic savings are 100 and 75 m€ /year for the dh supply systems in denmark for the low and ultra scenarios respectively. the calculated additional investment costs for the electric heaters are 37 m€ /year, and if the costs of these can be reduced by two thirds, the scenarios would be economically on the same level. on the other hand, if the increase in pipe costs is larger than assumed here, the results will tip more in favour of the low scenario. because of the high additional costs in the hp scenario and the relatively low increase of the system benefits this is not seen as an option that can be feasible in general. the hp solution might be feasible in concrete cases under the right circumstances, though. if the costs of the low and ultra scenarios would be on the same level, there is still a risk in the ultra scenario, because the larger investments in the buildings lock the demand to that solution. if these investments are made it is still possible to operate at higher temperatures, but then the investments have been wasted. if an additional unit is added to the dh substation, an electric heater or especially a booster hp, it will also increase the need for maintenance and the risk for errors. the low scenario is more simple in the sense that it only requires investments that would be feasible anyway and thereby nothing is wasted if the temperatures are not reduced as much or as fast as planned. 4.4. synergy between ltdh and savings in space heating one important assumption in this study is the implementation of savings in sh of approximately 45% in existing buildings [17] and new buildings following the building codes with low sh demands as well. in this study, only modest changes in the cost for the dh grid are included because the assumed heat savings enable a reduction in temperature difference between dh supply and return. if no savings in sh are implemented, the temperature difference between supply and return cannot be reduced as much as suggested in this study, and thereby the benefits cannot be achieved either. alternatively, significantly higher costs in dh grid investments will have to be considered to account for the higher flow needed to cover the demand. 4.5. sensitivity of the results the sensitivity of the results to a number of important parameters have been analysed. the costs for the household investments and electricity consumption in dhw boosting are relatively uncertain, because no large-scale implementation have been done, but the values assumed are rather optimistic. therefore, the 16 international journal of sustainable energy planning and management vol. 12 2017 comparison of low-temperature district heating concepts in a long-term energy system perspective costs and electricity consumption will more likely be higher in the ultra and hp scenarios, making these less feasible compared to the others. in figure 6, the sensitivity to fuel price changes is presented. these changes in fuel costs can change the relation between the savings in the scenarios, but not the overall results. the same tendency can be seen when altering the applied interest rate and, in the 2035 case, the co2-price. in this study the ida models of denmark in 2035 and 2050 are assumed as starting points for the scenario analyses. the pace of the transition towards 100% re do not influence the conclusions, since the relations between the scenarios are similar in 2035 and 2050. if the development goes in a completely different direction than proposed in the ida energy vision [17], the results may not be representative. 4.6. conclusion it can be concluded that it is a feasible strategy to reduce dh temperatures on medium and long term in the development towards a re system. to reduce the return temperature to about 25 °c requires replacement and adjustment of the building heating systems, but this is feasible to do so, even if the supply temperature is not reduced, with an annual reduction of socioeconomic costs of 50 m€ /year in 2050 for the dh supply system in denmark. the supply temperature should be reduced as much as possible until electric boosting of dhw becomes necessary, which happens at about 55 °c and gives an annual reduction in socioeconomic costs of about 100 m€ /year. the feasibility on a general level of a further temperature reduction to e.g. 45 °c, taking local temperature boosting of dhw into account, is very questionable and will rely on a very low investment cost in the units to heat the dhw. a solution with micro hps for temperature boosting seems beyond realistic from an economic perspective, but under the right circumstances in small concrete areas it might be feasible. before considering electric boosting of temperatures, organisational issuesrelated to trade-offs between benefits for the dh company of reduced temperature and the increased costs for electricity for the consumers have to be solved. acknowledgement the authors would like to thank jesper skovhus andersen, manager at ringkøbing fjernvarme for delivering valuable data and christian nørr jacobsen and kasper qvist, dh specialists at sweco for providing important insights from their ltdh project. the work presented in this paper is a result of the research 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 19 2019 69 international journal of sustainable energy planning and management vol. 19 2019 69–82 1corresponding author e-mail: aoadepoju@futa.edu.ng abstract micro and small enterprises (mses) are the engine of economic growth in nigeria. but they also contribute heavily to the climate change through their choice of energy. mostly prefer source is the fossil fuel for electricity generation despite the growing awareness of the need to reduce greenhouse gas emissions by embracing renewable energy technologies across the globe. meanwhile, mses accounts for a large proportion of businesses in lagos state, nigeria and the situation is not different. hence, this study investigated the factors influencing willingness to adopt renewable energy technologies among the mses. the study surveyed 385 mses between january and march, 2017 in lagos state, nigeria but found 223 suitable for the analysis. using logit regression, the results showed that creating awareness and knowledge about renewable energy, adequate government policies, trust, peer-effect, development of renewable energy markets and technology acceptance factors (if it makes life easier, simple to use and improve the quality of work) are all positive and statistically significant in influencing the willingness to adopt renewable energy technologies among the mses. cooperation between private enterprises and relevant government agencies supported by ‘political will’ is required to promote the aforementioned factors influencing the willingness to adopt rets in nigeria. 1. introduction the need for renewable energy to serve as an alternative to fossil fuel is no longer news across the globe. this is not because renewable energy is cheap compared to fossil fuels; rather the negative environmental and health effects fossil fuels have on the general populace may be irreversible. energy is one of the indispensable factors for continuous development and economic growth [1, 2, 3, 4]. conversely, energy usage also contributes to environment degradation, such as air pollution, soil contamination and rise in sea level otherwise known as climate change. renewable energy offers the opportunity to contribute to a number of important sustainable development goals among which are: social and economic development, energy access, energy security, climate change mitigation and the reduction of environmental and health problems. the mitigation of dangerous anthropogenic climate change is seen as one strong driving force behind the increased use of renewable energy worldwide. lastly, the demand for energy is expected to increase worldwide over the next 30 years [5], and particularly in developing countries such as nigeria where rapid factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria yusuf opeyemi akinwale1 and adeyemi oluwaseun adepoju2* 1 department of economics, college of business administration, imam abdulrahman bin faisal university, dammam 31441, kingdom of saudi arabia. 2 department of project management technology, school of management technology, federal university of technology akure, km 7 akure-ilesa expressway, ondo state, nigeria. keywords: renewable energy technology; willingness to adopt; micro and small enterprises; technology acceptance; nigeria; url http://dx.doi.org/10.5278/ijsepm.2019.19.7 mailto:aoadepoju@futa.edu.ng http://dx.doi.org/10.5278/ijsepm.2019.19 70 international journal of sustainable energy planning and management vol. 19 2019 factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria economic growth is expected. adoption of renewable energy could lead to environmental quality, and creating awareness about environmental protection and sustainable development would promote people’s adoption behaviour. it is anticipated that a shift in public awareness of environmental issues would result into a significant changes in the public understanding and acceptance of climate change [43]. this is based on the premises that awareness of renewable energy would affect willingness to adopt it which would eventually affect its adoption as inferred from theory of reasoned action and technology acceptance model. most businesses in lagos state, which is the commercial hub of nigeria, are mainly micro, small and medium enterprises. the majority of these enterprises are currently using diesel-powered generators to privately generate electricity to support their businesses since there is high shortage of electric power from the national grid [54]. recently, it has been noticed that some of them have started using solar energy and rechargeable inverters to support their electricity needs. the role played by micro and small enterprises in various countries cannot be undermined as majority of households operate businesses within that scale. micro, small and medium enterprises (msmes) have been said to contribute largely to gdp worldwide [6, 7], thus it becomes necessary to study the use of energy amongst these enterprises. according to nigeria’s national bureau of statistics [8], msmes in nigeria contribute an average of 48.5% in nominal terms to gdp and 7.3% to exports. this further reiterates the importance of msmes which cannot be overemphasized in the nigerian economy. meanwhile, it is noteworthy to state that there are many msmes in the informal sector not captured by the national bureau of statistics. this study concentrates on lagos state which is the former capital city of nigeria. there are presently 36 states in nigeria with federal capital territory (fct) inclusive. lagos state has a mean monthly maximum temperature which steady around 90˚f (32˚c) and the mean monthly minimum temperature of approximately 72˚f (22˚c), with a land mass of 3,671 square kilometres. the state being the commercial hub of the country has an estimated population of over 12 million in 2015 (base on the 2015 estimations) but many unofficial private institutions put the current population of lagos state to be above 20 million people. the state has a youth literacy rate of 99.3% in any language and the highest adult literacy rate 92.3%, as well as the lowest severity of poverty rate of 1.1%. furthermore, lagos state has the highest consumption of pms otherwise known as petrol (19.2%) out of all states in the country followed by fct (8.7%) and ogun state (5.86%) as at year 2015 [51]. moreso, lagos state consumed 44.8% of the country’s diesel followed by rivers and ogun states with 14.87% and 8.47% respectively. in addition to this, 18.2% of the country’s kerosene was consumed by lagos residents, followed by 8.72% and 5.6% consumed by fct and oyo states as at end of 2015 [51]. meanwhile, the state also records the highest movement of cargo traffic and passengers on aircrafts and ships at both the airports and the seaports. all these attract businesses from all over the globe to lagos state. this makes lagos state a good place to deploy renewable energy in nigeria. due to the large number of micro and small enterprises in nigeria, there is a need to investigate the level of awareness of renewable energy as well as the factors that could be influencing their willingness to adopt renewable energy technologies as alternatives to fossil fuels in lagos state. it has been documented in the industrialised countries that public acceptance of renewable energy technologies is crucial to their successful introduction into society [9, 10]. this is because poor public acceptance of renewable energy technologies could hinder the implementation of sustainable energy technologies which hampers the attainment of important environmental and societal goals [11]. the article is divided into five sections. section 1 introduces the article; section 2 presents the theoretical and empirical reviews as well as the status of micro and small enterprises in nigeria. section 3 and 4 present the methodology used to carry out the study and results analyses respectively, while section 5 concludes the article. 2. literature review and theoretical framework this section provides the theories and empirical reviews of the study as well as the status of mses in nigeria. 2.1. theory of reasoned action and technology acceptance model the theory of reasoned action (tra) provides a model and explains how and why attitude affects behaviour [12, 13]. according to the theory, intention to perform certain behaviour precedes the actual behaviour. this intention is known as behavioural intention, and comes as a result of the idea that performing behaviour will international journal of sustainable energy planning and management vol. 19 2019 71 yusuf opeyemi akinwale and adeyemi oluwaseun adepoju by davis in 1986 [16]. tam explains how users acquire, learn, accept and use a technology. the model suggests that when users are presented with a new technology, a number of factors influence their decision about how and when they will use it. tam provides a basis with which one traces how external variables influence belief, attitude, and intention to use. the two main factors influencing the intentions to use a particular technology are perceived usefulness, which is a degree to which a person believes that using a particular system will improve his job’s output; and perceived ease of use is the degree to which a person believes that using a particular system would be free from effort. figure 2 showing the tam depicts that one’s actual use of a technology system is influenced directly or indirectly by the user’s behavioural intentions, attitude, lead to a specific outcome [14]. behavioural intention is important to the theory because these intentions are determined by attitudes to behaviours and subjective norms as shown in figure 1. feng [15] stated that an individual’s behaviour is determined by his/her attitude toward the outcome of that behaviour and by the opinions of others within his social environment. based on this tra, the first determinant is personal to each individual which is called “attitude towards the behaviour” and refers to attitudinal factors. the second determinant of intention is the individual’s perception of the social pressure put on him/her to perform or not to perform a particular behaviour and refers to subjective norm. on the other hand, technology acceptance model (tam) was an offshoot of tra, and was first developed beliefs evaluation normative beliefs motivation to comply subjective norm attitude intention behaviour figure 1: theory of reasoned action source: ajzen and fishbein [12, 13] external variables perceived usefulness perceived ease of use attitude towards behavioral intention to use actual use figure 2: technology acceptance model. source: davis [19] 72 international journal of sustainable energy planning and management vol. 19 2019 factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria with the people in the community and funding policy to encourage the citizens is also revealed in the study of reinsberger and posch [25] as factors which influence photovoltaic adoption in austria. hotel energy solutions [26] conducted a study based on an in-depth interview on the factors and initiatives affecting renewable energy technologies adoption among the european union small and medium enterprises in the hotel industry. the study found that cost of installations, distance from the renewable manufacturers, lack of adequate information and low awareness of res benefits among local and regional authorities as well as unclear formal requirements are the main factors affecting renewable energy technologies adoption among the smes in the hotel industry. ng’eno [27] also conducted a study among household in kenya on the factors affecting the adoption of solar power technology for domestic power usage. the study revealed that the level of knowledge and awareness of solar technology, level of income of households, and availability of substitute power source influence the adoption of domestic solar technology. some studies pointed out that government policy is an important factor influencing willingness to adopt renewable energy [28]. renewable energy technologies (rets) could face opposition and barriers due to public perception, policy design, not in my backyard (nimby) syndrome and lack of information about its impact on landscape and the environment [10, 28, 29, 30, 31]. policies can either accelerate or slow down the diffusion of rets [28, 32, 33]. verbruggen et al. [33] argued that policies affect directly drets costs, prices, and technology innovation. mattes et al. [34] using the german data of the european manufacturing survey 2012 found that access to renewable energy resources, size of firm, location of firm, financial resources, policy mix in terms of political and legal frameworks are major factors influencing the adoption of renewable energy technologies among the german firms in the manufacturing sector. according to graziano [35], education influences decision of adopting agents in various ways. education affects the pre-adoption process in that it provides adopting agents with the tools to understand and be acquainted with the direct and indirect advantages of adopting rets. few studies have shown that higher education attainment and training increase the likelihood of rets’ adoption [21, 36] as information plays a key perceived usefulness of the system, perceived ease of the system [17]. tam also proposes that external factors affect intention and actual use through mediated effects on perceived usefulness and perceived ease of use. consequently, the predictive capacity inherent in the theory of reasoned action [18] and the technology acceptance model may have relevance to evaluate decision making within the small business field, hence warrants the use of these theories for this study. 2.2. empirical literature on the willingness to adopt renewable energy sources the findings of bollinger and gillingham [20] shed light on the role of spatial peer-effect of diffused renewable energy technologies (drets) generally and solar photovoltaic (pv) systems specifically in california. their studies among others found that peer-effect, personal attitude/values and favourable subsidies have influenced the willingness to adopt a solar pv technology [20, 21]. the socioeconomic and demographic characteristics of agents adopting technologies and those of the agents’ surroundings are the focus of many studies in drets diffusion. agents act like other ‘peers’ for two main reasons: for emulating someone perceived as guidance; or for reducing the risk associated in being an innovator [20]. the physical presence of the solar panels in the market creates a sense of security, reducing the perceived risk for potential adopters and showing the change from the business-as-usual is possible. snape and rynikiewicz [22] investigated the same effect in the uk and their results shows stronger adoption in regions where agents first adopted photovoltaic systems and a concentric pattern, with lower adoption in the further areas. according to fischer and sauter [23], social references seem to influence both acceptance and resistance to renewable energy technologies as friends and neighbours seem to be important references for investing in solar panels. also, friends’ and relatives’ opinions were found to be important determinants of people’s views on local renewable energy projects [24]. heaslip et al. [9] also found in their studies conducted in denmark and ireland that the extent of community involvement (social factor) in the development of sustainable energy community projects is a significant factor determining the acceptance of such energy projects in the community. the community involvement which involved regular public meetings international journal of sustainable energy planning and management vol. 19 2019 73 yusuf opeyemi akinwale and adeyemi oluwaseun adepoju china. they found that household characteristics (such as family size, age, gender, household income, location and structure), knowledge and public awareness about the technology (such as higher education, publicity and demonstration), policy and regulations, financial support from the government and renewable energy market development are all significant in influencing the adoption of clean fuels and cooking stoves in china. there are few studies which have examined the awareness and attitudes of members of the public towards renewable energy usage in nigeria [1, 48, 52, 53]. however, there is a dearth of study being conducted on the adoption of renewable energies among micro and small enterprises in nigeria despite that this category of business constitutes a large number in the country. majority of these businesses utilise privately owned fossil fuel energy generators to carry out their daily business activities as there is a limited supply of electricity from the national grid. hence, this study investigates the factors influencing adoption of renewable energy among mses due to the importance of these factors and given the lack of study particularly on mses in nigeria that would allow the dynamics of their acceptance. 2.3. status of the micro, small and medium enterprises in nigeria the contribution of micro, small and medium enterprises (msme’s to the economic growth of a nation is well documented. study findings on msme in many developing countries have indicated that countries with larger share of msme employment have higher economic growth than their counterparts [44]. in fact, it is suggested that one of the significant characteristics of a flourishing and growing economy is a booming and blooming msmes sector [8]. msme therefore play an important role in the development of a country by creating employment for rural and urban growing labour force, providing desirable sustainability and innovation in the economy as a whole [5]. moreso, a large number of people rely on the small and medium enterprises directly or indirectly in nigeria [8]. it is important to provide some categories in which micro, small and medium enterprise have been defined. individual countries’ circumstances determine how msme is being defined in that country, for instance some countries define it (msme) by the total assets, role in the diffusion of drets. knowledge about the existence of rets, their accessibility, their role and advantages positively affects acceptance and adoption [9, 10, 21, 36, 37]. correlations between knowledge of a technology and acceptance of the technology have been studied more widely. for hydrogen technology acceptance, mostly positive effects of its knowledge on acceptance of the technology have been found [38, 39, 40, 41]. these studies have shown that people with more knowledge on hydrogen as a fuel perceived less safety risks, which was related to a positive attitude towards using hydrogen as a fuel and willingness to use hydrogen fuel technologies. feng [15] analysed the key factors that affect users’ intentions of adopting renewable energy technologies in taiwan. with a total of 273 persons interviewed to comprehend their attitude and behaviour concerning renewable energy technologies. theory of reasoned action, technology acceptance model and roger’s diffusion of innovations were the basis for the study. the results of the study showed that perceived usefulness (such as whether the system is better than previous used, the economic benefit to gain, the convenience and satisfaction for using it), subjective norm (such as the influence of friends and families), compatibility (such as the past experiences of a person and the present demand) and perceived ease of use (such as understanding of how easy it is to use the system) are major factors influencing the adoption of renewable energy technologies among the sampled respondents. unlike many other literatures, the result of this research also found that income is not a significant variable as it does not affect attitude toward the use of ret. studies on the acceptance of carbon capture and storage showed that perceived risks and benefits of these technologies indeed predict attitude towards the technology [42]. the study also revealed that costs, risks and benefits of the technology also influence choices. huijts et al. [12] explained the intention to act in favour or against new sustainable energy technologies, which is influenced by attitude, social norms, perceived behavioural control, and personal norm. in the framework, attitude is influenced by the perceived costs, risks and benefits, positive and negative feelings in response to the technology, trust, procedural fairness and distributive fairness. shen et al. [43] examined factors influencing adoption and sustainable use of clean fuels and cook stoves in 74 international journal of sustainable energy planning and management vol. 19 2019 factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria adopters of new technologies. some of these msmes across industries and economies have the unrealized innovation potential [47]. many msmes in nigeria have been forced out of business as a result of the poor electricity supply [48]. the estimated total installed capacity of gas and hydro power stations in nigeria is 8,000 mw, whereas the power generation capacity available is approximately 4,000 mw from which less than 3,000 mw is readily available to generate electricity [1, 49]. nigerian businesses have relied so much on diesel generating sets to provide electricity for themselves but the cost of running self-generating sets is too high apart from the health hazards attached to the fossil fuel burning. hence, there is need to adopt new, cleaner and sustainable technologies to supply electricity to the msmes, but their willingness to adopt such technologies need to be examined. 3. methodology of the study the methodology section contains the data and sample sub-section which is followed by the description of measurements of variables and logistic regression. others by employment, turnover, or paid-up capital. however, in nigeria, the current classification is based on the number of employees and assets (excluding land and buildings) as depicted in table 1 [8]. in practice, the number of employees is the most common standard used in national sme policies worldwide. it is possible under the criteria stated in table 1 above that a conflict of classification may arise. in such cases, the employment-based classification will take precedence. according to [8], msmes contribution to gross domestic product in nominal terms stood at 48.47% and contribution to exports at7.27%. figure 3 shows the contributions of msmes to gdp by economic sector. while services sector accounted for 45.72% of the total, agriculture accounted for 42.02% and industry accounted for 12.26%. as of 2010, the majority (99.87%) of the msmes were micro enterprises, 0.12% was small enterprises while 0.01% was medium enterprises [8]. from the total number of micro enterprises, trade accounted for the majority (54%) followed by manufacturing (13%), agriculture (9%), and other services (7%) among others. from the small and medium enterprises, majority (35%) of the enterprises are in education sector, followed by trade (22%) and manufacturing (20%) among others. the msmes in nigeria have been facing some challenges which are responsible for their slow growth and development. these include limited capacity for research and development, low adoption of technological innovation, poor infrastructural facilities, epileptic power supply, poor financing and lack of government supports, poor access to banks’ credit, inadequate managerial and entrepreneurial skills, limited demand for their products and services, inability to compete at international market, burden of multiple taxes, and imperious actions of government functionaries and agents [45]. however, spencer and kirchhoff [46] regarded many small enterprises as “ideal types” of new technology-based enterprises that are key drivers of innovation and economic growth. these enterprises are characterized with the fast table 1: classification of micro, small and medium enterprises in nigeria s/n size category employment assets (n million) (excluding land and buildings) 1 micro enterprises less than 10 less than 5 2 small enterprises 10 to 49 5 to less than 50 3 medium enterprises 50 to 199 50 to less than 500 source: [8] agriculture 42% industry 12% services 46% figure 3: contribution of msmes to gdp by economic sector in nigeria source: [8] international journal of sustainable energy planning and management vol. 19 2019 75 yusuf opeyemi akinwale and adeyemi oluwaseun adepoju 3.1 data and sample population as a result of dearth of information as regards the micro and small enterprises’ adoption of renewable energy in the national statistics, this study employed research survey design to collect primary data and obtained the required information. primary data is questionnaire based, and measurements are dichotomous responses. for a large populations, cochran [59] found in israel [60] developed the eq. (1) to yield a representative sample for proportions. (1) this is valid where no is the sample size, e is the desired level of precision (e=.05), p is the estimated proportion of an attribute that is present in the population (assumed p=.5 i.e. maximum variability) and q is 1-p. the value of z is found in statistical tables which contain the area under the normal curve (z=1.96). a total of 385 questionnaire were calculated and administered among the mses across the five administrative zones (popularly known with the acronym ‘ibile’ which include ikeja, badagry, ikorodu, lagos island and epe) of lagos state being the commercial hub of nigeria in the first quarter of year 2017. the study was able to retrieved only 300 questionnaire out of which only 223 questionnaire were found useful due to large numbers of incomplete information from the discarded questionnaire. the questionnaire administration involved random sampling without replacement which elicited information from the mses on their knowledge of renewable energy technologies and other key factors influencing their willingness to adopt renewable energy sources. some of these factors include their level of awareness about renewable energy, education, training, financial support and policy of government, size of firm, age of firm, location, market development, income and trust among others. the study uses descriptive statistics and logit regression to analyse the data. 3.2 measurement of variables the specific objective of the study is to examine the factors influencing the willingness to adopt renewable energy technologies among the micro and small enterprises in nigeria. based on the literature, the following questions were used to capture the independent variables in eq. (2) below: x1: do you think having more knowledge and awareness about renewable energy technology will influence your adoption of it; x2: do you think that adequate government policies and standards for the production of renewable energy equipment and protection of consumers will influence you in adopting renewable energy sources; x3: will the development of renewable energy market that supplies the required accessories continuously affect your willingness to adopt renewable energy sources; x4: do you think level of participation of local residents in the planning and implementation process of renewable energy technologies in your environment can influence extent of adoption of renewable energy in your enterprise; x5: do you think your previous experience of using renewable energy technology can influence its adoption; x6: trust in stakeholders who are responsible for the renewable energy technology (such as regulators or owners of the technology) will influence my willingness to adopt it; x7: i will adopt renewable powered electricity if it makes life easier for me; x8: i will readily use renewable energy if it is simple to use and maintain; x9: using renewable energy would improve my job quality and my standard of living; x10: do you think the influence of other businesses in your area will encourage you to adopt renewable energy technologies? the ten aforementioned questions are measured in binary terms (yes or no). also the dependent variable, which is, willingness to adopt renewable energy by the mses is also measured in binary term. each enterprise is asked whether it is willing to adopt renewable energy or not. since the dependent variable is binary, the logit regression is therefore adopted for analysis. the binary logit model involves dichotomous dependent variable whose probabilities, conditional upon explanatory variables are modelled [50]. since there can be two choices such as whether the enterprise is willing to adopt renewable energy or not, then a simple logit model is relevant. a binary regression with (0, 1) choice is represented as yi *= ß'xi+ԑi (2) where from eq. (2), yi* is a latent variable and ß' is the coefficient of explanatory variables xi*. the latent 2 o 2 z pq n = e 76 international journal of sustainable energy planning and management vol. 19 2019 factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria 4. results and the analyses this section presents the obtained background information of the owners of mses, characteristics of the enterprises, and results of the regression analysis conducted from the study. 4.1 descriptive analysis table 2 revealed that ages of the majority of the owners of the mses sampled are between 26-40 years (53.4%) and 41-60 years (31.8%). this showed that majority of the mses in these areas are middle-aged between 26-60 years as many that fall below this age might still be schooling at various academic institutions or learning one trade or the other. table 2 also showed that 47% of the owners of the mses have bachelor’s degree and equivalents as their highest academic qualifications, followed by 20.5% of them who had master’s degree as their highest academic qualification. this implies that majority of the respondents have academic qualification expected to enable them access requisite information and knowledge about their businesses and renewable energy. table 3 indicated that trading (23.7%), services (22.7%), manufacturing (20.5%), agriculture (12.5%) and information technology related businesses (9.1%) constitute the largest proportion of mses’ businesses respectively. 78.4% and 21.6% of the sampled mses are located in the urban centre and rural area respectively. table 2: personal characteristics of the owners of the mses characteristics % age below 25 5.7 26-40 53.4 41-60 31.8 above 60 9.1 highest academic qualification primary school certificate 2.3 senior secondary school certificate 8 national college of education cert. 4.5 national diploma 9.1 bachelor's degree and equivalents 46.6 postgraduate diploma 5.7 masters 20.5 doctorate 3.4 variable yi* is not directly observable rather what is observable is a dummy variable yi which depict whether the enterprise is willing to adopt renewable energy (i.e. yi = 1) or is not willing to adopt renewable energy (i.e. yi = 0). a logistic function g( ß' xi ), where 0< g( ß' xi)<1 which is the cumulative distribution function (cdf) for a standard logistic random variable can be stated as in eq. (3). (3) if the probability of willingness to adopt re is p(yt = 1)= g(ß'xt), then the probability of not willing to adopt will be p(yt = 0)= [1p(yt = 1)]= 1g(ß'xt). meanwhile, the ratio of the two probabilities (e.g willingness and non-willingness to adopt re) can be referred to as the ‘odd ratio’ which can be expressed as in eq. (4). (4) this can be expressed in logarithmic function which is a standard logistic model, where binary dependent variable’s behaviour is captured by the log-odds ratio as in eq. (5). (5) logit regression use maximum likelihood (ml) method to estimate parameters in the model. the ml of the models above is given by the product of the probabilities of re adoption success and non-adoption. the coefficients of the logit model, like the ordinary regression coefficient, define the parameter estimates. these coefficients signify that a unit increase in the independent variable (xt) listed above as x1 to x10 produces ßt change in the log odds of the dependent variable. positive sign for the coefficients indicate that the log of the odds ratio of the dependent variable increases as the value of the independent variable rises and vice versa. the logit coefficients are in ‘log-odds’ units and are therefore usually converted into ‘odds ratios’ for a more intuitive explanation. also, pseudor2 based on the log likelihood, which is (1 – the ratio of unrestricted and restricted log likelihood) is used to measure goodness of fit in logit model and it varies from 0 to 1. β β β = + ) ( ) 1 ( ' ) i i i exp ( 'x g 'x exp x = − − i i g 'xp p g x ( ) 1 1 ( ' ) β β = = − i i p in in exp x x p ( ( ' )) ' 1 β β international journal of sustainable energy planning and management vol. 19 2019 77 yusuf opeyemi akinwale and adeyemi oluwaseun adepoju profit (-0.49) are not significant, though the correlation values are averagely high. mattes et al. [34] and shen et al. [43] also show that willingness to adopt rets is correlated with size of enterprise, highest academic qualification, age of enterprise and location of business. the results of age of the owners of the enterprise and monthly income are against the findings of ng’eno [27] and shen et al. [43]. this implies that the age of the owner of the enterprise and the profits of the business have not made any statistical difference to the willingness of the mses to adopt rets. 4.2 factors influencing willingness to adopt renewable energy technologies by the micro and small enterprises table 6 presents an ordered logit regression results for the factors considered to influence willingness to adopt renewable energy technologies by the micro table 3: nature and location of the mses nature of businesses and the location % nature of business trading 23.7 information technology 9.1 pharmaceuticals 3.4 catering 4.5 hotel 2.3 manufacturing 20.5 services 22.7 agriculture 12.5 others 2.3 location of businesses urban 78.4 rural 21.6 approximately 66% of the enterprises are micro with less than 10 employees while 34% are small enterprises between 10 and 50 employees (shown in table 4). table 4 also revealed that almost half of the mses have their profits between n100,000 and n500,000, and majority (71.6%) of the businesses have been established between 2 and 10 years while only few (25%) of them have been in existence for more than 10 years. table 5 shows the correlation between willingness to adopt renewable energy sources and characteristics of the businesses/ owners. the result indicated that the correlation between willingness to adopt re sources and highest academic qualification (0.48), nature of businesses (0.61), size of enterprise (0.38), age of enterprise (0.51) and location of business (0.52) are all significant at 10% level of significance and also have the same direction of relationship with one another. however, the correlation between willingness to adopt re source and age of the owner of the enterprise (0.55) and monthly table 4: size, profit and number of years of establishment size, age and profit of the mses % size of enterprise less than 10 65.9 between 10 and 50 34.1 age of enterprise (number of years of establishment) less than 2 years 3.4 2 – 5 years 45.5 5 – 10 years 26.1 above 10 years 25 monthly profit of the mse less than n100,000 15.9 n100,000 to n500,000 47.7 above n500,000 36.4 table 5: correlation analysis s/no variables 1 2 3 4 5 6 7 8 1 willingness to adopt rets 1 2 age of the owners 0.55 1 3 highest acad. qualification 0.48* 0.72** 1 4 nature of business 0.61* 0.13 0.44* 1 5 size of enterprise 0.38* -0.51 0.32 0.38 1 6 age of enterprise 0.51* 0.24 0.53 0.28 0.42 1 7 monthly profit -0.49 0.39 0.48* -0.22 0.40 0.63* 1 8 location of business 0.52* 0.22* 0.51 0.33* 0.43 0.48* 0.28* 1 *p < 0.1 **p < 0.05 78 international journal of sustainable energy planning and management vol. 19 2019 factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria in influencing the willingness of the mses to adopt renewable energy technologies in nigeria. this means that previous experience of micro and small enterprises and the participation of local residents in the process of planning do not significantly impact on the mses adoption of rets. macfadden r2 of 0.46 shows that the model is moderately fits. meanwhile, knowledge and awareness of renewable energy is the most influencing factor, followed by government policies, peer-group effect, trust, technology acceptance factors (improve job quality and standard of living, makes life easy and simple to use) and development of renewable energy market in nigeria. there is need to create proper awareness of renewable energy among the businesses so as to enlighten the business owners more about it, which will later encourage them to adopt it in their enterprises. government should also encourage the use of renewable energy through different policies such as creating enabling environment for the easier production of renewable energy equipment and also protect consumers from substandard products. this will create a sustainable renewable energy markets where renewable energy products could be easily purchased. many nigerians have lost trust in government to actualise some of the policies made as a result of lack of political will. thus, the government through relevant regulators and the private renewable energy companies should all play their roles and small enterprises in nigeria. some of these factors are obtained from the relevant past studies conducted in other countries. while willingness to adopt renewable energy technologies (y) is a dependent variable, the explanatory variables (xn) are the 10 factors influencing willingness to adopt renewable energy technologies. the ordered logit regression results in table 6 show that knowledge and awareness about renewable energy (x1), government policies (x2), renewable energy market (x3), trust (x6), makes life easy (x7), simple to use (x8), improves job quality and standard of living and peergroup influence of nearby businesses (x10) are all statistically significant to influence the willingness to adopt renewable energy technologies by the mses using 10% level of significance. the aforementioned variables also influence the likelihood of mses adopting rets with odd ratios of 25.03, 11.13, 1.97, 0.39, 2.46, 1.42, 2.53, 9.39 for x1, x2, x3, x6, x7, x8, x9 and x10 respectively. some of these results are in line with the study of feng [14] on technology acceptance factors; verbruggen et al. [33] on government policies; shen et al. [43] on public awareness and renewable energy markets; and huijts et al. [11] on trust and peer-effects. however, participation of local residents in the planning and implementation process (x4) and previous experience in using renewable energy technologies (x5) are not statistically significant table 6: factors influencing willingness to adopt renewable energy technology by mses variables descriptions coefficient odd-ratio x1 knowledge and awareness about renewable energy technology 3.22** 25.03 x2 adequate government policies and standards for the production of renewable energy equipment and protection of consumers 2.41*** 11.13 x3 development of renewable energy market that supplies the required accessories 0.68*** 1.97 x4 participation of local residents in the planning and implementation process of renewable energy technologies 0.45 1.57 x5 previous experience of using renewable energy technology -1.08 0.34 x6 trust in stakeholders who are responsible for the renewable energy technology (e.g. regulators or owners of the technology) 1.22** 3.39 x7 if it makes life easier for me 0.90*** 2.46 x8 if it is simple to use and maintain 0.35*** 1.42 x9 if it improves job quality and standard of living 0.93*** 2.53 x10 influence of other businesses in the area will encourage my enterprise to adopt renewable energy technologies 2.24* 9.39 macfadden r-squared 0.46 *p < 0.1 **p < 0.05 ***p < 0.01 international journal of sustainable energy planning and management vol. 19 2019 79 yusuf opeyemi akinwale and adeyemi oluwaseun adepoju particular variable is largely stimulated by the lack of political will and carefree attitude of the government on the formulation, planning and implementation of the energy policies. most of the time proper attention are not paid to the composition of the stakeholders on policy formulation. the compositions are mostly bias in favour of the pro-government. therefore, the practitioners do not feel their input in the final policy document which makes its implementation difficult. in most cases, the energy policy documents are not updated in time nor review which culminate into it being outdated. it may also be reasonable to say that most of the developing countries, and in particular nigeria, do not initiate the changes in technological advancement but are rather imported into their spaces. these are more disruptive requiring different learning, skills and application in a country where lack of planning and worrisome implementation is predominant. the result is insightful and prove the reason why the country needs to provide more enabling environment to increase the level of absorptive capacity in the renewable energy technologies. 5. conclusion it is well documented that renewable energy has been found to be an alternative to the currently dominated fossil fuel across the globe. while many developed and emerging countries are fully integrating renewable energy into their national grid system, most developing countries still lag behind. since micro and small enterprises occupied a large proportion of the nigerian economy, this study therefore examined the factors influencing willingness to adopt renewable energy technologies. theory of reasoned action and technology acceptance model were adapted in evaluating some of the factors influencing willingness to adopt rets. correlation was established between willingness to adopt rets and highest academic qualification, nature of businesses, size of enterprise, age of enterprise and location of business. furthermore, the factors that have been established in this study to significantly influence willingness of mses to adopt rets are knowledge and awareness about renewable energy, government policies, renewable energy market, trust, peer-group influence of nearby businesses and technology acceptance factors (such as the technology makes life easy, simple to use, improves job quality and standard of living). the adoption and efficient implementation of renewable energy in nigeria is expected toward proper execution of renewable energy projects in the country so as to regain the citizens’ trust, as it has been indicated in this study that trust influence the willingness to adopt rets by the mses. the technology acceptance factors such as ‘if the technology makes life easier’, ‘simple to use’ and ‘raising the standard of living’, are all important to be perceived positively by the renewable energy users. furthermore, juxtaposing the general characteristics and the regression results where there had been insignificant relationship in the outcomes could be explained as follows. at first, willingness to accept innovation is always situational and real time experience. this is a reflection of the result obtained earlier in the literature [58]. it was reported that the cost priority and pay-back priority were the best decision-making criteria for choosing the best renewable building-integrated power production units. in this case, the cost priority indicates the present scenario and while the pay-back option analysis the future. emphasis are not always dwell on the past especially when it is not negative. the decision to invest is always based on the present situation predicting the future for micro and small firms in particular. the result may also reflect a compliment to their level of education (table 2) as the study composition indicates clearly that above 70 percent of the respondents have already earned a bachelor degree. this might be an implication that they are well informed, and possessed the ability to assess and process information (tangible and intangible benefit accrue to the use of renewable technologies) toward making decision in line with the adoption of a renewable energy. in addition, the age of the owners which is centred around 26-40 years old as well as the age of the enterprise predominantly within 5 years of establishment (about 75 percent) show that majority of mses are within the age limits where adventures and risks can be experimented on new technologies so far it will give them a competitive advantage. according to studies the prices of solar energy technologies have been on a decreasing trend [55, 56] to an extent that prices of the panels had declined by 65 per cent in the 5 years up to 2014 [57]. the prices are more or less at par with the subsidized petroleum products thereby refuting the emphasis on the long-term breakeven and benefits of renewable energy technologies to a moderate term. secondly, the outcome of participation of local residents in the planning and implementation process of renewable energy technologies was insignificant. this 80 international journal of sustainable energy planning and management vol. 19 2019 factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria 2007. http://geography.exeter.ac.uk/beyond_nimbyism/ deliverables/bn_wp1_4.pdf (accessed 15 june 2017) [10]. heaslip e, costello gj, lohan j, assessing good-practice frameworks for the development of 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https://ieri.org.za/sites/default/files/text_-_comparing_ris_and_clustered_industries_in_developing_countries.pdf https://www.inderscienceonline.com/doi/abs/10.1504/ijret.2015.070149 https://www.inderscienceonline.com/doi/abs/10.1504/ijret.2015.070149 1197-4400-1-le.qxd abstract this paper analyses the performance of two cases of renewable energy (re) auction/tender systems in an effort to contribute to the evaluation of and best practice in re auction/tender systems. this is done by comparing regimes in different settings, one concerned with danish offshore wind development, the other concerned with renewable energy development in south africa (sa). it is found that regulatory factors which promote certainty in deployment, including measures to ensure that projects achieve grid connection, are important in assuring delivery of the programmes. however cost reductions that are associated with renewable energy auctions are not caused by the auction systems themselves, but rather are associated with general declines in the costs of renewable energy technologies. moreover, the effect of renewable energy auctions systems may be more concerned with limiting renewable energy deployment rather than reducing the costs of energy generated by renewable energy projects that are deployed. 1. introduction competitive procurement of renewable energy through auctions and tenders is a relatively new way of procuring renewable energy (re). renewable energy auctions and feed-in tariffs are both associated with the award of long term contracts to renewable energy developers which guarantee payment of specific amounts for energy which is generated. the distinction between an auction and a tender is that in the latter format factors other than pure price are taken into account by the government in awarding the contract. as will be discussed, both systems studied here (in denmark and south africa) have elements of auctions and tenders. this paper aims to contribute to the evaluation of re auction/tender systems. this will be done through analysis of the performance of two auction/tenders systems with regard to some key selected criteria. these criteria are grouped around the two crucial concepts of certainty and cost. international journal of sustainable energy planning and management vol. 08 2015 43 in doing so, we can develop theory and practice of the effective use of auctions/tenders. this paper could provide useful information for policymakers when designing future auction/tender systems. interest in, and reliance on such competitive procurement methods is expanding. indeed eu state aid guidelines for renewable energy support now recommend the use of such methods [1]. according to eu commission advice: ‘a well-designed auction can lead to significant competition between bids revealing the real costs of the individual projects, promoters and technologies, thus leading to cost-efficient support levels, and limiting the support needed to the minimum’ [2]. on the other hand supporters of setting ‘feed-in tariff’ prices by administrative means argue that the effect of the eu commission guidelines ‘is to contain renewable power growth to lower levels than so far, and to give big corporate operators a better position to compete in this sector’ [3]. international journal of sustainable energy planning and management vol. 08 2015 43-56 renewable energy auctions and tenders: how good are they? ������� �� �������� � �� ������� � � � ��� ���� �� ������� �� � �������� �� ������� � �� ��� ������� ���� �� ��� � ������� �!"# $%&� � ���� �� ���� keywords: renewable energy; auctions and tenders; denmark; south africa url: dx.doi.org.10.5278.ijsepm.2015.8.5 * corresponding author email: d.toke@abdn.ac.uk 44 international journal of sustainable energy planning and management vol. 08 2015 renewable energy auctions and tenders: how good are they? so far there is a relative scarcity of work analysing the effectiveness of renewable energy auction schemes, mainly owing to the fact that they have not been in operation very much or very long compared to conventional feed-in tariffs or green certificate support mechanisms for renewable energy. however there is an extensive literature on renewable energy policy instruments in general, a few of which can be mentioned on account of their numbers of citations and/or relevance [3], [4], [5], [6], [7], and several others which can be cited as an example of a wider literature [43], [44], [45]. [46], [47], [48], [49], [50], [53]. a review of the existing (limited) literature on renewable energy auctions suggests that among the aspects of design studied, the issue of the nature and type of penalties imposed for non-delivery of projects is important [4]. anaya and pollitt [5] comment that the absence of penalties was a factor in the failure of the british renewable energy procurement mechanism to deliver capacity in the 1990s [6]. moore [6] has compared the uk experience to that of brazil, which has organised its re programme through auctions. more broadly, a review of administrative rules underpinning design of re auctions has been undertaken by irena [7]. a discussion of key issues in implementation of renewable energy auctions may be gained from detailed examination of particular cases. in particular we need to examine the extent to which, and the costs at which, the projects are actually being delivered and also the ways in which delivery success is facilitated or challenged through regulatory conditions. regulatory conditions are studied by reference to the concept of ‘certainty’. in particular there will be: 1. a discussion of the extent to which the delivery of renewable energy projects is associated with the degree of regulatory certainty, this including not just with the auction/tender bidding mechanism, but also with related infrastructural issues. details of criteria to measure this certainty will be set out in the methods section. the criteria for certainty includes modes of scrutiny of bids for projects, coordination of delivery of projects, achieving planning consent, site evaluation, ensuring grid connection and ensuring the developers take some financial responsibility for the possibility of failure to deliver the projects. 2. a discussion about the extent to which the introduction of auction systems in renewable energy can be cited as a cause of cost reductions in the delivery of re projects. the key criterion here is whether the changes in costs can be clearly associated with the auction/tender mechanisms themselves or can be associated with contextual market or technological changes. the next step in the paper will be to describe the method adopted. this will be followed by an analysis of the danish programme of offshore windfarms followed by an analysis of the south african renewable energy programme. the results will then be discussed and finally conclusions will be made. 2. method certainty is measured by examining the following issues: a) planning consent for the projects. the degree to which planning consent is guaranteed for the projects or at least that the developers have secured planning consent as a condition for being awarded a contract. b) the extent to which grid connection is assured c) the extent to which the government helps the projects to determine project viability at the sites chosen (e.g. assessing windspeeds) d) the degree of coordination between agencies to ensure delivery of the projects given contracts e) the extent to which developers have to pay significant financial penalties if they fail to deliver the project on time f) scrutinisation and evaluation of financial viability of bids for contracts cost is examined by studying changes in prices awarded to renewable energy developers in successive rounds of contract awards. contextual issues are also examined, especially wider changes in technology costs that are independent of types of policy instrument used to promote renewable energy projects. the technique employed here is to analyse country case studies of renewable energy auction regimes. we select two of them as apparently successful (so far) exercises in renewable energy auctions. these are denmark offshore wind power auctions/tenders and south africa’s renewable energy independent power producers programme (reippp). these two cases are selected because their renewable energy policy instruments involve re auctions/tenders in different conditions. one is what is known as a developed industrial economy, another in an emerging economy. it may be the case that if there are common lessons to be learned from these cases in different economic conditions, then such common lessons may be plausibly used as guides to form hypotheses with which to study other cases of re auctions. this study is compiled mainly by reference to other studies, official reports and reports by ngos and also a small number of interviews that have been organised in order to shed light on issues that were not so otherwise clear in the documents studied. 3. danish offshore wind auctions/tenders we shall structure this section by examining some relevant history and background of the danish renewable energy and particularly offshore wind sector before describing the evolution of the tender/auction system. then we shall look at the extent to which the regulatory conditions for offshore wind contribute to ‘certainty’ factors that help deployment, and then there will be an examination of the impact of auctions on costs of offshore wind. this section on denmark will be rounded off by a discussion of how outcomes have been affected by the certainty in the regulatory arrangements and how costs have been affected by the auction system. 3.1. history and background of danish offshore wind denmark’s offshore wind capacity is mainly bound up in five farms constructed since 2001, with a contract for another windfarm (horns rev 3)having been awarded in march 2015. wind power generated around 40 per cent of the level of danish electricity demand in 2014, and this proportion continues to increase [8]. calculations made on the basis of data available from the danish energy agency suggests that offshore wind now makes up around half of the production from danish wind power. denmark plans to continue expanding offshore wind as a major component of its target to generate 50 per cent of electricity from renewable by 2020 [9]. denmark was a pioneer in wind turbine development in the 1970s to 1990s[10]. it also developed a system of funding re that became known as ‘feed-in tariff’, that of setting prices that electricity utilities would have to pay to producers of wind power and other re sources. during the 1990s denmark also acted as a pioneer by extending its wind power programme into offshore projects. however, a new more right wing government took office at the end of 2001 and they introduced policies which led to a slowdown in the rate of onshore wind power development. the focus for re development was largely shifted thereafter onto offshore wind projects. a consensus has developed about this programme, with legislation agreed in 2012 that saw further emphasis on the offshore wind programme, with some continued development of onshore windfarms. the onshore programme has continued to be funded through a traditional ‘feed-in’ tariff style of approach, whilst the offshore programme has been funded through a renewable energy auction scheme since 2005. initially denmark used a form of ‘feed-in tariff’ method to fund its first offshore windfarms, involving paying a ‘minimum price’ for a limited period. in this case the payments were set to be buttressed by extra payments if the wholesale market price rose fell below a set amount, although in 2001 when this arrangement was established power prices were very low and did not begin to rise until 2004. horns rev 1 and rødsand 1 windfarms were constructed on this basis. however, after 2002 the government changed the procurement policy to adopt an auction system for offshore windfarms [11]. this system has been used since then, albeit with some fine-tuning as is discussed in the next sections. at the time of writing this paper, a tender was being organised for a ‘nearshore’ 350 mw windfarm. five companies applied for the project, and three of them have been invited to negotiate with the dea to be given the tender [15]. 20 per cent of the equity in this windfarm will be offered to local people. 3.2. evolution of the auction system the system has gone through some changes since the start of the auction programme in order to improve project delivery. in particular penalties have been introduced. the launch of the auction programme preceded an increase in energy prices, which became marked from 2005 onwards. this coincided with an increase in commodity prices of resources such as steel and copper that are used in construction of offshore windfarms. hence offshore windfarm costs also increased. although one offshore windfarm (horns rev 2) was international journal of sustainable energy planning and management vol. 08 2015 45 david toke completed under the original tender price that emerged from the auction, the original developers of the other windfarm given a contract at the auction round (rødsand 2) withdrew after it became clear to them that the price agreed was no longer profitable. a new auction was organised and one company bid for the contract at a rather higher price. however, this time the contract stipulated that a failure to complete the contract within a defined time period would entail a penalty being paid. penalty clauses have been inserted in the contracts since then. although the general principles have remained the same the system was fine-tuned between the last two auctions. only one bid was made for anholt windfarm in 2010, and so the system was reformed. the details of the delivery schedule and penalty mechanism were left up to negotiations between the danish energy agency (energistyrelsen) and the developers who had been approved as bidders in the pre-qualification stage. four bids were made for the following horns rev 3 windfarm in 2015. in effect the process became a little more like a tender rather than an auction. the premium price is payable for 20 twh of production, which is likely to correspond to around 12 years of operation, after which market rates for electricity prices will be paid to the operators [14]. all of danish offshore contracts have been won by large multinational companies such as dong, vattenfall and e.on. a penalty, rising up to 300 million dkk, was set to be paid by the developer if the winning company (in this case vattenfall) failed to complete the 400 mw horns rev 3 project by a timetable set out in the agreement [13]. no accounts of the capital cost of horns rev 3 are currently available, but if we assume a capital cost for the project of 30 million dkk per mw then this maximum penalty is equivalent to a penalty of around 2.5 per cent of the capital costs of the project. 3.3. factors contributing to certainty in danish offshore wind using the set of criteria set out in the methods, we can summarise the danish offshore wind tender system the following way. the system adopted is highly regulated and focussed containing the following elements which promote greater certainty [9, 12]: a) planning consent is guaranteed for the project to be procured based on a planning consensus among stakeholders b) grid connection costs up to the windfarm, including the necessary transformer, are born by the electricity system rather than the windfarm developer c) initial surveys of windspeeds and wave patterns and also geotechnical and environmental studies of the seabed are carried out under the auspices of the government d) in general the project is closely coordinated between the danish energy agency (representing the danish government) and the developers e) developers have to pay significant financial penalties if they fail to deliver the project on time f) there is scrutiny and evaluation of financial viability of bids for contracts. the danish energy agency operates a ‘pre-qualification’ process to ensure that the companies making bids will have project proposals that are economically viable 3.4. the issue of technology costs under the auction system the paper now turns to look at the issue of what changes in technology costs there have been under the auction programme, as measured in power prices awarded to the developers with successful bids. figure 1 shows the prices awarded for power purchase agreements for offshore windfarms expressed in 2015 danish prices. note that this refers only to projects that have been completed and the most recent project, horns rev 3, which is expected to be completed. as can be seen from figure 1 the bid prices for projects increased from 2001 onwards, and only the latest project settled this year has shown that prices have fallen again. the operators of horns rev 3 will be paid 770 dkk per mwh, which converts to $116 (usd) per mwh, 100 euros per mwh or £70 (gbp) per mwh. however, it needs to be borne in mind that this price excludes grid connection, which could add around 20 per cent to the price if the developer had to pay. nevertheless, this cost compares favourably with the cost of offshore windfarm contracts awarded by the uk (also through an auction system) at £120 per mwh. the fact that the uk schemes tend to be in deeper waters compared to horns rev 3 might also account for some of the difference in cost. the uk system of auctions for ‘contracts for difference’, which announced its first contract awards in 2015, is perhaps too new to be the subject of analysis of outcomes. 46 international journal of sustainable energy planning and management vol. 08 2015 renewable energy auctions and tenders: how good are they? copper and other energy and commodities prices. by the same token it should not be automatically assumed that the more recent decline in offshore wind costs is solely attributable to the tender system for awarding offshore wind contracts. we can help explain price fluctuations by comparing the price changes with studies of contracts that have not been awarded using auction methods. such a comparison may be used as a proxy for a comparison of wind power technology costs. it may be plausible to look at studies of how wind turbine prices have fluctuated elsewhere on the global market, as reflected through prices that have to be paid to developers for electricity that is generated. one time-series study related to the us market for wind power can be seen in international journal of sustainable energy planning and management vol. 08 2015 47 david toke 1.2 d k k /k w h 1 0.8 0.6 0.4 0.2 0 ..2001.. ..2005.. ..2008.. year ..2010.. ..2015.. figure 1: prices set for offshore windfarms in denmark source: [17], [18], [19], [20]. all prices converted to 2015 danish prices using [52]. 100 90 80 70 60 50 2 0 1 3 $ /m w h 40 30 20 10 0 ppa year: 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 contracts: 9 13 17 30 26 39 49 48 38 13 18 mw: 570 547 1,643 2,311 1,781 3,465 4,048 4,642 3,980 970 2,761 source: berkeley lab, ferc, ventyx, intercontinentalexchange wind project sample includes projects with ppas signed from 2003-2013 nationwide wholesale power price range (by calendar year) generation-weighted average levelized wind ppa price (by year of ppa execution) figure 2: onshore wind power contract prices in the usa reprinted with permission of the authors. source [21, p 60] it is interesting that the prices payable under the old feed-in tariff regime (denmark 2005) are significantly lower than any awarded under the auction regime. these are not exactly comparable given that under the feed-in tariff regime developers had the possibilities of making more money over the minimum price if market electricity prices rose. however, at the time that the projects were developed energy prices were still low and developers would have had to finance the project at the minimum price. however, it should not be concluded from this that feed-in tariffs are necessarily more costeffective compared to auctions. rather we could examine contextual factors for explanations of cost changes, in particular changing levels of energy, steel, figure 2. the ‘ppas’ that are studied are ‘power purchase agreements’, which are payments per mwh to the developers, and as such are analogous to the payments made per mwh to danish offshore windfarm developers under contracts issued under the auction programme. although this study refers to onshore wind turbines, offshore wind turbines were still largely based on onshore technology during this period, and would certainly have been sensitive to similar changes in global wind turbine manufacturing costs. from this it can be seen that there were big increases in wind power prices from 2004 to 2009 followed by decline in the most recent years. this is in parallel to the increases in prices of danish offshore wind power note: the us wind prices seem very low because the wind power contract prices are also, in effect, topped up by $23 per mwh (2013 prices) from the federal production tax credit. contracts seen in figure 1. hence it can be plausibly argued that technological factors would seem, from this comparison, to be the main driver of fluctuations in wind power costs rather than the procurement procedure that is used by governments. it should be noted that in the usa renewable portfolio standards which encourage suppliers to offer contracts to renewable energy operators are the standard means of allocating contracts to wind developers [16]. this is as opposed to auctions. 3.5. discussion what does seem plausible is that the success of the danish offshore wind programme in delivering several offshore windfarms through its auction/tender process is much concerned with the degree of regulatory certainty given to the developers and the degree of coordination (organised through the danish energy agency) that is deployed to achieve this. this includes certainty about grid connection, planning consent, technical site investigations as well as payment of premium electricity prices. the fact that the danish government switched from having no penalties for non-implementation of tenders towards having financial penalties for nondelivery, after the rodstand 2 project was not implemented by its original contractors, suggests that a penalty system for non-implementation may be useful, in encouraging project delivery. as a general evaluation it can be said that the danish offshore wind programme seems to be successful in that large volumes (relative to the size of danish electricity market) have been delivered. this can be ascribed largely to the great degree of regulatory certainty and coordination exercised by the danish energy agency. the prices are low relative to offshore wind power, although the recent decline in contract prices should be seen as redeeming sharp increases in price from 2005 to 2010. the rise and fall of these prices run in parallel to changes recorded in windfarm prices in the usa. 4. south africa (sa) and renewables we shall order the section on south africa in a way that is broadly similar to that which has been done in the case of danish offshore wind. we shall examine some relevant history and background of the south african renewable energy programme, then we shall look at the evolution of the south african tender/auction system for renewable energy. we shall summarise the ways in which certainty for the programme is to be achieved, and then there will be an examination of the impact of auctions on costs of renewable energy. this section on south africa will be rounded off by a discussion of how outcomes have been affected by the certainty in the regulatory arrangements and how costs have been affected by the auction system. 4.1. history and background south africa’s re programme is, as in most emerging economies, a new one, but it is fast developing. total electricity generation capacity is around 45.7 gwe and electricity consumption is around 234 twh [40]. hitherto most electricity (over 90 per cent) has come from coalfired power stations run by the state owned electricity utility, eskom. an integrated resource plan (irp) which was adopted in 2011 anticipates a rapid deployment of re, visualised as growing to over 20 gwe by 2030 [22]. south africa’s electricity system has succeeded in connecting up most of the country’s residents, and it has done so whilst attempting to keep consumer prices as low as possible. however, perhaps because of efforts by the government to restrict price rises, eskom did not build sufficient power station capacity to meet demand for electricity. since 2008 south africa has suffered a series of debilitating grid failures. parallel to this there has been increasing pressure for renewable energy sources to be developed. an integrated resource plan (irp)which was adopted in 2011 anticipated a rapid deployment of re, visualised as growing to over 20 gwe by 2030 [22, p 14–16]. the granting of over a 1000 mwe of contracts a year since 2011 through a renewable energy tender systems implies that, up to date, this ambition is on track. by round 4 in april 2015, 5037mwe of renewable energy contracts had been issued [23]. of this capacity just over half has gone to onshore wind and nearly 40 per cent to solar photo voltaics (pv), other contracts also going to concentrated solar power, biomass, small hydro and biogas. 4.2. evolution of the auction/tender system the south african government’s renewable energy independent power producer procurement programme was launched in 2011 in order to provide the main means of meeting the irp target for renewable energy deployment. initial suggestions were made in favour of a feed-in tariff made before 2011 [24] [25]. however in the end 48 international journal of sustainable energy planning and management vol. 08 2015 renewable energy auctions and tenders: how good are they? no feed-in tariff offer was made. pressure from energyintensive industry and government departments such as the treasury for prices to be kept as low as possible was associated with the adoption of a tender system. the biggest contribution that will come from introducing independent power producers (ipp’s) is that it will create a more efficient industry because at the moment with eskom’s monopoly there is virtually no incentive for them to be efficient. also efficiency requires transparency which competition naturally introduces. [26]. the department of energy doe receives tenders for contracts to fill up annual tranches of renewable energy procurement. successful proposals not only have to bid low prices, but they also have to fulfil criteria for local economic development as part of the country’s black economic empowerment (bee) programme. the bee criteria constitute 30 per cent of the criteria for awarding the contracts. contribution to local economic development and black economic empowerment are key criteria in the selection of winning bids, involving criteria such as the need to achieve at least 2.5 per cent of equity ownership by local people and ‘between 12% and 20% of the people employed on each project have to be residents of local communities located within 50km of the project site’ [42]. the local and black economic empowerment criteria make up 25 per cent of the scoring in evaluation of the bids [33]. it may be that such requirements have, paradoxically, favoured non-south african developers associated with large multinational companies secure large proportions of the project given contracts. enel, for example, the former italian state electricity company has picked up a considerable portion of the contracted capacity [40]. the equity and bank loans necessary to expedite the projects can be sourced at much lower rates of interest by multinational companies (who can issue guarantees based on their balance sheets) compared to most domestic (south african) developers [28], [51]. this has contributed both to low bid prices for the re projects but also a trend towards ownership of the projects given contracts by non-south african interests. it is necessary to explain how the coordination of the renewable energy programme is to be achieved. this also involves explanation of the grid connection arrangements and the penalty system. hence we have three elements of the coordination system that provides to the ‘certainty’. first, there is a penalty system to ensure that those who win and then accept contracts are committed to project delivery. prospective developers have to lodge a bid bond with the authorities organising the tender system (the department of energy) of 100,000 zar per mw. which is roughly 1 per cent of capital costs of the project. bonds are returned if the companies making tenders are unsuccessful. if the developers win a contract and then sign with the government they must then deposit a further 100,00 zar per mw. second, there is a coordinating group of agencies to steer the reippp. this involves the department of energy, eskom, which has a near-monopoly of the electricity industry, the national energy regulator of south africa, and the treasury. third, there has been a commitment within the programme that eskom will ensure cheap connection of the renewable energy projects into the electricity grid. this is very important to the programme, especially as the prices for the projects have fallen in successive rounds. in practice eskom has had difficulty in redeeming its commitment to connect to the grid all of the re projects winning bids. in some cases grid connection proved to be rather more expensive for the projects than originally envisaged by the re developers. initially the early projects (rounds 1 and 2), seemed able to absorb higher than anticipated grid connection costs into their cost structure [29]. however in the case of round 3 problems emerged which led to the postponement of the financial closure of the round from autumn of 2014 to spring of 2015. these delays were put down to the financial problems suffered by eskom in offering affordable grid connection to the re projects [34, 35]. this problem was only overcome when the coordinating group of agencies procured more finance for eskom based on a loan from a german bank [37]. despite the hiccup with the postponement of financial closure for round 4 projects there is confidence that all but 2 of the 64 successful bids made in rounds 1–3 are going ahead. two of the 17 projects given contracts in round 3 did not go through to financial closure, implying that the developers would forfeit their bid bonds. however there are still question marks about the delivery of round 4 projects. there are continuing doubts about whether all of the projects will achieve grid connection and there is uncertainty over the effects of a rule-change which no longer requires debts to be underwritten by banks in advance of bid acceptance [38] [45]. international journal of sustainable energy planning and management vol. 08 2015 49 david toke 4.3. factors contributing to certainty in the south african renewable energy programme we can summarise how south africa’s renewable energy tender regime can be analysed in terms of our previously mentioned five ‘certainty’ criteria. a) re projects must have been granted planning consent in order to be awarded contracts for premium prices. however, there are few records of controversies surrounding large scale re projects in south africa. the degree to which planning consent is guaranteed for the projects or at least that the developers have secured planning consent is a condition for being awarded a contract. b) in theory responsibility for provision of grid connection rests with eskom, although in practice this responsibility has not been fully carried in practice leading to some delays. c) site selection and evaluation is a matter for the developers. d) there is a policy of coordinating the programme between the department of energy, treasury, the national energy regulator of south africa and eskom. the financial closure of projects in each bidding round is coordinated and synchronised to promote implementation. e) the department of energy (doe) has required that there must be an agreement by bank(s) to underwrite any debt as a condition for a bid to be accepted. the doe evaluates each bid for its financial plausibility. f) developers must post significant guarantee bonds prior to bidding for contracts and also after signing contracts, as discussed later. sources: [32, 33] 4.4. the issue of technology costs under the auction system so far there have been four rounds of bidding for the renewable energy contracts, with awards being made for contracts in 2011 (round1), 2012 (round 2), 2013 (round 3) and then round 4 in 2015. the final round was delayed following problems with assuring grid connection of projects given contracts in round 3. below are graphs for the bid prices for onshore wind and solar pv (which together secured over 90 per cent of the contracted capacity) in different rounds of bidding. these are shown in figures 3 and 4 in rand (zar) per mwh in 2015 south african prices. the data is derived from the department of energy (2015). these figures are based on data released by the south african government which were based on 2014 prices, so inflation is added onto them to generate figures for 2015. the proportion of contracts won by domestic (south african) developers fell from 59 per cent in the first round to 22 per cent in the third round (own research). the ratio of unsuccessful to successful bids has also consistently risen through the bidding rounds. davin chown commented that ‘the lack of projects going to sa based developers has led to deep concerns’. chown also commented that a lot of developers would prefer a feedin tariff system that could achieve a higher volume of renewable energy deployment and form the basis for a long term sustainable energy sector where governments developmental policy objectives are also met, [29]. as can be seen in figures 3 and 4, both wind power and solar prices have fallen. indeed, the round 3 and round 4 prices are at least competitive, arguably rather lower than, the cost of power from new coal fired power plant in south africa. the department of energy gave a (2014) price of wind power of 619 zar which equates to 676 zar in 2015. this converts to around $56 per mwh in us currency (june 2015 prices), certainly less than fossil fuel power prices in the eu. for south africa, the prices for wind power are considerably lower than 970 zar price said, according to nersa, to be the levellised cost of power from new coal fired power plant being built by eskom [30]. however, before accrediting this fall in prices (solely) to competitive bidding in the renewable energy auctions, it has to be borne in mind that wind power and solar pv prices were falling in other countries. as can be seen in figure 2, wind power prices also fell in the usa after 2009. indeed, the wind power contracts in 2013 pay wind operators less than the south africa average bid prices, even after the production tax credit (and inflation since 2013) is added to the contract prices. as can be seen in 2013, wind power contracts were being awarded for no more than $20 per mwh, which equates to around $45 per mwh (june 2015 prices) being paid to the operators when the production tax credit and inflation since 2013 is taken into account. this is still less that in the case of the average price for the south african wind power contracts. in the case of solar pv it is not possible to maintain a case that solar pv prices have fallen due to renewable energy auctions themselves simply on the basis that sa auction prices have fallen. this is 50 international journal of sustainable energy planning and management vol. 08 2015 renewable energy auctions and tenders: how good are they? because there has been a global decline in solar pv auctions during this period which runs in parallel with declines in the south african auctions for solar pv. prices of solar panels declined by 65 per cent in the 5 years up to 2014 [31]. certainly the south african market is only a very small part of the solar pv market, and most of the build-up in solar pv capacity has come from countries such as china, the eu, the usa and japan who have (up until 2015) not usually employed renewable energy auctions to promote solar pv installation. hence sa prices are likely to be influenced by global trends rather than vice versa. 4.5. discussion in sum, then, it can be seen that while there has undoubtedly been success (so far) in implementing the sa renewable programme with declining costs, it is not evident that the cost reductions can be substantially ascribed to the auction process itself. however, the auction/tender system does control costs in that the government can control the number of projects that can develop projects for a given set of bid prices. past and continued progress in the renewable energy programme is dependent on certainty being achieved for projects to be able to secure grid connection that is affordable to the developers. this has only been achieved so far because of the coordination of the programme. hence this coordination led by the south african government is important, and it has succeeded so far in overcoming some serious financial problems being faced by eskom. however, there is uncertainty about delivery of new projects. so it is clear that continued regulatory leadership and certainty is a vital part of delivery of the sa renewable programme. 5. overall discussion of two cases in the introduction key objectives were set out to analyse the performance of two auction/tenders systems, first in order to ascertain the degree and type of regulatory certainty that generated effective delivery of renewable energy, and second to examine the extent to which auction systems can be said to reduce the costs of renewable energy. in practice we can see in both cases (sa and denmark) that a high degree of regulatory certainty is important. first, it is important to guarantee that schemes awarded contracts are able to achieve grid connection that is affordable within the terms of their original tenders. in denmark this is achieved simply through the agency of the state taking on the costs of the grid connection and provision of transformer. in the case of south africa it is achieved through a guarantee that the utility eskom would cover grid connection costs. however, in practice this has become merely an objective of achieving affordable grid connection for the developers. there have been initial problems with implementing this for the third round projects. such problems have been overcome following intervention by the sa government. however, question marks remain over how well grid connection will be achieved for the projects given contracts in the fourth and successive rounds of the south african re programme. it needs to be noted that grid connection should be considered as an integral part of the auction/tender process, and not be looked upon as a separate issue. international journal of sustainable energy planning and management vol. 08 2015 51 david toke 1600 1400 1000 1200 600 800 400 200z a r /m w h ( 2 0 1 5 p ri ce s) 0 ..2011.. ..2012.. ..2013.. year ..2015.. figure 3: average bid prices for successful wind power tenders under reippp. source; doe 2015 [23] all prices converted to 2015 south african prices using [52] 4000 3000 2000 1000 z a r /m w h ( 2 0 1 5 p ri ce s) 0 ..2011.. ..2012.. ..2013.. year ..2015.. figure 4: average bid prices for successful solar pv tenders under reippp source: doe 2015 [23] all prices converted to 2015 south african prices using [52] the point is that the auction system restricts the number of schemes that can be deployed to those that are awarded the contracts. if there was a ‘feed-in tariff’ system then developers might find sites where grid connection was cheaper, and these projects would then be deployed instead of projects that win bids but which cannot be set up because grid connection costs turn out to render them uneconomic. re auction schemes can only deliver a given quantity of renewable energy at a given price if schemes awarded contracts under the bidding system can achieve affordable grid connection. much the same can be said about planning consent in that re auction systems can only work efficiently if the projects can gain planning consent within any timeframe demanded. in the cases studied of danish offshore wind and south african re this is not a problem, although this has been a problem in the past in the case of the uk in the 1990s [38]. second, there needs to be an effective coordinating mechanism. in the case of denmark this was done through the aegis of the danish energy agency (dea). in the case of south africa, a coordinating group headed by the department of energy office dealing with the reippp occupies this role. the dea’s role is simpler since it has to deal with a smaller number of companies and projects. third, a key issue of certainty is that of providing certainty that the developers will carry out their projects if they are awarded contracts. this is being achieved in most cases in south africa, and the risk of losing their money will certainly motivate developers to press for eskom to deliver on its commitments to assure affordable grid connection. in the case of denmark a ‘bid bond’ system was introduced after developers pulled out of the original contract for the rodsand 2 project. the issue of the impact on reducing costs of renewable energy auction systems needs to be looked at more carefully than simply reading off recent declines in auction prices. in the case of the south african renewable energy programme, costs have been declining and appear to be competitive with, indeed arguably cheaper than, a conventional (coal) alternative. however, in the case of the danish programme offshore wind prices have only declined since 2010. in south africa, of course, the re auction programme has only been operating since 2011. but wind power costs have been declining since 2010, and solar pv costs have been declining for decades. given the earlier discussion there is no evidence (from these cases) that the auction schemes have reduced renewable energy costs any faster than global technological trends for renewable energy. in the case of wind power these seemed to rise in the 2005–2009 period. two further points need to be made here. first, auctions or tenders are useful in those cases where governments want to plan the amount of capacity that is implemented, and if a key risk is that too great a volume of projects may be implemented at too great a cost. however, critics may argue that auctions therefore err on the side of keeping programme costs down rather than delivering large volumes of renewable energy. it can be argued that auction or tender programmes can reduce costs principally by rationing the number of projects. if the emphasis on developing volume is preferred, then it may be that feedin tariffs could be an effective policy choice. the second point is that there is no evidence in the two cases studied here that the auction or tender systems have an inherent ability to reduce costs below what is dictated by technological trends. certainly it is possible to read too much into the declining costs recorded in recent auctions such as in south africa and denmark. these are welcome signs for renewable energy of technological cost reductions, but they are not generated by the auction/tender systems per se. these cost trajectories seem to be influenced by changes in technological cost pressures, and recent declines in auction costs are reflections primarily of that. indeed, in the danish case the process set under the feed-in tariff are still lower than the prices being given to more recent projects. likewise, in the case of south africa, cost reductions have paralleled the trend of cost reductions globally. it should also be added that the tender/auction systems studied here are dominated by large transnational corporations. it may be that this is inevitable in the case of offshore wind projects, although in denmark there are efforts to sell shareholdings to local people. it is clear from the south african case that large companies have an advantage in having access to cheaper sources of finance compared to locally based developers. 6. conclusion this paper posed two aims. one concerned the degree of regulatory certainty necessary for an effective auctions/tender programme. the other concerned the ability of auction/tender systems to reduce the costs of renewable energy. two different cases, danish offshore windfarms and south african renewable energy, were 52 international journal of sustainable energy planning and management vol. 08 2015 renewable energy auctions and tenders: how good are they? examined to see whether even in such apparently different cases whether common themes emerged. one thing that both cases have in common is that the auction/tender regimes used in these countries appear to be at least relatively successful in delivering renewable energy. another common factor is that well organised coordination of the programmes is important to guarantee, as far as possible, that the projects who win contracts can achieve grid connection. also in both cases planning consent is not difficult to obtain, and also, in both cases, there has been serious attempts to evaluate the financial plausibility of the bids that have been made. the existence of penalties on companies winning contracts for non-delivery of projects also appears also to be important. these factors are crucial contributions to the concept of assuring ‘certainty’. on the issue of costs, it seems clear that the main cause of recent cost reductions has little, if anything, to do with the auctions/tender systems themselves, and mostly, if not entirely, to do with declining technological costs of renewable energy in recent years. it is certainly wrong to assume that recent reductions in costs associated with renewable energy auction systems are caused by the auction systems themselves. rather, the cost reductions coincide with a period of declining costs for renewable energy. this implies that a conventional feed-in tariff system may, in principle at least, be no more expensive for a given level of renewable energy deployment than an auction system. certainly the auction systems can help countries plan their renewable energy programmes, and control costs, but this may only be an optimum policy if the intention is to limit renewable energy deployment below a given threshold rather than expand it towards a greater potential. however, it is also the case that the programmes need to be well regulated so as to achieve certainty on issues including grid connection. nevertheless, sceptics of auction systems (and supporters of conventional feed-in tariff systems) may still maintain that the system is more oriented towards controlling costs rather than developing larger volumes of capacity that may, for example, be relevant to rapid adoption of systems for obtaining 100 per cent of energy from renewable energy [43]. the evidence in this study is that, certainly in the case of south africa, the auction system is constraining renewable energy development well below that which would be feasible for little additional cost if a conventional (non-auction) feed in tariff system was deployed. 7. acknowledgements acknowledgements to lesley masters, jelte harnmeijer and anna harnmeijer for help in research on renewable energy in south africa 8. references web references accessed on august 20th 2015–12–10 [1] european commission (2014) guidelines on state aid for environmental protection and energy 2014–2020 2014/c 200/01 http://eur-lex.europa.eu/legal-content/en/txt/?uri= celex:52014xc0628(01) [2] european commission (2013) european commission guidance for the design of renewables support schemes, https://ec.europa.eu/energy/node/69, page 6. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1137-4071-1-le.qxd 1. introduction in order to help compliance with global requirements and targets for greenhouse gas (ghg) reductions and the deployment of renewable energy technologies within local communities, we undertook an assessment of various analyses of how and to what extent different municipalities can engage in the transition of energy supply systems. examples of such assessments undertaken outside denmark are many and include investigations of how local governments can engage in the implementation of specific renewable energy technologies, and how they adapt to climate strategies in planning processes at the municipal level [1], [2]. 1.1. danish governance of biogas examples from denmark include studies of how local governments can engage in the implementation of district heating, windmills, biomass and geothermal international journal of sustainable energy planning and management vol. 08 2015 17 energy within local communities [3], [4], [5], [6]. however, there have been a limited number of analyses of local governments and governance of biogas technology. vast amounts of literature describe biogas technology, focusing on technical issues, feedstock, ghgs and management etc. [7], [8], [9], [10], [11], and literature also exists on how municipalities can support biogas with a specific purpose, such as transportation [12], [13]. but an investigation of how municipalities more broadly can govern biogas in their renewable energy portfolio is currently lacking. thus this paper is aimed at contributing to this discussion.1 1.2. biogas in denmark biogas technology has been deployed in denmark since the 1970’s. initially this was in response to the oil crises, which led to a focus on the use of indigenous energy resources. at that time, biogas technology consisted of relatively simple farm scale plants that produced heat to * corresponding author e-mail: rbl@ruc.dk international journal of sustainable energy planning and management vol. 08 2015 17-30 municipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark �������� ����� ������ � �������� � �� ���� �� ���� ������ � � ������� ��� ��� ����� ���� � ������������� !�"� #�$ �%&� '&&& (��)����� �� ���) abstract biogas provides many potential benefits relating to renewable energy production, environmental protection and job creation. however, the lack of initiatives from the national government and local municipalities hamper the spreading of biogas plants, and hence the large potential of manure, and other types of digestible organic waste materials, is not being fully utilized for energy purposes. the development of the biogas sector could be enhanced by seeing municipalities as energy consumers constituting a local market for biogas, as regulators enforcing new requirements and regulations on the biogas sector, and finally as facilitators assisting and helping involved stakeholders. to achieve this we suggest slimming down documentation; requiring that part of the municipal heat be provided by biogas; identifying alternative heat markets for the sale of non-upgraded biogas, and mapping new types of gas boosters etc. we conclude that the role of municipalities as facilitators is the most important support for biogas that local governments (municipalities) can provide. keywords: biogas, denmark, energy planning, local governments, municipalities, renewable energy. url dx.doi.org/10.5278.ijsepm.2015.8.3 dx.doi.org/10.5278.ijsepm.2015.8.3 18 international journal of sustainable energy planning and management vol. 08 2015 municipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark substitute the consumption of oil on, for example, pig farms [14], [15]. today, two kinds of biogas production are used in denmark, namely large scale centralized biogas plants that capture feedstock from multiple sources and smaller farm biogas plants that process manure and organic waste from a single farm. centralized plants receive animal manure from several farmers, as well as organic waste such as sludge from wastewater treatment, organic waste from the food and beverage industry, oil residues from the fish industry and organic fractions from commerce, etc. within recent years, these plants have also begun to add different types of agricultural residues (straw, grass) and energy crops (beet, maize) to increase gas yield [7]. the main focus of this paper is on centralized biogas plants in denmark. the first centralized biogas plant was established in 1984; today there are approximately 25 [14]. the combined heat and power (chp) produced is usually distributed as heat in a local district heating system or sold and distributed via a larger system in the region, and electricity sold to the national grid. on farm biogas plants, the feedstock can also include a mix of organic materials (e.g. grass, beet and maize) and animal manure, but this usually comes from a single farm. the heat is used to warm up stables and farmhouses and the electricity is distributed on the national grid [11]. currently there are 46 farm biogas plants in denmark [16]. the biogas produced has been utilized almost exclusively for chp production in denmark [16], however several new plants have been established to distribute gas on the well-distributed natural gas network [17]. here, the biogas is upgraded in a process in which co2, sulphur and moisture are removed and the gas cleaned and dried resulting in a quality similar to natural gas, thereafter it is injected into and distributed via the ngas network [7], [18]. this method is, for example, commonly applied in germany, sweden and in the netherlands, and in both germany and sweden biogas is also utilized on a large scale within the transportation sector [19], [12]. here, private cars, as well as fleets of, for example, city buses and refuse trucks run on biogas. the use of biogas in the transport sector requires (relatively) expensive cleaning, upgrading and compression, etc. [20], [21]. danish biogas plants currently contribute 4.2 pj or 0.5% to the national energy consumption, which totals around 800 pj [16]. 60% of this energy is produced at biogas plants, and the remaining on wastewater treatment plants and landfill sites. the estimated total available manure (manure and available organic industrial waste) that could be treated in danish biogas plants constitutes a potential of approximately 40 pj of energy [16]. the energy agreement arrived at in 2008 states that by 2025 30% of this manure must be digested, amounting to 12 pj [22]. in 2009, the danish government launched its green growth strategy, which proposed that by 2020 50% of the manure should be digested, providing 20 pj of energy [23]. achieving these political targets requires a further development of the framework conditions governing the biogas sector [24]. this must include not only enhanced national governmental frameworks, but also stronger capacity at the local governmental level through stronger municipal support [25], [26]. when focusing on the many benefits associated with biogas, emphasized further below, it becomes evident that local authorities could benefit extensively from the implementation of biogas plants within their community. so far, the many obstacles for deploying the biogas technology in denmark have hampered a further exploitation of these benefits, the most important being: 1) a lack of organic biomass waste to increase the gas yield, 2) a relatively limited market for biogas, 3) a lack of financial loan opportunities, 4) difficulties in locating space for large centralized biogas plants due to local resistance, 5) high plant investments and low plant profitability and 6) a long timeframe for realizing biogas projects [24], [26], [27], [28]. the benefits of biogas are however numerous and comprise not only the production of renewable energy that substitutes the use of fossil fuels, resulting in carbon dioxide (co2) emission reductions, but also benefits associated with the handling of manure. thus, ghg emissions from the agricultural sector will be reduced, more specifically from nitrous oxides (n2o) and ch4 (methane) previously emitted from farmland and stables, manure canals and uncovered manure storage tanks and open pits, etc. [7]. digested manure etc. (named digestate) can, for example, provide the following environmental and economic benefits [7], [11], [29], [30]: 1) limit odor annoyance when distributing digested manure on farm land, 2) reduce the risks of nitrogen pollution when applying the digested manure on farm land as the crop’s capacity to utilize the nitrogen increases compared to non-digested manure, 3) increase the value of manure as fertilizer by digesting biomass containing high contents of nitrogen (nh4) together with manure, e.g. ray grass and clover grass, 4) lower the risk of spreading diseases by means of pathogen organism, kiim, etc., as the manure undertakes a hygenization and sterilization process during the digestion process, 4) nutrients are recycled to farmland and assist in the buildup of the carbon stock and humus content of the soil, 5) valuable minerals and e.g. finite resources as phosphor are recycled, and 6) avoided expenses to purchase of artificial fertilizers are obtained which require large amounts of fossil fuel energy entailing a high carbon footprint. the implementation of centralized and farm biogas plants can also generate new job opportunities within danish municipalities in remote areas lacking development [31]. manpower will, for example, be needed to produce, collect and transport organic materials to boost gas production such as source separated household waste and residual straw from farmland. the technical equipment, such as the construction of and maintenance and operation of the plant, also bring about jobs; some short term such as those associated with the construction phase, and some permanent, such as those connected with daily maintenance and operation [31], [32]. biomass technology is, compared to other renewable energy technologies, more labor intensive and thus creates more jobs both directly and indirectly [31]. but how can municipalities more specifically support a further deployment of biogas technology within danish municipalities in order to harvest the many benefits outlined above? which concrete actions could be undertaken at the municipal level, and what type of activities can actually be provided at the local level to enhance the implementation of biogas technology? in order to answer these questions, we will investigate the specific opportunities open to the municipalities to support the biogas sector, and provide new knowledge of how and in which areas municipalities can strengthen their future role in disseminating biogas technology. the aim of this paper is therefore to answer the overall question of how danish municipalities can support the dissemination of biogas plants within their local communities? 2. methodology the methodological approach applied in this paper identifies the beneficial roles of local governments (municipalities) by drawing on the work of corfeemorlot et. al. (2009) [25], burkeley & kern (2006) [33] and dea (2013) [34]. according to this approach, municipalities, among others, can influence the biogas sector by utilizing biogas in their local energy consumption, as being energy consumers, by enforcing requirements and regulations on the sector through their role as regulators, and by assisting and helping the involved stakeholders as facilitators. the planning elements (1–4 below) related to biogas can to a greater or lesser extent, be governed by danish municipalities. the degree to which municipalities can govern these planning elements in favor of biogas is determined by the municipalities’ roles as consumers, regulators and facilitators, shown in brackets below, and elaborated further in the following: 1) regulation and supervision (facilitator) 2) heat planning (consumer/regulator/facilitator) 3) physical planning (facilitator) 4) renewable energy planning etc. (consumer/ facilitator) as an energy consumer, for instance, the municipality uses different energy services, which they can influence. thus, they can promote the use of biogas as an energy source in the municipality through the use of biogas in their own energy consumption (renewable energy planning). looking at the municipality as a regulator, there are also options for supporting an enlargement of the biogas sector, for example by requiring local chp plants to utilize the biogas produced, in accordance with the heat supply law (heat planning). as a facilitator danish municipalities can support the biogas sector by improving the regulatory procedures and thus speed up the authority’s work on biogas (regulation and supervision). in addition to the municipalities’ role in supporting biogas, this paper also suggests ways in which the national government could support biogas, but the pivotal emphasis is mainly on the municipalities’ role. the methodology applied is thus to identify – by applying the theoretical lens described above – the areas in which municipalities can support the biogas sector. the results can be utilized to guide municipalities’ efforts to promote biogas as a renewable energy technology. data utilized throughout this paper are based on the academic literature, reports and documents from danish authorities, as well as from consultants and researchers working within the field. interviews have also been conducted with the above informants. data regarding municipalities concerning regulation and supervision is international journal of sustainable energy planning and management vol. 08 2015 19 rikke lybæk & tyge kjær based on actual project participation during the planning and implementation of a biogas plant in denmark. the authors took part in the preparation and planning phase of the solrød biogas plant located on zealand. this enabled them to gain knowledge and experience relating to how the approval process for biogas could be improved. dialogue and communication with planners, consultants and experts within the biogas sector has subsequently strengthened the validity of the observations, and the usability of the suggestions on how to improve the process. 3. municipal opportunity analysis the paper now proceeds with an investigation of municipal support opportunities for biogas, applying the analytical lens described above, which is summarized at the end of the paper. finally, we provide a discussion and conclusion of the paper’s main findings. 3.1. regulation and supervision (facilitator) biogas is legislatively related to agricultural, environmental, planning and energy laws, and danish municipalities must therefore comply with this regulation in their authorities’ work on biogas. for example 1) agricultural laws such as the livestock manure law provide rules for storage of manure, and the 2) environmental law, for example, regulates smell and leakages from biogas plants, the 3) sludgeregulation sets the quality of waste supplied to biogas facilities, and the 4) livestock law provides rules for the use of biomass and digestate distributed on farmland as fertilizer. as far as planning the 4) planning law constitutes the overall planning framework for biogas, including environmental impact assessments (eia), where energy laws include e.g. the 5) law on heat supply, that provides rules for heat planning within danish municipalities (see section 4.2), as well as the 6) risk-regulation that complies with the storage of biogas [24]. the role of municipalities in regulation and supervision has so far thus primarily been limited to authority work in providing review connected to planning and environmental procedures for biogas, such as conducting risk assessments, eia, comply with rules regarding manure distributed on farmland, provide construction and digging permits and conduct municipal and local planning, etc. [27]. in addition to the role mentioned above, the government has required the municipalities to point out relevant sites for the implementation of centralized biogas plants in their municipal planning so as to support a further development and deployment of biogas plants in denmark. status ultimo 2013 showed that 40 out of 98 municipalities had identified ‘positive areas’ for locating biogas plants in their municipal plans, and that another 30 support the implementation of biogas in their community [26]. this support is, however, primarily a statement of interest, as no real active engagement by municipalities in promoting biogas follows [28]. hence, as far as authority is concerned the role of danish municipalities is very clear, but further activities actually facilitating and promoting require a more active role by local governments as is emphasized below. engaging relevant stakeholders and acting as a platform for dialogue between local actors interested in biogas is not the concern of local governments. danish municipalities are in general not very active in supporting biogas though there are a few exceptions such as the municipalities of solrød and ringkøbing-skjern where best practice cases of biogas implementation can be found due to, for example, an active, open and stakeholder inclusive approach. municipalities do not engage in helping and assisting potential investors with, for instance, pre-feasibility studies in the initial planning phase for biogas, or in providing guidance when it comes to the availability of local feedstock, etc. activities related to municipalities being potential consumers of locally produced biogas are also limited, just as surveys of market expansions for biogas within municipalities are limited (for instance new heat markets and alternative distribution options for biogas). the municipal power given by the heat supply law means that local governments can require energy companies to investigate and implement certain types of energy plants, as well as local chp plants to utilize certain type of fuels. however, these are also rarely enforced, but they could certainly benefit the biogas sector. thus, besides a few very active municipalities, local governments mainly provide authority work [13]. section 4 will look at how local governments can play a more active role in promoting biogas additional to the authority work, but first we will suggest how municipalities and the national government could be more supportive in their authority work. 3.2. speed up the process regulatory procedures connected with the implementation of renewable energy technologies 20 international journal of sustainable energy planning and management vol. 08 2015 municipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark within danish municipalities is time consuming. it may take up to five to eight years before a large scale biogas plant is actually constructed. hence, regulatory procedures within the municipalities can account for several year of authority work, before the necessary permissions and paper work etc. are in place. such a process is described below [26], [27], [28]. after a first ‘screening and scoping’ of a biogas proposal, the municipality needs to complete five important documents, before the necessary approvals are finalized for continuing the work. first, an environmental impact assessment (eia) needs to be conducted providing an analysis of a project’s impacts on the surrounding environment. second, a municipal plan appendix is provided, as an amendment of the existing municipal plan in which they summarize and specifies key policy objectives for the further development of the municipality. third, an environmental permit is made including terms regarding the use of equipment and internal function of the business and connected emissions, such as air emissions, noise, waste and selfmonitoring etc. fourth, a local plan is provided. this is a detailed plan with binding rules for a particular area of the municipality, and thereafter a rural zone permit is made to prevent uncontrolled development and construction in the countryside and preserve valuable landscapes. usually, if a plant is to be established in rural areas, which normally would be the case for biogas, a rural zone permit is required from the municipality to construct new buildings, to change the use of existing buildings and undeveloped land. fifth, and finally, a project approval needs to be granted, as local authorities must approve heat supply projects when the heat is to be distributed on the collective heat supply system [35]. the most time consuming activities related to the above regulatory procedures are the decisions taken by the municipal board, as well as the public hearing periods which most often regard issues of where to place the biogas plants. the eia and environmental approval can be a time consuming process [28], [36]. the five documents described above can be prepared separately, but the legislators – such as the european communities guideline etc. – state that the documents should be conducted in parallel and published at the same time. but this is often not the case [36], [37]. conducted separately, the three documents will require 93 weeks of municipal work. the same approach is suggested for the two remaining documents (local plan and the rural zoning approval). thus, there are no formal barriers to prevent these documents from been completed simultaneously. it would only require that the municipal plan appendix should be approved before the local plan by the municipal board [28], [36], [37]. so, if all five documents were made at the same time, it would be possible to speed up the process and provide a shorter timeframe for the municipal regulatory procedures for biogas (41 weeks). if only the three first documents can be done as a parallel process a long timeframe of 66 weeks would be necessary (still 30 days faster than normal). thus, the two last documents require 15 additional workdays to be finalized, compared to the short timeframe. in order to support the work on municipal documents, it is suggested that the municipality – in the initial stage of the process – develop an overall project report for the potential biogas plant. thus the data for the five documents can be taken from this report consequently speeding up the process [36], [37]. 3.3. new biogas approval process and flow thus, we suggest that the process of implementing biogas plants from pre-feasibility to realization of the plant should be conducted in three phases, presented in the following, based on the authors field observations and concrete participation in the planning process connected to the implementation of solrød biogas plant, and from information provided by lindgaard (2014) [37] and others: phase 1 consists of the initial pre-feasibility study, analysis of the biomass substrates/feedstock to be digested at the plant together with manure and a survey of potential owners of the plant, as well as location options (see figure a). phase 2 consists of parallel processes, the first being to elaborate the overall project report, conducted at the same time as contracts regarding e.g. substrates/ feedstock, manure and sale of energy, etc. second, is to conduct the municipal plan appendix along with proposals of the biogas plant design/concept, as well as preliminary bidding material. third, is to elaborate the local plan and the rural zone permit in parallel with both the eia and the project approval connected to the municipal heat supply. the forth, and final task, will be to provide the environmental approval in parallel to business cases and the final bidding material. phase 3 will be the construction phase where the contract for constructing the plant is finalized and the actual construction of the facility is initiated. international journal of sustainable energy planning and management vol. 08 2015 21 rikke lybæk & tyge kjær after phase 2 we suggest that project developers apply for municipal loan guarantees, as the project will be well prepared and the risks associated with the project minimized. to facilitate the biogas planning process, as described above, it would be beneficial if the national government could support phase 1 and 2, due to the high costs connected with the tasks and analysis required in these phases. the total costs connected with the documentation needed in these two phases average 3.4 million dkk (453,000 euro), of which the majority are connected to companies providing input to e.g. eia, contracts, technical/juridical assistance. thus, many stakeholders are reluctant to engage in biogas production, as the process is not only long, but also very costly [27]. we therefore suggest that national government grants are provided to support the work in this initial phase. 3.4. slimming down the amount of documentation required slimming documentation could be achieved by setting a higher standard for the initial documents. today, the eia is often approved without including all the required and necessary data and information, which is compensated for in the later environmental approval [37]. the information needed in the environmental approval is almost identical to what is required in the eia [28], [37]. thus, a thorough eia undertaken at the beginning of the process could make the environmental permit phase unnecessary, and hence lead to a faster approval process. this supports the above suggestion of conducting an overall project report in which all relevant data are available, and thus in general to be better prepared in the initial stage of a biogas project. 4. heat planning (consumer/regulator/facilitator) a municipal task in denmark is to conduct heat planning. municipal heat planning takes its point of departure in the heat supply law [35], and in a planning system where heat plans are elaborated that began in the 1980’s [38]. the planning system requires that municipalities should elaborate heat plans, with the purpose of limiting fuel utilization and substitute the oil consumption, as a consequence of the energy crises in the late 1970 [15]. extension of the collective heat supply – not only in larger city areas but also in districts bordering city areas – can reduce ghg emissions, just as intensified use of renewables in the heat supply will, as is the case with biogas, solar heat, geothermal energy for collective or individual heat supply. municipal heat planning should take its point of departure in enhanced physical planning, where the municipality, both in their municipal plans and in their local plans, can provide guidelines for an expansion of the collective heat supply (discussed in a later section) [38]. another opportunity is to develop a market for biogas, substituting the use of fossil fuels currently being utilized [39]. thus, municipal plans can describe how the municipality plans to reduce its ghg emissions by e.g. expanding the collective heat supply by means of, for example, biogas, and how the municipality will create a market for certain renewables and support renewables through other means including biogas. 22 international journal of sustainable energy planning and management vol. 08 2015 municipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark initial prefeasiblity studies analysis of the biomass applied mapping of potential owner-ship overall project report municipal plan appendix environmental approval bussiness cases eia final bidding material contract on input/output proposals on biogas plant design & bidding construction contracts construction local plan & rural zone permit project approval connected to heat supply phase 1 phase 2 phase 3 figure a: from idea to project realization 4.1. increase heat markets municipalities can actively increase the heat market targeting biogas by requiring a share of their heat supply to be produced by biogas, hence substituting the use of ngas for heat production. this could be within municipal housing with individual ngas boilers or in municipal buildings with gas-fired boilers, e.g. schools, sports facilities, etc. another option is to expand the municipal heat markethj for biogas by requiring distribution of city gas based on biogas from manure-based plants [40]. this opportunity is not yet taken within danish municipalities, but could eventually substitute the use of existing city gas provided by ngas. the distribution of biogas supplied as city gas in denmark only happens in the city of aalborg and copenhagen, where the biogas is produced from sludge generated on wastewater treatment plants. an enlargement of the heat market for renewables will allow municipalities to lower their co2 emissions and comply with ghg emission reduction targets as, for example, formulated in the covenant of mayors (see later) [41]. 4.2. identify alternative heat markets besides identifying heat markets within the sphere of the municipal energy consumption alternative heat markets can also be found including agricultural business, such as horticultures using heat during summer periods (night and early morning) as opposed to the traditional heat markets constituted by households during winter periods. alternative markets could also include other types of manufacturing industries that would benefit from the supply of heat on a non-fluctuating annual basis, e.g. food manufacturing industries. this would benefit the economy of biogas chp plants, as surplus heat during summer periods is most often cooled and thus lost. alternative heat markets will therefore provide good opportunities for implementing biogas plants within the municipality with favorable plant profitability [42]. 4.3. mandatory use of biogas municipalities can actively support the biogas sector by requiring local ngas chp plants to utilize biogas from a nearby biogas plant as required by the heat supply law. this will provide new opportunities for selling biogas and securing a certain income level when distributing the gas, hence making the investment in biogas technology less risky. presently, many ngas chp plants are reluctant to accept biogas, in their mandatory transition to renewables, as they prefer cheaper types of green fuels such as wood chips, pellets and straw [43], [44]. the advantages of combusting biogas are however a cleaner fuel, access to a larger district heating network, and that the gas will be provided by the local community as opposed to imported wood brickets. 4.4. realize biogas proposals municipalities can also actively elaborate project proposals for collective heat supply initiatives, hereunder the supply of biogas. project proposals regarding, for example, the use of specific types of renewables, supply of energy to new industrial and residential areas, and interconnection (coupling) between energy systems, can thus be addressed [42]. alternatively, the municipality can require energy supply companies to conduct project proposals, through the heat supply [35]. when a proposal is finalized and approved by the authorities the municipality can actually require the energy supply company to implement the project [35]. project proposals emphasizing heat supply must in general meet the danish political target of a co2 neutral energy supply in 2030, and it is therefore necessary to substitute the use of fossil fuels and to increase the resource efficiency [45]. 4.5. use biogas to substitute ngas and oil municipalities should support biogas being primarily utilized for local chp purposes with supply of district heating (dc) if a local heat market is available, as the economic and environmental benefits are highest compared to other types of biogas usages [46]. otherwise, the energy could directly be distributed as non-upgraded biogas to industry and household, substituting oil & ngas and ngas used for city gas. if this is not an option other means of biogas distribution should be supported by the municipality (for example upgrading to the ngas network and for transportation purposes) [42]. such support could be achieved by municipalities providing help with calculations, prefeasibility studies etc. of different biogas distribution options to select between. 5. physical planning (facilitator) the location of residential areas, office workplaces, institutions (schools, nursery homes etc.), industrial areas and technical facilities etc. are decided by municipalities in their city plans, which divides the city area into zones and separated physical areas, where each area is subject to international journal of sustainable energy planning and management vol. 08 2015 23 rikke lybæk & tyge kjær a specific predefined planning framework or optic [47]. beside the city plans, municipalities also point out areas for agriculture, raw materials extraction and for the implementation of wind turbines etc. in the more open land outside city areas, which also are subject to zoning and specific planning framework (ibid.). thus, we argue that physical planning that to a higher degree thinks across traditional zones and predefined landscape purposes etc. could support the implementation of biogas plants (and other renewables) in the municipal energy planning, and thus increase the use of re. the importance of appropriate location of centralized biogas plants has recently been studied by deep, et. al. 2015 [55]. 5.1. suggestive expansion of heat supply the municipal city plan should establish an overview of existing and future residential and industrial areas seen in connection to its present heat supply, e.g. the physical existence of district heating and ngas networks, etc. the biogas chp plant, producing electricity, district heating and non-upgraded biogas, could thus be located in proximity to existing and near, future, residential and industrial areas, phasing out the use of ngas in the existing heat supply by means of district heating. the supply of energy could alternatively be provided by smaller local networks distributing non-upgraded biogas to cover industrial process heat demands (high temperature), or as district heating to household and industry (low temperature). thus, a local network of low pressure gas and district heating pipes would distribute energy services to industry and households within the community. as the residential and industrial areas gradually expand new biogas plants could be established and the biogas networks could be integrated or coupled [42]. the distribution of biogas will thus develop as a suggestive expansion of the municipal heat supply, due to new residential and industrial areas being developed by means of the physical planning. a priority for such local gas networks should, however, be the supply of non-upgraded biogas to industry, as it often has a constant demand all year round [48]. this is the case in ringkøbing-skjern municipality, where the dairy company arla foods, which produces milk powder, now will terminate their use of ngas for process heat generation, and instead utilize non-upgraded biogas [49]. 5.2. energy distribution the supply of energy from biogas plants can, as mentioned, be provided in local gas or district heating pipes, or supplied on the conventional ngas or district heating network. in areas where a further expansion of the conventional district heating network is possible, it is beneficial to do so as the heat supplied from the biogas plant can be connected to a large distributing system. in this way, any surplus heat can be supplied on a network that reaches a larger area in the region. as opposed to areas, where a further expansion of the conventional district heating system is not an option, it is favorable to establish smaller networks for distribution of non-upgraded gas – preferably to industry – and district heating to both industry and households in the community [42]. the above planning should be undertaken in cooperation with neighboring municipalities in order to avoid competition of manure and biomass and to obtain synergies in heat planning. 6. renewable energy (re) planning etc. (consumer/facilitator) re planning is important for supporting the implementation of renewables, and several elements connected to such planning can be utilized by municipalities to promote the implementation of re in local communities. besides municipal opportunities to support biogas we will, as mentioned earlier, also look at how national government can strengthen the framework conditions. 6.1. climate accounts and targets; covenant of mayors there are other options connected to climate, energy and the promotion of renewables within municipalities, for instance the covenant of mayors, which is an inter european association, or a convent, consisting of local and regional authorities [41]. the purpose of such collaboration is to promote the use of renewable energy and increase the energy efficiency. participants are obliged – as a minimum – to live up to the eu target of 20% co2 reduction before 2020. eu recognizes that especially local authorities, municipalities, have a profound impact as far as minimizing the consequences of climate change. the covenant of mayors is thus a unique model for management of several local levels in combating climate change, due to its mobilization of local and regional stakeholders in complying to the overall eu target for co2 emission reductions, etc. [41]. participants of the convent are obliged to elaborate co2 accounts that is, baseline-accounts of their co2 24 international journal of sustainable energy planning and management vol. 08 2015 municipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark emissions. one year after it is signing the covenant participants are required to provide a sustainable energy plan (seap), which consists of a detailed plan of how to reach the specific, for example climate targets [41]. every second year an implementation report must also be written to evaluate and survey the municipal activities, e.g. the implementation rate and impacts of the different ongoing activities. the board of the municipal must approve this report [41]. although the covenant of mayors has no legal implications for the municipal sphere, and there are no sanctions applied on municipalities not complying with their targets etc., it is beneficial for municipalities to join this convent. they will be included in a network of stakeholders throughout the eu that are motivated to combat climate change, and be provided with tools and knowledge of how to do so. the database benchmark of excellence will, for example, be available for participating municipalities, outlining best practices based on data from the convents members. the sustainable energy plans will also be accessible from a database, showing which target other municipalities within the eu has, and how they will comply with them [41]. 6.2. strategic energy planning (sep) strategic energy planning is a concept that allows municipalities to plan for their local energy supply to become a more flexible and more efficient energy supply system, so that the transition to renewable energy and energy savings can happen in the most energy efficient way for a given society. with this planning framework, the municipality, using knowledge about the existing energy system, including the current energy demand and future energy savings, and by surveys of available resources within the community should decide what the future energy supply should be. this should include the purpose of the heat supply law, as well as local policy objectives on energy within municipalities [50]. municipalities will prepare the first generation of strategic energy planning simultaneously, and in line with the local plans, achieve the expected synergies through inter-municipal cooperation and coordination with other municipal planning activities. in order to achieve the necessary flexibility and energy efficiency, the plan will not only affect the collective heat planning, but also other elements of the energy chain as cooling, energy conservation and dissemination of individual renewable energy technologies [50]. we believe that municipalities can use strategic energy planning to integrate renewables, including biogas, in their energy supply in short, middle and long terms. setting up goals for its share of the energy supply and by which conversion methods sep should be integrated in the energy system. the strategic energy planning can for example, in the short term, focus on the eu/seap initiated targets for 20% co2 reduction within 2020, and in the middle term achieve the targets of a fossil free power and heat supply in denmark by 2035. the long term could be to live up to the targets of a fossil free energy supply by 2050, which includes the transportation sector. thus, sep could for example indicate that biogas in the initial phase primarily should be used for biogas chp – district heating to households, low temperature process heat industry, gas to industry and for city gas – without an expensive upgrading to ngas standards. secondly, to push the energy and transport system to evolve the biogas should subsequently be used for transportation and ngas purposes, emphasized below. at this later stage, the costs connected with upgrading biogas would eventually be reduced due to new technological innovations. 6.3. vehicles fleet biogas for transportation purposes is in its very infancy in denmark, and only a handful of service stations provide for gas vehicles using ngas, but more will be established in 2015/16 [17]. danish municipalities can play an important role in creating a market for biogas for transportation. thus, a large municipality or company vehicle fleet could initiate a development of biogas for transportation, e.g. the municipality of copenhagen or a large taxi company. for example, sweden has busses and trucks that are operated on biogas derived from biogas plants, as mentioned in the introduction [12]. to motivate municipalities to engage in this, they could look to the climate related benefits of using gas for transportation instead of diesel or petrol. municipalities should therefore be able to calculate the carbon benefits from the use of biogas into their carbon accounts. 6.4. biogas feasibility municipalities can also assist local stakeholders by providing knowledge regarding the economies of implementing a biogas plant. they can thus provide assistance regarding calculations in and pre-feasibility analysis of the value of biogas in different supplyinternational journal of sustainable energy planning and management vol. 08 2015 25 rikke lybæk & tyge kjær scenarios using their own sep knowledge. they could also provide assistance by supporting and facilitating negotiations when doing supply contracts, etc. 6.5. financial support it would also support the biogas sector if municipalities could disseminate knowledge regarding financial support provided by national government/municipal funds e.g., discussed below: grants for planning the implementation of biogas plants should be available. this is already the case for windmills, where financial support from the national government is provided in the initial phase of the planning for erection of windmills in local communities. grants could also be available for supporting the distribution of small local biogas networks, as in e.g. ringkøbing-skjern municipality [51], which could support the build-up of a decentralized biogas infrastructure, making biogas projects more economically viable due to an enlargement of local markets. provide a public loan guaranty (e.g. 1–1.5% interest rate plus the interest rate of the national bank), for investments in biogas plants are important [52]. this will lower the production costs of biogas and make the plants less dependent on substrates, etc. it is pivotal for the biogas development that a municipal loan guarantees (low interest rate loan) can be obtained, if the danish national government cannot provide such grants. if the danish government cannot provide the grants and loan mentioned above, we suggest that municipal grants could be provided where possible. 6.6. map biomass potentials another opportunity for municipalities to support the biogas sector is to identify or map the available biomass potentials that could be supplied to biogas plants consequently boosting gas production. available livestock manure, deep litter, mink and poultry waste, residual straw, biomass from natural conservation etc. municipal support could also include the potentials for growing energy crops, and how source separated household waste can be supplied to the plants. this will assist the sector in applying feasibility studies concerning which type and size of plants to implement, and the potential gas yield etc. such work could be coordinated with neighboring municipalities to avoid competition or double counting of resources [29]. 7. summary of all support opportunities 26 international journal of sustainable energy planning and management vol. 08 2015 municipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark table a: summary of the municipal support opportunities for biogas municipalities consumer regulator facilitator regulation & speed up the authority work process supervision new biogas approval process and flow (could be provided by the danish national government) slimming down the documentation required heat planning increase the local heat market increase distribution options support pre-feasibility studies require projects to be realized identify alternative heat markets physical planning suggestive expansion of the heat supply re planning increase the local market for adopt covenant of mayors & strategic renewable energy energy planning (sep) conduct biogas feasibility analysis dissemination of options for financial support (preferably provided by the danish government, but alternatively by municipalities where economic possible) continue public loan guarantees (could be provided by national government mapping local biomass resources (boosters) 8. discussion and conclusion municipalities can play a vital role in supporting the biogas sector, through their role as facilitators, consumers and regulators; the first of these having the highest impacts. the municipalities’ role as biogas facilitator is very important, and the support opportunities identified, should therefore be applied where possible. within regulation and heat planning we suggest speeding up the biogas process and slimming down the documentation required. within heat planning we suggest supporting pre-feasibility studies and identify alternative heat markets. in physical planning a suggestive expansion of the heat supply is suggested, and within renewable energy planning we recommend the adoption of the covenant of mayors and sep, and to assist stakeholders with biogas feasibility studies and mapping local biomass boosters, etc. the opportunity analysis shows that local governments (municipalities) in denmark can support biogas in various ways. it will, however, hardly be realistic to apply all the suggestions mentioned above in each municipality. support for biogas is context dependent, so each community will have to select between the suggestions provided after having conducted a status of the biogas situation locally. as illustrated, the highest impact on the biogas sector is identified within municipalities, through their role as facilitators, then as consumers and finally as regulators. this indicates that the municipal role as facilitator is extremely important in order to support this sector and that as many of the suggestions provided above should be applied where possible. we argue that the work with biogas in connection to the strategic energy planning (sep) is especially important, as is can be used to set targets for biogas within municipalities in the short, middle and long run, and thus include some of the suggestions on how to apply more energy from biogas in the municipal energy supply, e.g. city gas, vehicle fleet on biogas, etc. the focus on inter-municipal work in the sep is also very important, as the catchment area for biomass (manure and gas boosters) and the distribution of energy, can include a large area and thus more than one single municipality. dialogue between stakeholders is therefore fundamental. biogas technology provides a flexible source of energy that can be integrated in the energy supply systems of local communities in various ways; thus biogas can be adapted to many different contexts and assist in the transition of the energy supply. biogas can be upgraded to ngas and stored in the well-distributed ngas networks, and e.g. be utilized as a back-up and fast start-up fuel on decentralized chp plants, when wind turbines do not provide base-load electricity in a future danish energy system, based on 100% renewable energy [45]. biogas is perceived as an important transition technology that can be employed to meet some of the energy supply challenges that denmark, and many other countries are facing. biogas is connected to not only the energy sector but also to the agricultural sector, and these sectors therefore constitute important infrastructure that support the development of the technology, and must be nursed in the right direction as suggested here. deployment of the biogas at the local level can constitute an engine that provides local governments (municipalities) with the supply of renewable energy that adds value and generates bio-economic solutions related to production and consumption of energy, and agricultural activities. environmental benefits at the local level, such as improved air quality from distribution of manure as fertilizer, enhanced soil quality and prevention of nitrogen leakages etc. are also cobenefits, which can improve local citizens’ everyday lives, as well as natural ecosystems [11]. biogas can thus act as an urban-rural link in which organic waste streams are recycled back to farm land as nutrients for agricultural crops, and promote the development of more sustainable agricultural practices, hereunder the expansion of organic farming. biogas can furthermore reduce soil contamination by hygenization and sterilization and provide farmers with a better quality soil in which soil depletion is avoided. to promote these benefits we suggest that local governments, besides the suggestions already made, focus on facilitating the supply of biomass substrates with high content of nitrogen, which could create additional benefits for farmers in terms of crop yields and saved expenses to artificial fertilizers, e.g. grasses like clover grass and ray grass. applying more substrates (gas boosters) than the allowed amount by 2018 (will be limited to 12% from now 25%) [53], will need to be revised for some gas boosters, as the nitrogen level of the digestate (fertilizer), and thus the gas yield, will be too poor to favor a continued dissemination of the biogas technology in denmark. grasses containing high nitrogen levels can for example be harvested from international journal of sustainable energy planning and management vol. 08 2015 27 rikke lybæk & tyge kjær extensively farmed soil, from areas dedicated natural conservation and as cover crops. in this way, valuable farm land utilized for food and fodder production will not be included in the growing of energy crops, as seen in other european countries, e.g. in germany [8], [54]. here large land areas are devoted to the production of, for example, beet and maize for biogas production, jeopardizing the sustainability of biogas feedstock. acknowledgments funding for this research was provided by ‘bioenergy zealand’ & growth forum zealand’, with the objective to increase the disseminations of biogas plants on 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1171-4620-1-le.qxd 1. introduction since fossil fuels increase greenhouse gas emissions and cause global warming, the use of alternative resources as biofuels are more developed today [1]. for this reason, recently much attention has been paid to the development of alternative fuels in order to meet the emission standards and to reduce the dependency on fossil fuels [2, 3], as well as to counteract the recent changes in fossil fuel’s prices and their influence on the energy worldwide scenario. in this context, taking into account the biodiversity and the “food vs. fuel” debate in mind [4], special attention has been paid to feedstocks such as non-edible vegetable oils and waste products (e.g. fatty acid distillates, waste cooking oils and waste animal fats). international journal of sustainable energy planning and management vol. 09 2016 3 although previous researches [3, 5-23] using waste cooking oils (wco) and fatty acid distillates (fad) have demonstrated that their use as feedstocks to produce biofuels is possible, it is not common yet and without a practical use represent a potential source of contamination. in addition, their use for biofuels and energy production may improve the efficiency in the refining oil, food and service industries (restaurants, hotels and food factories), adding value to these industries and contributing to the concept of zero-waste. on the other hand, wco and fad are potential alternatives for diesel engines due to their nature. however, the direct use of wco and fad might bring several problems in engine performance and emissions. these problems are mainly associated to a lower heating value and cetane number of wco compared to diesel * corresponding author. tel.: (+537) 2663669 e-mail address: emelo@ceter.cujae.edu.cu and eliezer.ahmed.melo.espinosa@gmail.com international journal of sustainable energy planning and management vol. 09 2016 3-16 emulsification of waste cooking oils and fatty acid distillates as diesel engine fuels: an attractive alternative �������� ���� �������������������������������������������������������� ���� �� �������!�� ����� ��������� �������� ��� ����������������������� � ��������� ���� ������������������������������� � �� ���� �� ���!���� �"# �! $�� �� �����%���&�'�(�)#$�*��������� ���+,+-��.�%������ �� /�0�����1���� ��� ���.��������� 1� ��� ���������������� ���� �����������������$�������� ����2�����)��%�������� ����3 ��������� ��������4���53+---��2������5���� 1 abstract: the scope of this paper is to analyze the possibility and feasibility of the use of, the emulsification method applied to waste cooking oils and fatty acid distillates as diesel engine fuels, compared with other commonly used methods. these waste products are obtained from vegetable oil refining industry, food industry, service sector and frying process, mainly. however, they are a little bit applied as feedstocks to produce biofuels and constitute a potential source of environmental contamination. from the review of the state of arts, significant decreases in exhaust emissions of nitrogen oxides, cylinder pressure as well as increases of the ignition delay, brake specific fuel consumption, hydrocarbon, smoke opacity, carbon monoxide, particulate matters to emulsified waste cooking oils and fatty acid distillates compared with diesel fuel are reported. in some experiments the emulsified waste cooking oils achieved better performance than neat fatty acid distillates, neat waste cooking oils and their derivatives methyl esters. keywords: emulsified biofuels; waste cooking oils; fatty acid distillates; diesel engine; url: dx.doi.org/10.5278/ijsepm.2016.9.2 4 international journal of sustainable energy planning and management vol. 09 2016 emulsification of waste cooking oils and fatty acid distillates as diesel engine fuels: an attractive alternative fuel. also, properties as kinematic viscosity and surface tension have a significant influence on the fuel injection process as well as the premixed formation into the diesel engine combustion chamber [24, 25]. it is estimated that some 20 million tons of oils and fats are used for frying around the world, with industrial frying the major user of frying oil [26]. particulary in china, the potential amount of waste cooking oils and soapstock is about 2.5 and 1.0 million tonnes/year, respectively [27]. in the united states for example, soybean oil refining processes potentially produce 100 million pounds of soapstock (another by-product from vegetable oil industry)[28]. only in 2008, malaysian refineries produced 750 000 tonnes of fad [29]. from the above exposed reasons and seeking for a more engine-friendly fuel, it is necessary to change the feedstock properties by applying different methods such as: preheating, blending with diesel fuel, transesterification, cracking/pyrolysis or emulsification [3]. among these methods, the emulsification technique applied to wco and fad has not been studied thoroughly. the scope of this paper is to analyze the possibilities and feasibilities of the emulsification method applied to wco and fad through the main experimental results already reported. 2. waste oil products as potential feedstocks for biofuels industrial and household wastes are produced on a daily basis and are managed in many ways, depending on their type [30]. one of the most important challenges for the industrial sector dedicated to the vegetable refining oil, service and food industry is to find solutions for the use and reduction of the waste products generated. the waste cooking oils and fatty acid distillates are available around the world and generally have a low commercial value and a little use. the fad from the refining oil industry are obtained as is shown in figure 1. despite the wco are used for soap and animal feed productions [8] part of them are still discharged into the environment. also, it is important to take into account that the use of wco for the production of animal feed in few countries is forbidden resulting in the availability of important quantities of wco [12]. in addition, the reuse of cooking oils might cause serious difficulties on human health. due to the high temperatures, carcinogens as benzopyrene are released but also free radicals. the full recycling flow chart for waste cooking oil is shown in figure 2. transportation of fresh fruit bunches fruit bunches enter the plant oil extraction at mill stripping in rotation drum purification in a clarification tank sterilization in large pressure vessels crude vegetable oil refining process physical refining (steam) degumming and pre-bleaching deacidification and deodorization fatty acid distillates refined vegetable oil extraction in homogeneous oil mash figure 1: full processing flow chart for a general vegetable oil physical refining process [3, 7, 14] according to the wco and fad composition, they are suitable for the production of biofuels (see table 1) enhancing the efficiency in the industries above mentioned; contributing to the concept of zero-waste concerning the utilization of by-products generated in the vegetable oil refineries, reducing the environmental degradation [12]. acoordin to researchers as kartina and suhaila [13], they state that wco is the cheapest source and can reduce problems on waste oil disposal whereas fad is a by-product from oil refining, therefore it can be a readily available feedstock to produce engine biofuels. however, the direct use of these waste oil products as engine fuel might affect the engine performance and engine component wear. in order to obtain an economic and environmentally-friendly engine fuel from waste oil products, it is necessary to change their properties (e.g.: viscosity, surface tension, free fatty acid content, etc.). for this reason, different methods have been used, such as preheating, blending, dual fuel operation, transesterification, cracking/pyrolysis and emulsification. among these methods, demirbas et al. [41] and meher [42] specified that the transesterification is the most promising solution to the high viscosity problem and is an interesting method to produce a cleaner and environmentally safe fuel. preheating of the fuel is a common simple process applied to the fuel prior to its injection into the combustion chamber. this process is basically a heating device that warm up the fuel up to around 60-70°c in order to decreases the fuels viscosity to levels near diesel fuel and then is injected into the system. dual fuel operation is a valve system settled in order to prepare a blend of two fuels prior to their introduction into the diesel engine. the fuels blending let to obtain a fuel with viscosity level between the neat components. the transesterification is a well-known chemical process that transforms the glycerides found in oils into methyl esters, which according to their properties close to diesel fuel are known as biodiesel. cracking and pyrolysis are physical processes that by a thermal bonds brake transform an organic molecule into short ones and then converts a chemical substance into a derivate. emulsification is the action, process or method for obtaining emulsions. a two non-miscible phases are blended using a substance known as surfactant as a surface active component that under certain experimental conditions leads to a stable system that acts as a single phase. the preparation of an emulsion produces no byproducts but consumes surfactant, commonly also co-surfactant and water. international journal of sustainable energy planning and management vol. 09 2016 5 eliezer ahmed melo-espinosa1, ramón piloto-rodríguez, roger sierens and sebastian verhelst collection process of waste cooking oils refined waste cooking oil neutralization process filtration process sedimentation process households hotels food factories transporation of waste cooking oils collected waste cooking oil refining process restaurants and cafeterias figure 2: full recycling flow chart for waste cooking oil table 1: physicochemical properties of wco, fad, diesel fuel and biodiesel [12, 31-40] fad diesel fuel biodiesel properties wco (from soybean) diesel fuel astm d975 astm d6751 viscosity (mm2/sec) 33,40–43.36 29 2–4.6 1.9–4.1 1.9–6 density (g/cm3) 0.88–0.925 0.908 0.810–0.860 ns ns flash point (°c) 210–302 ns 67.5–78 52min 93 water content (%) 0.2433–0.0693 0.3869 ns 0.05max 0.05max lhv (mj/kg) 36.47–39.60 36.5 42.39–44 ns ns cetane number 33.4–37 ns 40–60.5 40min 47min c (w/w%) 76.8 ns 84–87 ns ns h (w/w%) 11.6 ns 16–33 ns ns o (w/w%) 10.6 ns 0 ns ns ns: not specified transesterification of triglycerides produces biodiesel and proceeds through a reaction with alcohols in the presence of a catalyst and producing glycerol as a coproduct [43]. biodiesel also has drawbacks, including cold weather limitations due to a relatively higher cloud point and pour point, and might increase emissions of nitrogen oxides (nox) [43]. atmanli [36] and agarwal [44] pointed out that the transesterification process is a relatively expensive chemical process since it involves the use of chemicals, catalysts and a heat. also, depending on the quality of the feedstock (free fatty acid, glyceride and moisture content), different steps are needed. the free fatty acids are hydrolysis/oxidation substances of oil due to cooking and storage. [41]. the free fatty acid and glyceride content in fatty acid distillates and waste cooking oils are shown in table 2. due to the high free fatty acid (ffa) content of wco and fad, these sources cannot be converted directly to biodiesel via alkaline transesterification [13]. although different methods to decrease ffa are reported [45–47] for enhancing the transesterification efficiency, biodiesel production is not economically profitable. 3. emulsification method applied to waste cooking oils and fatty acid distillates an alternative to the transesterification process (or even to improve the atomization and emissions of biodiesel) might be the use of the emulsification method. emulsification is the process of dispersing one liquid in a second immiscible liquid using a third substance known as emulsifier or surfactant. through this process, a dispersed system is obtained containing small droplets of water suspended in wco or fad. emulsification is a simple process and might need no modification of the original engine design for its use [59]. emulsions are an interesting alternative as diesel engine fuel due to their simultaneous reduction of smoke and nox emissions [38, 59, 60]. additionally, because of the microexplosion phenomenon, it is also possible to recover in some proportion the decrease on the heating value. due to the presence of water in the emulsion formulation, the emulsified fuel droplets are characterized by a difference between water and fuel volatility. the droplets are heated by convective and radiative heat transfer and its temperature reaches the superheat limit. inside the droplet, this is followed by a rapid bubble nucleation,and then, internal formation of vapor bubbles. the vaporization of water then blows up the oil layer and thereby forms smaller oil droplets enhancing the spray atomization. this phenomenon is called microexplosion. different researches reported about the formulation of emulsified biofuels using wco or fad and the use of surfactants such as sorbitan monooleate and polyoxyethylene sorbitan monoolate mainly; also cosurfactants such as ethanol and methanol. however, it is possible to use other surfactants with a hydrophiliclipophilic balance (hlb) between 4–6 [61] and even one with higher hlb depending on continuous phase and emulsion type. in addition, it is possible to use short-chain alcohols as co-surfactants with the aim of increasing the amount of water and/or to further improve the stability of the emulsified biofuels. the characteristics of some surfactants and co-surfactants used as emulsifier agents are shown in table 3. on the other hand, researchers such as morais et al. [72], porras [73] and bhimani [65] point out that a mixture of hydrophilic and hydrophobic surfactants yields a more stable emulsion. for this reason, in order to obtain a mixture of surfactants with hlb number according to the interval previously recommended, a mathematical equation (eq. 1) given by mollet [74] and bhimani [65] can be used. through this equation, the mass percentage (%) of the surfactants involved in the mixture can be obtained. table 2: free fatty acid and glyceride content in wco and fad for different feedstocks ffa glycerides type feedstocks (wt %) (wt %) ref. fad cotton 85.0 ns [48] palm 70.0–93.0 20–30 [46, 49] hazelnut 45–50 ns [50] soybean 30.1–45.4 13.0–23.3 [51–53] rapeseed 48.8 32.9 [54] wco ns 5-37.96 54.4–96.2 [8, 45, 55–58] ffa: free fatty acids, fad: fatty acid distillate, wco: waste cooking oil, ns: not specified emulsification of waste cooking oils and fatty acid distillates as diesel engine fuels: an attractive alternative 6 international journal of sustainable energy planning and management vol. 09 2016 %surfactant a = [100 • (x-hlbb)] • (hlba–hlbb) –1 (1) %surfactant b = 100 − (% surfactanta) (2) where: x: hlb required hlba: hydrophilic-lipophilic balance of the surfactant a hlbb: hydrophilic-lipophilic balance of the surfactant b 4. experimental reports about the formulation of emulsified wco and fad it is difficult to establish an accurate methodology in order to formulate emulsified biofuels because there are different feedstocks and different methods of preparation such as mechanical stirrer or membrane emulsification [67]. among these methods, the use of dispersion has been the most applied. different researchers [75–77] noticed that a high rotational speed leads to small water droplets. however, the ultrasonic vibration technique is an effective choice to produce dispersed systems at high-intensity. this method has been also claimed by researchers such as wilhelm et al. [4], lin and chen [5] as an excellent choice for effectively preparing tiny particles in a solution. as was previously mentioned, the emulsification techniques applied to waste cooking oils and fatty acid distillates have not been studied thoroughly [67]. however, researchers as yoshimoto, mubarak, nanthagopal, subbarao, kannan, jaikumar, senthil and ramanathan [2, 33, 34, 38, 78, 79] formulated emulsified biofuels using waste cooking oil and their derivatives. yoshimoto [38] conducted an investigation about the emulsified wco, which were discarded from restaurants and households. the emulsified wco were prepared with different percentage of water (10–40%), 1% of surfactant (crs-75) and a blend in equal proportions of wco and diesel fuel as continuous phase. the kinematic viscosity of the emulsified wco formulated was exponentially increased with increasing of the water content. according to the stability tests, emulsified wco had good stability. different emulsified waste cooking oil methyl esters (wcome) were prepared by kannan and anand [2] using span 80 as surfactant and different proportions of biodiesel, diesel and ethanol as continuous phases. the lower heating value decreases with water addition and increases the ignition delay in a compression ignition engine. water addition was limited between 0.5 and 2 ml in 100 ml of fuel sample [2, 80]. among the emulsified wcome formulated only two (b60d20e20: 60ml wcome + 20ml diesel fuel + 20ml ethanol + 4g span80 + 0.5ml water and b70d10e20m: 70ml wcome + 10ml diesel fuel + 20ml ethanol + 4g span 80 + 0.5ml water) showed good miscibility and optical appearence; besides, 4g of span 80 and 0.5ml of water were found to be suitable for micro-emulsion fuel formulation. lower kinematic viscosity and density for both emulsified wcome selected were reported compared to neat wcome. in addition, slight differences between caloric values of emulsified wcome and neat wcome were reported. mubarak and senthil [78] prepared emulsified biofuels using wco, ethanol, water and span 80 as surfactant. the emulsions were prepared by varying the international journal of sustainable energy planning and management vol. 09 2016 7 eliezer ahmed melo-espinosa1, ramón piloto-rodríguez, roger sierens and sebastian verhelst table 3: surfactants and co-surfactants used in emulsified biofuels’ formulation energy chemical chemical content viscosity density name formula (mj/l) hlb solubility cn (mm2/sec) (g/cm3) ref. sorbitan c24h44o6 ns 4.3 ns ns 300 0.99 [62–64] monooleate (span 80) polyoxyethylene c64h124o26 ns 15 ns ns 165 1.06 [65–67] sorbitan monooleate (tween 80) methanol ch3oh 16 ns miscible 2 0.6 0.79 [68–71] ethanol c2h5oh 19.6 ns miscible 5-11 1.1 0.79 1-butanol c4h9oh 29.2 ns 77 17 1.7 0.81 1-octanol c8h17oh 33.7 ns 0.59 39 4.4 0.83 fp: flash point, cn: cetane number, ns: not specified amount of neat waste cooking oil, water and the ratio of surfactant/co-surfactant (span 80/ethanol) in the system. these emulsified biofuels were prepared stirring vigorously. from the stability test, it was found that the mixture of 70% of wco, 15% of water, 10% of ethanol and 5% of span 80 was stable for two weeks [78]. the physicochemical properties of emulsified biofuels formulated were not reported. senthil and jaikumar [34] obtained emulsions with specified amount of neat wco, water, ethanol and surfactant span 80. from the stability test, it was found that the mixture of 70% of wco, 15% of water, 10% of ethanol and 5% of surfactant by volume was stable for two weeks [34]. this emulsified wco (same composition) was also reported as stable by ramanathan [79]. on the other hand, nanthagopal and subbarao [33], using a high-speed stirrer prepared emulsions with diesel fuel-wco blend (equal quantities), different water amount (10, 20 and 30%) and surfactant. the physicochemical properties of the emulsions in both studies were not reported. reding et al. [81] formulated emulsified wco with different percentage of water (10–40% by weight) just before its use as engine fuel, avoiding the use of surfactants. the use of surfactants were discarded because in the targeted context of rural development, these surfactants would create a dependence on chemical products, [81]. the emulsions were produced using a magnetic stirrer with a 7 minute maximum fuel line residence prior to the fuel pump injection. in this research, the physicochemical properties and the stability test of the formulated emulsified wco were not reported. on the other hand, emulsified fad from soybean were formulated by melo [3]. the emulsified fad were prepared as ternary systems using residual fad, methanol, also a factorial design 23 was developed. the selected factors analyzed were: temperature, methanol percentage and stirring time. the microemulsions formation was detected as the formation of one phase of a very clear, transparent and totally stable liquid system. the dynamic viscosity of emulsified fad was higher than diesel fuel. the density measurements did not show significant differences among fuels. 5. engine performance and exhaust emissions assessment a critical analysis from most of the literature reviewed shows significant difference between the assessment of engine performance and exhaust emissions of diesel engines fuelled with diesel fuel, emulsified wco, fad and their emulsified derivatives. the results reported are influenced by the engine operation mode, type and tuning of the injection system, and finally, on the optimized combustion chamber configuration [82]. the physicochemical properties of the emulsified fad, wco and their derivatives also play a significant role. a summary of the experimental results reported about the use of emulsified wco, fad and their derivatives compared with diesel fuel are show in table 4. waste cooking oils, fatty acid distillates, surfactants and co-surfactants have a lower heating value, cetane number and poor volatility than diesel fuel is generally reported (see table 1). these properties have an 8 international journal of sustainable energy planning and management vol. 09 2016 emulsification of waste cooking oils and fatty acid distillates as diesel engine fuels: an attractive alternative table 4: performance and exhausts emissions assessment of diesel engines fuelled different biofuels from fad and wco compared with diesel fuel type engine performance, emissions and engine components wear ref. neat fad (preheated at 70°c) petter slight differences in ignition delay [3, 15] 1-cylinder � cylinder peak pressure di � bsfc different blends (10,15, 25, � nox 50%) of fad in diesel fuel � co and hc emulsified fad petter � bsfc [3] 1-cylinder � nox di neat fad 6-cylinder � dark deposits on the piston crown, the rings, [7, 22] (preheated at 110°c) di the combustion chamber and the injector. heavy erosion produced by particles in the fuel facilitates the start of microcracks, producing fatigue loads and the failure of fuel injectors international journal of sustainable energy planning and management vol. 09 2016 9 eliezer ahmed melo-espinosa1, ramón piloto-rodríguez, roger sierens and sebastian verhelst table 4: performance and exhausts emissions assessment of diesel engines fuelled different biofuels from fad and wco compared with diesel fuel (continued) type engine performance, emissions and engine components wear ref. neat wcome deutz � cylinder pressure, heat release rate and ignition delay [10] and two blends (70 and 2-cylinders � co, hc 30% ) of wcome in diesel fuel di � nox different blends (10, 20, 30 and 50%) 1-cylinder � bsfc and cylinder peak pressure [87] of wcome in diesel fuel di � bte, co and hc � nox emulsified wcome and emulsified 1-cylinder � kinematic viscosity with the increase of the [38] wco-diesel fuel blend in equal di water amount proportion (both emulsions with � nox and smoke 10, 20, 30 and 40% of water) neat wcome kirloskar � bte with the increases of wcome using blends [9] and blends (90, 70 and 1-cylinder � bsfc with the increases of wcome using blends 50% ) in diesel fuel di � exhaust gas temperature and smoke opacity with the increases of wcome using blends neat wco kirloskar � bsec, exhaust gas temperature, co and smoke density [12] (preheated at 30°c, 75°c 1-cylinder � bte and nox and 135°c ) di neat wcome and blends of kirloskar � bsec (10, 30, 50 and 70%) in diesel fuel 1-cylinder � bte and nox [88] di � smoke density emulsified wco listeroid � bsfc, hc, co and opacity [81] (10, 20, 30 and 40%) 1-cylinder � exhaust gas temperature at 75% and 95% load idi � bte and nox different blends (25, 50 and 75%) ttf 8000s � smoke and hc [89] of wcome in diesel fuel 4-cylinder � co and nox di neat wcome and blends of kirloskar � rohr and bte [90] (20, 40, 50 and 80%) in 1-cylinder � cylinder peak pressure and bsfc diesel fuel di � ignition delay, co and hc � nox and exhaust gas temperature two emulsified wcome kirloskar � bsfc and co [2] 1-cylinder � bte, hc, no and smoke di �combustion duration, cylinder pressure, rohr and id neat wco and kirloskar � cylinder pressure. however, the emulsified [34, 78] emulsified wco 1-cylinder wco was higher than neat wco for three (70% wco, 15% water, 10% di experimental points ethanol and 5% span 80) � bsec and ignition delay � bte and nox � hc, co and smoke opacity. for some experimental points the emulsified wco was lower than neat wco emulsified wco with 23.5% � bte compared with diesel fuel,≠�bte compared [79] oxygen enrichment with neat wco and emulsified wco at peak load (70% wco, 15% water, 10% � smoke, nox, hc and co compared with diesel ethanol and 5% span 80) fuel and neat wco, especially at peak load a blend of wco in diesel fuel (50%) di � bsfc, except to emulsified wco-diesel fuel [33] with 30% of water � bte wco-diesel fuel emulsions with � co and nox different water contents (10, 20 and 30%) � pm and smoke intensity di: direct injection, idi: indirect injection, wcome: waste cooking oil methyl ester, bte: break thermal efficiency, bsfc: brake specific fuel consumption, bsec: brake specific energy consumption, rohr: rate of heat release, hc: unburned hydrocarbons, pm: particulate matter, co: carbon monoxide, nox: nitrogen oxides important influence on the premixed combustion phase, ignition delay, rate of heat release, fuel consumption and emissions. an increase of bsfc (due to the lower heating value) compared with diesel fuel [2, 3, 34, 78, 81] was achieved, as well as a decrease of break thermal efficiency (bte) except for nanthagopal [33] who reported an increase of bte using wco-diesel fuel emulsions. nanthagopal [33] reports a decrease of the bte with the increase of water content due to poor mixture formation as a result of high viscosity of the emulsion. in addition, an increase of bte compared with neat wco and emulsified wco at peak load was reported by ramanathan [79] using an emulsified wco with 23.5% oxygen enrichment. higher ignition delay for emulsified biofuels compared with diesel fuel and neat wco are reported by senthil, jaikumar and mubarak [34, 78]. this result is expected due to the lower cetane number of the components used to formulate the emulsions. the presence of short chain alcohols (e.g. ethanol) affected the ignition quality as a result of their lower cetane number and higher latent heat of evaporation. it is valid to point out that the amount of water which is in the emulsified biofuels also delays the ignition. moreover, according to exhaust emissions one of the most important advantages of the emulsified fuel is the possibility of decrease the nitrogen oxide emissions (nox). in accordance with experimental reports (see table 4), several researches shown decreases of nox emissions compared with diesel fuel, neat wco, neat fad and their derivatives. similar results are reported by different researchers [37, 67, 83-85] using other feedstocks. an explanation to these results is the thermal effect of the water on the combustion temperature decreasing it into the combustion chamber. nevertheless, formation of nox is quite complex, numerous intermediate species exist [86]. increases of unburned hydrocarbons (hc), particulate matter (pm), carbon monoxide (co) and smoke opacity for emulsified biofuels are generally reported. these results might be a consequence of the higher viscosities of the emulsified biofuels compared with diesel fuel. higher bulk modulus and density of wco, fad and their emulsions are expected, which have an important influence on the injection timing and impact of fuel on the cylinder walls. also, the variations on the ignition delay (delay in the start of combustion) and its influence on premixed combustion period, also plays an important role. however, in some experiments the emulsified wco achieved lower hc, co and smoke opacity than neat wco [78] and diesel fuel [33]. this behavior might be attributed to improvements on spray formation and the oxygen content when biofuels are used. ramanathan [79], using an emulsified wco with a 15% water and 23.5% oxygen enrichment achieved important decreases of exhaust emissions such as smoke, hc and co compared with diesel fuel and neat wco. arrows in table 4 represents the property or parameter behavior compared to diesel fuel. according to the literature survey shown in table 4, the use of fad for energy production in diesel engines increase the bsfc, not depending of the fuel pre-treatment or derivate due to the lower heating value compared to diesel fuel. the reduction of nox emissions is positive but increase on co and hc joint to deposit formation on the injectors are drawbacks, but a real assessment of the use of fad and its derivatives in a diesel engine should start with the reduction of waste as a pollution source and the reduction of conventional fuel dependency. on the other hand, the results shown in table 4 for wco and its derivatives. concerning the wco, the results are diverse and in some cases opposed. for wco, reduction of nox and co is generally reported but increses in energy and fuel consumption due to the lower heating value are also reported. based on different reports for this byproduct, a generalization is not possible from table 4, but generally the use of emulsion decrease nox but increasses co emissions. better engines performance and exhaust emission reduction are in several cases achieved but not for all the parameters, that is normally not possible to reach. some opposite results demonstrate that this is an updateable field of research and the main thought to take into account is that the use of this residuals for energy production is in any case a benefit for the human and industrial activities, since they are by-products of very low commercial value an in certain societies are an important source of pollution. 5. conclusions the review of state of the art in this paper developed is an approach to emulsified waste cooking oils and fatty acid distillates with the aim of enhance the knowledge about this topic (formulation, characterization, engine performance and emissions). investigations carried out about the use of wco and fad as diesel engine fuel showed the transesterification as the most commonly 10 international journal of sustainable energy planning and management vol. 09 2016 emulsification of waste cooking oils and fatty acid distillates as diesel engine fuels: an attractive alternative applied method; in spite of the necessary step to remove the free fatty acids, glyceride and moisture content found in fad and wco, as well as economic and environmental advantages that brings the emulsification method. these investigations prove that emulsification method applied to wco and fad is a suitable alternative to diesel fuel without modifying the diesel engine. according to the engines performance and exhaust emissions, it is possible through emulsification to use the fad and wco as engine biofuels for energy production with adequate performance. differences between physicochemical properties of fad, wco and diesel fuel are responsible of variations of the specific fuel consumption, ignition delay and exhaust emissions. although the engines performance and exhaust emissions behavior depend on the physicochemical properties of the emulsified biofuels, the influence of the engine type and experimental conditions need to be further researched. in addition, studies focused on the formulation, stability, as well on the behavior of the physicochemical properties of the emulsified fad and wco need to be addressed. acknowledgement the authors wish to express their acknowledgement to the flemish interuniversity council’s (vlir) university development cooperation, funding a south initiatives program entitled “emulsified systems for biofuels. assessment of their performance in diesel engines”, because of their greater support to this research, which was performed under this 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1067-3618-1-le.qxd international journal of sustainable energy planning and management vol. 05 2015 57 * corresponding author e-mail: aviel.verbruggen@uantwerpen.be international journal of sustainable energy planning and management vol. 05 2015 57–68 europe’s electricity regime: restoration or thorough transition �������� ���� ������ ������� ����������� ���� � ������������������� �� ���������� ��� ������� �������� � �!�� � ���� "� ��!� � #� ����!�"#���#���!� ��$%������� ���&� ���������� '� #���#(��$����� �)����������������*���� � ������ � �� ���� ���������� ��� �������������� �������������� � ����� ���� ���� �� ��!� ��� "�#�� ����$���������� � ����������%"�� �� ������&��'�()����������*������� +����� ���%� � � ��� ��#���� �������� ���� ����������&,���� ������(��&�'�����+����� ����*������� �������� � �� �*� ����.� "�� ��������� � �� ��/�������*� "�� �� ���01�)�2�������'��/��������� ���� � &���� ��� � ��&���� ���� ���-��������������� ��������� � ���/� ���"������ ����-��(��&3�(�������� ����&�����4� � ������ � �� ��5��6������!��� 4���'�����0����5��6�������� ���� � ������ � �� ������������*��-���� �71���%��0����������% ���� " �������#�� ���� ��#� �����!��� ��5 �-�� ��$���������� � ����������* ��� �� ���2'��&��'�(0���������*������� � ����� ���� �����-��������5� ���5 �-�� ��8��-������� � ���� 9���:��5�������8��-��5��-��� ; # � �; �5����� ��%��� ��� � �� �#��� ��� � �<#5%#=�� 1���� ��6��72�:�����:��)�>�-��-��5����� 4 *��� ����� ���-��>�������� ����������������5?���-�@�����)��$��:����*��� �����$��� �� � ������ � �� ������-�����3���a �# ������!���� �+��4�����'��$b������-������3� abstract concerns about climate change, diminishing social acceptance of traditional fuels, and technological innovations have led several countries to pursue energy transition strategies, typically by massive diffusion of renewable electricity supplies. the german ‘energiewende’ has been successful so far in terms of deploying renewable power, mainly by applying particular feed-in tariffs, and by bundling public, academic, industrial and political support. so far though, only few eu member states proceed with a similar transition. in march 2014 ceos of europe’s major energy companies publicly opposed a fast and thorough transformation of electricity supplies to become fully renewable. in april 2014 the european commission published new state aid guidelines, generally mandating renewable energy support mechanisms (premiums, tenders) of lesser performance than regularly adjusted, specific feed-in tariffs. the new guidelines are likely to be pernicious for the fast deployment of renewable electricity supplies. in light of these challenges, this position paper highlights two implications of power sector transitions. first, the engineering-economics theory of power generation systems needs fundamental revision, mainly since a growing share of power sources no longer function on command. second, and based on the experience in germany, the paper sketches out a strategy for a thorough transition of the power sector, which, in the end, also entails normative judgements. deep changes in energy systems and associated ways of living require societal consensus building based on ethical considerations. keywords: renewable electricity support; electricity industry transition; energiewende; polluter pays principle; eu energy state aid guidelines url: dx.doi.org/10.5278/ijsepm.2015.5.6 abbreviations: eeg = erneuerbare-energien-gesetz (german renewable energy act); fit = feed-in tariff; so = system operator; srmc = short-run marginal cost 58 international journal of sustainable energy planning and management vol. 05 2015 europe’s electricity regime: restoration or thorough transition 1. introduction: electricity industry transition transition of the existing energy systems in industrialized countries is high on the climate and energy policy agenda. according to ipcc [1] co2-eq emissions by industrialized economies need to be reduced by 80 to 95 percent by 2050 compared to 2000 emissions and must peak prior to 2020, to stay below 2°c global average temperature increase on earth. this message was reinforced by the 5th assessment report of ipcc [2]. deployment of low-carbon energy systems by the year 2050, or earlier, is the key goal, spearheaded by rapid transitions to low-carbon electricity supplies. since 2007, more and more citizens, organizations, companies, and politicians support ipcc’s findings. notwithstanding the growing support, lock-in is a strong force of inertia [3]. many people, companies, and organizations live from fossil fuel and nuclear energy supplies. infrastructures, equipment, technology, planned projects, practices, theory, mental maps, and beliefs are hooked on low-priced availability of fossil fuels and grid electricity. the related interests are sizeable. the opposition against a fast and thorough energy transition is real and organized. this paper does not study the many lock-in factors. it signals how the organized opposition against a fast transition went more public in march 2014, when the ceos of the major energy companies in europe proposed to change the course of successful transition paths and retard the deployment of distributed renewable electricity supplies [4]. new eu commission state aid guidelines under preparation for some years, where published in april 2014 [5], and help to promote the ceos agenda. we contrast these activities with the opposite perspective, which aims for thorough transition towards more sustainable, 100% renewable, electricity supplies, within a few decades. in 2010, electricity globally was generated almost 4/5th by thermal plants [68% fossil + 11.7% nuclear fuelled], and 1/5th from renewable sources [15.8% hydro + 4.5% from biofuels, waste, geothermal, wind and direct solar] [6]. bringing the renewable energy share in electricity supply to almost 5/5th over the coming decades is a technological, industrial, financial, political, and social challenge at local, regional, and global levels [7, 8, 9]. this article focuses on two aspects of the transition challenge. first, a generic issue is the engineeringeconomic analysis and representation of integrated electric power systems. a revision of the basic assumptions about power supply sources and of the engineering-economic theory and models based on these assumptions is one example of the fundamental changes (or rather reversals) a thorough transition of electricity systems implies. the tenet of all power capacities being fully under system operator (so) command is growing obsolete with every new wind turbine or pv panel coming on line. second, the positions and recent moves by the electric power sector vested interests are discussed. in october 2013/march 2014 the sector interests triggered a restoration campaign, designed to slow this transition. in april 2014 the eu commission published new state aid guidelines that will likely have a pernicious impact on the deployment of renewable energy supplies. counteracting restoration requires a renewed emphasis on a thorough transition policy and action, implying several reversals in conventional thinking and practicing. the paper is structured as follows. section 2 provides a short description of the engineering-economics theory of optimal composition and least-cost operation of integrated electric power generation systems. the theorems are assuming that the so can command the power plant capacities. section 3 describes how the streamlined theory, already in the past was continuously adapted to match technical and economic constraints and facts of the real world. section 4 provides an overview of the first transition phase in europe’s electric power sector. the focus is on germany, and the ‘energiewende’ is analysed as an evolutionary model for the future. there is a concise review of main factors that explain the launch of an effective energiewende. section 5 reports a few salient moments and elements of the restoration campaign coordinated by the ceos of the major energy companies in europe under the umbrella of magritte group. it appears that through the new state aid guidelines for energy (except nuclear power) of april 2014, the eu commission supports the approach of the major energy companies. although several power companies announced to undertake more activities and investments in renewable energies and energy efficiency, the danger is real that this restoration campaign will have a strong retarding impact on the transition towards 100% sustainable renewable energy supplies. section 6 provides an outline of basic steps needed to avoid such pitfalls and to deploy a path for a thorough transition; such outlines are common in strategic planning. a clear mission provides framing for the fundamental changes (reversals) that make up the thorough transition. this section implies several normative stances. a short conclusion is proposed in section 7. 2. electricity sector economics 1950-2000 the second half of the 20th century witnessed a tenfold growth of global electricity use. more rivers were dammed for harnessing hydropower. nuclear power was named backstop technology for substituting fossil fired power, with breeder reactors and fusion to kick in well within the horizon of the 20th century [10]. nuclear power would provide enough ‘electricity to all for all uses’ (electric sector advertising in the 1960/70s). fossil-fired thermal power units scaled up from tens of mw to thousands of mw, with increasing conversion efficiency approaching the limits of physical laws. these large-scale systems were top-down designed and operated, with end-users absorbing ever more electricity. pollution, waste, and risks were largely rolled off on nature, society, and the future. generation and transmission were highly controlled, functioning on command by central system and plant operators, with distributed generation languishing. engineering-economic models and practices governed investments, operations, and pricing of electric power [11]. the interlinked models answered the major engineering-economic questions on reliably meeting the demand for the non-storable electric current by endusers: when should which capacities be built? how should they be operated? who should pay which costs? the sublimated version of the theory assumes a continuum of capacity options, from high fixed / low variable costs (base-load) to low fixed / high variable costs (peak-load). in an optimally composed generation system, installed capacities run their number of hours as least cost generator of the range. all plants function ‘on command’: they supply power when the system operator (so) orders it, and they do not supply power when not ordered by the so. because electric current is not storable and is very rapidly transmitted over networks, the operations occur ‘in real time’. over brief time spans (e.g., 15 minutes) available generation capacities are ranked in merit-order by variable generation costs (fuel and other avoidable running expenses). the variable cost of the marginally loaded plant equals the short-run marginal cost (srmc) of the integrated generation system, this being the theoretical proper kwh price of generation for all end-uses during that brief time span. when the sequence – investment, operations, pricing – fits perfectly, the major issues of power supply achieve neat solutions: all end-users during the real time interval are treated equally via a srmc-price, signalling the momentary opportunity cost of generated power. in an optimally composed and operated production park, revenues obtained via srmc-pricing would cover full costs. 3. recalcitrant realities preclude theoretical optimality multiple technical, economic, and practical factors challenge the sublimated theory [12]. first, economies of scale, discrete sized generation units, sunk costs of long-living assets, and fluctuating input factor prices impede optimal compositions of electricity production systems. at the operations side, start-up costs, limited ramping rates, ‘must run’ units having priority over cheaper plants and spinning capacities disturb the simplicity of textbook merit-order rankings and blur the meaning of srmc prices. the difficulty to calculate with precision less visible external costs related to the placement, functioning, emissions and waste of power plants, is used as excuse to reject or minimize the inclusion of these costs in the accounts and in the prices of delivered power. smart metering and ict significantly extend the ability to control real time operations, governed by many factors [13]. but how practical is it for most end-users to process themselves the information overload? in the case of most electricity consumers, end-use prices do not reflect the swinging srmc pointers, but are constant prices per kwh delivered over the month (year) or two-part (per kw capacity and per kwh), and sometimes with separate peak and off-peak period measuring and billing. also, pricing is highly influenced by regulators with other logics, criteria, and frameworks than engineeringeconomic optimality. second, follow-up of actual power generation systems is a full time expert job, applying theoretical models and various practices under ever-changing circumstances. distinctive variables fluctuate permanently, as do srmc signals that mark the functioning of power systems [13]. as a corollary, most non-expert parties (small businesses, households) may lack the knowledge and time to international journal of sustainable energy planning and management vol. 05 2015 59 aviel verbruggen, maria-rosaria di nucci, manfred fischedick, reinhard haas, frede hvelplund, volkmar lauber, arturo lorenzoni, lutz mez, lars j. nilsson, pablo del rio gonzalez, joachim schleich, david toke comprehend sufficiently electric power systems to benefit from its erratic intricacies. we assess that the revenues/expenses ratio of small and residential end-users muddling in intricate electricity system balancing issues is very low: promoting such participation holds no societal merit as some expect [14, 15]. by contrast, simple and transparent public regulations shield small power producers and end-users from this duty, e.g., by preferring stable feed-in tariffs (fit) to fluctuating tradable green certificates or premiums paid on top of power prices settled at power exchanges (sections 4 and 5). third, power generators, not commanded by so, cause nuisance. apart from several generator and plant classifications (incumbent/independent; central/ distributed; large/small), the distinction commanded /autonomous is the really discerning one. ‘commanded’ permits the full institutional dispatching of a generation capacity by so, i.e., when ordered, current is delivered or throttled (taking into account physical and technical plant constraints). commanded plants are singledirectionally linked to the grid, and only deliver power. ‘autonomous’ limits or excludes control by so, except in protecting the technical safety of the synchronous power system, when autonomous generators are connected to the grid [16]. due to electric current being non-storable, grid connection mostly ensures the best reliability/cost ratio for autonomous power plants. electric currents may then flow bi-directionally: either as back-up power from the grid to the autonomous site (bridging the gap between own generation and own demand when the former is lower than the latter), or to the grid as surplus power generated beyond the site’s consumption. in most of the 20th century few autonomous generators survived as on-site (often industrial cogeneration) power plants. the 1978 purpa legislation in the usa opened the grid to mainly independent generators, some functioning rather as single-directional commanded capacities, others as bidirectional autonomous capacities. by liberalization, more inroads on franchised utility monopolies occurred, often by incumbent electricity companies from other areas. except for liberalized systems designed with a mandated pool, the authority of so concentrates on balancing and other ancillary services. delivery and throttle orders are then sent through hourly system power price signals. economic rationality normally induces plant owners to only run their capacity during hours when their srmc is lower than the exchange price at that hour. notwithstanding the theory’s deficiencies, it remains embraced by most academics and practitioners. 4. first transition steps in europe’s electricity sectors just as the usa [17], europe showcases a variety of electricity supply industries rooted in their historical national predecessors, e.g., france’s dependence on nuclear power. most member states housed vertically integrated (public or private) monopolies for generation and transmission in franchised areas. distribution and delivery to small customers belonged to the vertical monopoly or were assigned to local – generally public – undertakings (e.g., municipal power plants in germany). power supply theory and practices (section 2) prevailed in a patchwork of implementations. so far, eu directives enacted in three stages (1996, 2003, and 2009) impose market liberalization. unbundling of the main functions, third party access, and privatization allow more exchange and ‘foreign shopping’ by the eu’s incumbent power companies. but limited interconnection capacity, locked-in national customs, and inherited infrastructure and systems retard and mock the single european electricity market. the liberalization agenda was complemented by climate change policies after 1997 (kyoto protocol) requiring fundamental changes [18], and by the directive on the promotion of renewable electricity in 2001 [19]. the european commission organized climate policy at eu scale with the emissions trading scheme as flagship. already in the early phase of european renewable energy policy different visions of the member states became obvious. in 1998−99, the commission insisted on establishing a tradable green certificates market for supporting renewable electricity but did not prevail in either council or parliament. to rescue its feed-in tariffs (fit) germany rejected the european commission plans [20]. only few governments then favoured a system based on tradable green certificates. germany (second to denmark) took a lead in transforming its electricity sector from a fossil-nuclear system to near-fully renewable energy supplies. this leadership is rooted in societal, academic, and political circles with a strong aversion to nuclear power and an argued belief in renewable energy potentials [21, 22]. the 1986 chernobyl disaster brought a majority of the population to reject nuclear power. after a brief reversal 60 international journal of sustainable energy planning and management vol. 05 2015 europe’s electricity regime: restoration or thorough transition in 2010 (postponement of nuclear phase-out), the 2011 fukushima disaster led to the reinstatement, on a broader political basis, of the phase-out decision taken in 2000. this decision was sealed by the advice from an ethics commission, which was composed of a representative panel of german civil society [23]. this illustrated how crucial decisions, stretching far in time, ridden with uncertainty, incomplete knowledge and irreversibility, cannot be resolved by technicaleconomic cost/benefit studies or lobbyism politics, but need the ethical, overarching perspective fostered by civil societies [24]. the ethical dimension has been important in the german nuclear energy policy debates, particularly in the german parliament from 1986 to well into the 2000s; it reached a summit with the formal instalment of the ethics commission in 2011. germany is engaged in a fast transition to full renewable electricity supplies [25, 26]. the renewable electricity share increased from 6.6% in 2000 to 27.3% of domestic consumption in 2014 [27]. new renewables now account for the largest share of any energy source in the german power mix. the role of well-designed financial support for renewable electricity generation projects has been vital for this success up to 2014. key aspects of the support systems included: • investment reliability for renewable energy generators was secured via fixed tariffs per kwh for 20 years. thus, remuneration was not exposed to market risks. these features meant low investment risk and facilitated raising mortgages. • with support linked to the energy delivered, fits provide better incentives for efficient functioning of the plants than support linked to capacity or investment expenses. • renewable electricity deployment was not curtailed by quota; utilities have to purchase all renewable power on offer. in addition, since the fit bill is levied on grid electricity end-users via a surcharge, the growth of renewable electricity was not exposed to public budget problems or (except the past few years) political setbacks. • fits are set to reflect the projected levelized cost prices of renewable energy projects over 20 years, differentiated by technologies and capacity, adjusted automatically (usually annually) to account for cost degression, and regularly reviewed. actual growth of renewable electricity supplies systematically far exceeded the forecasts. • this stable and predictable support system led to the rapid growth of renewable power supplies from non-utilities, mostly private persons and farmers [28, 29]. it also stimulated the german industry to become a world leader in pv and wind turbine technologies, in design and engineering, and in exports of machine tools and whole production factories. the industry has been highly successful at lowering the cost of renewable electricity technologies, but – in the case of pv cells – was severely damaged by a trade war with chinese producers and a domestic pv policy that reinforced the crisis of the sector. • things began to change in 2010 since 2010 electricity from renewable sources is mainly sold on the day ahead spot market, lowering the wholesale price and revenues from the sale of eeg power by 0.5 1 ct/kwh [30], but increasing the surcharge on consumers, while rewarding the incumbent power generators. • electricity-intensive industries benefit from this merit-order-effect, i.e. the replacement of fossil fuels with substantial operating costs by wind and solar generation with almost zero operating costs, while being largely exempted from paying the surcharge. • the eeg surcharge rose from 2.05 €ct/kwh in 2010 to 6.24 €ct/kwh in 2014 and now accounts for nearly 20% of household electricity prices. this increase is mainly due to the fast expansion of renewable power supplies and to increasing exemptions for electricity-intensive industry [31]. these exemptions increased steeply in the first half of the current decade (from one to about five billion euros), further adding to the surcharge on small consumers. • the eeg surcharge on small consumers rose from 2.05 €ct/kwh in 2010 to 6.24 €ct/kwh in 2014 and now accounts for nearly 20% of household grid electricity prices. the major causes of this increase are: the merit order effect of lower prices for wholesale power is not passed on to households; more surcharge exemptions for electricity-intensive industry rolled on households; legacy cost of pv installed in previous years when this was still very costly [31]. international journal of sustainable energy planning and management vol. 05 2015 61 aviel verbruggen, maria-rosaria di nucci, manfred fischedick, reinhard haas, frede hvelplund, volkmar lauber, arturo lorenzoni, lutz mez, lars j. nilsson, pablo del rio gonzalez, joachim schleich, david toke • since 2014 (2010 for pv) there are ‘flexible caps’ on renewable electricity expansion, reducing compensation if caps are exceeded. eeg 2014 [32] means to cap the former unlimited growth, e.g. at 2.5 gw/year each for onshore wind and pv. to enforce this constraint, the eeg 2014 amendment provided for faster and steeper adjustments of support levels than in the past (monthly for pv, quarterly for onshore wind and biomass), also as a response to growing critique since 2010 that fit expenses, or quantity of capacity installed, or both, came down too slowly, in particular for pv. • the costs of renewable power technologies have dropped significantly since the eeg was introduced. most prominently, the system costs of photovoltaic installations in germany decreased by over two thirds in the last eight years, i.e. from 5100 eur/kwp in 2006 to 1640 eur/kwp in 2014 [33]. the speed of the transition accelerated continuously between 2000 and 2014. to put an end to this acceleration, eeg 2014 nips the growth to a lower rate than that achieved in recent years. the german energiewende is embedded in a supportive socio-technical environment, including r&d-intensive providers of renewable technologies and system components. r&d results are broadly disseminated (www.bine.info). despite relatively high power prices for end users, which burden low-income households, support for a decentralised energiewende remains overwhelming [34]. after all, germany is a wealthy country, and the gdp share of end-user electricity expenditures in 2012 was only about 2.5%, roughly the same as in 1991 [35]. since 2011 (fukushima; ethics commission), the german energiewende builds on an even broader societal, but not political, consensus, spanning also across the lines of the major political parties, despite some wavering government decisions. at least two of the four big utilities (notably enbw and e.on, more recently also vattenfall) are reconsidering their business models. electricity-intensive industries continue to request lower energy prices despite they enjoy comparatively favourable electricity prices for german industry [36]. other industrial companies benefit from the new opportunities and some changed their strategy (notably siemens which quit building nuclear plants and now is the worldwide leader on offshore wind turbines). new societal preferences are triggered by citizens, communities, grassroots initiatives, and cooperatives. citizens own about half the installed renewable capacity and a growing share of renewable electricity generation is forthcoming from small-scale projects [37, 38]. however, replacing fits by bidding systems in 2017 (a reform laid down in eeg 2014, in line with new eu state aid guidelines, and which started in 2015 with a first pilot non-rooftop pv installations) is likely to inhibit the growth of prosumers as non-professional investors might have difficulty to deal with increasing transaction costs and related risks. the strong post 2011-societal consensus on renewable power contrasted with growing disagreements on eeg at the level of political elites. a new consensus between the two major parties (cdu, spd) is reflected in eeg 2014 whose purpose it is to reduce the annual growth rate of renewable capacity by caps and to reduce the cost of such power by forsaking feed-in tariffs and market premiums by a shift to bidding systems. so far the eeg 2011 targets for 2050 – 80% renewable electricity by 2050, in stages – have not been modified, except for the fact that former minimum goals now became upper limits (caps). energiewende in germany is not just a story of smooth deployment. in recent years its critics became more vocal, especially as regarded the supposedly high costs of feed-in tariffs and in particular pv tariffs [39]. pv tariffs however came down radically since then, and the cost debate is distorted, for example by confusing high legacy costs of pioneer technology investment with lower later costs of more matured technology, that however only could be obtained by the high investment in preceding pioneer projects [40]. the bavarian government continues to militate against wind energy, while nearly all other bundesländer improved the supporting schemes for wind energy. some connections of offshore wind farms are behind schedule. foreign critics argue that paradoxically energiewende led to a higher use of coal. but the brief trend of higher use of coal in 2012 and 2013 was mainly due to lower coal prices, which were not counteracted by co2 emissions taxes or sufficiently priced emissions allowances. the insufficient pricing of externalities and risks of fossil fuel and nuclear-based power generation is a major bias against the deployment of renewable energy supplies. however, the trend of more coal use was broken in 2014. also, peaks in supplies of wind and of solar power at almost zero marginal cost, disturb the standard merit 62 international journal of sustainable energy planning and management vol. 05 2015 europe’s electricity regime: restoration or thorough transition order loading of commanded capacities. the oversupplies by inflexible capacities, occasionally lead to very low (a few times negative) system prices, not rewarding the actual generation costs of the plants, with inroads on the returns of incumbent companies owning large-scale base-load plants. the critics of the before 2014 renewable energy act joined forces with the eu commission (section 5 of this manuscript), to facilitate the enactment of eeg 2014, whose purpose it is to rein in ‘excessively’ rapid renewable power deployment. among other things, eeg 2014 aims to end accelerated growth of renewable power (achieved up to now), which suits the major power companies and those who argue that more rapid deployment might endanger germany’s competitive position in the world economy. many other european governments have been arguing for some time that europe as a whole has taken on excessive climate policy burdens, which endanger its industry. some criticize the german nuclear phase-out for ‘lack of solidarity’. this inertia is related to habits, convictions such as disbelieving renewable energy potentials while trusting incumbent accounts of a ‘transition crisis’, vested interests and technological lock-ins also play an important role (e.g. coal in poland; nuclear in the uk). many governments consider the 2008 eu target of 20% renewable energy, and the new, non-binding overall target of 27% by 2030, as ambitious enough. the (formerly) high cost of pv, the merit-order effect’s impact on incumbents’ profits and the 2014 reorientation of the energiewende in germany became an argument for several other european governments to limit their efforts for a similar energy transition [40]. 5. restoration by vested interests modest growth of renewable electricity supplies, often the result of wavering policies and ineffective support systems, makes slight inroads on established power supply systems, resistant against low degrees of nuisance. but already ten percent of renewable wind and solar electricity have a substantial impact on incumbents’ profits through the merit order effect (reducing wholesale prices) and of course reduce the output of gas, coal and nuclear plants. the ceos of the largest european energy companies defend their present core assets. on march 19, 2014 under the aegis of the magritte group, they issued a ‘call for government and state heads to implement immediate and drastic measures to safeguard europe’s energy future’ [4]. ‘nine recommendations to reform europe’s energy and climate policy so as to achieve the three key objectives of competitiveness, sustainability and security of supply’, are complemented by three proposals (www.gdfsuez.com): preference for ‘mature renewables in the regular market’, ‘priority to the utilization of existing competitive power capacity rather than subsidizing new constructions’, and ‘restore the ets as a flagship climate and energy policy’. the proposals are likely to slow down the deployment of, mainly decentralized, renewable power, and of the further development of so far non-mature technologies. on april 9, 2014, the eu adopted new “environmental and energy state aid guidelines for 2014-2020” [5]. the guidelines make bidding systems the central support instrument for renewable power in the future and ban feed-in tariffs for most situations, thus abolishing a key instrument of energiewende. they consider exemptions from renewable energy surcharges for industrial companies as state aid and require that these companies make a contribution, which however may be limited to a fraction of the rates small customers pay. on july 23, 2014 the european commission accepted a compromise german eeg 2014. the overall goal of these guidelines is to reduce the supposed burden from renewable power support in the name of european competitiveness and affordability of the electricity bills. the likely intention is to contain renewable power growth to lower levels than so far, and to give big corporate operators a better position to replace prosumers as chief generators of renewable electricity (in germany and some other fit countries, the corporates largely underestimated the role of prosumers). the common practice of juxtaposing and trading-off ‘quid pro quo’ the three eu energy policy goals hides their hierarchic and interdependent relationships. when analysing the three interrelated goals, the first and leading one is sustainability; this first goal can only be realised by the thorough transition to harvesting renewable energy sources available on european lands and seas. such sustainable energy systems naturally bring security of supply as a corollary because use is made of domestic european energy sources, and dependence on precarious imports and unreliable external forces diminishes by every new local renewable flow harvested. the sustainable and secure energy systems become affordable through technological international journal of sustainable energy planning and management vol. 05 2015 63 aviel verbruggen, maria-rosaria di nucci, manfred fischedick, reinhard haas, frede hvelplund, volkmar lauber, arturo lorenzoni, lutz mez, lars j. nilsson, pablo del rio gonzalez, joachim schleich, david toke innovation, because technology is the par of energy sources to obtain energy supplies. technological success is feasible when unfettered priority is given to the transition, demonstrated clearly by the german energiewende. the actual cascading interdependencies contrast with the official trade-off narrative between sustainability, security, and affordability. assigning superior weight to ‘market’ functioning above sustainable development is a case of confusing means and goals. the electricity ‘market’ is still dominated by major power companies, with fossilnuclear fuelled capacities that produce a range of accompanying externalities and risks. the guidelines and eeg 2014 impose the biased markets as basis for future renewable plants >100kw [32]. on april 9th, european commissioner almunia, then responsible for competition policy, stated: ‘many renewable energy sources have reached a scale and a level of maturity that allows them to compete with other sources.’ this statement would undoubtedly hold if ‘other sources’ were priced at total costs, including externalities and risks, and if the available energy infrastructures and institutions suited renewable energy. but this is not the case, something that hinders the establishment of a level playing field. renewables may be on the way to competitiveness even so, but their progress will be slowed. moreover, on 8 october 2014 eu’s competition commissioner, joaquín almunia approved intended loan guarantees and price commitments for uk’s nuclear power project hinkley point c [41]. a level playing field does not seem to be required for new construction of nuclear fission power. premiums, quota with tradable certificates, and bidding systems (tenders, auctions) become substitutes for fit tariffs (except for < 100kw new projects during the next 10 years), although earlier experience evidenced high windfall profits, more administrative and transaction expenses, higher risks for small investors, and lower effectiveness [42, 43]. stop/go jamming of the deployment pace is caused, for example, by legislators squeezing the funding or by speculative uneconomic bids. some countries experienced widespread failure to deploy schemes that had been awarded contracts under competitive biddings [44,45,46, 47]. we assess that the overall result of the guidelines will be not only to slow the current dynamics of renewable technology deployment, but also its development; this will weaken the european market and most likely affect the international positioning of many european renewable power manufacturers [48]. germany as a well-endowed and experienced renewable electricity developer may eventually overcome such setbacks. but what about member states at an earlier phase of the transition path? 6. vision for a thorough transition corporate strategy theory and practice teach that success is preceded by visions. without a vision, success is unlikely. the thorough transition of electric power systems from fossil fuel and nuclear dependent topdown constructions, towards exclusively renewable energy supplies from mainly local resources and therefore bottom-up directed, means a full u-turn. in such cases, it is important that practical action follows a strategic meta-vision on the transition to low-carbon electricity supplies, specifying a mission and fundamental changes (reversals) prerequisite in accomplishing the mission. the explicit formulating of a mission (the end-goal) and changes (the way from here to the end-goal) requires a thorough sustainability assessment of what a ‘good’ electricity industry is. pending the results of such assessment, a default version is proposed here. we thereby abstract from comparing the possible designs of technical power systems and markets [49, 50, 51]. ‘flexibility options’ may protect incumbent power systems against surging inroads by fast and unforeseen expansion of renewable power flows form wind and pv. our position is that such inroads are necessary to generate the destructive schumpeterian innovations the future needs. 6.1. mission. leading industrialized and industrializing countries and regions in the world (e.g., g20 and oecd member countries; eu) transform their electricity sectors to 100% renewable energy based supplies. locally available natural flows (wind, solar, water, biomass), harvested to a large extent by prosumers, deliver the main share of the supplies. centralized renewable power plants are placed and designed to complement and backup the local sources, with the caveat that the need for such centralized back-up is minimized by giving priority to flexibility options (demand responses, load management, storage facilities, opening the heat market as a sink for surplus electricity) and to strengthening grids and interconnections. electric utilities design 64 international journal of sustainable energy planning and management vol. 05 2015 europe’s electricity regime: restoration or thorough transition business models to assist prosumers, guaranteeing network services, frequency and voltage stability. regulators control the performance of the utilities and the prices charged for delivered services. the transformations are kick-started without further delay, and the highest pace is pursued. 6.2. fundamental changes (reversals). the electricity supply systems intended by the mission, are of a very different nature than today’s dominant fossil-nuclear fuelled ones. significant adaptations and reversals in electricity supply paradigms and market structures are prerequisites for starting the transformations with proper impulses in the right directions. the main reversals proposed here: • adopting a mission similar to section 6.1 for the intended transition. this societal-political adoption is crucial and prerequisite for undertaking successful transitions. • the fast development of local renewable, reliable electricity supplies, as core of smart energy systems, is the principal goal of energy and related r&d and industrial policies. • the mission reverses previously dominant perspectives, positions, responsibilities, and cost allocations: ° perspectives: the future electric power systems are the vantage points to evaluate proposed and ongoing actions and transition programs. back casting prevails over forecasting. clarified perspectives avoid the new build of non-sustainable fossil and nuclear power plants. ° positions: the established, inherited electric power systems are main sources of climate and nuclear risks, nature and environment degradation, human health dangers. the old systems have to be replaced as-soon-aspossible, also when this implies stranded investments. ° responsibilities: today, variable renewable electricity supplies disrupt established power systems. the obsolete discourse tells the disruptors that they are responsible for their impacts on existing systems. the opposite must be upheld: non-sustainable, incumbent systems are responsible for damage and risks, and their phase-out is a necessity. ° cost allocation: the obsolete discourse wants to charge renewable electricity challengers with the expenses of their integration into obsolescent incumbent generation and network systems. this conflicts with the polluter pays, alias extended producer responsibility, principle. the principle implies that non-sustainable, prevailing power systems assume the responsibility for the expenses of ‘disruption’ caused for giving way to the requirements of upcoming, sustainable, renewable supplies. at minimum, incumbent systems should stop increasing the burdens for a thorough transition. • the theory and handbooks on electricity economics need revision. the old model assumes all power capacities function on command. the future sustainable power systems own limited capacities on command (hydro reservoirs, bio fuelled plants, and new forms of storing energy from converting power), compared to overwhelming redundant capacities for harnessing natural energy flows (wind, solar, water). natural flows can be by-passed, not commanded, either by people or by system operators. with srmc near zero they claim first places in the merit-order loading. next to large renewable plants, there will be a huge number of small-scale plants, often set up as smart energy systems with integration of heat, power, transportation and gas, and owned by customers, cooperatives, and communities. they first serve own needs and interact with the grid bidirectionally. such electricity sources are the future default, normal ones. their integrated functioning requires continuous utility support in transmission, central storage, backup and balancing power. the future theory and practice rejects the axiom that the sustainable sources ‘disrupt’ the present non-sustainable power systems. this rethinking of power systems with all its consequences is challenging the creativity of scientists, engineers, and regulators. formulating the new sustainable energy mission and exploring the changes necessary for its accomplishment, surpasses the boundaries of traditional cost-benefit analysis. it implies an iterative social learning process and ethical norms as the foundation for a wide consensus. international journal of sustainable energy planning and management vol. 05 2015 65 aviel verbruggen, maria-rosaria di nucci, manfred fischedick, reinhard haas, frede hvelplund, volkmar lauber, arturo lorenzoni, lutz mez, lars j. nilsson, pablo del rio gonzalez, joachim schleich, david toke 7. conclusion ipcc [1, 2] already stated that mitigation should reduce emissions by 80 to 95% in industrialized societies by 2050. this implies electricity generation will need to be practically carbon free. the electricity sector is essential for spearheading the transition to a low-carbon energy economy. vested interests locked into carbon intensive power and/or into nuclear generation options retard the breakthrough and the full deployment of renewable electricity supplies. . a major lesson learnt on the promotion of renewable energy is that its deployment is a long-term and evolutionary process that requires enduring policy support [43]. in contrast the april 2014 eu state aid guidelines strengthen the restoration, which could lead to wasting precious years for mitigating climate change [50]. for avoiding further lock-in by non-sustainable energy systems, infrastructures, and institutions, a thorough energy transition strategy is required. agreement on a clear mission, and awareness and acceptance of deep reversals, are major ingredients of this strategy. for example, applying the extended polluter pays principle assigns the responsibility for present system disturbance not to the renewable energy challengers but to the non-sustainable incumbents. the reversals also call for novel electricity engineering economics theory and practice. the proposed strategy is not fully developed, but a first response to recent turns in electricity policy making which are likely to extend carbon lock-in. maybe the emerging sustainable renewable electricity options are already developed enough to resist these efforts to delay the energy transition. but we must also realise that time is of essence, and that we need clear orientations for an electricity policy that can help minimise climate change. references [1] ipcc, 2007. mitigation of climate change. working group iii contribution to the fourth assessment report of the intergovernmental panel on climate change. summary for policymakers and technical summary (www.ipcc.ch) [2] ipcc, 2014. climate change 2014. mitigation of climate change. working group iii contribution to the fifth assessment report of the intergovernmental panel on climate 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 05. 2055-7528-1-le.qxd:1953-6976-1-le international journal of sustainable energy planning and management vol. 17 2018 45 abstract renewable energy sources are playing a key role in the transition to a low-carbon based economy while maintaining cost and environmental effectiveness. however, climate change threatens this opportunity especially in countries like rwanda where more than half of the total supplied electricity in the country comes from hydropower. this study assesses the evolution of rwanda’s electricity demand towards 2050 and suggests a power supply scenario that considers impacts of climate change on the country’s hydropower generation. the study findings indicate that to meet the projected demand under the business as usual (bau), more than 20% of electricity requirements would come from imported more polluting fossil fuels. under the suggested alternative scenario, however, no fossil fuels will be needed by 2050. furthermore, the average emissions for the 2012-2050 period are estimated at 116 gco2eq/kwh for the alternative scenario and 203 gco2eq/kwh for the bau scenario. based on the findings of the study, it is concluded that the developed alternative scenario is resilient since it meets the projected demand when impacts of climate change are accounted for. moreover, the scenario ensures the security of the country’s electricity supply because it only relies on domestic energy resources. furthermore, the suggested scenario positions the country to a low-carbon development pathway compared to the existing power supply plans. 1. introduction climate change has negatively affected electricity supply systems around the world, and will continue to do so, especially in countries like rwanda where the share of hydropower in the total electricity supply mix is high. for such power supply systems, an energy planning approach that considers potential impacts of climate change is necessary. this study assesses the evolution of rwanda’s electricity demand towards 2050 and suggested a power supply scenario to meet the projected power demand by considering impacts of climate change on the country’s hydropower generation. this section provides general information on rwanda, the country’s electricity demand and supply, and an overview on climate change impacts on hydropower generation on the african continent in general and in rwanda in particular. 1.1. general information on rwanda rwanda is one of the countries with the highest population growths and population densities on the african continent. in 2012, for example, the total population of the country was about 10.5 million inhabitants with an average population growth rate 1 corresponding author: e-mail: tuhorakeye@yahoo.fr international journal of sustainable energy planning and management vol. 17 2018 45–60 assessment of a climate-resilient and low-carbon power supply scenario for rwanda théoneste uhorakeye1 and bernd möller department of energy and environmental management (eem­sesam), interdisciplinary institute for environmental, social, and human studies, europa­universität flensburg, munketoft 3b, 24937 flensburg, germany keywords: bottom up; climate change; energy planning; long-range energy alternatives planning system; representative concentration pathways top down; url: dx.doi.org/10.5278/ijsepm.2018.17.5 46 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda of 2.6%, and a population density of 415 inhabitants/km2 [1]. between 2002 and 2012, the life expectancy has risen from 51.2 to 64.4 years while the number of people living under the poverty line has declined from 58.9% to 44.9% over the same period [1]. it is projected that rwanda’s population will vary between 15.4 and 16.9 million by 2032 [2], and will exceed 21 million by 2050 [3]. due to the expected rapid increase in the country’s population, it can be expected that more and more energy will be required to meet the growing demand. in terms of economy, rwanda’s income is mainly based on services, agriculture, and industry. the service sector dominates the country’s economy in such a way that for the 2008–2012 period, for example, its share to the gross domestic product (gdp) varied between 51.1% and 52.8% [4]. according to the same source, the agricultural sector contributed 32.0% to 33.9%, while the industrial sector contributed 14.4% to 16.3%. in terms of per capita, the gdp (at current market prices) has increased from us$ 207 in 2000 [5] to us$ 720 in 2016 [6]. the average gdp growth rate (at constant 2011 prices) for the 2010–2015 period was 7% [6]; and existing scenarios predict a gdp growth rate of 8% by 2032, and most of the increase are expected to come from the industrial and service sectors [19, 20]. the expected country’s expansion in economy will likely result in an increased total energy needs, especially electricity. 1.2. rwanda’s electricity demand and supply rwanda is one of the countries with the lowest access to electricity and the lowest per capita power consumption in the world. in 2014, for example, rwanda was ranked among 15 least electrified countries with an access rate of 19.8% [7]. by december 2016, the access rate to electricity was 30% [8] while the average per capita power consumption was 42 kwh in 2014 [9]. the reasons of such low electricity access and consumption include the lack of investments in the power generation and considerable technical (transmission and distribution) and non-technical (illegal connection) losses. an analysis of energy data collected from rwanda energy group (reg) reveals that the total electricity losses for the 2000–2013 period, for example, varied between 17% and 33%. the minimum power demand has increased from 18.5 mw in 2003 to 42.9 mw in 2013 while the maximum peak power demand has increased from 43.0 mw to 87.9 mw over the same period [10]. the maximum peak demand was projected to reach 470 mw in 2018 [9], however, during a visit to rwanda energy group in february 2018, it was noticed that the installed capacity was 210 mw. although the country faces power supply challenges, rwanda is endowed with different types of energy resources, most of these resources, however, remain untapped. the country’s electricity (potential and exploited) resources comprise: • hydropower, where more than 330 potential sites totalling over 350 mw have been identified [11], and only 90 mw were installed by 2016 [12]; • solar energy, which varies with the country’s topography and increases from the west (3.5 kwh/m2 per day) towards the east (6.0 kwh/m2 per day) [13], and only 8.75 mw were connected to the national grid by 2016 [12]; • geothermal energy, where estimates predicted between 150 and 320 mw [14], and the assessment of this resource was still underway in 2017; • peat reserves, where 155 million tons of dry peat were estimated [15], and the first peat fired power plant was still under construction in 2017; • methane gas, which is dissolved in deep waters of the kivu lake where up to 350 mw of electricity (share of rwanda) can be produced [16], and about 30 mw of methane fired power plants were in operation in 2017 [12]; • wind energy, where preliminary estimates revealed an annual mean wind speed varying between 2.43 and 5.16 m/s [17]; • municipal waste, which represents a promising potential given the increasing lifestyle in urban areas, where there are considerable amounts of post-consumption waste such as organic waste, paper, cardboard and wood that can be used to generate electricity. 1.3. effects of climate change on hydropower generation generally, the designs for hydropower generation capacities are based on historical daily and seasonal climatic patterns. however, due to expected changes in precipitation and temperature, many power generation facilities will operate under climatic conditions different international journal of sustainable energy planning and management vol. 17 2018 47 théoneste uhorakeye and bernd möller from those they were designed to operate under. as demonstrated in the fifth assessment report (ar5) of the intergovernmental panel on climate change (ipcc), the global mean temperature will continue to rise throughout the 21st century whereas precipitation will increase in some regions, decrease in some others while others will experience no significant change [18]. this may not only compromise the ability of electricity supply systems to meet average and peak demands it might hamper the opportunity of power producers to recover their investments as well as the viability of new investments [19], [20]. in africa, a number of studies have assessed impacts of climate change on the future hydropower generation on the continent. hamududu and killingtveit [21] analysed the trends in power generation for the central and southern african regions and found that, towards the end of the 21st century, hydropower generation may decrease by 7% to 34% in the southern african and increase by 6% to 18% in the central african regions. yamba et al. [22] assessed implications of climate change and climate variability on hydropower generation in the zambezi river basin and concluded that power generation from the existing and planned hydropower plants would increase for the 2010–2016 period, and then decline towards 2070. harrison and whittington [23] assessed the viability of the batoka gorge hydropower scheme to climate change. they found that annual flow levels at victoria falls will decline between 10% and 35.5%, which would cause reductions in annual electricity production between 6.1% and 21.4%. beyene et al. [24] assessed the potential impacts of climate change on the hydrology and water resources of the nile river basin and concluded that stream flow at the nile river will increase for the 2010-2039 period and decline for the 2040-2099 period; and that the power generation would follow the stream flow’s trends. in rwanda, climate change is reported to have disrupted hydropower generation during the last decade. until 2003, all the electricity supplied in the country was 100% dependent on hydropower [12]. since 2004, however, water resources have declined especially in the burera and ruhondo lakes (from which about 90% of the total electricity came from) which caused more than 60% losses in hydropower generation [25]. to temporarily respond to this situation, emergency diesel generators have been introduced, and to ensure an affordable tariff, the government was obliged to subsidise the electricity sector through paying part of the capacity charges for rented generators as well as exempting fossil fuels for power generation from paying import duties. the costs of running these emergency generators, in 2005 for example, were estimated to be 1.84% of the country’s gdp [26]. despite these subsidies, however, the electricity tariff has continuously risen where the tariff for the residential sector between 2005 and 2012, for example, has increased by more than 60% [27]. like in the past, hydropower generation is expected to represent a significant share in the total power supply mix of the country for the mediumand long-term. it is projected under the “electricity master plan 2008–2025” [28] and the “rwanda electricity development plan 2013–2032” [29] that more than 50% of the total power supply mix of the country over these two period will come from hydropower. although these plans did not consider climate change, uhorakeye and möller [30] demonstrated that climate change impacts will negatively affect hydropower generation in rwanda. in their study, the authors analysed the future climate of rwanda under two representative concentration pathways (rcp): rcp4.5 and rcp8.5; and they found that there will be considerable reductions in annual precipitation especially for the period 2030 to 2060. their analysis also revealed that changes in temperature relative to the 1961 to 1990 average will range between +2.19 to +3.72°c for rcp4.5, and +5.19 to +5.98°c for rcp8.5. relative to the designed power generation, the resulting changes in hydropower generation were estimated to range between –13% and +8% for the 2020 to 2039 period, and –22% and –9% for the 2040–2059 period. given these considerable losses and the expected high share of hydropower generation in the future country’s power supply mix, it is necessary to develop power supply plans that incorporate impacts of climate change in order to reduce or mitigate negative impacts on the overall electricity subsector; and this is the aim of the present study. 2. methodology this section discusses the methodology used to project the evolution of rwanda’s electricity demand and the way the demand could be met by considering impacts of climate change on the country’s hydropower generation. this section starts with describing the energy model 48 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda used in this study, and goes on with the approaches used to analyse the future electricity demand and supply. the section concludes with highlighting ways in which power generation costs and associated emissions are estimated. 2.1. energy modelling tool the complexity of energy systems requires appropriate data management and handling in terms of systematic preparation and aggregation of temporal and spatial energy processes, energy flows, capacity extensions, costs, waste heat recovery, energy storage systems, etc. thanks to the advancement in computational technology, energy models allow to represent mathematically these complex energy systems, which facilitates their conceptualization and analysis [31–33]. highly relevant for most developing economies is the inclusion of growth in population and per capita domestic product, as the future electricity demand is highly sensitive to both. in this study, the long-range energy alternatives planning system (leap) model is used. leap is not a model for a specific energy system, but a tool that can be used to build simple to complex energy systems. the model supports a wide range of modelling approaches for both the demand and the supply [34]. on the demand side, leap supports bottom up, top down, and hybrid modelling methodologies. on the supply side, the model provides flexible and transparent accounting, simulation, and optimization methodologies to model power generation and capacity expansion planning. for calculations, leap provides two conceptual levels: the first level comprises leap’s built-in expressions while the second level allows modellers to specify multi-variable models or enter spreadsheets and expressions. most of leap’s calculations occur on an annual time-step, but also seasonal, monthly, daily and hourly time-steps are supported, and the time horizon can extend for an unlimited number of years (typically between 20 and 50). leap has been used for over 70 peer-reviewed journal papers including the modelling sustainable longterm electricity supply-demand in africa [35], assessment of renewable energy and energy efficiency plans in thailand’s industrial sector [36], projections of energy use and carbon emissions for bangkok [37], future scenarios and trends of energy demand in colombia using long-range energy alternative planning [38], industrial sector’s energy demand projections and analysis of nepal for sustainable national energy planning process of the country [39], energy efficiency and co2 mitigation potential of the turkish iron and steel industry using the leap (longrange energy alternatives planning) system [40], and implication of co2 capture technologies options in electricity generation in korea [41]. 2.2. electricity demand analysis an analysis of the electricity consumption is assessed by grouping the power demand into two categories: the residential and non-residential sectors. the residential sector comprises households while the non-residential sector groups together the agricultural, the industrial, and the service sectors. the sectors comprising the nonresidential sector are grouped together because of the lack of disaggregated information on electricity consumption by each of them. a bottom up approach is used to analyse the evolution of the power demand by the residential sector. this method is chosen in order to take into considerations the main drivers of the sector; namely the access to electricity, the effects of equipment saturation, the population growth, and improvements in efficiencies of household appliances. the year 2012 is used as base year because a national population census, which provided considerable amount of information necessary to undertake this study, was conducted in that year. the average base year (2012) power consumption per an electrified household is estimated based on eq. (1) where eav represents the average annual electricity consumption of an electrified household (in kwh), pi is the rated power of appliance i (in kw), ni is the average number of appliance i per household, hi is the usage time of appliance i (hour/day), and 365 is the number of days in a year. the data used in eq. (1) were extracted from the fourth population and housing census [1], and from the economic data collection and demand forecast study [28]. (1) to project the population towards 2050, assumptions used in three existing projection scenarios for the 2013–2032 period by the national institute of statistics rwanda (nisr) are adopted. according to these projections, the population growth rate by 2032 will be 1.63% for the low scenario, 1.89% for the medium scenario, and 2.18% for the high scenario from 2.31% in e p n h pav i i n i i e i= ⋅ ⋅ ⋅ ⋅ = ∑365 1 , international journal of sustainable energy planning and management vol. 17 2018 49 théoneste uhorakeye and bernd möller 2013 [2]. for the period beyond 2032, the trends observed in the nisr’s projections are maintained, which leads to growth rates of 1.45% for the low scenario, 1.71% for the medium scenario, and 2.00% for the high scenario. similarly, the assumption by nisr that the number of persons per households would decline from 4.3 in 2012 to 3.1 in 2032 is adopted. for the period beyond 2032, this study assumes that there will be very little decline in the household size so that it will be 3 persons per household in 2050. the number of households with access to electricity is estimated based on the existing two electrification pathways: the likely and ambitious scenarios. the likely scenario anticipates that 35% of the country’s households would have access to electricity by the end of 2017 [9] and 71% by 2032 [29]. the ambitious scenario predicts that 48% of the country’s households would have access to electricity by the end of 2017 [9] and 78% by 2032 [29]. given observed difficulties and challenges in the implementation of different power generation and transmission projects during the last years, only the very likely electrification scenario is considered in this study. for the period 2033–2050, this study assumes that the remaining non-electrified households will be those located very far away from the national electricity grid so that a 100% electrification would be achieved in 2050. it is important to mention here that a 100% electrification rate in 2050 does not mean that all households will have access to electricity in 2050. there are different initiatives whereby households located far away from the national grid are being supported to access electricity through off-grid solutions. this electrification scheme is not simulated in this study. the assumed 100% electrification means that all households would be connected to the national grid by 2050. on the other hand, it is assumed that all household appliances will consume 15% less than the consumption in 2012 thanks to the improvement in energy efficiency. furthermore, an assumption that most of these appliances will saturate towards 2050 is adopted. as for the power consumption by the non-residential sector, the top down approach is chosen because the bottom up approach requires more details on the end use electricity equipment which was not possible to acquire for the whole sector. to analyse the evolution of the power consumption by the non-residential sector, the relationship between the past electricity consumption and the gdp of this sector is determined using the regression method of ordinary least squares. this method allows to determine the slope a and intercept b of eq. (2) that fits best data [42]. in the context of this study, y represents the non-residential sector’s energy consumption and x is the sector’s gdp. y = ax + b (2) eq. (3) and eq. (4) is used to respectively determine coefficients a and b of the line represented by eq. (2). in these two equations, xi is the total gdp for year i while yi is the power consumed by the non-residential sector in producing the total gdp for year i. the energy data used to determine the relationship was obtained from reg while the gdp data was extracted from rwanda statistical yearbooks 2009 and 2013 [1] [43]. (3) (4) eq. (5) represents the determined logarithmic relationship between the non-residential electricity consumption and the national gdp. to check the goodness of fit, pearson’s correlation coefficient is determined. this coefficient is found to be +0.99 which indicates a very high positive correlation between the electricity demand and the gdp. log(y) = 1.256log(x) –2.78 (5) for the future power consumption of this sector, three electricity demand scenarios are developed based on different gdp growth rates. these scenarios are (i) the high scenario which envisages rwanda as a fastdeveloping economy where the gdp growth would slightly decline from 8.0% in 2012 to 6.0% in 2050, (ii) the medium scenario which anticipates a moderate economic development so that the gdp growth rate would decrease from 8.0% in 2012 to 4.5% in 2050, and b n x y x x y n x x i i n i i n i i n i i n i i i n i i n = ⋅ − − ⋅ − ⎛ ⎝ ⎜ = = = = = = ∑ ∑ ∑ ∑ ∑ ∑ 2 1 1 1 1 2 1 1 ⎜⎜ ⎞ ⎠ ⎟⎟ 2 a n x y x y n x x i i i n i i n i i n i i n i i n = ⋅ − ⋅ − ⎛ ⎝ ⎜⎜ ⎞ ⎠ ⎟⎟ = = = = = ∑ ∑ ∑ ∑ ∑ 1 1 1 2 1 1 2 50 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda (iii) the low scenario where the economy would grow slowly so that the gdp growth rate would decrease from 8.0% in 2012 to 3.0% in 2050. the total national electricity demand is determined by combining the residential and non-residential sectors’ demands, and since this combination leads to nine different scenarios, only three representative scenarios are analysed. these scenarios are called in this study the “very low scenario” which comprises the low scenarios of each sector, the “very likely scenario” which includes the medium scenarios of the residential and nonresidential sectors, and the “very high scenario” which incorporate the very high scenarios of both sectors. the peak power requirements, preq,i (in mw), for each year between 2012 and 2050 are calculated according to eq. (6) where ereq,i is the electricity requirements (in mwh), lf is the load factor while 8764 is the number of hours in a year. (6) the electricity requirements ereq,i in eq. (6) is the sum of the total simulated electricity demand and the transmission and distribution losses. in this study, it is assumed that the transmission and distribution losses will decline from their 2012 level of 21% to 10% by 2020 and then be maintained at this level during the rest of the simulation period. the 2013 load factor used to calculate the peak power requirements was also obtained from reg. 2.3. power supply analysis to meet the estimated electricity demand described in the previous section, a business-as-usual (bau) and an alternative power supply scenarios are developed. each of these two scenarios includes three sub-scenarios: a sub-scenario which does not consider impacts of climate change on hydropower generation, and scenarios that considers impacts of climate change. climate change is assessed under two representative concentration pathways (rcps): rcp4.5 and rcp8.5. rcp4.5 is a stabilization scenario where the total radiative forcing (rf) is stabilized to 4.5 w/m2 after 2100 while rcp8.5 is characterized by increasing greenhouse gas (ghg) emissions leading to a rf of 8.5 w/m2 in 2100 [44]. the development of the bau scenario is based on the country’s existing power generation plans. since these plans extend up to 2025 only, the generation capacity beyond this year is gradually increased (within the p e lreq i req i f , , = ⋅8764 country’s potential limits) to match the demand. according to these plans, nearly 32% (over 400 mw) of the electricity requirements by 2025 would be covered by imports from ethiopia and kenya [45] however, these countries may prioritize to satisfy domestic power demands first before exporting to other countries since electrification rates in these two countries are also low: 45% for ethiopia and 65% for kenya [8]. to consider these effects, electricity imports are excluded from the analysis of the future power supply. for hydropower generation, it is assumed that the installed capacity would increase from the planned 254 mw by 2025 to the national (so far) proven capacity of about 350 mw by 2050. similarly, the capacities for methane and geothermal-based power generations are set to increase up to their maximum estimated capacities (350 mw and 340 mw respectively) by 2050. based on recent development in solar power generation which envisages 39.75 mw by 2025 [28], it is assumed that a cumulative capacity of 100 mw solar power can be achieved by 2050. as for peat-based power generation, a capacity of 300 mw is used in the simulation. it is assumed that the demand that cannot be met by the above power generation technologies will be covered by power generation from imported fossil fuels. to analyse the evolution of rwanda’s power supply under climate change (under rcp4.5 and rcp8.5), monthly time series of hydropower generation from the study “impacts of expected climate change on hydropower generation in rwanda” by uhorakeye and möller [30] (described in the introduction section) are used. the development of the alternative power supply scenario is guided by principles such us the scenario’s ability to allow the country to terminate its dependency on imported fossil fuels for its power supply and meet the growing demand with domestic resources despite the emerging climatic conditions. to achieve this, five measures are explored as described below. • improvement of efficiency of household appliances: under the bau scenario, it is assumed that the efficiency of household appliances will increase by 15% by 2050, and that these improvements would be voluntarily achieved by consumers. under the alternative scenario, it is assumed that the government will intervene by introducing import standards so that old and non-efficient appliances would not be allowed to enter into the country. it is assumed that this measure would lead to 10% consumption reductions compared to the bau scenario. international journal of sustainable energy planning and management vol. 17 2018 51 théoneste uhorakeye and bernd möller • intensive exploitation of the nyabarongo river: this river draws its waters from the northern, southern and western parts of rwanda and then flows over 350 km before it drains into the akagera river at lake rweru in the southeastern rwanda. this study suggested cascading more run of river power plants and building reservoir storages on this river which would lead to 140 mw more. • more use of solar energy: it is assumed under this scenario that the installed capacity of solar power plants would increase from 0.25 mw in 2012 to 8.75 mw in 2015 and 500 mw in 2050 (compared to 100 mw for the case of the bau scenario). • introduction of wind energy: based on the results from an assessment of wind energy resources in rwanda by de volder [17], this study assumes that up to 250 mw wind power plants can be installed by 2050. • municipal waste: the use of municipal waste as a source of electricity is considered for kigali, the capital city of rwanda where data was available. in 2012, for example, 400 tons of solid waste per day (of which 75% of it were organic and paper matters) were collected [46]. since the population of kigali is expected to increase from about one million inhabitants in 2012 [47] to 3.5 million by 2040 [48], available waste for power generation would also increase from 300 tons to about 940 tons per day over the same period. given a net heat content of 14 gj per metric ton [34] and an electrical efficiency of 35% [49], and assuming an availability factor of 80%, the 300 tons would be enough to supply a 21 mw power plant, and the 940 tons of waste in 2040 would be equivalent to about 66 mw capacity. for the simulation in leap, the generating technologies are assigned dispatching priorities according to specified orders. once power plants with high priorities achieve their maximum operating capacity, plants with the next order are dispatched until they also reach their capacity limits and so on. in this study, the first priority is assigned to solar, wind, and run-of-river-based hydroelectric power plants. the second priority is assigned to dam-based hydropower plants, the third priority to methane and geothermal power plants, the fourth priority to peatbased power plants, and the fifth priority to diesel fired power plants. 2.4. estimation of power generation costs and emissions • capital costs: investment costs per megawatt for all technologies other than solar, wind, and wasteto-power are estimated based on information from two studies: one by the african development bank (afdb) [50], and another by fichtner and decon [51]. to estimate the capital costs for solarbased power plants in the base year, the unit capital cost for the existing rwamagana solar power station (8.5 mw) is used. for the future development, it is assumed that investment costs would fall by 25% by 2020, 45% by 2030 and 65% by 2050 relative to the costs in 2012 according to estimates by the international energy agency (iea) [52]. as for wind, since no power plant from this technology had been installed yet in the country by 2017, international average data are used. to consider factors such as transport of wind power generation components as well as the cost of technology transfer, a factor of 10% is added to the international data. consequently, an average of us$ 2,000/kw is taken as the global average investment costs; and for rwanda the cost would be 10% higher (i.e. us$ 2,200/kw). according to iea [53], the average investment cost of wind energy is projected to decline by 25% on land, and 45% off-shore by 2050. being a landlocked country, a reduction of 25% by 2050 is applied for rwanda. concerning municipal waste-topower, its investment cost is estimated based on information from the confederation of european waste-to-energy plants [54]. • operation and maintenance costs: the fixed operation and maintenance (o&m) costs for different technologies are obtained from afdb [50], fichtner and decon [51], and iea [55]. the variable o&m costs for hydropower, geothermal, solar and wind technologies are assumed to be zero according to iea [55]. the variable o&m costs for waste-to-power are also set to zero since households and institutions pay a fee for waste collection. it is assumed that the variable o&m costs will be offset by the paid collection fee. as for diesel fired power plants, the projection of oil prices by iea [56] are adopted. as for emissions from the electricity generation, they are calculated internally in leap which is achieved by linking the electricity producing technologies to the 52 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda model technology and environmental database. this database includes default emission factors suggested by the intergovernmental panel on climate change (ipcc) for use in climate change mitigation analyses [34]. in this study three greenhouse gas (ghg) emitting fuels namely diesel, methane gas and peat are linked to ipcc tier 1 default emission factors. under tier 1 approach, ghg emissions from stationary combustions are calculated by multiplying the consumed fuel by the default emission factor [57]. 3. results this section presents the simulation results of the evolution of rwanda’s electricity demand and supply under both the bau and the suggested alternative scenarios. furthermore, it discusses the estimated generation costs and emissions from power generation. the section concludes by highlighting required adjustments in policy and institutional frameworks to implement the suggested power supply scenario successfully. 3.1. projected electricity demand by 2050, the total annual power consumption in rwanda is projected to be 6,546 gwh under the very low scenario, 8,100 gwh for the very likely scenario, and 10,240 gwh for the very high scenario, from 380 gwh in 2012. like in the past, the residential sector will continue to dominate the national demand for electricity except for the 2041-2050 decade when the nonresidential sector will take a lead. the projected total power demand as well as the shares of the residential (res.) and the non-residential (nonres.) sectors are presented in table 1. in terms of power generation requirements (including transmission losses), about 7,270 gwh will be required by 2050 for the very low scenario, 9,000 gwh for the very likely scenario, and 11,380 gwh for the very high scenario, from 480 gwh in 2012. the evolution of the electricity generation requirements between 2012 and 2050 are shown in figure 1 (left). it is important to highlight that these electricity requirements may exceed the simulated power presented in this section if losses are not reduced to the assumed values. it was, for example, planned to reduce technical losses from 20% in 2007 to 15% by 2012 [58]. on the contrary however, losses have risen over this period and reached 21% in 2012 and 22% in 2013. as for the installed capacity requirements (assuming a reserve margin of 20%), about 1,480 mw will be needed in 2050 for the very low scenario, 1,830 mw for the very likely scenario, and 2,310 mw for the very high scenario. the evolution of the requirements in installed peak capacity between 2012 and 2050 is also presented in figure 1 (right). 3.2. projected impacts of climate change on rwanda’s hydropower figure 2 shows hydropower generation anomalies for the 2012–2050 period. this figure is constructed based on hydropower generation time series developed by uhorakeye and möller [30] in their study described in the introduction section. as it can be noticed in figure 2, there is no significant difference between the designed and the simulated hydropower generations for the period 2012–2021. over this period, the cumulative hydropower generation anomalies are about +3 gwh for both rcp4.5 and rcp8.5. between 2022 and 2031, deficits equivalent to table 1: projected electricity demand per scenario and per sector very low very likely very high________________________________ ________________________________ ________________________________ total res. nonres. total res. nonres. total res. nonres. year (gwh) (%) (%) (gwh) (%) (%) (gwh) (%) (%) 2012 380 51.32 48.68 380 51.32 48.68 380 51.32 48.68 2015 537 55.26 44.74 538 55.24 44.76 540 55.18 44.82 2020 923 58.19 41.81 934 57.93 42.07 943 57.59 42.41 2025 1,487 60.07 39.93 1,529 59.34 40.66 1,568 58.50 41.50 2030 2,272 61.41 38.59 2,387 59.96 40.04 2,504 58.42 41.58 2035 3,185 61.04 38.96 3,445 58.60 41.40 3,730 56.08 43.92 2040 4,161 59.57 40.43 4,675 55.79 44.21 5,276 51.95 48.05 2045 5,289 58.69 41.31 6,215 53.23 46.77 7,385 47.76 52.24 2050 6,546 58.48 41.52 8,100 51.01 48.99 10,240 43.63 56.37 international journal of sustainable energy planning and management vol. 17 2018 53 théoneste uhorakeye and bernd möller about 3000 gwh are expected under rcp4.5 while rcp8.5 presents surplus of about 150 gwh. as for the 2032–2050 period, almost all the years over this period will record deficits in power generation. for the whole period, more 7,200 gwh deficits are expected for rcp4.5 and 4,659 gwh for rcp8.5. 3.3. bau power supply without climate change considerations the analysis of the bau power supply scenario revealed that the national energy resources will be sufficient to meet the power demand projected under the very low and very likely electricity demand scenarios. consequently, the analysis of the power supply concentrated only on electricity supply scenarios that meet the projected demand under the very high scenario. as described in the methodology section, the bau power supply under no climate change considerations assumed that hydropower plants will continue to produce their designed energy throughout the simulation period. under this assumption, it was found that the share of hydropower to the total power supply mix will increase very high very likely very low 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 2015 2020 2025 2030 2035 2040 2045 years very high very likely very low 2,250 2,000 1,750 p o w e r co n su m p tio n ( m w ) 1,500 1,250 1,000 750 500 250 2015 2020 2025 2030 2035 2040 2045 years figure 1: electricity generation (left) and peak power (right) requirements e le ct ri c p o w e r (g w h ) 2015 – 600 – 500 – 400 – 300 – 200 – 100 100 200 rcp4.5 rcp8.5 300 0 2020 2025 2030 2035 2040 2045 2050 figure 2: hydropower generation anomalies between 2012 and 2050 54 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda from 55.6% (of 480 gwh) in 2012 to 77.7% (of 1,740 gwh) in 2025, and then decline to 17% (11,380 gwh) in 2050. the simulation results reveals that power generations from hydropower, solar, methane, and geothermal will meet the whole demand until 2040. after this year, power generations from peat and diesel will be needed: peat will represent 18.5% and diesel 16.5% of the total electricity needs in 2050. the distribution of the generation between different technologies under the bau scenario are shown in figure 3 (a) while the total power supply and the percentage shares of the used technologies are presented in table 2. as for the alternative power supply scenario without climate change considerations, it is projected that 10,700 gwh will need to be generated in 2050, from 480 gwh in 2012. the reduction in the power demand of about 6% compared to the bau scenario is due to the assumed improvements in efficiency of household appliances. under this scenario, no electricity generation from diesel power plant will be needed until 2050. in addition, the share of power generation from peat will decline from 18.5% (under the bau scenario) to about 9.0%. the distribution of the power generation between different technologies under the alternative scenario are shown in figure 3 (b) while the corresponding total power supply requirements and the percentage shares of different technologies are presented in table 2. 3.3. power supply under rcp4.5 for the bau power supply under the rcp4.5 pathway, the shares of different technologies to the total power supply mix will oscillate following the variations in hydropower generation. the share of hydropower generation is projected to increase from 55.6% (of 480 gwh) in 2012 to 73.9% (of 1,740 gwh) in 2025 (against 77.7% under no climate change consideration scenario), and then decline to 12.6% (of 11,380 gwh) in 2050 (against 17% under the no climate change consideration scenario). the power generation distribution between different technologies under the bau scenario are shown in figure 4 (a). in 2050, more power generation from diesel will be required under this power supply scenario (20.9%) compared to the case of no climate change considerations (16.5%). the total power supply requirements and the percentage shares of different technologies under the bau power supply scenario evolving under rcp4.5 are presented in table 3. concerning the alternative power supply scenario evolving under the same rcp4.5, no electricity generation from diesel-based power plants will be needed for the whole simulation period. however, the share of peat in 2050 will represent 16.4% (against 9.0% under no climate change consideration), and this is due to considerable losses in hydropower generation caused by climate change. the distribution of the power generation between different technologies under this scenario are shown in figure 4 (b) while the corresponding power supply requirements and the percentage shares are presented in table 3. (a) (b) diesel hydropower geothermal methane peat solar 0.0 2015 2020 2025 2030 2035 2040 2045 years 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) diesel hydropower geothermal methane peat solar waste wind 0.0 2015 2020 2025 2030 2035 2040 2045 years 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) diesel hydropower geothermal methane peat solar diesel hydropower geothermal methane peat solar waste wind 0 0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) figure 3: electricity supply by resource under no climate change considerations international journal of sustainable energy planning and management vol. 17 2018 55 théoneste uhorakeye and bernd möller 3.4. power supply under rcp8.5 under rcp8.5, the contribution of different technologies to the total power supply mix will follow variations in hydropower generations like in the previous section. for the bau scenario when the climate evolution follows rc8.5, the share of hydropower will increase from 55.6% (of 480 gwh) in 2012 to 71.3% (of 1,740 gwh) in 2025 (against 77.7% under no climate change considerations), and then decline to 14.8% (of 11,380 gwh) (against 17% under the no climate change consideration) in 2050. the distribution of the power generation between different technologies under the bau scenario are shown in figure 5 (a) while the corresponding total power supply requirements and the percentage shares of different technologies are presented in table 4. the performance of the proposed alternative power supply scenario under rcp8.5 differs from that under rcp4.5 regarding the amount of available hydropower production which dictates the shares of the other energy technologies. like in the case of rcp4.5, no diesel-based power generation will also be needed under the rcp8.5 table 2: shares of different technologies under no climate change considerations scenario technology 2012 2020 2030 2040 2050 diesel (%) 42.48 0.00 0.00 0.00 16.48 hydropower (%) 55.61 92.30 66.36 32.51 17.01 geothermal (%) 0.00 0.30 15.20 37.92 25.20 bau methane (%) 1.85 3.84 15.84 27.88 21.62 peat (%) 0.00 0.00 0.00 0.00 18.53 solar (%) 0.06 3.56 2.60 1.69 1.16 total (twh) 0.48 1.10 2.78 5.86 11.38 diesel (%) 42.48 0.00 0.00 0.00 0.00 hydropower (%) 55.61 88.59 79.40 44.98 23.70 geothermal (%) 0.00 0.00 0.00 20.69 26.78 methane (%) 1.85 0.00 0.00 15.06 26.42 alternative peat (%) 0.00 0.00 0.00 0.00 8.96 solar (%) 0.06 11.41 12.51 11.34 8.21 waste (%) 0.00 0.00 5.02 4.54 3.28 wind (%) 0.00 0.00 3.07 3.39 2.65 total (twh) 0.48 1.08 2.68 5.57 10.70 (a) (b) diesel hydropower geothermal methane peat solar 0.0 2015 2020 2025 2030 2035 2040 2045 years 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) diesel hydropower geothermal methane peat solar waste wind 0.0 2015 2020 2025 2030 2035 2040 2045 years 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) diesel hydropower geothermal methane peat solar diesel hydropower geothermal methane peat solar waste wind figure 4: electricity supply by resource under rcp4.5 56 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda scenario. the share of peat-based power generation will reach 13.4% in 2050 (against 16.5% under rcp4.5, and 9.0% under no climate change considerations). the power generation distribution between different technologies under the alternative scenario are shown in figure 5 (b) while the corresponding total power supply requirements and the percentage shares of different technologies are presented in table 4. 3.5. emissions from power generation and generation costs under no climate change considerations, the average emissions for the 2012–2050 period are projected to be 101 gco2eq/kwh for the alternative scenario, and 183 gco2eq/kwh for the bau scenario. under the rcp4.5 power supply scenario, the average co2 emissions are 116 gco2eq/kwh for the alternative scenario, and 203 gco2eq for the bau scenario. in case of rcp8.5, emissions are projected to be 104 gco2eq/kwh for the alternative scenario, and 192 gco2eq/kwh for the bau scenario. figure 6 (left) compares the projected average emissions for the 2012–2050 period. no-cc in this figure refers to “no climate change considerations”. regarding power generation costs, the average unit costs between 2012 and 2050 for the bau scenarios are table 3: distribution of the electricity supply by resource type under rcp4.5 scenario technology 2012 2020 2030 2040 2050 diesel (%) 42.48 0.00 0.00 0.00 20.91 hydropower (%) 55.61 92.69 46.77 26.86 12.59 geothermal (%) 0.00 0.27 24.80 41.18 25.20 bau methane (%) 1.85 3.48 25.83 30.27 21.61 peat (%) 0.00 0.00 0.00 0.00 18.53 solar (%) 0.06 3.56 2.60 1.69 1.16 total (twh) 0.48 1.10 2.78 5.86 11.38 diesel (%) 42.48 0.00 0.00 0.00 0.00 hydropower (%) 55.61 89.18 64.13 37.14 17.51 geothermal (%) 0.00 0.00 6.04 24.44 26.78 methane (%) 1.85 0.00 7.24 20.67 26.41 alternative peat (%) 0.00 0.00 0.00 0.00 16.47 solar (%) 0.06 10.82 14.36 11.34 8.21 waste (%) 0.00 0.00 4.71 3.03 1.97 wind (%) 0.00 0.00 3.52 3.39 2.65 total (twh) 0.48 1.08 2.68 5.57 10.70 (a) (b) diesel hydropower geothermal methane peat solar 0.0 2015 2020 2025 2030 2035 2040 2045 years 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) diesel hydropower geothermal methane peat solar waste wind 0.0 2015 2020 2025 2030 2035 2040 2045 years 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 p o w e r su p p ly ( t w h ) diesel hydropower geothermal methane peat solar diesel hydropower geothermal methane peat solar waste wind figure 5: electricity supply by resource under rcp8.5 international journal of sustainable energy planning and management vol. 17 2018 57 théoneste uhorakeye and bernd möller projected to be 12.71 us¢/kwh under no climate change considerations, 13.13 us¢/kwh under rcp4.5, and 15.76 us¢/kwh under rcp8.5. as for the alternative scenario, the average unit generation costs are anticipated to be 13.20 us¢/kwh under no climate change considerations, 13.73 us¢/kwh under rcp4.5, and 13.24 us¢/kwh under rcp8.5. figure 6 (right) compares the projected average power generation costs per kwh for the 2012–2050 period. 3.6. policy and institutional frameworks to successfully implement the suggested alternative power supply scenario, enabling policies as well as institutional frameworks must be in place. a policy that allows independent power producers (ipps) to cover the production costs and earn reasonable returns on their investments is required at the first place. in this regard, a feed-in-tariff (fit) scheme for solar and wind technologies is necessary until these technologies mature. in addition to the fit policy, other incentives such as the construction of access roads to the power plant sites and transmission lines connecting new plants to the national grid would also attract private investments. fit policy will not only increase the share of renewable energy in the country power supply mix, also through the implementation and operation of solar and wind projects, thousands of jobs will be created, especially in rural areas where more than 80% of the country’s population live. table 4: distribution of the electricity supply by resource type under rcp8.5 scenario technology 2012 2020 2030 2040 2050 diesel (%) 42.48 0.00 0.00 0.00 18.74 hydropower (%) 55.61 84.61 71.60 28.16 14.75 geothermal (%) 0.00 0.86 12.64 40.42 25.20 bau methane (%) 1.85 10.97 13.16 29.73 21.62 peat (%) 0.00 0.00 0.00 0.00 18.53 solar (%) 0.06 3.56 2.60 1.69 1.16 total (twh) 0.48 1.1 2.78 5.86 11.38 diesel (%) 42.48 0.00 0.00 0.00 0.00 hydropower (%) 55.61 88.26 80.63 38.94 20.54 geothermal (%) 0.00 0.00 0.00 23.46 26.78 methane (%) 1.85 0.00 0.00 19.84 26.42 alternative peat (%) 0.00 0.00 0.00 0.00 13.44 solar (%) 0.06 11.74 11.78 11.34 8.20 waste (%) 0.00 0.00 4.71 3.03 1.97 wind (%) 0.00 0.00 2.88 3.39 2.65 total (twh) 0.48 1.08 2.68 5.57 10.7 183 101 116 104 203 192 225 bau alternative 200 175 150 125 100g c o 2 e q /k w h 75 50 25 no-cc rcp4.5 rcp8.5 12.71 13.2 13.73 13.2413.13 15.73 17.5 bau alternative 15.0 12.5 10.0 u s $ c e n ts /k w h 7.5 5.0 2.5 no-cc rcp4.5 rcp8.5 figure 6: average emissions and generation cost per kwh for the 2012–2050 period 58 international journal of sustainable energy planning and management vol. 17 2018 assessment of a climate-resilient and low-carbon power supply scenario for rwanda however, to operate these two technologies know how is required. therefore, a training component should be given a priority in the deployment of solar and wind technologies in the country. in the past, the government, in partnership with its development partners, has organized training courses on hydropower projects development and management. in the author’s knowledge this has considerably reduced the number of hydropower projects that failed shortly after their commissioning due to inadequate maintenance and management. 4. conclusions this study analysed the evolution of rwanda’s electricity demand and supply towards 2050. since hydropower generation is expected to represent a considerable share in the country’s total power supply mix, and given the expected vulnerability of this technology to the impacts of climate change, a planning approach that incorporates impacts of climate change on rwanda’s hydropower generation was necessary. under the bau power supply scenario, it was found that there will be deficits in hydropower generation of more 7,200 gwh under rcp4.5 and 4,659 gwh under rcp8.5. as consequence of these losses, more than 20% of electricity requirements in 2050 are expected to come from imported fossil fuels. under the suggested alternative scenario, however, no imported fossil fuels would be needed by 2050. also the average co2 emissions per kwh for the 2012–2050 period is 116.42 gco2eq for the alternative scenario against 203.24 gco2eq for the bau scenario. the average generation cost per kwh between 2012 and 2050 varies between 12.71 and 15.76 us¢/kwh for the bau scenario, and between 13.20 and 13.73 us¢/kwh for the alternative scenario. these findings allow to conclude that the suggested scenario is resilient to climate change impacts as it meets the projected power demand when these impacts are accounted for. furthermore, the scenario also ensures the security of the country’s power supply because it re-lies only on domestic energy resources. moreover, co2 emissions per kwh under this scenario are about 40% lower than the emissions under the bau scenario. to successfully implement this scenario, fit scheme for solar and wind technologies are recommended until these technologies mature. in addition, shortand long-term training courses in these two technologies are also recommended since investors will be interested in investing in areas where they can find manpower with 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice microsoft word ijsepm titelblad vol 9-.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    skibbrogade 5, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, and emd international 1288-4863-1-le.qxd 1. introduction a number of optimisation based methods for the design of district heating systems have been proposed in the academic literature. these studies typically focus on the dimensioning of heat network and production assets, as well as the location of the production units, for optimal economic and environmental performance [1, 2, 3, 4, 5, 6]. other research endeavours have looked into the question of expansion of existing district heating networks introducing metrics to assess economic international journal of sustainable energy planning and management vol. 09 2016 57 viability [7] (e.g. the effective width) and making use of geographical information system (gis) tools [8, 9, 10, 11, 12].however, one factor that is often overlooked in these studies is the stage-wise, time-dependent development and growth of heat networks. heat networks ‘phasing’ is an important step in prefeasibility studies of heat networks schemes but its determination is usually not based on mathematical optimisation, so the optimality of the corresponding decisions is not guaranteed. the objective of phasing is to modulate capital outlay in order * corresponding author e-mail: rl508@ic.ac.uk international journal of sustainable energy planning and management vol. 09 2016 57-74 optimal phasing of district heating network investments using multi-stage stochastic programming ������� �� ���� ��������� � ������������ �������� ������� ���������� ���� ��������� ���� �� ��� ��� ������������������������� ��������������������������������� ������� �� ���� ������� ���� ������� � � �� ������ !"��#� $������������ ���%���������%�� ������������������������&���������� �������'��������������������������%�� ����������������� ����� � �� ���� ������� ���� ������� ��� �� ������ !"��#� ��������� ��(��� � ��������� ������������� ���%���������%�� �������������������������#�$����� ��� ���$ ��� �������������� ����� � �� ���� ������� ���� ������� ��� �� ������ !"��#� abstract most design optimisation studies for district heating systems have focused on the optimal sizing of network assets and on the location of production units. however, the strategic value of the flexibility in phasing of the inherently modular heat networks, which is an important aspect in many feasibility studies for district heating schemes in the uk, is almost always overlooked in the scientific literature. this paper considers the sequential problem faced by a decision-maker in the phasing of long-term investments into district heating networks and their expansions. the problem is formulated as a multi-stage stochastic programme to determine the annual capital expenditure that maximises the expected net present value of the project. the optimisation approach is illustrated by applying it to the hypothetical case of the uk’s marston vale eco town. it was found that the approach is capable of simulating the optimal growth of a network, from both a single heat source or separate islands of growth, as well as the optimal marginal expansion of an existing district heating network. the proposed approach can be used by decision makers as a framework to determine both the optimal phasing and extension of district heating networks and can be adapted simply to various, more complex real-life situations by introducing additional constraints and parameters. the versatility of the base formulation also makes it a powerful approach regardless of the size of the network and also potentially applicable to cooling networks. keywords: district heating; network expansion; multi-stage; phasing; url: dx.doi.org/10.5278/ijsepm.2016.9.5 58 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming to gradually develop a heat network as a function of available heat demand (the building loads that are ready for connection) and to minimize investment risk. in many uk feasibility studies, phasing typically consist of a cluster or ‘seed’ network and a set of future extension options for this seed network [19]. in order to improve the way in which phased investments are planned and executed, the influence of future heat demand and fuel prices uncertainties on the performances of district heating network investments might be taken into account when planning networks. contrary to the classical net present value (npv) approach, which treats the investment problem as if it was a now-or-never proposition, multi-stage stochastic programming [13, 14, 15, 16, 31] actively takes into consideration the possibility for the decision-makers to take recourse actions as more information about uncertain parameters becomes available. in this paper we propose the use of a simple multi-stage stochastic programming formulation for the optimal phasing of district heating networks. the type of uncertainty taken in consideration is heat demand uncertainty (whether a block of buildings will connect to the network or not) and fuel costs uncertainty which affect the production operation costs. the numerical examples demonstrate that a risk-aware decision maker investing in district heating networks under uncertainty can use this approach to determine not only the optimal growth of a network from a single heat source or separate islands of growth, but also the optimal marginal expansion of an existing district heating network. the paper contains the following sections in addition to this introduction: in section 2, the overall approach to the optimal district heating network investment phasing problem is presented followed by a stochastic mixed integer linear programming formulation. in the third section, the approach is demonstrated on hypothetical case studies to illustrate different expansion patterns. finally a discussion of the applicability, relevance and limitations of the method as well as some concluding remarks are provided in section 4. 2. methodology the objective of this paper is to propose a model for the optimal phasing of district heating network investments. the emphasis of this approach is not set on the sizing of production units (e.g. gas engines) as this problem is typically a task which is carried out separately through a detailed analysis. the location of production units is not a key consideration either because this choice is often mainly driven by soft-engineering constraints, which significantly narrows down the set of available solutions. the key inputs of the optimisation problem are the annual and (diversified) peak demands of heat of blocks of buildings. these two parameters are used to estimate the network’s capital and operational costs. as stated above, the capacity and capital cost of the heat sources will be considered as an input to the model. the only decision affecting these production units will be the date at which they are phased in. in the proposed approach we use a two-step scheme. the first step performs a basic preliminary calculation of the size of the network pipe sections that minimizes capital cost and heat losses. the output of this first step is then used within the phasing problem, which determines the optimal key stages of development of the heat network. in order to address the problem of heat demand and fuel price uncertainty, the model is formulated as a multi-stage stochastic programming problem. stochastic programming has been used to optimise investment under uncertainty of energy systems and infrastructures [13, 14, 15]. unlike deterministic optimisation, stochastic programming can solve optimisation problems featuring uncertain parameters. as it is not possible to have access to the value of uncertain parameters (for instance future fuel prices or future heat demand), stochastic programmes are formulated to yield solutions that are feasible over a range of predefined scenarios (often discrete and portraying probability distributions) and which maximise the mathematical expectation of a cost function over a range of parametric realizations. a typical class of stochastic programming problems is that of multi-stage formulations [16] which are typically used to schedule investment decisions under uncertainty over some finite planning horizon. in this paper we use a simple scenario-based formulation for combinations of heat demand and fuel price uncertainty scenarios. the possible effects of these two kinds of uncertainty are modelled through the use of a set of discrete scenarios based on forecasts from the uk’s department of energy and climate change (decc) [17]. the objective of the stochastic formulation will be to provide the best non regret phasing solution under uncertainty. in the following section, we present the equations defining the optimisation problem for each step. 2.1. nomenclature here the notations used for the model description are listed: sets and indices: n set of candidate nodes p set describing the periods of the finite investment horizon ω set of possible (demand) scenarios ε set of edges r index of pipe diameters parameters: crdiam cost per unit of length of laying a pipe of diameter r (£) heatllossesr heat losses per unit of length for a pipe of diameter r (w/m) cp,water water heat mass capacity (j/kg.k) ρ density of water (kg/m3) || i,j|| euclidian distance between nodes i and j (m) peakdemandi peak heat demand for node i (mw) δtpeak difference between forward and return temperature at peak load. (°c) a adjacency matrix of the unoriented graph (n, ε) σ cost of building a pipe per unit of length (£/m) heatdemandi,t,m heat demand at node i at time period t and in scenario m (mwh) heatpricet,m heat sale price at time period t and in scenario m (£) heatlossesi,j heat losses per unit of length for the pipe between nodes i and j (w/m) boilerproductioncostst.m boiler heat production cost at time period t and in scenario m (£) wasteheatpricet,m price of waste heat at time period t and in scenario m (£/kwh) availabilityi,t binary parameter stating whether building i can be connected to the network at time t (equal to 0 if building is available for connection at time t) networkcapexbudgett maximum annual network investment budget (£) maximumboileroutputi maximum annual load that boiler at location i can provide (mwh) maximumwhannualoutputi maximum annual load that waste heat source at location i can provide (mwh) minloadwasteheat minimum annual load at which connection to waste heat source is feasible (mwh) networkassetlifetime lifetime of network assets, assumed longer than economic lifetime (years) m an arbitrarily large positive real number im discount rate in scenario continuous variables: fi,j flow of heat at peak load between nodes i and j (mwh) vmax,r maximum velocity of fluid in pipe of diameter r (m/s) δpmax,r maximum pressure drop of fluid in pipe of diameter r (pa/m) re reynolds number vi,j velocity of water in pipe between nodes i and j (m/s) δpi,j,r pressure drop in pipe of diameter r between nodes i and j (pa/m) fi,j,r fannings friction factor for pipe of diameter r between nodes i and j rt,m revenue for period t and in scenario m (£) c nett,m network costs (capital and operating) at time period t and in scenario m (£) international journal of sustainable energy planning and management vol. 09 2016 59 romain s. c. lambert, sebastian maier, john w. polak and nilay shah heatrevenuei,t,m heat revenue for node i at time period t and in scenario m (£) c repex,acct,m sum of all outgoing replacement costs at time period t and in scenario m (£) crepext,m anticipated annual replacement costs resulting from investments at time period t and in scenario m (£) cprt,m production costs (capital and operational) at time period t and in scenario m (£) qi,t,m heat production for node i at time period t and in scenario m (mwh) q boileri,t,m boiler heat production for node i at time period t and in scenario m (mwh) qwhi,t,m waste heat production for node i at time period t and in scenario m (mwh) binary variables: di,j,r binary variable equal to 1 if nodes i and j are connected by a pipe of diameter r ∀i��,t�p,m�ω,ni,t,m binary variable taking the value 1 if node i is connected at time t in scenario m ∀i��,t�p,m�ω,p _ i,t,m binary variable taking the value 1 if a plant is built on node i and connected at time t in scenario m ∀i��,t�p,m�ω,pi,t,m binary variable taking the value 1 if a plant exists at node i and is connected at time t in scenario m ∀i��,t�p,m�ω,eij,t,m binary variable indicating whether node i and j are linked by a pipe with flow from i to j in period t and scenario m ∀i��,t�p,m�ω,e _ ij,t,m binary variable indicating whether a pipe is built between node i and j with flow from i to j in period t and scenario m whi,t,m binary variable representing existence of waste heat supply at location i time period t and in scenario m wh —– i,t,m binary variable representing introduction of waste heat supply at location i at time period t and in scenario m 2.2. built-out network sizing in this section, we present the problem of optimal sizing of the heat network. this optimisation problem is similar to previous work in the literature [1]. it is presented here for completeness although it is not the main focus of this paper. in this problem, it is assumed that the network is fully built out: all the building loads have been connected and appropriate heat sources are available at predefined locations with a predefined capacity. the network is designed under steady state diversified peak conditions to determine the sizing of the pipes. in order to avoid any redundancy with the second stage, we only consider a cost minimization problem. (1) the capital cost of the heat network depends both on the length of the pipes and their diameter. a constraint is added to signify that only one diameter can be chosen for each pipe: (2) (3) the fully built out network must respect the city layout (i.e. the adjacency matrix): (4) the flow of heat at each node depends on heat production and heat consumption at this node, as well as the heat losses: (5)∀ ∈ − ⋅ ⋅ ⋅ = ∈ ∑i j, n, j , heatllossesf d i j fi j n i j r r, , , , jj i n i iq, j∈ ∑ + − diversifiedpeakdemand d ai i, ,j,r j≤ d di, j,r j,i,r+ =1 di j r r , ,r ≤ ∈ ∑ 1 z c d i jnetwork capex i r r rl = = ⋅ ⋅ ∈∈ ∑∑ , ,j,r diamc ε 60 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming hydraulic constraints: the velocity of water in any given pipe is related to the diameter of the pipes as well as the heat flow: (6) the water velocity is constrained according to engineering parameters for each diameter: (7) maximum pressure drops are also taken into account according to diameter-dependent constraints: (8) ,where kr is a linear coefficient relating pressure drops and velocity according to the fanning’s factor: (9) where fi,j,r the fanning’s friction factor is approximated by the haanland equation [19]: (10) contrary to the work in [1], we only consider the minimizing of capital costs of the heat network. note that this step could be replaced by more detailed hydraulic analyses, such as the ones typically conducted in feasibility studies. its only purpose is to provide a basic estimate as input data for the phasing stage, since most of the network costs consist of civil-engineering and site development/planning costs rather than the cost of the pipes. because uncertainty is considered in the second stage, estimates of network costs are deemed sufficient as a basic input. 2.3. optimal phasing problem formulation in this section, a formulation of the optimal network phasing problem is presented. the basic starting elements are a set of candidate “end-user” nodes to be f k r i j r, , . . log . . = ⋅ + ⎛ ⎝ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎛ 1 8 6 9 3 7 10 1 11 re ⎝⎝ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎡ ⎣ ⎢ ⎢ ⎢ ⎢ ⎤ ⎦ ⎥ ⎥ ⎥ ⎥ −2 δp f v r i j r i j r i j , , , , .= ρ 2 2 k v m d pr i j i j r max r, , , .( )− − ≤1 δ v v m di j max r i j r, , , ,( )≤ + −1 ρ πc v r f m dp water l peak i j i j r, , , ,( )⋅ ≥ − −⋅δt 2 4 1 connected and a set of allowable pipes (edges) and associated costs between these nodes. the edges correspond to possible routes for the district heating pipes, which are usually constrained by the city layout. these edges are assigned with a capital cost linked to the distances and size pipe. objective function the objective function defines a multi-period calculation of the expected discounted cash flows of the district heating system: (11) this function consists of the probability weighted sum of discounted cash flows for all considered scenarios. the cash flows are composed of the sum of revenues from heat sales on the one hand and capital expenditure (capex) and operational expenditure (opex) on the other hand: (12) revenues are the sum of heat sales for all the areas connected to the district heating network: (13) the coefficient of 0.95 accounts for 5% overhead administrative expenses. this is assumed without loss of generality, although this figure will be case-dependent. for a particular node, the heat revenue is the product of the heat demand and the heat price. (14) the heat price is a constrained decision variable for the planners. in the uk, local authorities might assign different prices depending on the type of customer (e.g. social residential housing or commercial) [19]. the costs consist of the sum of capital costs and operational costs for both production and distribution (the network). network costs in this model mainly consist of a conservative estimate of civil engineering works, estimated in the first step and which are linearly dependent on the distance. (15)c e et m network capex i j j n i j t m, , , , , ,= + ∈ ∑ pipecost jj i t m i n , , ,( ) ∈ ∑ heatrevenue heatdemand heatpricei t m i t m t, , , ,= r nt m i t m i t m i n , , , , ,.= ∈ ∑0 95 heatrevenue cf r c ct m t m t m network capex t m production , , , , ,= − − ,, , , , ,capex t m production opex t m repex accc c− − θ = ⋅ +∈∈ ∑∑ ω ( ) ( ) , m cf i t m m t mt p 1ω international journal of sustainable energy planning and management vol. 09 2016 61 romain s. c. lambert, sebastian maier, john w. polak and nilay shah in addition, we consider the situation in which an annual budget constraint determines the maximum capital outlay for network expansions: (16) production costs consist of the capital costs to install a new production unit, as well as maintenance and fuel costs: (17) anticipated future replacements costs are also taken into consideration: for a particular year t capital outlay, an annual replacement cost is calculated for future anticipated replacements costs and expenses related to this particular capital outlay: (18) for a given year t, the total replacement expense for all past capital investment outlays is calculated as: (19) topology constraints topology constraints consist of rules defining the way a network can be built, taking into account the city layout that stems from a given land-use. firstly, the potential existence of a pipe between two nodes implies these nodes are connected to the network, potentially as consumers or producers (unless they are intersection ‘dummy’ nodes with no heat production or demand): (20) (21) secondly, pipes can only exist in line with the city layout which is defined by the set of the allowable connections between nodes as defined by the adjacency matrix: ∀ ∈ ∈ ∈ ≤i j n t m e ni j t m j t m, , , , , , , , ,p ω ∀ ∈ ∈ ∈ ≤i j n t m e ni j t m i t m, , , , , , , , ,p ω c ct m repex acc t m repex t t 1 1 , , ,= ≤ ∑ c c t m repex t m network capex , , . = networkassetlifettime prodassetlifetime + ct m production capex , .⎛⎛ ⎝ ⎜ ⎞ ⎠ ⎟ ci t m production opex , , , = boilerproductioncoststt m i t m boiler t m i t m whq q, , , , , ,+ ⋅wasteheatprice ct,m production,capex ct m network capex t p , , ∈ ∑ ≤ networkcapexbudget (22) similarly, a set of allowable plant locations is also defined for heat production. (23) although plant location is considered, in this paper, plant locations are not a key optimisation variable. previous studies [1, 3, 4] have taken into account the optimal locations of plants to minimize operating costs. although plant location does have an influence, its choice is usually constrained by the availability of a hosting site or land area as well as other soft-engineering constraints. another rule-of-thumb will dictate that production units should be placed near large anchor loads to minimize heat losses. in our problem formulation, we consider binary variables defining the existence of pipes and the direction of heat flow in each pipe. for the calculation of the net peak heat flow the following constraint is imposed: (24) this will ensure that only a positive net heat flow is considered to represent the steady state of the heat network. note that this does not exclude the possibility of having bidirectional flows under different heat load conditions (for example when during periods of lower heat demand) but only represents an annual aggregate flow. similarly, binary variables are defined for the construction of these pipes whose purpose is not to represent the existence at any given date, but the date at which they are built. (25) chronology constraints chronology constraints concern the earliest connection dates for each cluster of demand: (26) another chronology constraint states that a plant or a network section can only be built once: ∀ ∈ ∈ ∈ ≤ −i n t m ni t m, , , , ,p ω 1 earliestconnectionl,t(( ) e ei j t m j i t m, , , , , ,+ ≤ 1 e ei j t m j i t m, , , , , ,+ ≤ 1 ∀ ∈ ∈ ∈ ≤i n t m p yi t m i, , , , , ,p ω ∀ ∈ ∈ ∈ ≤i j n t m e ai j t m i j, , , , , , , ,p ω 62 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming (27) (28) finally, construction constraints state that if an edge or a plant exists at time t, it has to have been built in one of the preceding periods . (29) (30) physical constraints in this model, physical constraints mainly consist of energy balances for each node of the heat network. the sum of inlet flows is equal to the sum of outlet flows, heat production at the node minus the energy consumed by the node: (31) in these constraints, specific heat losses per meter for each network section are taken into account. these depend on the diameter of the pipes in that specific section. to relate network section existence binary variables to the existence of a non-zero heat flow, some additional constraints are formulated. this ‘big-m’ [4] constraints state that if a flow exists between nodes i and j, then pipes must exist at these locations: (32) similarly, if heat is produced at node i then it implies that node i is a plant site. (33) note that plant locations are also restricted to selected nodes that are available to host the plant: ∀ ∈ ∈ ∈ ≥i n t m m p qi t m i t m, , , . , , , ,p ω ∀ ∈ ∈ ∈ ≥i j n t m me fi j t m i j t m, , , , , , , , , ,p ω ∀ ∈ ∈ ∈ − ∈ ∑i j n t m fi j t m j n i j, , , , , , , ,p ω heatlosses i, jj e⋅ = + + ∈ ∑i j j i t m i t m j n i t mf q, , , , , , , ,heatdemand nn ∀ ∈ ∈ ∈ − + ≥ ∈ ≤ ∑i n t m p pi t m i t m t t t , , , , , , , , p p ω 1 1 1 0 ∀ ∈ ∈ ∈ − + ≥ ∈ i j n t m e ei j t m i j t m t t , , , , , , , , , , , p p ω 1 1 1 0 ≤≤ ∑ t t t1 1 2 1∈ −{ }, , ,k ∀ ∈ ∈ ∈ ≤ ∈ ∑i j n t m ei j t m t , , , , , , ,p p ω 1 ∀ ∈ ∈ ≤ ∈ ∑i n m pi t m t , , , ,ω 1 p (34) the relative contribution of waste and peak boilers heat at a certain production location is described in the following constraint: (35) both boilers and waste heat sources will be constrained by their maximum annual output, which is the maximum annual amount of heat that can be supplied by a given plant: (36) (37) another ‘big-m’ constraint is used to relate the existence of a waste heat recovery facility or plant to the production of waste heat at a given node i: (38) similarly to network trenches sections and production nodes, binary variables are used to represent both the existence and the decision to build or put in place a waste heat recovery facility: (39) another constraint is formulated to cap the proportion of heat that can be supplied from the waste heat sources: (40) this equation relates to the fact that the waste heat, having a lower cost than “heat-only” boiler heat, will serve as a base load for the district heating system and that its limited annual output will entail topping up the heat production with “heat -only” boilers during peak demand. the coefficient α represents the maximum proportion of the load that can be provided by waste heat. this relative proportion between the two q qi t m wh t i t m t , , , ,≤ ∈ ∈ ∑ ∑α p p wh i t m t , , ≤ ∈ ∑ 1 p m wh qi t m i t m wh⋅ ≤, , , , qi t m wh i, , ≤ maximumwhannualoutput qi t m boiler i, , ≤ maximumboileroutput q q qi t m i t m wh i t m boiler , , , , , ,= + ∀ ∈ ∈ ∈ ≤ i n t m pi t m i , , , pr , ,p ω oductionlocation international journal of sustainable energy planning and management vol. 09 2016 63 romain s. c. lambert, sebastian maier, john w. polak and nilay shah different types of heat sources will be determined separately based on an analysis of the load duration curve of the system. in this paper, however, it is considered as an input to the optimisation model. a constraint to restrict the introduction of a waste heat source recovery facility is presented below. this constraint states that a waste heat facility may only be introduced if a sufficient heat demand justifies it. this reflects the typical situation of uk district heating schemes where risk-averse local authorities will kickstart a seed network with “heat-only” boilers and introduce more expensive heat production units (such as chp plants) only when sufficient heat demand is secured. this phasing approach is typically used by local authorities in the uk (see e.g. [19] ) and its purpose is to minimize risk of capital outlay while facing uncertain demand. (41) similarly to previous constraints, the following constraint relates to the existence of a waste recovery facility at time t to its introduction in a previous time period: (42) non-anticipativity constraints non-anticipativity constraints are used to link the variables of the set of scenarios into a set of initial decision steps. this step will therefore be the best ‘no-regret’ decision for all scenarios considered. these constraints are applied to the binary variables which define production and consumer nodes, pipes and flows. until uncertainty is revealed at time t, it is necessary to use a conservative approach that will be the best decision on average for all of the considered scenarios. (43) (44) (45) ∀ ∈ ∈ ≤ =i j n m t t e ei j t m i j t m, , , , , , , , , , 'ω ∀ ∈ ∈ ≤ =i n m t t n ni t m i t m, , , , , , , 'ω ∀ ∈ ∈ ≤ =i n m t t p pi t m i t m, , , , , , , 'ω ∀ ∈ ∈ ∈ − + ≥ ∈ ≤ ∑i n t m wh whi t m i t m t t t , , , , , , , , p p ω 0 1 1 qi t m wh i t m, , , ,≥ ( )minloadwasteheat – 1 – whm (46) (47) (48) (49) (50) in the following sections, our optimisation model is applied to hypothetical examples representing simplified typical urban situations. 3. numerical examples in this section, the optimal phasing model is applied to theoretical examples. the assumptions for the different examples are presented in the next paragraph. two situations will be considered: the development of a network from a single energy centre (or plant location) and the expansion of the network from initially isolated islands of growth. the influence of discount rates on the expansion patterns will also be presented. 3.1. modelling assumptions • the peak demand is an input to the model and is assumed to be diversified. the calculation of the diversified peak demand from the peak demand of buildings will usually require an indepth analysis of the various types of loads to be connected to the district heating network and the proportion of heat demand between space heating and hot water preparation the capital costs for the waste heat recovery system are assumed to be calculated separately. this is justified by the fact that the cost calculation of such a facility is case dependent and that the complexity of the financial evaluation cannot be accurately represented in the optimisation model. ∀ ∈ ∈ ≤ =i j n m t t wh whi j t m i j t m, , , , , , , , , , 'ω ∀ ∈ ∈ ≤ =i j n m t t wh whi j t m i j t m, , , , , , , , , , 'ω ∀ ∈ ∈ ≤ =i j n m t t f fi j t m i j t m, , , , , , , , , , 'ω ∀ ∈ ∈ ≤ =i n m t t q qi t m i t m, , , , , , , 'ω ∀ ∈ ∈ ≤ =i j n m t t e ei j t m i j t m, , , , , , , , , , 'ω 1 64 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming • in this numerical example, we consider a uk baseline situation where natural gas is a prevalent fuel. a more realistic setting would consider the evolution of the national energy system and the possible introduction of competitive sources of heat, requiring specific calculation for the capital costs of production but this is not the object of this paper. • this also avoids any loss of generality since the waste heat sources can be of a different nature such as industrial residual heat, waste heat from incinerators or from power stations etc. in the island growth case, it is assumed that gas boilers are pre-existent (typically associated to anchor loads) and that their over-capacity can be used to supply neighbouring loads for the early phasing stages of the seed network. • one single price of heat is applied to all buildings and there is no differentiation by type of customer. this is a simplification: in sweden, for example, various pricing mechanisms and tariffs are usually in place. lower variable prices of heat are offered if the customer pays for the full cost of the connection to the building. more tariffs are being introduced by district heating companies in order to move from a ‘one-sizefits-all’ business model to a better value proposition in order to overcome stagnation. in the uk, in order to fight fuel poverty, local authorities differentiate between social housing and private buildings. in this example, a typical 2% annual increase is assumed, although it would be possible to choose to index the price of heat to the cost of individual boilers heating. • in this study the equivalent utilisation period at peak demand for heat production is set to 870 hours. it is assumed that the waste heat source cannot supply more than 90% of required annual supplied heat. • location of production units is assumed a priori since it is in practice mainly determined by soft engineering constraints and an arbitrary set of plant node locations has been selected. • because accurate pumping costs are difficult to estimate and depend on complex hydraulic calculations, they are overestimated and included in the calculation of network trench costs. in this study, the costs of network sections are only indicative and their accurate calculation is not the subject of this paper and may be disregarded without loss of generality. • here we consider two different types of uncertainties. the first one is associated with the uncertain availability of several areas of heat demand represented by nodes: one area/building decides upon whether to connect to the network or not. in the case of a larger district heating scheme, the willingness of the buildings owners to connect will determine whether a district heating network section can be built in this area. the second type of uncertainty is that of gas prices, which are represented through a discrete set of gas price projections. • in this study, the economic horizon for the calculation of the discounted cash flows is set to twenty years. it is assumed that the lifetime of network assets is higher and is set to 40 years (needed for the replacement cost calculations). the lifetime of the production facilities is set to 20 years. • the cost of waste heat is assumed to equal half of the marginal cost of heat, which is based on the price of natural gas to reflect the current uk situation. the cost of waste heat will often depend on opportunity costs for the entity that supplies it. in the case of a waste incinerator, for example, it could be based on electricity that could have been supplied using the facilities’ turbines, and the calculation will relate to the z-factor of the facility (the z-factor relates to the decrease of efficiency of electricity production for each additional unit of heat produced; consequently, the z-factor can be used as an estimation of the opportunity cost of supplying heat rather than electricity). 3.2. problem description in this section some results are presented mainly to illustrate the various kinds of situations the optimisation model can address. in this paper we consider a topology consisting of both nodes and edges, which are represented by an adjacency matrix. the topology used in this paper is that of the proposed uk eco town of marston vale, which has been used to illustrate spatial modelling and optimisation models in other publications [4,6]. in this paper the topology of marston vale is used for the sole purpose of illustrating the nature of results that can be generated by the proposed optimisation international journal of sustainable energy planning and management vol. 09 2016 65 romain s. c. lambert, sebastian maier, john w. polak and nilay shah approach. the results presented below are case and parameter dependent and are not meant to represent an actual assessment of the real town. assigning heat demand to the 47 considered nodes, the cost minimization model of section 2.2 is used to generate estimates for both pipe sizes and costs of the various network trenches. in figure 3 it can be seen that oversizing some trenches (the main ‘artery’ of the network in figure 3) is necessary to allow for possible future linking of separate island networks. recall that this sizing is based on basic hydraulic calculations and merely an indicative input to the phasing optimisation problem. in this example it is considered that a certain number of nodes may or may not connect in the future. it is therefore important to put in place a phasing strategy that will account for this uncertainty. the combination of future connection uncertainty and the uncertainty of future gas prices (four scenarios) is represented by a set of 16 scenarios (4 scenarios of gas price projection multiplied by 4 scenarios of heat demand). each price projection scenario corresponds to a forecast of the uk’s department of energy and climate change [17]. the heat demand scenarios are constructed as follows: we consider a hypothetical situation in which two new developments (nodes) may or may not connect to the district heating network. the probability of connection is not known and assumed to be 50%. the connection uncertainty is revealed in year 4, which means planners have to take decisions that accommodate both outcomes for each development (the event of a connection for each node is independent of the other). therefore four heat demand scenarios for the district heat network are constructed corresponding to the following situations: both uncertain nodes, only one of the two uncertain nodes, or none of the uncertain nodes decide to connect after year 4. another relevant situation, yet not treated in this numerical example is the case of continuous heat demand uncertainty. this type of uncertainty arises, for example, from inaccuracies in the estimation of heat demand profiles in a particular area comprising a large number of buildings, or the uncertainty of future (mainly space heating) demand resulting from efficiency gains of retrofitted buildings. in this case, a range of discrete scenarios would be created representing the estimated range of uncertainty of a set of anticipated trends (e.g. baseline, high level of refurbishment, medium level of refurbishment). we illustrate the types of situations that can be examined using the proposed optimisation problem. figures 4 and 5 show the two different expansion patterns: phasing from a single source of heat and phasing from separate islands of growth eventually linking into one single network in order to share access 66 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming n 0 500 1000 1500m figure 1: the city-layout of the marston-vale hypothetical case study. figure 2: topology of the city layout showing candidate end user nodes and allowable edges. figure 3: pipe sizes for the district heating scheme. the required sizes for the different pipes are indicated on the blue edges. the red circles correspond to potential production sites. to a waste heat source, respectively. these types of development patterns apply to district energy schemes of different sizes. it is important to note that it could also be used for district cooling applications; in which case, gas boilers would be replaced by absorption or compression chillers whereas free cooling sources (e.g. water bodies) would be considered to be the base-load of the scheme. since a set of scenarios is considered, the evolution shown in figures 4 and 5 display one possible outcome in the case of one of the considered scenarios. the first four steps of the evolution will be the same for all the scenarios as a result of the use of nonanticipativity constraints. the later stages (i.e. for the years 10 to 20) will be specific to the represented scenario and, for the sake of simplicity, the corresponding expansion strategies are not shown here. however, while none of the scenarios will exactly describe the future development, the optimisation over their expected value will allow for the anticipation of future possible outcomes, when assuming that the scenarios are sufficiently representative of possible future events. in figures 6 to 8, the influence of discount rates is displayed. the selected discount rates of 2%, 4.5% and 10% represent typical values for public companies, public-private partnership and private companies, respectively. the evolution of both annual heat flows and heat production output illustrate the stage-wise growth patterns of the considered heat network. this is in contrast to methodologies used in typical uk feasibility studies where expansions are determined a priori before the net present value (npv) calculations are performed. in figure 9 the corresponding investments and operation expenses of the cash flows are displayed. as expected, the importance of future cash flows decreases with an increase of discount rates. in that case, short term cash flows are prioritized. when maximising the expected npv, the optimal solution will consist of expansion decisions that provide comparatively lower cash-flows in the longer term, but higher ones in the near term, thus compensating for decrease in future revenues. this is accompanied by a higher risk in the underlying cash flows due to the more aggressive expansion. in this case the npv distribution across all scenarios tends to becomes more “fat tailed” with lower expected values, and a larger proportion of scenarios tends to be less favourable. in figures 6 to 8 it can be observed that in the case of incremental investment into network expansion the discount rate has a strong influence on the growth patterns of the heat network, despite exhibiting a broadly similar final configuration. in other words, contrary to classical npv analysis, variations in the required international journal of sustainable energy planning and management vol. 09 2016 67 romain s. c. lambert, sebastian maier, john w. polak and nilay shah t=1 t=2 t=3 t=4 t=5 t=6 t=7 t=8 t=9 figure 4: optimal phasing from a single heat source location showing expansion from year 1 to year 9. discount rate do not only result in the decreasing importance of net cash flows and postponement of predetermined investments over the time horizons, but also alter the scheduling of the discrete investment decisions. in the simple formulation presented in this paper, the range of solutions consists of an incremental network expansion, combined with an incremental increase of heat production and phasing of production assets. the advantage of simultaneously addressing annual heat production growth and network expansion lies in the fact that the phasing of additional production facilities is justified by the corresponding increase of the annual heat demand for the district heating scheme. investments in new production assets are therefore directly commensurate to heat demand and not an arbitrary threshold. clearly, the use of a stochastic formulation also allows for an adequate consideration of risks when sufficiently representative scenarios are used. in classical net present value analysis, the calculation of discounted cash flows is performed considering a fixed investment plan and predefined investment decisions. in the example situations shown in this paper, the npv is maximised by the optimal choice of investment decisions. since the investment decisions, due to the modularity of district heating development, produce different cash flows, that have an influence on network profitability, it can be seen that different discount rates will produce different expansion patterns. 4. concluding remarks in this section, the relevance and applicability of the presented optimisation of district heating phasing are discussed. the aim of the optimisation formulation and numerical example was to illustrate the usefulness of the method to determine the incremental, optimal evolution of heat networks in various cases: from a single source to separate islands of growth as well as expansion of an existing district heating network. because of the simple formulation of the optimisation problem, it can easily be applied to schemes of various sizes and to district cooling networks. large district heating systems typical to scandinavia, could use a 68 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming t=1 t=2 t=3 t=4 t=5 t=6 t=7 t=8 t=9 figure 5: optimal phasing from separate islands of growth gradually expanding and linking to capture waste heat (at a discount rate of 4.5%) international journal of sustainable energy planning and management vol. 09 2016 69 romain s. c. lambert, sebastian maier, john w. polak and nilay shah t=1 t=2 t=3 t=4 t=5 t=6 t=7 t=8 t=9 figure 6: islands of growth expansion with a discount rate of 2.5% t=1 t=2 t=3 t=4 t=5 t=6 t=7 t=8 t=9 figure 7: islands of growth expansion with a discount rate of 10% 70 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming similar approach to prioritize areas of development for their development activities related to district cooling networks. this situation is an example of heating network marginal extension. in the case of large existing separate schemes, the optimisation problem formulation could be used to anticipate the optimal future linking of the networks to efficiently integrate some new heat sources. the linking from island networks to one single large network is a pattern that has characterized swedish district heating schemes around the time of the 1973 oil crisis, when separate community schemes were joined to be supplied by industrial waste heat. a current trend in mature large district heating systems is the creation of interconnected multi-municipal networks sharing production facilities for increased security of supply. typical examples include the helsingborg-landskrona-lund heat ring [21]. this latter situation could also be modelled with the presented approach since its validity does not depend on network size. in areas with limited access to industrial heat, the same methodology could be applied in the case of renewable energy from such sources as municipal solid waste and biomass. recent studies investigating the integration of alternative energy sources into dh systems include [29,30]. in these schemes, the cost of heat from the plant will be based on the opportunity cost of the reduction of electricity income corresponding to the heat to be supplied. this is explained by the fact that the heat is produced from a bleed from the steam turbine and the ratio of lost power to produced heat is represented by the ‘z factor’. examples of such schemes in london include the south east london chp [22] in which french company veolia invested in a heat network to supply southwark housing estates. another example is that of edmonton energy from waste scheme [23], a 40 year old plant that will be supplying heat to the upper lee valley heat network. the above discussion shows the universal nature of this type of phasing approach that, despite its simplistic formulation, can be applied to a wide range of district energy schemes. in terms of planning decision making, the use of a sequential decision-making approach allows for the determination of expansion schedules that might not have been identified using arbitrary incremental network expansion. the presented approach could, in principle and subject to context adaptation, be used to show local authorities and planners how their district heating 5 0 1 2 3 4 5 6 7 dhn scheme costs for r=2% network capex production capex production opex repex c os t ( m £) 10 time (years) 15 20 5 0 1 2 3 4 5 6 7 dhn scheme costs for r=4.5% network capex production capex production opex repex c os t ( m £) 10 time (years) 15 20 5 0 1 2 3 4 5 6 7 dhn scheme costs for r=10% network capex production capex production opex repex c os t ( m £) 10 time (years) 15 20 figure 8: costs of the district heating scheme for discount rates set to 2%, 4.5% and 10%. international journal of sustainable energy planning and management vol. 09 2016 71 romain s. c. lambert, sebastian maier, john w. polak and nilay shah scheme might evolve over time. in the uk, for example, district heating schemes that are partially funded by public grants sometimes feature pre-existing building level community gas boilers from different locations instead of a single energy centre. this naturally leads to a larger number of potential island growth scenarios. in particular, the consideration of heat production increase and phasing of heat production facilities, in parallel to network growth, is one of the major strengths of the proposed approach. as explained above, the consideration of supplying the seed heat network with peak heat only gas boilers represents a typical uk situation where planners avoid the introduction of capital intensive heat sources until a sufficient heat load has been supplied. by using a sequential decision problem formulation it is possible to determine when it is optimal to introduce a new heat source given the achievement of an optimal annual heat demand threshold. clearly, practical application of the proposed approach to real life case studies will require specific and detailed studies of the load duration curves, production facilities, maintenance costs, hydraulics of the scheme under consideration. other decisions such as flow temperature levels and storage require a more granular approach in their implementation (especially in the temporal domain). this is evidently not the subject of this paper. however, once accurate values for the costs of the scheme have been determined, it will be possible to use a similar approach to that proposed in this paper to determine the optimal phasing stages of the district heating network expansion. it is interesting to note that the formulation of the optimisation problem bears similarity to other investment problems typically formulated as knapsack problems [24], in which the value of an objective function is maximised by the selection of a number of investment options under a capital cost budget constraint. in terms of managing uncertainties, there exists a number of options for potential improvements. first of all, with a better coverage of the range of future scenarios, including the use of stochastic evolution of heat demand characterized by increases in energy efficiency, connections lost to other types of heat supply systems, the infilling of current areas with new buildings etc. another possibility will be the application of riskaverse objective functions, for example, based on 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[24] kong x, gao l, ouyang h, li s, solving large-scale multidimensional knapsack problems with a new binary harmony search algorithm, computers & operations research, 63 (2015), pages 7–22. http:// dx.doi. org/ 10.1016/j.cor.2015.04.018 [25] arup, denet – decentralised energy networks masterplanning prefeasibility tool. http://www.arup.com/ projects/denet.aspx [accessed: 24-jan-2016] [26] parsons brinckerhoff – royal borough of greenwich energy masterplan (2014) http://www.londonheatmap.org.uk/ content/uploaded/documents/greenwich_emp.pdf [27] parsons brinckerhoff, upper lee valley decentralised energy network pre-feasibility study (2011). www.haringey 4020.org.uk/summary_-_ulv_enterprise.pdf[accessed: 24-jan-2016] [28] clasp. procuring heat networks, learning from the swedish approach http://claspinfo.org/procuring-heatnetworks-june2015 [accessed: 03-mar-2016] [29] margaritis n, rakopoulos d, mylona e, grammelis p. introduction of renewable energy sources in the district heating system of greece. international journal of sustainable energy planning and management. 4 (2014), pages 43–56. http://dx.doi.org/10.5278 /ijsepm. 2014.4.5 [30] zhang j, di lucia l. a transition perspective on alternatives to coal in chinese district heating. . international journal of sustainable energy planning and management. 6 (2015), pages 49–68 http://dx.doi.org/10.5278/ijsepm.2015.6.5 [31] zugno m, morales j.m, madsen h. decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts. international journal of sustainable energy planning and management. 7 (2015), pages 19–36. http://dx.doi.org/10.5278/ijsepm.2015.7.3 [32] poyri – the potential and costs of district heating networks. (2009) http://www.poyry.co.uk/sites/www.poyry.uk/files/ a_report_providing_a_technical_analysis_and_costing_of_dh networks.pdf [accessed: 02-mar-2016] 72 international journal of sustainable energy planning and management vol. 09 2016 optimal phasing of district heating network investments using multi-stage stochastic programming http://dx.doi.org/10.1016/j.enconman.2012.03.006 http://dx.doi.org/10.1016/j.apenergy.2009.12.001 http://dx.doi.org/10.1016/j.energy.2013.06.028 http://dx.doi.org/10.1016/j.enpol.2014.07.015 http://dx.doi.org/10.1016/j.ijepes.2015.06.009 http://dx.doi.org/10.1016/j.apenergy.2012.09.019 http://dx.doi.org/10.1016/j.rser.2014.09.019 http://dx.doi.org/10.1016/j.ejor.2015.05.048 https://www.gov.uk/government/publications/updated-energy-and-emissions-projections-2014[accessed:24-jan-2016] http://www.londonheatmap.org.uk/content/uploaded/documents/redbridge%20emp.pdf[accessed:21-oct-2015] http://dx.doi.org/10.1016/j.erss.2014.08.005 http://www.landskronaenergi.se/gemensam-fjarrvarmeledning-bra-for-skanes-miljo/.[accessed:03-mar-2016]. http://www.selchp.com/[accessed:21-oct-2015] http://northlondonheatandpower.london/document-library/options[accessed:03-mar-2016]. http://dx.doi.org/10.1016/j.cor.2015.04.018 http://www.arup.com/projects/denet.aspx[accessed:24-jan-2016] http://www.londonheatmap.org.uk/content/uploaded/documents/greenwich_emp.pdf www.haringey4020.org.uk/summary_-_ulv_enterprise.pdf[accessed:24-jan-2016] http://claspinfo.org/procuring-heat-networks-june2015[accessed:03-mar-2016] http://dx.doi.org/10.5278/ijsepm.2014.4.5 http://dx.doi.org/10.5278/ijsepm.2015.6.5 http://dx.doi.org/10.5278/ijsepm.2015.7.3 http://www.poyry.co.uk/sites/www.poyry.uk/files/a_report_providing_a_technical_analysis_and_costing_of_dhnetworks.pdf[accessed:02-mar-2016] appendix: parameter values used in the presented numerical example international journal of sustainable energy planning and management vol. 09 2016 73 romain s. c. lambert, sebastian maier, john w. polak and nilay shah table 4: cost of laying out transmission pipes type pipe size (nominal internal mm) 150 250 350 450 green field cost (£/m) 870 1328 1663 2023 brown field 920 1378 1719 2093 hard urban 1862 2320 2820 3412 hard sub-urban 1383 1841 2257 2741 table 1: summary of sources for used parameters and datasets parameter source maximum pressure drop [27] maximum velocities [27] district heating pipe costs as a function of length and diameter [25] heat losses as a function of pipe diameter [26] gas projection prices [17] table 2: heat losses for varying diameters mains diameters (nominal internal mm) heat losses (w/m) 150 20 200 25 250 28 300 35 350 42 400 49 450 53 table 3: maximum pressure drops and velocity as a function of pipe diameter pipe size (nominal internal mm) maximum allowable pressure drop (pa/m) maximum velocity (m/s) 100 200 2 125 200 2.5 150 200 3 200 200 3 250 200 3.5 300 300 3.5 400 300 3.5 450 300 3.5 remark: these figures 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university 03.1034-4001-1-le.qxd 1. introduction energy systems worldwide have experienced a great degree of change due to the unprecedented deployment of renewables over the last years. in particular, the danish energy system has almost become a symbol for this pursuit of sustainability as the penetration of wind power has been pushed beyond the record level of 30% in 2013 [5]. however, sustainability does not come free of challenges. renewable sources such as wind and solar are characterized by two features that distinguish them from conventional sources of electricity: they are intermittent and only partly predictable. at a power system level, the intermittency of these sources implies that other units in the system must be able to ramp up their production to meet the load at periods when wind and/or solar power are not available, or to ramp down when wind or solar irradiation pick up. similarly, power international journal of sustainable energy planning and management vol. 07 2015 19 production must be planned in advance so that sufficient flexible units are on in order to be able to cope with the partly unpredictable future trajectory of wind and solar power production. among the solutions proposed to alleviate the challenges introduced by renewables in power systems, the integration of the latter with the heat system is a low hanging fruit that is believed to have great potential in denmark [12]. as roughly 60% of the danish houses is connected to urban district heating networks, the heat system can add a significant level of flexibility if managed smartly with the power system. for example, electricity-fueled units (heat pumps, electric immersion boilers) can turn wind power in excess of the demand of electricity into heat that eventually can be stored into hot-water tanks for future use. similarly, the larger inertia of the heat system can be employed to counterbalance the fluctuations of renewable 1 corresponding author e-mail: marco.zugno@gmail.com international journal of sustainable energy planning and management vol. 07 2015 19-36 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts ������� ��� �� ����� ���������������������������� �������� � �� ������ ����������� � � �������� ���� ��� ���� ���� � �������� �� �� ����� ���������������� ������ � ! �� �"#$%!! "��& '� �(�� �� ����& abstract this paper reviews a number of applications of optimization under uncertainty in energy markets resulting from the research project ensymora. a general mathematical formulation applicable to problems of optimization under uncertainty in energy markets is presented. this formulation can be effortlessly adapted to describe different approaches: the deterministic one (usable within a rolling horizon scheme), stochastic programming and robust optimization. the different features of this mathematical formulation are duly interpreted with a view to the energy applications reviewed in this paper: trading for a price-maker wind power producer, management of heat and power systems, operation for retailers in a dynamic-price market. a selection of results shows the viability and appropriateness of the presented stochastic optimization approaches for managing energy systems under uncertainty. keywords: stochastic programming; robust optimization; probabilistic forecasting; energy market; renewable energy url: dx.doi.org/10.5278/ijsepm.2015.7.3 dx.doi.org/10.5278/ijsepm.2015.7.3 20 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts production, thereby providing balancing services to the electricity system. to a large extent, the trade of heat and electricity takes place in short-term markets arranged in the time span between the day preceding the delivery of the commodity and real-time. for example, 70% of the electricity trade in the nordic region takes place in the day-ahead market, elspot, which closes at noon on the day before delivery [15]. similarly, the bulk of heat production in the copenhagen area, i.e., 34 500 tj per year, corresponding to 20% of the total district heating load in denmark, is settled on a day-ahead basis [17]. at the time of closure of these markets, producers must have made a decision on their trades, while market operators must run market clearing procedures to determine the dispatch of the units as well as the prices. obviously, these decisions must be based on the information available at the day-ahead stage, which for uncertain parameters like wind power production or heat demand is a forecast of their future evolution. the aforementioned trends in future energy systems, i.e., increasing uncertainty due to renewables and higher level of integration across systems and markets for different commodities, have implications for the decision-making problems that both utilities and market operators have to face. firstly, decision-making models have to span across different commodities rather than consider them separately. only in this way can the benefits of energy systems integration be reaped. secondly, these optimization models should account for the stochasticity affecting the decisions to be made, since larger shares of renewables introduce greater degrees of uncertainty in the energy system. the research project ensymora produced a number of contributions to the state-of-the-art in decision support models for the energy industry, particularly tailored to the case of denmark. this paper discusses and summarizes five of them. the first contribution is a model to optimize the trading strategy for a large wind power producer that, owing to its size, impacts the market as a price-maker [18]. the second contribution aims to support the day-ahead trading and dispatch processes of utilities managing combined heat & power (chp) plants [20]. related to this topic is [14], where a day-ahead scheduling model is used for evaluating the economic value of heat pumps and electric boilers in the danish energy system. furthermore, [8] studies the possibility of operating chp units and wind farms as a portfolio to reduce their joint balancing cost. finally, [19] considers the market strategy for a retailer operating in a real-time pricing environment. the red thread behind these contributions is the increasing role of optimization under uncertainty due to the real-time uncertainty in forecasts of wind power generation, prices, load, etc., in the management of sustainable energy systems. in particular, three methods to deal with uncertainties in optimization are employed. in [8], we consider the use of a deterministic optimization model within a rolling-horizon framework. furthermore, stochastic programming [3] is used in [18, 14, 19]. finally, [20] employs robust optimization [1]. in section 2 of this paper, we introduce the general formulation of a problem of optimization under uncertainty and describe how it can be tackled with a deterministic model in a rolling-horizon framework, using stochastic programming or robust optimization. the various types of forecasts needed as input for each of the aforementioned frameworks are described in section 3. then, section 4 discusses the results obtained in some applications of these techniques to energy markets. finally, conclusions are drawn in section 5. 2. mathematical framework for economic problems in energy the classical model for optimization under uncertainty in energy markets can be written as (1a) (1b) (1c) the subscript ω indicates that the linear cost coefficient q in eq. (1a) and the right-hand-side h in eq. (1c) are stochastic, i.e., functions of the realization of a random variable ω ∈ ω. we assume in the following that an appropriate probability space (ω, f, p) is defined. in optimization problems within the energy market domain, the objective is often aligned with the minimization of cost (possibly minus a term representing revenues) subject to the fulfillment of balance constraints that enforce that supply and demand for a commodity be equal. with this in mind, the tx wy+ ≥ ∀ ∈ ω ω ω ωh , . s t. . ,ax ≥ b min c q y x y . , ω � �mx + { }ω ω ω stochasticity in the cost coefficient qω reflects the uncertainty in the future realization of market prices. furthermore, the uncertainty in the future demand for a commodity (heat or power) or in production (e.g., from a wind farm) results in stochastic right-hand side hω for the balance constraints. the variable vector x indicates the so-called first-stage variables. because of the time structure of the decisionmaking problem, the decision on the value of these variables is to be made in advance and, thus, in the face of uncertainty. indeed, only a statistical description (forecast) of the probability distribution of the stochastic parameters qω and hω is available at this stage, but not their true realization. typically, in energy problems this type of variables include day-ahead offers and decisions on the on/off status of slow units, which cannot be changed in real-time, or nominal values (pre-dispatch) for the power and/or heat output of units. on the contrary, decisions yω can be adjusted when the uncertainty in the problem unfolds. these variables are referred to as recourse variables. in energy-related problems, they typically represent the real-time redispatch of flexible units or the purchase or sale of electricity in the balancing market. under the definitions above, the product q�ωyω indicates the cost of recourse decisions. as this cost is a function of the uncertainty, ω, it is stochastic itself. it is up to the modeler to decide which operator mω{.} related to the random variable ω is to be included in the objective function. typical choices are the expectation or an appropriate risk measure [13]. the vector x can be a collection [x�1 ... x � m] � of m firststage decision variables. as energy markets often require producers, retailers and operators to make day-ahead decisions for each hour of the following day, optimization problems typically span multiple time periods. this implies that each decision variable xm is itself a vector including a decision for each time period [xm1 xm2 . . . xmt]�. similarly, let us assume there are n types of recourse decisions to be made for each of the t time periods. according to these definitions, model (1) is well defined if: (2a) (2b) (2c)t w∈ ∈ ω → × ×r r rl mt l nt l2 2 2, , : .h ω a ∈ ∈×r rl mt l1 1, ,b c x, , , : ,∈ ω →r rmt ntq y ω ω unless further assumptions on the cardinality of ω are made, eq. (1c) might involve an infinite number of constraints. similarly, the applications of the operator mω{.} on the recourse cost in eq. (1a) might involve an infinite number of function evaluations. in the remainder of this section, we review strategies for approximating the solution to this (otherwise intractable) problem and describe some of their applications to energy market problems. 2.1. deterministic optimization within rollinghorizon scheme a deterministic solution to the problem of optimization under uncertainty (1) can be found by simply replacing the uncertain variables with a deterministic quantity related to the uncertainty, e.g., a point forecast. finding the deterministic solution is perhaps the easiest, though roughest, approximation to a stochastic optimization problem. typically, the conditional forecast expectation, see section 3.1, is the chosen point prediction [4]: (3a) (3b) (3c) note that the recourse variables lose their adaptive nature in this formulation, as yω is replaced by y� ∈ �ντ, which represents the response of the system when the realization of the uncertainty is equal to its deterministic counterpart (which in this case is the expectation). as a trade-off for the simplicity of deterministic problem (3), there is in general no guaranteed bound on the degree of suboptimality introduced by using the deterministic solution instead of the “true“ solution to (1). in fact, even the feasibility of the deterministic solution under all the realizations of the uncertainty with a non-negligible probability cannot be guaranteed. in energy markets, the risk of infeasibility may be not that problematic, as a deficit in electricity or heat production can be covered by a purchase in a real-time market, the start-up of an expensive backup unit or as, a last resort, the curtailment of load. however, these “emergency“ decisions involve high costs (either monetary or in terms of corporate image) that quickly degrade the overall performance of the deterministic decision. t wyx h+ ≥ { }� eω ω . s t b. . ,ax ≥ min c q y x y, . � �� �x + { }eω ω international journal of sustainable energy planning and management vol. 07 2015 21 marco zugno, juan miguel morales and henrik madsen an approach to reduce the suboptimality of the deterministic decision consists in solving a sequence of deterministic problems (3) in a rolling horizon fashion. when the first problem in the sequence is solved, only the part of the solution corresponding to the first time period in the horizon, i.e., xm1, m and y�n1, n is implemented in practice. the horizon is then rolled one step forward by updating the variables x and y as well as the coefficients c, �ω {qω} and �ω {hω}, before solving a new version of optimization problem (3). note that rolling one step forward includes an update of the point forecasts used for the stochastic variables qω and hω. the described rolling-horizon approach falls within the domain of deterministic model predictive control [10]. it is better suited to problems of control of the output of a system in real-time than for market operation, as the former requires frequent updates (e.g., hourly) of the control strategy, while market offering or clearing problems are faced on a daily basis and do not allow for an update of the chosen strategy within the same trading floor. in [8], we determine the real-time production strategy for a portfolio consisting of a wind farm and a combined heat and power (chp) plant using the approach described in this section. 2.2. stochastic programming the stochastic programming approach to (1) is based on a discretization of the uncertainty space ω. by doing that, we approximate the probability distribution with a discrete number of scenarios ω1, . . . , ωs, see section 3.3, with associated probability pω1, . . . , pωs,. the optimization problem resulting from this discretization is: (4a) (4b) (4c) two important differences with respect to model (1) render its stochastic programming version (4) tractable. the first one is the fact that the recourse decision yω need to be determined only at a finite number (s) of points ωs . the second difference is that constraint (4c) tx wy+ ≥ = ωs s sh sω , ,..., .1 s t. .ax ≥ b, min c q y. ,x y s s s s s s p ω ω ω ω � �x + = ∑ 1 ∀∀ need to hold for a finite number of realizations of the uncertainty ω. in contrast, observe that model (1) requires the determination of the whole recourse functions : yω : ω → �nt and includes an infinite number of instances of constraint (1c). moreover, observe that in (4) we implicitly made the assumption that the modeler wishes to include the expected value of the recourse cost in place of the operator mω{ }, which in the case of discrete uncertainty boils down to a sum weighted by the scenario probability. however, this is not the only description of the uncertainty allowed in stochastic programming. for example, the use of conditional value at risk (cvar) [16] would also result in tractable optimization problems, see [13]. while the deterministic formulation (3) has mt + nt variables and l1 + l2 constraints, the size of stochastic programming model (4) is (mt + snt) × (l1 + sl2). despite being tractable, (4) can quickly grow too large if an excessive number of scenarios, s, is chosen. 2.3. robust optimization with linear decision rules in this section, we consider a special case of robust optimization, i.e., where the recourse decision yω is an affine function of the uncertainty. we make the following assumptions: a1 the uncertain parameters qω, hω depend linearly on the random variable, i.e., qω = qω, hω = hω. a2 we require eq. (1c) be valid ω ∈ u, where u is a bounded polyhedral set described by the set of r linear inequalities dω ≥ d. note that u is a subset of ω that is chosen by the modeler depending on the desired level of conservativeness of the solution. a3 the recourse decision yω is restricted to be an affine function of the uncertainty, i.e., yω= yω. note that a1 implies no loss of generality, as one could simply redefine the probability space on the new variables (qω, hω). then, uncertain parameters and random variables would coincide, hence the linear dependence between them would be trivial. assumption a2 is a modeling assumption needed for tractability. note that the modeler can freely choose the polyhedral set u. typically, the larger u, the more conservative the solution, as feasibility must be ensured for a larger set of realizations of the uncertainty. different types of closed convex sets, e.g., elliptical, can be chosen without destroying tractability; we refer the interested reader to [1]. finally, a3 is also needed for tractability. ∀ 22 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts under the assumptions above, model (1) can be reformulated in a robust optimization framework as follows: (5a) (5b) (5c) note that constraint (5c) can be reinterpreted in the following equivalent reformulations: (6) where the min operator in the latter inequality works rowwise. replacing the inequality on the right side of eq. (6) into (5), after some reformulations we can obtain: (7a) (7b) (7c) (7d) (7e) where σω is the variance-covariance matrix of ω. in order to get eq. (7a) from (5a), we performed the following substitutions: (8) e e e ω ω ω ω ω ω ω ωω � � � � � � q y q y q y { } = { }{ } = { }{ } = tr tr tr qq y q y � � � � e ω ω ω ωω ω { }{ } = + { } { }⎛⎝⎜⎜⎜ ⎞ ⎠ ⎟⎟⎟ ⎧ ⎨tr ∑ e e ⎪⎪⎪ ⎩⎪⎪ ⎫ ⎬ ⎪⎪ ⎭⎪⎪ , λ ∈ ≥ ×r 0 2 r l , d� � λ = −( )wy h , λ�d ≥ −tx, s t. .ax ≥ b, min c tr. , ,x y q y λ � � � x + { } { }⎛⎝⎜⎜⎜ ⎞ ⎠ ⎟⎟⎟ ⎧ ⎨ ⎪⎪ ∑ ω e eω ω ⎩⎩⎪⎪ ⎫ ⎬ ⎪⎪ ⎭⎪⎪ wy h tx wy h tx −( ) ≥ − ∀ ∈ ⇔ −( ){ } ≥ − ∈ ω ω ω ω , min , u u tx wy h+ ≥ ∀ ∈ω ω ω, .u s t. .ax ≥ b, min c x y . , � � �x + { }eω ω ωq y where we exploited respectively: the fact that a 1 × 1 matrix is equal to its trace, the invariance of the trace operator to cyclic permutations of the arguments, the linearity of expectation and the definition of variancecovariance matrix. constraints (7c)-(7e) are equivalent representations of the right-hand side of eq. (6) based on linear duality [9]. we refer to [20] for further details on the latter transformation, whose derivation is rather lengthy. 2.4. bilevel programming bilevel programming can be employed to model different decision-making problems in energy markets [7]. in particular, we review here its applications to the offering problem of a price-maker wind power producer [18] and to model the stackelberg game between retailers and residential consumers in a dynamic-price environment [19]. as both problems are subject to uncertainty, they can be cast in the framework (1). in view of its large capacity, a price-maker agent can exercise a significant impact on the market price through its offering strategy. hence, the market-clearing process conducted by the market operator has to be included within the optimization model to determine the optimal offer. similarly, the real-time signal set by a retailer impacts the consumption plan from price-responsive consumers. the determination of the latter is an optimization problem in itself that has to be included within the retailer pricing problem. in their most minimal formulation, the marketclearing problem for a market operator or the schedule determination for a consumer can be casted as linear programming problems (9a) (9b) in a market-clearing problem, u represents the quantities to be dispatched, i.e., production and consumption for each market player, and cl the marginal cost or benefit indicated in the offer or bid submitted by the corresponding agent. constraints (9b) include a number of physical limits of the system (e.g., transmission capacity), market limits (e.g., dispatch limits specified in the offers), and balance between s t. . : .a l l u b≥ μ min u .c u l � international journal of sustainable energy planning and management vol. 07 2015 23 marco zugno, juan miguel morales and henrik madsen supply and demand at each node. constraints of the latter type are particularly important, as the associated dual variables, indicated in (11) with μ, can be interpreted as the electricity price at the corresponding location of the grid. we refer the reader to [13] for a more detailed description of the electricity marketclearing process. in the consumer problem with dynamic pricing, u represents the consumption along with some states of the system (e.g., temperature in the case of a heating system). the cost coefficient cl includes the price sequence sent by the retailer (multiplying consumption in the objective function) and possibly a penalty for states exceeding a comfort zone. constraints (9b) include dynamic equations linking consumption and states as well as physical restrictions. since problem (9) is linear, the following karushkuhn-tucker (kkt) conditions are necessary and sufficient for optimality [9]: (10a) (10b) note that kkt conditions are non-linear, as the ⊥ operator implies that either the left or the right-hand-side are equal to zero. hence, the ⊥ condition in eq. (10a) could be replaced by μ° (alu−bl) = 0, where ° is the pairwise product between corresponding vector elements. a reformulation that allows to linearize the ⊥ condition is proposed in [6]. the result is a reformulation of eqs. (10) as a set of linear inequalities involving additional binary variables. as a result of the observations above, we cast the trading problem of a price-maker wind power producer as a bilevel programming problem. in general terms, it can be formulated as follows: (11a) (11b) (11c)tx wy+ ≥ ∀ ∈ω ω ωh , ,ω s t. .ax ≥ b, min q yx u q c x y , , , . ω ω ω ω ω ω � �m+ { } a l l c�μ = . 0 0≤ − ≥μ ⊥ a u b ll , (11d) (11e) note that the optimality conditions for the balancingmarket clearing, eqs. (11d)-(11e) control how the offer in the balancing market (included in the recourse vector yω) affects the balancing market price qω. indeed, such constraints link yω and qω. the primal constraints for the balancing-market clearing, i.e., the conditions on the right of the ⊥ operator in eq. (11d), are slightly different from the one in eq. (10a). the presence of the yω variable in eq. (11d) captures the effect of the offer of the wind power producer at the balancing market stage on the clearing of the same market. thus, (11) models the price-maker behavior of the wind power producer on the balancing market. note that the balancing market offer of the wind power producer is in turn influenced by its day-ahead offer x through eq. (11c). optimization model (11) is nonlinear, due to the multiplication between decision variables qω and yω in eq. (11a) some additional reformulations allow us to transform it into a mixed-integer linear problem (milp). we refer to [18] for the details on this linearization. similarly, the problem of determining the optimal market and pricing strategy for a retailer in a dynamic pricing environment [19] can be cast as the following bilevel programming problem: (12a) (12b) (12c) (12d) (12e) the retailer (upper-level problem) influences the consumers (lower-level) by deciding the price signal πω. a l �q ω ω π= ∀ ∈, .ω ω 0 0≤ − ≥ ∀ ∈q u b lω ω ⊥ a l , ,ω ω tx wy+ + ≥ ∀ ∈ ω ω ω vu h , ,ω ω s t. .ax ≥ b, min u yx c x y , ,ω ω ω ω ω ω ω π π � � �m+ −{ }q a l �q c lω = ∀ ∈, .ω ω 0 0≤ − −( ) ≥ ∀ ∈q b b yl l wω ω ω⊥ alu , ,ω 24 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts in turn, the consumers decide their consumption plan uω, which enters the upper-level constraints (12c). among other restrictions, eq. (12c) include a balance condition between the electricity purchased in the dayahead market, x, and in the balancing market, yω. additional reformulations are needed, see [19], to get rid of the nonlinearity given by the revenue obtained for sales to consumers, in the objective function in eq. (12a). 3. forecasting in this section, we review the different types of forecasts needed in the formulations of optimization under uncertainty described in section 2. 3.1. point forecast point forecasts are the simplest type of prediction, as they aim at forecasting a single value describing a certain characteristic of the probability density function of a random variable. arguably, the most widely used point prediction is the conditional forecast expectation. let us assume that, at time t, we are interested in the forecast of the expectation of random variable hωt + k, i.e., we are forecasting k-steps ahead or with lead-time k. we define this forecast as: (13) such a forecast is conditional on the information γt available at time t, which is in turn used to identify a suitable mathematical model g for the stochastic process hω and to determine an estimate θ� of the parameters of this model. given the assumptions on model and parameters, h�t+k|t is a k-step ahead prediction (issued at time t) of the expected value of random variable hω, t + k . an example of conditional forecast expectation of the production of a wind farm with leadtimes in the range between 1 and 24 hours is shown in figure 1. hourly forecast expectations are plotted along with the corresponding observations (i.e., the values measured in reality). as one can see, the forecast expectation overestimates wind power production during the first part of the day (roughly until hour 10), while it mostly underestimates it during the second part of the day. another type of point forecast is the conditional quantile forecast. such a forecast aims at predicting a specific quantile of the distribution of a random h h g t k t t k t � � + + = { }| , ,| ,eω ω γ θ π ω ω �u , variable. assuming the same issue-time and target of the expected-value forecast in eq. (13), we can define the forecast α-quantile, h�αt+k|t’ by requiring that the following condition be met: (14) according to this condition, the probability that hω, t+k is not larger than h�αt+k|t ’ given model g and the estimated parameter set θ� , is equal to α. note that this coincides with the definition of quantile for a continuous probability distribution. an important case of quantile forecast is the conditional median forecast, which is defined by setting α = 0.5 in eq. (14). despite providing a rather limited picture of the distribution of a random variable, point forecasts are widely used in decision-making as a result of their relative simplicity. for instance, the deterministic optimization framework introduced in section 2.1 is based on the use of point forecasts such as the conditional forecast mean or median. 3.2. probabilistic forecast decision-makers may need more information on the distribution of a random variable than the single value provided by a point forecast. for example, they might be interested not only in knowing the expected value of an uncertain parameter at a point in time, but also on the uncertainty associated with such a point forecast. interval and density forecasts provide this type of information. an interval forecast with confidence β provides the decision-maker with a range where the random variable is forecast to take values in with probability β. interval p h h g a t k t k t a tω ω γ , | , , . + + ≤{ } =� �θ international journal of sustainable energy planning and management vol. 07 2015 25 marco zugno, juan miguel morales and henrik madsen time (h) 1 4 8 12 16 20 24 n o rm a liz e d p o w e r 0 0.2 0.4 0.6 0.8 1 forecast expectation observations figure 1: example of day-ahead conditional forecast expectation along with the realized trajectory of wind power production. forecasts can be obtained by pairing quantile forecasts, defined by eq. (14), in the following manner: (15) note that there are multiple definitions for an interval forecast with a given confidence. for example, an interval forecast with confidence β = 0.9 could span both the quantile ranges 0–0.9 as well as 0.05–0.95. in the latter case, the interval is centered about the median, i.e., there is an equal probability of the random variable falling short or long of the median. the definition in eq. (15) is for intervals centered about the median. interval forecasts often find an application in robust optimization models, see section 2.3. indeed, the definition of the uncertainty set u may include (among others) constraints enforcing that uncertain parameters be included within an interval with large confidence β. density forecasts give a full picture of the probability density function of a random variable. essentially, they consist of a collection of interval forecasts issued with different confidence levels. naturally, the finer the resolution in terms of confidence level, the more precise the information on the probability density function. in figure 2, the example of forecast of wind power production in the previous section is enriched with the density forecast for the whole forecast horizon. probabilistic forecasts provide information on the uncertainty of a point forecast. they can be seen as a snapshot of a random process at a specific point in time in the future. indeed, they model the probability density function of a random process at a given point in time, but they provide no information on the time-dependence structure of the forecast error. scenarios fill in this last piece of information. 3.3. scenarios many uncertain parameters in optimization problems are actually stochastic processes with non-negligible dynamic properties. for example, the forecast errors (i.e., the deviation between observation and the conditional forecast expectation) for wind power production at consecutive time periods have a significant positive correlation. this implies that, if production at time t+k falls short of the forecast, there is a higher chance that it will also fall short of the forecast at time t+k+1. scenarios provide a framework for modeling the dynamics of a random process. considering the random process hω,t , we define a scenario as a plausible trajectory of this variable during � � �i h h t k t t k t t k t+ = + − + +⎡ ⎣⎢ ⎤ ⎦| | ( )/ | ( )/,β β β1 2 1 2 ⎥⎥ . the time horizon of interest to the decision-maker. considering a range of lead-times between 1 and k, we can define a set of s scenarios as: (16) if a sufficiently large number of scenarios is drawn, the (discrete) probability distribution of the s scenario values, h�st+k|t ’ for any given lead-time k can approximate reasonably well the (continuous) probability density function predicted for the same leadtime by the density forecast described in section 3.2. furthermore, the dynamics of the scenarios should comply with the estimated time-dependence structure (autocorrelation) of the random process hω,t. figure 3 illustrates 10 scenarios simulating wind power production during the next 24 hours, along with the conditional forecast expectation and the observations already shown in figure 1. notably, the forecast errors for each scenario show positive autocorrelation, as scenarios that fall long of the forecast expectation at a given time tend to fall long also at neighboring time periods (and scenarios falling short tend to remain short). scenarios are extensively used within multi-stage stochastic programming models of the type introduced in section 2.2. typically, problems of this type are characterized by multiple sources of uncertainty, e.g., the cost qω and the right-hand side hω in model (4). appropriate scenarios for these random variables should be issued so as to account not only for the autocorrelation for each random process, but also for their mutual correlation. we refer the interested reader to [13] for an introduction on the topic. � � � �hs t t s t t s t k t s s h h h= ⎤⎦⎥ ⎡ ⎣⎢ ∀ + + +1 2| , | | ,..., , == 1 2, ,..., .s 26 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts time (h) n o rm a liz e d p o w e r 0 1 4 8 16 2012 24 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 80% confidence 60% confidence 40% confidence 20% confidence observations forecast expectation figure 2: example of dayahead probabilistic forecast of wind power production at various confidence levels, along with its point forecast (expectation) and actual trajectory. 4. applications in this section, we review some applications of the methods described above. section 4.1 deals with the determination of the optimal trading strategy for a pricemaker wind power producer. then, the management of heat and power systems is considered in section 4.2. finally, section 4.3 focuses on market strategies for an electricity retailer participating in a real-time pricing environment. 4.1.trading wind power as a price-maker the problem of trading wind power is addressed in [18]. that work considers a producer whose size is sufficiently large to impact the balancing market prices as a result of its trading strategy. the problem is particularly relevant in denmark, where wind power penetration has already surpassed 30% [5] and few large producers dominate the market. however, its relevance extends to other markets as the installed production capacity from wind (or solar, which could be addressed in a similar fashion) is constantly growing. the stochastic programming approach described in section 2.2 is employed in [18]. realistic scenarios of day-ahead price, wind power production and system demand are used as input to the optimization problem. in turn, the latter outputs an offering curve specifying a given number of volume-price pairs. note that the latter is the specific form in which producers are required to submit their day-ahead market offer to nord pool [15]. as described in section 2.4, the price-maker nature of a market participant can be accounted for by casting the trading problem as a bilevel programming model. in this case, the lower-level problem represents the clearing process of the balancing market. equilibrium conditions of the type of eqs. (11d)–(11e) model how the offer submitted at the day-ahead market, the actual wind power production and the deviation of the other market players affect the balancing market price. since the lower-level problem involves stochastic parameters (wind power production and deviation from other market participants), there is an instance of such equilibrium conditions per scenario. table 1 summarizes the structure of the optimization problem. for each stage, it lists the variables representing the decisions to be made and the uncertainty that is revealed after making those decisions. figure 4 illustrates the optimization model with a diagram. forecast scenarios of day-ahead prices, wind power production and system deviation are inputs. the output of the model are the quantity offers to be submitted at the day-ahead and balancing markets. the feedback line from the balancing market represents that the determination of the clearing prices for this market is endogenous in the optimization model, so that the pricemaker behavior of the producer can be taken into account. financial results obtained with the strategic offering model described above are reported and compared to the international journal of sustainable energy planning and management vol. 07 2015 27 marco zugno, juan miguel morales and henrik madsen time (h) n o rm a liz e d p o w e r 0 1 4 8 12 16 20 24 0.2 0.4 0.6 0.8 1 scenarios forecast expectation observations figure 3: example of scenarios modeling wind power production forthe next day. table 1: stages, decisions and uncertainty in the optimization problem modeling the trading problem for a price-maker wind power producer [18]. stage decision variables uncertainty revealed after stage 1) day-ahead price-offer pairs • day-ahead price • wind power production • aggregate deviation from other players 2) balancing • volume purchased/sold (upper level problem) • balancing market dispatch (lower level problem) • balancing market price (lower level problem) ones obtained with simpler deterministic offers in [18]. three price-inelastic strategies, where a certain quantity is offered at any price level, are chosen as benchmarks. in the first one, the day-ahead offer is the conditional mean forecast of wind power production. this implies that the difference between the actual production from the wind farm and the day-ahead conditional mean forecast is to be sold (or purchased, if the production is smaller than the forecast) in the balancing market. note that balancing market prices are in general different from day-ahead prices, so this strategy is not necessarily optimal. the second strategy consists in offering the conditional median forecast in the day-ahead market, and then settling the difference from the actual production in the balancing market. the last strategy consists in selling all the production at the balancing stage (i.e., submitting a zero offer in the day-ahead market). a base case is considered first where the wind power producer‘s penetration in the balancing market is 20% and there is a small positive correlation between wind power production and the deviation from the other wind power producers. results show that the strategic offering model outperforms the benchmarks by roughly 1.5% (zero offer) and 3% (mean and median offers). furthermore, the degree of improvement provided by the strategic offer is analyzed at different levels of penetration of the wind power producer. figure 5 is constructed from simulation results published in [18]. it illustrates the percentage improvement in profits obtained when switching from the simpler trading strategies described in the fourth paragraph of this section to the proposed price-maker trading strategy. it shows that offering no electricity at the day-ahead market is nearly optimal as long as the producer is small. however, the performance of this strategy deteriorates as the size of the producer increases. on the contrary, the degree of suboptimality of the strategies where forecast mean and median production are offered at the day-ahead market tends to drop as the size of the producer gets larger. the impact of correlation between wind power production and the aggregate net system deviation is also assessed in [18]. figure 6 illustrates results from the same paper. it emphasizes that the suboptimality of the zero-offer is a decreasing function of this correlation. on the contrary, the mean and median offers perform comparatively better when this correlation is negative. 28 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts wind power forecast system deviation forecast optimization day-ahead market balancing market scenarios offer (quantity) offer (quantity) clearing price day-ahead price forecast scenarios scenarios figure 4: diagram of the optimization model to determine the optimal trading strategy for a price-maker wind power producer in [18]. 10 12.5 15 17.5 20 22.5 25 0 1 2 3 4 5 6 7 8 wind power penetration (%) p ro fit im p ro ve m e n t (% ) mean median zero figure 5: profit improvement with respect to basic trading strategies at different levels of wind power penetration. 4.2. managing heat and power systems owners of heat and power producing units typically have to come up with production plans with a certain advance in time to the actual delivery of these commodities into the respective grids. this is partly caused by the fact that the preferred floor in which electricity is traded is the day-ahead market. in this section, we review some applications of stochastic optimization to the management of heat and power systems. 4.2.1. unit commitment and dispatch for heat and power systems because of the time structure of electricity and heat markets, heat and power production units have to be predispatched on a day-ahead basis. furthermore, these units may need some time to turn on and off. at the time of making the dispatch decision, important parameters like the actual heat demand or power prices are unknown. hence, this optimization problem calls for a stochastic approach. a robust optimization approach with the use of linear decision rules along the lines of section 2.3 is proposed in [20]. in this approach, redispatch decisions are made affine functions of the uncertain heat demand. a suitable budget uncertainty set [2] specifies intervals for the maximum deviation of heat demand at each time period, as well as a limit for the total deviation over the optimization horizon. the conditional expectation of the power price is also given as input to the optimization model, along with its correlation with heat demand. the optimization model outputs the plan for the on/off status of the units as well as for heat and power production. table 2 sketches the structure of the optimization problem. figure 7 illustrates the optimization model with a diagram. point forecast of day-ahead power prices, heat demand as well as uncertainty set for the latter and their correlation are inputs to the model. the output of the model are the unit-commitment and heat dispatch for day-ahead scheduling of the heat network, as well as offers to the day-ahead and balancing power markets. the work in [20] establishes the viability of the robust optimization approach with linear decision rules for this type of problems by showing tractability in a representative instance of the problem, including two chp units, an expensive heat-only unit as backup and a heat storage. the presence of storage renders the approach especially interesting, as it allows to consider a large number of stages (24 hourly periods in the case of [20]) without having to give up on the nonanticipativity of the solution, on the contrary of stochastic programming. in the illustrative example in [20], the storage appears to be the unit that is used the most to guarantee the instantaneous heat balance. since this is not a production unit, the chp plants contribute by filling up the storage after deviations have taken place. furthermore, the example shows that extraction chp units may increase heat imbalance when the correlation between heat demand and power price is positive. this occurs because when a unit of this type is running at its international journal of sustainable energy planning and management vol. 07 2015 29 marco zugno, juan miguel morales and henrik madsen 0.7 0.5 0.3 0.1 0.1 0.3 0.5 0.7 0 2 4 6 8 10 demand−wind correlation p ro fit im p ro ve m e n t (% ) mean median zero figure 6: profit improvement with respect to basic trading strategies at different levels of correlation between wind power and real-time deviation of power demand. table 2: stages, decisions and uncertainty in the model optimizing the unit commitment and dispatch for a heat and power system [20]. stage decision variables uncertainty revealed after stage 1) day-ahead • unit commitment heat consumption • heat production pre-dispatch • power production pre-dispatch 2) balancing • heat production redispatch electricity price • power production redispatch maximum total production level, an increase in the power output can only be obtained by a proportional drop in heat production. hence, this unit may decrease its heat production when power price and heat demand increase simultaneously. figure 8 shows the ratio between heat output and heat-demand increase for the extraction chp unit according to the linear decision rules in the example in [20]. the negative values indicate decreasing heat output when heat demand increases to allow for a larger power output. as a result, other production or storage units in the system must ramp-up to guarantee heat balance in these cases. 4.2.2 assessment of the economic value of heat pumps and electrical boilers a setup similar to the one in the previous section is considered in [14]. the focus on that paper is to assess the potential for the instalment of heat pumps and electric immersion boilers into the heating system serving the greater copenhagen area. in order to do that, realistic technical data for the units included in the chp plant amagervaerket are employed along with actual realizations of heat and electricity prices. the economic value of heat pumps and electric boilers is assessed by simulating the day-to-day market operation of a heat and power system. this includes decisions on unit commitment, pre-dispatch of heat and day-ahead trade of electricity, and the heat redispatch in real-time. this operational model is built along the principles of stochastic programming described in section 2.2. table 3 sketches the structure of the optimization model. scenarios modeling the stochastic parameters (power prices, heat demand) are generated using time series models [11]. the simulation of the system operation spans four representative weeks, from which yearly financial results are extrapolated. figure 9 illustrates the optimization model with a diagram. scenarios of day-ahead power prices and heat demand are inputs to the model. the output of the model are the unit commitment and heat dispatch for day-ahead scheduling of the heat network, offers to the day-ahead power markets, and the updated unit-commitment and redispatch to cope with the real-time need for heat. the simulations performed in [14] show that the financial improvement obtained by the use of a stochastic model instead of a deterministic one, i.e., the value of the stochastic solution, varies between around 0.5% up to above 17%, depending on time of year. the highest improvement is obtained during summer, where the dispatch of the system is less flexible as the heat pump and electrical boiler are both turned off. fall and spring trail with an improvement of about 1.5%, while the smallest figure is obtained during winter. another interesting result is that the value of the stochastic 30 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts optimization day-ahead heat market day-ahead power market unit-commitment + dispatch offer (quantity) offer (quantity) day-ahead power price forecast point forecast + uncertainty set point forecast correlation balancing power market heat demand forecast figure 7: diagram of the model optimizing the unit commitment and dispatch for a heat and power system [20]. time (h) k q ( m w h ) -40 -30 -20 -10 0 5 10 15 20 10 20 figure 8: ratio between heat output and heat-demand increase for an extraction chp unit dictated by the linear decision rules in the example in [20]. solution is highly influenced by the installed capacity of these units. indeed, as these units provide flexibility, they render the deterministic solution less and less suboptimal. hence, the authors argue for the importance of stochastic models when making investment decisions. moreover, [14] shows that additional benefits between €3 m and € 4.5 m can be obtained by installing a heat pump and electric boiler of reasonable size. however, the yearly benefits from these units could increase by as much as €7.3 m in a future scenario with lower electricity prices (with an average decrease of €6.7/mwh with respect to the current price level), which would imply cheaper operation for these units. 4.2.3 portfolio strategies for jointly balancing wind power and chp plants a portfolio consisting of a wind farm and a heat-andpower system is considered in [8]. in that paper, the operation of the portfolio in the balancing market is optimized so as to minimize the cost of its total imbalance, i.e., the deviation between actual production and the day-ahead offer for these units. the problem is of particular relevance to northern europe and specifically to denmark, where cogeneration is believed to have large flexibility potential to support the integration of wind power [12]. the model in [8] represents the operation of the portfolio in the balancing market only. hence, the results (dispatch) of the day-ahead electricity market is considered as an input. the optimization problem is built on the deterministic equivalent and is simulated with a rolling-horizon strategy as described in section 2.1. point forecasts (expected conditional mean values) are used for the uncertain parameters, which include heat demand, wind power production and balancing penalties (i.e., the differences between up-/downregulation prices and the day-ahead price). forecasts are issued with a horizon spanning from 1 to 23 hours ahead, since the time horizon for the optimization model includes 24 hourly time periods. the realization of heat demand and wind power production during the hour of operation is assumed to be known. figure 10 illustrates the optimization model with a diagram. point forecasts of heat demand, balancing market penalties and wind power are inputs to the model along with the dispatch resulting from the day-ahead power market. the output of the model are the updated unit-commitment, the redispatch to cope with the realinternational journal of sustainable energy planning and management vol. 07 2015 31 marco zugno, juan miguel morales and henrik madsen table 3: stages, decisions and uncertainty in the model to assess the value of heat pumps and electric boilers in a heat and power system [14]. stage decision variables uncertainty revealed after stage 1) day-ahead • preliminary unit status • day-ahead price • heat production pre-dispatch • heat demand • day-ahead power offer 2) balancing • final unit status • heat production redispatch • power production redispatch heat demand forecast optimization updated unit-commitment + redispatch heat delivery (real-time) day-ahead power market unit-commitment + dispatch day-ahead power price forecast scenarios scenarios day-ahead heat market offer (quantity) figure 9: diagram of the optimization model used in the assessment of the economic value of heat pumps and electrical boilers in [14]. time need for heat and the corresponding balancing market electricity offer. the model described above is run over a period spanning 10 months in 2012 within a fully operational framework, i.e., with state-of-the-art forecasts of uncertain parameters and actual nord pool market data [15]. the joint management of the heat and power system and the wind farm is compared to the independent operation of these assets. from a financial perspective, operating the system as a portfolio provides an average revenue increase of 0.55% over the simulation period. furthermore, it brings about a reduction of 16.32% in the total volume of imbalances, i.e., involuntary deviations from the day-ahead schedule that are to be settled in the balancing market. note that the latter is an important figure, as it signals that producers prefer to balance their portfolios internally, rather than through the market. those results refer to the case where the operational objective is the maximization of revenues with no account for imbalances. by further imposing that the total imbalance of the portfolio be no larger than the one of the wind farm alone, financial improvement drops to 0.19%. however, imbalances in this case are reduced by 41.31% compared to the independent operation. 4.3 market strategy for a retailer under dynamic pricing the case of a retailer operating in a demand-response environment with dynamic pricing is considered in [19]. in that paper, it is assumed that a retailer purchases all the electricity necessary to supply a group of residential consumers in the wholesale markets. in turn, the consumers purchase electricity from the retailer paying a real-time price chosen by the latter. consumers are assumed to be flexible in their load for heating purposes (e.g., if they are equipped with a heat pump) as long as the temperature in the dwelling is within a given comfort band. the model developed in [19] is a three-stage stochastic programming model with two levels. the upper-level problem consists in the profit maximization for a retailer, while the lower-level ones aims at maximizing the benefit (minus the costs) for the residential consumers. table 4 summarizes the decision variables and the uncertainty unfolding at each stage. the model outputs the market strategy for the retailer in terms of purchase of electricity in the different market floors and of dynamic price signal to be sent to the consumers. figure 11 illustrates the optimization model with a diagram. scenarios of day-ahead and balancing market prices, temperature and inflexible consumption are inputs to the model. the output of the model are the power purchase at the day-ahead market, the purchase/sale at the balancing power market and the price for the flexible consumers. the feedback arrow from the flexible consumers indicates that the power consumption is modeled endogenously through the lower level problem in the optimization model. the illustrative example in [19], among other results, is used to compare the financial performance of the realtime pricing model with deterministic approaches. the 32 international journal of sustainable energy planning and management vol. 07 2015 decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts heat demand forecast optimization updated unit-commitment + offer (quantity) wind power forecast point forecast balancing power market heat delivery (real-time) updated unit-commitment + redispatch day-ahead power market balancing power penalty forecast point forecast point forecast power schedule figure 10: diagram of the optimization model to jointly balance wind power plants and chp units in [8]. first benchmark is the case where the consumer price for electricity is flat, while the second one is a time-of-use pricing scheme where the price is higher when consumption peaks and lower at valley periods. the reported profit improvement ranges from 4.96% against the fixed pricing scheme to 8.93% against the time-ofuse one. such an improvement is boosted by an increase in revenues from consumers (2.47% and 5.68%, respectively) and a reduction in market cost for electricity procurement (−2.75% and −0.97%, respectively). in particular, balancing costs for deviations of total consumption from the electricity purchase in the day-ahead market drop by 13.54% and 5.68%, respectively. 5. conclusion this paper reviews a number of contributions to decisionmaking under uncertainty in energy markets resulting from the project ensymora. from a methodological point of view, the red thread unifying these studies is the use of techniques of optimization under uncertainty and of probabilistic forecasting within decision-making and optimization. the common focus is on problems of interest to future energy systems, including the large-scale deployment of renewables, integration across different energy systems and smart grids. we first give a general formulation that is directly applicable to problems of decision-making under international journal of sustainable energy planning and management vol. 07 2015 33 marco zugno, juan miguel morales and henrik madsen table 4: stages, decisions and uncertainty in the model to determine the optimal market strategy for a retailer in a dynamic price environment [19]. stage decision variables uncertainty revealed after stage 1) day-ahead • day-ahead electricity purchase • day-ahead electricity price • weather-related uncertainty 2) balancing • real-time price charged to end• up-/down-regulation price consumers (upper level problem) • consumption from inflexible load • energy purchased by the consumer (lower level problem) temperature of consumer building (lower level problem) 3) ex-post • purchase/sale at balancing market balancing power price forecast optimization temperature forecast balancing power market day-ahead power market day-ahead power price forecast inflexible demand forecast scenarios scenarios scenarios scenarios residential consumers power purchase power purchase/ sale power price power consumption figure 11: diagram of the optimization model to determine the market strategy for a retailer under dynamic pricing [19]. uncertainty in energy markets. from this general formulation, we show how to derive a deterministic version of a problem of optimization under uncertainty (which can be easily implemented within a rollinghorizon framework in control problems) as well as how to apply stochastic programming and robust optimization. in parallel, we show how various elements in these formulations can be interpreted in different energy-market applications and we introduce the types of forecasts needed to account for uncertainty within these models. the applications reviewed in this paper span the perspectives of a broad range of actors involved in energy markets. the case of a wind power producer trading in two electricity market floors (day-ahead and balancing) is considered in [18]. furthermore, we review decision-making problems on different timescales for owners of combined heat and power (chp) plants. the considered applications include investment analysis [14], optimal day-ahead unit-commitment and dispatch [20] as well as operation in the balancing market [8] as a portfolio with a wind farm. finally, the perspective of an electricity retailer operating in a dynamic-price environment is considered in [19]. a selection of results from the case-studies included in the reviewed papers is presented. these results confirm the viability of different techniques of optimization under uncertainty for decision-making in energy markets with a large fraction of stochastic, and hence partly unpredictable, renewable power production. comparisons with deterministic solutions for these problems show that stochastic methods can bring average financial improvement of a few percentage points in the considered problems. besides being a review-paper, this article can be considered as an introduction to the topics of optimization under uncertainty as well as of modeling and forecasting of stochastic processes. indeed, it includes the basic formulation of an economic optimization problem, and guides the reader through the main solutions to account for uncertainty in the parameters, namely deterministic optimization with rolling-horizon, stochastic programming and robust optimization. the main forecasting concepts and products to be used within these optimization models are also briefly but rigorously reviewed. finally, the reader is presented example results that show the potential of the optimization strategies within decision-making in energy markets. the reader interested in a more complete treatment of these topics is referred to state-ofthe-art textbooks throughout this paper. acknowledgements the work of the authors is partly funded by dsf (det strategiske forskningsra° d) through the 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[17] varmelast.dk. varmeplaner, december 2014. url http://varmelast.dk/da/varmeplaner/varmeplaner. in danish. [18] m. zugno, j. m. morales, p. pinson, and h. madsen. pool strategy of a price-maker wind power producer. ieee transactions on power systems, 28(3):3440–3450, 2013. url http://ieeexplore .ieee.org/xpls/abs _all.jsp?arnumber =6494365. [19] m. zugno, j. m. morales, p. pinson, and h. madsen. a bilevel model for electricity retailers‘ participation in a demand response market environment. energy economics, 36:182–197, 2013. url http://www. sciencedirect.com/ science/article/pii/s0140988312003477. [20] m. zugno, j. m. morales, and h. madsen. robust management of combined heat and power systems via linear decision rules. in 2014 ieee international energy conference (energycon), pages 479-486, dubrovnik, croatia, 2014. url http://iee explore.ieee.org/xpls/abs_all.jsp?arnumber=6850470. international journal of sustainable energy planning and management vol. 07 2015 35 marco zugno, juan miguel morales and henrik madsen http://link.springer.com/book/10.1007%2f978-0-387-74503-9 http://www.pearsonhighered.com/educator/product/predictiv e-control-with-constraints/9780201398236.page http://link.springer.com/book/10.1007%2f978-0-387-74503-9 http://ieeexplore.ieee.org/xpl/articledetails.jsp?arnumber=6582012 http://link.springer.com/book/10.1007%2f978-1-4614-9411-9 http://www.nordpoolspot.com/#/nordic/table, december 2014 http://www.risk.net/journal-of-risk/technical-paper/2161159/optimization-conditional-value-risk http://varmelast.dk/da/varmeplaner/varmeplaner 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice abstract this study of the district heating system of aalborg (denmark) analyses how fiscal instruments affect the extent excess heat recovery helps reduce the carbon footprint of heat. it builds on a supply-and-demand framework and characterizes the changes in excess heat supply with consequential life cycle assessment in reference to one gigajoule distributed. the heat supply curve is defined through ten scenarios, which represent incremental shares of excess heat as the constraints of the said legal instruments are lifted. the heat demand curve follows the end-users’ response to price changes. the most ambitious scenario doubles the amount of excess heat supplied and reduces the heat carbon footprint by 90% compared to current level, for an end-user price increase of 41%. the price increase results from a higher supply of excess heat at a higher price and an unchanged purchase cost from the coal-fired chp plant despite a lower supply. this highlights the necessity of a flexible supplier when the share of recovered excess heat is high. 1. introduction in the 2020 energy strategy of the european commission, the european union (eu) defined specific climate targets to lower ghg emissions and energy use by 20% and increase alternative energy sources by 20% [1]. a series of more stringent targets are soon to be formulated for 2030 and 2050. a suggested way to reach these targets is to reduce the use of fossil fuels and increase the energy efficiency of specific energy pathways. industrial symbiosis (is), a concept defined as the exchange of residual material and energy flows between otherwise unrelated industrial activities within a geographically defined scope [2], is a possible solution for industries and countries to achieve the above-mentioned targets. it is a concept that can potentially improve industrial sustainability and be “an important strategy for lowcarbon development” [3]. international journal of sustainable energy planning and management vol. 14 2017 39 however, the development of is is not without obstacles, as described by various scholars such as harris (2007), lehtoranta et al. (2011) and desrochers (2001) [4–6]. both chertow (2004) and bojsen & ulhøi (2000) present obstacles of economic, legislative, organizational or physical nature that often prevent the full deployment of an is system, if not its emergence at all [2, 7]. for instance, a repressive legal framework can limit incentives for companies to utilize and transform waste materials and excess heat [7]. also, the development of inter-industrial collaborations on residual materials requires time and resources for the participating parties. it is critical for the development of is that firms have an economic drive (i.e. lower transaction costs) and political support (i.e. specific goals for lowering emission levels and promoting closed-loop systems) [8]. however, the literature documenting the impacts of such obstacles on the development of is remains broad and theoretical. to our 1 corresponding author e-mail: sacchi@plan.aau.dk international journal of sustainable energy planning and management vol. 14 2017 39–56 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating !"#$%&'($))*%+ ,'-$&$'."&/0$&0%&"1$'!$#/*21$ !"#$%&'"(&)*+),-$((.(/0)1$-2*%/)3(.4"%5.&60)7"(8529%//$8"):;0)<===)1$-2*%/0)!"('$%> keywords district heating; heat recovery; industrial symbiosis; excess heat; life cycle assessment; url: dx.doi.org/10.5278/ijsepm.2017.14.4 40 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating knowledge, there exist no case studies demonstrating the extent to which such obstacles can prevent is from developing or provide indication on the performance level one could have hoped to see, had they not existed. the relevance of is in reducing emissions of greenhouse gases (ghg), notably through the recovery of excess heat for district heating (dh) purposes, has been recognized by governments and scholars alike [9–11]. heat recovery in the context of dh is understood as the process of retrieving excess heat released by various industrial activities without additional use of energy [10]. the heat is either directly distributed in the dh network for domestic heating purposes or complements the production of a dedicated heat plant. if not recovered, the excess heat usually dissipates into an air or water compartment and is lost. furthermore, academic studies point at the importance of conducting system studies exemplifying the benefits of excess heat recovery [9]. therefore, this study precisely intends to model and describe the influence of legal and economic constraints that prevent the full exploitation of the advantages that is can deliver in terms of carbon footprint reduction. in this case, is is based on the context of excess heat delivery in the receiving dh network of the city of aalborg in denmark. this paper is structured as follows. the next subsection describes the concept of is. section two introduces the case study of aalborg in details. the case is central for this study as it provides a basis for modelling dh supply scenarios with varying shares of excess heat as explained in section 3, namely “description of the method”. section 4 highlights the most relevant results. main conclusions are drawn in section 5, followed by a discussion in the last section. 1.1. industrial symbiosis chertow [12] defines the concept of is as a network of unrelated firms that share diverse resources such as heat, energy, water, waste materials and even information. it results in economic and environmental benefits for the engaged parties as it leads to reduced production and purchase costs while it also decreases the consumption of virgin resources [13]. there exist numerous examples of self-organized is networks, which, taken to a larger scale, are called eco-industrial parks. the cases of kalundborg (denmark), guayama (puerto rico), styria (austria) or rotterdam (the netherlands) are only few of the many successful examples documented in the literature [14]. in kalundborg only, fifty unique synergies take place between the industries in the area. a third of the synergies are concerned with the exchange of water and heat [14]. 2. case study: industrial symbiosis and district heating in the city of aalborg 2.1. aalborg energy strategy the city of aalborg is situated in the region of northern denmark and is part of the municipality of aalborg. the municipality has translated the danish energy ambitions of minimal dependence on non-renewable energy sources into a local strategy for fossil-free heat production. an important message is the emphasis on the need for diversified energy sources which include excess heat from industries, heat pumps, solar and wind power and geothermal energy. one of the short-term goals the strategy contains is the increased use of excess heat in the dh system, delivered at both high and low temperature [15]. there is emphasis on striving for costeffective technologies for sustainable energy production [16]: cost-effectiveness and price for end-users are important factors at the governance level when considering alternative energy sources. 2.2. aalborg is synergies not as known as the is case of kalundborg, the city of aalborg has for the past few years multiplied the cases of inter-industrial collaborations among local companies. figure 1 illustrates the current synergies in aalborg. the names of the public and private stakeholders remain undisclosed. a fair share of the synergies is related to the local portland cement producer. the cement producer is strategically located in the industrial area of aalborg with a direct access to transportation by water and land. the location eases the receiving of waste materials from the coal-fired combined heat and power plant (chp plant), the harbour and other neighbouring activities. most of the exchanges documented cover the processing and exchange of alternative fuels and energy flows. the recovery and exchange of excess heat from industries is one of the main “resources” delivered from industries to the local heat distribution company. some exchanges are constrained in supply by the demand for the primary product they derive from, e.g. the supply of heat from the waste incineration plant is constrained by the supply of municipal solid waste (msw). it is itself constrained by the level of consumption activity of the local households. in practice, however, the import of msw from other regions is always possible. international journal of sustainable energy planning and management vol. 14 2017 41 romain sacchi & yana konstantinova ramsheva as this paper focuses on dh, the following paragraphs detail is synergies in the context of dh. currently, more than 60% of all danish households, both urban and suburban, are connected to the dh grid [17]. in the urban area of aalborg, the dh network supplies 80% all of the building stock heated area [18]. as the figure 2 [19] depicts, the dh grid is sustained by the following suppliers, listed by ascending order of supply priority: • a waste chp plant, that co-produces heat and electricity as a result of the thermal treatment of msw, • the portland cement producer, that co-produces heat as a result of white portland clinker production, • the municipal crematorium and wastewater treatment plant, • the coal-fired chp plant [20], that, when in cogeneration mode, co-produces electricity and other co-products along with the supply of heat, • and several small-scale decentralized natural gas-/biomass-fired heat plants in the outskirt of the city that act as a back-up capacity. the share of excess heat in the dh grid in 2016 represents almost 40% of the net amount of heat distributed. it is mainly provided by the waste treatment plant and the portland cement producer. they deliver a steady amount of heat all year through as the latter is aligned on the supply level of the primary activity they derive from, namely waste volume reduction and white portland clinker. the coal-fired chp plant is the only unconstrained and dedicated heat supplier that covers for the short-term variations in heat demand throughout the year. indeed, while the suppliers of excess heat can vary the amount of heat recovered and supplied through investment in heat recovery equipment, they are not flexible regarding the overall amount of heat produced. hence, the latter is conditioned by the stochiometric requirements of their main activity. in other words, the amount of excess heat produced depends on the demand for cement or the availability of household waste to treat, for the cement producer and the waste chp plant respectively. for that reason, excess heat does not bear any environmental burden since a marginal increase in the meat and bone meal chalk gypsum fly ash cleaned sand dredged sand cooling cement dried sewage sludge coal chp biodiesel production aalborg district heat supply energy and fuel-based exchange material-based exchange upcoming exchange constrained in supply waste water wastewater crematory boiler producer waste chp harbour ship hospital human remains municipal solid waste ethylene glycol current configuration a nim al residues livestock w asteanimal fodder sea food processing cooling equipment market market figure 1: material and energy flow exchanges in the industrial area of aalborg 42 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating heat supply via investment in additional heat recovery does not lead to any noticeable increase of the plant emissions or activity. thus, this study considers excess heat carbon neutral [21] at the margin, as the environmental burden is entirely associated to the primary activity the recovered heat derives from. unlike recovered excess heat, the production of heat at the coal-fired chp plant bears all the environmental burden of the plant activity, as the total emissions largely fluctuate according to the demand for heat, not electricity or other co-products when the plant operates in co-generation mode. as such, any additional amount of excess heat in the network displaces demand for heat from the coal-fired chp plant, which reduces the carbon footprint of a gigajoule (gj) of heat delivered. it helps the city to achieve its long-term commitment of a ghgneutral dh system by 2050, set by the danish government [22]. 2.3. aalborg is constraints a number of academic studies look into the advantages of excess heat recovery and conclude that there are still unexploited benefits [9, 10, 23]. unfortunately, many initiatives to engage in is synergies often find initial investments in infrastructure or transaction costs very high [8]. it is the case notably with large-scale flue gas condensation units needed to enter the market. additionally, according to our knowledge, there is currently no sufficient documentation on the importance of economic profitability in the context of is, apart from a swedish study, where the authors analyse the unexploited potential for excess heat in the context of sweden [24]. in denmark, two national fiscal instruments seem to play a role in the decision of investing in excess heat recovery, both stemming from the heat supply act (lov om varmeforsyning, in danish): a tax on recovered energy (usually passed on to the end-users) as well as a price ceiling principle (or price cap), which limits by law the return on investment for heat recovery infrastructures using the so-called substitution principle. this substitution principle sets a price limit for heat that usually corresponds to the lowest purchase price paid to the average conventional heat supplier of the country, namely largescale coal-fired power plants. the former instrument aims % coal chp cement waste chp boilers crematorium wastewater waste water human remains municipal solid waste aalborg district heat supply current configuration regular heat supply percentage of heat demand fulfillment excess heat recovery contrained supply potential supplier market market nonwoven fabric printers chp 2 % < 1 % < 1 % < 1 % 21 % 17 % 60 % figure 2: district heat suppliers in aalborg in 2016. source: based on [19] international journal of sustainable energy planning and management vol. 14 2017 43 romain sacchi & yana konstantinova ramsheva at avoiding the undesirable production of false excess heat (where the excess heat is purposely produced with the additional use of fuel), while the latter aims at keeping the end-users heat price as low as possible, with the objective to maximize the social and economic welfare of the endusers. the authors consider the latter instrument may lead to a payback time for investment in true excess heat recovery that lays beyond the acceptable time horizon for many private actors in the industrial area of aalborg. a paradoxical situation arises where the different stakeholders are caught between the will of the government to maximize the social wellbeing of the dh recipients by offering heat at the lowest possible price and the long-term environmental agenda of the city to gradually decarbonize the dh system. the authors wish to study the effects of the fiscal instruments set in place by the government destined to enforce the former agenda on the ability of the city to pursue their environmental objectives. in this context, the present study wishes to answer the three following questions: • what is the effect of the price ceiling principle on the environmental performances of the is system at delivering low-carbon dh with the current installed capacity? • to what extent can excess heat recovery help the city fulfil its objective of a ghg-neutral dh system? • what would be the economic impact on the endusers? these questions are answered with reference to the distribution of one gigajoule of heat to the end-user at the margin. 3. description of the method this study applies both qualitative and quantitative research approaches to provide sufficient data and answer the three questions formulated above. this study relies on a supply-and-demand framework for dh in aalborg in 2016. it helps to capture the changes in the environmental footprint of the distributed heat as more excess heat is introduced in the network. it follows a seven-step approach. step 1. the current dh supply — identification of the current heat supply capacity of the system step 2. the current dh demand — collection of data regarding the current demand for heat for the built environment in aalborg step 3. changes in supply of excess heat — cost and energy modelling of different scenarios with varying shares of excess heat in the system step 4. changes in demand for dh — evaluation of the response of the end-users to varying shares of excess heat (via the price elasticity of demand) step 5. identification of the substitution effect on the marginal heat supplier because of a change in demand step 6. market equilibriums — for each scenario, the market equilibrium is calculated step 7. carbon footprint analysis — the changes in the system because of the incremental supply of excess heat are characterized with the help of consequential life cycle assessment (lca) the next sections describe the approaches this study follows to gather the necessary data for each step. 3.1. step 1. the current dh supply on the supply side, the current capacity of individual heat producers (the coal-fired chp plant, the waste treatment plant and the portland cement producer) are modelled based on technology and cost information provided by the ministry of energy, published environmental and financial reports as well as direct communications with company representatives during the spring of 2017. a supplier cut-off criterion of 1% is applied: minor heat suppliers such as the local crematorium, the waste water treatment plant and potential newcomers are excluded as the benefits in terms of results completeness or accuracy would not justify the time spent on modelling them. the coal-fired chp plant and the waste treatment plant illustrate a challenging case of cost allocation (between the production costs of heat and electricity). for the coal-fired chp plant, an additional task was to distinguish the inputs associated to the co-generation mode, as opposed to those associated to the condensation mode, where only electricity is produced. indeed, the environmental report only gives the aggregated annual use of inputs and outputs. hence, with a heat-to-power coefficient of 0.78 (given by the ratio between the heat and electricity nominal power output) and an overall reported conversion efficiency of 91% in co-generation mode, it was possibly to obtain the needed inventory. the v and e allocation method suggested by the ministry of treasure [25] is used to split the investment and maintenance costs as well as the fuel inputs between the co-products, to estimate unitary heat production costs 44 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating for heat and electricity, as depicted in figure 3. the company is free to choose between both v and e allocation methods when reporting fuel use for taxation purpose. since the share of fuel destined to produce electricity is exempt of taxation, in all logic, the reporting energy company chooses the method that allocates as much resources to electricity production as possible. the same logic is followed in the present model. a 5% profit margin is added on top of the production cost to obtain the per-gigajoule purchase price of heat. it is important to note that, although it is needed at this stage to perform a cost allocation to determine unitary production costs, the emissions of the plant are entirely associated to the production of heat in the lca model, as the demand for the latter determines the production of both heat and electricity when in co-generation mode. 3.2. step 2. the current dh needs on the demand side, the current need for heating and the overall heat footprint of each square meter of the built environment in aalborg are calculated based on the method followed by kragh and wittchen (2014) [26] and presented in figure 4. the danish ministry of statistics provides the detailed distribution of the heated area in aalborg in 2016 per building type, heating technology and building age intervals [27]. episcope’s tabula model, a european harmonized model for measuring and comparing building thermal efficiency across types and locations, is used to estimate the current energy footprint per heated square meter for the 300 different building typologies in aalborg [28]. pre-existing danish building typologies in episcope were adapted to the context of aalborg, under the assumption that the danish building stock is homogenous enough to do so. some parameters were adjusted to the context of aalborg, such as weatherrelated parameters. additional building typologies were created on top of those existing in the episcope database. presumably, reducing the complexity and variety of heat transfers of the whole building stock in aalborg down to a few dozens of parameters re-arranged into 300 building typologies is done at the expense of accuracy. this is confirmed when the overall heating demand obtained overestimates the real reported heating demand for 2016 by 10%. nevertheless, the authors believe it provides a solid base for estimating the price elasticity of demand discussed in the next sections. annual financial reports annual environmental reports technology data catalogue for energy plants (energinet) investment fixed and var. operation costs fixes and var. maintenance costs mass and energy balance allocation of total production cost and emissions unitary production cost and emissions figure 3: cross checking of data sources for the approximation of unitary cost and emissions for heat international journal of sustainable energy planning and management vol. 14 2017 45 romain sacchi & yana konstantinova ramsheva 3.3. step 3. changes in supply of excess heat it is hypothesized in the ‘introduction’ section that the current legislative framework hinders the recovery of additional excess heat in the dh system of aalborg. as confirmed through written and face-to-face communications with the current excess heat suppliers [29–31], there is a current price ceiling on heat recovery which strongly limits the overall profitability of heat recovery operations. thus, it does not allow a payback time short enough for the present investors. in this study, such constraint is lifted to deduct its effect. a triangulation method is used to ensure the validity of the data and the conclusions drawn upon it [32]. first, individual semi-structured interviews with existing excess heat suppliers are conducted. they allow to estimate potential supply of additional excess heat. additional supply capacity from existing suppliers is mainly achieved by means of investment in: • the extraction of latent heat from the condensation contained in the flue gases, • the enhanced extraction of latent heat from the flue gases below the dew point with marine scrubbers, further aided by large-scale heat pumps, • the recovery of radiative heat on rotary kilns. second, the financial investments required for retrieving the additional excess heat in question are estimated, completed by the ministry of energy’s technology data for energy plants documentation [33]. with knowledge on the potential additional heat supply, the associated financial investment and the acceptable investment payback time of the suppliers, an excess heat supply curve in relation to the price level offered to the different suppliers is obtained. the heat supply curve is defined throughout a total of 10 scenarios presented in table 1. all scenarios supply the demanded amount of heat in 2016 of 6.715 tj (minus the demand change because of the price elasticity of demand described in the next section), in addition to a 17.5% network loss. they are listed with an incremental share of excess heat, to draw a supply curve for excess heat. • scenario 0 corresponds to a supply mix without the presence of excess heat, but only the coalfired chp plant; • scenario 1 adds the heat supply from the smallscale chp plants located at the outskirt of the city, i.e. biomass and natural gas heat plants; • scenario 2 includes the excess heat delivery from the waste treatment plant; • scenario 3 adds excess heat from one of the recovery units located at the cement factory; • scenario 4 adds a second heat recovery unit located at the cement factory and represents the country denmark denmark denmark denmark denmark age interval 20112007-2010 1999-2006 1979-1998 1973-1978 kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year kwh/m2/year single family house terraced house building ... ... ... ... ... ... ... ... ... ... ... ... age interval district heat demand aalborg aalborg aalborg aalborg aalborg 2010-2014 2005-2009 2000-2004 1995-1999 1990-1994 kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year kwh/year ... ... ... ... ... ... ... ... ... ... ... single family house terraced house building ... aalborg-specific parameters adjusted heating degree-days average number of storeys per building type age interval: 1995-1999 aalborg district heating gas boiler biomass boiler electrical appliances age interval: 2000-2004 aalborg district heating gas boiler biomass boiler electrical appliances age interval: 2005-2009 aalborg district heating gas boiler biomass boiler electrical appliances single family house age interval: 2010-2014 aalborg district heating gas boiler ... m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 m2 biomass boiler terraced house buildings public buildings sport facilities ... electrical appliances figure 4: illustration of the method followed to define the demand for district heat in aalborg [27, 28] 46 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating t ab le 1 : e xc es s he at s up pl ie rs m ix f or e ac h of t he 1 0 sc en ar io s sc en . sc en . sc en . sc en . sc en . 4 sc en . sc en . sc en . sc en . sc en . su pp lie r d es cr ip ti on 0 1 2 3 (c ur re nt ) 5 6 7 8 9 c oa l-f ir ed c h p pl an t • c oa lfi re d c h p p la nt x x x x x x x x x x • h ea t p ow er o ut pu t o f 42 0 m w a t 9 0° c • l h v o f co al : 2 3 g j/ t • 85 % n et e ff ic ie nc y ra te in co -g en er at io n m od e in 2 01 6 (9 1% g ro ss e ff ic ie nc y ra te ) • 0. 78 g j of e le ct ri ci ty c opr od uc ed pe r g j of h ea t d el iv er ed • a nn ua l o pe ra tin g tim e: 8 76 0 ho ur s o ut sk ir t c h p pl an ts s m al lsc al e bi om as s an d na tu ra l g as h ea t p la nt s. x x x x x x x x x w as te c h p pl an t • 94 % e ff ic ie nc y (h ea t a nd e le ct ri ci ty ) x x x x x x x x • l h v o f m s w : a ro un d 11 g j/ t • p ow er o ut o f 50 m w a t 8 0° c • 0. 3 g j of e le ct ri ci ty p er g j of h ea t d el iv er ed • a nn ua l o pe ra tin g tim e: 8 14 2 ho ur s c em en t p ro du ce r — r ec ov er y un it 1 • d ou bl e st ag e he at e xc ha ng er x x x x x x x • p ow er o ut pu t o f 37 m w a t 7 4° c • p ow er o ut pu t o f 54 m w a t 6 0° c • a nn ua l o pe ra tin g tim e: 7 44 0 ho ur s c em en t p ro du ce r — r ec ov er y un it 2 • d ou bl e st ag e he at e xc ha ng er x x x x x x • p ow er o ut pu t o f 15 m w a t 7 4° c • p ow er o ut pu t o f 24 m w a t 6 0° c • a nn ua l o pe ra tin g tim e: 7 44 0 ho ur s c em en t p ro du ce r — r ec ov er y un it 3 • d ou bl e st ag e he at e xc ha ng er x x x x x • p ow er o ut pu t o f 19 m w a t 7 4° c • p ow er o ut pu t o f 60 m w a t 6 0° c • a nn ua l o pe ra tin g tim e: 7 44 0 ho ur s • e st im at ed in ve st m en t: 8 m ! • e st im at ed a nn ua l m ai nt en an ce : 0 .4 4 m ! w as te c h p pl an t — e xt ra r ec ov er y un it • c on de ns in g he at r ec ov er y un it x x x x • po w er o ut pu t o f 3, 4 m w a t 8 0° c • a nn ua l o pe ra tin g tim e: 8 14 2 ho ur s • e st im at ed in ve st m en t: 9. 1 m ! c em en t p ro du ce r — r ec ov er y un it 4 • d ry f lu e ga s he at r ec ov er y un it x x x • p ow er o ut pu t o f 6 m w a t o ve r 10 0° c • a nn ua l o pe ra tin g tim e: 7 44 0 ho ur s • e st im at ed in ve st m en t: 4. 43 m ! c em en t p ro du ce r — r ec ov er y un it 5 • d ry f lu e ga s he at r ec ov er y un it x x • p ow er o ut pu t o f 15 m w a t o ve r 10 0° c • a nn ua l o pe ra tin g tim e: 7 44 0 ho ur s • e st im at ed in ve st m en t: 9. 4 m ! h ea t p um p • l ar ge s ca le h ea t p um ps x • n um be r of h ea t p um ps r eq ui re d: 38 a t 4 m w th • s ou rc e te m p. in : 6 0° c , s ou rc e te m p. o ut : 3 0° c • s ou rc e si nk in : 4 2° c , s ou rc e si nk o ut : 8 0° c • l or en tz c o p : 1 2. 6 • a nn ua l o pe ra tin g tim e: 7 44 0 ho ur s • e st im at ed a nn ua l c os t: 28 m ! e st im at ed s ha re o f ex ce ss h ea t in t he d h s ys te m (% ) 0 0 22 37 43 50 51 57 60 90 international journal of sustainable energy planning and management vol. 14 2017 47 romain sacchi & yana konstantinova ramsheva current situation in aalborg (also previously presented in figure 2); • scenario 5 builds on scenario 4 and adds the heat delivered by a third recovery unit at the cement factory; • scenario 6 includes an additional heat recovery from the waste treatment plant; • scenario 7 and 8 add radiative heat from the rotary kilns of the cement producer; • the additional excess heat in scenario 9 is obtained by the further recovery of latent heat below the dew point of the flue gases of the cement kilns. scenario 9 implies that the dh network delivery temperature of 74°c is reduced to 60°c. recovering heat at a lower temperature allows to extract additional latent energy contained in the moisture of the flue gas. it results in more energy at a lower temperature. the recovered heat is then increased to 80°c with several large-scale 4mwth heat pumps and an auxiliary use of electricity, to be usable for residential heating. in earlier scenarios, where the excess heat is delivered at 74°c by the cement factory, the coal-fired chp plant had the task to add 6°c to the recovered heat to reach an average temperature of 80°c. recovering the heat at a lower temperature also entails the purchase and installation of water treatment infrastructures to handle and clean the additional condensate water. it also encompasses additional maintenance costs that result from the fouling effect of gypsum-rich condensate water on the heat exchangers. 3.4. step 4. changes in demand for dh this step concerns the modelling of the response of the demand to changes in the end-user dh price. heating is a necessity good for which the demand is rather inelastic. while an increase in the dh price leads to a decrease in the heat amount demanded, it is necessarily compensated to keep a constant amount of indoor comfort. the possibility for the end-users to switch to alternative means of heating as a response to increments of the dh price is discarded. it is indeed legally and economically difficult to do so once the heated area is connected to the dh grid. a permission to stop using the dh network needs to be asked to the relevant authority. when granted, the annual fixed part of the dh end-user subscription, used to finance the connection to the dh sub-station, still needs to be paid, rendering the switch to other sources of heating uneconomical, albeit not impossible. the study makes instead the simplifying assumption that the reduced demand for dh, because of a price increase, is instead displaced on the thermal renovation of the building envelope. sourcing from a database that contains updated prices on thermal renovation projects in denmark (molio pris database) [34], a solver is used to find the optimal combination of renovation works for each building typology in aalborg in order to comply with the current regulation for renovated buildings (br2015) [35] at a minimal cost. the need for additional insulation is calculated with reference to an indoor comfort temperature of 20°c, as indicated in the br2015 regulation, with a 5-year average annual heating degree-days for the region of aalborg. a series of constraints have been added to the solver. for example, buildings before 1930 cannot undergo façade walls renovation (for aesthetic preservation reasons), while only buildings built between 1900 and 1950 can undergo wall cavities filling with glass-blown granulates (buildings built after 1950 are assumed to be already insulated that way). additionally, the economic cost of wall insulation from the inside includes the lost liveable indoor area multiplied by the current average square meter cost in aalborg. estimating the cost of thermal renovation for each building type allows to define the dh price level at which the building owner would rather invest in the insulation of the building envelope rather than accept the change in dh price (price elasticity of demand). the heavy assumption made here is that building owners follow a strictly economic rationale, which might not always be true in practice. the decision of investment happens when the return on investment over the lifetime of the renovation project (that is the ratio between the avoided heating cost over the project lifetime and the total cost of insulation) reaches a ratio of 1.33. while the ratio of 1.33 may seem arbitrary, it is the one considered by the br2015 guidelines [35]. such exercise allows to approximate a demand curve for dh in relation to its price, presented later in section 4.1 ‘the dh demand curve’. 3.5. step 5. substitution effects and price elasticity of demand as the scenarios introduce an increasing share of excess heat in the dh grid, the price and quantities purchased 48 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating from each supplier by the utility company to satisfy the demand change too. additionally, as the share of excess heat supply increases, the share of heat supplied by the dedicated coal-fired chp plant reduces to keep a constant supply output on the market. doing so increases the unitary heat price from that coal-fired chp plant as fixed capital and investment costs allocated to the production of heat still run despite a lower production level. the relation between the amount of heat demanded from the coal-fired chp plant and the purchase price level is depicted in figure 5. in parallel, a reduced heat delivery from the coal-fired chp plant also leads to a reduced co-delivery of electricity (as the coefficient of co-production of the coal-fired chp plant between both outputs in cogeneration mode is assumed constant). the missing delivery of electricity will be compensated by an equivalent production of electricity from a mix of marginal electricity-supplying technologies in denmark, coming mostly from biomass and wind power [36]. it is assumed that the energy distribution company runs at marginal costs — which is confirmed by the two latest financial reports of the aalborg utility company [37, 38]. this means that any increase in heat purchase costs translates in an increase in price on the side of the end-users. considering the price elasticity of demand, an increase in price for the end-users translates in an overall reduced demand for heat. such reduction is obtained from the demand curve calculated in step 4. the model reduces the required heat supply by an equivalent amount from the marginally least-preferred heat supplier in the mix of suppliers, namely the coal-fired chp plant. this returns a midto long-term market equilibrium (step 6, discussed in section 3.5) for which the carbon footprint of a distributed gigajoule of heat can be calculated (step 7, discussed in section 3.6). at the same time, as the demand reacts (decreases) and the supply from the coal-fired chp plant reduces, the model considers the amount of transportation activity, the production of insulation materials and all other requirements necessary to support the renovation works needed to preserve the initial indoor comfort temperature of 20°c on the share of the building stock that reacts to the dh price change. common thermal transmittance values are used for mineral wool and a local production is assumed for most materials (mineral wool, concrete, bricks, gypsum boards, windows, doors, ventilation systems, etc.) as well as an average transportation distance of 150 km from their production facility to the renovation site. 3.6. step 6. market equilibriums knowing the calculated supply and demand preferences at any given price level allows to calculate the market equilibrium for each scenario. as the share of excess heat increases through the scenarios, it returns a new end-user price level. the latter induces a decrease in demand for dh and an increase in demand for thermal insulation. this affects in turn the supply of dh and its price level. this is the mid-term equilibrium at which a new dh quantity is supplied for a corresponding enduser price level. 3.7. step 7. carbon footprint analysis ‘carbon footprint’, as defined by wiedmann and minx (2008) is the amount of ghg emitted through the life cycle of a product or service, supplied by an organization or by a process [39]. to consider the consequences of increasing the supply of excess heat on the carbon footprint of the heat produced, a consequential lca is conducted and thus provides a comparison of the environmental impacts of each scenario [40]. the results from the lca can give a good starting point for developing a discussion on the potential solutions for aalborg in delivering ghgneutral dh to its end-users with the current available resources. when the market equilibriums for the different scenarios are defined, the lca model calculates the carbon footprint of one gj of heat distributed to the enduser at the margin as an increased share of excess heat is introduced in the system. the material and energy 0 200 400 600 800 1000 2000 4000 6000 8000 10000 amount of heat supplied [tj] p ric e in de x amount supplied function of price level current price level (index 100) figure 5: relation between the amount of heat purchased from the coal-fired chp plant and the purchase price level international journal of sustainable energy planning and management vol. 14 2017 49 romain sacchi & yana konstantinova ramsheva requirements to deliver one gj of heat in each scenario are modelled in openlca, the lca tool used in this study. background processes — e.g. transport activities, production of insulation material, supply of electricity — are modelled using the consequential life cycle inventory database ecoinvent version 3.3. the presence of large uncertainties in the underlying economic model of each supplier calls for the use of uncertainty-handling techniques, such as the monte carlo analysis. to do so, uncertain parameter inputs were identified, in accordance with the communications with the excess heat suppliers. an uncertainty distribution profile was associated to several of these parameters. table 2 lists some of the uncertain parameters at the excess heat recovery level. the monte carlo algorithm iterates 1,000 times through each scenario. for each iteration, a random variable is picked within the uncertainty distribution of each model input for which uncertainty was defined. the algorithm then builds a technology matrix which is passed to the lca solver class of openlca. the solver multiplies the inverse of the technology matrix by an environmental matrix and a demand vector to return the total material and energy inventory of each scenario. table 2: non-exhaustive list of parameters and associated uncertainty distributions probability distributiondistribution parameters uniform mean: 1.06 min: 1.05 max: 1.08 triangular mode: 0.175 min: 0.15 max: 0.2 triangular mode: 7440 min: 7000 max: 8000 uniform mean: 150 min: 100 max: 200 triangular mode: 77 min: 72 max: 82 description gj of heat in at 60°c for every gj of heat out at 80°c delivered by the heat pumps. heat loss ratio in the dh network. annual number of hours of operation at the cement factory. distance for the delivery of materials necessary to thermal renovation works. purchase price of heat from supplier 1. parameter name gj_in_out_hp network_loss operating_time_ap transport_distance price_supplier_1 17 0 1.086 1.135 27 0 0.150 0.200 23 0 7.037e3 7.9 17 0 1.001e2 2.00 26 0 72.024 81.728 50 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating the inventory is then multiplied by the characterization factors provided by the ipcc global warming 100a method to obtain a carbon footprint expressed in kg of co2-eq per gj distributed with a time horizon of 100 years. 4. results interpretation this section details the calculated demand (section 4.1) and supply (section 4.2) curves as well as the resulting changes in the carbon footprint of one gigajoule of heat (section 4.3). 4.1. the dh demand curve figure 6 illustrates the relation between demanded district heat and the heat price index in aalborg. the red polynomial regression curve allows to approximate a demand curve for dh in relation to its price. the curve is later used to find market equilibriums for each heat supply mix scenario, presented in the next sub-section. two groups of buildings are more prone than others to react to dh price increments: • old buildings that would find a significant reduction of their energy footprint through insulation, • relatively recent buildings, often public institutions, with a large heated area and a wellinsulated envelope that would find interest in upgrading, at limited costs, to a newer ventilation system with heat recovery. the mild slope of the demand curve indicates a rather inelastic demand to dh price changes. it is because the price elasticity of demand in this study is defined in a context where the change to other means of heating is not permitted and where the building owners act rationally, as explained in the section 3.4. thermal renovation projects are expensive and roi of 1.33 are only reached at high dh price increase. in practice, some building owners would switch to another source of heating, while others would simply not notice price changes. real and measured data would likely differ with the demand curve illustrated below. 4.2. the new market equilibriums figure 7 shows the market equilibriums reached for the 10 scenarios. from left to right, each scenario introduces an increasing amount of excess heat in the supply mix. scenario 4 represents the current situation in aalborg. scenarios 5 to 9 represent market 10 0 11 9 13 2 14 5 15 8 17 1 18 3 19 6 20 9 22 2 23 5 24 7 26 0 27 3 28 6 29 9 31 2 32 4 33 7 35 0 36 3 37 6 38 8 40 1 41 4 42 7 44 0 45 3 46 5 47 8 49 1 50 4 51 7 52 9 54 2 55 5 56 8 58 1 59 4 60 6 61 9 63 2 64 5 65 8 67 1 68 3 69 6 70 9 72 2 73 5 dh price index 100 (100 = current price) 0 1000 2000 3000 4000 5000 6000 7000 8000 h ea t d em an d [t j] poly. regression of demand variation 0.00138× 2 -4.532× +8353 farm houses single family houses terraced houses multi-storey buildings student accomodations public institutions other permanent residences other services offices/services hotels cultural buildings teaching facilities hospitals daycare facilities other institutions sport facilities other leisure facilities figure 6: relation between demanded district heat and the heat price level in aalborg international journal of sustainable energy planning and management vol. 14 2017 51 romain sacchi & yana konstantinova ramsheva demanded amount outskirt chps waste chp cement producer recovery unit 1 cement producer recovery unit 2 cement producer recovery unit 3 cement producer recovery unit 4 cement producer recovery unit 5 heat pump coal-fired chp (demand-adjusted) avoided through insulation waste chp extra recovery unit 0 1000 2000 3000 4000 5000 6000 7000 scenario 0 scenario 1 scenario 2 scenario 3 scenario 4 (current) scenario 5 scenario 6 scenario 7 scenario 8 scenario 9 h ea t s up pl ie d [t j] 79 85 96 99 100 103 105 107 111 141 end-user price index (scenario 4 = 100) figure 7: market equilibriums for each supply mix scenario (red scatter = demand curve for heat). from left to right, increasing shares of excess heat are introduced equilibriums where the constraint from the price ceiling principle is lifted. each scenario corresponds to a new price level. as the price level increases, the demand for heat, represented by the red demand curve, decreases. the least-preferred supplier, the coal-fired chp plant, is affected by the decrease in demand. the missing heat output is compensated by means of heat preservation through insulation of the building stock. scenario 9 introduces the use of heat pumps to boost the temperature level of the heat recovered at the cement producer recovery units. hence, the share of the cement producer supply increases. additionally, the red segment represents the additional supply of heat generated by the auxiliary input of electricity in the heat pumps (calculated as the difference between the amount of heat transferred to the sink and the amount of heat transferred from the source, for the calculated coefficient of operation). the evolution of the unitary price can be seen in figure 8. scenario 9 reaches an excess heat share of 90% for a price increase of 41% compared to scenario 4. this price increase is the result of the combination of two cost-related aspects. there is an increased cost of purchase of excess heat on one hand and a constant cost of purchase of heat from the coal-fired chp plant on the other hand. 65% of the purchase cost increase is associated with the investment and maintenance of 38 4mwth heat pumps. they represent an annual cost of 28 m", of which almost a third (or 20% of the additional purchase cost) is a tax applied on the use of electricity in the context of heat production. the remaining of the purchase cost increase (35%) comes from an increased volume of excess heat purchased from the cement producer and the waste chp plant at a higher price (that reflects investments in heat recovery equipment and infrastructures to collect and treat condensate water). it is to note that a fourth of these 35% represents the tax on recovered energy discussed in section 2.3. despite its reduced supply throughout the scenarios, the coal-fired chp plant needs to ensure the role of flexible heat supplier. it can adapt to short-termed seasonal demand fluctuations and complete the supply to meet demand peaks. at the same time, it needs to cover fixed and running expenses despite a lower heat production output level (reference to figure 5). this creates a lock-in situation where the virtually unchanged 52 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating cost of purchase of heat from the coal-fired chp plant prevents any savings that could be used to finance the above-mentioned investments. 4.3. carbon footprint results the results of the monte carlo simulation analysis are presented in figure 9. uncertainty in the model inputs propagates throughout the outputs. for that reason, it is difficult to conclude on a clear carbon footprint improvement for scenario 4 over scenario 3. however, there is a clear statistical improvement trend as the share of excess heat in the dh system increases. for example, compared to the current estimated carbon footprint of about 153 kg of co2-eq per gj distributed (scenario 4), scenario 9 delivers a gj of heat at almost a tenth of that value (about 11 kg of co2-eq per gj distributed on average). this shows that untapped potential in excess heat recovery can lead to substantially lower carbon footprint levels for the dh system, and bring the city closer to its ghg-neutral heat delivery objective. 5. conclusions in the introduction of the paper, three research questions were raised. this section aims to provide answers to each of them, based on the results presented in the preceding section. furthermore, it elaborates on some weaknesses of the model and what possible drawbacks those can have on the results of the study. q1: what is the effect of the price ceiling principle on the environmental performance of the is system at delivering low-carbon dh with the current installed capacity? the below country-average price for the endusers of the dh network in aalborg is a result of a political decision [41]. nevertheless, such a price ceiling on the dh suppliers’ side may restrict further capitalintensive investments in excess heat recovery. indeed, this study indicates that the amount of excess heat supplied could be at most multiplied by two, had favourable economic conditions been in place. in other words, the effect of the price ceiling principle on the environmental performance of the dh system is to drastically limit the potential for carbon footprint reduction, aside from keeping the end-users price low. the lca analysis conducted in this study indicates that increasing the supply of excess heat can substantially reduce the need for coal-based heat, and, altogether with a demand displacement effect, lead to a reduction of the heat carbon footprint by 93% compared to the current situation. as discussed in the section 2.2, such answer s ce na rio 0 s ce na rio 1 s ce na rio 2 s ce na rio 3 s ce na rio 4 s ce na rio 5 s ce na rio 6 s ce na rio 7 s ce na rio 8 s ce na rio 9 0.0 5.0 10.0 15.0 20.0 h ea t p ric e [# p er g j di st rib ut ed ] distribution costs administration costs other production costs other income other expenses outskirt chps waste chp cement producer recovery unit 1 cement producer recovery unit 2 cement producer recovery unit 3 cement producer recovery unit 4 cement producer recovery unit 5 coal-fired chp heat pump waste chp extra recovery unit figure 8: unitary price structure per gj distributed international journal of sustainable energy planning and management vol. 14 2017 53 romain sacchi & yana konstantinova ramsheva holds on the assumption that recovered excess heat does not bear any of the environmental burden associated to the industrial process. q2: to what extent can excess heat recovery help the city fulfil its objective of a ghg-neutral dh system? the different scenarios built in this study follow the shortand longer-term strategies of aalborg municipality of moving away from fossil fuels for heating purposes, e.g. using high-, mediumand low temperature heat from industries. the most ambitious scenario (scenario 9) results in a tenfold lowering of the carbon footprint of the heat compared to the current scenario (scenario 4) i.e. from 153 kg of co2-eq. per gj distributed down to about 11 kg of co2-eq., provided that the share of excess heat grows from 43% to 90% of the supply mix. q3: what would be the economic impact on the endusers? as presented in section 3.3 ‘changes in supply of excess heat’, a share of excess heat as high as 90% of the gross supply mix can be achieved through capitalintensive investments in various equipment. it results in an increase of the end-user price of 41% compared to the current price level, ceteri paribus. the market equilibrium for each scenario is calculated after consideration of the demand elasticity and displacement of the demand for alternatives, i.e. thermal insulation of the building envelope. the results from section 4.1 ‘the dh demand curve’ show that insulation is a preferred strategy for old buildings, while more recent buildings with large heated area are rather upgraded with a new mechanical ventilation system with indoor heat recovery. but the reader should be aware that the conclusions of this study hold on the assumption that building owners act rationally and that the decision of insulating a house is taken as soon as it is economically viable to do so. this assumption is, without a doubt, weighting heavily on the calculation of the demand elasticity. some building owners may decide to undergo building renovation well before the project reaches a roi of 1.33, while others may be unaware of heating price changes. while such uncertainty may have an influence on the end-results, the authors assume the above-described market dynamics and the conclusions drawn from them would remain unchanged. 6. discussion a potential drawback about the proposed scenarios in this study is the focus on excess heat as the only viable alternative to coal-based heat. instead, diversifying the energy sources (e.g. geothermal, wind power-to-heat), an ambition very high on the agenda of aalborg municipality [16], could be a plausible alternative. diversifying the energy mix secures against volatility of prices and supply levels [42]. scenario 0 scenario 1 scenario 2 scenario 3 scenario 4 scenario 5 scenario 6 scenario 7 scenario 8 scenario 9 0 100 200 300 400 500 600 kg o f c o 2eq . p er g j di st rib ut ed 0 20 40 60 80 100 120 140 160 e nd-user price index (s cenario 4 = index 100) monte carlo results (1,000 iterations) 254.61 255.52 248.23 191.5 153.34 138.34 119.47 103.71 97.29 10.84 79 85 96 99 100 103 105 107 111 141 figure 9: monte carlo simulation results for each supply mix scenario (red values = carbon footprint median, blue scatter = end-user price level index). boxes represent 50% of the distribution while the interval defined within the black horizontal lines represents 90% of the distribution. cross-shaped points are outliers to the distribution 54 international journal of sustainable energy planning and management vol. 14 2017 the effect of price regulation on the performances of industrial symbiosis: a case study on district heating however, alternative (renewable) energy sources can be costly to implement compared to excess heat recovery. for illustrative purpose, table 3 shows the average nominal investment per mw of heat for common district heating technologies given by the danish ministry of energy and compares it to the average nominal investment associated to the capacity increment between scenario 4 (current capacity) and scenario 9 (most ambitious scenario). between scenarios 4 and 9, an additional 125 mw of excess heat are installed, for an average nominal investment of 0.2 m"/mw. the low nominal investment figures are explained by the fact that infrastructures already exist and a substantial part of the economic burden is sustained by the activity the heat is a co-product of. the analysis of the price increase between scenario 4 and 9 in section 4.2 shows that the necessity to keep a flexible heat supplier prevents savings that could partly or entirely finance the needed investment in heat recovery equipment, leading to an overall price increase. the supply agreement between the city of aalborg and the coal-fired chp plant will last until 2027, after which a national directive phases out heat and electricity production from coal. hence, should the excess heat recovery be taken to an extent similar to scenario 9, it would be desirable to opt for a smallto medium-scale renewable-based heatproducing technology that has the ability to adjust to shortterm demand variations (e.g. biomass or biogas). from a time perspective, the excess heat supply is constrained and hardly flexible. there is a risk that the system over-supplies in the summer, when the demand for heat is low, and under-supplies in winter, when the demand for heat is high. to consider the seasonal profile of the demand for heat would require heat storage solutions. this would certainly add an additional economic burden on the end-users. on a system level, it could also be argued that this study does not fully reflect the positive impacts that is brings in a global perspective, but only relative to the carbon footprint of the district heat. the case of the dh system of aalborg was selected due to the ongoing, upcoming and potential is synergies. the study showcases the benefits that can potentially be drawn from a fully-deployed is system for both surrounding industries and the society, with an angle on municipal excess heat delivery. yet, the aim of this study is not to investigate an optimal energy mix for supplying dh to aalborg, but rather to demonstrate that the city of aalborg can achieve its ambition of providing a cleaner heat with the available, yet untapped, resources without investing in technologies that require heavy investments and without the use of additional fuel. the conclusions are relevant for an international audience with an interest in is, since they provide general insights on how legal and economic instruments can hinder the full development of collaborative industrial projects. acknowledgements the authors of this paper would like to thank several persons: mads kristian ullitz and michael rosengreen christensen at aalborg portland a/s for their continuous support, and kim b. wittchen, senior researcher at the danish building research institute, for his valued guidance and work behind the episcope model. the table 3: comparison of nominal investment per mw between common district heating technologies and the additional excess heat supply capacity scenarized in this study nominal investment (m!/mw-heat) source solar 2 [34] geothermal 2 wave power 7.8 electrolysis 1.4 – 6 centralized biogas 3.4 – 5.8 cement producer — recover unit 1 0.03 present study cement producer — recover unit 2 0.04 cement producer — recover unit 3 0.1 cement producer — recover unit 4 0.7 cement producer — recover unit 5 0.6 waste chp plant — extra recovery unit 0.2 heat pumps 0.2 international journal of sustainable energy planning and management vol. 14 2017 55 romain sacchi & yana konstantinova ramsheva authors would also like to thank frede hvelplund, professor at the department of planning of aalborg university, for the constructive discussions. finally, the authors appreciate the help and time from the representatives at the planning department of aalborg municipality, the utility company aalborg varme 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[42] pavel gl, budu ar, moraru de. optimization of energy mix – nuclear power and renewable energy for low emissions energy source a benefit for generations to come. energy procedia 2017;112:412–7. doi:10.1016/j.egypro.2017.03.1092. http://www.sciencedirect.com/science/article/pii/s1876610217 312171 https://doi.org/10.1016/j.energy.2010.08.041 http://www.stm.dk/multimedia/energistrategi_2050.pdf https://pdfs.semanticscholar.org/5b22/9f0cc5d0804cecd08083cfb4992c68c89328.pdf http://www.diva-portal.org/smash/get/diva2:578721/fulltext01.pdf http://www.skat.dk/skat.aspx?oid=2061647&chk=212484 http://www.sciencedirect.com/science/article/pii/s037877881300604x http://www.statistikbanken.dk/bol105 http://episcope.eu/building-typology/country/dk/ https://www.barnesandnoble.com/w/qualitative-research-design-joseph-amaxwell/1100615037 https://ens.dk/sites/ens.dk/files/analyser/technologydata_for_energy_plants_-_may_2012._updated_2015.pdf https://molio.dk/molio-prisdata/prisdata-footer/brug-molioprisdata/. http://bygningsreglementet.dk/forside/0/2. https://consequential-lca.org/clca/marginal-suppliers/the-special-caseof-electricity/example-marginal-electricity-in-denmark/ https ://aalborgforsyning.dk/media/536400/underskrevet_aarsrapport_2015_varme_dirigent-aalborgvarme. http://www.aalborgforsyning.dk/media/769261/aalborg-varme. http://citeseerx.ist.psu.edu/messages/downloadsexceeded.html http://www.sciencedirect.com/science/article/pii/s0048969712009503 http://energitilsynet.dk/varme/statistik/prisstatistik/. http://www.sciencedirect.com/science/article/pii/s1876610217312171 01. 2301-7643-editorial.qxd:1953-6976-1-le international journal of sustainable energy planning and management vol. 17 2018 1 abstract this editorial introduces the 17th volume of the international journal of sustainable energy planning and management. the volume present work on photo voltaic systems for decentralised applications and country studies of both ghana, kenya & south africa and of rwanda. finally, methodology development papers on decision-making and biomass resource estimation round off the volume. 1. photo voltaic systems and system impacts kozarcanin & andresen [1] combine analyses of photo voltaic (pv) installations with analyses of electric power grids in small-scale systems. based on two cases in vaxjö, sweden, they find that it is not required to add active smart grid control even when installing sufficient pv capacity to meet annual electricity demands eightfold. they do not reveal problems with overvoltage which would be the case with the same capacity on individual houses. for the combined installation on residential buildings, imbalances are shared on the medium voltage grid where impacts are smaller than on the low-voltage grid tomc & vasallo [2] also investigate photo voltaic systems in appartment buildings, here with a focus on community renewable energy networks; a topic they have also addressed in previous work [3,4]. combinding loads and productions from multiple residents and having a communal battery decreases the likelyhood that demands have to be met by external sources as the total of individual imbalances exceeds the total of individual imbalances when coordinated in an integrated manner. 2. country studies kwakwa et al. [5] analyse links between energy consumption and urbanization rates, economic growth and more using statistical evidence from the period 1975 to 2013 for ghana, kenya and south africa. they find a number of factors affecting demands positively and negatively and also factors that have different impact on the three case countries with income and urbanization consistently being factors driving up energy demands. with positive links to energy consumption, detaching economic growth from energy usage through improved efficiency becomes important. the analyses also indicate e.g. the sensitivity of the kenyan energy system to energy prices * corresponding author: e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 17 2018 01–02 editorial international journal of sustainable energy planning and management vol 17 poul alberg østergaard* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords: photo voltaic systems; country studies; decision–making; biomass estimation; url: dx.doi.org/10.5278/ijsepm.2018.17.1 2 international journal of sustainable energy planning and management vol. 17 2018 editorial international journal of sustainable energy planning and management vol 17 rwanda is a country of ample hydropower resources, however while the resource is climate change favourable, climate change is not favourable for hydropower in rwanda. combined with both population and economic growth, rwanda is thus facing the potential prospect of heading towards a more fossildependent energy system. uhorakeye & möller[6] therefore investigate alternative pathways using locally available renewable energy sources in a rwandan setting. 3. methods for energy planning in [7] saleki investigate a decision-making method for designing energy supply systems in teheran. using a four-step method, involving technical deliberation, system design choice preference and cost-based ranking, saleki find that focus should be put on photo voltaics and wind power in teheran for the energy supply of individual houses. acknowledging the important role of biomass in future renewable energy-based energy systems, better methods are required for the assessment of available biomass resources. based on this presupposition, torretojal et al.[8] estimate biomass availability for energy production based on light detection and ranging (lidar) flights. acknowledgements the international journal of sustainable energy planning and management appreciates the contributions from the reviewers that have assisted the authors in improving their work. references [1] kozarcanin s, andresen gb. grid integration of solar pv for multi-apartment buildings. int j sustain energy plan manag 2018;17. http://dx.doi.org/10.5278/ijsepm.2018.17.2. [2] tomc e, vassallo am. community electricity and storage central management for multi-dwelling developments: an analysis of operating options. int j sustain energy plan manag 2018;17. http://dx.doi.org/10.5278/ijsepm.2018.17.3. [3] tomc e, vassallo am. community renewable energy networks in urban contexts: the need for a holistic approach. int j sustain energy plan manag 2015;8:31–42. http://dx.doi.org/ 10.5278/ ijsepm.2015.8.4. [4] tomc e, vassallo am. the effect of individual and communal electricity generation, consumption and storage on urban community renewable energy networks (cren): an australian case. int j sustain energy plan manag 2016;11. http://dx.doi.org/ dx.doi.org/10.5278/ijsepm.2016.11.3. [5] kwakwa pa, adu g, osei-fosu ak. a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa. int j sustain energy plan manag 2018;17. http://dx.doi.org/10.5278/ijsepm.2018.17.4. [6] uhorakeye t, möller b. assessment of a climate-resilient and low-carbon power supply scenario for rwand. int j sustain energy plan manag 2018;17. http://dx.doi.org/10.5278/ijsepm. 2018.17.5. [7] saleki s. introducing multi-stage qualification for micro-level decision-making (msqmldm) method in the energy sector – a case study of photovoltaic and wind power in tehran. int j sustain energy plan manag 2018;17. http://dx.doi.org/10.5278/ ijsepm.2018.17.6. [8] torre-tojal l, esposo jms, bastarrika a, lopez-guede jm. biomass estimation using lidar data. int j sustain energy plan manag 2018;17. http://dx.doi.org/10.5278/ijsepm. 2018.17.7. http://dx.doi.org/10.5278/ijsepm.2018.17.2 http://dx.doi.org/10.5278/ijsepm.2018.17.3 http://dx.doi.org/10.5278/ ijsepm.2015.8.4 http://dx.doi.org/dx.doi.org/10.5278/ijsepm.2016.11.3 http://dx.doi.org/10.5278/ijsepm.2018.17.4 http://dx.doi.org/10.5278/ijsepm.2018.17.5 http://dx.doi.org/10.5278/ijsepm.2018.17.6 http://dx.doi.org/10.5278/ijsepm. 2018.17.7 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university abstract the objective of this paper is to better understand the local energy transitions process, given the importance of local energy transitions. a systematic literature search was conducted and 18 core and 18 peripheral papers on local energy transitions were selected. the 18 core papers were assessed using the framework given by turnheim et al. [1]. findings show that local energy transitions have characteristics or features which are not adequately explained by the framework used. sources of innovation and the innovation in niches in local energy transitions are explained by socio-technical theories such as strategic niche management (snm) and multi-level perspective (mlp). the pathway dynamics and the normative goals are covered by quantitative modeling studies of local energy transitions. the specific features of local energy transitions which are not adequately analysed by the existing framework are ownerships of transitions, situative governance issues, spatial scale issues, differing priorities and differing institutional structures, along with the analysis of pathway dynamics. a suggestion for extending a framework to analyse local energy transitions is proposed. 1. rationale for studying local energy transitions the field of energy transitions is considered very important in the current socio-politico-environmental context [2], with the earth entering the era of the anthropocene [3]. thus, energy transitions to sustainable and ‘green’ means of energy provision [4], along with but not limited to, increased energy efficiency and energy effectiveness are keys to limiting ghg emissions from fossil fuels. energy transitions are deemed to be socio-technical transitions [5] and societal transitions [6]. historically energy transitions have taken a rather long time, in most cases decades [7], and as such most studies of energy transitions have been a posteriori or “after the fact” studies [8]. energy transitions are complex, involving different socio-political and cultural contexts with far-reaching impacts for the world. these different contexts impact upon many factors associated with the energy transitions processes, such as the time it takes for the transitions to happen, the choice of technological innovations underpinning the transitions processes, the pathways taken in the transitions etc. at the same time, energy transitions, at the local level, involve individual actors and policy structures leading to interactions and networks which are difficult to assess and predict. furthermore, local energy transitions have an important place in current times, since local communities are well placed to identify local energy needs, and if given the agency are ideally situated to achieve common energy, environment and other wider societal goals [9]. thus there are clear indications that the local level transitions are growing in importance [10]. there is no set definition of local energy transition. in general terms, local energy transitions can be understood as energy transitions which happen at a sub-national scale, with some help partly coming from residents. but, * corresponding author email: sujeetha@chalmers.se understanding the local energy transitions process: a systematic review !"#$$%&'(!$)*'++",'-'./ '.0(1-2+(34(5&)6-$. !"#"$"%&'%(')&*+,-'.*/0&%1%,-2'30415*+$'6&"#*+$"7-'%('.*/0&%1%,-2'89+$41$#:,*&';<2'=>?'@a2'b%70*&cd+,2'ef*g*&h' keywords: local energy transitions; socio-technical transitions; transitions research; dynamics; url: dx.doi.org/10.5278/ijsepm.2017.14.5 international journal of sustainable energy planning and management vol. 14 2017 57–78 international journal of sustainable energy planning and management vol. 14 2017 57 understanding the local energy transitions process: a systematic review 58 international journal of sustainable energy planning and management vol. 14 2017 this definition is very simplistic. the authors agree with [11] that the term ‘local’ has multiple meanings and conceptualisations. at the same time, as hoppe et al. [10] state, for the purposes of this paper the authors have defined local as “communities of place”, and to specifically mean a geographically bound sub-national “community of place”. as tomc and vassallo [12] explain, a community is a loosely bound group of actors, and for purposes of this study, a group of actors who act to further an implementation of transitions process in a defined geographical place. this definition is important since it defines the crux of this study’s research problem. some literatures also give tractable explanations of local energy transitions which encompass grassroots innovation [13], regional energy innovation [10], community energy [14], citizen power plants [15], local institutional and governance structures [16] among others. these are some of the empirically similar phenomena to local energy transitions which have been looked at in scientific literature. the objective of this study is to understand the local energy transitions processes, through in-depth analysis of local energy transitions literature. as far as the authors know there have been no attempts to understand the local energy transitions processes by themselves. in most literature, energy transitions scholarship has been given a wider scope for investigation and explication, and given the rapid proliferation of local energy transitions and the effects they are having on the energy systems, as noted by [11, 14, 17, 18], the authors think that understanding local energy transitions should be a sustained activity on its own. ultimately, the paper intends to differentiate the study of local energy transitions from the broader transitions literature and propose an extended framework to study local energy transitions. the rest of the paper is structured as follows: chapter 2 gives the methodological framework. chapter 3 presents the analysis and findings of the core and peripheral papers. chapter 4 discusses the main findings and contextualises the core papers amongst the findings from the peripheral papers. section 5 concludes. 2. methodological framework this section explains the methodological steps underpinning this study. it explains the selection process of scientific literature analysed, the framework used for analysis in this study and subsequently the process of analysis which leads to its conclusions. 2.1. selection of scientific literature the selection of scientific literature is an important part of the research. the objectivity of the findings and their accuracy are invariably linked with the selection process. the method employed here closely follows the method proposed by schulze et al. [19]. literature dealing with local energy transitions between the years 2010 to 2017 are systematically selected. the reason for limiting our search to these years is that the authors posit that local energy transitions in peer-reviewed literature are sparse in years preceding 2010 and as such, the study is not losing out on any significant peer-reviewed literature. the authors carried out the same search for all the years, and did not find any significant papers that would have warranted changing the search filters. in the quest to find papers studying local energy transitions, an electronic database search was done on the scopus. the search strings are “local” and “energy transitions” in the title, abstract, keywords field. it may be argued that there are empirical findings which can be found by using other similar search queries such as community energy or local energy projects. but the purpose of this paper is not to analyse similar empirical phenomena, but rather to focus on understanding the process of local energy transitions1. the presence of energy communities and local energy initiatives in the literatures by themselves does not imply that the literature deals with local energy transitions. the focus in this study is on understanding the process of local energy transitions and thus only the papers dealing with transitions at the local level are of interest. while community energy or grassroots energy initiatives and bottom-up energy initiatives are allied concepts, they do not necessarily imply transitions at their core. thus, for the purposes of this study, which is to understand and shed light on the local energy transitions process, the search queries “local” and “energy transitions” suffice. the search results were refined further by filtering for language and journal articles. the reasoning for using the logic operator ‘and’ for the two search strings was to eliminate energy transitions papers which did not focus on local energy transitions. 1 it could be argued that the search query should include the word “process”. the authors ran the search query with the word “process” along with “local” and “energy transitions” and there were no differences to the relevant search results returned. this has lead the authors to infer that papers dealing with local energy transitions processes and energy transitions do not differentiate themselves under those two categories. international journal of sustainable energy planning and management vol. 14 2017 59 sujeetha selvakkumaran and erik ahlgren this search query returned 344 research articles, out of which 36 articles were selected by the authors by reviewing the abstract manually, one by one. apart from the 36 papers selected, the rest of the papers were deemed not useful for this study. most of the discarded papers fell under completely different fields of study such as phase transitions, waste water treatment methods etc. table a1 in the supplementary file gives the complete list of journal articles returned through the search query. in addition to this, the authors used the referencing software mendeley (see [20] for further details) and added the selected literatures to it. from then on, mendeley sent curated emails with suggestions for related papers on a bi-weekly basis, which is continuing till the time of writing, and these suggestions were also monitored extensively to make sure that critical papers were not missed by the authors. the 36 papers selected were further divided into two categories, chiefly based on their treatment of local energy transitions process. of these 36, 18 peerreviewed papers are directly studying local energy transitions, and from herein known as the core papers. these core papers will form the crux of the material which is analysed and studied in this study. the rest of the selected papers are situated on the periphery of local energy transitions; that is, these papers do not focus on the local energy transitions processes, but, are important enough to be assessed to gauge challenges and opportunities within the local energy transitions field. these papers are defined as peripheral papers, in this study. these papers are used to tease out features which are present in them, but which may or may not be present in the core papers, and features which are not assessed by the frameworks in table 1: a brief description of the framework put forward by turnheim et al. [1] characteristic sub-criteria explanation analytical scale — types of scale and sectoral divisions. e.g. national comparisons across the world or transitions processes in the world. multi-scale linkages — how multiple scales have been linked. e.g. how the sector being analysed has been linked with the technology or innovation. scale and temporality time horizon — time duration of the transitions process analysis, such as whether short term, medium term or long term. time orientation — forward looking or backward looking, temporally temporal articulation – time resolution. e.g. annual or bi-annual methodological strategy — the methodology that has been used in the study of the transitions process, such as whether quantitative or qualitative. explanatory focus — how the transitions process has been explained. e.g. has it been explained through case studies, or through model-building. treatment of complexity predictive inclination – projections or forecasts into the future, or back-casting from an ideal future. treatment of uncertainty — how the various uncertainties associated with the study of the transitions process are handled. e.g. handled through sensitivity analyses or through validation by experts. sources of innovation — how sources of innovation are considered. e.g. multiple sources of innovation considered together, or in isolation. innovation and inertia system inertia — how the barriers for the change through the transitions process have been handled in the study. normative positioning and conceptualisation -a normative goal has been considered and conceptualised. e.g. absolute reduction of energy use and if so whether the goal has been conceptualised in numbers for a specific year, with respect to base year. normative goals approach to sustainability – the handling of sustainability, whether explicitly through some indicator, or implicit. conceptualisation of policy — how policy has been considered in the study. e.g. policy can be conceptualised as a rigid rule under which all the aspects of the transition process should come under or it could also be conceptualised as a soft rule, which can be exempted. governing transitions representation of decision-makers — indicates how the different heterogenous agents of the transitions process have been taken into account in the study. view on intervention — how the study tackles the different intervention methods in the transitions process. understanding the local energy transitions process: a systematic review 60 international journal of sustainable energy planning and management vol. 14 2017 literature. figure 1 gives a representation of the mapping of the scientific literature. for the purposes of this paper, the authors have clearly focused on papers dealing only with the local energy transitions process. hence, inherently, the study may miss out on learnings from other aligned fields, such as other ecological transitions etc. while the authors do not see this as an obvious flaw in the methodology, it may be argued that there might be valuable learnings to be obtained from other fields. the authors acknowledge this argument, but, at the same time due to the focus of the paper being on local energy transitions and time constraints, refrain from increasing the scope of the paper. 2.2. general overview of the framework used to assess the core papers there are a few literatures which elucidate frameworks to assess broader energy transitions or similar empirical phenomena, chiefs among them being [5, 21], [1, 22]. the authors of this study found the framework put forward by [1] to be the most comprehensive. in the seminal work by [1], the paper identified five challenges in the study of sustainability transitions. in this study, the authors reframe the challenges presented by turnheim et al. [1] as a framework consisting of five essential characteristics and subcriteria that needs to be assessed. as per [23], a framework helps to identify the elements and the relationship among these elements that one needs to consider for analysis. the authors of this study posit that analytically, the comprehensive challenges and their descriptions turnheim et al. [1] postulate is a framework. thus, figure 2 presents the five characteristics and their sub-criteria as stylised by the authors of this study. turnheim et al. [1] framed the five challenges to highlight the analytical aspects of sustainability peer-reviewed scientific literature electronic database scopus search; “local” “and” “energy transitions” abstract review: exclude 308 articles articles studying local energy transitions: 18 separation of articles into two categories articles studying peripheral subjects: 18 344 articles 36 articles figure 1: a representation of the method of paper selection for review in this study, adopted from [19] international journal of sustainable energy planning and management vol. 14 2017 61 sujeetha selvakkumaran and erik ahlgren transitions that need to be considered when studying transitions. the five challenges (now reframed as characteristics in this current study) that turnheim et al. [1] mention is: • scale and temporality — the different scales, for example macro, meso and micro scales noted in socio-technical analysis, and the inter-scale and inter-temporal treatment of transitions. • treatment of complexity — how uncertainty is treated in the transitions study, along with what the explanatory focus in on. • innovation and inertia — where and who the sources of innovation are and how the emergence of innovation is explained, along with how system inertia is treated. • normative goals — how the normative positioning is treated in the transition along with the presence of sustainability and other secondary goals. • governing transitions — how the plurality of actors, and their interplay and how they are governed are all dealt with. these five characteristics are essential to understanding how the transitions process has been studied. each of these characteristics have sub-criteria which feed into the characteristics. the brief explanations for the sub-criteria given in figure 2 are presented in table 1. the authors of this study use this framework to assess the core papers and see how they have studied local energy transitions and have helped to understand the local energy transition processes. hence this framework, with its sets of characteristics and sub-criteria are essential to this paper. turnheim et al. [1] also typify three different approaches normally in use to study sustainability transitions, and they are 1) quantitative systems modelling, 2) socio-technical analysis, and 3) initiativebased learning. quantitative systems modelling is the approach of projecting various scenarios of future which are brought on by different transitions processes, which depart from a status-quo current state. this approach generally places emphasis on cost-optimizing transition pathways, while leaving out the dynamics of how the actual transitions are to be achieved. the socio-technical analysis is the approach of considering the transitions process as involving multiple processes resulting in social, technical and institutional reconfiguration and alignment, and often times with the possibility of multiple future outcomes. the initiative-based learning approach is a group of heterogenous approaches where the emphasis is placed on actors in novel socio-technical scale and temporality analytical scale multi-scale linkages time horizon time orientation temporal articulation treatment of complexity methodological strategy explanatory focus predictive inclination treatment of uncertainty innovation and inertia sources of innovation system inertia normative goals normative positioning and conceptualisation approach to sustainability governing transitions conceptualisation of policy representation of decisionmakers view on intervention figure 2: the framework which lists key characteristics and sub-criteria to assess the local energy transition studies, as given by turnheim et al. [1], stylised by authors understanding the local energy transitions process: a systematic review 62 international journal of sustainable energy planning and management vol. 14 2017 configurations, where most transitions takes place as a result of ‘learning by doing’. in effect, the quantitative systems modelling approach can answer questions such as how much transitions are going to cost, and how much the benefits are going to be, whereas the sociotechnical analysis approach can answer questions related to how the transitions processes are going to change the society. likewise, the initiative-based learning approach can answer questions as to how different actors can enhance different transitions processes. turnheim et al. [1] provide an explanation on how these three approaches deal with the challenges (which has been reframed as ‘characteristics’, by the authors of this study) and conclude that the three approaches tackle the challenges differently and the sustainability transitions field may benefit from using the three approaches complementarily. while the definitions of quantitative systems modelling and socio-technical analysis, as defined by turnheim et al. [1] are comprehensive (for more details see [1]), the authors of this study would like to discuss the definition given for initiative-based learning. turnheim et al. [1] typify initiative-based learning as “going from a to b to be achieved if the relevant actors are involved in defining and legitimising new technologies… understanding the motives and strategies of actors on the ground is critical to making transitions socially-robust and sustainable”. given this definition it would be reasonable to presume that understanding local energy transitions processes would be done mostly through initiative-based learning. this assumption underpins the current authors’ analysis of the core papers. as mentioned before, the framework put forward by turnheim et al. [1] gives the most comprehensive set of key characteristics of transitions, with sub-criteria for each characteristic as well (see figure 2). the red boxes encircling two sub-criteria have been inserted to point that these two are the sub-criteria which the authors surmise represent certain local energy transitions process characteristics. for example, rygg [16] clearly shows how local-level biogas and heating transitions are impacted by the different decision-makers such as municipal officials, biogas producers, local households etc. and their interactions with each other. at the same time, rygg [16] also articulates how the different decision-makers (or stakeholders) act as different sources of innovations, such as municipal governments etc. after the selection of the core papers and the peripheral papers, the core papers are analysed through the framework given by turnheim et al. [1]. after the analysis is done, the findings kept in mind, while the peripheral papers are inductively analysed. the inductive analysis is carried out to find other features which have been highlighted and studied with regards to understanding the local energy transitions; features which are not the same as the characteristics identified by turnheim et al. [1]. once these features have been identified, how these features will help improve the understanding of the local energy transitions processes in the core-papers are discussed as well. 2.3. summary of the methodology the methodology undertaken in this study can be summarised thus: the core and peripheral papers are selected from existing literatures, and the framework is used to analyse the core papers, on the characteristics of scale and temporality, treatment of complexity, innovation and inertia, normative goals and governing transitions. subsequently, with these characteristics in mind, the peripheral papers are inductively analysed for further features which are present in the understanding of local energy transitions processes and these features are identified. following this, a discussion is presented such that the core papers are situated within these features identified in the peripheral papers. the methodology chosen for this study is entirely based on secondary sources of information, specifically peer-reviewed scientific literatures. while this methodology serves the purpose in understanding what has been done in the field of study of local energy transitions, there has been no attempt to validate the findings or the conclusions with either experts or practitioners in the field. 3. analysis and findings section 3 presents the analysis of the core papers with the framework presented in section 2.2 and the inductive analysis of the peripheral papers. prior to the analysis of the core papers using turnheim et al.’s [1] framework, this sub-section presents the descriptions of the core papers. table 2 gives the domain of interest of the selected papers, along with their methodological choice and the theoretical concepts that have been used in the papers’ analysis. in the papers selected there is a wide variety in terms of both demand [13, 24–26] and supply side interest. international journal of sustainable energy planning and management vol. 14 2017 63 sujeetha selvakkumaran and erik ahlgren table 2: a general description of the local energy transitions literature domain of methodology no. title interest theoretical concept choice of analysis 1 a grassroots sustainable energy niche? supply side strategic niche management qualitative: analyses of 12 case reflections on community energy in the uk [13] and demand (snm) studies in various communities side in the uk, along with 15 interviews with key stakeholders 2 challenging obduracy: how local communities supply side actor-network theory qualitative methods: structured transform the energy system [17] (ant), social movement interviews theory (smt) 3 decentralisation dynamics in energy systems: a supply side network theory coupled quantitative: simulations of generic simulation of network effects [30] with system dynamics different consumers in simulation, systems households adopting to solar pv dynamics (sd) model technology 4 decentralised laboratories in the german energy supply side theory of multi-level qualitative methods: interviews transition. why local renewable energy and demand governance and desk research initiatives must reinvent themselves [24] side 5 dynamics of energy transitions under changing supply side dynamic interactive quantitative: dynamic interactive socioeconomic, technological and climate and simulation model simulation model conditions in northwest germany [25] demand side 6 energetic communities for community energy: a overall integrated community qualitative: exploratory analysis, review of key issues and trends shaping energy energy systems (ices) thought experiment integrated community energy systems [9] sector 7 energy transitions in small-scale regions – what supply side regional innovation qualitative: interviews with we can learn from a regional innovation systems systems (ris) actors from different subsystems perspective [10] (more than 30) 8 harvesting energy: place and local supply side socio-geographical and qualitative; literature review, entrepreneurship in community-based local entrepreneurship and semi-structured interviews renewable energy transition [14] roots of community energy 9 local authorities as niche actors: the case of overall multi-level perspective qualitative: interviews (6) and energy governance in the uk [31] energy (mlp) document analysis sector 10 local energy policy and managing low carbon supply side network and agent mixed: quantitative (historical transition: the case of leicester, uk [32] and demand interaction secondary data analysis) and side qualitative: semi-structured interviews 11 local governments supporting local energy supply side strategic niche management qualitative: case study analysis initiatives: lessons from the best practices of (snm) through extensive interviews and saerbeck (germany) and lochem (the document analysis. netherlands) 12 local niche experimentation in energy overall strategic niche management qualitative: case study transitions: a theoretical and empirical energy (snm) and exploration of proximity advantages and sector regional innovation disadvantages [27] systems (ris) 13 one, no one, one hundred thousand energy overall social representations qualitative: analysis, thought transitions in europe: the quest for a cultural energy theory (srt), cultural experiment approach [18] sector approach continued understanding the local energy transitions process: a systematic review 64 international journal of sustainable energy planning and management vol. 14 2017 most studies have used qualitative methodologies in their studies, mostly with in-depth case studies [13, 15, 27–29], while some studies have used quantitative methods such as systems dynamic modeling [30], and agent-based modeling [26]. the most common theoretical concepts are multilevel perspective (mlp) and strategic niche management (snm), which are aligned with the quasievolutionary socio-technical transitions theory. 3.1. assessment of the selected literature using the framework by turnheim et al. [1] as mentioned before, turnheim et al. [1] propose the most comprehensive of all frameworks to represent the salient characteristics of the sustainability/socio-technical transitions. given the lack of such assessment frameworks for local energy transitions, the authors use this framework to analyse the selected core papers. as stated before, turnheim et al. [1] propose dividing transitions studies into three types: 1) quantitative systems modelling, 2) socio-technical analysis and 3) initiative based learning, and in their work the authors say that local energy transitions fall under initiative based learning. the authors of this present work will present evidence to the contrary in this and the following sections. the inductive analysis of the studies is conducted to glean how they have treated the characteristics postulated by turnheim et al. [1]. in table 3 the authors present the salient aspects for each literature coming under the core papers, under the five characteristics. a close inspection of table 3 and the findings presented clearly articulate certain common strains within the different local energy transitions literature belonging to the core papers selected for this study. as mentioned before, most studies have analysed the local transitions process through socio-technical transitions theories such as strategic niche management (snm) [11, 13, 27] and multi-level perspective (mlp) [24, 29, 31]. these theories explain the niche and regime interactions well, along with the innovation process. the analytical scale is local in terms of place (such as communities [14, 24]) and limited to the sub-national scale, and most of these studies are backwards looking, in terms of explaining and theorising after the fact. they help understand the transitions process as interactions between niches and regimes and landscapes, and in some studies the governance issues are framed as policy level explanations. for example, in [24] the governance of transitions is presented along the different structures present in the multiple bottom-up initiatives. table 2: continued domain of methodology no. title interest theoretical concept choice of analysis 14 photovoltaic diffusion from the bottom-up: supply side the swot analysis and mixed design methodology: analytical investigation of critical factors [33] analytic hierarchy process swot is qualitative and ahp is (ahp) quantitative 15 scaling up local energy infrastructure; an agentsupply side agent based modeling a mixed method; qualitative based model of the emergence of district heating and demand (abm) modeling through companion networks [26] side modeling, and then abm with simulations 16 supporting energy initiatives in small supply side visions development, mixed methods: qualitative and communities by linking visions with energy scenario analysis and quantitative methods; a simple scenarios and multi-criteria assessment [28] multi-criteria assessment numerical model (mca), scenario analysis is done using a simple numerical model 17 the establishment of citizen power plants in supply side resource-based qualitative: semi-structured austria: a process of empowerment? [15] understanding of sociointerviews of the actors technical regimes 18 towards a sustainable socio-technical system of supply side multi-level perspective mixed quantitative (secondary biogas for transport: the case of the city of (mlp) and sociotechnical data analysis) and qualitative, linkoping in sweden [29] perspectives on system semi-structured interviews builders international journal of sustainable energy planning and management vol. 14 2017 65 sujeetha selvakkumaran and erik ahlgren governance is primarily addressed through networks and governance, and intermediaries and participants are represented in the analysis. while explicit actors and their agencies are discussed, the organisation behind the energy communities and networks are the point of interest. governance is not explicitly addressed. but their actors and the networks which create different paths are analysed. the multi-level governance perspective is used which gives explicit analysis of the different governance structures present in the case studies. while actor heterogeneity is considered through the model validation process, governance of transitions is not considered in the analysis. the governance issues are tackled through the ices framework, in the complex transition process. both normative positioning and approach to sustainability are assumed implicitly, and are not explicitly analysed. decentralisation and renewable energy generation are considered as normative goals. normativeness is prescribed through the diffusion of different power plants. normative positioning is unclear in the analysis. but, implicitly, higher decentralisation and transition to decentralised energy initiatives are treated as a normative goal. normative goals are lacking; the analysis is exploratory in nature. normativity is not explicitly prescribed. there is no single norm which is considered but rather community energy and sustainable initiatives are considered the end goal. while innovation is analysed, especially with respect to the transitions of each case, inertia is not explicitly analysed. innovation and inertia are both framed as opposition to present energy system. system inertia and innovation are not explicitly addressed. emergence of innovation is not assessed, and inertia is not discussed as well. innovation and inertia are modeled as explicitly constraints in the simulation model. the emergence of ices by themselves are considered as an innovation but inertia is not considered. complexity is tackled through in-depth case study analysis, and no attempts at predictions. the strategic niche management (snm) explains the niche-level interactions and the networks which lead to collective learning. analysis of community energy movement as a socio-technical transition movement. predictive capacity is limited. complexity is tackled through simulation of the energy system transition, with built-in predictive capacity. also, actor heterogeneity is explicitly modelled, along with the pathways taken in the transition. the analysis is done through the nicheregime-landscape interaction model and through rich analysis of the interviews. explanatory focus is on the interaction and the supporting structures and barriers. complexity is addressed through model simulation and through model validation through involved stakeholders. different scenarios can capture the different pathways that are possible which lend a predictive capacity to the analysis. the framework of “integrated community energy systems” (ices) is used to analyse the myriad local level energy transitions. the framework of analysis consists of structures, systems, barriers and motives along with the transition actors. community energy scale is considered and analysis of the past is undertaken. community energy is likened to niche’s and their interactions with the regime are analysed. scale matching from energy communities and their transformation into the regime are assessed. temporally backwards looking analysis is present. the analytical scale at the collection of household level, and expost and ex-ante analysis is presented. scale is set at a decentralised local energy initiatives and temporality is primarily backwards looking. the regional-level scale is selected along with forward-looking temporal analysis of the local level energy transition. the scale is local integrated energy communities and backwards looking temporal analysis is presented 1 a grassroots sustainable energy niche? reflections on community energy in the uk 2 challenging obduracy: how local communities transform the energy system 3 decentralisation dynamics in energy systems: a generic simulation of network effects 4 decentralised laboratories in the german energy transition. why local renewable energy initiatives must reinvent themselves 5 dynamics of energy transitions under changing socioeconomic, technological and climate conditions in northwest germany 6 energetic communities for community energy: a review of key issues and trends shaping integrated community energy systems table 3: the analysis of the selected core papers with the framework adopted from turnheim et al. scale and treatment of innovation normative governing paper title temporality complexity and inertia goals transitions continued understanding the local energy transitions process: a systematic review 66 international journal of sustainable energy planning and management vol. 14 2017 while interactions and the interplays are considered in the analysis, governance issues are not given much focus. governance within the different 'levels' of place are analysed in this study. governance in the general energy sphere, and its influence in local energy governance is addressed in this study. the study is about energy governance and how local and national energy governance are at opposing ends of each other. so, the governance issues are discussed at a policy level. governance of energy initiatives are discussed, but their interactions with multiple levels of governance are not analysed. governing of the transitions are not tackled in the analysis. normativity is not explicitly considered, but more regional and local level energy communities are considered better. the normative reasoning of social, economic or other needs for the local level transitions are implicitly assumed in this analysis. sustainability and renewable energy are considered as normative goals. better co-benefits such as reduction of energy poverty and the transition to renewable energy are considered as the normative goals. more renewable energy initiatives and sustainability are considered as normative, along with communities working together, and social benefits. normativity is considered through the ultimate transition itself, and through the second order learning ensuing due to the proximity effects. innovation and inertia are considered as arising out of the ris's sub-systems' interactions with each other, and they are not covered in the analysis. the energy community initiatives themselves, and their place and local entrepreneurship are considered as innovations. inertia is not explicitly considered. local actors themselves are considered an innovative niche, and how they promote and protect the niche is also explicitly analysed in this study. innovation and inertia are not explicitly considered in the study. while the transitions in the household and local level are assessed, the inertia associated is not articulated. while local energy initiatives are considered as innovation agents, inertia is not considered explicitly. innovation is considered as a niche and inertia is considered through the niche's interaction with the regime and the landscape. the analysis is framed through the lens of reginal innovation systems (ris), which looks at locally embedded actors and systems and their interactions. complexity is analysed through the “actors”, that is technologies being considered as actors who start the complex dynamics of local energy transitions in terms of complexity, how local actors brought about local and wider energy transitions is assessed through the multi-level perspective (mlp). in terms of complexity, external data are correlated with the autonomy municipal and local energy actors had in their respective communities. while quantitative in nature, the results are not presented in their predictive capacity. complexity is treated through the framework of strategic niche management (snm), where the local energy initiatives are thought of as innovation agents bringing energy transition. the analysis is done through comparative case study analysis, which does not lend itself to generalisations or predictions. the socio-technical transitions at local levels are assessed through strategic niche management (snm), and how different localities share their networks and the outcomes of those different transitions processes are also analysed. the analytical scale is at the small-scale regional level, where transitions in the smallscale regional level are considered as catalysts for major transition. community level energy initiatives are considered here, and backwards looking analysis is presented. analytically local actors’ role in wider energy transitions are presented, in local communities, through backwards looking case studies. analytically, the impact of household level transitions has on the transition of energy systems of communities are assessed in this paper, in a backwards looking timeframe. the scale is at a municipality level, and looking backwards the scale is local level transitions processes and the networks and proximity effects between them. the study adopts a backwards looking analysis. 7 energy transitions in small-scale regions what we can learn from a regional innovation systems perspective 8 harvesting energy: place and local entrepreneurship in community-based renewable energy transition 9 local authorities as niche actors: the case of energy governance in the uk 10 local energy policy and managing low carbon transition: the case of leicester, uk 11 local governments supporting local energy initiatives: lessons from the best practices of saerbeck (germany) and lochem (the netherlands) 12 local niche experimentation in energy transitions: a theoretical and empirical exploration of proximity advantages and disadvantages table 3: continued scale and treatment of innovation normative governing paper title temporality complexity and inertia goals transitions international journal of sustainable energy planning and management vol. 14 2017 67 sujeetha selvakkumaran and erik ahlgren table 3: continued scale and treatment of innovation normative governing paper title temporality complexity and inertia goals transitions governing transitions are not covered in this analysis. governance of transitions are not covered. governance issues are not explicitly considered, but they are tackled through policy implications in the analysis, in terms of the governance at the local and national scale, especially the governance of the infrastructural decision. governance of transitions have only been considered through the actor heterogeneity. the governance issues are discussed with respect to communication and interaction of citizen power plants with the communities. normative goals are not stated, though it is implied that sustainability and a drastically changed energy system are the end goals. there are comparative pair-wise assessments of the transition processes, and normative goals are not stated. the model analysis deals with explorative scenarios, and does not accommodate normativities. many normativities are considered explicitly, such as sustainability, energy security, costeffectiveness. inherently, citizen power plants and the transition of the infrastructure is treated as normative. innovation is tackled through the technical and social factors that the transition process entails, while inertia is implicitly tackled through the social factors and other artefacts. innovation is implicitly treated as a strength in the swot analysis, but inertia is not articulated. innovation and inertia are both tackled exogenously, through the technologies and the agents' behaviours. innovation has been considered explicitly through the diffusion of new energy technologies in the system and inertia has been tackled through exogenous constraints innovation and inertia are implicitly assessed through the policy motives and barriers in the socio-technical transitions framework. treatment of complexity is by analysing local transitions through the lens of social, cultural, technical and other pertinent factors and trying to gauge the transition processes happening in different planes. the bottom-up initiatives and their transition processes are analysed through the strength-weaknessopportunities-threats (swot) framework, and analytical hierarchy process (ahp) helps quantify them. the complexity of the local level energy transition is tackled through the modelling of agents and their behaviour in the local level transition. at the same, the different pathways are explicitly specified, articulating a predictive capacity. future local community energy transitions are analysed by linking it to the visions of local actors. the analysis has predictive capacity, with the use of an energy simulation model, and linking the possible transition pathways with the actors' actions. the transitions in the infrastructure through the citizen owned renewable power plants is analysed, and the complexity is viewed through the lens of socio-technical transitions theory. predictive capacity is non-existent and a case study methodology gives in-depth analysis of the transitions process at the local level. analytically this study tries to find the commonalities between the local transitions processes and their place within the regional and national contexts. it has a backwards looking timeframe. local community level bottom-up initiatives are analysed, the analysis is presented in a backwards looking manner. the scale is represented by local level energy infrastructure, and the relationship it has towards the national energy transition, and with a forward-looking timeframe. the scale is at a municipal scale, with forwards looking timeframe. the analytical scale is both local and regional level, with the electricity generation infrastructure and backwards looking temporally. 13 one, no one, one hundred thousand energy transitions in europe: the quest for a cultural approach 14 photovoltaic diffusion from the bottom-up: analytical investigation of critical factors 15 scaling up local energy infrastructure; an agent-based model of the emergence of district heating networks 16 supporting energy initiatives in small communities by linking visions with energy scenarios and multi-criteria assessment 17 the establishment of citizen power plants in austria: a process of empowerment? continued understanding the local energy transitions process: a systematic review 68 international journal of sustainable energy planning and management vol. 14 2017 table 3: continued paper title scale and treatment of innovation normative governing temporality complexity and inertia goals transitions in terms of governance issues, the interaction at the local and national energy governance levels is analysed in the study. the completion and propagation of biogas in the local municipality is implicitly assumed to be normative, along with the participation of local actors. the local actors and their actions on the transition in the energy system is explicitly analysed, and inertia is implicitly discussed through the barriers to the transition. the complexity is analysed through the multi-level perspective (mlp) framework and socio-technical perspective on system builders. while predictive capacity is limited, there is theorising articulated, at the local energy transition level. the analytical place scale is based on a municipality and an extended temporally backwards point of view is adopted in this study. 18 towards a sustainable sociotechnical system of biogas for transport: the case of the city of linkoping in sweden the literatures assessed in this study through the framework of turnheim et al. [1] do not leave room for the analysis of spatial scale and its impact on the transitions process. for example, in [13] the authors study how intermediaries and other actors help diffuse tacit knowledge, through the actor network. there is a geographically spatial aspect to this study of the transitions process. yet, the spatial aspect of the diffusion of tact knowledge aiding the transitions process is a key characteristic of this literature. another example could be the study of [30], where the density effects are closely looked at to see how they impact on the transitions process. again, this is due to the spatial dynamics underpinning the transitions process and the framework is in-adequate in coping with this aspect. in the studies which use socio-technical transitions theories normative goals are not explicitly mentioned, and the transition to general sustainable energy systems are implicitly held as normative. for example, in [9], the creation of energy communities are implicitly held as being the goal in the transitions process. while this is not in any way redundant, how this implicit normativity is captured in the study is not clear, thus creating unnecessary ambiguity. per the explanations of the approaches tended by turnheim et al. [1] and our inductive analysis, the studies which are of the socio-technical analysis type are weak in treating the characteristics of “normative goals” and “treatment of complexity”. the examples of sociotechnical theories are snm and mlp. the uncertainty of the transitions process, which is a sub-criterion of “treatment of complexity” is not considered in most socio-technical studies. the findings in table 3 agree with this point of view of turnheim et al. [1]. as mentioned in section 2.2, and shown in figure 2, representation of decision makers and sources of innovation (sub-criteria) belonging to ‘governing transitions’ and ‘innovation and inertia’ (characteristic), respectively are closely aligned with the specific complexities of local energy transitions. in the next section, this study presents features highlighted in peerreviewed literature to be included in a suggested framework to assess local energy transitions. on the other hand, in studies which complexity is analysed quantitatively, and normative goals are explicitly stated (such as [30]), governance of transitions are not analysed. another characteristic which is explicitly analysed is the pathways of the transitions and its dynamics, in the quantitative modeling studies. while snm and mlp are clear in their explanation of the niche-regime interactions and niche-niche interactions, they often fall short of explicating the pathway dynamics that are possible through quantitative models. for example, the literature [26] clearly articulates how the different district heating projects contribute to the overall uptake of the innovation over time, and the proportion of the different types of project and their contribution to the diffusion. this is the pathway dynamics that are explicitly tackled in this particular literature studying this transitions process. upon closer scrutiny, another important aspect which should be noted is whether these local energy transitions studies should fall under initiative-based learnings (the definition of initiative-based learnings, as given by turnheim et al. [1] is discussed in section 2.2). while the authors of this study agree that these studies (core papers) have considered the myriad actors and their actions, and the learnings that accrue through this, the primary method international journal of sustainable energy planning and management vol. 14 2017 69 sujeetha selvakkumaran and erik ahlgren behind these studies are not limited to this type. in fact, as presented before, most of the studies use socio-technical transition theories for their understanding of the transitions processes, while some use quantitative methods. this finding is significant because it implies that at present local energy transitions processes are primarily understood through socio-technical theories or through quantitative modeling studies, in conjunction with initiative-based learnings. yet, both socio-technical studies and quantitative models have different strengths and weaknesses. while the socio-technical approach is good at espousing the innovation and governance issues, they fall short in explicating the normative goals or even taking them into account. likewise, while quantitative modeling is good at explicating the normative goals and in scrutinising the analytical scale better, they fall short in explicating the governance issues. the analysis of these core papers along the framework postulated by turnheim et al. [1]) clearly show that different approaches have different positive and negative aspects. the authors of this study agree that no type is complete by itself, as concluded by turnheim et al. [1] and that the approaches should be used complementarily. the findings also reinforce another premise that the authors of this present study intuited at the beginning of the study. the reference [2] has presented extensive information on the shortcomings of socio-technical transitions theories in studying transitions. these shortcomings are proven valid when they are transferred to the analysis of local energy transitions processes too. at the same time, they also give credence to the premise that in literatures, local energy transitions are mostly treated as broader energy transitions happening at a local scale. the findings in table 2 show this clearly. thus, the question whether socio-technical transitions theories, such as mlp and snm which are widely used to study broader transitions are sufficient to understand local energy transitions processes, becomes pertinent. 3.2. analysis of the peripheral papers this section will present the analysis and findings from reviewing the peripheral literature chosen in this study, as mentioned in section 2.1 (selection of scientific literature). the papers have been read and inductively analysed to capture any unifying features that were given in the peripheral papers of local energy transitions selected in this study. the section 3.1 systematically assessed the core papers. the aim of this section is to identify the features and explain them, and lay the foundation for the discussion in the following chapter, as to including the identified features into local energy transitions studies. table 4: the unifying features identified in the peripheral literature regarding local energy transitions spatial scales and ownership of different institutional situative paper title levels transition priorities structures governance 1 a practice approach to study the impact of spatiality spatial dimensions of the energy on the transitions transition [34] process 2 decentralised combined heat impact of different impact due to impact of differing impact of civil and power in the german ruhr geographical agency and priorities; society valley; assessment of factors locations ownership of sometimes the participation on blocking uptake and integration process transition is by the institutional [42] itself important structure regardless of the cost 3 does civil society matter? institutional different levels challenges and strategies of structure adaptive grassroots initiatives in italy’s fostering or of governance energy transition [43] hindering and its impacts transition process 4 exploring the transition regulatory governance of potential of renewable energy frameworks and different actors communities [44] relationship with differing institutions continued understanding the local energy transitions process: a systematic review 70 international journal of sustainable energy planning and management vol. 14 2017 table 4: continued spatial scales and ownership of different institutional situative paper title levels transition priorities structures governance 5 grassroots innovations in impact of learning networking community energy: the role of as a priority between different intermediaries in niche stakeholders development [45] 6 growing grassroots innovations: actor interactions exploring the role of as the main motive community-based initiatives in of transition governing sustainable energy transitions [46] 7 local power: exploring the different priorities motivations of mayors and key influencing the success factors for local transitions municipalities to go 100% decisions and renewable energy [4] processes 8 local renewable energy the spatial aspects cooperatives: revolution in of propagation of disguise? [47] transitions movements 9 participation in transition(s): public impacts of differing actor reconceiving public participation transitions due to dynamics and engagements in energy seen as the main the politics of adaptive transitions as co-produced, driver of system change governance for emergent and diverse [36] transition transitions 10 putting an energy system the spatial aspects transformation into practice: of decentralisation the case of the german and impact on energiewende [48] transitions 11 situative governance and energy situative transitions in a spatial context: governance case studies from germany [35] through actor heterogeneity and power 12 social planning for energy ownership of transitions [38] transition creating a wider socio-energy system, as opposed to a techno-energy system 13 stakeholder participation in stakeholder municipal energy and climate participation as planning – experiences from a driver for sweden [49] ownership of transition 14 sustainability transitions: political structure political inertia a political coalition and its influence changing the perspective [39] on transitions governance of transition international journal of sustainable energy planning and management vol. 14 2017 71 sujeetha selvakkumaran and erik ahlgren table 4: continued spatial scales and ownership of different institutional situative paper title levels transition priorities structures governance 15 towards a low carbon future: a different phenomenology of local governance electricity experiments in structures under germany [50] high-uncertainty 16 triggering transformative ownership of multi-level change: a development path transitions governance and approach to climate change being fluid its impact on response in communities [41] transitions 17 what drives the development of transition seen as transition seen as community energy in europe? a socio-ecological a socio-ecological the case of wind power system, impacted system, impacted cooperatives [40] by spatial scales by institutional structures 18 whose energy transition is it, ownership of anyway? organisation and transition being ownership of the energiewende antithetical to a in villages, cities and regions [37] technocratic transition system table 4 presents the significant features identified in the peripheral literature, through inductive analysis. these features were gleaned from the analysis of the peripheral papers, after the understanding of the core papers through the framework of turnheim et al. [1]. the five main features were identified and the following sub-sections 3.2.1 to 3.2.5 introduce the features thus identified. 3.2.1. spatial scales and levels faller [34] says that frameworks studying local transitions have ignored the fact transitions processes happen as a result of transitions practices, and these practices should be situated within the context of transitions processes, which take place at different spatial locations. at the same time, fuchs and hinderer [35] argue that the spatial context should be considered when governance is considered. the spatiality, in terms of geographic, physical and cultural location, and the different levels of spatiality and their interactions are all important in the context of local energy transitions. for example, a similar culture could be in different geographical locations but might spur on similar transitions processes and the framework to study transitions should be able to take this into account. similarly, physical locations could be dependent on physiological conditions which spur on the transitions process but might not be in geographical proximity to each other. 3.2.2. ownership of the transitions chilvers and longhurst [36] make the point that often in local energy transitions the varied methods, objectives and processes of participation of the different actors are completely ignored. thus, the nature and the mechanics of the local energy transition is often not accurate. ownership is empirically tied to agency and participation in transitions studies. ownership is defined as the concept of laying claim to the transitions process and/or the artefacts surrounding the transitions per se [36]. along with the different participatory models brought out by that literature, moss et al. [37] point out that local energy transitions is an issue of ownership: to think of it technocratically and to think of local energy transition as a socio-technical transition is a travesty to the inimitable characteristics underpinning local transitions, especially in the current times of co-owned, co-produced or co-created transitions (coining of terms by authors). thus, some of the points of ownership are; • co-produced or co-created transitions and their assessment, • cooperatives at the helm and their governance structures, • collaborative and symbiotic nature of said transitions, • adaptive capacity and, in general, resilience of societal systems, and • conflicts and mediation understanding the local energy transitions process: a systematic review 72 international journal of sustainable energy planning and management vol. 14 2017 3.2.3. the different priorities of the local communities and with the inherent synergies and oppositions–sub-optimal results busch and mccormick [4] show that local communities have different objectives, which are sometimes not in conjunction with the national or even the regional goals, and as such are even prepared to accept sub-par results, in terms of the transitions they are aiming for. they have used the “theory of planned behaviour” to map out said differences, but this aspect is also interconnected with the issue of ownership. 3.2.4. the different institutional structures, and the interplay between levels of institutional structures the plurality of actors of different types, in differing levels requires different institutional structures, as noted by [38, 39]. for example, the local municipal council has a say over land-use, but the feed-in-tariffs are set by national agencies, and the aggregators are regional operators, in the case of decentralised electricity generation [40]. thus, this is also an important element of local energy transitions. but it should be considered in conjunction with situative governance, which is explored in the next sub-section. 3.2.5. situative governance situative governance as explained through the theory of multi-level governance (mlg) [41] is the core of burch et al. work. in that, they suggest that local transitions happen because of effective situative governance, which governs the multiple actors and institutions. thus, situative governance should be considered as a unifying thread of institutional structures and ownership. also, situative governance also implies governance under higher uncertainty, which is a characteristic inherent in local energy transitions. this section has identified five additional features (when compared to turnheim et al. [1]) which is part of local energy transitions and hence ought to be assessed, studied and articulated when studying and understanding local energy transitions. in short, the authors argue that local energy transitions are not limited to the characteristics given by turnheim et al. [1]. as such, in the framework proposed by turnheim et al. the two sub-criteria marked in red in figure 2, section 2.2 (sources of innovation and representation of decision-makers) are somewhat related to the governance feature identified in the group of peripheral literature. but they are not sufficient. the five features presented here are essential in capturing the nature of collaborations and differential priorities which underpin the local energy transitions and practices. this would be a contribution to the general study of local energy transitions. the forthcoming sections 4.1 and 4.2 would further articulate this point. 4. discussion this section discusses the core papers, and situates the five features identified in section 3.2, among the core papers. in the following section (section 4.2) the authors of this paper propose an extension to turnheim et al.’s [1] framework, which may help better in the understanding of local energy transitions process. 4.1. situating the identified features among the core literatures in the previous section the authors identified five features of local level energy transitions that are not represented in the most comprehensive framework by turnheim et al. [1]) that is used to assess energy transitions. those are: spatial levels and scale, ownership of transition, differing priorities, institutional structures and situative governance. along with this, the authors identified that the pathway dynamics (pd) is also not studied in local energy transitions papers. the rest of the section 4.1 discusses these identified features in the context of the core papers. the authors have arranged and discussed the five features among the core papers, and as such all 18 of the core papers are discussed in sub-sections 4.1.1 to 4.1.5, but not all the 18 papers are discussed in the context of each feature. the aim of this discussion is to not get into lengthy prognostication of these papers, but rather to highlight how the core papers could have benefitted from an analysis of the five identified features, or in some cases articulate how the features are treated in the papers. the discussion serves as a justification of why these features are important in explicating local energy transitions. 4.1.1. spatial levels and scales the spatial levels and scales take an important place in some studies selected in the core literatures. the [27] points out that spatial parity provides advantages and needs to be discussed in local level energy transitions. also, while socio-technical transitions theories talk international journal of sustainable energy planning and management vol. 14 2017 73 sujeetha selvakkumaran and erik ahlgren about niche-regime interactions, they often do not account for spatial niche-to-niche interactions, which is assessed by [27]. in both [10] and [9], while technological, and institutional factors are considered, spatial features and the spatial context is not explicitly considered. as coenen et al. [24] mention, the analyses presented in the papers mentioned above would be enriched by the spatial context as well, since this will enhance the explanation of the transitions. in [14], the crux of their analysis has been based on the local initiatives having place-based relevance in propagating energy transitions. they also consider technologies as being ‘space-based actor’ and setting in motion a social revolution. the spatial scale is an important analytical point-of-view in local energy transitions. 4.1.2. ownership of transitions ownership of transitions as a means of driving transitions is looked at by [24]. how the national policies helped local communities owning renewable initiatives to thrive are assessed along with other enabling factors for local energy transitions. how agency and participation in local networks helps energy transitions is analysed through actor network theory in [17]. sometimes ownership of transitions is an important enabler or in some cases, a motivating factor as [15] mentions, for local energy transitions. most local energy transitions ownerships are different compared to national or even global level energy transitions. they have different ownership structures, such as coownership of technologies or patents among other things, which needs to be considered when one studies the said transitions. 4.1.3. differing priorities in [29], the authors say that at the beginning of the transition to biogas, one of the reasons for local communities to consider biogas was as a waste-disposal method and for improving local air-quality. while the national government’s policies helped, the uptake was driven by completely different priorities, among the local actors. in most local energy transitions, the local communities see the transitions as more than just means to an end, but rather as being important for other reasons as well. these reasons could range from economic upliftment of the society [33], networking and learning among the community [13], empowerment of the society [15] and even cultural unity [18, 28]. thus, the normative goal should be wide enough to accommodate these differing and sometimes suboptimal priorities which may be the nature of local energy transitions. 4.1.4. institutional structures analysis of institutional structures are considered with socio-technical transitions theories. but, they are mostly considered with the technological regime, where institutional structures prop-up the regime-change. but, as discussed in [10], most local energy transitions’ institutional structure should be amended to accommodate local energy cooperatives, and other intermediaries. also, while considering the techno-economic details and the pathway dynamics in a transition study, it is also important to assess whether the supporting institutional structure will have an effect, and if it will, what sort of an effect it would be, to make the assessment of the transition more meaningful [25]. how the multitude of actors, such as prosumers and intermediaries are considered becomes important in local energy transitions, according to [30]. for example, [11] articulate that some energy communities have equal decision making power while some depend on executive decision-making power by some local authority. the institutional structures and their analyses becomes essential to accommodate the multiple actors and their interactions. 4.1.5. situative governance in [35], the authors base their analysis on the situative governance structures and associated issues which are endemic to local energy transitions. situative governance is called for when transitions happen under high uncertainty, and they do so in most local energy transitions [26]. lemon et al., [32] also stress that situative governance is an important part in ensuring that transitions and their benefits reach local communities, and that such governance structures are in place. situative governance becomes an important feature to consider in assessing local energy transitions, because of the involvement of multiple actors as pointed out by [25, 31]. the feature of situative governance is important when considered in conjunction with ownership of transitions and institutional structures. understanding the local energy transitions process: a systematic review 74 international journal of sustainable energy planning and management vol. 14 2017 4.1. proposing an extension to the assessment framework of turnheim et al. [1] this section proposes an extension to the framework presented by turnheim et al. [1], and the extensions stem from the five features discussed in the preceding sections. figure 3 gives the proposed extension, where along with the five original characteristics (scale and temporality, treatment of complexity, innovation and inertia, normative goals and governing transitions) a new characteristic titled “institutions” is added. in figure 3, the newly added characteristics and subcriteria are shaded in green. the “institutions” characteristic has the sub-criteria of “ownership of transitions”, “participatory models” and “power and agency dynamics”. as discussed in section 3.2, this characteristic encompasses the characteristic that local energy transitions have complexities arising out of varied ownership and participatory models, which lead to more varied and complex power and agency dynamics, which in turn would affect the outcome of the assessment of local energy transitions. the power and agency dynamics are brought on by the differing priorities of local communities, with its inherent synergies and conflicts, and along with the different participatory models and ownership (as mentioned before, co-produced or cocreated transitions) within the local energy transitions and their studies would be enriched with this extension. as discussed in section 4.1, spatial scales and levels are important in local energy transitions, as spatial interactions come into more focus in local level transitions studies. thus, the authors also propose adding a sub-criterion “spatial scale” to the already existing “scale and temporality” characteristic. in addition to the discussions presented in sections 4.1 and 4.2, the authors also propose adding a subcriterion to the characteristic “treatment of complexity” as per section 3.1. the pathway dynamics is important in understanding the local transition process, and in understanding the effects of the transitions themselves. as such, “treatment of dynamics”, either in its descriptive or normative form [5], needs to be accounted for in local energy transitions studies. thus, the authors extend the “treatment of complexity” characteristic with a sub-criterion “treatment of dynamics”. overall, authors agree with various literatures which have called for an integration and combination of several methodologies to deal with socio-technical [5, 8], and energy transitions [22, 51, 52]. a combination of methodologies will shed more light on the complexities figure 3: the proposed extended framework to assess local energy transitions, as stylised by the authors scale and temporality analytical scale multi-scale linkages time horizon time orientation temporal articulation spatial scale treatment of dynamics treatment of uncertainty predictive inclination explanatory focus methodological strategy sources of innovation system inertia approach to sustainability normative positioning and conceptualization treatment of complexity innovation and inertia normative goals governing transitions conceptualisation of policy representation of decisionmakers view on intervention institutions ownership of transitions participatory models power and agency dynamics international journal of sustainable energy planning and management vol. 14 2017 75 sujeetha selvakkumaran and erik ahlgren arising in studying and understanding local energy transitions and processes. the extension of the turnheim et al. [1] framework is tendered because of the deep inductive analysis carried out of a set of 18 core, and 18 peripheral papers. this proposition could be strengthened by empirical studies and theorising as well. this would increase the validity of the proposed extended framework and will better articulate how the understanding of local energy transitions processes are enhanced by extending the said framework. 5. conclusion the findings with regards to the core papers selected in this study show that most studies have analysed the local transitions process through socio-technical transitions theories such as strategic niche management (snm) and multi-level perspective (mlp). these theories explain the niche and regime interactions well, along with the innovation process. the analytical scale is local in terms of place and limited to the sub-national scale, and most of these studies are backwards looking, in terms of explaining and theorising after the fact. but, they fail to treat complexity of the transition in terms of the pathway the transition takes and the dynamics of that pathway of the transition. the studies which use a primarily quantitative methodology, such as system dynamics or agent-based modeling, have normative goals which are explicitly stated, but these studies do not tackle the governance of transitions extensively. while socio-technical transitions theories have some inherent shortcomings, our findings point out that in the core papers selected, local energy transitions were mostly studied as broader energy transitions, and the shortcomings discussed in [1] are still present in these literatures. this finding calls for better scrutiny of understanding local energy transitions. while the turnheim et al. [1] framework is the most comprehensive in terms of analysing sustainability transitions, the authors find through the analysis of the peripheral papers that local energy transitions share most of the features of energy transitions and processes but, also have certain additional features which are often overlooked. the five such features that are critical when studying local energy transitions are spatial scales and levels, ownership of the transitions, differing priorities of the actors, different institutional structures, and situative governance issues. finally, the paper proposes extending the framework put forward by [1] by adding a characteristic titled “institutions” with sub-criteria “ownership of transitions”, “participatory models” and “power and agency dynamics”. at the same time, it also prescribes adding the sub-criterion “treatment of dynamics” to the characteristic “treatment of complexity” and adding the sub-criterion “spatial scale” to the characteristic “scale and temporality”, respectively. acknowledgements this work was funded by the eu interreg project (project number: 20200803) samskabende grön omstillning (co-creating green transitions) and by the swedish energy agency. the authors would like to thank the anonymous reviewers who gave valuable comments which have improved this article. references [1] turnheim b, berkhout f, geels f, hof a, mcmeekin a, nykvist b, et al. evaluating sustainability transitions pathways: bridging analytical approaches to address governance challenges. glob environ chang 2015;35:239–53. doi:10.1016/j.gloenvcha.2015.08.010. 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[52] holtz g. modelling transitions: an appraisal of experiences and suggestions for research. environ innov soc transitions 2011;1:167–86. doi:10.1016/j.eist.2011.08.003. 09.1120-4053-2-le.qxd 1. introduction electricity generation from renewable energy sources (res-e) is supported in many countries around the world. in the european union, every member state has established a dedicated policy programme for financial support of res-e [1]. ever since the first support schemes were designed by policy makers some decades ago, there is an ongoing debate about which policy instruments and which design options are most suitable for reaching the targeted deployment of renewable energies. this paper contributes to this debate by exploring risk implications of policy instruments and by analysing the impact of policy choices on incentives for private investors. this perspective is especially relevant in liberalised markets. here, policy making must ensure that adequate incentives are given to private investors if international journal of sustainable energy planning and management vol. 07 2015 117 specific res-e targets are to be achieved. to design policies that are effective (in terms of target achievement) and efficient (in terms of ensuring the highest social welfare), policy makers must look beyond costs and (amongst other things) consider all aspects of profitability that are of concern for private investors, including risk aspects and other effects on cost of capital (see also [2]). such a focus on profitability and risk rather than on costs is crucial for designing policies that create adequate investment incentives. therefore, this paper uses a stochastic discounted cash flow approach to model average profitability (i.e. net present values) as well as risks (i.e. probability distributions of net present values). using an extended financing and investment decision model we identify the impact of increased risks on renewable investments and thus on the required renewable support. thereby we go beyond standard international journal of sustainable energy planning and management vol. 07 2015 117-134 support mechanisms for renewables: how risk exposure influences investment incentives ������� ���� � ��������� ���������� ������� �� ���� ������������� ���������������������� ���� ������ �� ����� ���� � �������������������� ����������� !��"��# $ ��% ���������# ������������& �� ����������� �� ���� ���'��� ���������(�� ���������� ���� �&��� ������ ���� � ������ �%���)�������*��+��������� �� ���� �,����������� ���-��.��������/����� # abstract we analyse quantitatively how risk exposure from different support mechanisms, such as feed-in tariffs and premiums, can influence the investment incentives for private investors. we develop a net cash flow approach that takes systematic and unsystematic risks into account through cost of capital and the capital asset pricing model as well as through active liquidity management. applying the model to a specific case, a german offshore wind park, we find that the support levels required to give adequate investment incentives are for a feed-in tariff scheme approximately 4-10% lower than for a feed-in premium scheme. the effect of differences in risk exposure from the support schemes is significant and cannot be neglected in policy making, especially when deciding between support instruments or when determining adequate support levels. keywords: investment risk; unsystematic risk; liquidity management; offshore wind; feed-in tariffs. url: dx.doi.org/10.5278/ijsepm.2015.7.9 * corresponding author e-mail: lkit@dtu.dk dx.doi.org/10.5278/ijsepm.2015.7.9 118 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives finance models which focus exclusively on systematic risk, i.e. risks that are correlated with overall market returns. such standard approach would provide adequate results for perfectly diversified investors. yet renewable investors frequently do not have a perfectly diversified portfolio. we therefore acknowledge the relevance of non-systematic risk (sometimes called idiosyncratic risk) by explicitly modelling liquidity management. liquidity management should be a key concern for companies in the presence of systematic and unsystematic financial risk if financial illiquidity is costly. thus we develop a more realistic model of investor behaviour which allows assessing the impact of support scheme design on investment decisions. with such insight, policy makers are able to make more informed decisions about required support levels and to evaluate the consequences of e.g. switching from one policy instrument to another. in europe, fixed feed-in tariffs (fit) are the dominant policy instrument applied for the support of res-e [1]. with an increasing share of variable res-e in the system and an increasing pressure to improve market integration of res-e, many countries have now started to re-evaluate the use of traditional fit schemes. some have already implemented alternatives, mostly in form of feed-in premiums (fip) [1]. a counter-argument frequently put forward against fip is that this instrument exposes res-e investors to higher risk (see [3]). in this paper, we do not investigate which policy instrument is to be preferred. instead, we take the ongoing policy trend in europe as a starting point and develop a general approach to analyse the implications of exposing investors to higher market risk. we then use the developed approach to analyse the switching from a fit to a fip scheme and quantify the consequences regarding investment attractiveness and required support payments for the case of an offshore wind investment in germany. the developed model aims at a theoretically consistent approach, drawing from different aspects of financial theory, along with an empirically sound parametrisation. the standard model for dealing with risk in investment analysis is the capital asset pricing model (capm), developed by sharpe, lintner, and mossin ([4-6]), which determines systematic risk and cost of capital based on the correlation of asset return with the market. we consider systematic risk based on the capm approach. in addition to that, we also consider unsystematic risk. we diverge from the standard approach here by assuming that investors may accrue cost from avoiding financial distress. in this, we draw from the approach developed by schober et al. [7]. the contributions of this paper are threefold: 1) we expand the framework of schober et al. [7], who assessed the impact of unsystematic risk via liquidity management for a single year, by developing a multiyear approach; 2) we apply the framework to a new area, namely investments in renewable energy projects under different support schemes; 3) we quantify the consequences of different risk exposures for a concrete case, an offshore wind park in germany. the remainder of the paper is structured as follows. in section 2, we describe the background for our analysis, including the relation to financial theory, the general dcf approach and the relevant support instruments. in section 3, we introduce our methodology, including the model structure, the modelling of stochastic processes, the modelling of liquidity management, and the beta analysis for the capm. in section 4, we apply the model to a specific case, namely a german offshore wind park in the baltic sea. we discuss the results in section 5 and conclude with section 6. 2. general considerations: investment risk 2.1. standard financial theory and systematic vs. unsystematic risk a basic assumption of standard financial theory and portfolio selection theory, as formulated by markowitz in 1952, is that risk and return are the only and equally important factors to consider in investment appraisal [8]. later, sharpe and lintner [4,5] showed that firms should only be concerned with systematic risks when considering investment in new assets. this is, because it is assumed that perfect portfolio diversification can be obtained at shareholder level without transaction costs. this also implies that a firm should not undertake costly measures to avoid bankruptcy as, in perfect markets without transaction costs, old firms can go bankrupt and new firms can be established immediately at no loss. in reality, however, costs of bankruptcy can be substantial and irreversible [9]: they can include loss of market share, inefficient asset sales, foregone investment opportunities, and more. in the presence of transaction costs, the generally agreed assumption of financial theory that investors are risk-averse (see [10]) predicts that investors are willing to take action against risk exposure, by implementing safety measures. firms are thus often willing to undertake costly measures to avoid economic and financial distress [11]. in newer developments of financial analysis, risks other than systematic market risk are being acknowledged. further risk factors are incorporated, e.g. in the three-factor model by fama and french [12], with the argument that market imperfections (and consequential diversification constraints) as well as transaction costs make more types of risk costly. the choice of model can have significant implications on the valuation of investment projects. empirical studies have found that required returns on equity may differ by 2% and more between the capm and the fama-frenchmodel [13,14]. also for renewable assets, we expect that both systematic and unsystematic risks are relevant for investment decisions, because of transaction costs and irreversibility effects. we thus acknowledge that failures (e.g. bankruptcy) are costly to investors, and incorporate them into the analysis. our model is therefore based on a net cash flow approach with risk modelling at two levels: 1) systematic risk, which stems from market risks and influences the cost of capital; and 2) unsystematic risk, which affects the required capital basis for an investment. more specifically, we assume that firms use liquidity reserves to mitigate their exposure to risk of financial distress. a greater variation in profit will generally require higher liquidity reserves. we thus expect that a support mechanism which mitigates variation in profits the most leads to the lowest required liquidity reserves and thus highest expected returns or lowest required support levels. a challenge with unsystematic risks is, however, that they are mostly in-transparent and specific for an individual firm. we therefore revert to an application case showing the concrete effects in a specific setting. 2.2. discounted cash flow evaluation of an investment the standard method for evaluating investments is the discounted cash flow (dcf) approach (see e.g. [15]). in this approach, all positive and negative cash flows related to the respective investment project are simulated, discounted with the applicable rate for the cost of capital, and summed up, as shown in eq. (1): (1) where i0 are the investment costs, rt are the revenues, ct are the operational costs, r is the discount rate (cost of capital), and t is the project lifetime. npv i r c r t t t t t = − + − += ∑0 1 1( ) , if the resulting net present value (npv) of a project is positive, then the investment should be undertaken. since many of the different elements contained in the future cash flows are not known with exactitude, they have to be simulated. to account for the uncertainty, many investors include probability distributions of underlying elements in their assessment. this is done by e.g. creating different scenarios or making monte carlo simulations. in principle, all three basic cash flows, namely revenues rt, operational cost ct, and investment cost i0, can contain uncertainties. we simplify subsequently by assuming that at the time of investment decision, i0 and ct are known and fixed. this may e.g. be achieved through fixed price contracts. future revenue streams rt are, however, uncertain and can cause variations in the returns from the project, which induces risk. traditional dcf analysis is based solely on standard financial theory and the assumptions underlying the capm in which only systematic risk is relevant. systematic risks are exclusively dealt with through the cost of capital r. we have argued above that also unsystematic risks should be accounted for in our type of analysis. we do this by considering the prevention of bankruptcy through liquidity management. some may argue that a real option approach would be most appropriate to dealing with risks. this is especially the case for irreversible decisions (such as investments with sunk costs) and evaluation of different decision options (such as operational choices). in this paper, we, however, deal with a somewhat different kind of risk exposure: first, our starting point is the assumption that the investment is politically desired and thus shall be undertaken we are merely investigating the effects of different support schemes on that investment; second, the profitability is in our setting mostly unrelated to operational decisions. we therefore argue that these kinds of risk are sufficiently addressed by a stochastic approach as used here, in which we use a dcf analysis with added risk elements, i.e. liquidity management and related monte carlo simulation. 2.3. liquidity management: cash reserves in firms when considering unsystematic risks in form of risk of default or bankruptcy in a firm, one should distinguish between economic and financial distress. economic distress occurs at low market asset values relative to debt and causes insolvency. financial distress occurs at low cash reserves relative to current liabilities and leads to illiquidity. usually, a firm defaults because of both factors, but this has not necessarily to be the case. international journal of sustainable energy planning and management vol. 07 2015 119 lena kitzing and christoph weber davydenko [11] shows that 13% of defaulting firms in his sample were insolvent but still liquid, and 10% of defaulting firms were illiquid but still solvent. in our theoretical model, we focus on the indicator of financial distress (and firms avoiding illiquidity), acknowledging the simplification made. moreover, we simplify by assuming that risk of financial distress represents all unsystematic risks in a firm. knowing that there might be additional sources of costly unsystematic risk, our results can only establish the lower boundary for such costs. this approach corresponds to the one taken by schober et al. [7]. one way of dealing with risk of financial distress is liquidity management. liquidity management can take the form of either expenses for costly hedging (in order to reduce the risk of low revenues for the firm) or provision of an additional capital buffer in the firm [7]. we understand liquidity management as the decision to upholding an optimised level of capital buffer within the firm to prevent defaulting, i.e. the going concern in possible illiquid states. a firm has several options to create a capital buffer: 1) secure bank lines of credit; 2) establish sufficient cash reserve in the beginning of a risky project; 3) raise required capital in the short term from shareholders (through retained earnings or equity injections). as discussed by flannery and lockhart [16], uncertainty about access to funds in the future (including from banks) might lead to excess cash holdings in a firm. bates et al. [17] give an overview of the literature's theories of holding excess cash in firms and show empirically that excess cash holdings in firms are common. thus, we focus on cash reserves and capital from shareholders in this analysis (and not bank lines of credit). because of the time-value of money and tax effects of cash holdings, a firm will however consider it optimal to build up cash reserves as late as possible. this corresponds to the conclusions of acharya et al. [18], who find that constrained firms are more likely to save cash out of cash flows. therefore, we focus on the third of the above mentioned options, in which firms raise capital as late as possible either through retained earnings (i.e. by saving of incoming cash flows during operations) or, whenever necessary, by additional equity injections. this implies that a firm will strive to keep the liquidity reserve in any year as low as possible just at the level needed to avoid financial distress in the next period with sufficient probability. it should be noted that liquidity management through cash reserves in the firm can at best decrease the risk of financial distress to a desired level, but can never eliminate it completely. 2.4. support schemes and investment risk several different policy instruments can be used to provide financial support for renewable energy projects. these span from investment grants over tax breaks to generation-based support. the latter type is dominant in europe [1]. here, one can distinguish between instruments that expose renewable producers to market price risks and those that eliminate or at least reduce market price risks. during the early implementations of renewable support, mostly those instruments were applied that shield renewable producers from market price signals and thus also market risks [1]. these are for example fixed feed-in tariffs, where renewable producers are guaranteed a fixed price for a certain period (e.g. 20 years). eq. (2) illustrates the revenue flows under a feed-in tariff scheme: (2) where qt is the renewable energy production volume per time period and fit is the long-term guaranteed tariff level. uncertainty stems here solely from the unknown production volume, which depends on the available renewable resources in time period t. more recently, other instruments like quota systems with tradable green certificates or feed-in premiums are increasingly applied in europe [1]. in these schemes, support is paid out as market add-on. this means that renewable producers need to sell their production on the power market and are exposed to its risks. we focus here on feed-in premiums, under which revenues are determined as in eq. (3): (3) where qt is the renewable energy production volume in period t, st is the power price and fip is the long-term guaranteed premium level. gt is a weighting factor (sometimes labelled “market-value factor”) describing the fact that the average revenue by renewable producers might be below (or above) the average spot price level. this thus allows taking into account systematic correlation between the supported production and the market price [cf. 19]. revenue risk stems in this support r q g s fipt fit t t t= +( ), r q fitt fit t= , 120 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives international journal of sustainable energy planning and management vol. 07 2015 121 lena kitzing and christoph weber setting from both the unknown production volume and the unknown market price. 3. methodology 3.1. model structure we develop a multi-year cash flow model that estimates the investment incentives for a wind energy investor under different risk exposures, and that incorporates dynamic liquidity management. it is dynamic in the sense that the liquidity reserve is recalculated each year depending on the current cash flow situation. however, it is static in the sense that the cost of capital used for the liquidity reserve is fixed and does not depend on previous utilisation. the purpose of the model is to determine a shareholder value (shv) after liquidity management which then can be used to compare the attractiveness of investment under different scenarios. for transparency reasons we model a firm that has a single activity: the investment project throughout the lifetime of the project. this is also similar to creating a special purpose vehicle for a project. we thus assume that the shv of this project/firm is the key determinant for the investment decision. using the shv we can also derive the minimum required support level for the specific project by assuming that the investment threshold is given by an ex-ante expected shv of at least zero. based on these two indicators (shv and required support levels), comparisons between different support scheme designs can be made. figure 1 illustrates the model structure. the model consists of several parts: a power price model, a wind production model, the beta analysis (estimating cost of capital), and the cash flow model (divided into cash flows before liquidity management and after). all parts of the model are necessary to be able to adequately dealing with risk: power price and wind production model generate inputs to the cash flow model, which calculates the cash flows required to determine the shareholder values. since the cash flows to shareholder depend on the liquidity reserve, which in turn depends on the probability of financial distress, a nested monte carlo simulation approach is required. probability distributions and expected values of shareholder values and support payments are the result of our cash flow analysis. at the step of discounting the cash flows for the shareholder value, the beta analysis is required to determine the cost of capital for the shareholders. in the following sections, the different components of the model are explained in detail. since we aim at deriving a multi-year investment assessment, we focus on the stochastic characteristics of annual quantities and prices, which in turn represent aggregates of shorterterm (e.g. hourly) values. 3.2. power price model for modelling the annual average power prices, we use the two-factor model developed by schwartz and smith [20]. this two-factor model consists of a long term process reflecting the uncertainty in the equilibrium cash flow model support payments beta analysis shareholder value power price model wind production model cash flows cash flows before liquidity management after liquidity management monte carlo simulation risk implications monte carlo simulation quantile analysis required reserves figure 1: model structure price and a short term process reflecting stochastic shorter term deviations from the equilibrium price. the logarithm of the overall power price st is obtained as the sum of the two stochastic components: (4) the long term process ξt expresses fundamental changes in the equilibrium level that are expected to persist, and reflects the natural logarithm of the longrun equilibrium level st — . changes in this long-run equilibrium level may e.g. be related to changing fuel prices or modifications in the co2 regime. the developments over the last decade suggest that these changes are hardly predictable and that also in the future, substantial uncertainty will persist. the long term process then follows an arithmetic brownian motion: (5) where ξt has drift μξ and volatility σξ. this corresponds, according to itô's lemma, to (6) the long term process can be exactly discretised using an euler scheme [21], to: (7) where εt is a random element with εt ~ n(0,1). the short term process χt expresses the mean reverting relation between the current price and the currently expected long term equilibrium: (8) its deviations are assumed to revert to zero following an ornstein-uhlenbeck process: (9) where χt has volatility σχ and mean reversion coefficient κ. d dt dzt tχ κ χ σ χ χ= − + , χ ξt t t t t s s s= ⎛ ⎝⎜ ⎞ ⎠⎟ = −ln ln( ) . ξ ξ μ σ εξ ξt t t tt t+ = + +δ δ δ , d s s dt s dzt t t= + ⎛ ⎝⎜ ⎞ ⎠⎟ +μ σ σξ ξ ξ ξ 1 2 2 . d dt dztξ μ σξ ξ ξ= + , ln( ) .st t t= +ξ χ the discretisation necessary for simulation is according to phillips [22] : (10) where ω– t is a random element with ω – t ~ n(ρχξεt,1–ρ 2χξ), and ρχξεt e [–1,1] represents the correlation of dzξ and dzχ. for sake of simplicity we set the market value factor gt to 1. this is also justified by the fact that the market value factor for offshore wind in germany has been so far rather close to 1 and is expected to remain so at least in the near future [cf. 23]. 3.3. wind power production model wind production is modelled in a somewhat simplified setting by assuming that the wind production of one period is unrelated to previous or subsequent periods. we deem this approach appropriate when the model calculations are based on relatively large time steps t, such as monthly or yearly periods. thus focusing on time-uncorrelated distributions, several studies emphasise the appropriateness of weibull distributions. these are deemed most appropriate for estimating wind speeds and also wind energy production (see e.g. [24] or [25]). we thus use a weibull distribution, directly on the wind energy production. for the implementation in simulation, we use the quantile inverse cumulative distribution function: (11) where qt is the stochastic wind power production in period t, p is the average expected wind power production from the project, λ is the scale parameter of the weibull distribution, k is the shape parameter of the weibull distribution, and 0 < εt < 1 is a uniformly distributed random variable, corresponding to the quantile of the production distribution function. 3.4. cash flow model: before and after liquidity management as mentioned above, we focus on the shareholder values and thus use the free cash flow available for shareholders fcfet as basis of the evaluation. we denote the sum of all discounted fcfe after liquidity management as the shareholder value (shv). this q pt t k= − −λ ε( ( )) ,ln 1 1 χ χ σ κ ωκ χ κ t t t t t te e + − − = + − δ δ δ1 2 2 , 122 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives indicator serves as the basis for comparing the investment incentives between different cases. at time of investment (t = 0), fcfe0 consists of cash flows from investment and financing activities. total capital required at project investment is: ω0 = i0 + l0, where i0 is the direct investment cost and l0 is the liquidity reserve that the firm has chosen to establish from the beginning of the project (if any). we calculate the free cash flow available for shareholders before liquidity management for each year t =1...t as: (12) where rt are the revenues, ct are the operation and maintenance cost, θt are the interests paid for interestbearing debt, tt are the payable taxes (based on revenues, operational costs depreciation and interests), and dt are the debt injections (if positive) or the debt repayments (if negative). the revenues rt depend on the production volume, on the achieved market price, and on the payments from the support scheme. the revenues under the two analysed support schemes are defined as in eq. (2) and (3). the operation and maintenance cost ct are in our model deterministic and fixed costs, but in principle they can also be modelled as stochastic, if necessary. the interest bearing debt is calculated as follows: in the year of investment, a loan corresponding to a certain percentage of total investment ω0 is taken, which is then repaid on an annuity basis over a predefined amount of years. the liquidity management is addressed through creating a cash reserve, here denoted the liquidity reserve lt, which changes with δlt = lt – lt–1. the liquidity reserve must not become negative at any point in time during the project lifetime. as soon as lt < 0, there is insufficient cash available and the firm experiences financial distress. we calculate the free cash flow available for shareholders after liquidity management as: (13) the change in liquidity reserve δlt depends on the liquidity reserve still available in the ongoing year lt, the expectation of fcfet+1 and the risk appetite of a firm. in order to determine the required level of liquidity fcfe fcfe lt lm t t= + δ , fcfe r c t dt t t t t t= − − − +θ , reserve lt to avoid financial distress in the following year with sufficient probability, we apply a quantile computation analogous to the value-at-risk (var) calculation: (14) where η is the level exceeded by fcfe t+1 at confidence level α ε [0,1]. we define lt = max{0,–η}. if η is positive, no liquidity reserve is required since the free cash flow is almost certainly positive and thus sufficient to satisfy all payment obligations. in contrast, a negative η implies that liquidity reserves are necessary to prevent financial distress. we determine η by monte carlo simulations on fcfet. assuming for example that the firm strives to avoid financial distress with a probability of a = 99.73% (the three-sigma rule), financial distress may only occur in 0.27% of the simulation paths in any year. from the simulation results, we determine η as the 0.27%-quantile of fcfet +1, from which we then derive the required liquidity reserve lt. depending on the level of the liquidity reserve in the previous year lt−1, we subsequently determine the required change in reserve δlt. we also undertake a sensitivity analysis for a financial distress probability of a = 95.45% (two-sigma). after having determined the necessary liquidity reserve for each year, an additional set of monte carlo simulations must be undertaken for fcfet lm. in outcomes where fcfet+1 realises as fcfet+1 > η, the excess reserve is paid out to the shareholders in each year, so that no cash is held in the firm other than the reserve required for the subsequent year. in outcomes where the liquidity reserve was not sufficient in a year, i.e. where fcfet+1 realises as fcfet+1 < η, the firm is assumed to immediately default. as a simplification we model this as if from this year onwards, all future cash flows in the defaulting simulation path become zero. this implies that we do not consider any final financial settlements and consider neither additional equity obligations nor pay-outs after bankruptcy of the firm. 3.5. model outputs: shareholder value and support payments the shareholder value is then determined as: (15)shv fcfe r t lm e t t t = += ∑ ( ) , 10 η α αα= = − < −− + +q fcfe p fcfeq t t( ) { : ( )},1 11 1sup international journal of sustainable energy planning and management vol. 07 2015 123 lena kitzing and christoph weber the free cash flows available for shareholders after liquidity management fcfet lm are discounted with the cost of equity re, which is described in section 3.6. the support payments are determined from a socioeconomic perspective, as they are borne by all electricity consumers or tax payers. they are calculated differently for each support scheme: for fip schemes with a fixed market add-on, the support level is straightforward: it directly corresponds to the guaranteed premium. the net present value of support payments (nsp) is for each simulation path calculated as the sum of the discounted yearly support payments, which corresponds directly to the project revenues from support: (16) where we use the risk-free rate rf to reflect the social time preference rateii . this ensures also a consistent comparison of the different cases. for fit schemes, the support payments have to be determined as difference between the guaranteed tariff and the market price: (17) this relies on the following assumptions: (1) the market value of the electricity produced under the fit corresponds to the current market price st, (2) this value is fully realised by the off-taking entity, and (3) the revenue from its market sales is entirely used to counterbalance the cost of support. otherwise, the total support costs would depend on further factors and could not be calculated based on the market prices only. note that potentially, in years where the market price lies above the guaranteed price level, the fit support costs can be below zero. to obtain the equivalent fit support level in real terms that is directly comparable with the fip support level, the total support payments nspfit are then divided by the total production and an equivalent real per unit price is computed using an annuity factor. 3.6. estimating beta and the support scheme-specific cost of capital as mentioned above, we use the capm to describe the impact of systematic risk on the required return on nsp q fip s r fip t t f t t t = −( ) +( )= ∑ 11 , nsp q fip r fip t f t t t = +( )= ∑ 11 , equity. the expected rate of return on equity re is estimated by the capm as [15]: (18) where rf is the risk-free rate, rm is the market return, and βe is the equity beta. risk-free rate rf and market return rm are general (not firm-specific) indicators and can be estimated by adequate long term government bonds and market indices (such as the s&p500, eurostoxx or dax). equity beta βe describes to what extent the risks of a firm (in occurrence a project) are correlated with general market risks. generally, βe is derived from historical observations using a two-step procedure: first, an asset beta βa is determined from historical returns (on shares) using eq. (19): (19) this procedure can easily be applied for firms with publicly quoted stocks, using historical time series of their stock prices. however, we are not dealing with a stock-listed company but a specific investment project. we thus have to derive historical equivalent returns by creating a time series of profits for each support type. since the price for fit consists of a fixed tariff, there is no variation in market prices. for fip schemes, we create a time series from historical power prices, the fixed premium and a fixed level of operation and maintenance cost and depreciation. this reflects typical fip 'profits', from which the returns can be derived. using eq. (19), asset beta βa can be derived, comparing the obtained time series to the market index. since the fip time series becomes more or less volatile depending on the level of the fixed premium, the asset beta changes with the support level granted. this should be accounted for in any model application. second, βa needs to be re-leveraged to βe based on specific firm characteristics, i.e. debt/equity-ratio and tax rate rt, using eq. (20) [26, p.713]: (20) the resulting 'geared' beta βe can be used to calculate the cost of equity using eq. (18). β βe a tr d e = + −⎛ ⎝⎜ ⎞ ⎠⎟ 1 1( ) . d e βa a m m cov r r var r = ( , ) ( ) . e r r r re f e m f[ ] = + −( )β , 124 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives i and not as often done using an euler scheme, see [21] ii how societal risk preferences should be reflected in the used discounting factor requires further investigation. as the nsp serves subsequently only as a relative measure for comparing different support schemes, we leave this question for further research. for the data analysis, we use the closing price of each trading day from a (stock) market index and compare it to a closing price of forward electricity prices, which are then adjusted according to the support scheme. here, closing prices of short term electricity forwards (e.g. one-year ahead) are used as basis, acknowledging that the life-time value of a project does not only depend on short term electricity forwards, but on the longer term electricity price evolution. yet data and our empirical estimation of the power price model suggest that oneyear ahead power futures already strongly correlate with the long-term price expectations. therefore, changes in forward prices reflect changes in project value and can be compared to asset prices from stock markets. 4. case application: offshore wind project applying the developed model to a specific case, we chose a typical offshore wind project in the german baltic sea. we first introduce the assumptions taken for the cash flow analysis, then proceed to the beta analysis, and finally present the case results. 4.1. cash flow analysis as basis for the cash flow analysis, we make a number of assumptions related to the design choices of the support schemes, the stochastic processes, and project specific characteristics. 4.1.1. support schemes as mentioned in section 1, feed-in tariffs and premiums are the two support schemes that are highly relevant in the current european discussion of energy policy development. we thus compare the two in our case. we assume the fit scheme to be a traditional price guarantee. this means that an operator of a renewable project receives a pre-determined, fixed price for each unit of electricity generated, independent of the market price. we do not allow temporary or permanent optingout of the fit scheme. we see this as simplification, as in some circumstances an opting-out might be attractive, e.g. when the market price becomes structurally higher than the guaranteed tariff. such analysis is not in focus of our study, but it might be relevant for future investigation. we assume the fip scheme to be a pre-determined, fixed add-on to the market price for each unit of electricity generated. neither the fit nor the fip prices are assumed to be index-regulated, i.e. they do not increase with inflation but remain constant in nominal terms. in order to increase the transparency of results we assume that the support in both cases is granted throughout the project lifetime. we do not ex ante assume a support level. we rather determine the minimum required support levels in each scheme through simulation. 4.1.2. calibration of the price processes the two-factor schwartz and smith model is calibrated to the german power market. as basis for the calibration we use german power forwards (phelix futures), more specifically the closing price on each trading day between october 2003 and september 2013 [27]. the relevant prices of the 1-year forwards and 5-year forwards are shown in figure 2. since the focus of the paper is not on advanced econometric estimation, we use rather straightforward calibration techniques for deriving the parameter values. for the long term process the drift and volatility parameters μξ and αξ have to be estimated. we use international journal of sustainable energy planning and management vol. 07 2015 125 lena kitzing and christoph weber 4.6 0.8 0.4 0 −0.4 −0.8 −1.2 4.2 3.8 3.4 3 40-2003 32-2006 25-2009 18-2012 = in(st) (left axis) = in(st) – (right axis) 100 80 60 40 20 0 p o w e r p ri ce ( e u r /m w h ) 40-2003 32-2006 25-2009 18-2012 st (1-year forward) st (5-year forward) tξ tξtχ figure 2: historical power prices, weekly, 1-year and 5-year forwards from the german market (eex), and the corresponding short-term and long term model processes, [27] and own calculations 5-year forwards as proxy, since these represent the longest time horizon on the german power market with at least some trading volume on a continuous basis. αξ is estimated as the standard deviation of price differences δξt = ln (s _ t) − ln (s _ t−1) where s _ t is represented by the weekly time series of the 5-year forward over ten years (from mid-2003 to mid-2013). the drift is estimated by taking the average of, δξt = ln (s _ t) − ln (s _ t−1) and hence μξ can be analytically derived from the formula. in a last step, the parameters must be annualised from weekly values using a factor of , whereby δt =1/52. we arrive at an annual drift of μξ = 0.00148 and volatility of σξ = 0.11402. as starting value s _ 0 for the simulation, we take the closing price of the last traded 5-year forward of our time series, i.e. from week 36 in 2013, and obtain s _ 0 = 37.65 eur/mwh. for the short term process mean reversion coefficient κ, volatility parameter σχ, and correlation parameter ρχξ have to be estimated. we estimate κ from an ordinary least squares regression analysis of the time series δχt = χt − χt−1 with χt−1 = ln(s _ t −1). from the resulting weekly coefficient α , the annualised mean reversion rate is derived using the relation (cf. eq. (10)). we obtain κ = 0.5377. in an alternative approach based on skorodumov [28] that uses the property of 1/2 be made with a diagonal line mean-reverting process for estimating the mean reversion and a graphical analysis of the price process, we would arrive at a similar level of κ = 0.4806. we derive σχ by making use of the closed-form solution of the process, as described by davis [21]: (21) we estimate var [χt +δt] from our time series through least squares linear regression. inserting all parameters into eq. (21), we find σχ = 0.0976. to estimate ρχξ, we apply the standard statistical approach, using , where we have n = 520 observations. the correlation is estimated to be ρ ξ ξ χ χ σ σχ ξ ξ χ = − − −= ∑ ( ( ))( ) ( ) δ δ δ δi i i n n 11 var et t t tχ σ κ κ χ + − +[ ] = −( )δ δ1 2 2 2 ( ) , t a 1 2 2 = ln( ) − +ln t ( )1 a δ δt μ σξ + ⎛ ⎝⎜ ⎞ ⎠⎟ 1 2 2 ρχξ = 0.1073. as starting value s0 for the simulation, we take the closing price of the last traded 1-year forward of our time series, and obtain s0 = 37.28 eur/mwh. 4.1.3. calibration of the wind distribution the wind model is calibrated to a historical wind index. the most comprehensive set of data available is from denmark [29], which is a set of monthly values from 1979 to 2013. since our model is based on annual considerations, we aggregate the data into yearly values. we assume that this data set is also applicable for a location in the german baltic sea. as described in section 3.3, the weibull distribution is determined by scale parameter λ and shape parameter k. we use the maximum likelihood method for estimating the parameters, and obtain λ = 103.6 and k = 12.05. the wind index obtained from the weibull distribution is then multiplied with the expected annual wind production. we estimate the expected annual wind production to be 4,040 mwh/mw at 100% availability, which is the expected average for a typical new large offshore wind park in the baltic sea, such as kriegers flak [30]. at 96% availability, the expected electricity exported to the grid is estimated at 3,878 mwh/mw per year. 4.1.4. project specific cost assumptions the required project specific assumptions are investment cost, operational cost, project lifetime, depreciation rules, and income tax rate. table 1 summarises all estimates. we estimate investment costs based on an average of the historical investment cost of all 45 commercial offshore wind parks in europe (data collected from [31]). furthermore, we expect additional project financing cost, which we estimate based on information given in [32]. total upfront capital expenditures are thus estimated to be 3.87 million eur/mw. 126 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives table 1: project specific cost assumptions, based on [30-33] and own calculations investment cost 3.01 meur/mw additional financing cost 0.86 meur/mw operational cost 106.8 keur/mw/y lifetime 20 years depreciation straight line, 20 years income tax rate 28.1% empirical values for operational costs of offshore wind parks in europe range from 20.2 eur/mwh to 36.7 eur/mwh (2010 prices) [31, p.80]. in reality, the operational costs are partially fixed and partially dependent on the production volume. we simplify by assuming fixed annual cost. we use the average value of source [33] transferred to 2014-prices and a per-mwvalue, arriving at a fixed annual cost of 106.8 keur/mw. the income tax rate in germany comprises 15% corporate tax, 0.825% solidarity levy, and a local trade tax, which depends on the municipality the offshore wind park is assigned to. the federal state of schleswig-holstein e.g. suggests that local trade tax from offshore wind parks is to be paid out to the municipality of helgoland [34], with a local tax rate of 12.25%. in total, we arrive at an income tax rate of 28.1%. 4.1.5. assumptions on debt financing cost valuable information on financing of existing offshore wind parks in europe can be found in [32] and [33]. in table 2, we present some relevant data for the (rather limited) experiences in germany. from the data of existing german projects, we can expect a debt share between 60% and 70%. since this is such a decisive assumption for the case, we analyse different debt shares, while focussing most on the results within this range. we assume that the project can obtain a 15-year loan. the total interest rate consists of a bank margin (2.5% to >3%), added to a (risk-free) reference rate. as reference rate, the interest rates for 10-year german government bonds can be usediii. the 'bund 14' was at 1.66% in january 2014 [35]. often, a swap premium is also added (typically 0.2% to 0.5%) [32]. we hence estimate the total interest rate to be 5.21%, consisting of 1.66% reference rate, 3.25% margin and 0.3% swap premium. 4.2. beta analysis and cost of equity as described in section 3.6, we start the beta analysis by determining the asset beta. we undertake the analysis based on historical developments of the dax index [36], as compared to returns composed of support payments and german one-year power forwards (phelix futures) on a daily level [27]. annual costs are deducted from the returns, as described above. we have ten years of consistent data, from october 2003 to september 2013, with data on each trading day. power price data before 2003 are not considered as being sufficiently reliable because of limited market liquidity in the first years after liberalisation. international journal of sustainable energy planning and management vol. 07 2015 127 lena kitzing and christoph weber table 2: financial data of real offshore wind parks in germany [32, p.73] financial capacity cost gearing tenor (loan close project (mw) (meur) (debt share) maturity) (years) margin 2011 globaltech 1 400 1850 58% 15 3% 2011 meerwind 288 1200 69% 15 2.5-3% 2010 borkum west 200 780 59% 2+15 >3% 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 1979 1984 1989 1994 w in d in d e x [] 1999 2004 2009 historically observed wind index 10 8 6 4 2 0 n o . o f o b se rv a tio n [ -] 0.6 0.8 1.0 1.2 1.5 historically observed wind index fitted weibull distribution figure 3: historical wind production index, annual, 1979-2013 [29], and the fitted weibull distribution iii german government bonds with 15 year duration are rather exceptional. therefore 10-year bonds are used as best available approximation. from time series analysis, we find a positive correlation of the market index and the power prices. a fit scheme, which eliminates this positive correlation through a fixed price guarantee, is expected to have an asset beta of zero. this can certainly be seen as a simplification, but is theoretically consistent in our approach. a fip scheme partially decreases the positive correlation, to an amount depending on the support level: the higher the support level, and thus the fixed part of the income, the lower the correlation of return with the market. figure 4 shows the results of our analysis. depending on the support level, we are now able to determine the beta, using the relationship depicted in figure 4. in order to estimate the equity beta βe, we releverage the betas using eq. (20), specifically for each support level. for example, a fip of 50 eur/mwh corresponds to approximately 150% of the long-term average market price. the asset beta amounts to βa = 0.11 and the corresponding equity beta is then βe = 0.24, with 28.1% tax rate and 60% debt share. the results of our analysis correspond roughly to the findings of [32], who estimate that the introduction of a fit mechanism in the uk will result in a 0.1 reduction of the asset beta. we obtain the overall cost of equity by applying eq. (18). here, we make a restriction: we assume that the cost of equity applied in the project appraisal cannot be lower than the total interest rate of the loan obtained for the project plus a margin. this reflects rational decision making by shareholders who would not accept a lower expected rate of return for their equity than the cost of debt. in fact, as the equity in a project involves greater risks than the debt, there should be a positive margin between the cost of equity and the cost of debt. we estimate this margin to be 2%, which is a conservative assumption when compared to wallasch et al. [37, p.99] and to [32] where differences between cost of equity and cost debt amount 4–7%. 4.3. results of the case application we apply all above described assumptions and run the model with 5000 monte carlo simulations. in the presentation of results, we focus on the required support levels (in eur/mwh), as introduced in section 3.5. the support levels are set so that in each case, an expected shareholder value of zero is reached, which is assumed to be the threshold of investment. for illustration, we also show the probability distributions of total support payments (keur/mw) over the project lifetime and corresponding shareholder values (keur/mw). 4.3.1. results for different debt shares because the debt shares are a crucial assumption with significant impact on the results, we present the results over the whole range of gearing, i.e. debt shares between 0% and 100%, in figure 5. for comparison, debt shares between 58-69% have been achieved for offshore wind parks in the past (see section 4.1.5). one could expect 128 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives 0.6 0.5 0.4 0.3 0.2 0.1 0.0 y = 0.2971x-1.379 r2 = 0.9589 0% 100% 200% support level as multiple of the average market price d iff e re n tc e in a ss e t b e ta b e tw e e n f it a n d f ip s ch e m e s 300% 400% + ++ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + figure 4: difference in asset beta of a fip scheme as compared to a fit scheme 500 400 300 200 100 0 0% 20% 40% 60% 80% 100% debt share c a p ita l r e q u ir e d f o r l iq u id u ty m a n a g e m e n t [k e u r /m w ] fip fit 110 100 90 80 70 60 50 0% 20% 40% 60% 80% 100% r e q u ir e d ( e q u iv a le n t) su p p o rt le ve l [ e u r /m w h ] debt share fip fit figure 5: case results for the whole range of debt shares, required support levels in eur/mwh (left) and capital required for liquidity management in keur/mw (right) that the fit can achieve higher debt shares than a fip, because of the more stable cash flows. in our results, the fit scheme requires support levels between 97.3 eur/mwh and 78.8 eur/mwh, constantly decreasing with increasing debt shares. at very high debt shares, the liquidity reserves have to become extremely high to prevent financial distress. this is, because the debt service is becoming higher while the fixed part of the revenues becomes lower with decreasing support levels. we would have expected to find an optimum gearing of below 100% debt share this is not the case in our settings, most likely due to several risk factors which we do not model in the cash flows (such as e.g. risk of technical failures, which would always lead to some safety margin in the loan structure). the fip scheme requires support levels between 100.6 eur/mwh and 87.4 eur/mwh, decreasing first with higher debt shares and then increasing again, so that we find an optimum gearing at approximately 82.5% debt. the increase in required support level is due to the higher cost of liquidity management, which affects the fip much more than the fit scheme, because of the additional revenue uncertainty due to fluctuating prices. taking the range of debt shares between 20% and 90% into account (which is more realistic than the whole range), the difference in support levels required by the schemes are between 3.5 eur/mwh and 8.3 eur/mwh, corresponding to 4-10% of total support paid. as expected, the fip scheme requires higher support levels than the fit scheme, due to the higher risk exposure and consequently higher variation in shareholder values. figure 6 illustrates this on the left hand side. on the other hand, the support payments show higher variations under a fit scheme. note that the evaluation of the variability of support payments is not within the scope of our analysis. comparing these results to the literature, we find that they are comparable to previous analyses. for example kitzing [38] arrived for a danish offshore case at a difference in required support levels of 5-10 eur/mwh between fit and fip, however using a different approach, which is based on a mean-variance analysis and thus not fully comparable to this liquidity management approach. for debt shares lower than 82.5%, the fit scheme requires (as expected) fewer liquidity reserves than the fip scheme. for example at 70% debt share, the cost of holding the reserve has a present value of 88 keur/mw under the fip scheme, which corresponds to 53 million eur for a wind park of 600 mw. here, the fit scheme would require 4 million eur fewer liquidity reserves. the difference is, however, surprisingly small. we thus investigate the significance of the liquidity management further in section 4.3.2. 4.3.2. the effect of liquidity management in order to test the significance of liquidity management for the results, we analyse the results of a case with liquidity management as compared to a case in which no liquidity management is undertaken. for the latter we assume that the firm can tolerate negative cash holdings, e.g. through a bank agreement with short term loans or through a mother company guarantee. we investigate the effect based on the example of 70% debt share. table 3 compares all relevant results for this case. it becomes apparent that the required support levels increase through liquidity management, e.g. for fip from 85.4 eur/mwh to 88.0 eur/mwh. this is due to international journal of sustainable energy planning and management vol. 07 2015 129 lena kitzing and christoph weber 2500 2000 1500 1000 500 0 500 1,500 2,500 3,500 4,500 5,500 6,500 support payments, pv, keur/mw fit fip fit fip 2500 2000 1500 1000 500 0 −1,500 −1,000 −500 500 1,000 1,5000 shareholder value, pv, keur/mw n o . o f si m u la tio n o u tc o m e s figure 6: distribution of simulation outcomes for shareholder value and support payments, for a debt share of 70% the cost related to holding the liquidity reserves. the difference in required support increases though only by 0.1 eur/mwh, corresponding to approximately 2% of the effect. a factor that makes the liquidity management seem less significant is the opposing effects of liquidity management and beta: because support levels are increased through liquidity management and thus the share of fixed income increases, the beta is reduced for fip, in the case of 70% debt share from 0.217 to 0.208 (see the relationship depicted in figure 4). therefore, the difference in cost of capital between the two schemes decreases, which works in favour of the fip scheme. without this decrease in beta the difference in support levels between the fit and the fip scheme would have increased to 5.0 eur/mwh. this was, however, overshadowed by the effect from the beta reduction before. taking all of this into account we conclude that in our investigated cases most of the difference in support level stems from systematic risk, modelled through the beta differences. there is, however, also a small and continuous effect from liquidity management throughout the whole range of debt shares. the liquidity management counterbalances some reduction effects from changes in beta that could otherwise have led to an underestimation of the differences in required support level. therefore, it is crucial to consider both elements in the analysis. note that we determine the cost of capital only once in the calculation, i.e. we use a constant debt share for each scenario. this implies that additional capital injections through liquidity management do not affect the discount rate, which is a simplification. in our cases, the additionally required capital makes on average 3-7% of the injected equityiv. within this range, we find it acceptable as an approximation to operate with constant cost of capital. since the fip scheme generally requires higher additional capital, it would also be affected more by a dynamic determination of the cost of capital. the difference between the two instruments would then increase somewhat. 4.3.3. sensitivity analysis because the debt shares are a crucial assumption with significant impact on the results, we have shown results for the whole range of debt shares above. another factor especially important for the liquidity management is the assumption what probability threshold a firm applies when it comes to avoidance of financial distress. in the above analysis, we have assumed a rather strong avoidance probability of 99.73% (the three-sigma rule). when relaxing this assumption to two sigma, i.e. allowing financial distress with a probability of 95.45%, the capital required for liquidity reserves decreases substantially. taking a debt share of 60% as example, the present value of liquidity reserves decreases from 39 keur/mw to 2 keur/mw, on average over all monte carlo simulations. 5. discussion 5.1. comparison to the actual eeg tariffs the german renewable energies act (eeg) provides two different options of feed-in tariffs for offshore wind parks starting operation before january 2018: 1. an initial tariff of 150 eur/mwh for 12 years plus a tariff of 35 eur/mwh for the remaining 8 years; 2. an initial tariff of 190 eur/mwh for 8 years ('optional acceleration model') plus a tariff of 35 eur/mwh for the remaining 12 years. the period for the initial tariff of 150 eur/mwh is extended by 0.5 months for every nautical mile of distance to shore outside the 12-mile zone, and by 1.7 months for each metre of water depth exceeding 20 metres. we estimate that a park with a distance to shore and water depth typical for german offshore wind parks currently under development could realistically achieve 14 years of the higher initial tariff of 150 eur/mwh, and then 6 years at 35 eur/mwh. applying these tariff levels in our model, we obtain an internal rate of return for the project of 6.4%, which 130 international journal of sustainable energy planning and management vol. 07 2015 support mechanisms for renewables: how risk exposure influences investment incentives table 3: required support levels and their differences with and without liquidity management, for 70% debt share, in eur/mwh without liquidity with liquidity management management support instrument fit fip fit fip required equiv. support level 80.7 85.4 83.2 88.0 difference in support level 4.7 4.8 iv the most extreme case in the monte carlo simulation resulted in 19.1% increased equity. is in line with the rates of return of 7-9% that the german government assumes reasonable for wind parks (at somewhat higher assumptions on cost of debt) (see [37]). hence, our model overall aligns with what is underlying official government policy in germany. in a next validation step, we compare the eeg tariff levels to our calculated ones, using the indicator of discounted net support payments over the whole lifetime of the project. these amount to 3.7 million eur/mw for the eeg tariffs as compared to 3.4 to 3.5 million eur/mw in our cases. we thus arrive at support payments that are equivalent to 92-95% of the actual eeg levels. hence, our modelled tariffs of 121.2 to 125.3 eur/mwh (that are assumed constant over 20 years) are comparable to the actual eeg tariffs (that are stepping down from 150 to 35 eur/mwh after the initial period). 5.2. model assumptions and their consequences we have made several crucial assumptions and simplifications. we have focussed on financial distress and related issues and have not treated other risks more than by introducing an add-on to the cost of equity reflecting some of these risks. we have focussed on a single investment and do not consider portfolio effects. if portfolios would be considered, one can expect that required support costs would be decreased in that sense we have calculated a maximum range of required support levels. on the other hand, portfolios could also change the risk exposure of investors and thus the risk implications between fit and fip. our approach cannot capture these effects. investigating this remains to further research. we assume for transparency reasons and comparability of results that there is no opt-out option of the feed-in tariff scheme. however, we can see from our case simulations that in 4.7% of the price scenarios, a price occurs exceeding the lowest fit level (of 121.2 eur/mwh). in these situations, a res-e producer would opt-out of the fit scheme and transfer into normal market operation had he the opportunity to do so. this has some consequences on our estimation of support payments because they are estimated as the difference between guaranteed tariff and market price and can become negative. had the fit producer the option to leave the fit scheme whenever the market price exceeds the tariff (and maybe even return to the fit at a later point in time), no instances of negative support payments could occur. in this case, the netting approach adopted here would underestimate the overall support payments related to a fit. assumptions regarding project-specific costs are also decisive for the results. we have used average values for all estimations. specific parks can lie significantly higher or lower than that. this will have an effect on the required support levels and also on the absolute differences. however, since support schemes are usually not designed for single projects but a whole sector, our approach of taking an average wind park seems reasonable. additionally, it could also be beneficial to test the consequences for a marginal park, i.e. the most expensive wind energy investment necessary to reach deployment targets. the choice of power price process and its calibration also affects the results. especially seasonal variations and jumps could have been modelled. however, we do not expect that incorporating these into the model would lead to significant changes in the comparative conclusions, because of the long time horizon of the analysis. we have confirmed that moderate changes in parameters of the short term process do not have any significant effect on the conclusions. an issue still to be analysed is the consequences of having two different distribution types. the wind production model uses a weibull distribution whereas the power prices are assumed lognormal. since the cash flows under the fit scheme only depend on the wind production and not the power prices, the results under the two support schemes fit and fip are affected differently by the two distribution types. especially the skewness factor differs between the two schemes. whether this affects the comparison of the support schemes depends on the risk preferences of the decision makers. here, further investigations are needed. 5.3. implications for policy makers the model and insights generated in this study can help policy makers to determine appropriate support levels for renewable support schemes. while we do not assume that support instruments are designed for individual investors, we use the case of a single investment as case to demonstrate the impacts that different support scheme designs have on required support levels. we have shown that similar differences occur over the whole range of gearing (i.e. debt shares), so we can assume that most investors would be affected in a similar way. international journal of sustainable energy planning and management vol. 07 2015 131 lena kitzing and christoph weber the insight about impacts on required support levels is especially relevant when switching from a certain support scheme to another, e.g. from a fit to a fip scheme. then, the net support levels of the fit cannot be directly transferred to the new scheme they must be adjusted upwards to ensure continued adequacy of investment incentives. in the recent past, policy makers in europe are becoming more and more concerned with the burden of support schemes on consumers [39]. policy making strives to limit total support costs to a minimum that can still provide the desired deployment of new renewable projects. in this, policy makers should be aware of the connection between required support level and risk exposure: the higher the risk exposure, the higher the required support level. as this analysis illustrates with a quantitative case, the effect of both systematic risk and unsystematic risk should not be neglected in policy making. 5.4. further development of the approach in a first step, it could be beneficial to test the significance of several assumptions made. first, the loan maturity could influence the results significantly. we expect that the shorter the duration of the loan, the smaller the difference between the support schemes. second, with technology development and further decreases in overall cost of offshore wind, also the support levels are expected to decrease. it could thus be beneficial to make a similar analysis with reduced support levels. we expect that the lower the support levels are, the larger the difference between the fit and fip scheme becomes, as volatile market prices become more dominant in the fip case. as the results are very sensitive to the assumed debt share, it would be of great advantage if these were not set exogenously, but could be determined endogenously. this could be e.g. done on the basis of probabilistic analysis of deficits in debt service, and limiting them to a certain level. we expect that here, the fit could achieve higher debt shares, due to the more stable income flows. additionally, the model could be further expanded to cover other support instruments, such as tradable green certificate systems with quotas. 6. conclusion this study contributes to the analysis of risk implications from policy instruments in several ways: first, we developed a multi-year approach to liquidity management in a firm in order to capture effects of exposure to unsystematic risks. second, we adapted the framework to wind energy investment projects. third, we quantified the policy consequences of choosing between feed-in tariffs and premiums for a specific case. in an application case for a german offshore wind park in the baltic sea, we estimated that a fip scheme would require a 3.5 to 8.3 eur/mwh higher support level in order to give the same investment incentive as a comparable fit. this corresponds to about 4-10% of the total support payments. as for most case specific analysis, these values are very much dependent on the assumptions taken. we find, however, that they show very illustratively that there is a systematic difference between support levels required for fit and fip, respectively, and that the difference can be significant. while the focus of the analysis in this paper is only on certain risk aspects and does not evaluate the general benefits or disadvantages of different policy instruments, it does provide additional insights for policy makers about how to determine support levels. we find that risk 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[39] del río p, cerdá e. the policy implications of the different interpretations of the cost-effectiveness of renewable electricity support.energy policy 2014;64:364-72. doi:10.1016/j.enpol .2013 .08.096. international journal of sustainable energy planning and management vol. 07 2015 133 lena kitzing and christoph weber doi:10.1016/j.enpol.2008.06.022 doi:10.1016/0304-405x(93)90023-5 doi:10.1080/0013791x.2012.677302 doi:10.1016/j.eneco.2013.02.004 doi:10.1016/j.jfi. 2007.04.001 doi:10.1016/s0304-405x(96)00896-3 doi:10.1016/j.rser.2010.01.005 doi:10.1016/j.energy.2011.02.008 www.4coffshore.com/windfarms/ www.bloomberg.com/quote/dax:ind doi:10.1016/j.energy.2013.10.008 doi:10.1016/j.enpol.2013.08.096 www.eex.com www.vindstat.dk << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice microsoft word ijsepm titelblad vol 13-.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    rendsburggade 14, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands  dr tao ma, shanghai jiao tong university, china    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, and emd international 1527-5268-1-le.qxd abstract energy systems are becoming increasingly complex, integrating across traditionally separate sectors such as transportation, heating, cooling and electricity. integration through the use of district heating is the main topic of this editorial introducing volume 10 of the international journal of sustainable energy planning and management. the editorial and the volume presents work on district heating system scenarios in austria, grid optimisation using genetic algorithms and finally design of energy scenarios for the italian alpine town bressanonebrixen from a smart energy approach. 1. introduction smart energy systems [1–3] expand on the sectorspecific approach of the smart grid approach by tackling the entire energy system more holistically and designing and optimising the entire system across traditional energy sectors with a view to harvesting synergies and flexibility at the lowest costs. such an approach can pave the way for 100% renewable energy systems [3–5], and in this, district heating is a major enabler for costeffective transitions to renewable energy [6–8]. this volume present work from the international conference on smart energy systems and 4th generation district heating held in copenhagen, denmark, august 2015 where the key-focus was on the integration of district heating systems into smart energy systems from the 4th generation district heating approach [9]. this approach includes low-temperature district heating (see e.g. how low-temperature district heating stands against individual solutions [10]); a production system characterised by integration with renewable energy supply and the organisation and design of specific public regulation measures including international journal of sustainable energy planning and management vol. 10 2016 1 ownership, tariffs, reforms to assist the implementation and integration of district heating (see e.g. [11] on the integration between wind power and heating systems from an organizational perspective). 2. district heating optimisation in this volume, büchele et al. [12] investigate the potential for district heating and cooling in austria using the bottom-up model invert/ee-lab. they determine significant potentials in austria, with an economically feasible potential of 67% of the austrian heat demand. the also determine that while e.g. heat from waste incineration and geothermal sources are cost competitive, cogeneration of heat and power cannot compete against natural gas boilers. razani and weidlich [13] investigate how genetic algorithms may be applied for analysing three scenarios for district heating networks – district heating with centralized heat storage, semi-decentralized heat storage and decentralized heat storage. they find that the central storage exhibits the best economy of the three – however also the largest energy losses. decentralised heat * corresponding author email: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 10 2016 1-2 smart energy systems and 4th generation district heating �������� ��� � ��� ������� � �������� ��� ������������� �� �������� � ������� ���� � ��� ����� � ������������ � ��������������������������������������� ���� �������� � ������� ���� � ��� ����� � ������������ � ������������� ������!" ���#���$%������� &��� ��!���� ���� keywords: renewable energy; smart energy systems; district heating and cooling; url: dx.doi.org/10.5278/ijsepm.2016.10.1 smart energy systems and 4th generation district heating 2 international journal of sustainable energy planning and management vol. 10 2016 storages, according to their findings, are the most expensive however also the most efficient in terms of minimising heat production ab works. 3. smart energy systems at urban level prina et al. [14] investigate smart energy systems with a case from the municipality of bressanone-brixen in italy. based on both a deterministic approach using the energyplan model [15] and an approach where energyplan simulations are combined with a metaheuristic approach, the authors design scenarios for the energy system in an approach similar to that presented by mahbub et al. [16]. references [1] lund h, andersen an, østergaard pa, mathiesen bv, connolly d. from electricity smart grids to smart energy systems – a market operation based approach and understanding. energy 2012;42:96–102. http://dx.doi.org/ 10.1016/j.energy.2012.04.003. [2] lund h, mathiesen bv, connolly d, østergaard pa. renewable energy systems – a smart energy systems approach to the choice and modelling of 100 % renewable solutions. chem eng trans 2014;39:1–6. http://dx.doi.org/ 10.3303/cet1439001. [3] mathiesen bv, lund h, connolly d, wenzel h, østergaard pa, möller b, et al. smart energy systems for coherent 100% renewable energy and transport solutions. appl energy 2015;145:139–54. http://dx.doi.org/10.1016/j.apenergy. 2015. 01.075. [4] mathiesen bv, lund h, karlsson k. 100% renewable energy systems, climate mitigation and economic growth. appl energy 2011;88:488–501. http://dx.doi.org/10.1016/ j.apenergy.2010. 03.001. [5] connolly d, lund h, mathiesen bv. smart energy europe: the technical and economic impact of one potential 100% renewable energy scenario for the european union. renew sustain energy rev 2016;60:1634–53. http://dx.doi.org/ 10.1016/j.rser.2016.02.025. [6] xiong w, wang y, mathiesen bv, lund h, zhang x. heat roadmap china: new heat strategy to reduce energy consumption towards 2030. energy 2015;81:274–85. http://dx.doi.org/10.1016/j.energy.2014.12.039. 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[11] hvelplund f, möller b, sperling k. local ownership, smart energy systems and better wind power economy. energy strateg rev 2013;1:164–70. http://dx.doi.org/10.1016/ j.esr. 2013.02.001. [12] büchele r, kranzl l, müller a, hummel m, hartner m, deng y, et al. comprehensive assessment of the potential for efficient district heating and cooling and for high-efficient cogeneration in austria. int j sustain energy plan manage 2016. http://dx.doi.org/10.5278/ijsepm. 2016.10.2. [13] razani ar, weidlich i. a genetic algorithm technique to optimize the configuration of heat storage in dh networks. int j sustain energy plan manage 2016;10. http://dx.doi.org/ 10.5278/ijsepm.2016.10.3. [14] prina mg, cozzini m, garegnani g, moser d, oberegger uf, vaccaro r, et al. smart energy systems applied at urban level: the case of the municipality of bressanone-brixen. int j sustain energy plan manage 2016;10. http://dx.doi.org/ 10.5278/ijsepm.2016.10.4. [15] østergaard pa. reviewing energyplan simulations and performance indicator applications in energyplan simulations. appl energy 2015;154:921–33. http://dx.doi.org/ 10.1016/j.apenergy.2015.05.086. [16] mahbub ms, cozzini m, østergaard pa, alberti f. combining multi-objective evolutionary algorithms and descriptive analytical modelling in energy scenario design. appl energy 2016;164:140–51. http://dx.doi.org/10.1016/ j.apenergy.2015.11.042. http://dx.doi.org/10.1016/j.energy.2012.04.003 http://dx.doi.org/10.3303/cet1439001 http://dx.doi.org/10.1016/j.rser.2016.02.025 http://dx.doi.org/10.1016/j.enpol.2013.10.035 http://dx.doi.org/10.1016/j.energy.2014.02.089 http://dx.doi.org/10.1016/j.esr. 2013.02.001 http://dx.doi.org/10.5278/ijsepm.2016.10.2 http://dx.doi.org/10.5278/ijsepm.2016.10.3 http://dx.doi.org/10.5278/ijsepm.2016.10.4 http://dx.doi.org/10.1016/j.apenergy.2015.05.086 http://dx.doi.org/10.1016/j.apenergy.2015.11.042 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 3. 1881-6749-1-le_q8_1881-6749-1-le abstract this article investigates a low carbon pathway, the theoretical frame for understanding the tradeoffs between economic development and climate change. an already developed model – electricity planning-low carbon development (ep-lcd) – was adapted and modified to examine the nonlinear relationship between generation adequacy and greenhouse gas (ghg) emission reduction for better targeted strategic regional intervention on climate change. two broad scenarios – base and lcd option – were tested for the west african power pool (wapp). the cost impact of increasing generation capacity in the lcd option was estimated at us$1.54 trillion over a 50 year period. achieving the goal of low carbon pathway would be largely influenced by government decision. four strategies, in line with the nationally determined contribution in paris agreement, were recommended. these are: a) enforced improved efficient electricity generation through increased energy efficiency that should result in increased capacity factor; b) decreased energy intensity of economic activities to result in reduced emission factor in existing plants; c) attract new investment through low tax or tax exemption to reduce cost of constructing power plants for the benefit of base-load plants; and d) subsidized cost of low-carbon fuels in the short run to benefit intermediate load plants and allow for the ramping up of low-/no-carbon fuel generation capacity. these are recommended considering the region’s specific economical and political conditions where funds are tremendously difficult to raise. implementing these recommendations will allow the electric power industry in west africa to contribute to achieving sustainable development path. 1. introduction climate change is a complex, multi-faceted, and serious threat the world faces [1]. tackling it requires an understanding of existing trade-offs with the economic growth required in large parts of the world. this will simultaneously advance developmental aspirations as well as address climate change impact. low carbon development (lcd) pathways is explored for the west african electricity system, as a paradigm that contributes to addressing these twin challenges. this brief is prepared from a study [2] that evaluated the planning international journal of sustainable energy planning and management vol. 14 2017 21 processes in the west african power pool (wapp) electricity system vis-a-vis lcds. the concept of low carbon development strategy (lcds) was introduced by the conference of parties to the united nations framework convention for climate change (unfccc). it represents a common but differentiated approach to meet the overall emissions reduction objectives. west africa (figure 1) is made up of the 15 countries benin, burkina faso, cape verde, cote d’ivoire, gambia, ghana, guinea, guinea bissau, liberia, mali, niger, nigeria, senegal, sierra leone, and togo. fourteen of these are located on the continent. the total * corresponding author e-mail: abiodunmomodu8@gmail.com; amomodu@cerd.gov.ng international journal of sustainable energy planning and management vol. 14 2017 21–38 energy use: electricity system in west africa and climate change impact abiodun s. momodu* centre for energy research and development, obafemi awolowo university, pmb 024, ile-ife, 220005, nigeria keywords: low-carbon-development; electricity; system dynamics; climate change; west africa; url: dx.doi.org/10.5278/ijsepm.2017.14.3 22 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact population of west africa was estimated at 353.2 million [3] in 2015. this population is very unequally distributed, with nigeria holding over 52% of this, occupying a land space of only approximately 18% out of the total of 5,105 million km2. the africapolis study [4] reports an annual urban growth rate of 5.1% and a population growth rate of 4.3% between 1950 and 2000 for west africa. the report went further to categorize the region as one of the least urbanized in the world, partially because it is also one of the least industrialized and poorest in terms of economic resources. going further, a world bank ranking of the wapp countries amongst 217 global economies by the gross domestic product (gdp) shows that only nigeria is ranked amongst the first 30 global economies, with only two more ranked amongst the first 100 economies while the remaining countries in the wapp fall in the range of 100th to 195th global economies. in per capita terms, the poorest country in the wapp is niger, which was ranked 144th in the world, with $359/capita in 2015. the “richest” country, nigeria, in the 23rd place with gdp per capita of $2,672 [6]. over the last few years, the local economy of some of the wapp countries (nigeria, liberia, guinea, mali) have suffered badly from financial, political and social turmoil [4]. low levels of urbanization and high levels of poverty go hand in hand with low populations in many countries: guinea bissau, gambia, liberia, togo, and sierra leone all have fewer than 5 million inhabitants. because of this combination of low levels of urbanization and wealth, the urban markets of west africa are insignificant when seen on a global scale. according to the world bank, the region in 2015, had a combined gdp estimated at us$628 billion, which was barely 3% of that of usa with an almost similar population size in the same period. the economy of west africa is coordinated under the aegis of ecowas (economic community of west african states), established in 1975. in terms of energy, west africa’s strategic resources include hydro-electricity, oil, natural gas and coal. these are unequally distributed in the territory. additionally, aside from its hydro sources, the region is endowed with other renewable energy sources such as solar insolation, bio-energy and wind. however, despite being endowed with these energy resources, access to electricity in the sub-region has remained at less than 50% in the urban areas and less than 20% in rural areas. energy use, particularly electricity is projected to rise in the nearest future. at an average economic growth rate of about 6% annually, the demand for electricity is projected to grow in the same or higher proportion. the implication is obvious as regards ghg emissions, depending on the choice of the mix of power plants that would be needed to meet the future demand for electricity [7]. it is in realization of the need to harness and efficiently utilize its energy resources for development that it (ecowas) established the west african power pool in 1999, which became operationalized in 2006 [7]. the wapp, which is a specialized institution of ecowas is the institutional framework of the regional electric system. the strategic objective of the wapp is based on a dynamic vision of the integration of the operation of the national electricity networks in a unified regional market. this unified regional market must make it possible to ensure in the medium and long term an optimal electricity supply, reliable and at an affordable cost to the population of the various member states [7]. west african electricity system currently has an installed capacity of 17,155 mw, out of which available capacity was 10,094 mw in 2015 [8]. installed capacity is the nameplate/rated/nominal capacity representing the intended full-load sustained output of a power plant in the power system. on the other hand, available capacity is the maximum amount of power that the system is capable of generating in a given period. the large difference between installed and available capacity in the case of west africa power system is figure 1: political map of west africa [5] international journal of sustainable energy planning and management vol. 14 2017 23 attributed to age of generation stock which in turn affects their efficiencies and produce high energy intensity. the wapp system has only four electricity technology types in its generation stock, categorised based on fuel. the technologies within these fuel types also vary in terms efficiency, emission and capacity factor. the current composition as of 2015 shows that oil contributes about 14%, coal, 0.3%, natural gas, 48.5% while hydro make up the rest with 37.2% [2] of production. nuclear is currently not among the mix of generation technologies. it is noted that anthropogenic greenhouse gas (ghg) emissions are mainly driven by population size, economic activity, lifestyle, energy use, land-use patterns, technology and climate policy [9]. meaning, new approaches, such as low carbon pathway being examined in this article, are needed to control future emissions [9]. 1.1. statement of problem rapid transformation involving adequate provision of critical infrastructure such as energy including electricity for socio-economic development is needed by west africa member states. to avoid preindustrialization trajectory*, this will demand ample understanding of the trade-offs between economic growth and development aspiration on the one hand, and climate change issues on the other. arguably, the subregional desire to develop should precede that of global environmental concern in ranking; however, it is important that this developmental pursuit be done with some sense of responsibility to the environment [10]. this is the underlying principle behind the paris agreement to which all wapp member countries are signatories. though large-scale economic development is needed to pull millions of citizens out of abject poverty, a “business-as-usual” approach would exacerbate the problem of climate change with potentially irreversible long-term consequences. with these factors affecting anthropogenic emissions, west africa sub-region, though considered amongst the non-annex 1 countries*, could well become a prime source for future ghg emissions except if its policy makers adopt strategic intervention for the energy consumption agenda and climate change mitigation. this is to meet economic development from future demand and avoid the same trajectories as those of developed countries [11, 12, 13]. according to [5], “business-as-usual” are projected for non-annex i emissions in the absence of any new climate policies to control emissions. these projections however shows that by 2050, emissions in all nonannex i regions would need to be substantially reduced below “business-as-usual”. for west african countries, without any strategic intervention, the quest to increase generation capacity in the power sector would definitely take the same trajectories as those of developed countries and cause undesired increase in the release of ghg emissions to the atmosphere [11, 12, 13]. lcdss have attracted the interest in the climate negotiations as a soft alternative to voluntary or obligatory ghg emission reduction targets in developing countries as it also represents the concept of nationally determined contribution (ndc) to emission reduction [11]. although there is no internationally agreed definition of lcdss, this article focuses on policy of integrated climate and (low-carbon) development strategies that cover the intersection of development and ghg mitigation in west africa power sector. low-carbon development strategies represent a different planning paradigm from what used to be the norm in planning the power sector [14, 15, 16]. in line with this global expectation, it becomes important to develop lcds for the power sector, a critical infrastructure in west african sub-region for sustainable development. 1.2. objective west african nations are evolving, and need energy to drive their various economic activities. energy drives economic development, and in turn, economic development drives the need for more energy usage. it is imperative to therefore understand how the energy use of these nations will evolve at the different stages of their development as an essential means of having a reliable prospective analysis and planning. this study is intended as a decision support tool for wapp future electricity consumption in examining the push-pull factors of the system as regards climate change. it is well reported that the relationship between electricity consumption and economic growth is non-linear [17, 18, 19, 20, 21]. also, literature on development history across countries have usually shown an ‘s-shaped’ (sigmoid) relationship between per capita electricity consumption and per capita gdp [22, 18]. systems that exhibit s-shaped growth behavior are abiodun s. momodu * this simply refers to the path that has had predominantly fossil-fuel based energy technologies , * non-annex i parties are mostly developing countries without any obligation to meet any defined emission target under the kyoto protocol. 24 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact characterized by constraints, or limits to growth [23]. by this growth, two points of inflexion are indicated, which, in terms of electricity development, the first corresponds to the transition from non-industrial to industrializing stage, in which increase in economic growth leads to a more proportionate growth in electricity consumption. the second inflexion point corresponds to where economic growth rate would become de-linked from electricity consumption because of two major factors. first, the structure of the economy at this point is dominated by the service sector as shown in the case of industrially developed countries; and second, due to increase in energy efficiency [24]. to avoid previous-industrialised ghg emission trajectory, nations in west africa, which are the nonannex 1 countries, would need to adopt strategic intervention in energy consumption by understanding the trade-offs between the variables of energy and economy. this challenge makes the use of system dynamics (sd) as the modelling tool with its nonlinearity capacity important to examine these factors. sd has the capacity to endogenously alter the active or dominant structure of a system and shift loop dominance. given the expected s-shaped growth trend in the economy of west africa, will its electricity development have to rise to eventually reach the level of that of developed countries or will it peak at a certain level in its development path? what will be the implication of this growth path to emission from the electricity industry? the answers to these questions could be useful in adjusting policies towards attaining sustainable development path in the wapp. this informs the objective of this article: to provide policy decision support system in energy consumption agenda and climate change. 2. energy consumption and ghg emission pattern in west african countries a number of studies have been conducted as regards electricity and climate change in west africa. a study by gnansounou et al [25] examined strategies on electricity supply and climate change, reporting on the evolution of regional electricity market on the basis of two strategies – “autarkical” and “integration†”. it recommends integration strategy as it leads to fast retirement of the aged power plants and the integration of new investment projects to bring about additional benefits in terms of reduced capital expenditures, lower electricity supply cost and the enhanced system’s reliability compared to the autarkical strategy. it did not examine the climate change and cost impacts. another study on wapp [26] develop models to understand the long-term interactions between investment and performance in the electric power system. it shows that wapp interconnection has a clear impact on the local system prices and investments in new construction but there will still be large regional variations in prices and new construction. a third study [27] assesses extreme temperatures and heat waves impacts on electricity consumption in some cities in west africa. it reports that electricity consumption trends in the cities examined match extreme temperatures evolution well. an sd study [15] examines trade-offs between economic growth and climate change that provides the context to explore lcd pathways for the west african electricity system. it identifies four high leverage points that could serve to achieve lcd in the wapp. in terms of consumption, table 1 shows the 2015 installed generation and available capacity and ghg emission factor for countries of west africa. nigeria had the highest installed and available capacity. this is followed by ghana and cote d’ivoire respectively. based on available data for 2015, the least electrified and ghg emitting country is liberia. however, in examining the countries through the lens of per capita consumption as represented in figure 2, a different hierarchy emerges. the highest per capita electricity generation country is ghana at 469 kwh/person and ghg emission of 0.153 tco2eq/capita, followed by cote d’ivoire with 333 kwh/person and 0.108 tco2eq/person. though senegal has the third highest per capita electricity generation, it has the second highest per capita emission rate at 0.134 tco2eq. this therefore shows that for better targeted strategic regional intervention on climate change, detailed examination of micro production/consumption of electricity is essential. micro production/consumption means taking the effects of consumption into consideration in the choice of generation technology. as nigeria contributed significantly to the wapp electricity generation, its per capita consumption is critical to keeping emission at a controllable level. this immediately presents an opportunity to examine improvement in capacity and emission factors from the power plants in the member countries of wapp. † autarkical refers to something that is free from external control and constraint, or independent; while integration refers to something dependent or not constrained. international journal of sustainable energy planning and management vol. 14 2017 25 abiodun s. momodu 3. methodology 3.1. data collection table 1 represents wapp member country level data as the set of basic data used to develop and run the main model (figure 3) used in analysis in this article. these data were elicited from secondary sources, principally with institutions in west africa related to electricity provision and regulation, namely, wapp and ecowas regional electricity regulatory authority (erera). other data elicited include population and its average growth rate, gdp, per capita income, average per capita electricity demand, electricity generated, average electricity tariff, generation technology type, amongst others. all these data are used on a model developed based on system dynamics to examine the (nonlinear) relationship between generation adequacy and ghg emission reduction in the wapp. the model evaluates the tension between providing adequate supply capacity against reducing emission from the table 1: installed and available capacity, average emission factor, capacity life time and time to adjust capacity in west african countries in 2015 – base scenario data average emission time to installed available factor of capacity adjust capacity, capacity, power plants, lifetime capacity country [mw] [mw] [tco2/mwh] [years] [years] benin 205 134 0.563 25 20 burkina faso 219 135 0.693 25 21 cote d’ivoire 1,632 1,195 0.326 25 20 gambia 100 39 0.777 25 21 ghana 2,814 2,185 0.326 25 20 guinea 203 109 0.793 25 21 guinea bissau 0 26 0.728 25 20 liberia 23 22.6 0.568 25 21 mali 220 86 0.580 25 20 niger 164 138 0.867 25 21 nigeria 10,915 5,061 0.578 25 20 senegal 683 468 0.817 25 21 sierra leone 0 0 0.568 25 20 togo 224 180 0.952 25 21 total 17,155 9,550 sources: [7], author estimation 0 1 2 3 4 5 6 be ni n bu rk in a fa so co te d lvo ire g am bi a g ha na g ui ne a g ui ne a bi ss au li be ria m al i ni ge r ni ge ria se ne ga l si er ra l eo ne to go ghg emissions (tco2/cap) electricity generated (x1000 kwh/cap) figure 2: per capita electricity generation versus per capita ghg emission [8] 26 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact f ig ur e 3: e le ct ri ci ty p la nn in gl ow c ar bo n d ev el op m en t v 1 m od el ( ad ap te d fr om m om od u et a l [2 ] c a p a ci ty u n d e r c o n st ru ct io n g ri d g e n e ra tio n c a p a ci ty in tit ia tin g c a p a ci ty co m p le tio n sc ra p p in g < g ri d g e n e ra tio n c a p a ci ty > < sc ra p p in g > p o p u la tio n n e t p o p u la tio n g ro w th r a te g ri d e le ct ri ci ty g e n e ra te d ta rg e t ca p a ci ty p e r c a p ita e le ct ri ci ty g e n e ra te d h is to ri ca l a n d e st im a te d g ro w th r a te f o r w e st a fr ic a < t im e > r a tio o f p e r c a p ita d e m a n d to n o rm a l p re ss u re t o a d d a d d iti o n a l c a p a ci ty tim e t o a d ju st ca p a ci ty 1 g d p ch a n g e in g d p a g g re g a te d e m a n d g o ve rn m e n t e xp e n d itu re in ve st m e n t c o n su m p tio n e xp e ct e d in co m ec h a n g e in e xp e ct e d i n co m e n o rm a l e xp e ct e d in co m e p e r ca p ita in co m e ra tio o f p e r ca p ita in co m e t o n o rm a l d e m o g ra p h y m o d u le p o w e r d e m a n d e co n o m y m o d u le e le ct ri ci ty m a rk e tin g m o d u le c a p a ci ty a d d iti o n m o d u le h is to ri ca l e m is si o n fr o m w a p p < g ri d e le ct ri ci ty g e n e ra te d > in co m e s tr e a m f ro m e le ct ri ci ty g e n e ra te d $ p e r b $g ri d b a se c a p a ci ty c u m u la tiv e e m is si o n -w a p p s ys te m cu m u la tiv e e le ct ri ci ty g e n e ra te d g ri d c a p a ci ty c o st s tr e a m f ro m e le ct ic ity g e n e ra te d w a p p s ys te m p ro fit e m is si o n r a te f ro m e le ct ri ci ty g e n e ra tio n w a p ro je ct e d e n e rg y d e m a n d p ro je ct e d c a p a ci ty re a l p e r ca p ita e le c d e m a n d < p e r c a p ita e le ct ri ci ty g e n e ra te d > c u m g ri d c a p cu m c a p u co n st ru ct io n c o 2 f o o t p ri n t fr o m e le ct ri ci ty g e n e ra tio n < p o p u la tio n > cu m u la tiv e in co m e cu m u la tiv e c o st cu m u la tiv e p ro fit cu m p e r ca p d e m a n d co n v g w h to k w h < g ri d e le ct ri ci ty g e n e ra te d > cu m g ri d e le ct ri ci ty g e n e ra te d b a se p o p u la tio n b a se g d p ce n ts t o u s $ e m is si o n e st im a tio n m o d u le < p e r c a p ita e le ct ri ci ty g e n e ra te d > < p e r ca p ita in co m e > e le ct ri ci ty in te n si ty b a se g e n e ra tio n -2 0 1 5 m w h p e r g w h < b a se p e r c a p ita e le ct ri ci ty d e m a n d > g w h to m w h p o p g ro w th ra te tim e t o a d ju st ca p a ci ty co n st ru ct io n t im e h o u rs in a ye a r ca p a ci ty f a ct o r ca p a ci ty li fe tim e e m is si o n f a ct o r g ri d e le ct ri ci ty g e n e ra tio n b a se p e r c a p ita e le ct ri ci ty d e m a n d p ro d u ct io n a d ju st m e n t tim e m a rg in a l p ro p e n si ty t o c o n su m e e xp e ct a tio n f o rm a tio n t im e o p c o sta ve ra g e t a ri ff lo ss e s n o rm a l p e r ca p ita in co m e t x c o st international journal of sustainable energy planning and management vol. 14 2017 27 abiodun s. momodu generation technologies in the west africa electricity system. it arranged the complexities in the west african electricity system and established its basic interconnecting structure to conduct the analysis, in line with global expectations for reduced emission and achieve economic growth. 3.2. model development for this study, the electricity planning – low carbon development (ep-lcd) model [2] was adapted and modified with its conceptualization based on [28, 29]. this is called ep-lcd v1 shown in figure 3. to develop the structure, the boundary was set around electricity supply, generation and marketing, population and the gdp. to incorporate the study objective into the model, the study relied on a review of the operations of the wapp electricity system as described in article 1 of the wapp establishing document as well as wapp’s vision and mission that aims to make the electricity system in the ecowas sub-region to be operated as a merchant power market when enabling environments for this kind of operations is achieved [30, 31]. the ep-lcdv1 model (figure 3) is largely focused on electricity operations and interconnections in the wapp power system as well as ghg emitted from the system. the power system examined emission from the basis of generation and average emission factor as well as based on generation technology types. the dynamics are described by a set of non-linear differential equations that account for existing system feedbacks, delays, stock-and-flow structures and nonlinearities. the model is distinguished by the manner in which various sectors and spheres are connected together to form a complex link of feedback loops in which the electric system can be analyzed and weighted as driving or limiting the county’s lcd agenda. (the set of equations used in the model can be found in the appendix). a major principle in the developed sd model is the leverage points. leverage points are places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything [32]. leverage points are points of power in a system that modelers not only believe in but would want to know where they are and how to locate them. there are steps to help identify places of intervention in a system [31]. the “state of the system” – electricity, a nonmaterial commodity – in whatever standing stock is of importance. the inflow – electricity generation, investment and financial flow – increase the stock, while the outflow – transmission, distribution, losses and thefts – decrease it. so the bedrock of this system consists of physical stocks and flows, obeying the laws of conservation and accumulation. now the challenge in the wapp power system is principally inadequacy; meaning that the inflow rate is lower than the outflow rate, making the non-storable commodity be in shortfall always. it takes time for systems to respond to desired growth as is typical for flows to accumulate. same thing with the electricity system in wapp, it will take time to correct the anomalies making it to be sluggish in responding to desired changes. it is critical, however, to be able to identify the ‘leverage points’ along the line of the operations of the electricity system in wapp with the superimposed lcd models and the corrective measures to achieve desired objectives as enunciated in the objectives, vision and mission of wapp. systems have at least two negative feedback loops, or correcting loops [32]; one controls the inflow, and the other one controls the outflow, either or both of which can be used to bring the system to a desired level. it is important to point out that the goal and the feedback connections are not visible in the system. however, a long-term view of the system will enable one to figure out what are the leverage points in it. now, this study involves superimposing a new paradigm – lcd – into the planning of an already complex system in wapp, to bring out future plan that is responsive to delivering electricity that is globally cost competitive and also achieve desired reduced emission. 3.3. brief description of model workings as an approach to understanding complex systems and their dynamic behavior, sd was used to model the west african electricity system as it relates to other sectors. the different sectors are segmented as modules in eplcdv1 model as presented in figure 3. the model was built in vensim® using basic sd variables. it analyzed low carbon emission in the west africa electricity system. explaining variables is often difficult without reference to equations, but it is useful to have a complete categorization and specify conventions. vensim® is designed so that what a variable is and does can be determined by the way it is defined or used. vensim® has eleven variable types [33], but only those used to develop the model for this study are described here. 28 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact a. auxiliary. any dynamic variable that is computed from other variables at a given time. auxiliaries are typically the most numerous variable type. an auxiliary variable has an expression involving other variables in its equation. b. constant. a variable whose value does not change over time. a constant can be temporarily changed prior to simulating a model. c. initial. like a constant, except that it is the result of combining different variables at initialization time. d. level. the dynamic variables in the model. levels all have integral (integ) equations. e. lookup. nonlinear functions with numerical parameters (where the parameters are the xand y-axis values). f. subscript element. an element of a subscript range. these identify the meaning of specific values of a subscript. the subscript elements appear on the right hand side of a subscript range equation. g. subscript range. rather than repeating the same equation with different names, an one equation can be written using a subscript that takes on different values. this variable type is referred as subscripted, with one name representing more than one distinct concept. subscript ranges are defined using a special equation that begins with a colon (:) h. units. units are defined as additional information about a model variable and can be used to check the model for dimensional consistency. units are entered as an expression in the units field of an equation. i. unchangeable constants. these are constants that cannot be changed during simulation experiments. constants and unchangeable constants are almost the same. the only difference is that the value for an unchangeable constant is determined from its equations, or read from a spreadsheet when a model is checked, and never changed after that. the model consists of interconnections of three different sectors. the sub-sectors, namely, electricity (split into capacity addition (mw) and power demand (gwh)), demography (principally the population) (persons), economy as depicted by the gross domestic product (gdp) (billion us$), make up the three modules in the model. there are two sub-modules in the model as offshoot from the power demand segment under the electricity module. these are: emission from electricity consumption (tco2) and electricity marketing (us$). for this article, analysis of results from the model was limited to only the electricity module as data needed from other two modules narrowed the integrity of their results. each of the modules has at least one level variable with integral equation. most level variable equations in vensim® software take the form of: level variable (name) = (inflow(t) – outflow(t), initial_value(0) level variables represent stocks in system dynamic models. this means that all the level variables in the model, namely, population, gdp, capacity under construction, and grid generation capacity are stock operating the principle of accumulation*, and take on the form of equation (1) to run in the model. now, the critical aspect of level variable is that it allows for the introduction of the concept of delay, a dynamic function, into the system being modeled. being stocks, these variables have four important characteristics of having memory, changing the time shape of flows, decouple flows and create delays. the concept of delay is expatiated upon elsewhere [36]. one of the principal equation is that of grid generation capacity as represented thus: grid generation capacity [wapp member countries] = ∫(completion [wapp member countries]– scrapping [wapp member countries], grid base capacity [wapp member countries]), units: mw. what is placed in the [x] shows the subscripts to the equation. this allows one variable and equation to represent a number of different distinct concepts. the grid segment has capacity under construction to reflect how capacity is increased over the years. the grid capacity segment also has scrapping, which is driven principally by capacity life time (years). the critical aspect of the capacity under construction is the assessment of initiating capacity, which in turn is driven by target capacity (mw) and time to adjust (years). the target capacity is driven by per capita power generation in the system. the per capita power generation (kwh/person) in the system is assumed to be driven principally by population (this is derived from the demography segment of the model). (in a fully liberalized market, this is expected to be determined by investor behavior – e.g. see [36]). it is important to state that the modules in the model are subscripted. subscript in the modules allowed a * accumulate: growing or increasing over time (source: [38]) international journal of sustainable energy planning and management vol. 14 2017 29 abiodun s. momodu variable (e.g. grid capacity, birth rate, gdp, etc) to represent more than just a data for the variable. in this model, the subscript dealt with wapp member country level information as well as aggregation of generation technology types in the wapp. 3.4. scenario development and sensitivity analysis parameters within the model forms the basis for developing the scenarios for analysis. for this study, two scenarios on the wapp electricity system, base case and lcd options, are analyzed. the base case scenario represents continuing a “business-as-usual” approach that draws on technologies in the electricity system as they currently are. no consideration is given for efficiency and how these technologies fare in terms of contribution to global warming through emission of ghg into the atmosphere. the lcd options on the other hand, draws on technologies with higher efficiency and low carbon emission to replace generation technologies that have high emitting factors. the lcd option is examined based on changes in two parameters, namely, capacity and emission factors, against two different values of per capita electricity generation levels respectively. other parameters are kept constant as in base case scenario. to improve on the wapp system, the lcd option 1 was assumed to have emission factor improved by 10%, meaning ef is reduced by a factor of 0.1 from that of the base scenario, for each of the plants, while for lcd option 2, it is reduced by a factor of 0.3. the model is made up of seven subscripted parameters, with the base case values listed in table 1 being country level data and table 2 being aggregated technology type in the wapp. the high leverage points for policy intervention were identified from tables 1 and 2. high leverage points are places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything [32]. further testing – sensitivity analysis – could be conducted on the model. the high leverage points form the basis for constants to conduct the sensitivity analysis. sensitivity testing is the process of changing assumptions about the value of constants in the model and examining the resulting output [39]. with multiple parameters identified in the model as high leverage points in the model, the multivariate sensitivity simulation (mvss) or monte carlo simulation is a natural choice. four high leverage points identified in the west african electricity system are capacity factor (cf), emission factor (ef) (country average and technology type), time to adjust capacity and expectation formation. in running of the model, two parameters stood out on their effect on generation capacity addition and gdp. literature is scarce on the issue of time to adjust capacity, which is similar to expectation formation time, therefore an explanation of these parameters is given briefly. for time to adjust capacity, usually a number of steps are taking to manage the load in a grid system. this is known as load management or demand side management. this is simply the process of balancing the supply of electricity on the network with electrical load by adjusting or controlling the load rather than the power output. however, due to the fact that generators in the network will at a time or the other come to the end of their lifetime and be disengaged from service, it is critical to also determine the time to adjust capacity. time to adjust capacity refers to the time in planning for generation capacity when new capacity must be planned table 2: base case parameters in the ep-lcd model normal per capita time to fuel / capacity capacity capacity construemission electricity adjust technology (mw) factor lifetime ction time factor demand capacity type (dmnl) (years) (years) (tco2/mwh) (mwh/cap) (years) residual fuel oil 1410 0.48 25 3 0.2786 0.146 20 gas 4892 0.58 25 3 0.2020 hydropower 3760 0.54 50 10 0.0 coal 32 0.48 25 8 0.3413 nuclear 0 0.40 25 10 0 sources: [1, 31, 34, 35] 30 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact for and be added to existing capacity to avoid overstretching the installed capacity. this is usually signaled by tight reserve margin. reserve margin [38] is what the electricity utility industry employs as a simple strategy for maintaining reliability, i.e., always have more supply available than may be required. yet it can be difficult to forecast future electricity demand, and building new generating capacity can take years. the industry regularly monitors the supply situation using a measure called reserve margin. reserve margin is capacity minus demand)/demand, where “capacity” is the expected maximum available supply and “demand” is expected peak demand. it is calculated for electric systems or regions made up of a number of electric systems. for instance, a reserve margin of 15% means that an electric system has excess capacity in the amount of 15% of expected peak demand [38]. for this study, the sensitivity analysis has not been conducted in the model. 4. result and analysis of model output based on different scenarios comparison of the result from running the model at base case and lcd options (1 and 2) respectively is presented in this section. the model was run in time space of 50 years, with 2015 as the base year and 2064 as the terminal year. the values for lcd options parameters for the model are presented in table 3, with its implication explained in section on low carbon development strategy in wapp. after establishing the model structure and unit checks made, it was further validated using values gotten for wapp in an independent study [40]. the expectation formation periods were determined at 7.5 years for the base case scenario and 7 years for the lcd option scenario. time to adjust capacity was located at 21 and 20 years respectively, deduced from the average time it will take to construct a combined cycle gas power plant (3 years) and an allowance of 2 years for delays and its decommissioning time. in reality, these times (expectation formation and time to adjust) are missing in operating most of the power systems in the region. for example, out of the 24 documented power plants in nigeria, only 14 were built as recent as 30 years or less ago. these power plants are only 48% of the total generation capacity, with no immediate plans of their replacement. table 4a shows the ranges of future generation capacity in mw with projected electricity to be generated from this capacity as well as the emissions measured in billion mwh and tonnes of co2 respectively. table 4b gives the assumptions made for each of the scenario options using 2015 as the reference year. from the model run, weighted average emission of ghg was 27.1 million tco2 equivalent for the base scenario in the 50 year period. for the two lcd options, the average weighted average annual emissions table 3: lcd option parameters in the ep-lcdv1 model ldc option 1 lcd option 2 country average emission average country average emission average country factor of power plant capacity factor, factor of power plant capacity plants, [tco2/mwh] [tco2/mwh] plants, [tco2/mwh] factor, [tco2/mwh] benin 0.5067 0.756 0.3941 0.81 burkina faso 0.6237 0.756 0.4851 0.81 cote d’ivoire 0.2934 0.728 0.2282 0.78 gambia 0.6993 0.784 0.5439 0.84 ghana 0.2934 0.756 0.2282 0.81 guinea 0.7137 0.798 0.5551 0.855 guinea bissau 0.6552 0.756 0.5096 0.81 liberia 0.5112 0.756 0.3976 0.81 mali 0.522 0.756 0.406 0.81 niger 0.7803 0.672 0.6069 0.72 nigeria 0.5202 0.742 0.4046 0.795 senegal 0.7353 0.812 0.5719 0.87 sierra leone 0.5112 0.672 0.3976 0.72 togo 0.8568 0.812 0.6664 0.87 sources: author’s assumption international journal of sustainable energy planning and management vol. 14 2017 31 abiodun s. momodu is 31.5 and 15.8 million tco2 equivalent respectively. the cumulative emission for the scenarios are 1.4, 2.2 and 0.8 billion tco2 respectively. adopting the strategy of improved capacity and emission factors of these aged plants achieved significant reduction in emission levels as seen in the lcd option 2. 4.1. traditional economy versus low carbon economy in the electricity system the paris climate change agreement entered into force on november 4, 2016, with 197 parties having ratified, accepted, approved or acceded to its instruments with the depositary. by signing the agreement, the countries committed themselves to reducing greenhouse gas emissions unconditionally by 20 per cent and conditionally by varying percentage in line with their nationally determined contributions (ndc). some countries and regions of the world have repositioned their electricity sector to meet global challenges. this is one area amongst many that the paris agreement could be effected at low cost through focus on lcd strategy. the countries in the wapp have ratified, accepted, and approved the agreement. so to achieve the ndc in west africa, this deliberate strategic process could be adopted as a low-hanging option to contribute to the reduction of global warming. electricity expansion in west africa targets unserved areas to expand access. the cheapest means of this expansion is the use of fossil fuels. taking this path to economic growth (industrialization process) unmitigated, will aggravate the already felt climate change impact in the sub-region. this could be with irreversible consequences. the fact really is that most of the current policies for developments in the sub-region are premised on the framework used in preindustrialization era. to avoid the after-effect of such policies, it is important that the wapp system pursues a developmental agenda that responds adequately to global climate change obligations as well as meet with this projection of future generation requirements. so wapp as a cooperation system for electricity generation, would need to incorporate the strategies of low carbon development (lcd) in its operations to achieve a balance between development and ghg emissions . in this way, firstly, the critical challenge of the sector to achieve reduced ghg emission is addressed. secondly, the strategies are developmental in that they will allow for increased energy access and consumption, incorporating acceptable regulatory option(s) to improve standard of living in the long-run. the generation capacity examined in the model is only that of the available capacity and not the installed capacity. table 4a: ranges of future generation capacity (mw), electricity generation (mwh) and co2 emissions (tco2) scenario 2015 2030 2064 base 9912 8974 13718 lcd option: 1 9912 12108 31049 lcd option: 2 9912 12108 31049 base 29368 26535 40366 lcd option: 1 44051 53797 137838 lcd option: 2 44051 53797 137838 base 15.3 13.8 20.9 lcd option: 1 18.3 22.5 57.1 lcd option: 2 16.1 19.6 50 table 4b: some assumptions made to estimate ranges of future generation capacity, electricity generation and co2 emissions assumptions average per capita electricity base 115 reference year: 2015 consumption for wapp lcd option: 1 363 countries, mwh/cap lcd option: 2 611 average capacity factor for base 0.54 reference year: 2015 countries, ratio lcd option: 1 0.75 lcd option: 2 0.81 average emission factor for base 0.6526 wapp countries, tco2/mwh lcd option: 1 0.5221 lcd option: 2 0.4568 expectation formation, years base 7 lcd option: 1 7.5 lcd option: 2 7.5 time to adjust capacity, years base 21 lcd option: 1 21 lcd option: 2 21 32 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact for instance, nigeria has an installed capacity of about 12,500 mw but can only have an available capacity of only about 40% of that to generate electricity. the reasons for the low level capacity utilization are traceable to incessant gas shortages, illmaintained power plants, weak transmission capacity [41], vandalism, obsolete distribution network, amongst others. by merely assuming an increased capacity factor of 0.5 to that of the base scenario value (i.e. cf>0.5base), the change in generation rose significantly as shown in table 4a. 4.2. low carbon development strategy in wapp to achieve development, energy consumption would need to be increased. this means expansion of grid capacity in generation, transmission and distribution. so at first glance as shown in table 5, development policies will be running counter to reducing ghg emission . thus to counter such direction is to apply low carbon development strategy. this strategy will handle tension between achieving development and reducing ghg emissions from infrastructural provision. that is, lcds will achieve needed trade-offs between development policy and climate policy. lcds is counterintuitive, taking cognizance of the existence of negative feedback loops. this is demonstrated in the result shown in table 5. the base scenario guided how mitigation targets were set. to examine low hanging options available for achieving lcds in the wapp electricity system, the two other alternatives were ran for the lcd option, namely, lcd option 1 and 2 scenario. the first alternative considered increased efficiency in the generation capacity by a factor of 50%, through improved average capacity factor across the countries. the second alternative, considered reduced emission through reducing average emission factor across wapp member by 30%. this is in addition to the strategy adopted in lcd option 1. in the first alternative, the system gained increased energy generation, though with table 5: results for generation capacity in the base and lcd option 1 & 2 scenarios country scenario 2015 2025 2030 2035 2045 2055 2064 unit mw benin base 134 110 117 125 142 162 181 lcd option 134 141 164 191 259 351 461 burkina faso base 135 105 110 115 126 137 149 lcd option 135 136 155 177 231 301 383 cote d’ivoire base 1195 926 936 947 968 990 1010 lcd option 1195 1173 1295 1430 1743 2125 2541 gambia base 39 28 26 25 23 21 19 lcd option 39 35 37 38 42 45 49 ghana base 2185 1797 1916 2042 2321 2637 2959 lcd option 2185 2301 2679 3118 4225 5724 7524 guinea base 109 85 89 93 102 111 120 lcd option 109 110 125 143 187 243 309 guinea bissau base 26 20 20 21 21 22 22 lcd option 26 26 28 31 38 46 55 liberia base 23 18 18 19 21 23 25 lcd option 23 23 26 30 39 50 64 mali base 86 64 62 60 56 53 50 lcd option 86 80 85 90 101 113 126 niger base 138 102 102 101 100 98 97 lcd option 138 130 141 153 181 213 247 nigeria base 5061 4595 4928 5285 6079 6993 7932 lcd option 5061 5569 6422 7406 9848 13096 16926 senegal base 468 333 318 304 278 254 234 lcd option 468 480 529 582 705 853 1014 sierra leone base 133 162 198 243 365 549 793 lcd option 133 162 198 243 365 549 793 togo base 180 133 133 132 130 128 127 lcd option 180 195 223 256 335 438 558 international journal of sustainable energy planning and management vol. 14 2017 33 abiodun s. momodu corresponding increase in emission as shown in table 6. still on table 6, for lcd option 2, when the average emission released from these plants were improved upon through across board 30% reduction in the emission factors, a reduced emission was achieved compared to merely improving the capacity factor. the energy generated in both alternatives, however, were similar. these two low-hanging alternatives analyzed were fist identified as high leverage points from conducting the base run simulation. the strategic intervention examined is for improved capacity and emission factors respectively. all other identified parameters are kept at their base run values. for the electricity sector, this intervention is seen as low hanging option to address the trade-offs between economic development and emission reduction as options for targeting low carbon economy in west africa. the possible barriers to achieving this intervention include but not limited to the following: (1) not being ready to promote the technical knowhow needed to achieve desired improvement in the capacity and emission factor levels amongst the existing power generation technologies across the nations in wapp; (2) not willing to incentivize the sector to attract potential investors and innovators with adequate reward. innovation means practices amongst the stakeholders in the wapp system that generate electricity, to have desirable features in line with global emission reduction objectives, as in the paris agreement. to estimate the cost impact, only existing technologies were examined without taking into consideration environmental factor improvement such as carbon capture storage alongside the generation technology. further, the estimate of cost impact was based on an across board average having combined the overnight cost [42, 43] for all existing generation table 5: emission projection from generated electricity country 2015 2025 2035 2045 2055 2064 benin_base 226,100 185,959 211,318 240,135 272,881 306,154 benin_lcd 271,320 285,769 387,195 524,617 710,814 934,283 burkina_base 280,384 219,006 239,190 261,235 285,311 308,871 burkina_lcd 336,461 338,621 441,564 575,803 750,851 953,468 cdv_base 1,124,299 871,223 890,825 910,868 931,362 950,201 cdv_lcd 1,349,159 1,323,769 1,614,082 1,968,063 2,399,674 2,868,496 ganbia_base 94,182 66,948 61,158 55,869 51,037 47,047 gambia_lcd 113,018 101,326 110,511 120,528 131,453 142,129 ghana_base 2,134,793 1,755,796 1,995,228 2,267,311 2,576,496 2,890,654 ghana_lcd 2,561,752 2,698,184 3,655,822 4,953,344 6,711,383 8,821,332 guinea_base 273,443 213,584 233,269 254,768 278,248 301,225 guinea_lcd 328,132 330,238 430,633 561,549 732,265 929,866 gubis_base 56,727 43,958 44,947 45,958 46,992 47,943 gubis_lcd 68,073 66,792 81,440 99,300 121,077 144,732 liberia_base 38,472 30,050 32,820 35,844 39,148 42,381 liberia_lcd 46,166 46,463 60,588 79,007 103,025 130,827 mali_base 149,490 110,531 104,188 98,210 92,574 87,779 mali_lcd 179,388 166,577 187,260 210,512 236,650 262,937 niger_base 318,737 236,206 233,207 230,246 227,322 224,723 niger_lcd 382,484 360,709 425,192 501,203 590,801 685,057 table 6: results of running the ep-lcdv1 model at different cf and ef respectively difference scenario 2015 2064 50 million tco2 base (a) 15.28 20.9 5.62 lcd options lcd-cf0.5 > base_efbase (b) 22.93 71.37 48.44 lcd-cf0.5 > base_ef0.3 < base (c) 18.34 57.1 38.76 34 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact technologies in west africa, namely, oil, natural gas, coal and hydro. the cost impact was calculated based on construction of new power plants. factors determining cost of electricity from new power plants include construction costs, fuel expense, environmental regulations, and financing costs. other factors that drive power plants cost are government incentives, air emissions control on coal and natural gas. figure 4 is the mini model developed to assess the cost impact of these trade-offs. it was assumed that compounded annual initializing (growth) rate and compounded annual scraping rate in the system will be 6% and 1.5% respectively. cost values were taken from [37, 38]. table 7 shows the cost impact for 2064. total cumulative cost impact is approximately us$1.54 trillion from 2018 through to 2064. the cost impact was limited to capital, financing and fuel costs [42, 43] to estimate what is needed to achieve trade-offs in the wapp system. this means that the total cost will be significantly higher than what is estimated here. it is pertinent to point out that the cost estimates are based on oecd standard. the cost of this same technologies from other regions may be more competitive. now, the existing mix of generation technologies in the wapp system consists of oil-fired, natural gas, coal and hydro plants. the generators are not new and they have aged, and over the years, have been affected by changes in technology and economics. indeed, most of the plants in the wapp system have units that were built decades ago as base-load stations. though most of them are still operated as base-load*, they are best supposed to operate as cycling or peaking plants because high fuel prices and poor efficiency has made them economically marginal. this implies that the regional organization will need to get the government of wapp member nations involved to incentivize the strategic intervention process to for lcds. the government in this region must decide to deliberately influence the factors affecting cost of electricity to determine the kind of improvement that could be achieved in existing plants and/or power plants that would be built in the future. first of such approach would be to encourage the policy of energy efficiency through technology improvement with increased capacity factor and decreased energy intensity of economic activities that will also mean reduced emission factor. to encourage energy efficiency and decrease energy intensity of economic activities will both require increased spending on research and development on the part of government. this is currently non-existent in the west african region. second strategy should be aimed at incentivizing construction of power plants to especially benefit baseload plants such as those that will encourage emission reduction, which are costly to build. the third approach which will be short term, say in a five year period, that will allow low carbon fuels (principally, natural gas) cost to benefit intermediate load plants as a transition * base-load plants such as nuclear, coal, and geothermal base-load units, are expensive to build but have low fuel costs and therefore low variable costs. other than for planned and forced maintenance, these generators will run throughout the year. intermediate load plants, such as combined cycle units, are very efficient but use expensive natural gas as a fuel. these cycling plants will ramp up and down during the day, and will be turned on and off dozens of times a year. peaking load plants, use combustion turbines and are relatively inefficient and burn expensive natural gas. they run only as needed to meet the highest loads. generation capacity initializing capacity scrapping capacity rate of scrappingrate of initializing initial generating capacity cumulative generation capacity cost impactovernight cost mw to kw convertor cumulative cost impact figure 4: cost impact assessment model for wapp energy-climate change trade-offs table 7: cost impact of generation capacity in the wapp system in 2064 technology/ overnight cost, capacity in cost implication, fuel type $/kw (2012$) 2064, mw us$, billion oil-fired 1200 4027 4.84 natural gas 1023 13,970 14.30 coal 3246 91.4 0.30 hydro 2936 10,740 31.54 total 50.98 sources: [42, 43] international journal of sustainable energy planning and management vol. 14 2017 35 abiodun s. momodu process; these category of power plants are inexpensive to build but rely on an expensive fuel. this is to encourage a quick ramp up of generation capacity to increase economic dispatch in the grid system. these strategies should however be reviewed periodically in line with determination to meet paris agreement on ndc for these nations. 5. summary and conclusion the central focus of this article is to present a developed sd model for assessing the wapp electricity system behavior in a low carbon economy. its principal aim is to eliminate the usual trial and error approach that characterizes policy formulation, which are usually costly and time consuming. the model presented – is adopted and modified electricity planning-low carbon development (ep-lcd) [2] – consists of the following modules: socio-economic, electricity and lcd option. the socio-economic module consists of variables and parameters on population and gdp; the electricity module has electricity marketing, capacity addition, power demand and lcd option has co2 emission estimation from electricity generation activities. for this study, the most critical sector is the capacity addition, which was linked to emission assessment from electricity generated in the system. the structure of the model was first established to ascertain the model behavior, this was followed by unit checks; the model was calibrated using values for the parameters in the mode. the data used were from wapp. high leverage points were identified after the base run simulation was done. comparing results of the two scenarios: base case run revealed the high leverage points in the model that was used to conduct the and lcd option runs. the high leverage points are: capacity factor, adjustment time for capacity, expectation formation and emission factor. the first three are directly or indirectly relevant to capacity addition and energy generated while the last one has relevance with emission. high leverage points are variables within the west african electricity system that are small yet could produce desired low carbon development strategy as identified in the simulation and help to situate firming of intervention for reducing environmental footprint from electricity production. the results from the model shows weighted average emission of harmful ghg to the atmosphere was 27.1 million tco2 equivalent for the base scenario, while for the two lcd options, the average weighted average annual emissions is 31.5 and 15.8 million tco2 equivalent respectively. the cumulative emission for the scenarios are 1.4, 2.2 and 0.8 billion tco2 respectively. adopting an improved capacity factor for the existing power generation stocks and a reduced emission factors achieved marked reduction in emissions over the years. estimated cost impact is approximately us$1.54 trillion from 2018 through to 2064. the cost impact of increasing generation capacity in the lcd option was limited to capital, financing and fuel costs, meaning that the total cost could significantly higher than this. the study noted that most generators in the wapp system have aged. they have been affected by changes in technology and economics. indeed, most of the plants in the wapp system have units that were built decades ago as base-load stations. though most of them are still operated as base-load, they are best supposed to operate as cycling or peaking plants because high fuel prices and poor efficiency has made them economically marginal. the implication is that government incentives are needed to drive the process of avoiding the trajectory of industrial era in west africa nations. a number of countries in the region have privatised their power industry. thus government decisions to influence, or not influence, the factors affecting cost of electricity can largely determine the kind of improvement that would happen in the existing generation plants and/or power plants that would be built in the region in the future. three of such strategies are recommended to cause improvement in existing power plants in line with paris agreement, reduce the cost of constructing power plants to benefit base-load plants and reduce the cost of fossil fuels to benefit intermediate load plants in the short run period to allow the ramp up of generation capacity. these should be done from between 2018 and 2030 to incentivize the market. the study concludes by recommending four strategies to encourage the implementation of energy efficiency policies, in line with the nationally determined contribution in paris agreement. these are: a) enforcement of improved efficient electricity generation through increased energy efficiency that should result in increased capacity factor. this could be achieved through incentivizing retrofitting process; b) decreased energy intensity of the economy that should result in reduced emission factor amongst existing plants. this strategy involves rehabilitation of the 36 international journal of sustainable energy planning and management vol. 14 2017 energy use: electricity system in west africa and climate change impact existing installations to elongate the lifespan of aged power plants in improved forms; c) attract new investment through low tax or tax exemption to reduce cost of constructing power plants for the benefit of base-load plants. this is to attract investment in new generations that encourage low carbon economy in the wapp system; and d) subsidized cost of low-carbon fuels in the short run to benefit intermediate load plants and allow for the ramping up of low-/no-carbon 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 04.1019-3783-1-le.qxd 1. introduction this article analyses a set of bids submitted to the electricity spot market by three norwegian reservoir hydro producers in four two week periods in 2011. our objective is to provide insight into actual bidding, and our findings indicate that there is scope for improved efficiency. not all marginal costs are taken into account, possibly leading to overproduction at low prices. marginal costs seem in some cases to be overestimated at high price levels, leading to planned underproduction in scarcity situations. in summary, we document examples of bidding that deviate from rational benchmarks. as indicated, our contribution lies in analysing bidding behavior empirically. this has been done for electricity markets before [27, 25, 13]. however, their purpose is to detect abuse of market power, whereas we are looking for sub-optimal behavior for individual producers. on the other hand, normative (optimization) approaches to this problem abound, and here we cite a international journal of sustainable energy planning and management vol. 07 2015 37 few. refs. [6, 2] develop stochastic mixed integer optimization models for production bidding given uncertain prices. we extend [9] who develop piecewise linear bidding curves for nordic hydropower producers. also building on [9], [17] formulate the bidding problem as an intraday problem considering bidding into the day-ahead market, whereas the longer-term interday problem is modeled as a markov decision process managing storage operations over time. further, [7, 5] optimize the day-ahead bidding for a generic set of power plants in the same hydrological system. finally, [1] compares a stochastic bidding approach with current best practice in the nordic market. we refer to [14, 16, 15] for wider reviews on bidding strategies, including thermal generation. the analysis is of interest to hydropower producers who want to improve their bidding process. however, it is also relevant for regulators and market analysts who are doing market surveillance and day-ahead price international journal of sustainable energy planning and management vol. 07 2015 37-58 insights from actual day-ahead bidding of hydropower �������� �� ������ � � ����������������� �� ������������������,� ������������ � �� � ��b a�������� � �� �������� ��� ����� � � ���� ����� �� ����� �� �������� � �������� �� ���� �� � � ���� ������ � !"#$% ��� ������ ������& b�������� � �� ������������ ���� ���� � �������� �� '��� ���� � � �������������(� )� *%++ ,-.� ��� /� �� ���(& abstract we analyse bidding behavior in the nordic electricity market, where producers submit supply schedules for tomorrow’s generation in a day-ahead auction. we use the two-stage stochastic mixed-integer linear program of fleten and kristoffersen (2007) [9] to generate efficient bids to assist in the analysis. these bids are compared to those submitted by three nordic reservoir hydropower producers over four two week periods in 2011. being price takers, the producers maximize their profits by bidding their marginal cost. we find that the hydropower producers often come close to the model-optimal result. however, not all marginal costs are taken into account, possibly leading to overproduction at low prices. marginal costs seem in some cases to be overestimated at high production levels, leading to underproduction in those situations. keywords: hydroelectric power generation, reservoirs, uncertainty, bidding, empirical analysis. url: dx.doi.org/10.5278/ijsepm.2015.7.4 1 corresponding author e-mail: stein-erik.fleten@iot.ntnu.no dx.doi.org/10.5278/ijsepm.2015.7.4 38 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower analysis. although our data is from one country only, the day-ahead structure is common in many liberalised electricity markets and so our results are of interest in a wider setting, providing an in-depth picture of how dayahead bids are formed, and thus of the market microstructure of day-ahead markets. the outline of the article is as follows. in sections 2 and 3 we present the premises that flexible hydro producers have to deal with when bidding day-ahead. section 4 presents the bids and gives the main empirical analysis, structured around the producers’ decisions of deciding the bid volumes, setting the price points and deciding what type of bids to use, respectively. in section 5 we report on results from implementing a stochastic optimization model for bidding, where optimized bids are compared with actual ones. finally, we conclude in section 6. 2. physical electricity markets power producers have to choose where to sell their physical power. however, besides bilateral agreements with large industrial power consumers, the major marketplace to trade large volumes of power is the dayahead auction. in total 334 twh, or 77%, of the electricity produced in the nordic market was traded through the day-ahead auction in 2012 [20]. the corresponding numbers for eex are; 321 twh turnover at the day-ahead market, i.e. about 28% of consumption. at 12:00 noon both retailers and producers submit bids to these two european day-ahead markets for buying or selling electricity for the coming day, that is the next 12–36 hours. the participants can use several combinations of prices and volumes for each hour, thus creating a piecewise linear bid function, in addition to other types of bids. after receiving all bids, the market operators sets the uniform system and zonal spot prices. at around 12:30–12:45 the prices are made public and a producer will learn how large a volume he is committed to produce for every hour the next day. all power producers and suppliers have balancing responsibility, overseen by the respective transmission system operator in each country. if a producer for some reason cannot or does not want to comply with the committed volume, he must make an adjustment trade. for this purpose the market operators also organizes intraday trading markets. there still might be outages or other incidents that cause deviations from the dayahead (and intraday) schedule. therefore, there are balancing markets, where the system operators accepts bids for upwards or downwards ramping of production. in addition to the balancing markets, system operators also coordinate markets for primary reserves. the extent to which bidding into one of these markets must be planned together with bidding into other markets is an active research question [23, 8,4]. since producers can not be guaranteed any production in the closer to real time markets, producers looking to sell in an efficient market must necessarily bid much of their power into the day-ahead. the problem faced by the producers, hereby referred to as the bidding problem, thus consists of how much power to offer for tomorrow, at what prices and for which hours through what type of bids. this problem is further complicated by technical requirements and constraints in physical production, variable feed-in fees to the grid owner, as well as start up costs and variable efficiency curves for the generating units. as a price taker in a competitive market you achieve your optimal outcome by offering your good to marginal cost [12]. however, where thermal power plants can relate their marginal costs to the cost of fuel, hydropower producers get their water for free. for flexible hydro producers, the marginal costs translates into the opportunity cost of not being able to sell power from this water at a later stage [22]. and determining the latter part is far from easy, as value of an additional unit of water in the reservoirs, the marginal water value, depends on more than just future price expectations. it is also dependent on the current reservoir level, local inflow expectations and the size of reservoir compared to it’s average inflow and production capacity [24, 19]. next we outline some factors that affect how the bids are formed in the context of a norwegian hydropower producer, namely transmission tariffs, license power, marginal water value, efficiency curves of generating units, and start up costs. 3. internal premises for bidding power producers in norway pay a fee when delivering power to the electricity grid, from here on referred to as the feed-in fee. this fee consists of a fixed part of 1 eur/mwh paid to the system operator, statnett, and a variable part paid to the grid owner. the fixed part of the fee is set for several years at a time to cover costs for statnett and is equal for all power stations and all hours of the week. the variable part equals the marginal loss rate multiplied with the day-ahead price for every hour. the marginal loss rate is set by the system operator on a weekly basis to account for grid losses. if your production is closer to the power drain, you might in fact improve the grid situation by supplying the grid. thus the marginal loss rate can be both positive and negative. the marginal loss rate is given as two different values over the span of a week, one for weekdays (07:00–22:00) and one for weekends and nights (22:00–06:00). with regards to bidding, the fixed part should not have any effect, whereas the variable part should be added or subtracted in determining the price points for every hour. note that even though the rates are given in advance, the price for the next day is still unknown and day-ahead price variations will add uncertainty to the fee payment. hydropower producers in norway are required to deliver up to 15% of the electricity production to the local and county councils and to the state at an estimated price set by the government [21]. this obligation is known as license power. the arrangement ensures that the local community benefits from the economic surplus generated by the electricity production and trade. for 2011 the license power price is set at 13.35 eur/mwh. for certain producers this license power may be evident in the bidding through buying power at very low prices, simply for the possibility to cover the obligation through purchases at a favourable price level compared to producing it themselves. the most important parameter when bidding hydropower is the value of an additional unit of water in a reservoir, the marginal water value, or simply the water value. as a fully correct water value calculation is complex, most producers use specialized software to perform an approximate calculation [26]. some do their own simplified calculations in customized computer programs or as simple functions of the reservoir levels. we do not have exact water values for all three producers, nor will we create our own models for estimating them. however, through deduction it is possible to infer the water values from the bids. the bidding problem also relates to the efficiency of the power plants and each separate turbine. the efficiency ε at which a turbine runs can be given by its power output, w, in mw divided by the flow of water, q, also in mw: η = w (q)/q (at nominal water height and flow). modern turbines and generators are able to convert up to 95% of the kinetic energy to electric power. both above and below best point the efficiency usually drops a few percentage points, illustrated with the concave curve in figure 1a. naturally, producers want to run their turbines at best point for much of the time. however, as the spot price rises so should the producer’s willingness to produce above best point. on the other hand, due to high start up costs or minimum flow constraints, a producer might also end up producing below best point. when bidding for power stations with multiple turbines, producers also have to consider the combined efficiencies of two or more turbines. depending on the efficiency curves of the turbines, it might be better to run three turbines at a certain point of production than two, or vice versa. figure 1b shows actual combined output international journal of sustainable energy planning and management vol. 07 2015 39 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma best point power output water inflow [mw] o u tp u t [m w ] 0 0 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 100 ->0 ~0.95 e ff ic ie n cy max cap (a) efficiency curve for a single turbine related to power output. (b) combined efficiency curves for one to four identical turbines. figure 1: efficiency and output curves for one and several combined turbines. the single efficiency curve shows the actual efficiency relative to the power output while the multiple turbine curve shows output relative to the water inflow. of one to four identical turbines relative to water inflow. at a given flow of water, producers naturally want to get the highest possible power output in return. in this case we see a slight overlap when using one and two turbines, and an increasing overlap when including more turbines. where the curves intersect, the producer is indifferent to using one more (or one less) turbine. we will use the term efficiency curve for both types of curves shown in figure 1 as they both are able to display the efficiency of turbines. if a producer starts a turbine from a stand-still, both direct and indirect costs will occur. the direct costs come in the form of inefficient use of water (for a few seconds) and potential extra use of manpower, while the indirect costs are wear and tear on the equipment and a risk of a failure in the start up procedure. although very low compared to other power production technologies, start up costs still have to be accounted for when running a hydro plant. large hydropower producers have many power stations, some with multiple turbines. after nord pool spot clears the market, producers are given a total production commitment according to the spot price and their submitted bids. producers then need to plan their allocation of the realized volume commitment across their power plants and turbines in a way that minimizes the total costs. at this point they usually run a deterministic short term optimization, for instance shop [11]. a stochastic approach is suggested by [10] and developed further by [3]. thus, the possibility of post commitment production allocation favours big producers with many power plants. in a sense, it releaves some of the pressure on bidding optimally as, with luck, even bidding somewhat poorly might in the end result in a production scheme where every turbine runs at a highly efficient output level. a further remedy for unfortunate bidding and commitment is the intraday market. finally, penalties for imbalances in the balancing market, although always positive, may not always be substantial. 4. bid analysis in the following section we present the empirical analysis of the bids. first we give a summary of the bids and other information we have received in 4.1. in 4.2 we analyze the bids based on the underlying factors found in section 3. finally, in section 4.3 we analyse the relative performance of the bidding for each producer, over the whole data period. 4.1. presentation of bid data we have gathered a unique data set from three norwegian hydropower producers. this includes all variations of bids submitted by the producers to nord pool spot for four two week periods representing four seasons in 2011. additionally, producer a in particular has provided us with highly detailed data regarding all their cascades and power stations and thus enabled a more extensive analysis of their bidding. the annual electricity generation is less than 10 twh for all of the producers, placing them below top 10 among nordic producers, and below top 3 in norway, regarding their relative size. table 1 gives a brief overview of the data we have received from the three producers. the hourly bid is the most common type of bidding product used by norwegian hydropower producers, and is submitted to the market operator in matrices. the hourly bid matrix can be quite large, spanning 24 rows and up to 64 columns representing respectively the hours and the price points. actual bids are presented in cut-outs of full matrices in section 4.2 to illustrate and support the analyses. however, to exemplify the dimensions, the matrices are plotted along three axes in figure 2 below. we present three plots of these matrices, one for each company, and each matrix with different characteristics. for producer a we also include a block bid, i.e. a bid valid for several hours (here 18:00–22:00, for 40 mw), that will be accepted if and only if the average spot price for those hours is above 18.75 eur/mwh for this case. 40 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower table 1: overview of the data received from producers a, b and c. a cascade is two or more sequential reservoirs and power stations in the same hydrological system. h = regular hourly bids, b = block bids, l = linked blocks. indiv. power bid types water efficiency producer scope station bids in use values curves a all bids yes h + b + l yes yes b cascade no h + b no no c all bids no h + b no no 4.2. patterns in the bids we find that there are basically three decisions that a bidder faces in the day-ahead auction. these are deciding the volumes to bid, setting the exact price points you want to bid in, and finally figuring out what type of bids to use. we analyze the first two of these. naturally, all these decision are strongly interconnected. a producer would likely never set a price point without having an idea of which volume to connect it to. to clarify the presentation they are still analyzed separately. 4.2.1. deciding the volumes the production volumes found in a bid matrix or a block bid are naturally connected to the technical specifications of the turbines a producer controls. depending on the price level and price expectations, a producer usually wants to run his turbines at the minimum level, at best point, at maximum capacity or somewhere in between the latter two. these levels of production are fixed and do not change unless the producer decides to physically alter the design of the power station. submitting sensible bids thus consists mainly of setting a limited set of volumes at strategic price points. however, a number of other elements come into play when setting the volume points. these include bilateral contracts, pumping and an assessment of the maximum available capacity. bilateral agreements include the obligation to deliver concession power, as well as directly to industrial international journal of sustainable energy planning and management vol. 07 2015 41 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma hours v o lu m e s (m w ) prices [eur/mwh]024 20 16 12 8 4 0 -40 -20 0 20 40 60 20 40 60 v o lu m e s (m w ) 0 50 100 150 200 250 300 hours prices [eur/mwh]0 24 20 16 12 8 4 0 20 40 60 hours v o lu m e s (m w ) prices [eur/mwh]0 24 20 16 12 8 4 0 0 50 100 150 200 250 300 20 40 60 (a) bids a winter day for producer a, including ablock of 40 mw from18:00 to 22:00 at price 18.75 eur/mwh. the bid uses 37 price points in total. most of the volume is bid at low price levels, after which the bid flattens out. we also see how the drop in hourly bid volume corresponds with the entrance of the block. (b) bids a weekend summerday for producer b. the bids are quite stable throughout the day. volumes at the max. and min. prices are constant over the day. (c) both demand and supply bids a spring day for producer c. at 40 eur/mwh the bids shift from buying to selling. we also see distinct volume shifts at hour 6 and hour 21. figure 2: representative bids for producer a, b and c, respectively. consumers. we can therefore find bids in the bid matrices where producers bid to purchase power at low price levels. further, purchase bids can also represent bids to run pumping stations. analysis of these two issues is available upon request. it might seem natural for a producer to bid the combined technical capacity of all its turbines to elspot at the highest allowable price point of 2000 eur/mwh. however, this is not exactly the case. assuming that the producers want to produce as much power as they can at the maximum price of 2000 eur/mwh, the maximum production capacity becomes the sum of the hourly bid at maximum price and the submitted block bids in an hour. a surprising finding is that the maximum bid volume varies greatly, even in shorter periods of time such as a week, or even a day. figure 3 shows variations in maximum capacities, with figure 3a showing daily average maximum output over the weeks. variations on hourly intervals for weeks 25–26 are shown in figure 3b. there are a number of reasons for the observed variation. producers commit production in other markets besides day-ahead spot as they see it best to reduce risk and maximize profits, selling for example bilaterally to power intensive industry, or setting aside capacity for ancillary services markets. additionally, hydropower producers in norway must deliver concession power at at a varying level. in certain periods a producer can experience reservoirs that are empty, or nearly empty, to further disrupt the total output capacity. maintenance is another reason. finally, the maximum output also depends on the head of water which varies with the reservoir level. all in all, these factors strongly affect producers’ ability to deliver to elspot. as we can see the deviations for all producers are quite high. 4.2.2. setting the right price points once a producer has established which volumes are sensible to bid, he must figure out the right prices to connect them to. the marginal water value is a typical anchor at which the producers would want to bid their best point volume. however this is necessarily not sufficient. the producers also have to account for the fact the nord pool spot will interpolate their bids between consecutive price points as well as the fact that costs for feeding power onto the grid often are not included in the water values. additionally, at sufficiently high price levels, producers will want to produce above best point, and thus have to consider the drop in efficiency relative to the increase in price points. most often, the spot price will not equal any of the price points chosen by the producer. the exact hourly bid commitment will then be an interpolated value between volumes of the two neighboring price points. interpolation between bid points can be unfavorable for the producers, because of the risk of committing to produce in an infeasible or inefficient range. table 2 illustrates how producer c bids to avoid volume interpolation. the price points in italics show his marginal water values for four separate reservoirs when all marginal costs are accounted for. if the spot 42 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower week 13 − 14 week 25 − 26 d a ily a ve ra g e b id a t m a x p ri ce [ m w ] week 38 − 39 week 51 − 52 1 48 96 144 192 hours in weeks 25 − 26 h o u rl y b id a t m a x p ri ce [ m w ] 240 288 336 prod a prod b prod c prod a prod b prod c (a) daily avg. max. cap., all weeks (b) hourly max. cap. week 25–26 figure 3: maximum production capacity bid to elspot for producers a, b and c, showing high variations both within fortnightly and daily time perspectives. price exceeds these marginal water values, producer c will produce at exactly best point for the respective turbines, unless the spot price happens to land between the 0.125 eur price gaps, thus interpolating the bids. this is accomplished by setting two price points at the smallest allowed interval apart combined with a sharp increase in volume, leading effectively to almost piecewise constant bidding curves, as opposed to piecewise linear. notice also how the producer bids best point volume at the technical maximum price, implying that the turbine best point is calibrated to lie at maximum production. producers also purposely bid so as to control the interpolation between price points. bids with noticeable gaps between price points and volume points can represent a linear approximation of the falling efficiency above best point. table 3 below gives a real example of a bid matrix generated by producer a for a single power station. the strategy in the bid is to allow for interpolation whilst letting higher price levels balance the loss of efficiency. figure 4 illustrates this graphically. the efficiency η in table 3 is relative to best point efficiency set at 1, and have been used to calculate the necessary price levels to compensate for respective efficiency loss of running above best point. in table 3 producer a seems to want a disproportionally high premium to produce at maximum production. this sort of behavior is found in most of the bid matrices for producer a. this finding complies with evidence for smaller bidders in texas electricity market [13]. the particular reservoir in this example had a filling level of more than 90%, along with the other reservoirs in the hydrological system. at this storage international journal of sustainable energy planning and management vol. 07 2015 43 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma table 2: producer c uses neighboring price points to minimize the risk of interpolation of his hourly bids. top row shows bid prices in eur/mwh, and table entries are in mw. positive entries are purchases, and negative are sales. water values in italics. hour\price −263 41.875 42 46.625 43.75 56.25 56.375 58.625 58.75 2625 10 27.9 27.9 27.9 27.9 −16.6 −16.6 −16.6 −16.6 −34.8 −34.8 11 28.0 28.0 28.0 28.0 −16.5 −16.5 −16.5 −16.5 −34.7 −34.7 12 27.7 27.7 27.7 27.7 −16.8 −16.8 −16.8 −16.8 −35.0 −35.0 13 27.8 27.8 27.8 27.8 −16.7 −16.7 −16.7 −16.7 −34.9 −34.9 14 27.8 27.8 27.8 27.8 −16.7 −16.7 −16.7 −16.7 −34.9 −34.9 15 27.4 27.4 27.4 27.4 −17.1 −17.1 −17.1 −17.1 −35.3 −35.3 16 26.8 26.8 26.8 26.8 −17.7 −17.7 −17.7 −17.7 −35.9 −35.9 table 3: producer a setting strategic price points to allow and control interpolation, compensating for loss of efficiency above best point by using higher price points, single turbine. bid prices in top row are in eur/mwh, and table entries are in mw, where negative numbers indicate sales. hour\price −263 32.25 46.38 52.50 2625 1 0 −28 −31 −35 −36 2 0 −28 −31 −35 −36 . . . . . . 24 0 –28 –31 –35 –36 efficiencies relative to best point, η – 1 0.98 0.97 0.967 price pts to compensate for η (32.25/η) – 32.25 32.88 33.25 33.38 price volume entry price point best point max volume max price figure 4: graphical display of an hourly bid for a single turbine. the bid enters at the best point production level whereas the next price point hits at maximum production. the linearly increasing price between the two points should approximately balance the loss of efficiency from best point to maximum production. level, the turbines could run at full capacity for over 1700 hours without emptying the reservoir. thus we find this bidding pattern even more peculiar. even if the spot price should reach 1250 eur/mwh the producer will be allocated closer to 35 than 36 mwh, missing out on large profits, however improbable. producer a explains this by their high price expectations regarding the frequency controlled normal-run reserves market, closer to real time. thus producer a wants a large premium to dedicate all his production capacity to the spot market. we find similar bidding patterns for producer b, yet he charges a lesser premium to run at maximum capacity. for producer c we find that he does not charge a premium over its best point production, simply because the maximum production level is at, or very close to, the best production for all its turbines (table 2). this simplifies the bidding process and allows the producer to run at best point more frequently. the lowest price point at which the producer starts bidding to supply electricity is from here on referred to as the entry price point. below this point the producer will be offering zero supply and perhaps submit demand bids to cover other commitments cheaply. the entry price point should consist of what the producer sees as his marginal cost of production, including the marginal water value, the feed-in fees, etc. producers sometimes let portions of the water in their reservoirs run through their power stations no matter what the price level; this is rational if the water cannot be stored. the producers set the marginal value of this water to zero. thus if they can produce electricity from it at a price above their power stations’ direct marginal cost, they will. if not, they simply let water run through while disconnecting the generators. the lowest price at which the producers should bid for ‘non-storable’ production is henceforth known as the break-even price point. this should also include all marginal costs except the marginal water value. any time a producer for some reason employs the break-even price point, this should also be the entry price point, as a producer should never bid to produce below the break-even price point. surprisingly, the producers often bid at the breakeven price point for water in flexible reservoirs. our study gives no conclusive answers to why they do this, but in interviews they state it is most often due to the reservoir situation in combination with the weather forecast. strangely, we find there is plenty of available reservoir storage capacity in some of the periods when the producer bids power at the break-even price point. this implies that they see that a certain amount of water must under all circumstances be released from the reservoir. yet, they value the remainder of the water in the reservoir at a higher price. thus they can be seen as having two marginal water values, one at zero and one usually in the range of 10’s of eur/mwh. table 4 shows an example of producer a’s bids for an individual power station where there seems to be two water values in play. as in table 3, producer a charges a high premium for higher volumes. this particular power station is situated at the bottom of a cascade, so there should be no incentive to release water simply to be able to produce further downstream. some producers are more exposed to high feed-in fees and have to take the fee into consideration more than others when bidding. in certain areas during the winter season the variable part of the fee can be as high as 20% of the day-ahead price. others experience the variable part being close to 0% year around. the variable part of the feed-in fee can thus comprise a significant part of the direct marginal cost of production, and have a great impact on the entryand break-even price points. hence, we should be able to observe the changing feed-in fee reflected in changing entry price points. however, even though the marginal loss rate used to calculate the feed-in fee is known, it is also 44 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower table 4: producer a seemingly operating with two marginal water values for a single flexible reservoir, indicated from the use of the break-even price point as well as much higher price points. producer a bids to let water through at the break-even price point of 3.75 eur/mwh while bidding to produce more at much higher prices. the high premiums above 12.5 eur/mwh are in line with table 3. top row shows bid prices in eur/mwh, while table entries are in mw, with negative numbers indicating sale. hour\price −263 3.625 3.75 19.875 20 28.75 28.875 50 2625 1 0 0 −74 −74 −110 −110 −150 −165 −170 . 0 0 −74 −74 −110 −110 −150 −165 −170 24 0 0 −74 −74 −110 −110 −150 −165 −170 dependent on the unknown price the next day. producers can therefore at best use their price forecasts for the next day to predict the variable feed-in fee. we use the same price forecast as producer a had in hand when setting price points for the next day. the marginal loss rates are multiplied with the average price forecast, respectively between 06:00–22:00 and 22:00–06:00, to obtain forecasted variable feed-in fees for daytime and for the night. in this example, the change in the forecasted variable feed-in fee over a day is well reflected in producer a’s bidding for an individual power station, as seen in table 5 below. this example illustrates how a producer ideally should match the variable feed-in fee with the entry price point. yet, this not often the case for the producers in this study. the marginal loss rate can vary significantly from week to week and within any weekday, thus we should see a corresponding change in the entry price points the producers employ in their bid matrices. an example of where the change in the variable feed-in fee is not taken into account is presented below in tables 6 and 7. in the example, producer a bids to produce at 0.125 eur/mwh, below the feed-in fee alone and thus below his break-even point. neither does he change the entry price point according to change in the marginal loss rate from hour 6 to 7. this will cause a direct loss to the producer if the spot price should land below 2.75 eur/mwh. most likely is the feed-in fee not taken well into account in the higher price points either, thus causing a loss taking the marginal water value into account. the bid can therefore be said to be irrational. to improve the bid, the producer can simply bid at lower price points at night and at higher price points during the day according to the changing feed-in fees. 4.2.3. choosing the bid type the choice between bidding hourly bids or block bids, with or without links, is perhaps the most complex decision the bidding responsible has to deal with. linked block bids are block bids that are conditional on another block being accepted, i.e. the linked block bid only becomes valid if the parent block is accepted. the idea of allowing block bidding is to give producers with startup costs and other inflexibilities a predictable production schedule. an advantage stated by our set of producers is being able to set the exact best point production directly at the marginal water value. simply put, an average spot price above the marginal cost gives the most efficient production, and a price below means no production. such practise can be seen as rational and is a common way to submit block bids. a common strategy is to combine hourly bids with block bids, submitting the block bid at best point and the marginal water value, while the hourly bids cover the production from best point to maximum production at higher price points. often the producers find that spot prices hover around the marginal water value, so that hourly bidding will result in many startups, which is not desirable. international journal of sustainable energy planning and management vol. 07 2015 45 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma table 5: change in variable feed-in fee reflected well in producer a’s entry price points. the average forecasted change in the variable feed-in fee is very near the change in producer a’s use of entry price point. day night difference approx. marginal loss rate −5% 20% 25% entry price points [eur/mwh] 35 26.88 8.125 average variable feed-fee [eur/mwh] 6.94 −1.64 8.49 table 6: average feed-in fees seen by producer a in relation to table 7. day night approx. marginal loss rate 3% −3% average variable feed-in fee 14.1 −12.9 average total feed-in fee 22.1 −4.9 table 7: bid matrix showing irrational bidding as the entry price point (in italics) is below the feed-in fee alone, shown in table 6. first row numbers are in eur/mwh, while table entries are in mw, with negative numbers indicating sales. hour −263 0 0.125 75 87.5 2625 1 0 0 −8 −8 −11 −11 . 0 0 −8 −8 −11 −11 24 0 0 −8 −8 −11 −11 nord pool spot gives participants the possibility of submitting up to 100 block bids per day, where the blocks can be any consecutive combination of minimum three hours. the latter implies there are ∑ 22n =1 n = 253 possible combinations to choose from. however the producers rather use a few combinations of hours that give practical meaning with regards to peak and off-peak price hours, working shifts and feed-in costs, and stick to simple rules when making block bids. blocks are usually submitted sequentially in time, with the overlap often taking place at the shift of the marginal loss rate at 06:00, or according to work shifts around 07:00–09:00. the application of bid types varies quite a lot between the three producers. table 8 shows the volume share of the two main bidtypes submitted and realized over 8 weeks by the three producers. the producers each submit a sizeable share of block bids, which drop quite a bit once the bids are actually realized in elspot. producer b submits 27% of the total volume in block bids, but only 6% are actually realized. producer c is the most noteworthy in terms of the volume of block bids used, submitting 71% of his capacity in the spot market in blocks. a total of 60% was still realized and produced as block bids. producer c gives no other reasons for submitting block bids than what we have already mentioned, mainly bidding blocks to avoid starts and stops. however, producer c’s largest power station comprises a sizeable portion of his total capacity and is almost exclusively bid in using blocks. 4.3. performance analysis to find the potential increase in income for the producers, we perform an analysis of a case where the producers are able to predict every price peak within each two week period. in other words, we simulate having perfect foresight for the entire period, and producing at maximum bided capacity in the hours with the highest spot prices. given the limited technical and hydrological data on two of the producers some simplifications were necessary. we assume the producers’ capacity to deliver to the spot market is given by the sum of its hourly and block bids submitted for each hour. we aggregate the total volume of flexible electricity produced over each two week period, meaning we have subtracted bid volumes we consider less than fully flexible, i.e. bids at breakeven price points. thus the remaining volume should be 100% flexible. this energy is then reallocated to the highest priced hours until the total amount is allocated, where we assume we achieve the same average efficiency of the turbines. this is of course a somewhat unfair analysis as it disregards both the start up costs, the reservoir levels and the potentially lower efficiency achieved from always running at maximum capacity. yet it does paint a picture, and to a certain degree, the analysis can give an indication of the producers’ bidding performance. this is displayed in table 9 below. we see that the producers perform quite well, competing against perfect price information. the highest potential increase in income over the six periods is 11.1%. on average over the 8 weeks, the potential increase for all producers was 5.4%. producer a displayed a more stable performance than b and c. for producer c in week 38–39 there was very low net trade due to low price levels, making this analysis less interesting. we observe that all producers on average performed best in week 13–14. producers a and b had their weakest performance in week 38–39, and all had their second poorest results in week 25–26. clearly, there is some correlation between producers’ performance. it appears to be easier to perform closer to the upper bound in the spring and winter weeks, than in the summer and autumn weeks. in table 10 we have calculated the standard deviation of the zonal price relative to the average price in the respective periods. 46 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower table 8: volume share of hourly bids and block bids submitted by and realized for producers a, b and c over 8 weeks. producer a b c hourly bids submitted 76% 70% 29% block bids submitted 24% 30% 71% hourly bids realized 87% 94% 40% block bids realized 13% 6% 60% table 9: potential increase in actual realized income in each two week period given complete knowledge of future price levels. week 13–14 week 25–26 week 38–39 week 51–52 producer a 5.2% 5.8% 9.4% 5.8% producer b 1.2% 7.3% 11.1% 3.2% producer c 0.4% 6.2% – 3.7% average 5.4% the price deviations indicate that the higher the volatility in prices, the more difficult it is to bid optimally and take advantage of the high prices in a period. 5. comparison with optimization-based bids we implement the two-stage stochastic programming model in [9] for producer a, in order to compare actual bids with optimized bids. the next subsection explains assumptions used in the model setup, while section 5.2 discusses the results. see the appendix for details. 5.1. case description the system has four reservoirs and five power stations. inflow is assumed deterministic, while price scenarios were generated based on data on forecast errors, where forecasts were gathered from skm market predictor, a market analysis company. in particular, price scenarios are constructed as a normal distribution around these forecasts with a standard deviation equal to that of the area spot price for the respective hour 40 weekdays or 16 weekend days back in time. an example of 500 generated price scenarios for day-ahead is displayed in figure 5. the efficiency curves are based on the producer’s records of measured water flow versus power output. the need for a linear formulation is taken care of by linearly approximating the efficiency curves for each turbine. the efficiency curve is usually concave within the turbine’s operating range. the slope of the line stretching from the origin represents the best point conversion rate. this is displayed in figure 6. each turbine is also modeled with a minimum output, which in the figure is where the thick unbroken curve begins. the model is run with 300 scenarios over a two week horizon. we focus on day-ahead bidding for two particular days, 25 and 26 september 2011. in the optimization we bound the end-of-horizon reservoir level to match the realized one, making sure the optimization uses the same amount of water as was used in actual operation. we use only hourly bids and block bids; linked block bids are excluded to make the results more interpretable. for the same reason we exclude participation in intraday, balancing or ancillary services markets. feed-in fees are included in order to reflect timevarying transmission costs, and bid price points (parameters set in advance) are set using efficiency curves and actual water values when such are available, international journal of sustainable energy planning and management vol. 07 2015 47 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma table 10: standard deviation of zonal price relative to average price in period, showing a certain correlation to the producers potential to increase income shown in table 9. week 13–14 week 25–26 week 38–39 week 51–52 producer a 8% 23% 41% 28% producer b 7% 22% 39% 15% producer c 6% 23% 41% 28% 04:0000:00 −20 0 20 40 60 80 100 120 08:00 12:00 s ce n a ri o p ri ce s (e u r /m w h ) hours of day–ahead auction 16:00 18:00 20:00 figure 5: plot of 500 generated price scenarios for day-ahead no3 spot prices, 05.04.2011. best point q best point w actual w (q) curve linear approximations o u tp u t (m w ) used water (mm3/h) figure 6: linear approximations of efficiency curve formulated as conversion from water flow to output power. minimum and maximum production is indicated by the location of the solid line. besides making sure that bid points are located closely where the price scenarios are dense. in summary, we set up and solve a two-stage stochastic programming model for the bidding problem of producer a. 5.2. implementation and results the model is implemented in xpress 7.2.1 on a pc with 4x3.4ghz i7 processors and 16 gb ram. typical solution time is 1000 seconds for 300 scenarios for a problem having a two week horizon. 5.2.1. actual bids and model-generated bids for 25 sep the aggregated actual power station bids and the modelgenerated bids are displayed below in figure 7, respectively. the bids are roughly equal for all hours. the price axes have been cut from 60 eur/mwh to make the figures readable. worth noting first and foremost is the difference in entry price points. whereas the actual bids place the first volume of 14mw already at 1.4 eur, the model generates its first bid volume of 40mw at 7.20 eur. the marginal loss rate for the likely power station with a capacity of 15 mw, is 9.4% this weekend. this implies a total feed-in cost of c feed = π × c m1r + c fixed = 1.4 × 0.094 + 1.1 = 1.23 eur/mwh produced if the spot price turns out to be 1.4 eur. most likely this reservoir has a marginal water value above 0.17 eur/mwh, and thus the bid is irrational. the generated bids are not that easily split up into power station bids, and thus the same analysis can not be done. however through searching the model for a scenario price neighboring 7.20 eur, we see that the total feed-in costs are 67.04 eur, implying an average average realized feed-in cost of 1.68 eur/mwh. this implies a water value of 5.52 eur/mwh. and with all reservoirs being far from full, and an average price forecast of 24.9 eur, this too is irrational bidding. however, if a water flow constraint is binding, this sort of instance might occur. the figures also show that the model generates a higher hourly bid at maximum price. this comes from the fact that in addition to the hourly bids, the producer has also submitted block bids for this day, given in table 11. the model has not used any block bids, so adding in block volumes, the two bids equal approximately at a maximum volume of 217 mw. however the actual bids only max to 217 mw for the first 9 hours of the day. we can not find any good reasons why the bid volumes should drop to 215 mw for the remainder of the day, and thus see it as irrational bidding behavior. 5.2.2. out of sample comparison we run the actual bids through the same model instance that generated the comparing bids, but with new price scenarios, to see how they perform under uncertainty. the 48 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower price [eur/mwh] (a) actual hourly bids, 25.09.2011 (b) generated hourly bids, 25.09.2011 all hours b id v o lu m e [ m w ] 0 0 40 80 120 160 200 240 10 20 30 40 50 60 price [eur/mwh] b id v o lu m e [ m w ] 0 0 40 80 120 160 200 240 10 20 30 40 50 60 all hours figure 7: bids for sunday 25.09.2011 from producer a and the bidding model, respectively. the price axes have been cut from 2000 eur/mwh to make the figures readable. table 11: actual block bids of 25.09.2011 for the hydropower system in question. notice how the three block bids do not equal in volume, even though the hourly bids are constant throughout the day. volumes are in mw and prices are in eur/mwh. start stop volume price block 00:00 09:00 −23 33.5 b0009 09:00 20:00 −21 35.5 b0920 20:00 24:00 −21 35.5 b2024 results are displayed in 12. the actual bids end up with a little less generated output, but not enough to justify the loss in spot revenues. the average price achieved is 24.95 eur/mwh, compared to the generated bids’ 26.79 eur/mwh. we also see that the start-up costs are greater for the actual bids than the generated ones, even though the former use block bids. this can attributed to the fact that the model optimizes bidding for all five stations combined, whereas the actual bids have been constructed as bids for the individual stations. we conclude there is room for optimization-based improvements in bidding. 5.2.3. backtest for reference we also include a similar table with a onescenario run-through of actual spot prices, table 13. we see that the generated bids still outperform the actual bids. the realized spot prices for 25 sep turned out to be quite a lot higher than the forecast and thus the resulting numbers go up. the start-up costs are assumed to be equal 400 eur/start-up for all turbines, thus the number of start-ups are easily recognized. still, even though the empirical block bid is accepted, the generated bids achieve less startups through using hourly bids only. 5.2.4. actual and model-generated bids from 26 sep the resulting reservoir levels from 25.09.2011 was input as starting reservoirs for 26.09.2011. the aggregated actual power station bids as well as the bids generated by the model, are displayed below in figure 8. the actual hourly bid from producer a is identical to the bid from 25.09.2011. the bids generated on the other hand are split in two periods, displayed as the dashed line plot for 06:00-22:00 and the continuous line for the other 8 hours. now notice how the generated bids clearly differ in entry price points for the two plots. this reflects perfectly the fact that 26.09.2011 was a monday and the international journal of sustainable energy planning and management vol. 07 2015 49 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma table 12: results from fixing bids as parameters to the model with 300 price scenarios. note that the price scenarios are not the same that generated the bottom row bids. all numbers are averaged from the scenario realizations. output is given in mw, and the other numbers in eur. bids output spot income start-up costs feed-in costs profit actual 3 803 94 882 1 036 3 768 90 078 generated 3 832 102 654 706 3 974 97 973 table 13: running results from fixing bids as parameters to the model with actual spot prices for 25.09.2011. output is given in mw, and the other numbers in eur. bids output spot income start-up costs feed-in costs profit actual 3 895 118 775 1 200 4 567 113 008 generated 3 944 120 557 800 4 637 115 120 price [eur/mwh] all hours (a) actual hourly bids, 26.09.2011 b id v o lu m e [ m w ] 0 0 40 80 120 160 200 240 10 20 30 40 50 60 price [eur/mwh] hours 00:00 – 06:00, 22:00 – 24:00 hours 06:00 – 22:00 (b) generated hourly bids, 26.09.2011 b id v o lu m e [ m w ] 0 0 40 80 120 160 200 240 10 20 30 40 50 60 figure 8: bids for 26.09.2011 from from producer a and the bidding model, respectively. the price axes have been cut from 2000 eur/mwh to make the figures readable. marginal loss rates now vary intraday. the continuous line consequently enters at an earlier price than the dashed line which implies a lower feed-in cost. this makes perfect sense, seeing that all the power stations in question had a lower marginal loss rate for the night hours than the day hours. the figures show that the model still generates a higher hourly bid at maximum price. the difference in volumes are made up for through the first of the block bids given in table 14. however, the irrationality continues also here as the volumes for the other blocks do not equal the first. the change from 09:00 to 07:00 in the bidded blocks reflect the change from weekend to weekday, which again can relate both to peak hours for prices and the actual work shifts of the power stations. 5.2.5. out of sample comparison once more, we run the actual bids through the same model input that generated the comparing bids, but with new price scenarios. the results on how the bids deal with new stochasticity are displayed in table 15. again the generated bids do better than the actual ones. it should be this way though, seeing that the optimal bids were generated using the same model and a price scenario set with the same properties. the average price achieved is 27.55 eur/mwh, compared to the generated bids’ 28.09 eur/mwh. the start-up costs however, are in fact higher for the received bids than for the generated ones. the only conlusion we draw from this is that the model does not weigh start-up costs very heavily, neither should it, seeing that the estimated and used cost per start-up of 400 eur is less than 0.4% of the spot revenues. 5.2.6. backtest a similar table with a one-scenario run-through of actual spot prices is shown in table 16. now the actual bids gives way more output than the generated ones. what happens is that the actual bids naturally hits the exact water usage values per station as they were set based on the bids and efficency curves. the generated bids on the other hand now used a too high price forecast in generating new price forecasts, so that when the spot realizes way below forecast the commitments become way too low. the model hits the water usage per station, as it must, but does it through spilling whatever water it cannot produce. the average realized spot prices for 26 sep are 36.7 eur/mwh and 37.0 eur/mwh, respectively, for actual and generated bids. the generated bids now do one more start-up, and we conclude that comparing actual bids to the model bids and getting unambiguous results is easier said than done. 5.2.7. simulation: stochastic versus deterministic in section 4.3 we showed that producer a could have increased their week 13–14 period income by 5.2% given complete knowledge of future price levels. 50 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower table 14: block bids for 26.09.2011 for the hydropower system in question. the volumes blocked are not equal for all hours. volumes are in mw and prices are in eur/mwh. start stop volume price block 00:00 07:00 −23 33.5 b0009 07:00 20:00 −22 35.5 b0920 20:00 24:00 −21 35.5 b0920 table 15: running results from inputting bids as parameters to the model with 300 price scenarios. note that the price scenarios are not the same that generated the bottom row bids. all numbers are averaged from the scenario realizations. output is given in mw, and the other numbers in eur. bids output spot revenue start-up costs feed-in costs profit actual 3 762 103 633 1 744 4 116 97 773 generated 3 799 106 731 2 001 4 239 100 491 table 16: running results from inputting bids as parameters to the model with actual spot prices for 26.09.2011. output is given in mw, and the other numbers in eur bids output spot revenue start-up costs feed-in costs profit actual 4 113 146 738 1 200 5 827 139 711 generated 3 270 121 021 1 600 4 657 116 367 running a similar test for the single five-station cascade shows a 1.6% potential in increased income. in the following, we test to see how much profit the model can realize through the same period, testing both with a 300–scenario model and a 1-scenario deterministic model with price forecasts. the model is run iteratively for each day, first with price forecasts and free bid variables, then with actual prices and fixed bid parameters. the first day of running actual reservoir levels are used as initial levels, while the end-of period reservoir levels is fixed at the real end level. this initial run will generate bids that are put back into the model again, but now with actual prices for the first day. now, the reservoir levels at h = 24 from this fixed-bid realprices run are given as input to the next day’s model run, where all other parameters are updated as the time span h is reduced by 24 hours. this way we run through the model a total of 14 times, every other time being with fixed bids and real prices. 64 price points are used and 40 different blocks are possible to bid at every day, and every stochastic run uses 300 price scenarios based around the day-ahead forecast. the results in table 17 show that total profit over 14 days is 1.9% greater for the generated bids. such a small number and with only one run-through is not enough to draw any conclusions. yet we would like to point out our suspicion that the bidding design is such that we see the need to model short term price uncertainty to that great an extent. the stochastic model ends up realizing higher total start-up costs than the deterministic model. a possible explanation for this is again the fact that the stochastic model allocates a lot of total bid volumes to block bids, which may not be accepted in the deterministic real price run. in fact 23.6% of the block volumes are rejected. thus the model may need to shut down turbines as their volume was set aside for block production. the huge variance in daily feed-in costs can be explained to a large extent by the two weekends present. excluding the weekends gives standard deviations of 15% and 13% for the stochastic and deterministic model, respectively. also worth noticing from table 17 is the relatively higher standard deviation in the deterministic model run. the actual revenue increase compared to reality was minuscule 0.4% and -0.2%, for the stochastic and deterministic run-throughs respectively. we believe the improvement would have been higher if the prices and price forecasts had not been so stable. as of the 1.6% potential improvement shown in section 4.3, a deterministic run of the model with actual spot prices gives an increase in income of 0.9%, which confirms that the value of perfect information cannot be very high for this particular case. we have not run tests through the entire 14 days with actual bids to find a profit for comparison, however find it likely that this potential increase would be higher. in summary, four results are noted; first, optimized and actual bid curves are qualitatively similar, lending international journal of sustainable energy planning and management vol. 07 2015 51 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma table 17: results from running an iterative 14-day comparison between the stochastic and deterministic model. the standard deviations are given as a percentage of average. prices are given in euros, while costs, incomes and profits are given in 1000 euros. finally, volumes are in mws. stochastic deterministic average total st.dev average total st.dev price forecast 60.55 – 6.3% 60.55 – 6.3% actual spot price 60.52 – 6.2% 60.52 – 6.2% spot revenue 234.2 3 280 11% 230.2 3 222 24% feed-in cost 1.6 22.8 34% 2.0 28.6 127% start-up cost 1.3 18.1 8.3% 1.0 14.0 60% profit 231.3 3 239 13% 227.1 3 180 22% # unique volumes 97 – 35% 15 – 22% # unique price 49 – 14% 11 – 33% # block bids 24 – 36% 0 – – # blocks used 15 – 28% 0 – – avg. bids per block 2 – 17% 0 – – avg. vol. per block 18 – 66% 0 – – tot. vol. bid as block 1 832 25 648 31% 0 – – block commitment 1 399 19 592 38% 0 – – empirical support to the model of [9]. second, the entry price point for the actual bids are too low and do not reflect reasonable marginal water values including transmission tariffs. this is consistent with the empirical analysis in the previous section. third, at high volumes, the actual bids require higher prices than the optimized bids. one may ask whether the widespread use of such a practice may lead to higher prices than necessary in scarcity situations (and explain why economists tend to find empirical evidence of ‘non-competitive’ markups of prices over marginal costs [18].). further, the actual bids imply a maximum production that decreases after the first seven hours of the day. finally, using out-ofsample scenarios, the optimized bids give a revenue that is higher by 1.9%. it outperforms the actual bidding also in terms of start up costs, even though the actual bids contain block bids, while the optimization model do not. it seems that the optimization model is able to exploit the capability of the joint system of power stations; the actual bids are made from adding bids from individual power stations. 6. conclusion this analysis gives insight into how day-ahead bidding is done in practice, and as such provides a basis for improved system operation. the most decisive factors when bidding are the marginal water value, feed-in fees, technical and hydrological characteristics, and bilateral agreements outside the spot market. we find that the producers take some of these factors well into account, and others not always so well. among the things they consider well are the efficiency curves of the turbines and that they must choose to strategically interpolate or avoid it, as to hit suitable points of the efficiency curve. the feed-in fees are not taken as well into account. producers’ entry price points do not always adapt to changes in the variable feed-in fee over the course of a weekday, and some bids are submitted at price points below the feed-in fee alone. we also find that the producers do not fully utilize the range of price points allowed. the producers perform quite well in their bidding, as indicated by the analysis of the maximum potential increase in spot revenues. on average over the 8 weeks, the potential increase for all producers was 5.4%, competing against perfect price information. this comes both from the fact that price forecasts are generally good, and that the system design with several pricevolume bids and uniform spot prices is wellfunctioning. we still find that their performance correlates with the standard deviation of the price levels, meaning it is more difficult to bid optimally when price variations are high. the overall 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epslanguage=no a model for optimal bidding of hydropower this section presents a version of the [9] model to optimize day-ahead bidding given price scenarios for a given period forward in time as well as reservoir levels at the period’s start and end. the mathematical formulation of the model, with parameters, variables, constraints and objectives is given in section a.1. notational conventions to help the readability of the model, indices are always defined by small single latin letters. sets have capital letters in a calligraphic font, with potential controlling subscripted index and/or superscripted letters to point out that it is a subset of special characteristics. parameters are defined similar to sets, except with a regular font. all decision variables are lower case single latin letters, with lower case controlling subscripts. for reference the units used on parameters and decision variables in the implementation are included in the descriptions that follow. a.1 mathematical formulation sets and indices the model has a generic formulation with regard to reservoirs, power stations and turbines. the following sets and indices are used consequently in the modeling. s : set of scenarios, indexed by s, sized to s h: set of all hours the model spans over, indexed by h, sized to h i: set of bidpoints, indexed by i b : set of possible blocks, indexed by b r : set of reservoirs, indexed by r k: set of power stations, indexed by k t: set of turbines, indexed by t et : set of efficiency segments for turbine t, indexed by e subsets the model is split up into one dayahead part that is directly related to the bidding and one part for the coming days, that will not need bidding. thus the hour resolution is also split up into two subsets corresponding to the two model types. the other subsets relate to the topography and positioning of reservoirs and turbines. hd ⊆ h: set of hours for the day-ahead bidding hl ⊆ h: set of hours for long term part kr ⊆ k: subset of power stations that tap water from reservoir r kr + ⊆ k: subset of power stations directly above reservoir r tk⊆ t: subset of turbines in power station k parameters the constants and coefficients given as parameters in the model are stated below. notice that the price points for hourly bids and block bids are the same. also note that the capacity of a turbine is time dependent. πsh: area spot price for scenario s in hour h [eur/mwh] ρs: probability of scenario s pi: price at bidpoint i [eur/mwh] pbi: price for block b at bidpoint i [eur/mwh] bb start: the first hour of block b bb end: the last hour of block b bsb ave: average spot price for block b in scenario s [eur/mwh] wht cap: maximum output from turbine t in hour h [mw] wt min: minimum output from turbine t [mw] ete: efficiency for turbine t and segment e [mw] ete 0: efficiency constant for turbine t and segment e [wh/m3] qhk min: minimum flow for power station k in hour h [mm3/h] c shk feed: feed-in fee for station k in scenario s and hour h [eur/mwh] ct start: start-up cost for turbine t [eur] r0r : initial reservoir level of r [mm3] rrmax: maximum reservoir level in r [mm3] rrmin: minimum reservoir level in r [mm3] rrend: final end-of-period reservoir level in r [mm3] fhr: inflow to reservoir r in hour h [mm3/h] decision variables the variables can be split up into two groups, the ones related to the bids and the ones related to the actual water flow. the x-variables are the sole variables not dependent on scenario, and thus the only first-stage variables. all other variables are second-stage recourse variables. xhi : volume bid in hour h at bidpoint i [mw] x̂bi : volume bid for block b and bidpoint i [mw] ysh : commitment for hourly bids in scenario s and hour h [mw] ŷ sb : commitment from block bid b in scenario s [mw] wsht : power output from turbine t in scenario s and hour h [mw] 54 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower qsht : flow through turbine t in scenario s and hour h [mm3/h] q̂ shk : flow through power station k in scenario s and hour h [mm3/h] lshr : reservoir level of r in scenario s and hour h [mm3] objective function the objective maximizes the total revenues from day-ahead and the period to come, less costs associated with start-ups and feed-in fees. (1) (2) (3) subject to: (4) (5) (6) (7) ˆ , | x x w h bi i hi ht cap ib b h b b start b e ∈ ∈∈ ≤ ≤ ∑ ∑+ ≤ ∈ i ib nnd d∑ h ˆ ˆ , , | y x s b sb i p b bi bi sb ave = ∈ ∈ ∈ ≤ ∑ i s b y x p x x p psh h i h sh i ih h h i h i i = + −( )× − −− − − − ( ) ( ) 1 1 1π 11 1 1 , , , \ { } | ( ) s h i p pd i h sh ih ∈ ∈ ∈ ≤ ≤ − s h i π x x s h i h i h hi h ( ) , , , \ { } − ≤ ∈ ∈ ∈ 1 1s h i max z z z= + ×dt longβ z htk long s s sht h sh shk feed tk s w c l k = −( ) ∈ ∈∈∈ ∑ ∑∑ρ π∑∑ ⎛ ⎝ ⎜⎜⎜⎜⎜ ⎞ ⎠ ⎟⎟⎟⎟⎟ z h dt s s s sht h sh shk feed sht t staw c c d = −( ) − ∈ ∈ ∑ ∑ρ π δ rrt tk k ⎛ ⎝ ⎜⎜⎜⎜ ⎞ ⎠ ⎟⎟⎟⎟⎟ ⎛ ⎝ ⎜⎜⎜⎜⎜ ⎞ ⎠ ⎟⎟⎟⎟⎟∈∈ ∑∑ tk γ δ sht sht = = 1, if turbine is running in scet nnaro and hour 0, otherwise 1 if turbine s h starts up in scenaro and hour 0, oth t s h eerwise ⎧ ⎨ ⎪⎪⎪⎪⎪⎪ ⎩ ⎪⎪⎪⎪⎪⎪ (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21)l r s rs h r r end ( ) ,= ∈ ∈s r l r s h r shr r ≤ ∈ ∈ ∈min , , ,s h r l r s h r shr r ≤ ∈ ∈ ∈max , , ,s h r l l q f q s h shr s h r shk hr k shk r = − + + ∈ ∈ − ∈ ∑( ) ˆ ˆ , , \ 1 k s h {{ },1 r k r ∈ ∈ + ∑ r k l r q f q s r s r r s k r s k kk rr 1 0 1 1 1 = − + + ∈ ∈ ∈∈ + ∑∑ ˆ ˆ ,, s r kk ˆ , , ,q q s h k shk hk ≥ ∈ ∈ ∈min s h k ˆ , , ,q q s h k shk sht t k = ∈ ∈ ∈ ∈ ∑ s h k t w e e s h t e sht te teqsht t ≤ + ∈ ∈ ∈ ∈0 , , , ,s h t ε w w s h t sht ht cap l≤ ∈ ∈ ∈, , ,s h t δ γ γ s t s t s t s t ( ) ( ) ( ) , , 1 1 24 ≥ − ∈ ∈s t δ γ γ sht sht s h t ds h t≥ − ∈ ∈ ∈ −( ) , , \ { }, 1 1s h t w w s h t sht sht t d≥ ∈ ∈ ∈γ min , , ,s h t w w s h t sht sht ht cap d≤ ∈ ∈ ∈γ , , ,s h t w y y s h sht t sh sb b b h b b start b end∈ ∈ ≤ ≤ ∑ ∑= + ∈ t b sˆ , , | ∈∈ hd international journal of sustainable energy planning and management vol. 07 2015 55 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma (22) (23) (24) the objective function, (1) to (3), is the probabilityweighted sum of profit in all scenarios, both for the dayahead part and for the long term part. it includes the costs associated with feed-in fees and start-up costs for the turbines. the latter would naturally push production away from day-ahead towards the rest the period, such as to avoid the costs of binary start-up variables. to make up for this shift we include a factor β, calibrated to compensate for this through assuring an equal output for all days, relative to the price forecast. constraint (4) reflects a rule given by the market operator making their problem easier to solve. it states that all bids have to be strictly non-decreasing, thus making sure a producer cannot bid totally stepwise constant bids, as discussed in section 4.2.2. it also prohibits a decreasing hourly bid volume with rising prices, which otherwise might occur if block bids are bid in at a certain price or if participants are in possess of market power. due to the previous constraint (4) the interpolation to the correct committed volumes is done as easily as in (5). setting the commitment for each scenario based on scenario-independent bid variables also functions as the non-anticipativity constraint of the stochastic model. eq. (6) commits production from block bids if the price is below the average realized spot price. constraint (7) makes sure the model never bids such that total volumes from hourly bids and block bids are greater than the combined turbine capacity in any hour. the sum of production in all turbines have to equal total commitment from hourly bids and block bids, expressed through (8). constraints (9) to (11) set the binary variables, while (12) says that hour 24 is related to hour 1. the latter states that if the turbine is not running in hour 24, then it needs to start to be able to run in hour 1. this is included to discourage the model from doing more start-ups in the earlier hours of the day than the later hours. if a turbine is running one night, it is not unlikely that it will run the next night as well. γ δ sht sht s h t, { , }, , ,∈ ∈ ∈ ∈0 1 s h t w q q l s h k t r sht sht shk shr , , ˆ , , , , , , ≥ ∈ ∈ ∈ ∈ ∈ 0 s h k t r x x y y y s h i b hi bi sh sb sh , ˆ , , ˆ , , , , ,≥ ∈ ∈ ∈ ∈0 s h i b a turbine cannot deliver more power than its capacity, (13). the conversion from output power to water flow through the turbine is simplified through the linearizations of efficiency in equation (14). approximations et of the conversion rate from water flow to output power are given through the y-axis intercept at e 0te and a slope of ete. constraints (15) and (16) sum the flow through all turbines in power station k and bounds it to be equal to or higher than an hourly dependent minimum flow. eq. (17)-(20) control the reservoir levels and (21) states how the reservoir levels in the final hour have to equal the input end-of-period reservoir levels. notice how there is no explicit modeling of potential spill over reservoirs. as we will not analyze spill any further, it would only enter the model as an increase in the upwards unbounded q variable. a.2 input parameters this subsection will elaborate on the generation of input parameters for the model runs that are included in the results. price scenarios we have received historical dayahead price forecasts from skm market predictor as for all the days in question, denoted by πh h ∈hd. price scenarios have been constructed as a normal distribution based around these forecasts with a standard deviation σh equal to that of the area spot price for the respective hour 40 weekdays or 16 weekend days back in time. for the first day-ahead hour all scenarios will be normally distributed around the price forecast. given that in a scenario s the price πsh misses the forecast for hour h by (25) then the expectation for hour h +1 in same scenario s will be (26) thus we have (27) (28) π π φ σ sh sh sh h sh z s h z = ⎡⎣⎢ ⎤ ⎦⎥ + ( )× ∈ ∈ ∈ −e 1 1 , , \ { },s h uu( , )0 1 π π φ σ s h s h s z s z 1 1 1 1 0 1= + ( )× ∈ ∈− ( ) ( ), , ( , )s u e π π σ σ s h h sh h h s h h ( ) , , \ { } + + + ⎡ ⎣⎢ ⎤ ⎦⎥ = + ∈ ∈ 1 1 1 δ s h δ sh sh h s h= − ∈ ∈π π , , ,s h 56 international journal of sustainable energy planning and management vol. 07 2015 insights from actual day-ahead bidding of hydropower where the cumulative distribution function is (29) since we only possess day-ahead forecasts, the forecast for days to come, πh h ∈hl have been assumed φ π ( ) exp /x dxx x = − −∞∫ 1 2 2 2 to equal the day-ahead forecast, πh h ∈hd, for the remainder of the period, adjusting to weekends and weekdays according to average weekend versus weekday ratios for 2010. when going several days forward, we have also used a steadily increasing weight towards the forecasts to make sure the scenarios do not go way out of hand. an example of 500 generated price scenarios for day-ahead is displayed in figure 5. international journal of sustainable energy planning and management vol. 07 2015 57 erik nicholas alnaes roger blikra grøndahl stein-erik fleten and trine krogh boomsma << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university 01. 1194-3905-1-le.qxd 1. introduction this editorial introduces the sixth volume of the international journal of sustainable energy planning and management and covers topics ranging from solar energy in switzerland and kenya to the financial viability of municipal wind power projects in denmark to the transition of the chineese district heating sector towards low-carbon or renewable fuels. 2. solar energy two of the articles presented in this volume address spatial analyses of solar power, however using different methodologies and cases. quiquerez et al. [1] investigates two cases in the geneva region in switzerland for the suitability for heat and electricity production. the analyses are based on a gis assessment of roofs, available space and competition between technologies for producing electricity, domestic hot water (dhw) and space heating. meeting space heating demands while also meeting dhw demands markedly reduce the available space for pv panels. also, international journal of sustainable energy planning and management vol. 06 2015 1 dwellings in built-up areas have a much less potential for solar energy than dwellings in rural areas in terms of roof areas per capita. in the city the potential production is about 700 kwh per person while in rural or suburban areas, the potential production is 1,870 kwh per person. kenya has a higher solar irradiation than switzerland, however the technology is only being adopted slowly. oloo et al. [2] investigate the potential for solar power based on both a modelling approach based on locations and weather data (cloud data, transmissivity) and based on actual measurements for correlation analyses. they found good agreement between the theoretical modelling approach and the empirical data particularly in the nonmountainous areas. more than 70% of the land area in kenya has a solar energy potential of more than 5kwh/m2. 3. transition towards renewable energy maxwell et al. [3] look further into the implementation of renewable energy basing their analyses on a case study of a danish community, where they investigate how to 1 corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 06 2015 01-02 editorial international journal of sustainable energy planning and management vol 6 �������� ��� � ��� ��������� ������� � �������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� abstract this editorial introduces the sixth volume of the international journal of sustainable energy planning and management. topics include methodology for assessing solar power and solar heat potentials using geographical information systems using swiss cases, a similar analysis focusing on solar power in kenya and the spatio-temporal distribution of the production, and the establishment of the correct economic framework conditions or incentives to promote changes towards renewable energy systems taking a danish community as a case. lastly, an article investigate the chinese district heating sector with a view to identifying alternatives to the present coal-based heating infrastructure. keywords: solar mapping integration of energy sectors district heating transition url: dx.doi.org/10.5278/ijsepm.2015.6.1 2 international journal of sustainable energy planning and management vol. 06 2015 editorial international journal of sustainable energy planning and management vol 6 change the general financial setting so wind power on the one hand lowers end-user costs while on the other hand lessen their dependence on subsidies. a cornerstone in their suggested solution is an increased integration across sectors – electricity, heating and transportation. lastly, zhang and di lucia [4] on to one high coal demands; the chinese district heating sector. in northern china, 80% of all urban buildings are connected to district heating networks, of which 84.4% is covered by coal. thus, zhang and di lucia investigate the possibility for an energy transition looking at potentials for natural gas, biomass, geothermal energy, ground source heat pumps, municipal solid waste, and industrial excess heat. all is explored from a resource availability perspective but also from an institutional and an actor perspective. they acknowledge the potentials and the important role of district heating grids in future energy systems, but also find that “although dh systems offer technical opportunities to integrate different sources of energy and utilise resources that are difficult to employ in individual heating systems, the coal regime is particularly resistant to change”. references [1] quiquerez l, faessler j, lachal b, mermoud f, hollmuller p gis methodology and case study regarding assessment of the solar potential at territorial level: pv or thermal? int j sustainable energy plan manage 6(2015) pages 3–16. dx.doi.org/10.5278/ijsepm.2015.6.2. [2] oloo fo, olang l, strobl j spatial modelling of solar energy potential in kenya. int j sustainable energy plan manage 6(2015) pages 17–30. dx.doi.org/10.5278/ijsepm.2015.6.3. [3] maxwell v, sperling k, hvelplund f electricity cost effects of expanding wind power and integrating energy sectors. int j sustainable energy plan manage 6(2015) pages 31–48. dx.doi.org/10.5278/ijsepm.2015.6.4. [4] zhang j, lucia ld a transition perspective on alternatives to coal in chinese district heating. int j sustainable energy plan manage 6(2015) pages 49–69. dx.doi.org/10.5278/ijsepm.2015.6.5. 3%e2%80%9316.%20dx.doi.org/10.5278/ijsepm.2015.6.2. dx.doi.org/10.5278/ijsepm.2015.6.3. dx.doi.org/10.5278/ijsepm.2015.6.4. dx.doi.org/10.5278/ijsepm.2015.6.5. << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1821-6216-1-le.qxd abstract district heating systems are prevailing in parts of northern europe and this editorial introduces work on the optimisation of such systems in denmark, britain and norway. focus of two of the articles are on low-temperature systems. this is either directly through lowering the forward temperature and analysing system consequences and optimal forward temperatures as in the work of lund et al. – or it is by the use of the return pipe water for heating in district heating systems functioning at relatively high temperature levels, as in the work by ianakiev et al. on nottingham. analyses by trømborg et al. probe into future norwegian electricity market prices and their effects on the operation of district heating storage and electric boilers. finally, ogundari et al. compare photo voltaic systems to diesel systems in stand-alone systems for abuja, nigeria. 1. introduction this editorial introduces the 12th volume of the international journal of sustainable energy planning and management. this volume contains articles presented at the 2nd international conference on smart energy systems and 4th generation district heating, held in aalborg, denmark in september 2016 [1,2] as well as two ordinary submissions [3,4]. the first three articles focus on district heating systems while the last focus on stand-alone electricity systems for domestic consumption. the issue follows up on the 2016 special issue on the 1st international conference on smart energy systems and 4th generation district heating, held in copenhagen, denmark in august 2015 [5], that introduced work on district heating and cooling in austria [6], smart energy systems in italy [7] and optimisation of district heating networks [8]. international journal of sustainable energy planning and management vol. 12 2017 1 2. low-temperature district heating lund et al. [1] compare different temperature levels in district heating systems with forward temperatures ranging from 55°c via 45°c to 35°c. such temperature levels call for appropriate household installations – not least in order to provide domestic hot water at appropriate temperature levels without the risk of legionella formation[9,10]. low temperature levels also enable higher efficiencies in production units – e.g. heat pumps and cogeneration of heat and power (chp) units – while providing for lower grid losses as a consequence of the lower temperature difference to the surrounding soil. using energyplan [11,12], the authors find that the 55°c option forms the optimal case based on an economic assessment. basically, the temperature should only be reduced to the point where additional equipment in the form of e.g. booster heat pumps or electric (resistance) heating * corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 12 2017 1–4 smart district heating and electrification �������� ��� � ��� �� ����� � ������� ������� �� �� ��������������������������� ����������������������������������� ���� keywords: low temperature district heating; electricity for district heating; stand-alone electricity systems; url: dx.doi.org/10.5278/ijsepm.2017.12.1 2 international journal of sustainable energy planning and management vol. 12 2017 smart district heating and electrification is required to reach appropriate domestic hot water temperatures. ianakiev et al. [2] investigate the district heating system in nottingham, united kingdom, with a view to analysing whether return water (i.e. district heating water that has served its primary purpose and dissipated heat in radiators or heat exchangers in buildings) can be used for heating additional houses with systems designed for the lower temperature of the return pipe. the system in nottingham operates at high temperatures – 85°c to 120°c depending on season – and return temperatures are thus also high. at around 70°c these are comparable to forward temperatures in some district heating systems. the return water is used in heat exchangers to source 60°c systems. as the authors point out, a system like the proposed would “extract unused heat from existing systems and to make it more efficient and profitable. the nottingham district heating system has extra thermal capacity that can be extracted without affecting the hydraulic capacity by using the return pipe option.” 3. electricity for district heating trømborg et al. [3] investigate future electricity market prices on the nordic spot market and the impacts on the choice of heating technology. they apply the regional energy system model balmorel (see e.g. [13–15]) for establishing future energy scenarios for the nordic region and derive electricity prices for this. subsequently, they use the plant investment analysis model energypro (see e.g. [16–18]) to assess the impact of the time-varying prices on the operation of heat-only district heating systems in norway. the authors find that daily price variations will increase in the future, and that both thermal storage and electric boilers will become more interesting. the stronger role of thermal storage supports previous findings from this journal on the role of thermal storage in smart energy systems[19] stressing that heat storage should be applied to establish flexibility before resorting to the more expensive and inefficient electrical storage systems. 4. electricity supply in nigeria nigeria is on the one hand facing an increasing electricity demand and on the other hand an electricity supply infrastructure that is not following the pace of the demand development. in [4], ogundari et al. therefore investigate various means of providing off-grid electricity to residences. in one alternative, they assess the potential for photo voltaic collectors for housing complexes combined with batteries and all required converters to form a stand-alone electricity supply system. for comparison, they establish a diesel generator scenario. all scenarios are based on an assessment of the electricity demand for the housing complexes as a reference as well as with an efficient lighting system as alternative. notable is that electricity demands are substantial due to low costs of grid electricity – which in turn aggravates black outs. in their findings, the authors conclude that the photo voltaic system is preferable to the diesel generator system. this is also supported by previous work published in this journal, that showed good promise for solar energy for kenya, at a comparable latitude as nigeria [20]. references [1] lund r, østergaard ds, yang x, mathiesen bv. comparison of low-temperature district heating concepts in a longterm energy system perspective. int j sustain energy plan manage 2017;12:5–18. http://dx.doi.org/10.5278/ijsepm. 2017.12.2. [2] ianakiev ai, cui jm, garbett s, filer a. innovative system for delivery of low temperature district heating. int j sustain energy plan manage 2017;12:19–28. http://dx.doi.org/ 10.5278/ijsepm.2017.12.3. [3] trømborg e, havskjold m, bolkesjø tf, kirkerud jg, tveten åg. flexible use of electricity in heat-only district heating plants. int j sustain energy plan manage 2017;12:29–46. http://dx.doi.org/10.5278/ijsepm.2017.12.4. [4] ogundari io, akinwale yo, adepoju ao, atoyebi mk, akarakiri jb. suburban housing development and off-grid electric power supply assessment for north-central nigeria. int j sustain energy plan manage 2017;17:47–63. http://dx.doi.org/10.5278/ijsepm.2017.12.5. [5] østergaard pa, lund h, mathiesen bv. smart energy systems and 4th generation district heating. int j sustain energy plan manage 2016;10:1–2. http://dx.doi.org/10.5278/ ijsepm.2016.10.1. [6] büchele r, kranzl l, müller a, hummel m, hartner m, deng y, et al. comprehensive assessment of the potential for efficient district heating and cooling and for high-efficient cogeneration in austria. int j sustain energy plan manage 2016;10:3–19. http://dx.doi.org/10.5278/ijsepm.2016.10.2. [7] prina mg, cozzini m, garegnani g, moser d, oberegger uf, vaccaro r, et al. smart energy systems applied at urban level: the case of the municipality of bressanone-brixen. http://dx.doi.org/10.5278/ijsepm http://dx.doi.org/10.5278/ijsepm.2017.12.3 http://dx.doi.org/10.5278/ijsepm.2017.12.4 http://dx.doi.org/10.5278/ijsepm.2017.12.5 http://dx.doi.org/10.5278/ijsepm.2016.10.1 http://dx.doi.org/10.5278/ijsepm.2016.10.2 international journal of sustainable energy planning and management vol. 12 2017 3 poul alberg østergaard and henrik lund int j sustain energy plan manage 2016;10:33–52. http://dx.doi.org/10.5278/ijsepm.2016.10.4. [8] razani ar, weidlich i. a genetic algorithm technique to optimize the configuration of heat storage in dh networks. int j sustain energy plan manage 2016;10:21-32. http://dx.doi.org/ 10.5278/ijsepm.2016.10.3. [9] yang x, li h, svendsen s. decentralized substations for lowtemperature district heating with no legionella risk, and low return temperatures. energy 2016. http://dx.doi.org/10.1016/ j.energy.2015.12.073. [10] yang x, li h, svendsen s. evaluations of different domestic hot water preparing methods with ultra-low-temperature district heating. energy 2016;109:248–59. http://dx.doi.org/ 10.1016/j.energy.2016.04.109. [11] østergaard pa. reviewing energyplan simulations and performance indicator applications in energyplan simulations. appl energy 2015;154:921–33. http://dx.doi.org/ 10.1016/j.apenergy.2015.05.086. [12] energyplan website n.d. www.energyplan.eu. [13] münster m, morthorst pe, larsen h v., bregnbæk l, werling j, lindboe hh, et al. the role of district heating in the future danish energy system. energy 2012;48:47–55. http://dx.doi. org/10.1016/j.energy.2012.06.011. [14] tveten åg, bolkesjø tf, ilieva i. increased demand-side flexibility: market effects and impacts on variable renewable energy integration. int j sustain energy plan manage 2016;11. http://dx.doi.org/10.5278/ijsepm.2016.11.4. [15] kirkerud jg, trømborg e, bolkesjø tf, tveten åg. modeling the power market impacts of different scenarios for the long term development of the heat sector. energy procedia 2014;58:145–51. http://dx.doi.org/10.1016/j.egypro. 2014.10.421. [16] østergaard pa, andersen an. booster heat pumps and central heat pumps in district heating. appl energy 2016;184:1374–1388. http://dx.doi.org/10.1016/j.apenergy.2016.02.144. [17] streckien? g, martinaitis v, andersen an, katz j. feasibility of chp-plants with thermal stores in the german spot market. appl energy 2009;86:2308–16. http://dx.doi.org/10.1016/ j.apenergy.2009.03.023. [18] fragaki a, andersen an. conditions for aggregation of chp plants in the uk electricity market and exploration of plant size. appl energy 2011;88:3930–40. http://dx.doi.org/ 10.1016/j.apenergy.2011.04.004. [19] lund h, østergaard pa, connolly d, ridjan i, mathiesen bv, hvelplund f, et al. energy storage and smart energy systems. int j sustain energy plan manage 2016;11:3–. http://dx.doi.org/10.5278/ijsepm.2016.11.2. [20] oloo f, olang l, strobl j. spatial modelling of solar energy potential in kenya. int j sustain energy plan manage 2015;6:17-30. http://dx.doi.org/10.5278/ijsepm.2015.6.3. http://dx.doi.org/10.5278/ijsepm.2016.10.4 http://dx.doi.org/10.5278/ijsepm.2016.10.3 http://dx.doi.org/10.1016/j.energy.2015.12.073 http://dx.doi.org/10.1016/j.energy.2016.04.109 http://dx.doi.org/10.1016/j.apenergy.2015.05.086 http://dx.doi.org/10.1016/j.energy.2012.06.011 http://dx.doi.org/10.5278/ijsepm.2016.11.4 http://dx.doi.org/10.1016/j.egypro.2014.10.421 http://dx.doi.org/10.1016/j.apenergy.2016.02.144 http://dx.doi.org/10.1016/j.apenergy.2009.03.023 http://dx.doi.org/10.1016/j.apenergy.2011.04.004 http://dx.doi.org/10.5278/ijsepm.2016.11.2 http://dx.doi.org/10.5278/ijsepm.2015.6.3 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated 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almulla@kth.se international journal of sustainable energy planning and management vol. 18 2018 03–28 abstract low-carbon hydropower is a key energy source for achieving sustainable development goal 7 sustainable energy for all. meanwhile, the effects of hydropower development and its operation are complex and potentially a source of tension on transboundary rivers. this paper explores solutions that consider both energy and water to motivate transboundary cooperation in the operation of hydropower plants (hpps) in the drina river basin (drb) in south-east europe. here the level of cooperation among the riparian countries is low. the open source energy modeling system-osemosys was used to develop a multi-country model with a simplified hydrological system to represent the cascade of hpps in the drb; together with other electricity options, including among others: energy efficiency. results show that improved cooperation can increase electricity generation in the hpps downstream without compromising generation upstream. it also demonstrates the role of inexpensive hydropower to enhance electricity trade in the region. implementing energy efficiency measures would reduce the generation from coal power plants, thereby mitigating co2 emissions by as much as 21% in 2030 compared to the 2015 levels. in summary, judicious hpp operation and electricity system development will help the western balkans reap significant gains. 1. introduction improving cooperation in the management of transboundary waters has been an important goal in the international community for decades. bilateral and regional agreements on transboundary waters have been in place for more than 100 years [1] with more than 400 treaties adopted to manage transboundary rivers and lakes [2]. since 1948, about 295 international water agreements have been negotiated and signed [3]. the convention on the protection and use of transboundary watercourses and international lakes “water convention” was adopted in 1992 and entered into force in 1996 [4]. however, around two-thirds of the world’s transboundary rivers lack a cooperative management framework [3]. the analysis of individual systems such as energy and water is undertaken routinely [5] and is often focused only on a single resource [6]. in the early 1970s, some aspects of integrated system thinking were introduced in the study the limits to growth by [7]. around the same time, a second study focused on connected resources: water, energy, land, materials and manpower (welmm) [8]. further noticeable studies were introduced in the last two decades such as [5], [6], [9], and in 2011 the bonn nexus conference took place [10], where the nexus approach was presented as an integrated assessment the role of energ y-water nexus to motivate transboundar y cooperation: an indicative analysis of the drina river basin youssef almulla1*, eunice ramos1, francesco gardumi1, constantinos taliotis1, annukka lipponen2 and mark howells1 1kth royal institute of technology, brinellvägen 68, 100 44 stockholm, sweden 2the united nations economic commission for europe (unece), bureau s411, palais des nations, 1211 geneva 10, switzerland keywords: energy-water nexus; transboundary cooperation; hydropower; drina river basin; clews; osemosys; url: http://dx.doi.org/10.5278/ijsepm.2018.18.2 http://dx.doi.org/10.5278/ijsepm.2018.18.2 4 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin framework that supports the transition to green economy [11]. the climate, land-use, energy, water systems (clews) framework was also introduced to study conflicting objectives and identify synergies and trade-offs between sectors which otherwise may not be revealed [12]. while the definitions and scoping of nexus analysis vary, it is often presented as the integration of multiple sectoral elements of energy, water, and food production within an overarching governance approach [13]. the nexus approach is broader than established ‘integrated’ sectoral policy approaches, such as integrated water resource management (iwrm)i. the latter considers all water uses and the energy sector is an important water user [15]. however, energy is also used to pump and supply water. thus, in times of water shortage, the energy system can be strained to reduced hydropower production, this is in turn compounded as energy demand for water pumping can concurrently increase. this and other phenomena are not captured without considering both water and energy systems scenarios simultaneously [16]. this typically falls outside of the scope of (integrated resource planning) irps for electricity [17] or iwrms for water management. water as well as electricity and energy carriers often “flow” across state borders and developments in water and energy infrastructures have transboundary impacts, making cooperation crucial. if either water or energy can bring together the basin countries to look at both sectors together, cooperation could potentially provide a broader set of benefits. in september 2015, the united nations (un) general assembly declared the ‘sustainable development goals (sdgs). out of the 17 sdgs, this work is focused on three of them, namely sdg6, 7 and 17. sdg 6 aims at ensuring availability and sustainable management of water and sanitation for all. it has clearly highlighted the importance of transboundary cooperation in the sustainable management of water and sanitation in target 6.5ii. hydropower is a key low cost (affordable) renewable energy technology (ret). ret is needed to achieve sdg 7, specifically target 7.1 on universal access to affordable, reliable and modern energy service and target 7.2 on increasing the share of renewable energy in the global energy mix. since sdgs can not be achieved independently. sdg 17 aims at strengthening global partnership and its target 17.14 focuses specifically on enhancing policy coherence for sustainable development [18] to integrate different dimensions of sustainability in policymaking in a balanced way. furthermore, in 2016 the paris agreement on climate change was signed [19]. this agreement requires all countries to contribute to the mitigation of greenhouse gases (ghg) emissions by bringing forward their nationally determined contributions (ndcs) and to strengthen these efforts in the years ahead. again, the importance of ret and thus hydropower is underlined. the united nations economic commission for europe (unece), under the convention on the protection and use of transboundary watercourses and international lakes (water convention), conducted several assessments of the “water-energy-foodecosystem nexus” on transboundary water basins such as: alazani/ganykh, syr darya, isonzo/soča and sava river basins [20]. among other benefits, these efforts led to the development of the transboundary river basin nexus approach (trbna) [16], which will be used in this study to zoom into the sava river’s main tributary – the drina river. (an analysis for the broader sava river basin is forthcoming [21]). this approach employs ‘nexus dialogues’ between different stakeholders in the study area in the form of workshops, bilateral meetings and online exchanges of information [22]. these happen at various stages of the study. the workshops bring together representatives from water, energy, agriculture and environment sectors coming from ministries or ngos or utilities. each sectoral representative sketches scenarios for that sector’s development. draws and impacts on other sectors are identified. from these an integrated picture is developed and then quantified in a nexus assessment (and modelling effort). stresses plus opportunities (due to the linkages between sectors) are jointly identified and solutions co-created. additionally, the interactions with stakeholders facilitate data collection and/or suggest reasonable assumptions and finally, the findings of the nexus assessment are consolidated through these dialogues. 1.1. the drina river basin (drb) the drina river basin (drb) is located in southeast europe and has a surface area of 20,320 km2 [23]iii . the drina river is formed by the piva and tara rivers, both flowing from montenegro and converging at the border with bosnia and herzegovina to form the drina river, which continues flowing northwards to feed into the sava river as shown in figure 1 [25]. the drb is almost evenly distributed between three of the four riparian countries. it covers the northern half of montenegro (32% of the river basin), part of the east of bosnia and international journal of sustainable energy planning and management vol. 18 2018 5 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells cooperation among the countries on the operation of hpps in the drb. flow regulation is sub-optimal because most hpps in the basin mostly operate independently [29] rather than being coordinated through a single entity or arrangement that coordinates the operation of all hpps between various operators. effective regulation of river flow through reservoir operation and scheduled water releases can secure appropriate ecological flows, therefore minimising the impacts of low flows (in dry seasons) and provide flood protection (in wet seasons) [25]. this is unfortunately not the case in the drb, where the uncoordinated operation of hpps has a negative impact on the river flow by imposing a fluctuating flow regime along the river. this fluctuation affects water availability herzegovina (36% of the river basin), part of the west of serbia (31% of the river basin) and a very small part of the north of albania (less than 1% of the river basin area) [26]. this study will focus on the first three riparian countries only. the hydropower system in the drb was built between the 1960s and 1990 [25] when the countries were part of the former socialist federal republic of yugoslavia. the operation of the hpps system was planned and managed so to work in an optimised manner, with the flow regime controlled to minimise impacts of lower and higher flows attenuating natural extremes [28]. this coordination was not maintained after the breakup of yugoslavia, and there is currently low (or rather, informal and not institutionalised) figure 1: map of the drina river basin (drb) showing the key nexus overlap between energy, land-use and agriculture [27] 6 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin and electricity generation using the case study of the drina river basin (drb). through this approach, informed by the nexus dialogue with stakeholders in the basin, several nexus issues have been identified [26]. selected issues are addressed in the paper by the use of a modelling framework, with the aim to achieve the following specific objectives: 1) quantify the benefits of optimised production from the hydropower plants in the drb through enhanced cooperation; 2) explore the impact of cooperation on the generation output of hydropower plants and on electricity trade between the drb countries and neighbouring countries; 3) investigate the impacts of the implementation of (additional to 1&2) energy efficiency measures on emission mitigation and achieving the countries ndcs. the modelling framework is meant to provide longterm insights on the impacts and benefits that would derive for the countries in the river basin if cooperation and energy efficiency were to be enhanced. it is not intended to suggest specific short-term operational decisions by the power plant operators or new regulations, which are left to the relevant decision makers. currently, such decision makers consist of the regulatory authorities of each country, since much of the electricity system is controlled by state-owned. 2. methodology 2.1. osemosys the drina river basin energy-water model was developed for this analysis using the open source energy modelling system (osemosys), which is a bottom-up long-range energy system optimisation tool [37]. it includes the whole electricity system, from demand to supply and trade. it dynamically determines the electricity generation mix (in terms of technology portfolio and electricity generation) which minimises the net present cost of electricity generation over the entire modelling period, considering constraints related to resource availability, electricity demand, capacity adequacy and production limits. specific resource availability limits are introduced to simulate water constraints. in previous studies [38],[39],[40], water constraints have been introduced in osemosys but as exogenous model inputs. this study employs a water balance to replicate a simplified ‘hydrological’ model that is introduced for the first time in osemosys.org, and electricity generation in the hpps downstream, which became more vulnerable to both lower and higher flows. moreover, there is an urgent need to mitigate the risk of floods [30], and the uncoordinated operation of the hydropower plants with significantly associated reservoir capacity may cause or aggravate high water levels. in addition to the ecological flow regulations, the european fish directive [31], [32] aims to protect and improve the quality of fresh water. this is to protect fish and wildlife habitat from sudden and large fluctuations in water temperature. the directive differentiates between two types of fresh water, salmonid water and cyprinid water, and sets different limits on each type to regulate thermal discharge from thermal power plants to the river. such limits can curtail thermal power plants output, especially during droughts – or times of high ambient and river temperatures. the curtailment of thermal power plants generation due to thermal discharge constraints can result. this can increase the demand for hydropower generation, which, in seasons of low water availability, would put the security of supply at risk. based on this, a recent study suggests the importance of relaxing these constraints in extreme weather conditions (i.e. hot droughts) to secure electricity supply [33]. the full coordination of cascaded hydropower plants through the smart management of reservoirs discharges has the potential to regulate flow and temperature of rivers and may significantly reduce the need for curtailments of thermal generation in extreme weather conditions [34]. the benefits may be magnified if such coordination is allowed on the transboundary level. (typically control and thus coordination can be at national or utility level). electricity trade plays an important role in the drb countries and in the balkan region in general. the creation of a regional electricity market among western balkan countries, contracting parties of the energy community, is one of the priority clusters of the enc treaty [35]. additionally, the regional market development is foreseen to be integrated into the paneuropean electricity market [36]. given the high share of electricity generation by hydropower plants, these play a key role in determining the electricity trade potential of each country in the drina sub-basin. furthermore, the level of export is related to the quantity of energy used domestically by each country and will, therefore, be affected by actions aimed to improve energy efficiency. 1.2. aims and objectives this paper gives an example of implementing the trbna to support cooperation in transboundary water management international journal of sustainable energy planning and management vol. 18 2018 7 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells country from primary resources to power supply technologies, transmission and distribution networks down to the final electricity demand. the model is essentially constituted by so-called ‘technologies’ and ‘fuels’. the technologies represent any (aggregated or not) process transforming one energy carrier into another. the fuels represent the energy carriers flowing between technologies. for example, coal flows from a resource technology at the primary level to a thermal power plant to generate electricity at the secondary level with a certain efficiency. in turn, the electricity flows to the transmission and distribution network (with associated losses) to meet the final demand as shown in figure a 1 of appendix a. as far as the power supply technologies are concerned, all thermal power plants are aggregated by type of fuel they use. they are however split between country and within each country, they are split between power plants inside and outside the drina river basin. non-hydro renewable power plants, namely solar, wind and biomass are included in the model as indicated in the national renewable energy action plans (nreap) of each country [48], [49], [50]. hydropower plants in the three countries are considered in the model as will be described in the ’hydrological system’. finally, the interconnections between the countries sharing the basin and those with other countries are represented in the model as shown in table a 5. each power supply technology is characterised by economic, technical and environmental parameters (such as capital costs, variable and fixed operating costs, efficiency, emission rates, input and output fuels, availability, maximum load factors, etc.) which are userdefined. most of the parameters fed to the model are timedependent and can be adjusted over the time domain of the study, which extends from 2017 to 2030. detailed modelling assumptions and technology inputs are given in appendix a. the ‘hydrological system’ represents the drina river (downstream) and its main tributaries (upstream): uvac, lim, piva, tara and ćehotina as shown in figure 2. in this system, water flows from an upstream tributary (or river segment), it passes through a reservoir and a hpp and it reaches the downstream river (or river segment). when a dam is present in a certain part of a river, it is allowed to fill up the reservoir. inflows are a function of upstream water runoff, extraction of upstream hpp and dam operation. they generally depend on the season. outflows are a function of over-flows, other discharges and associated hpp operation. historical data from gauging stations [51] are used to calculate the average and for the first time in any model application in the basin. several studies have been carried out on the basin power plants. most studies, however, considered smaller parts of the drina basin and certain selections of power plants [41],[42],[43] or focused on hydrological aspects only [37],[43],[45]. there is no study that investigates the long-term impacts of energy and water nexus considering all hpps in the drb using the method applied here. the aforementioned objectives of this analysis can only be achieved if the full electricity system of the three riparian countries is modelled rather than a simplified representation of the power plants in the basin only, and that is mainly due to to the facts that: 1) all the hydropower plants in the basin are linked to the electricity grid in each of the three riparian countries and contribute to meeting the electricity demand on a country level. hence, any changes in the operation of the hydropower plants will affect the national supply systemiv and, vice versa, any increased electricity demand can probably cause extra stress on the hydropower plants in the basin. 2) electricity trade opportunities can be seen in the national context. since there is no basin level electricity trade market, the drb contributes to the surpluses that can be traded in each country on the national level. 3) energy efficiency measures are related to national targets and affect the overall electricity system and are not limited to the basin level. 2.2. model structure the drina river basin water energy model developed for this nexus analysis consists of two main systems: the ‘electricity system’ and a simplified ‘hydrological system’. the first system is the most common model type generated by ‘osemosys model generator’, focusing primarily on energy. it does not capture hydrological characteristics [46] such as water balance in different parts of a river. therefore, the second system is introduced in this analysis to allow for water balance accounting along the cascade of the existing hydropower plants in the drina river basin. the ‘electricity system’ was derived from a previous multi-country modelling effort of the electricity systems of the countries sharing the sava river basin developed by [47] and used in the transboundary nexus assessment of the sava river basin [38] as well as a forthcoming paper [21]. it represents the electricity system of each riparian 8 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin part of both the water balance (as water passes through them when they operate) and the electricity balance (as when they operate electricity is fed onto the grid as one of several suppliers, used to meet domestic and export and demand requirements). the model computes the electricity generation from each hpp respecting the mass balances of water passing through the turbine and generating electricity, based on the following correlation: e = p t; p = p q g h where: e = energy (gwh), p = power (gw), t=time (h), p = density (kg/m3) (~ 1000 kg/m 3 for water), q = water flow (m3/s), g = acceleration of gravity and maximum annual discharge in each tributary and segment of the river system. interpolation is done wherever data were missing from hydrological stations (see table a 7) to derive the values for the missing river segments. minimum environmental flow levels were respected in all scenarios and at different segments of the river based on data provided by the observatory commission, the international sava river basin commission (isrbc) [52] as shown in table a 9. the average and maximum annual discharges were used in the model to constrain the water availability in each segment of the river. the connecting elements between the electricity and water systems in the model are the hpps. they form a river (tributary) piva_rs2 uvac_rs2 lim_rs2 uvac_rs3 uvac_rs4 piva_tara_rs1 uvac_lim_rs1 piva_tara_cheotina_rs1 drina_rs1 tara_rs1piva_rs1 uvac_rs1 lim_rs1cheotina_rs1 piva hpp uvac hpp uvac dam potpec dam potpec hpp kokin bord hpp bistrika hpp visegrad hpp visegrad dam bajina basta dam bajina basta hpp zvornik dam zvornik hpp bistrika dam kokin bord dam piva dam drina_rs2 drina_rs3 drina_rs4 water flow rs: river segment reservoir hpp river (downstream) figure 2: schematic representation of the hydrological system of the drina river basin water-energy model international journal of sustainable energy planning and management vol. 18 2018 9 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells flow in the drina river. additionally, there is a number of small-scale hpps (less than 10mw), with a total capacity of 25 mw (1% of the total capacity in the basin). the bajina bašta pshpp, the small-scale hpps as well as all of hpps outside drina basin are modelled in a simplified fashion (as run-of-river hpps) due to their limited dependence on the water flow in the study area, the drb. the three countries of the drb have plans to expand their hydro capacity and utilise the untapped potential in the drb. however, there is high uncertainty about the implementation of these future projects [27]. provisions for these potential new hydropower installations are added in the model, which is allowed to decide if investment in new hydro capacities would be cost optimal for the overall energy and water system of the three countries. table a 8 shows the list of future power infrastructure projects considered in this study. 2.3. scenario description in order to achieve the objectives of this study related to the quantification of the impact of enhanced cooperation and energy efficiency measures, a range of scenarios was developed. these were developed based on available information on the status in the drb derived from literature and nexus dialogue with stakeholders: 1) base scenario (base). corresponds to a business as usual scenario and describes what may happen if the current status of low cooperation between countries continues in the next decade. historically, the operation of the upstream piva power plant took limited consideration of the impact on downstream power plants. however, (9.81 m/s2) and h = head (m), assumed constant in this study and equal to the difference between reservoir height and the dead storage. this is an important simplification. and while it is used in several applications such as [54], it should be revisited in future work. the electricity system takes the hydrological system as a constraint and computes the optimal scheduling of (i) existing and new capacity of both hydro and thermal power plants to meet the electricity demand; while simultaneously (ii) managing the mass balance of water along the rivers and within the dams. hence, by providing limited insight into simultaneous operation aspects of both the energy and water system, elements of the water-energy nexus are explicitly included osemosys. the mass balance of water is computed in osemosys for different river segments and for each of the reservoirs based on water inflow and outflow at the location of interest. the drina basin hosts about 1700 mwvi of hydropower capacity from the three countries [26] (see figure a 3 for an overview of the installed capacity in the three countries). since the focus of the study is on the existing hpps in the drina river basin, the eight major existing hydropower plants in the drina river basin are represented individually and in cascade in the model (see table 1). all the eight hpps have dams and are used for electricity generation only. their cumulative capacity reaches about 63% of drb total hydro capacity. the rest 36% of hydro capacity consists of the bajina bašta pump storage hpp (pshpp) with 614 mw, which is pumping water to the ‘laziçi’ dam and reservoir from the small tributaries downstream ‘laziçi’ [52] therefore its operation is not dependent on the water table 1: list of reservoirs and hydropower plants cascaded in the hydrological system of the drina river basin water energy model [52],[55],[56] location installed with respect reservoir capacity to drina name river size (mcm) (mw) country* river hpp uvac uvac 213 36 rs upstream hpp kokin brod uvac 250 22 rs upstream hpp bistrica uvac 7.6 102 rs upstream hpp potpec lim 27.5 51 rs upstream hpp piva piva 880 360 me upstream hpp visegrad drina 161 315 ba downstream hpp bajina bašta** drina 218 106 rs downstream hpp zvornik drina 89 96 rs downstream * ba: bosnia and herzegovina, me: montenegro and rs: republic of serbia. ** the rehabilitation of bajina bašta hpp increased the total capacity its four units in operation to 422 mw [57]. 10 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin country [41,42,50]. the plans project electricity demand up to 2020, therefore the demand for the following period up to 2030 is estimated based on the average annual trend in electricity demand in the last five years (2016–2020) (see figure a 2). 5) if energy efficiency measures are implemented in the electricity sector, nreaps assume energy savings of 0.7 twh for bosnia and herzegovina, 0.2 twh for montenegro and 3.2 twh in serbia by 2020, which correspond to between 4% and 8% reduction of gross electricity demand. the rest of the assumptions in this scenario are the same as in the co-operation scenario. this scenario provides some insight related to deeper policy coherence, a target of sdg17. 3. results and discussion this section presents selected results from the scenario analysis. the first subsection compares the first two scenarios while the other subsections compare scenarios 3 and 4 with scenario 2. 3.1. impact of cooperation among countries on the operation of dams in the drina river basin the comparison between the base scenario (base) and the higher-cooperation scenario (cop_ref) shows considerable cumulative electricity generation gains in the power plants downstream in the latter. under the assumptions and the conditions of these scenarios (base and cop_ref), the analysis shows that the annual generation of piva hpp remains unchangedviii, but the monthly release/generation does change. the cooperative management allows for timely water availability for power plants downstream at the desired time, which leads to generation gains and optimal operation of the overall system. as shown in figure 3, the cumulative electricity the flow regime in the entire drina river is affected by the operation of piva hpp [58]. it alters the amount and timing of water flow downstream. to simulate this, the base scenario imposes an arbitrary (from the point of view of the system) restriction on upstream hpps. based on discussions with stakeholders [48,52] it was decided to focus on the impact of piva hpp since it has the biggest reservoir size and the highest impact on water flow in drina river (compared to others upstream). the piva reservoir was assumed to operate with minimum outflow to the rivers downstream for one month of the year, which simulates an extreme historical situation. during that time it does not alter its level to improve the operation of the cascading system. the downstream plants (and the rest of the power system) are operated in a cost-optimal manner to accommodate this ‘independence’ of piva’s operation. for the other eleven months of the year, the system is assumed to operate optimally. 2) co-operation scenario (cop_ref). this aims to show what differences arise (with respect to the base scenario) in the least cost energy mix and operation profiles when a cooperative planning of the operation of all the hydropower plants in the basin is carried out. in this case, no power plant operates ‘independently’ and the operation profiles of all the hydropower plants are optimised, in order to guarantee the minimum discounted cost for the whole region along the time domain of the study. again, the water balance along the cascade constrains the availability of water and the operational limits of the hydropower plants and the electricity trade is bound to historical levels. 3) increased electricity trade scenario (cop_trd). this scenario has the same structure as the co-operation scenario. additionally, it explores the possibility for the three countries in the drina river basin to magnify the benefit from cooperation in the operation of hydropower plants and low-cost electricity generation by improving interconnections and trade of electricity between them and with neighbouring countries. 4) energy efficiency scenario (cop_ee). this scenario investigates the impacts of implementing energy efficiency measures on achieving the drb countries ndcs. the electricity demand projections for this scenario are obtained from the national renewable energy action plans (nreap) of each 0 100 200 300 400 500 600 bajina bastazvornikvisegrad g w h 390 113 520 figure 3: cumulative difference in electricity generation (gains) between the cop_ref scenario and the base scenario for the hydropower plants downstream piva in gwh. international journal of sustainable energy planning and management vol. 18 2018 11 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells increase in electricity generation and therefore cooperation between the countries. since the model is a cost optimisation model, the actual level of trade expansion will be decided based on its cost-effectiveness (noting that marginal generation costs are determined endogenously for the three countries considered). comparing the electricity trade profile between the historical limits and the extended trade under the (cop_ trd) scenario (figure 4), it can be noticed that all countries tend to increase the amount of electricity traded, which highly depends on low-cost electricity surplus produced from hydro and coal. the ratio between hydro and coal in this increase depends on how flexible hydropower plants are in increasing their operation levels. the contribution of non-hydro renewables to the increased trade opportunity is expected to be marginal in all the countries if their penetration is not assumed higher than the nreap targets. bosnia and herzegovina will continue to be mainly a net exporter of electricity, to montenegro and croatia. in the case of serbia, the massive hydro and coal potentials can play an important role in increasing export opportunities from 2021 onward. however, this growth in exports is affected by the decommissioning of ‘kostolac’ coal power plant in 2027 (1135 mw installed in 1967) which could create a steep-decrease in the net export level by roughly 4 twh (15 pj). montenegro increases both electricity import and export during the same period. the planned 415 km 1 gw high voltage dc cable connecting montenegro with italy will increase montenegro’s trade potential [49]. generation gains between 2017 and 2030 in bajina bašta hpp can reach about 520 gwh, which is equivalent to 30% of its average generation in one year. in bosnia and herzegovina, visegrad hpp can gain an extra 390 gwh cumulatively during the same years. the size of the reservoir (see table 1) and its location along drina river (see figure 1 and figure 2) cause the gains in electricity generation between the two scenarios to be different in different power plants downstream of piva hpp. this is clear in the case of zvornik hpp, which is further downstream in drina river with smaller reservoir size. it has the least gains in electricity generation among others but still increases its generation by 113 gwh during the same time interval. in other words, the share of annual electricity gains to the annual power plant output would represent about 3.1% in visegrad, 2.9% in zvornik and 3.05% in bajina bašta. 3.2. extended electricity trade opportunities in a cooperation scenario in the base and cop_ref scenarios, the amount of electricity that can be traded between the countries is constrained to the historical recorded maximum values between 2008 and 2014 [60]. in the cooperative scenario with extended trade (cop_trd), the model is allowed to increase the amount of electricity trade between the countries by up to 40%. this increase is allowed gradually from 2022 to 2025 and maintained thereafter. the representative value of 40% constitutes an assumptionix, to provide sensitivity about the potential -6 -4 -2 0 2 4 6 8 10 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 t w h ba net exports me rs hr -6 -4 -2 0 2 4 6 8 10 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 me net exports ba rs al it -6 -4 -2 0 2 4 6 8 10 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 rs net exports ba me al bg hr hu mk ro 10 historical limit p extended trade 0 historical limit p extended trade et exports extended trade 10 rs ne historical limit figure 4: trade profile for the three countries in the drina basin under the cooperative extended trade scenario (cop_trd) [al: albania; ba: bosnia and herzegovina; bg: bulgaria; hr: croatia, hu: hungary; it: italy; me: montenegro; mk: macedonia; ro: romania; rs: republic of serbia] 12 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin the reduced demand will also slightly decrease the pressure on hydropower plants, which will decrease their generation by about 700 gwh in 2021 and 2022. in other words, the reduced demand will delay investments in new hydro projects, especially in bosnia and herzegovina. from 2023 on, hydropower will increase again to generate up to its maximum possible capacity in both scenarios, offsetting thermal production and allowing meeting the national electricity demand as shown in figure 7. zooming into the drb, the profile of electricity generation between the two scenarios looks different from the profile on the three-country level. as shown in figure 8, the contribution of hydro generation inside drb is higher than thermal generation in both scenarios. the implementation of the energy efficiency measures is expected to have a small impact on reducing the stress on both sources of electricity. in the case of hydro, only slight decrease will be achieved between 2020 and 2022; furthermore, this interconnection facilitates potential electricity flows from other countries to montenegro and then to italy. this is seen in figure 4 as increased trade between the three countries. this outlook is in line with the national renewable energy action plan of montenegro [49] as well as with trans-balkan corridor project [61]. the latter shall enhance the connectivity of internal networks of montenegro, serbia, and bosnia and herzegovina as well as their transnational interconnectivity. it is worth mentioning that, under the assumed conditions of this study, montenegro has the opportunity to shift from a net electricity importer to a net exporter after 2020 (see figure 5). this is conditional to increasing the generation from inexpensive hydro and coal and the exploitation of biomass and wind potential as noted in the nreap. 3.3. impact of energy efficiency measures on hydropower and thermal generation on the national level and in the drina river basin the implementation of energy efficiency measures and the consequent reduction in final electricity demand result in reduced thermal (mainly coal) power generation in the three countries. the overall decline in thermal production in the three countries becomes clearer from 2021 onwards (see red dashed line in figure 6) when electricity savings become more significant, to reach the level of 7 twh by 2025 and 8 twh by 2030 as shown in figure 6. the decommissioning of ‘kostolac’ coal power plant in 2027 causes a steep decrease in thermal production in both cop_ref and cop_ee scenario. -4 -2 0 2 4 6 8 10 12 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 t w h coal gas wind solar hydro geothermal biomass net import figure 5: electricity generation mix of montenegro under the cooperative trade scenario (cop_trd) from 2017 to 2030 0 5 10 15 20 25 30 35 40 45 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 t w h hydro ee fossil thermal ee hydro ref fossil thermal ref figure 6: electricity generation in the energy efficiency and reference scenarios for the three countries of drb (in twh) from 2017 to 2030 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 0 e le ct ri ci ty ( g w h ) -100 -200 -300 -400 -500 -600 -700 -800 figure 7: absolute difference in hydro production in the three countries between cooperative energy efficiency (cop_ee) and cooperative reference (cop_ref) scenarios international journal of sustainable energy planning and management vol. 18 2018 13 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells demand of the (cop_ref) scenario. however, in the (cop_ee) scenario the decommissioning of ‘kostolac’ will not drive higher thermal generation from the drb due to low electricity demand in this scenario. coal-fuelled electricity generation is the main source of emissions from electricity sector; therefore any decline in coal-fired generation is obviously followed by a decline in co2 emissions in the region. this contributes to achieving the ndcsxii, which aim at reducing ghg emission by 2030 (compared to 1990 level) by 2% , 9.8% and 30% for bosnia and herzegovina, serbia and montenegro respectively [63]. figure 9 shows a comparison between the generation of electricity from different sources (thermal, hydro and other non-hydro renewables) under the cooperative reference scenario (cop_ref) and the cooperative with energy efficiency measures scenario (cop_ee). it also shows the total co2 emissions (in million tons) of all three countries from 2017 to 2030. as shown in graph (b), co2 emissions drop from 38 mt in 2017 to about 28 mt in 2030, which corresponds to mitigation of about 21% of total co2 emissions across the three countries in 2015. comparing the two scenarios, it can be noticed that the implementation of the energy efficiency action plans is expected to reduce the emissions from about 35 mt by 2030 in the (cop_ref) scenario to about 28 mt by 2030 in the (cop_ee) scenario. however, this reduced demand is enough to delay the investments in the first phase of middle drina hpp (dubravica, tegare and rogacica) from 2020 in the (cop_ref) scenario to 2022 in the (cop_ee) scenario. in the case of thermal generation, the savings will appear later between 2027 and 2030. the decom missioning of ‘kostolac’ coal power plant in 2027 will cause a drop in thermal production outside drb, which will increase the thermal generation inside drb to compensate for this drop and meet the high electricity 0 2 4 6 8 10 12 14 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 hydro inside drb ref thermal inside drb ref hydro inside drb ee thermal inside drb ee figure 8: electricity generation between the energy efficiency and reference scenarios inside the drb (in twh) from 2017 to 2030 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 e le ct ri ci ty g e n e ra tio n ( t w h ) a) cop_ref total hydro total fossil thermal total non-hydro res co2 emissions 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 c o 2 e m is si o n s (m t) c o 2 e m is si o n s (m t) e le ct ri ci ty g e n e ra tio n ( t w h ) b) cop_ee total hydro total fossil thermal total non-hydro res co2 emissions figure 9: comparison between a) cooperative reference scenario (cop_ref) and b) cooperative with energy efficiency measures scenario (cop_ee) in term of co2 emissions and electricity generation from thermal, hydro and non-hydro renewables. results aggregated for the three countries in the drina basin 14 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin 4. conclusions the electricity generation in the drina basin depends heavily on water management and flow regulation. the study focused on the potential benefits deriving from increased transboundary collaboration in the operation of hydropower plants, increased interconnections between the countries and energy efficiency measures to reduce the electricity demand. as a first outcome, the analysis demonstrates that improved cooperation in hydropower plants operation along the drina river basin could lead to increasing the annual production of hydropower plants downstream without affecting the output of those upstream. this signifies that the benefits and possible formalisation of coordination would merit investigation. in addition to improving the legislative framework to support the coordinated operation, the development of information exchange, involving possibly the establishment of information systems between power plants along the river basin and across national boundaries would seem beneficial. as a second outcome, if the coordination were to be agreed upon and formalised, the benefits of cooperation could be multiplied by development plans and investments in the electricity transmission network. the analysis shows how the increased hydroelectric production could unlock the potential for international trade, within and outside the three riparian countries. however, in the local policy context, the trade-offs related to further development of hydropower would need to be weighed against other objectives such as protection of ecosystems (environmental flows), flood risk management and other water uses notably agriculture whose water requirements are predicted to increase although the current use is low. finally, the analysis of the impact of energy efficiency measures in the end-use sectors shows interesting insights. the energy efficiency measures reduce the pressure on primary resources for energy supply (here mostly hydro and coal), while the improved cooperation in hydropower plants operation further improves their production, overall resulting in potentially increased availability of water for non-energy uses (e.g. agriculture). these benefits add to reduced ghgs emissions, which help the countries reach the ndcs. we note that sustainable energy (sdg7), ghg mitigation (sdg13) and policy coherence targets required for a global partnership (sdg 17) can be quantitatively analysed by developing a more integrated modelling framework. the aim of this study to gain insights using hypothetical scenarios – rather than predict outcomes. the future is shaped by many uncertainties. several factors affect the outcomes of this modelling effort – that are difficult to estimate. for example, the analysis shows it may be cost-optimal for the three countries to expand their electricity trade. however, this assumes that there is an efficient market shaped by well-crafted policy. in reality this might not be the case. for instance, there can be uncertainty associated with the future development of electricity prices. this could, in turn, be exacerbated if the three countries are exposed to the regional market due to increased transmission integration with other neighbours. further, large exogenous price fluctuations (and local distortions) may arise from connection to a much larger market in italy. another source of uncertainty in the analysis is related to future expansion plans for hydro and other non-hydro renewables. potential development of new dams and hydropower plants on the drina river or its tributary may increase the uncertainty of water availability along the river, especially downstream. this would have energy gains but may result in economic and environmental impacts or affect other water users (i.e. agriculture) and such trade-offs should be weighed sensibly and consultatively on the national and transboundary levels. . the deployment of intermittent non-hydro renewables like solar and wind will require changes in the electric power grid [64], which will affect the operation of hydro and coal power plants to accommodate these changes. those may have significant impact as hpps may be used to supply balancing services to the grid – as they can often be rapidly turned on and off. finally, predictable water flows on the drina river and its tributaries were maintained as throughout the years modelled. this aspect can be enhanced by having a variating volatile monthly water flow scheme. such enhancement would allow to better assess the resilience of the system against volatile future weather and an on average drying climate and drought/flood peaks due to climate change. these conclusions have supported an ongoing dialogue on water and energy nexus challenges, which brought together representatives of national governmental institutions and utilities of both energy and water sectors as well as the civil society in the three riparian countries. in the broader participatory assessment process, they also provided a starting point for identification jointly of actions to improve sustainable management of energy and water resource in the drina river basin such as enhanced data sharing and cooperative operation strategies. improvements in the modelling framework and its database could further support the dialogues. currently, international journal of sustainable energy planning and management vol. 18 2018 15 youssef almulla, eunice ramos, 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(2014). the paris agreement main page. retrieved the models of the energy system and of the hydrological system are both represented in osemosys, with the aim of providing a straightforward tool for scenario analysis and decision-making. however, more detailed indications for the hourly scheduling of the hydropower plants could be obtained by soft linking the energy system model created in osemosys with a hydrological system model designed in an ad-hoc tool and/or hourly dispatch model. the model considers environmental flow in all scenarios; however, it would be interesting to investigate the impact of power plants discharge temperature in the river. furthermore, additional data from local institutions and electricity utility companies, particularly regarding site-specific technology costs and water availability data, will allow the current data gaps to be filled and the resolution of the results to increase. disclaimer the views expressed in this article are those of the authors and do not necessarily represent the views of the united nations or its member states. references [1] huisman, p., de jong, j., & wieriks, k. 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(2016). global distribution of grid connected electrical energy storage systems. international journal of sustainable energy planning and http://www.wb-drinaproject.com/pdf/roof%20report%20-%20english%20-%20final.pdf http://www.wb-drinaproject.com/pdf/roof%20report%20-%20english%20-%20final.pdf https://balkangreenenergynews.com/intersectoral-cooperation-drina-river-basin-discussed-belgrade/ https://balkangreenenergynews.com/intersectoral-cooperation-drina-river-basin-discussed-belgrade/ https://docstore.entsoe.eu/documents/tyndp%20documents/tyndp%202016/projects/p0146.pdf https://docstore.entsoe.eu/documents/tyndp%20documents/tyndp%202016/projects/p0146.pdf https://www.epa.gov/sites/production/files/2015-07/documents/emission-factors_2014.pdf https://www.epa.gov/sites/production/files/2015-07/documents/emission-factors_2014.pdf http://dx.doi.org/dx.http://dx.doi.org/.org/10.5278/ijsepm.2016.9.4 http://dx.doi.org/dx.http://dx.doi.org/.org/10.5278/ijsepm.2016.9.4 https://www.energy-community.org/portal/page/portal/enchomedocs/3500148/0926ed3c92fa8c0e6a4.pdf https://www.energy-community.org/portal/page/portal/enchomedocs/3500148/0926ed3c92fa8c0e6a4.pdf https://www.energy-community.org/documents/reports.html https://www.energy-community.org/documents/reports.html http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_pc_205&lang=en http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_pc_205&lang=en https://transparency.entsoe.eu/transmission-domain/ntcyear/show https://transparency.entsoe.eu/transmission-domain/ntcyear/show international journal of sustainable energy planning and management vol. 18 2018 19 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells c) hydrological system assumptions that demonstrate how the river system and the cascade of hydropower plants with storage are developed in osemosys. table a 1 lists the global assumptions used in all scenarios. electricity system assumptions: • the electricity demand for each country is based on the national renewable energy action plans (nreap) to 2020 [41,42,57], with key assumptions the modelling assumptions are classified into three main categories: a) global assumptions, that are constant throughout the modelling period for the whole system; b) electricity system assumptions, mainly related to the techno-economic characteristics of the technologies included in the electricity system of the model; coal imports coal extraction natural gas imports natural gas extraction biomass imports biomass extractoin primary secondary tertiary final demand biom ass electricity electricity electricity imported electricity electricity import interconnection transmission electricity export interconnection el_tranmission el_tranmission el_tranmission el_distribution distribution el_final el_tranmission el_tranmission el_tranmission el_tranmission el_tranmission el_tranmission el_tranmission el_tranmission el_tranmission coal pp outside drina np pp outside drina biomass plant (chp) geothermal large hydro inside drina large hydro outside drina small hydro outside drina solar pv wind np pp inside drina coal pp inside drina exported electricity natural gas coal figure a 1: a generic representation of the reference energy system (res) for the electricity system in the drina river basin waterenergy model. [note: large hydropower plants are aggregated in this schematic representation for the sake of simplicity] appendic a 20 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin from literature with assumptions for future improved transmission and distribution system as shown in table a 3 and table a 4 [40,58]. • the renewable energy plans and targets are based on [41, 42,43]; all scenarios are developed to meet re targets for hydro and non-hydro energy (mainly solar, wind and biomass) by 2020 (see figure a 4), despite plans facing in some cases financing challenges. • conservative approach was followed with the penetration of non-hydro renewables beyond 2020. to address the uncertainty of the plans and unavailability of public data, the model was restricted to maintain the 2020 levels in the years after (unless specific dates were given for certain projects as shown in the list of projects table a 8). • for the electricity trade between countries: the model decides the price of electricity traded between the drb countries based on the optimisation of the overall electricity system. for the countries outside drb, that were not included in the model, prices were assumed for electricity imports and exports based on cost of electricity supplied to industries in each country as shown in table a 6 [67]. this limitation of this analysis that should be taken in consideration in future work. extrapolation for the period after that as shown in figure a 2. • in this analysis, site-specific techno-economic data for electricity generation technologies were not available; therefore, generic data from literature were used according to each technology type as shown in table a 2. • transmission and distribution losses are defined on the national level based on historical data table a 1: list of global assumptions used in the model # parameter assumption 1 monetary unit 2010 us$. 2 real discount rate 5% for all technologies. 3 time horizon 2010 to 2035. 4 reporting horizon 2017 to 2030 to prevent the ‘edge-effects’ of the mathematical optimisation from affecting the analysis. 5 temporal resolution yearly basis for the entire model period. each yearis represented by 36 periods (time slices) as follows: 12 seasons (months); 1 day type; 3 daily demand levels (day, night and peak). 0 10 20 30 40 50 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 t w h ba_cop_ee me_cop_ee figure a 2: electricity demand projections for the countries in drb from 2010 to 2035 for the two scenarios: cooperative reference (cop_ref) and cooperative with energy efficiency (cop_ee). [ba: bosnia and herzegovina; me: montenegro and rs: republic of serbia] international journal of sustainable energy planning and management vol. 18 2018 21 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells • all committed power plants are added to the model until 2016, other un-committed expansion projects (hydro, nonhydro renewables and thermal) are gradually allowed to be chosen by the model from 2017 to 2030. since the model is an optimisation model, it chooses projects that meet the demand at the least overall system cost. all power plants considered in this analysis are presented in table a 8. • emission factor data were obtained from [62]. table a 2: techno-economic parameters considered in the analysis capacity capital cost fixed cost variable cost life time efficiency factor technologies (us$/kw) (us$/kw) ($/mwh) years % % coal steam cycle (st) 2921 – 3.96 60 37% 85% fuel oil gas cycle (gt) 1488 – 4.16 25 35% 90% natural gas combined cycle (cc) 1238 – 0.80 30 48% 70–85% hydropower 2552 21 0.32 80 100% varies wind on shore 2205 – 3.97 25 n/a 25% solar photovoltaic 2100 – 5.58 25 n/a 15–48 % biomass 3039 – 5.56 30 38% 50% transmission lines 365 – – 60 95.88–99.52 %* – distribution lines 2433 – – 60 88.55–98.48 %* – . serbia montenegrobosnia and herzegovina 360 684 225 225 1028 2595 54 4632 325 20602170 hydro drb hydro total thermal drb thermal total figure a 3: overview of installed capacity (mw) at national and drina river basin level. table a 3: transmission and distribution losses based on national historical data (2012–2014) 2010 2011 2012 2013 2014 2015 bosnia and herzegovina % 6.9 6.9 6.9 6.9 6.9 6.6 montenegro % 16.6 16.6 16.6 16.6 16.6 15.9 serbia % 14.7 14.7 14.7 14.3 14.3 13.8 table a 4: projections for transmission and distribution losses country 2016 2020 2025 2030 bosnia and herzegovina % 6.4 5.5 4.3 3.2 montenegro % 15.2 12.5 9.0 5.6 serbia % 13.2 10.9 7.9 5.0 22 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin 60% 2009 res-e (%) ba rs me hydro geothermal solar pv wind biomass ba rs me 1% overal res target a) nreap res targets (%) b) contribution (%) to res electricity generation in 2020 2020 2009 2020 40% 20% 0% 1% 9% 7% 7% 4% 14% figure a 4: overview of the national renewable energy action plans (nreaps) of the drina river basin countries: a) res targets for the electricity sector and overall energy targets; b) expected contribution of res (%) to electricity production in 2020 table a 5: net transfer capacities, in mw, for 2015 [60,61] bosnia and from herzegovina serbia montenegro croatia italy hungary romania bulgaria fyrom albania to bosnia and herzegovina 100 200 400 serbia 100 100 150 300 200 200 100 0 montenegro 200 100 200 croatia 400 100 italy hungary 300 romania 150 bulgaria 100 fyrom 100 albania 200 table a 6: price of electricity in ($/mwh) for trade interconnections between countries [67] bosnia and herzegovina montenegro serbia import export import export import export albania 81.7 94.4 81.7 65.2 bosnia and herzegovina computed by the modelxiv computed by the model bulgaria 94.7 65.2 croatia 81.7 81.7 81.7 81.7 hungary 107.5 65.2 italy 138.9 138.9 macedonia 53.9 65.2 montenegro computed by the model computed by the model romania 96.8 65.2 serbia computed by the model computed by the model international journal of sustainable energy planning and management vol. 18 2018 23 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells table a 7: gauging station data on the average and maximum annual discharge at different locations of the drina river and its tributaries [51] avg. discharge rate (m3/s) max discharge rate (m3/s) station name location (along the drina river or its tributary) (2009–2014) (2009–2014) gorazde piva, tara and cehotina – lower 190 1245 cedovo uvac 5 48 bijelo polje lim 83 956 prijepolje mid lim lim middle 71 920 priboj lower lim lim lower 88 896 bajina bašta station drina upper 311 1150 radalij drina middle 389 4450 table a 8: list of power infrastructure projects considered in the model for the three countries of drb plant country plant name river type capa city (mw) fuel earliest year on ba ustripaca drina hydro 7 2015 ba bistrica-b2a drina (bistrica) hydro 8 2017 ba dub drina (ratiknica) hydro 9 2016 ba vrletina kosa vrbas (ugar) hydro 11 2018 ba ivik vrbas (ugar) hydro 11 2018 ba ugar usce vrbas (ugar) hydro 12 2018 ba janjici bosna hydro 13 2017 ba kovanici bosna hydro 13 2019 ba cijevna-3 vrbas hydro 14 2015 ba vranduk bosna hydro 20 2018 ba neretvice neretvika hydro 26 2017 ba ulog neretvika hydro 35 2015 ba bileca trebinsjica hydro 36 2020 ba mrsovo drina (lim) hydro 37 2017 ba paunci drina hydro 37 2026 ba sutjeska drina rb hydro 42 2017 ba foca (srbjine) drina hydro 44 2018 ba kablic bistrica (adriatic basin) hydro 52 2019 ba nevesinje trebinsjica hydro 60 2020 ba ustikolina drina hydro 60 2018 ba vrilo ·uica hydro 64 2014 ba buk bijela drina hydro 94 2018 ba gornja drina drina hydro 115 2015 ba dabar trebinsjica hydro 159 2018 ba dubravica middle drina hydro 122 2020 ba tegare middle drina hydro 124 2020 ba rogacica middle drina hydro 140 2020 ba kakanj ccgt in srb thermal 100 gas 2020 ba kongora outside drb thermal 550 coal 2017 ba gracanica bugojno a nd mine outside drb thermal 300 coal 2021 ba kakanj 8 in srb thermal 300 coal 2019 ba tuzla 7 chp in srb thermal 450 coal 2018 ba tuzla-b2 in srb thermal 450 coal 2023 ba zenica chp gt 1 bosna thermal 384 gas 2015 ba banovici litva (oscova,spreca,bosna) thermal 300 coal 2017 ba stanari ostruznja thermal 300 coal 2016 ba kamengrad sana (una) thermal 215 coal 2017 (continued) 24 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin table a 8: list of power infrastructure projects considered in the model for the three countries of drb (continued) plant country plant name river type capa city (mw) fuel earliest year on ba ugljevik-3 no 1 drina thermal 600 coal 2018 ba mesihovina wind wtg 1-22 wind 55 2014 ba trusina wind 51 2016 ba gradina bih wtg 1-35 wind 70 2014 ba pakline-ljubusa-kupres wind 408 2014 ba baljci wind 48 2015 ba jelovaca wind 36 2015 ba podvelezje-2 wtg 1-15 wind 48 2016 ba wf debelo brdo wind 55 2016 ba orlovaca wind 42 2016 ba ivovik wind 84 2016 ba mucevaca wind 60 2016 ba vlasic wind 50 2016 ba galica wind 50 2016 ba velika vlajna wind wtg wind 32 2017 ba borova glava-1 wtg wind 52 nd allowed after 2020 ba poklecani wind wth wind 72 nd allowed after 2020 ba wf kamena wind 42 nd allowed after 2020 ba wf merdïan glava wind 72 nd allowed after 2020 ba wf sveta gora , mali grad poljica wind 48 nd allowed after 2020 ba wf mokronoge wind 70 nd allowed after 2020 ba wf planinica wind 28 nd allowed after 2020 ba wf velja me?a wind 18 nd allowed after 2020 ba wf ivan sedlo wind 20 nd allowed after 2020 ba wf srdani 30 mw wind 30 nd allowed after 2020 ba wf crkvine wind 24 nd allowed after 2020 me komarnica piva hydro 172 2022 me hpp na moraci moraca hydro 238 2021 me perucica 8 zeta hydro 59 2018 me pljevlja 2 in the drina basin thermal 225 coal 2020 me mozur wtg 1-23 wind 46 2017 me krnovo wtg i wind 50 2017 me krnovo wtg ii wind 22 2017 me other i wind 8 2018 me other ii wind 26 2020 me other iii wind 17 2025 me other iv wind 21 2030 rs brodavero-1,2 lim hydro 58 2015 rs bajina ba·ta (after revitalization in 2013) drina hydro 422 2013 rs bistrica psp lim hydro psp 680 2020 rs kostolac-b no 3 danube thermal 350 coal 2019 rs stavalj grabovica/jablanica (uvac, drina) thermal 300 coal 2017 rs kolubara-b no 1 kolubara (sava) thermal 750 coal 2017 rs nikola tesla-b no 3 sava thermal 740 coal 2017 rs kovin cibuk wtg wind 170 2014 rs la piccolina vetro-1 wtg 1&2 wind 6 nd allowed after 2020 rs kula wtg 1-3 wind 9 nd allowed after 2020 rs ram velikovo-1 wtg wind 9 nd allowed after 2020 rs ram velikovo-2 wtg wind 9 nd allowed after 2020 (continued) international journal of sustainable energy planning and management vol. 18 2018 25 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells table a 8: list of power infrastructure projects considered in the model for the three countries of drb (continued) plant country plant name river type capacity (mw) fuel earliest year on rs belo blato wtg wind 20 nd allowed after 2020 rs pancevo wtg wind 50 nd allowed after 2020 rs vrsac plandiste wtg wind 102 nd allowed after 2020 rs bela anta wtg 1-60 wind 120 nd allowed after 2020 rs la piccolina vetro-2 wtg wind 120 nd allowed after 2020 rs kovin wellbury wtg 1-94 wind 188 nd allowed after 2020 rs dolovo wtg wind 350 nd allowed after 2020 rs vranje solar pv solar pv 10 nd allowed after 2020 ba stanari ostruznja thermal 300 coal 2016 ba kamengrad sana (una) thermal 215 coal 2017 ba ugljevik-3 no 1 drina thermal 600 coal 2018 ba mesihovina wind wtg 1-22 wind 55 2014 ba trusina wind 51 2016 ba gradina bih wtg 1-35 wind 70 2014 ba pakline-ljubusa-kupres wind 408 2014 ba baljci wind 48 2015 ba jelovaca wind 36 2015 ba podvelezje-2 wtg 1-15 wind 48 2016 ba wf debelo brdo wind 55 2016 ba orlovaca wind 42 2016 ba ivovik wind 84 2016 ba mucevaca wind 60 2016 ba vlasic wind 50 2016 ba galica wind 50 2016 ba velika vlajna wind wtg wind 32 2017 ba borova glava-1 wtg wind 52 nd allowed after 2020 ba poklecani wind wth wind 72 nd allowed after 2020 ba wf kamena wind 42 nd allowed after 2020 ba wf merdïan glava wind 72 nd allowed after 2020 ba wf sveta gora , mali grad poljica wind 48 nd allowed after 2020 ba wf mokronoge wind 70 nd allowed after 2020 ba wf planinica wind 28 nd allowed after 2020 ba wf velja meða wind 18 nd allowed after 2020 ba wf ivan sedlo wind 20 nd allowed after 2020 ba wf srdani 30 mw wind 30 nd allowed after 2020 ba wf crkvine wind 24 nd allowed after 2020 me komarnica piva hydro 172 2022 me hpp na moraci moraca hydro 238 2021 me perucica 8 zeta hydro 59 2018 me pljevlja 2 in the drina basin thermal 225 coal 2020 me mozur wtg 1-23 wind 46 2017 me krnovo wtg i wind 50 2017 me krnovo wtg ii wind 22 2017 me other i wind 8 2018 me other ii wind 26 2020 me other iii wind 17 2025 me other iv wind 21 2030 rs brodavero-1,2 lim hydro 58 2015 rs bajina bašta (after revitalization in 2013) drina hydro 422 2013 rs bistrica psp lim hydro psp 680 2020 rs kostolac-b no 3 danube thermal 350 coal 2019 (continued) 26 international journal of sustainable energy planning and management vol. 18 2018 the role of energy-water nexus to motivate transboundary cooperation: an indicative analysis of the drina river basin table a 8: list of power infrastructure projects considered in the model for the three countries of drb (continued) plant country plant name river type capacity (mw) fuel earliest year on rs stavalj grabovica/jablanica (uvac, drina) thermal 300 coal 2017 rs kolubara-b no 1 kolubara (sava) thermal 750 coal 2017 rs nikola tesla-b no 3 sava thermal 740 coal 2017 rs kovin cibuk wtg wind 170 2014 rs la piccolina vetro-1 wtg 1&2 wind 6 nd allowed after 2020 rs kula wtg 1-3 wind 9 nd allowed after 2020 rs ram velikovo-1 wtg wind 9 nd allowed after 2020 rs ram velikovo-2 wtg wind 9 nd allowed after 2020 rs belo blato wtg wind 20 nd allowed after 2020 rs pancevo wtg wind 50 nd allowed after 2020 rs vrsac plandiste wtg wind 102 nd allowed after 2020 rs bela anta wtg 1-60 wind 120 nd allowed after 2020 rs la piccolina vetro-2 wtg wind 120 nd allowed after 2020 rs kovin wellbury wtg 1-94 wind 188 nd allowed after 2020 rs dolovo wtg wind 350 nd allowed after 2020 rs vranje solar pv solar pv 10 nd allowed after 2020 • nd = no data international journal of sustainable energy planning and management vol. 18 2018 27 youssef almulla, eunice ramos, francesco gardumi, constantinos taliotis, annukka lipponen and mark howells t ab le a 9 : m in im u m e nv ir on m en ta l fl ow l ev el a t d if fe re n t se gm en ts o f th e d ri n a r iv er a n d i ts t ri b u ta ri es c ou n tr y h yd ro lo gi ca l st at io n r s -b ih re g. f b ih r eg . s er b ia r eg . m n e r eg . a ll m ay n ov a ll th e to to th e ye ar o ct ( a) a p r (b ) ye ar ja n f eb m ar a p r m ay ju n ju l s ep o ct n ov d ec r s -b ih u pp er d ri na ( b aš ta si ) 21 .7 14 .3 21 .5 14 .3 r s -b ih u pp er d ri na ( f oc a m os t) 28 .2 19 .3 28 .9 19 .3 s r b /r s -b ih m id dl e d ri na ( b aj in a b aš ta ) 54 .5 33 .4 50 .2 33 .4 s r b /r s -b ih l ow er d ri na ( r ad al j) 57 .2 36 .5 54 .7 36 .5 s r b /r s -b ih l ow er d ri na ( b ad av in ci ) 37 .4 56 .5 37 .4 m n e u pp er l im ( p la v) 3. 6 3. 6 3. 6 3. 6 8. 2 3. 6 3. 6 3. 6 3. 6 3. 6 3. 6 m n e u pp er l im ( b ij el o p ol je ) 10 .4 10 .4 10 .4 25 .2 10 .4 10 .4 10 .4 10 .4 10 .4 10 .4 10 .4 s r b m id dl e l im ( b ro da ve ro ) 10 .5 6. 9 s r b m id dl e l im ( p ri bo j) 18 .2 9. 2 13 .8 9. 2 m n e u pp er c eh ot in a (p lj ev lj a) 1. 3 1. 3 1. 3 1. 3 1. 3 1. 3 1. 3 1. 3 1. 3 1. 3 1. 3 m n e m id dl e c eh ot in a (g ra da c) 2. 1 2. 1 2. 1 4. 3 2. 1 2. 1 2. 1 2. 1 2. 1 2. 1 2. 1 r s -b ih l ow er c eh ot in a (v ik oc ) 2. 5 r s -b ih m id dl e s ut je sk a (i go ce ) 1. 9 r s -b ih m id dl e b is tr ic a (o pl az ic i) 1. 4 s r b u pp er j ad ar ( z av la ka ) 0. 31 s r b l ow er j ad ar ( l es ni ca ) 0. 83 s r b m id dl e u va c (r ad ij ev ic i) 0. 82 m n e u pp er p iv a (d us ki m os t) 1. 8 1. 8 1. 8 5. 8 6. 0 1. 8 1. 8 1. 8 1. 8 4. 8 1. 8 m n e l ow e p iv a (s ce pa n p ol je ) 12 .7 12 .7 12 .7 29 .2 30 .2 12 .7 12 .7 12 .7 12 .7 12 .7 12 .7 m n e u pp er t ar a (c rn a p ol ja na ) 2. 33 1. 1 3. 17 5. 01 3. 05 1. 1 1. 1 1. 1 1. 1 2. 96 3. 73 m n e l ow er t ar a (s ce pa n p ol je ) 13 .7 13 .7 13 .7 28 .8 32 .2 13 .7 13 .7 13 .7 13 .7 13 .7 13 .7 i i w r m c an b e de fi ne d as ‘ a p ro ce ss w h ic h p ro m o te s th e co o rd in a te d d ev el o p m en t a n d m a n ag em en t o f w a te r, l a n d a n d r el a te d r es o u rc es i n o rd er t o m a xi m iz e ec o n o m ic a n d s o ci a l w el fa re i n a n e q u it a b le m a n n er w it h o u t co m p ro m is in g t h e su st a in a b il it y o f vi ta l ec o sy st em s’ [ 14 ] ii t ar ge t 6. 5: “ b y 20 30 , im pl em en t in te gr at ed w at er r es ou rc es m an ag em en t at a ll l ev el s, i nc lu di ng t hr ou gh t ra ns bo un da ry c oo pe ra ti on a s ap pr op ri at e” ii i n um be r m ay v ar y be tw ee n so ur ce s, e .g . w b if r ep or ts a t ot al b as in a re a of 1 9, 68 0 k m 2 [2 4 ]. iv t hi s de pe nd s on t he i m po rt an ce o f th e po w er p la nt s in t he o ve ra ll m ix a nd h ow m uc h th ei r ge ne ra ti on c on tr ib ut es t o th e de m an d. v b as ed o n co ns ul ta ti on s w it h lo ca l ex pe rt s [5 3] , th e d ea d s to ra ge ( m in im um r es er vo ir l ev el ) is a ss um ed t o co rr es po nd t o 10 % o f th e re se rv oi r to ta l ca pa ci ty . vi d if fe re nt s ou rc es h av e di ff er en t es ti m at es o f th e to ta l in st al le d ca pa ci ty i n th e d ri na b as in , i. e. [ 44 ] st at es t ha t th e to ta l hy dr o ca pa ci ty i n d ri na b as in i s 19 32 m w . it a ls o st at es t ha t b aj in a b aš ta p um p st or ag e ha s 60 0 m w tu rb in e ca pa ci ty a nd 5 80 m w p um pi ng c ap ac it y. vi i t he r es er vo ir i s lo ca te d in t he b el i r za v r iv er c at ch m en t ar ea b ut t he p s h p p p ow er ho us e is l oc at ed n ex t to t he ‘ b aj in a b aš ta ’ h p p p ow er ho us e. vi ii o nl y re -d is tr ib ut io n oc cu rs b et w ee n di ff er en t m on th s w it hi n ev er y ye ar . ix b as ed o n di sc us si on w it h st ak eh ol de rs d ur in g th e ne xu s di al og ue s [5 3] a nd c om pa ri ng t he h is to ri ca l an nu al v ar ia ti on o f el ec tr ic it y tr ad e in e ac h co un tr y be tw ee n (2 00 8 – 20 14 ) [6 0] . x t he e ne rg y ef fi ci en cy m ea su re s co ns id er ed i n th e e e a p a ss um es n o ch an ge s in h yd ro lo gi ca l co nd it io ns . xi t he t ot al p la nn ed c ap ac it y is 3 86 m w b ut w il l be i ns ta ll ed o n di ff er en t ph as es s ta rt in g by 2 5m w i n ph as e 1 (s ee t ab le a 8 ). xi i a lt ho ug h th e su bm it te d n d c d oe s no t sp ec if y cl ea r ta rg et s fo r th e po w er s ec to r, t he i nt en de d m ea su re s in di ca te s si gn if ic an t co nt ri bu ti on o f th is s ec to r. xi ii t hi s is t he u nc on di ti on al e m is si on r ed uc ti on t ar ge t of b os ni a an d h er ze go vi na . t he c on di ti on al t ar ge t ai m s at 3 % e m is si on r ed uc ti on b y 20 30 c om pa re d to t he b as el in e (b a u ) sc en ar io . xi v s in ce t he e le ct ri ci ty s ys te m s of t he d ri na r iv er b as in c ou nt ri es a re m od el le d in t hi s an al ys is , t he p ri ce s of e le ct ri ci ty t ra de d be tw ee n th e th re e co un tr ie s ar e de ci de d by t he m od el b as ed o n th e op ti m is at io n of t he o ve ra ll s ys te m . 1. 2060-6983-1-le.qxd abstract this editorial introduces the 14th volume of the international journal of sustainable energy planning and management, which addresses transition pathways for sweden’s transportation sector, and for the west african power system towards low-carbon. also, industrial symbiosis with the aim of providing district heating in aalborg and prerequisites for energy transitions are addressed. 1. contents this editorial introduces the 14th volume of the international journal of sustainable energy planning and management. in [1], bramstoft & skytte investigate pathways for transitioning sweden’s transportation system to renewable energy. they create two alternatives based on a) a high degree of electrification and b) based on biofuels. using the energy systems analyses model steam, the authors investigate the effects from an overall energy systems approach, finding that the electric vehicle scenario presents the most cost-optimal solution with costs lower than a reference scenario whereas the bio scenario results in costs marginally higher than the reference scenario. momodu [2] investigate the trade-off between economic development and low-carbon pathways in west africa using the electricity planning-low carbon development model. the cost of establishing international journal of sustainable energy planning and management vol. 14 2017 1 a low-carbon development pathway for west africa is estimated at us$ 1.54 trillion over the coming 50 years. sacchi & ramsheva [3] investigate industrial symbiosis in aalborg, denmark, exemplified by the uptake of excess heat from industry to be delivered to the district heating network. they find amongst others, that additional excess heat may be harvested and used in district heating. in the most ambitious scenario, the carbon footprint by is reduced by 90% – albeit at the same time also resulting in 41% increased customer expenditures. in [4], selvakkuramen & ahlgren present a study of energy transitions described in the existing academic literature. analysing a total of 36 articles – what they describe as 18 core and 18 peripheral papers – the authors apply strategic niche management theory and multi-level perspective to analyse the transitions. they find, however, that the framework does not fully describe the transitions. * corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 14 2017 01–02 editorial – international journal of sustainable energy planning and management vol 14 ��������� ��� � �� �� ���������� � � ������� �� � �� ����������� ������������� ��� ���� �� � ��� ������� keywords transportation; industrial symbiosis; low-carbon pathways; energy transition; url: dx.doi.org/10.5278/ijsepm.2017.14.1 2 international journal of sustainable energy planning and management vol. 14 2017 editorial international journal of sustainable energy planning and management vol 14 references [1] bramstoft r, skytte k. decarbonizing the swedish transport sector with electricity or biofuels. int j sustain energy plan manag 2017;14:3–y. http://dx.doi.org/10.5278/ijsepm.2017.14.2. [2] momodu as. energy use: electricity system in west africa and climate change impact. int j sustain energy plan manag 2017;14:x-y. http://dx.doi.org/10.5278/ijsepm.2017.14.3. [3] sacchi r, ramsheva yk. the effect of price regulation on the performances of industrial symbiosis: a case study on district heating. int j sustain energy plan manag 2017;14:x-y. http://dx.doi.org/10.5278/ijsepm.2017.14.4. [4] selvakkumaran s, ahlgren e. understanding the local energy transitions process: a systematic review. int j sustain energy plan manag 2017;14:x-y. http://dx.doi.org/10.5278/ijsepm. 2017.14.5. << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedjoboptions true /dscreportinglevel 0 /emitdscwarnings false /endpage -1 /imagememory 1048576 /lockdistillerparams false /maxsubsetpct 100 /optimize true /opm 1 /parsedsccomments true 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<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> >> >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1336-4454-1-le.qxd 1. biogas two of the articles presented in this volume address biogas, however from different approaches. mukherjee et al. [1]address the issue of anaerobic digestion of manure for energy production, pointing out that agriculture while having a large role as greenhouse gas emitter also may play a role in greenhouse gas emission mitigation through the production of energy. one factor working against anaerobic digestion however is the required scale of operation, and while certain european countries have deployed centralized anaerobic digesters shared among groups of farmers, there is little experience with this n the united states. the authors find that “most of the time, cad [centralized anaerobic digesters] locations are chosen based on non-economic considerations” while proposing a combination of gis and mixed integer programming to address the location issue for a case study in connecticut. through their analyses, the authors find that cad are economically attractive to individual anaerobic digesters. international journal of sustainable energy planning and management vol. 08 2015 1 international journal of sustainable energy planning and management vol. 08 2015 1-2 editorial international journal of sustainable energy planning and management vol 8 �������� ��� � ��� �� ������� ������� � �������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� abstract this editorial introduces the eight volume of the international journal of sustainable energy planning and management. the volume addresses economically optimal biogas facilities based on spatial analyses in the united states, and analyses of the role of municipalities in expanding biogas in denmark. a large review article looks into community renewable energy networks, and finally support schemes for renewable energy production are analysed with cases from denmark and south africa. keywords: biogas; community renewable energy networks; support schemes for renewable energy url: dx.doi.org/10.5278.ijsepm.2015.8.1 1 corresponding author e-mail: poul@plan.aau.dk lybæk and kjær [2] address anaerobic digestion or biogas technology in their words based on analyses of the role of municipalities in advancing the use of biogas in denmark. denmark already has 25 cad with the first being established more than 30 years ago in 1984 and presently 46 farm biogas plants, however national plans propose to increase biogas production from manure from approximately 2.5 pj per year to 20 pj per year by the year 2020. municipalities play a triple role as energy consumers, regulators and facilitators and of these three, the authors stress the importance of the facilitator role in the further deployment of biogas and they also argue for the inclusion of biogas in municipal strategic energy planning. 2. community renewable energy networks tomc & vassallo [3] reviews the current body of scientific literature on community renewable energy systems, arguing for the transition from traditional radial electricity systems to bi-directional local energy systems 2 international journal of sustainable energy planning and management vol. 08 2015 editorial international journal of sustainable energy planning and management vol 8 with local resilience. notably, they mainly focus on electricity systems and smart grids as opposed to e.g. smart energy systems, as suggested in [4]. they probe into the technical components – solar, wind, hybrid generation, electric vehicles, geothermal – of such systems and finally the social aspects, where they label a top-down approach to the transition task “a sisyphean task” and that “a bottom-up approach like the one implied in cren [community renewable energy networks] is more likely to provide the required change on a more stable basis, for a longer time horizon than an average electoral cycle.” 3. incentive schemes for renewable energy in the last article of the volume, toke [5] probes into two support schemes applied to advance renewable energy deployment – mainly wind power – with cases from denmark and south africa. toke forwards the interesting and important conclusion that “cost reductions that are associated with renewable energy auctions are not caused by the auction systems themselves, but rather are associated with general declines in the costs of renewable energy technologies”. references [1] mukherjee d, cromley r, shah f, bravo-ureta b optimal location of centralized biodigesters for small dairy farms: a case study from the united states. int j sustain energy plan manage 8(2015) pages 3–16. http://dx.doi.org/10.5278/ ijsepm.2015.8.2. [2] lybæk r, kjær t mucipalities as facilitators, regulators and energy consumers: enhancing the dissemination of biogas technology in denmark. int j sustain energy plan manage 8(2015) pages 17–30. http://dx.doi.org/ 10.5278/ ijsepm.2015.8.3. [3] tomc e, vassallo am community renewable energy networks in urban contextx: the need for a holistic approach. int j sustain energy plan manage 8(2015) pages 31–42. http://dx.doi.org/10.5278/ijsepm.2015.8.4. [4] lund h, andersen an, østergaard pa, mathiesen bv, connolly d from electricity smart grids to smart energy systems a market operation based approach and understanding. energy 42(1)(2012) pages 96–102. http://dx.doi.org/10.1016/j.energy. 2012.04.003. [5] toke d. renewable energy auctions and tenders: how good are they? int j sustain energy plan manage 8(2015) pages 43–56. http://dx.doi.org.10.5278.ijsepm.2015.8.5 http://dx.doi.org/10.5278/ijsepm.2015.8.2 http://dx.doi.org/10.5278/ijsepm.2015.8.2 http://dx.doi.org/ 10.5278/ijsepm.2015.8.3 http://dx.doi.org/ 10.5278/ijsepm.2015.8.3 http://dx.doi.org/10.5278/ijsepm.2015.8.4 http://dx.doi.org/10.1016/j.energy. 2012.04.003 http://dx.doi.org.10.5278.ijsepm.2015.8.5 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1574-5580-1-le.qxd abstract it is often highlighted how the transition to renewable energy supply calls for significant electricity storage. however, one has to move beyond the electricity-only focus and take a holistic energy system view to identify optimal solutions for integrating renewable energy. in this paper, an integrated cross-sector approach is used to argue the most efficient and least-cost storage options for the entire renewable energy system concluding that the best storage solutions cannot be found through analyses focusing on the individual sub-sectors. electricity storage is not the optimum solution to integrate large inflows of fluctuating renewable energy, since more efficient and cheaper options can be found by integrating the electricity sector with other parts of the energy system and by this creating a smart energy system. nevertheless, this does not imply that electricity storage should be disregarded but that it will be needed for other purposes in the future. abbreviations caes compressed air energy storage chp cogeneration of heat and power nas natrium sulphur (sodium sulphur) electricity storage phs pumped hydro storage international journal of sustainable energy planning and management vol. 11 2016 3 large-scale integration of renewable energy into the energy system calls for a new magnitude of energy storage. especially within the electricity supply, a smart grid approach has focused on the need for electricity storage [1–3] in combination with flexible electricity demand and the expansion of transmission lines to neighbouring areas [4]. sometimes it is even stated that renewable energy is not a viable option unless electricity can be stored [5]. similarly, locatelli et al. state “electrical energy storage systems (ess) are one of the 1 corresponding author e-mail poul@plan.aau.dk international journal of sustainable energy planning and management vol. 11 2016 3-14 energy storage and smart energy systems ������� ��� ��� �������������������� ���������������� ������������ � �����!���"��#������ $���������%� ��� �&�����'��(��)#��� *���� �������+����,�� � ������ �� ���� ��� �� ���� ��� �� ���� ������ � ������� � ������ �� ���� ��� ���� ������ !� � ��� �"�� ��#��$� �� � � ������� key words: smart energy systems energy storage renewable energy heating transportation url: dx.doi.org/10.5278/ijsepm.2016.11.2 1. introduction the transition from a fossil fuelto a renewable energybased energy system is a change from utilising stored energy to tapping fluctuating energy sources that must be harvested when available, and either used instantaneously, or stored until the moment of use. dealing with this basic condition of the ongoing system change, it is often highlighted how a transition into a 100% renewable energy supply or even less ambitious 4 international journal of sustainable energy planning and management vol. 11 2016 energy storage and smart energy systems most suitable solutions to increase the flexibility and resilience of the electrical system”[6] and tan et al. “point out smart [..energy storage systems] is a promising technology for [..micro grid] and smart grid applications” [7]. a key problem with much of the literature in relation to storage and renewable energy systems is their tendency to focus only on the generated fluctuating electricity and its direct storage from a smart grid approach. even though the term smart grid can refer to different types of grids, it has for many years been associated exclusively with smart electricity grids, while other potential smart grid types, gas and thermal have been neglected. electricity storage is and will be an important part of the renewable energy system puzzle but electricity’s conversion to different storable and transportable energy carriers is crucial in order to transit to 100% renewable energy supply. the overall design of the energy system needs to be rethought as for the integration of flexible generation, different conversion technologies and grid solutions. therefore, in order to identify the best solutions one has to move beyond the simple smart grid approach and take a more holistic view as suggested by some authors [8–12]. electricity storage [13], flexible electricity demand [14] and transmission capacity [15] have either limited integration capacity or are associated with higher costs or actual opposition as in the case with transmission grid expansion [16]. 2. scope, methodology and structure this paper investigates the most efficient and least cost storage options as a part of a smart energy systems approach, as defined in [17]. by using this approach it is explained why the best storage solutions can be found by integrating the individual sub-sectors of the energy system. one of the main reasons why a cross-sector approach can identify more economically viable solutions is the cheaper and more efficient storage technologies that exist in the thermal and transport sectors, compared to the electricity sector. the paper is written as a synthesis of the authors’ previous research within the field, thus putting forward and integrating analyses and results into a comprehensive line of argument investigating first storage in different parts of the energy system, then size and cost of storage in the energy system followed by the role of thermal storage in smart energy systems. the discussion is broadened to the integration of cooling, transportation and biomass into the energy system, ending with findings on what can be accomplished at an energy systems level by utilising a smart energy systems approach with proper use of storage. for optimal system configurations, all potential decision variables should be considered using some sort of heuristics [18], however this article focuses on the potential role of storage across the energy system as well as the benefits from integrating traditionally separate parts of the energy system – without locating specific optimal system configuration. 3. electric, thermal, gas and liquid energy storage this section looks in to electric, thermal, gas and liquid storage from an investment, efficiency and sizing perspective. 3.1 cost and efficiency of energy storage options there is a fundamental cost difference between storing electricity and storing other forms of energy. here electricity storage is defined as a storage in which inputs and outputs are electricity even though typically electricity is converted to other forms of energy in the process. figure 1 shows the typical cost of electricity storage compared to thermal, gas and liquid fuel storage technologies. there is a variety of different technologies and sizes within each type of energy storage, which influences the investments and operation and maintenance costs. even though the exact costs vary, the magnitude of these differences does not change significantly, with the costs indicating that thermal storage is 100 times cheaper in terms of investments per unit of storage capacity, compared to electricity storage. moreover, gas and liquid fuel storage technologies are again substantially lower in investments than a thermal storage per unit of storage capacity. note that the costs for these latter are based on underground natural gas caverns and oil tanks, however in a future renewable energy system this can also be methane or methanol produced from biomass and hydrogen from electrolysis or similar sorts of renewable energy-based fuels [19]. in addition to the investment issue, electricity storage is prone to significantly higher losses than any of the other types of energy storage, particularly in conversion losses. gas caverns and oil tanks have practically nil loses; thermal storage has losses of maybe 5 percent depending heavily on size and retention time – however as electricity in almost all instances include conversion to and from the storage, losses are much more significant here. as a consequence of investment costs and losses, the economic feasibility of electricity storage technologies depends highly on the variation in electricity prices, typically on a daily basis. however, the nature of fluctuating renewable electricity sources, such as wind power, does not typically generate such price variations. therefore even in a system with a high share of wind power, such as the danish case, studies show that investments in electricity storage are not feasible for the simple reason that the storage will not be used often enough to justify the relatively high initial investments [20]. figure 2 shows how the per-use-cycle annualized investment costs of storing different forms of energy vary with the number of use cycles per year. the diagram is based on large storage technologies and shows how investment in electricity storage capacity in general requires annual cycles of at least 300-350 (equal to nearly once a day) to be able to match the cost of producing renewable energy as indicated by the hatched area. when comparing the cost of storing to the cost of producing renewable energy it should be noted that even though the electricity storage investment costs at e.g. 400 cycles per year are below the upper cost range of producing renewable energy, these storage costs include the purchasing of power to fill the storage and the operation and maintenance of the storage – nor the storage or conversion losses involved. thus even without losses and if there is a freely available electricity source, initial investment costs in electricity storage are so high that power from the storage will only be on par with renewable electricity production if used nearly daily. on the other hand, thermal storage investments and especially gas and liquid fuel storage are also feasible when storing energy with significantly fewer annual cycles. here energy can be stored for weeks, months and even years due to investment costs which are even smaller. thus, the feasibility of these other energy storage technologies is much better, especially when the energy system is rearranged to connect renewable energy to thermal, gas and/or liquid storage technologies. clearly, electricity storage has a more direct effect on the ability of the energy system to integrate fluctuating renewable electricity sources such as wind power [21], so a comparison cannot be made simply based on investment costs, cycle efficiencies and investment costs per cycle as shown in figures 1 and 2. the electricity system needs to be balanced at all times but to the extent possible other international journal of sustainable energy planning and management vol. 11 2016 5 henrik lund, poul østergaard, david connolly, iva ridjan, brian mathiesen, frede hvelplund, jakob thellufsen, peter sorknæs 1,000,000 100,000 10,000 p ri ce ( e/ m w h s to ra g e c a p a ci ty ) e ff ic ie n cy 1,000 100 10 1 100 90 80 70 60 50 40 30 20 10 1 electricity phs thermal gas cavern liquid fuel price cycle efficiency 40 35 30 25 20 10 5 0 number of cycles per year c o st p e r cy cl e ( € /m w h s to ra g e c a p a ci ty ) 0 50 100 150 200 250 300 350 400 15 gas liquid res production electricity thermal figure 1: investment cost and cycle efficiency comparison of electricity, thermal, gas and liquid fuel storage technologies. see assumptions, details and references in appendix 1. figure 2: annualized investment cost per use-cycle vs annual numbers of use-cycles. in the diagram the cost is also benchmarked against the cost of producing renewable energy, here shown for a wide cost span by grey (extension along horizontal axis is for presentation only; there is no cyclic dependence for renewable energy production). see assumptions, details and references in appendix 1. storage types are more favourable as discussed as discussed later in this paper later in this paper. 3.2. community vs individual domestic storage figures 3 and 4 illustrate another important factor, namely that there is a large element of economy of scale in energy storage. figure 3 shows this point for thermal storage technologies by comparing a domestic 160 litre hot water tank with a 6000 m3 thermal storage used by a local cogeneration of heat and power (chp)-based district heating company [22]. again there is a factor of 100 difference between the investments, but this time due to scale rather than type. moreover one should note that the local chp plant in this case has a storage capacity equal to 4 m3 for each dwelling, whereas the maximum thermal storage installed with individual heating solutions is usually less than 1 m3. these individual solutions are typically restricted to 1 m3 due to the space required for the tanks. if even larger thermal storage capacity is considered, such as the seasonal thermal storage installed in recent district heating-connected solar thermal plants in denmark2, then the unit cost of thermal storage is reduced by an additional factor of approximately five compared to the unit cost of storage for a local chp plant. for the communal heat storages, this of course requires the presence of district heating systems which introduces additional heat losses in the system. in denmark, heat losses in district heating networks vary considerably from system to system depending mainly on geographic heat demand intensity, but losses are on average approximately 20%. efficiency improvements in the system outweigh these losses [23,24] and in the future, losses may be decreased by lowering the forward temperature of district heating grids [25]. figure 4 illustrates how this in principle is the same for electricity storage technologies, even though the economy-of-scale influence is not as substantial as for thermal storage. in addition, for gas and liquid fuel storage technologies, there is an element of economy of scale but it is not as important since the costs of these types of energy storage are already low compared to the other costs in the energy supply. furthermore, where charging and discharging facility costs for other types of energy storage are insignificant, these are costly for electricity storage. the important point is that, if the renewable energy system can be designed so that it avoids electricity storage altogether and instead utilizes energy that can be stored in the form of thermal, gaseous or liquid fuels, and if this can be implemented at community level rather than in individual dwellings, then it will be more feasible to develop the storage capacity needed to integrate a high share of fluctuating electricity production such as wind, wave, and solar power. of course, this may come with a cost in terms of losses in energy conversion, however, these are inevitable, not only in wind or solar power integration, but in general to meet heating, cooling and transport needs in a 100% renewable energy supply [26–32]. if it is accepted that these losses are inevitable when covering heating, cooling 6 international journal of sustainable energy planning and management vol. 11 2016 energy storage and smart energy systems 1,000,000 p ri ce ( e/ m w h ) 100,000 10,000 1,000 160 litre 4 m3 6200 m3 200.000 m3 100 10 1 p ri ce ( e/ m w h ) sodium-sulphur battery 50 mw caes 350mw pumped hydro 1000mw 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 0 100,000 tesla powerwall fully installed 3.3kw figure 3: investment cost comparison of different sizes of thermal energy storage technologies. the sizes correspond to storages for a dwelling, a larger building, a chp plant and a solar dh system (see footnote 2). see assumptions, details and references in appendix 1. figure 4: investment cost comparison of different sizes of electricity energy storage technologies. see assumptions, details and references in appendix 1. 2 marstal with 2306 inhabitants on the island of ærø has two pit stores of 10,000 m3 and 75,000 m3 respectively [80]. vojens (7655 inhabitants) has recently inaugurated a 203,000 m3 pit storage [81]. dronninglund (3328 inhabitants) has a 60,000 m3 pit storage[82]. all population sizes from 2014 according to [83]. to eliminating the need for space heating is both technically challenging and very costly, especially as the heat demand nears zero. therefore an essential question in the design of holistic least-cost solutions in the heating sector is to identify to which extent energy should be saved and to which extent renewable energy should be supplied as well as to which extent individual solutions should be used and to which extent communal systems like district heating should be used. in this context, not only do heat savings need to be implemented in the future, it is also important to consider how the heat supply should be provided for buildings. many recent research and demonstration projects have also focused on the concept of a zero energy buildings [38,39], however in order to reach these objectives one and transportation demands with wind and solar power, then the losses are not occurring due to the storage of the energy, but due to the conversion of energy from electricity to heat, cooling or transportation. however, in order to identify the best and the least-cost solutions, a holistic smart energy systems approach has to be adopted. 4. smart energy systems smart energy systems may be defined as “an approach in which smart electricity, thermal and gas grids are combined and coordinated to identify synergies between them in order to achieve an optimal solution for each individual sector as well as for the overall energy system” [17]. such systems encompass new technologies and infrastructures, which create new forms of flexibility, primarily in the conversion stage of the energy system. the flexibility is achieved by transforming from a simple linear approach in today’s energy systems (i.e. fuel to conversion to end-use), to a more interconnected approach as shown in figures 5 and 6. in simple terms, this means combining the electricity, thermal, and transport sectors so that the flexibility across these different areas can compensate for the lack of flexibility from renewable resources such as wind and solar. heat pumps in the system provides a key conversion technology between electricity and the heating sector [33–35], which combined with heat storage and the thermal mass of buildings provides flexibility for the integration of fluctuating res-based electricity sources. similarly, electric vehicles provides the possibility of not only a dispatchable demand but also actual electricity storage that may be fed back to the grid [36,37]. electrofuels create a link between the electric system and transportation, so intermittent electricity production can be connected to large-scale fuel storage. additionally, the production cycle generates heat for the heating sector thus integrating across three traditionally separate sectors. note that figure 6 does not fully portray the complexity of smart energy systems to the fullest extent possible as the smart energy system is about integrating all sectors of the energy system and exploiting synergies across these. the following sections probe further into heating, cooling and transportation, and options for adding flexibility to the smart energy system. 4.1. smart heating and cooling although it is widely accepted that the heat demand will be reduced in the future, the steps of going all the way international journal of sustainable energy planning and management vol. 11 2016 7 henrik lund, poul østergaard, david connolly, iva ridjan, brian mathiesen, frede hvelplund, jakob thellufsen, peter sorknæs combustion engines fuel storage mobility electricity cooling heating power exchange electricity storage power plantsfossil fuel boilers resources conversion demands figure 5: today’s energy systems characterised by linear paths from fuel to energy demands mobility (partly) flexible electricity cooling heating solar etc. bioenergy fuels combined heat & power power exchange resources conversion demands heat pump fluctuating heat fluctuating electricity thermal storage wind etc. fuel storage electric vehicles electro fuels combustion engines electricity storage figure 6: the integrated smart energy systems has to include building-integrated energy supply, typically solar thermal and photo voltaic. the best solution will not be found if one considers these supplies as a part of the building; the least-cost design can only be found from a holistic smart energy approach [40]. the integration of the heating and cooling sector with electricity enables a higher fuel efficiency and increasing the share of fluctuating resources resulting in more efficient system and least-cost solutions. this becomes of even higher importance as the share of fluctuating electricity is increased towards 100% renewable energy systems. studies for several individual countries in europe [41] as well as the study heat roadmap europe [23,42] at the european union level, have reached the conclusion that the least-cost way to supply heating is to combine heat savings with district heating in urban areas and individual heat pumps in rural areas. these studies also indicate that an optimal solution is to be found if savings are implemented to the level of decreasing current average heating demands by approximately 50%, although the exact number differs a bit from country to country. the reason for applying district heating in the urban areas is that it enables obtaining the benefits of using waste heat from electricity production (chp) and industrial waste heat [43]. studies show that in the current system in europe, the waste heat from electricity generation and industry is almost the same as the total heat demand of europe [23]. as a result, by using district heating, europe could replace half of its heating demand with waste heat and thereby save a similar share of the natural gas and oil which is currently consumed in domestic boilers. in the future as more and more wind and similar sources replace fossil-fuel based electricity production, parts of the waste heat will come from other sources such as industry, biomass conversion and electrolysis. moreover some heat will come from waste incineration, geothermal and largescale solar thermal plants. however studies illustrate how the integration of wind and other fluctuating renewable electricity sources using large-scale heat pumps and thermal storage will play an important role [35,44]. the important conclusion is that power-to-heat will form an important part of the heating sector in a future renewable energy system. this applies to individual heat pumps in houses outside urban areas as well as heat pumps in district heating networks in urban areas. similar conclusions have been made with regard to cooling [45]. one might say, that power-to-heat technology combined with dedicated heat storage or the thermal mass of buildings provide a virtual electricity storage; it can be charged when there is a high availability of renewable electricity and while it cannot be discharged back onto the grid, loads can be deferred when there is a low availability of renewable electricity. this means that to a large extent there is the option to store renewable electricity as thermal energy at a low cost rather than at a relatively high cost in dedicated electricity storage. it will not involve any further conversion losses other than the inevitable ones that have to be accepted in any case to provide for our heating and cooling needs in the least-cost way. furthermore, this also provides the option of increasing the integration of renewable electricity such as wind by investing in additional heat pump capacity or to some extent also in less efficient but cheaper electric boiler capacity. 4.2. smart biomass and transportation in order to satisfy our transport needs in a future 100% renewable energy system with restricted biomass resources due to their high demand for various purposes [46–48], different power-totransport options will play an important role [49,50]. in fact, electrification of the transport sector will form one of the most viable ways of ensuring balance between production and demand in the electricity system [51]. however not all transport demands can be satisfied by direct use of electricity and parts of the sector such as long-distance transportation, marine and aviation will continue to rely on gaseous and/or liquid fuel that will have be produced from available renewable energy resources. in order to solve this challenge creating an additional link between the electricity sector and transport is needed. electrofuels [52] can store electricity in the form of liquid or gaseous fuels and hereby create flexibility in the system while meeting the demands of heavy-duty transport. in the process, fluctuating electricity is converted into hydrogen by the use of electrolysis and subsequently the hydrogen reacts with a carbon source from biomass (biogas or synthetic gas) or even from co2 emissions [53] to produce methane, methanol or other preferable fuels. this enables renewable electricity storage as a gas or liquid fuel, which represents a relatively low-cost option in comparison to complex electricity storage and at the same time it provides the option of increasing the 8 international journal of sustainable energy planning and management vol. 11 2016 energy storage and smart energy systems international journal of sustainable energy planning and management vol. 11 2016 9 henrik lund, poul østergaard, david connolly, iva ridjan, brian mathiesen, frede hvelplund, jakob thellufsen, peter sorknæs integration of wind or other fluctuating resources by investing in additional electrolysis capacity [19]. as with heating, the intention is not to supply back to the grid, but to create a deferrable load, and the conversion losses are inevitable as the energy demands for transportation needs to be meet using renewable energy sources either way. nastasi and basso go as far as stating “the powerto-gas option by renewable hydrogen production could solve the dispatch issues related to a wide deployment of res storage devices and their priority on the energy market”[54] 4.3. the overall system studies of complete regional, national or european energy transitions following the principles of a smart energy systems approach have demonstrated that it is possible to design 100% renewable energy systems where production and demand of renewable energy is balanced not only on a yearly basis but also on an hourly basis [28,30,55]. such high-temporal resolution energy systems analyses have been conducted using the energyplan model [56,57] taking into account all types of energy (electricity, heating, cooling, electrofuels and other renewable energy fuels), conversion technologies between the sectors and hourly balance has been established using thermal, gaseous and liquid fuel storage. a smart energy systems approach is also required to ensure the economic viability of future renewable energy-based energy systems. as noted in [58], wind power has the tendency to drive down spot market prices of electricity, thus undermining the very feasibility of wind power. photo voltaics have the same effect, though the current implementation is not comparable to that of wind power in denmark yet. a smart energy system with many deferrable loads across heating, cooling and transportation will thus increase the value of fluctuating renewable power generation. 5. conclusion the issue of energy storage is essential when discussing how to implement the large-scale integration of renewable energy both into the current system and in a future transition to a 100% renewable energy supply. a sub-sector electricity-only focus as has been seen from a smart grid approach typically leads to proposals primarily focused on electricity storage technologies in combination with flexible electricity demands and transmission lines to neighbouring countries. however, this paper argues that this will lead to the most expensive form of energy storage, electricity storage, which is approximately 100 times more expensive than thermal storage and even more expensive than storage for gases and liquids. it is therefore a cheaper and also a more efficient solution to utilise thermal and fuel storage technologies to integrate more fluctuating renewable energy, such as wind and solar power, than to rely on electricity storage. this however, requires a strong integration across traditionally separate energy sectors. thus, this paper has indicated how this cross-sector smart energy systems approach can lead to the identification of better and much cheaper options in terms of thermal, gas and liquid fuel storage in combination with cross-sector energy conversion technologies. heat pumps, which can be in each building in the rural areas or in district heating system in the urban areas, can connect the electricity sector to thermal storage, while electric vehicles and electrofuels can connect the electricity sector to storage in the transport sector. using these more efficient and cheaper options, it is unlikely that the other options in the electricity sector will be required solely for the integration of renewable energy. in fact, studies show that large electricity storage capacity is not economically viable for this sole purpose within any of the steps between now and a future 100% renewable energy supply. in conclusion, for the large-scale integration of fluctuating renewable electricity sources, electricity storage should be avoided to the extent possibleis and other storage types provide an option for system balancing and flexibility while having lower costs. direct electricity storage may be needed for other reasons but should not be prioritized if the aim is to 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[83] statistics denmark. statbank denmark 2016. http://www.statistikbanken.dk/statbank5a/selectvarval/define.as p?maintable=bef44&tabstrip=select&planguage=1&ff=20. international journal of sustainable energy planning and management vol. 11 2016 13 henrik lund, poul østergaard, david connolly, iva ridjan, brian mathiesen, frede hvelplund, jakob thellufsen, peter sorknæs appendix 1: assumptions for figures all data shown in figures 1-4 are shown in tables 1 and 2 below along with references for the data. columns 36 in table 1 are only relevant for figure 2 and the technologies included there. comment on annual costs all annual costs are calculated as an annuity of the investment based on a discount rate of 3 percent per year and the given lifetime plus fixed annual operation and maintenance (o&m) costs. comments on electrical storage nas storage is based on a ratio between installed discharge capacity and storage capacity of 6h in line with [60, 67]. compressed air energy storage (caes) is based on a 360 mw / 1478 mwh plant. phs costs vary considerably from site to site. a german plant is priced at about 100,000 €/mwh [68], electric power research institute lists a range from 4,40,000 to 6,00,000 us$/mwh or 3,30,000-4,60,000 €/mwh [60] at the average exchange rate of 0.755 us$/€ in 2010 [69]. as with nas, this is based on a ratio between installed discharge capacity and storage capacity of 6h. it should be noted that phs is by far the most used grid-connected electricity storage technology with 153 gw out of 154 gw globally [70]. only two caes plants are in operation – albeit both in the >100mw size range [70]. nas experienced a ten-fold increased from on 2,000 to 2,006 thus a technology with significant development [70]. efficiencies given in [71] for phs are 70-80%, [60] list cycle efficiencies as 80-82% and [72] list efficiencies from 76 to 85% depending on design. comments on thermal storage all thermal storages are calculated based on a δt=60k corresponding to a specific contents of 70 kwh/m3. the danish energy agency[71] list specific contents for large steel storage tanks and seasonal pit storages as 6080 kwh/m3. the 6200 m3 tank is an actual storage of skagen district heating company in denmark. the danish energy agency lists costs for large steel tanks for district heating at 160-260€/m3 [71] corresponding to 2,300-3,700 €/ mwh. costs of the 160 litre and the 4 m3 tanks are based on actual bids from a supplier including installation costs. the danish energy agency lists small tanks (150-500 l) at around 4€/ l though this cost does not include installation costs [71]. this corresponds to 57,000€/mwh comment on gas storage the costs are based on a gas cavern. for comparison, a five-cavern plant in denmark with 5*100 million nm3 equivalent to a total of 5.5 twh costs 254 m€ or 46€/mwh [71] comment on fuel storage storage costs vary according to local conditions including e.g. size and number of tanks, potential jetty construction, tank foundation details based on soil conditions. based on actual tanks of oiltanking copenhagen, prices are in the 200-250 €/m3 range. comment on production costs for renewable energy as noted by [73], “cost projections [of wind, solar] are abundant [..] although with high uncertainties attached”. investigating data from the danish energy authority and the danish transmission system operator energinet.dk on renewable energy technologies reveals a wide span of technology costs and thus production costs. the same technology costs are included from a 2012 assessment and a 2016 assessment to show how price expectations have changed with decreasing costs from on-shore wind but increasing costs off-shore. photo voltaics on the other hand have experienced a significant decrease over the same period of time. for comparison, median scenarios for biomass prices in denmark show costs of 6.2 €/gj in 2015 and 7.1 €/gj in 2030 [74] cif3 danish harbour giving a marginal fuel cost of 50-57€/mwh for a biomass condensing power plant with an efficiency of 45%. coal with a september 2016 price of approximately 72 us$/t [75] (64€/t) has a fuel cost of approximately 18€/mwh based on a condensing mode power plant with an efficiency of 45%. average cif prices for industry in denmark in 2015 were 382 dkk/t [76] or 50€/t thus a fuel cost of electricity of 14€/mwh if coal prices for power plant are equal to coal prices for industrial coal users. in figure 6, renewable electricity production is shown as a band from 30 to 50 €/mwh.3 cost, insurance and freight. 14 international journal of sustainable energy planning and management vol. 11 2016 energy storage and smart energy systems table 2: wind and photo voltaic technology costs and production assumptions. total production costs are calculated based on the other columns (and are thus not calculated by the stated references). investment costs are calculated as an annuity using a discount rate of 3 percent. years (2015 and 2030) refer to prognoses for the two years. investment technical fixed variable total production cost source cost lifetime capacity o&m o&m ____________________ [€/mw] [years] factor [€/mw] [€/mwh] [€/mwh] [dkk/mwh] wind – large on-shore 2015 1400000 20 0.337 n.a. 14 40 298 [77] wind – large on-shore 2030 1290000 20 0.365 n.a. 12 34 254 [77] wind – large off-shore 2015 3100000 20 0.457 n.a. 19 61 457 [77] wind – large off-shore 2030 2300000 25 0.502 n.a. 16 49 366 [77] grid-connected pv 2015 2000000 30 0.091 n.a. 34 216 1620 [77] wind – large on-shore 2015 1070000 25 0.37 25600 2.8 31 236 [78] wind – large on-shore 2030 910000 30 0.38 22300 2.3 29 217 [78] wind – large off-shore 2015 3500000 25 0.5 72600 5.5 72 542 [78] wind – large off-shore 2030 2700000 30 0.53 55000 3.9 58 436 [78] large grid-connected pv 2015 1200000 30 0.122 12000 0 93 697 [79] large grid-connected pv 2030 820000 40 0.140 8160 0 72 539 [79] table 1: characteristics for storage technologies. storage type investment cost annual costs [€/mwh fixed o&m [€/mwh storage [% of lifetime storage cycle capapcity] investment] [years] capacity] efficiency electricity – phs [59] 175000 0.5 50 4387 0.80 electricity – nas [60] 600000 0.5 30 33612 0.85 electricity – caes [20] 125000 – – – – electricity – tesla [61] 660000 – – – – thermal – pit [62] 500 0.5 30 28.0 0.85 thermal – large tank [63] 2500 0.5 25 156 0.95 thermal – 4000 l [64] 24000 – – – – thermal – 160 l [64] 180000 – – – – gas [65] 60 0.5 50 2.6 0.98 liquid [66] 20 0.5 30 1.1 1.00 06.1017-3817-1-le.qxd 1. introduction increased focus on electrified transportation has an influence on power systems. charging and discharging of electric vehicles (evs) could help power plants to produce in a more steady pace, even though an increased amount of fluctuating renewables are infuencing the system. fortunately, optimising the charging from the power system point of view often corresponds to optimising from the vehicle owners point of view. hence, charging when experiencing high amount of free power producing capacity and prices are low and stop charging when low amount of free power producing capacity and prices are high. with an expected increase in ev penetration, we investigate the international journal of sustainable energy planning and management vol. 07 2015 71 benefits of entering the market and charging intelligently in response to market prices. from the vehicle owners' point of view, optimising the charging might include participating in the regulating market, hence, bidding capacities for upand down regulation. this requires enough battery capacity left for either upor down regulation, and, thus, has an influence on the planned charging at spot price. however, when planning the charging of the vehicle, the regulating prices are unknown and stochastic. we envision a vehicle aggregator that can place bids for a large group of vehicles. an aggregator can be compared to a cell phone company, monitoring and charging for the communication on the phone. these companies have international journal of sustainable energy planning and management vol. 07 2015 71-78 strategies for charging electric vehicles in the electricity market �������� ����� ������������ ���������� ����������������� ������������ ���� ����� � �������� � ��� � �� ��� ��� ������������ ���������� ����������������� ���!!!�"�����# ��� ������ $ ����%��&'� ��� ������������ ���������� ���������� ��������� ���()!!�* ���+�� $���� ������ ��� &���� ���������� ��������,�� �� ������� ���������%�& ��� ������� ���� ��&��� ��-��(.!!�%�& ��� �� ������ ������ abstract this paper analyses di erent charging strategies for a fleet of electric vehicles. along with increasing the realism of the strategies, the opportunity for acting on the regulating market is also included. we test the value of a vehicle owner that can choose when and how to charge; by presenting a model of four alternative charging strategies. we think of them as increasing in sophistication from dumb via delayed to deterministic and stochastic model-based charging. we show that 29% of the total savings from dumb are due to delayed charging and that substantial additional gains come charging optimally in response to predicted spot prices, and in some settings additional gains from using the up and down regulating prices. particularly, strategies are chosen from uncontrolled charging through deterministic optimization, to modelling the charging and bidding problem with stochastic programming. we show that all vehicle owners will benefit from acting more intelligently on the energy market. furthermore, the high value of the stochastic solution shows that, in case the regulating price differs from the expected, the solution to the deterministic problem becomes infeasible. keywords: electric vehicles, regulating market, stochastic programming, bidding. url: dx.doi.org/10.5278/ijsepm.2015.7.6 1corresponding author e-mail: njua@dtu.dk dx.doi.org/10.5278/ijsepm.2015.7.6 72 international journal of sustainable energy planning and management vol. 07 2015 strategies for charging electric vehicles in the electricity1 market a large amount of customers as would the aggregators. the aggregator would bid for himself, however, the benefit or at least some of it, will go to the vehicle owner, e.g. in terms of an availability bonus. for simplicity, we present our model for one vehicle only. optimal bidding into the electricity market has been the focus of many articles. within the field of mathematical programming, [4] focuses on optimal sequential bidding in both the day-ahead market and regulating market, considering uncertainty in regulating prices. other examples of bidding models are [8, 16]. these models are all considering price-taking electricity producers and include details such as start-up costs, ramping restrictions, and storage balances. the charging of electric vehicles (evs) has been a focus area for a considerable number of articles. this diverges from the challenges and benefits in the entire energy system [12, 17] to optimal charging when driving patterns are stochastic, e.g. [11]. in [15], a deterministic model has been developed, showing incentives for flexible charging. they have clustered the vehicles depending on driving patterns, and show how optimal charging primarily fills the valleys of electricity demand. a few of the articles have focused on the electric vehicles bidding in the power market. in [2], a deterministic model with hourly time steps has been used to optimise bidding on both the day-ahead market and for secondary reserves. [6] provides a dynamic approach to the bidding problem, focusing on regulating reserves only. here, the bidding is split into two time periods; day 8-20 and night 20-8, and each bid counts for an entire period. furthermore, they argue that large vehicle pools compensate for the stochastic variation. stochastic programming has been used by [14, 1, 19, 9]. [14] maximizes the revenue to the aggregator in a two stage model, where bids are placed in the first stage and realised in the second. no discharging is allowed and the day-ahead market is not included. another two stage model is developed in [1], where they mitigate risk by coordinating bids on day-ahead market between wind power, thermal power, and electric vehicles. thereby, they try to minimise the trading risks from market and wind uncertainties. [19] also focus on two-stage problems, where they focus on bidding in both markets simultaneously and bidding in the day-ahead market only followed by participation on the regulating market. for regulating market only, they use rolling planning, hence, a series of two stage problems, to optimise for each hour of the day. the principle of rolling planning has been extended in [9] by using a multi-stage model, maximising probability that the regulation bid is accepted. the focus is on plug-in hybrid vehicles, resulting in the vehicles being able to drive even though, the charging does not meet the target. the contribution of this paper is to evaluate the benefit of more sophisticated charging strategies for the ev and whether the different types of vehicle owners can benefit from participating on the regulating market. four different charging strategies are compared, including deterministic and stochastic modelling. we allow for both up and down regulation in terms of either charging when not planned (down-regulation) and stopping a planned charging (up-regulation). hence, we do not allow for discharging of the vehicles. the article is structured as follows. next section introduces the market used in the model as well as the charging schemes. section 3 describes the model and section 4 the case study. in section 5, the results are presented. section 6 discusses the approach and section 7 concludes. 2. market and charging in the modelling, we focus on energy markets similar to the nordic european countries, norway, sweden, and denmark. we include both the spot market and the regulating market. the day-ahead market, also known as the spot market, is the market for trading power for delivery the coming day. the regulating market is a market for balancing the difference between the planned production and the actual demand. trading is done one hour before delivery [18]. we assume market prices can be forecasted with sufficient precision at the time of bidding, and simplify the model to capture the new information obtained between day-ahead and intra-day trading. we assume that the spot price is known when planning the charging on this market. however, the regulation prices are unknown and uncertain. hence, we are aiming to see if the increased details in modelling and also the ability to bid on the regulating market will create a value for the vehicle owners-either by bidding themselves (we are aware that this might not be a possibility, due to minimum bid sizes) or by having an aggregator controlling a fleet of vehicle bidding into the regulating market (also called the intra-day market). according to energinet.dk [7], bid sizes are required to be between 10 mw and 50 mw. this would call for a parked fleet of approx. 1450 evs. however, assuming vehicle charging has no influence on prices, our results scale to a number of vehicles. our modelling allows us to analyse the contribution of the single vehicles and, thus, the benefits of different combinations of vehicles for an aggregator. when discussing up-regulation, we believe that it is questionable whether the vehicle should be able to actually discharge. however, a great deal of the up-regulation could come from not charging when planned, hence, giving back the amount not charged yet to the power system (see [12]). for computational tractability, we confine ourselves to a linear representation of the interactions between charging and the grid. furthermore, we assume that the vehicles are always plugged in when parked. this might be too optimistic and, hence, create too much flexibility. however, when owning a fleet, this often does not create a problem, because some of the vehicles will be plugged at each time period. we will consider this when interpreting the results. for analysing the value of information, a number of charging strategies are analysed. we are comparing the following charging strategies: • uncontrolled charging in uncontrolled or ‘dumb’ charging, we assume that the evs charge their batteries as soon as they are plugged in to the electricity grid, hence, as soon as they return from a trip. furthermore, we assume that they always fill their batteries the same amount as they have discharged while driving, to keep the battery full and be ready for the next trip. hence, no information except the driving pattern is needed for this type of charging. furthermore, this strategy means that the vehicle owner will not act on the regulating market. • delayed charging as with uncontrolled charging. however, the charging is delayed from when the evs are plugged in. in this situation, some kind of intelligence is needed, in order to delay the charge, e.g. a timer setting the time for the charge to begin. however, still no actions can be taken on the regulating market. • deterministic charging the evs optimise their charging based on deterministic future electricity prices. we optimise the ev charging based on a forecast of future market prices on the regulating market. the forecast is based on historical data of, e.g. a 1 year period. price variations are, over a longer period, assumed to be similar, thus, a charging strategy based on these could add further value to the vehicle owner. hence, in this situation the vehicle owners can place bids on the regulating market, increasing the value of the ev. it is assumed that the vehicle owners can act both on the upand down-regulating market. however, upregulation can only be done in terms of stopping or downscaling already planned demand, hence, no discharging of the vehicles are performed. • stochastic charging as with the deterministic charging, the evs optimise their charging based on expected future electricity prices. however, here the market prices on the regulating market are considered uncertain, and, thus, they will be based on probabilities of future prices going up or down. this is done, using a two stage stochastic optimisation model. a number of scenarios will be developed to represent different possible price realizations. charging decisions are made before realising the actual regulating price. here, we are increasing the details of information in terms of the variation in historical price developments. this will be based on stochastic optimisation and as with the deterministic model, this enables bidding on the regulating market. our hypothesis is that increasing the details in the modelling the charging decisions will also increase the benefits for the vehicle owner and decrease the costs of electricity. however, the question is to which extend and, hence, how advanced the decision support system needs to be for the vehicle owner to benefit from these. furthermore, the extent to which the vehicle owner can play an active role in the power system with benefits is also expected to increase with increased information. 3. modelling description in the following, we are assuming the vehicle owner is a price taker. we are focusing on one operation day, namely a 24–hour time period. this will be divided into 24 time steps, where t = 1 represents the first hour, thus, the one between 00:00 and 01:00. t = 0 represents the time period before the calculation period. 3.1. uncontrolled charging the charging after each trip can be calculated using the following formula. international journal of sustainable energy planning and management vol. 07 2015 73 nina juul, giovanni pantuso, jan emil banning iversen and trine krogh boomsma (1) where, cht is the planned charging at time t in the spot market, chmax is the maximum charging within each time step, and drt is the driving at time t. τ is the length of the trip, μ is the number of time steps the vehicle has been charging continuously, and η is the charging efficiency. the equation reflects the fact that if the vehicle has used more power on the trip than can be charged within the first hour due to grid connection, the charging continues in the next hours, until fully charged. based on the above, the costs can be calculated by; (2) where pt spot is the spot price. 3.2. delayed charging as with uncontrolled charging, this can be calculated by multiplying spot price and charging. we are assuming that the vehicles are charging at night, whenever possible. now, the charging equation will be; (3) hence, the driving from the past 24 hours is summed, and the vehicle is charged to be able to meet the next 24 hours. this equation hold from the starting time, e.g. midnight, and until the vehicle is fully charged. then the charging starts over 24 hours later, e.g. at midnight. 3.3. deterministic charging for deterministic charging, we are minimising the costs of charging the vehicles. (4) where pet up and pe tdown are the expected up and down regulation prices respectively. λt up and λt down up is the charging in the regulating market. storage, stt, is balanced in each time period in order to meet restrictions on storage capacity as well as the need for driving: min z p ch pe pe t spot t t down t down t up t up t = + −( )( )λ λ == ∑ 1 t ch ch dr ch t k k k t t k t t = − ⎧ = − − = − − − ∑∑min ;max η μμ μ 1 24 ⎨⎨ ⎪⎪ ⎩⎪⎪ ⎫ ⎬ ⎪⎪ ⎭⎪⎪ z p ch t spot t t t = = ∑ 1 ch ch dr ch t k k k t t k t t = − ⎧ = − − = − − − ∑∑min max ; .η μτ μ μ 1 ⎨⎨ ⎪⎪ ⎩⎪⎪ ⎫ ⎬ ⎪⎪ ⎭⎪⎪ (5) charging has to be within the grid capacities; (6) furthermore, restrictions are made in order to ensure, that driving and charging cannot happen at the same time. (7) because of the assumed up-regulation not being an actual discharge of the battery, also need to ensure that the charging is always greater than λt up. (8) and finally, we have the non-negativity constraints: (9) 3.4. stochastic charging in stochastic charging, the regulating prices are uncertain. compared to the deterministic model, we have introduced the scenarios, s, and probabilities for each scenario to be realised, πs, in the stochastic model. the deterministic equivalent to the stochastic program is: (10) min ( ) , , , z p ch pe pe t spot t s t s down t s down t s u= + −π λ pp t s up s s t t t s s t st λ , , . . ( ) ⎛ ⎝ ⎜⎜⎜⎜ ⎞ ⎠ ⎟⎟⎟⎟⎟ = == ∑∑ 11 sst ch dr t t s t t s down t s up t− + + − − ∀ = 1 1 , , , , ,.. η ηλ ηλ .., , ,..., , ,..., ,min , max t s s st st st t t s t s = ≤ ≤ = 1 1 == ≤ = = = 1 1 0 1 ,..., , ,..., , ,.. max s ch ch t t ch dr t t t t .., , ,..., , ,..., , , t dr t t s s t s up t t s down λ λ = = =0 1 1 ddr t t s s ch t t t t s up = = = − ≥ = 0 1 1 0 1 , ,..., , ,..., , , , λ ...., , ,..., , , , , , , t s s st t t s t s up t s down = ≥ = 1 0 1λ λ ,,..., , ,..., , ,..., t s s ch t t t = ≥ = 1 0 1 st ch t t t t t up t down, , , ,...,λ λ ≥ =0 1 ch t t t t up− ≥ =λ 0 1, ,..., ch dr t t dr t t t t t up t t down = = = = 0 1 0 1 , ,..., , ,...,λ λ ddr t t t = =0 1, ,..., ch ch t ≤ max st st ch dr t t t t t down t up t = + + − − ∀ = −1 1η η λ η λ. . . ,.. , .., , ,...,min max t st st st t t t ≤ ≤ = 1 74 international journal of sustainable energy planning and management vol. 07 2015 strategies for charging electric vehicles in the electricity1 market furthermore, we have introduced a constraint saying that you cannot provide up regulation if down regulation is needed and vice versa. this was needed, since in some cases it could pay off to plan charging and then provide up-regulation in these hours later even though some scenarios were generating worse prices. as can be seen from the model, the second stage decision (the up and down regulation) is decided upon based on a span of future regulating prices, and the first stage decision, hence the charging in the spot market, is based on the specific realization of up and down regulation. scenario generation will be described in section 4.4. 4. case study our case study focuses on one vehicle type, namely nissan leaf. specifications are given in table 1. nissan leaf has two different battery use settings; long distance using the battery 100% or long life using the battery 80% [10]. we are using the long distance and, hence, assuming that 100% of the battery is available for driving and charging. however, in our analyses, the battery is never depleted below 20%. thus, we might as well use the long life. 4.1. data and assumptions we are assuming the vehicles are plugged to the electricity grid whenever they are parked. each vehicle have an assumed connection with 3 phases 10 amps, resulting in a grid connection capacity of 6.9 kw. hence, maximum charging capacity in each hour is 6.9 kwh. furthermore, we have assumed a charging efficiency of 0.9. 4.2. driving patterns we use the clustered driving patterns found in [15]. all 20 patterns are included in order to get an idea whether there are driving patterns or life styles where more sophisticated modelling is of greater value. this way we can also analyse whether it is more beneficial to own a fleet of vehicles with different driving patterns or a fleet with the same driving patterns. 4.3. spot prices for our analyses, we have used historical hourly spot prices from four days in four different seasons in 2014, hence, january 1st, april 1st, july 1st, and october 1st. 4.4. regulation prices forecasting differs for the different analyses. no forecasting is needed for uncontrolled and delayed charging. for the deterministic model, we are using an average of the price deviation from spot to regulation prices on an hourly basis, based on data from year 2013. this corresponds to the average of the scenarios for the stochastic analysis. hence, the regulating price is calculated based on the spot price plus/minus the deviation, depending on whether it is up or down regulation. 4.4.1. scenario generation scenarios are based on data from year 2013. regulation price scenarios are generated by means of the heuristic method described in [13]. the regulation price at each hour of the day is modelled as an independent random variable. the method uses marginal distributions for the random variables and copulas to describe the dependence between the marginal distributions. marginal distributions and copulas have been estimated based on historical regulation prices. 5. results results show decreasing costs with increasing intelligence in the charging decision. figure 1 shows the total costs of charging the 20 different vehicle international journal of sustainable energy planning and management vol. 07 2015 75 nina juul, giovanni pantuso, jan emil banning iversen and trine krogh boomsma table 1: based on ([5]) parameter unit value battery capacity kwh 24 efficiency km/kwh 5.8 total charging time hours 6–7 max driving per charge km 199 january 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 april euro july october uncontrolled delayed deterministic stochastic figure 1: total costs for different charging schemes. types (one of each). as seen from the figure, a large decrease is experienced between uncontrolled and delayed charging, hence, only moving charging to the night time. however, another large decrease can be found using either deterministic or stochastic modelling, especially with the electricity prices in the april data. as for the gain of using stochastic modelling instead of deterministic, we use the value of the stochastic solution (vss) described in [3]. however, when we try to solve the stochastic problem using the first stage solution of the deterministic, the problem becomes infeasible. this has been tried both with the implemented scenarios and another set of scenarios. infeasibility of e [z (x *, ξ)] is equivalent to a very high vss. hence, the solution to the deterministic problem is not robust towards slight changes in the regulation prices and, thus, regulation possibilities. this lack of robustness is partially due to some inappropriate planning on the up-regulation side. if we try to remove the possibility of up-regulation, we get the following vss for the total of all 20 vehicle types: january 9.762 € april 613.594 € july 584.433 € october 145.585 € the rather high values for april and july, is because the stochastic solution only charges the vehicles on the regulating market. hence, we count on the need for enough down regulation at some point during the day, when the car is parked. looking at the charging pattern as well as up and down regulation, it is evident that almost all of it is in the night time. hence, most of the vehicles will be parked and the assumption that vehicles are plugged in when not driving, does not influence our results much if at all. in figure 2, we see the cost average from the four seasons using the different clusters of driving patterns. from the figure we can see that we experience a decrease in costs between 40-60% when using the stochastic solution. furthermore, focusing on figure 3 we see that the monetary saving is quite different for the 76 international journal of sustainable energy planning and management vol. 07 2015 strategies for charging electric vehicles in the electricity1 market e v 1 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 e v 2 e v 3 e v 4 e v 5 e v 6 e v 7 e v 8 e v 9 e v 1 0 e v 11 e v 1 2 e v 1 3 e v 1 4 e v 1 5 e v 1 6 e v 1 7 e v 1 8 e v 1 9 e v 2 0 delayed stochastic figure 2: average costs as percentage of cost of uncontrolled charging. 0 50 100 150 200 250 300 350 400 e v 1 e v 2 e v 3 e v 4 e v 5 e v 6 e v 7 e v 8 e v 9 e v 1 0 e v 11 e v 1 2 e v 1 3 e v 1 4 e v 1 5 e v 1 6 e v 1 7 e v 1 8 e v 1 9 e v 2 0 delayed stochastic figure 3: average costs savings €. different vehicle types both because of the different charging needs, but also due to the different timing opportunities for charging. based on these analyses, we see that the savings for vehicle types ev10, ev16, ev19, and ev20 are very low. if an aggregator only has these vehicle groups in his fleet, the increment to act smart on the regulating market is a lot smaller than with a fleet of, e.g. ev11. 6. discussion from the results we see that in general it is of great value to introduce a stochastic model to optimise the charging and bidding on the regulation market for electric vehicles. the results could be scaled to a large number of vehicles, imitating that of an aggregator. however, we need to keep in mind that an increased number of vehicles does not increase the expected savings proportionally. the regulating market only needs a certain amount of regulating power. however, having a diversified fleet could enable bidding into the market at most hours, increasing the expected earnings. the model developed in this article could be enhanced to either include rolling planning for more details, or to develop a multi-stage stochastic model. hereby, the value of more sophisticated modelling could be studied as well as to which extend it is still beneficial to increase the details. furthermore, one could argue that normally reserves are not needed in the same direction throughout the complete hour. however, the intra-day market works on an hourly basis, but often does not allow for us to, e.g. provide down regulation services for the complete hour. adjusting the modelling to take the uncertainty of the amount of power to be available for regulation could therefore, also be a subject of further research. finally, other devices in the power system can also provide the same kind of demand response as the evs and could easily benefit from the detailed modelling as well. it could, e.g. be interesting to look into the values for electric heating, electric boilers, and electric cooling. 7. conclusion using mathematical models for charging the electric vehicles adds value to the vehicle owners or aggregators. the value varies between the different uses of the vehicles, for some the value is large, for others, the planning most likely does not give a value great enough for one actor to consider pooling with others and implementing the necessary intelligence in the vehicle. results show decreasing costs with increasing sophistication in the models. the increase going from uncontrolled to delayed charging is expected due to the lower power prices at night. hence, the vehicle owners can benefit from delayed charging. moving further to deterministic charging, gives another benefit, primarily found in the good price windows for upand down regulation. however, we have to keep in mind, that not all these prices windows are an option in the sense that what seems a good up regulation price window could turn out to be only a down regulation possibility and vice versa. moving further to the stochastic charging strategy, a slight benefit is seen compared to the deterministic model. the reason that the stochastic strategy seems only slightly better than the deterministic is that many of the good price windows are hard to predict, and hence, the good benefits we saw in the deterministic case are likely not as good as they seemed. we have showed, that for acting on the regulating market, the value of a stochastic model over a deterministic model is very high (with an infeasible stochastic solution to the deterministic first stage). only focusing on the day-ahead market with possibilities for down regulation, also results in a rather large vss. moving on to more detailed stochastic models might increase the value even further. acknowledgements this article is part of the ensymora project funded by the danish strategic research council. references [1] al-awami at, sortomme e, coordinating vehicle-to-grid services with energy trading, ieee transactions on smart grid 3(1)(2012), pages 453–462. http://dx.doi.org/10.1109/ tsg.2011.2167992 [2] bessa rj, matos ma, optimization models for an ev aggregator selling secondary reserve in the electricity market, electric power systems research 106 (2014), pages 36–50. http://dx.doi.org/10.1016/j.epsr.2013.08.006 [3] birge jr, louveaux f, introduction to stochastic programming, new york: springer; 1997 [4] boomsma tk, juul n, and fleten se, bidding in sequential electricity markets: the nordic case, european journal of operations research 238 (2014), pages 797–809. http://dx.doi.org/10.1016/j.ejor.2014.04.027 [5] clever, 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 04-1637-6448-1-le.qxd abstract in sweden there has been a move towards more cost reflective price models for district heating in order to reduce economic risks that comes with variable heat demand and high shares of fixed assets. the keywords in the new price models are higher shares of fixed cost, seasonal energy prices and charging for capacity. also components that are meant to serve as incentives to affect behaviour are introduced, for example peak load components and flow components. in this study customer responses to these more complex price models have been investigated through focus group interviews and through interviews with companies that have changed their price models. the results show that several important customer requirements are suffering with the new price models. the most important ones are when energy savings do not provide financial savings, when costs are hard to predict and are perceived to be out of control. 1. introduction within the framework of the district heating business, district heating (dh) must have a price in the heating market that is competitive and that also give the supplier a desired return on investment in the dh system. in sweden there are no regulations regarding the pricing of dh [1]. this means that each and every dh supplier determines how their price models should look like to different customer groups as well as the actual cost level. different ways to control the dh price has been discussed in various contexts, and the swedish competition authority has argued that a price regulation should be imposed on dh [1]. the dh industry on the other hand wish to strengthen the customers’ position on the heat market through increased transparency and selfregulation [2, 3]. recent studies on the design of dh price models [7, 8, 9, 10, 11, 13, 14, 16, 28, 29] bring up many important international journal of sustainable energy planning and management vol. 13 2017 47 considerations on price model design in respect to the financial challenges for the dh business like for example competitiveness with alternative heating solutions, the challenges of weather dependency and low capacity factor, the need for improvements in system efficiency, as well as the challenges associated with a declining heat market. although competitiveness on the heat market and system efficiency indeed are important matters to consider when deciding the price models for the dh industry, and for society at large since dh can play an important role as a cost effective way to decarbonize the future energy system [4, 5], it is evident that these studies holds on to a techno-economic system perspective on dh price model design with the goal to reduce the financial risks of the dh supplier. the customer is treated as system component, but not as an actor with its own needs, preferences and world view. questions can be raised regarding the customer benefits of the new price models and whether the dh industry can expect the customers to take on a system perspective when paying for the commodity of heat. 1 corresponding author: e-mail: kerstin.sernhed@energy.lth.se international journal of sustainable energy planning and management vol. 13 2017 47–60 costumer perspectives on district heating price models ������� ������ �� ������ ��������� ��� ��������� ���������� � �������� � �� ���� ���� ���� �� � � ��������� ���� ��� �� � � !"�� ## �� �� �$��� �� �$��� �������� ���� ��� %&#&&� � !�## "' ����()�*�� �$��� ��� +,�� -���� �(�.*������ "&� � !"�� �/ 0�*�.� �$��� keywords: district heating; price models; customer preferences; cost reflective; url: dx.doi.org/10.5278/ijsepm.2017.13.4 48 international journal of sustainable energy planning and management vol. 13 2017 costumer perspectives on district heating price models most recent studies about price models for dh that we have found in scientific journals are actually swedish studies. maybe this is not surprising since this has been a topical issue in sweden for some years now where many dh companies have started to review their price models. at the same time customer confidence in dh has been questioned in sweden. the debate has concerned pricing, the owners’ high requirements on return of investments, the lack of customer service and responsiveness to the customers’ situation [6]. given these circumstances, we have found it interesting to conduct a study were the customer perspective on those new dh price models is investigated. 1.1. aim of study the aim of this study is to investigate how swedish customers perceive the more complex price models which are now starting to take hold in the swedish dh sector. questions like the benefits for the customers, if the price models seems fair, how easy the price models are to understand and to use in calculations of energy efficiency measures, how important it is for the customers to have options to choose between in the price model and how a good price model for dh would look like from a customer perspective are investigated in this study. in order to study customer preferences we have worked together with three dh companies in sweden that all had made recent changes in their price models: södertörn fjärrvärme ab in södertälje, öresundskraft ab in helsingborg and sala-heby energi ab in sala. the three companies all had different price model strategies and different reasons for changing their price models. six focus group interviews with customers to the three companies were carried out as well as several interviews with company staff in order to understand customer responses and preferences to different components in the price models, strategic decisions behind the price model design, and experiences of the process of changing price models. to give the reader a background of recent studies’ advices on the design of dh price models as well as on components used in the models, a background of this is given in the next section (section 2). 2. components in the dh price models in sweden in a country like sweden with large temperature differences between the seasons the production costs for dh is usually characterized by cheap summer production and expensive winter production. the fixed assets in terms of large production plants and dh networks implies large capital costs for the dh utilities. previous swedish studies about dh pricing have indicated that the price models do not seem to reflect the underlying cost structure of production and distribution of dh to a satisfying extent [7, 8, 9].two primary problems have been emphasized associated with this situation. firstly: not having a cost reflecting price model implies an increased financial risk, as the revenues from heat sales may not reflect the actual costs. secondly: price models that do not reflect the actual cost structure from production and distribution means that customers can make energy efficiency measures or investments that are contra productive to system efficiency as the customers do not get enough incentives to follow system costs. in song et al [8] 237 pricing schemes were collected and classified at 80 swedish dh companies in four different price model components. the yearly heat production from these 80 companies accounted for the major part (85%) of the total heat production from dh in sweden. the study was made in 2015 and the components proportion of the total price to the customer was calculated for a typical multifamily house with a yearly heat consumption of 193 mwh, see figure 1. the grey bars shows the share of the cost for energy demand components (ecd) in the schemes. the orange bars stands for the share that comes from a load demand component (ldc). the yellow bars shows the share that come from a flow demand component (fdc). the lowest share of the costs, the black bars, constitutes the share from the fixed component within the schemes (fxc). as can be seen in figure 1, the energy demand component constitutes the largest part of the cost in the price model in most schemes. edcldcfxc 0% 20% 40% 60% 80% 100% p e rc e n t o f cu st o m e r p ri ce ( % ) fdc figure 1: proportion of price components in cost calculation of template building upon 237 pricing schemes as presented in song et al [8] according to the same study, 63% of the investigated pricing schemes used a constant energy price throughout the year. the fixed fee used in many companies only covered administration costs for meter-reading and billing. some kind of load demand component was used in the majority of the schemes, although the most commonly used type of ldc was based on an engineering approximation (the category number method) which, according to the authors, does not provide sufficient incitement for operation optimization. a flow demand component was used in a third of the investigated pricing schemes [8]. the conclusions that the authors make in the study is that most pricing models used today do not take into account customers’ consumption patterns and heat production costs for the heat. this, the authors argue, does not encourage customers to respond to the needs of the system and exposes the district heating suppliers to financial risk. 2.1. energy demand component in a deregulated dh market, the pricing method based on marginal cost is commonly used to determine the price of dh [10, 11]. the heat demand for space heating and thus the revenue from sales of heat is highly weather dependent. only the demand for hot tap water preparation is fairly constant over the year [12]. due to weather dependency the demand and heat sales can vary very much within the same day, between seasons or between the same season different years. in larger dh systems different production plants will be used to supply the different levels of energy demand and the plants with the highest operational cost will be started only when there is no capacity left in the ones with lower operational cost. hence, the marginal cost– defined as the cost to produce the last unit – will be defined by the plant with the highest operational cost running [10]. by reflecting the marginal cost in the price model to the customers, the price for energy will be higher in winter time when the demand is large and lower in the summer when there is only use for hot water preparation and not for space heating. in stridsman et al [7] the authors proposed that the marginal production cost could be broken down into three seasons instead of monthly price levels in an attempt to make the price model simpler to understand. they also proposed that the summer prices could be pressed to a very low level, if this reflects the actual case of low marginal costs for heat in the summer period. figure 2 shows an example of how the marginal production costs might look like over a year and how the energy demand component can be set at three levels. international journal of sustainable energy planning and management vol. 13 2017 49 kerstin sernhed, henrik gåverud and annamaria sandgren spring and fall price spring and fall price 30 20 10 -10 0 40 50 cold year normal year warm year winter price euro/mwh winter price summer price april may june july sept oct nov dec marginal cost for production augmarchfebjan figure 2: marginal cost of dh production and seasonal pricing [7] (the text in the figure has been translated from swedish and the cost per mwh has been converted from sek to eur) using a price model based on marginal production cost can also be a strategy to prevent customers from investing in partial conversions to other heating systems (such as heat pumps and solar heating systems) used together with dh, since this erase the economic incentives to make such installations. this has been shown for example in rolfsman & gustafsson [13]. 2.2. share of fixed and variable components in the price model a way to reduce financial risks in the price model is to have one fixed component for example based on an annual fee per installed kw or per year and one variable component in the dh price model [14]. a high share of fixed cost in the price model means that the company’s revenue will become less dependent on changes in heat demand [15]. in stridsman et al [7], the authors raised the issue that the swedish dh companies generally have a too high share of variable energy price in their price models. such pricing schemes will, according to the authors lead to a too high incentive for customers to improve energy efficiency, and the customers’ cost reduction when making energy efficiency measures will be greater than the cost reductions that are made from a system perspective. stridsman et al argues that the situation with a high share of variable costs could lead to an untenable situation for the dh companies pointing at the risk of undermining the profitability of the dh companies or on the risk of having to raise the price level of dh to the customers if the costumers energy demand decrease. a good starting point for deciding the level of the variable energy price, according to the authors, would be to use variable marginal production cost for production together with the costs for distribution heat losses [7]. also other studies of pricing of district heating found good cause not to have a too high share of variable price in the price model [8, 16], where the stricter requirements in the national building regulations on specific energy consumption per square meter was seen as risk factor, that ultimately leads to lower heating demands in the building stock. also future changes to a warmer climate [17] together with energy retrofits in the existing building stock [18, 19] might further exacerbate these risks. 2.3. load demand component the capacity utilisation, expressed as the load factor, is usually low for temperature dependent services like space heating and thus for dh. a low load factor means that the investment costs for the system will be shared by fewer product units and the product will be more expensive to produce [12]. if peak loads could be lowered in the dh system, this could lead to financial savings and environmental benefits as the use of expensive peak production usually fossil-fired boilers could be avoided [20]. load demand components in the dh price model can serve different motives. depending on how the component is designed, it could act as an incitement for costumers to lower their peak load demands [20]. partial conversion to air heat pump represents a competitive disadvantage for the dh system [21], not only because of the loss of sales volume for dh, but mainly because of the unfavourable load pattern on cold days where the air heat pumps drops in efficiency and high sudden peaks for the dh system evolves. introducing a load demand component in the price model may lower costumer interest in making partial conversions in alternative heating systems. another motive to charge the customers for their use of capacity is to get a fairer distribution of the real costs associated with installed capacity in boilers and network among the customer collective. several swedish dh companies that recently changed their price models are referring to their new price models as more “fair” using seasonal pricing and load demand components in their price models [22, 23, 24, 25, 26 and 27]. the installations of remote meter readings have opened up for new possibilities to measure customer energy use on hourly bases which means that new ways to charge for load demand can be developed [28]. in the study of price models for dh in sweden from 2015, five different pricing principles of charging for capacity were identified [8]: • estimate based on total consumption: the method is to use consumers’ total consumption during a certain period of time, either during the previous year or the previous high peak period, to determine the load demand. • the category number method, which is the most commonly used method in the swedish dh companies, assign costumer consumption hours per year (alternatively per winter) to different costumer groups – typically 2200 hours/year for multi-family houses and then divide the consumption of that period by the assigned consumption hours to calculate customers’ load demand. 50 international journal of sustainable energy planning and management vol. 13 2017 costumer perspectives on district heating price models • load signature method: this method use the correlation between customers’ historical heat consumption and outdoor temperature to predict customer consumption at the extreme weather condition through simple linear regression. • measured peak method: costumer peak load determines the level of the fee. the fee could be based either on the highest peak or a mean value of several high peaks. • subscribed/exceeded level method: the customer subscribe to a certain load level at which the customer will pay a relatively low variable price for energy. once the subscribed load level is exceeded, the customer will pay a higher cost for the energy exceeding the level. the authors concluded that the first three methods are merely engineering approximations that cannot provide sufficient incitement for operation optimization, while the last two methods can give reasonable incitements for customers to alter their consumption pattern. stridsman et al [7] proposed that the charge for capacity should be based on the highest peak measured at the customer, based on the daily energy usage divided by 24 (h). basing the fee on the highest hourly peak was seen as unnecessary due to the inertia in production and the buffer effect in the distribution network, which means that there is no need to cover peak demand on one hour basis. the authors also suggested that a rolling over 12 month would be a good solution, meaning that the customers are charged for the highest average daily power peak for 12 month if the peak is not exceeded, then the new peak would set the new level for the fee. 2.4. flow demand component using a flow demand component in the price model is a way for the dh companies to work with the cooling of the network. a decrease in return temperature sometimes with the result that also the supply temperature can be lowered can enhance the conditions for production units such as the use of flue gas condensation, heat pumps and industrial waste heat. lower return temperatures also gives other system benefits like lower heat losses, reduced pump work and an increase in the capacity of the network [29]. there are basically two models for flow charges used by the swedish dh companies. one model consists of a fixed price for each cubic meter of water passing substation, while the other model is designed as a bonusmalus system where dh customers with poor cooling will pay a fee which is in turn used to pay a bonus to customers with good cooling. for both models these fees can be charged either throughout the year or during the heating season only. in the summer months when the demand for heat is low, the supply temperature will vary in the network. the supply temperature in the outer areas far from the production plant can be several degrees lower than in the central areas. when flow rate is charged for throughout the year, customers in peripheral areas will be disadvantaged because the conditions for good cooling deteriorates at low incoming supply temperature. a few district heating companies have therefore introduced some form of correction factor to avoid disadvantaging between customer groups [29]. 2.5 conclusions from the literature review the review above shows that earlier studies on how district heating price models should be designed focus on a techno-economic system perspective on district heating and on reducing the financial risks of the district heating supplier. the authors express logical arguments for changes in pricing models that can benefit the district heating suppliers. however, how these changes will affect the costumers are not discussed or considered. questions can be raised regarding customer benefits, the fairness of the components in the price model, if the changes will lead to sustainability, how customers experience the complexness of the new models, and how it will affect customer choice and freedom of action. 3. method in order to investigate customer perspectives on the new price models a qualitative approach was chosen in this study. the reason for this was the character of the research issue. not all dh customers are familiar with their price model which components are included, how changes in customer energy consumption may affect the price, etc. we therefore saw a need to discuss these things with the customers, and to ask follow-up questions. the study was carried out in cooperation with three swedish dh companies that had recent experiences of changing their price models. customer responses were investigated through six focus group interviews with customers from the three companies, two at each company one with larger customers represented by large private or municipally owned real estate companies international journal of sustainable energy planning and management vol. 13 2017 51 kerstin sernhed, henrik gåverud and annamaria sandgren and one with smaller customers with representatives from housing associations, community associations and residential customers. the recruitment of participants were made through advertisement on the company web site and through calling customers from customer lists provided by the dh companies. the number of participants in the focus groups were between seven and eleven persons in each group. totally more than 50 customers participated. the focus group interviews took place at the dh companies head offices. the focus group interviews were led by a moderator. the discussion was recorded by a secretary. a few representatives from the companies were invited to sit in and listen to the interviews with clear instructions not to interrupt the discussion. the listeners were told to keep a very low profile. in the start of the focus group interview they got to say their name, but not giving any information about what position they had at the company or anything else. only at the end of the interviews were the representatives given the possibility to ask questions to the customer group and to comment on what had been said in the interview. the former experience we have had from inviting listeners to focus group interviews has been positive. that someone who has an interest in the question is sitting in and listening intensifies the discussion according to our experiences. the presence of representatives from the energy company could perhaps prevent participants from speaking up their mind about negative attitudes to the company or to the things that the company do. from the responses in our interviews we did not have the impression that this was a large problem in any of the focus group interviews, since the customers expressed both criticism and scepticism to components in the price model, to things that the companies did in the process to change price model and to other concerns connected to the dh company. interviews were also made with personnel staff at the dh companies, both with strategic staff such as ceo, director of marketing, business development, etc. and with staff who worked more customer-oriented such as salespersons, customer service, service, etc. 16 persons were interviewed in total, five to six persons at each company. the interviews focused on investigating how the work with the design and the launching of the price model was implemented, and to get the representative’s views on the customer response to the new price models. interviews were conducted with one or sometimes two interviewees at the time and lasted one to two hours. the interviews were carried out by two researchers, one taking notes and the other asking the questions. 4. analyses of price models and customer reactions the following section gives a short description of each district heating company, their price models and the customer response that was given in the focus group interviews. after this, a compilation of customer reflections on what qualities a good price model for district heating should have from a customer perspective is given. 4.1. södertörns fjärrvärme ab södertörns fjärrvärme ab (sfab) delivers district heating and cooling to customers in the municipalities of botkyrka, huddinge and salem close to stockholm area. sfab is owned by huddinge (50 %) and botkyrka (50%). sfab is the majority owner of söderenergi (58%), which is the company that produces the lion’s share of the heat that sfab delivers to its customers. the heat production is based on biofuels like wood chips from forest and from recycled wood. bio-oil is also used and a small share of fossil oil for some part of peak load production. about half of the deliveries go to apartment buildings, ten percent goes to community associations, five percent goes to homeowners and the rest goes to municipal buildings, hospitals, industrial customers etc. 4.1.1. construction of price models at sfab new price models were introduced in 2015 for large customers, while the price model for homeowners remained unchanged. for customers that use district heating for all their space heating and domestic hot water preparation, a choice between two different price models was imposed. table 2 shows the price list to large customers at sfab. the load component in the price model is built on a subscription load level. the subscription load level is measured at -5°c outdoor temperature. measurements are made every third year (or when the customer demands this). the load component is designed so that customers with larger power demand pay a lower fee in sek / kw. the motive to introduce the new price model called “fixed” with a higher share of fixed cost was not to give customers freedom of choice. the strategy was to make 52 international journal of sustainable energy planning and management vol. 13 2017 costumer perspectives on district heating price models the price model with a higher proportion of fixed rate more favourable to the customers over some years, and by this make the customers more apt to choose this alternative. in this way sfab hoped to avoid a negative customer reaction on the increased proportion of fixed costs in the pricing. the reason that sfab wanted to increase the fixed share in the price model was because they saw a future risk of reduced heat sales as their international journal of sustainable energy planning and management vol. 13 2017 53 kerstin sernhed, henrik gåverud and annamaria sandgren table 1: district heating prices sfab 2015, with the two models “base” and “fixed” that customers can choose from base fixed load component subscription load level 0−300 kw 880 sek/kw 5 200 sek/year + 1 115 sek/kw 301−875 kw 42 000 sek/year + 740 kr/kw 60 000 sek/year + 940 kr/kw >876 kw 230 000 sek/year + 525 sek/kw 270 000 sek/year + 700 sek/year energy component period december–march 500 sek/mwh 400 sek/mwh april, september–november 315 sek/mwh 255 sek/mwh may–august 120 sek/mwh 120 sek/mwh table 2: district heating prices sfab 2015 for customers with complementing heating system to district heating customers who meets any of the following criteria is referred to the price list “top”: 1) customers with other baseload than district heating. with other base-load means that you have a heat pump that covers the basic needs for heating and domestic hot water and that the use of district heating only covers parts of the need concentrated in the cold season. 2) if the installation has other sources of energy for heating along with the district heating, where the ratio of the annual heat consumption (kwh) and maximum power demand (kw) of heating is less than 2000. load component 0−425 kw 685 sek/kw 426−1 250 kw 46 000 sek/year + 580 sek/kw 1251 kw 221 000 sek/year + 440 sek/kw energy component january 545 sek/mwh february 560 sek/mwh march 485 sek/mwh april 375 sek/mwh may 140 sek/mwh june 120 sek/mwh july 120 sek/mwh august 120 sek/mwh september 185 sek/mwh october 320 sek/mwh november 430 sek/mwh december 515 sek/mwh major customers, the municipal housing companies, was facing a great need for renovation of apartment buildings built in the 60s and 70s which would probably lead to some energy efficiency measures in the buildings. according to the interviews with staff at sfab, an increase in competition from heat pumps had been noticed and unfavourable load patterns from customers who had partially converted their heating systems were detected. sfab therefore wanted to design a special price model to these customers. these customers did not have any alternative price model to choose between. the price list for these customers is shown in table 2. 4.1.2. customer reactions to sfab’s price models the participating customers in the two focus group interviews at sfab generally thought that sfab’s pricing models were relatively easy to understand, except from the load component were the customers did not understand why this component would have to be so inflexible and why it was measured only every third year. in the focus group with smaller customers, mainly housing and community associations, it became evident that some of the customers did not care to understand the price model at all, while others had great difficulty trying to communicate the price model to other members in the housing association. the price model “top” that is the option for those who have a heat pump or other supplemental heating alternatives, was seen as problematic by the representatives from condominium associations who represented many housing associations. they felt that it was difficult to communicate this kind of price model with members of the housing associations. they also expressed that they felt punished by the price model. example of quotation from the interview: “if you look on it from our associations’ perspective, they are not very familiar with any price model, which is why they have us, we’ll help them. but if you live with general perceptions that it is good and fine to save energy, then you get upset when you get punished for investing in a heat pump.” the two alternative price models “base” and “fixed” that costumers with only dh could choose from were discussed. participants were aware of this option, but they did not understand why there were two different price models to choose from. the choice was not seen as so important, especially in light of that the options were quite similar. examples of quotations: “this freedom of choice is overrated. we want a model that is reasonable and sensible, that’s enough. we do not have the ability to make a choice where the outcome is uncertain and the difference between the models are too small. so there is really no need to put energy to this choice”. “why don’t they have a model that stands out more, if we now have an option? a model with only variable energy price? you get no clear indications from sfab why they have this fixed tariff. what is the point?” customers expressed that if one, nevertheless, should have choices, then the dh company should help and guide the choice. the customers felt that they did not prioritize this issue. having to choose the pricing model was rather seen as a burden to the customers, than an opportunity for the customers to influence their situation. 4.2. öresundskraft ab öresundskraft ab is owned by the municipality of helsingborg, that is located on the south east coast of sweden. öresundskraft delivers electricity, gas, heat, cold and broadband to citizens in helsingborg and ängelholm. it also offers energy efficiency services. the heat production in helsingborg consists of residual heat from the nearby industry kemira and heat from a waste chp plant and some smaller plants fired by pellets and wood chips. fossil fuel is only used at the start of operation or at disruptions. 80% of the heat is delivered to 3,000 industrial customers and housing associations, and the remaining 20% is delivered to 11 000 small house customers. 4.2.1. construction of price models at öresundskraft ab a new price model were introduced in 2012 for all customers in helsingborg. in the new model the energy price had a greater seasonal variation, the proportion of variable energy price was enlarged and another type of load component was imposed (peak load with rolling 12 month instead of the category number method). the reasons for the change in price model was the desire to be more competitive against other heating options. the company also wanted to encourage energy efficiency measures which would give energy and load savings in winter time. a third season price level was introduced and the different price levels between the seasons were increased. also homeowners got a new price model with seasonal energy price. clear guidelines were developed by the management for the development of the new price model: 1. the model would encourage energy efficiency and reduction of electricity use 2. the revenue from the new price model should be a zero sum game and would not lead to any increase in the price for heat for the customer community as a whole. a redistribution of costs would however be done between different groups of customers. 54 international journal of sustainable energy planning and management vol. 13 2017 costumer perspectives on district heating price models 3. the distribution between the parameters of energy/load/flow was set at 70/20/10 over the entire customer community. 4. the model should reflect production costs price list for öresundkraft is shown in table 3. 4.2.2. costumer reactions to öresundskraft’s price model the participants in the focus group interview seemed to have some understanding of why öresundskraft wanted to impose a seasonal differentiation of the energy price. a reflection that came up was that seasonal price means that energy becomes more expensive when you need it the most, and this has negative consequences for the customers. the housing associations stated that they would prefer a more uniform energy price level over the year, because this would better reflect on the way that the associations receives funds from their own members. representatives from large real estate companies also saw seasonal energy prices as something negative. the commercial property owners expressed concerns about losing customers if they did not keep a good indoor climate and thought that they might have difficulties saving energy in winter time table 3 (page 55) energy component: “we’re on the commercial side. we measure customer satisfaction index and we measure the indoor climate in our facilities. it is just too expensive to lose a customer. we cannot reduce the indoor temperature, we must have satisfied customers” as explained earlier, öresundskraft base their load component on the customer’s highest peak (daily average). the highest daily average consumption is used to set the fee level for 12 months, unless this value is exceeded, then a new period of 12 months begins. the logic of this procedure was not appreciated by the participants, neither by the smaller nor the larger customers. it did not seem fair to them that the consumption a cold winter day would set the level of the fee for a whole year. twelve months was considered to be a too long period. some participants said that this load component made them feel insecure of the coming costs. what if there were suddenly an error in the customer dh substation? could this lead to a very high fee for the coming twelve month? “we would like to have alarms, warnings. it may be something wrong in the system. not everyone can handle the dh substations”. regarding the flow demand component not all customers understood how the component worked and international journal of sustainable energy planning and management vol. 13 2017 55 kerstin sernhed, henrik gåverud and annamaria sandgren table 3: district heating the price list of öresundkraft, 2015 (a) maximum daily (b) fixed price sek/year (c) load component sek/kw consumption / 24 h vat excluded vat included vat excluded vat included 0−30 kw 600 750 529,20 661,50 30−100 kw 2 808 3 510 455,60 569,50 100−250 kw 10 248 12 810 381,20 476,50 250−500 kw 28 748 35 935 307,20 384,00 >500 kw 65 748 82 185 233,20 291,50 energy component price sek/kwh season vat excluded vat included winter nov–march 50,46 70,58 spring/fall april–may, sept – oct 32,52 40,65 summer june–aug 9,98 12,40 flow component price sek/cubic meter season vat excluded vat included winter nov–march 3,78 4,73 the company’s motive to use this kind of component in the price model. more informed customers saw problems with the flow demand component in the summer time when the supply temperature was low in the grid. with a lower supply temperature the customer automatically gets a higher flow demand without using more energy. there is nothing the customer can do to control this. customers that had been contacted about high flow levels were grateful to the company about this alert. 4.3. sala-heby energi ab sala-heby energi ab (sheab) is a relatively small energy company owned by the municipalities of sala (87.5 %) and heby (12.5 %). sala and heby are situated about 120 km north west from stockholm. sheab is a local supplier of electricity, heat and energy efficiency services. in addition to these services the company also sells wood pellets. in 2010 a subsidiary was formed, hesab, that sells photovoltaic packages and energy efficiency services. the heat production is based on local wood chips or wood pellets, and bio-oil is used for peak load. sheab has about 1400 district heating customers, 900 of these are homeowners. there is only a few industrial customers, but quite many housing associations and housing companies. 4.3.1. construction of price models at sheab in 2010 sheab changed their price model for larger customers, while the price model for homeowners stayed the same. the price model contains only an energy price and a quantity discount to customers with high heat demand. the customers is given a possibility to bind their energy price for one, three, five or ten years (the same principle as interest rates could be bound in home loans). according to the interviews with strategic staff at sheab, the motive to change the price model was a desire to provide customers with a clear opportunity to influence their heating costs while providing a strong incentive to adopt cost-savings and energy efficiency measures. this also corresponded well with the new subsidiary hesab that offers energy efficiency services. when changing the price model sheab wanted to keep the overall level of income constant, and did this by distributing the previously fixed part to the price of energy instead. a typical price list to customers for district heating in sheab is shown in table 4. the table is depicted from the company’s website. note that the company has a column for the fixed price, where this price is set to zero. the company uses its variable price in their marketing and do the same thing when they sell electricity. 4.3.2. costumer reactions to sheab’s price model according to the focus group interviews, the customers seemed to be very satisfied with the fact that sheab had no fixed fee in the price model. with such a price model, energy savings and energyefficiency measures will have much greater impact on customer costs for heating. some customers indicated that they were aware that a completely variable price for dh entails certain risks and disadvantages, but these customers were still in favour of a fully variable price anyway. seasonal energy price: the reason why the energy prices should be higher in the winter was not obvious to the participants. for most commodities the marginal production costs become lower not higher when larger volumes are produced. this is not the case for dh. even if the customers did not understand the reason for the season based energy price, they accepted the higher winter price: “we have learned that it is more expensive to live in a cold climate when it is winter. we need more clothes and other things.” sheab use a bonus/malus system to charge the customers for flow demand. in the interviews some customers stated that the fee really worked as an incentive for them to work with their dh substations. some customers had signed service contracts to get help in improving their cooling. 56 international journal of sustainable energy planning and management vol. 13 2017 costumer perspectives on district heating price models table 4: district heating prices for sala-heby energi from 2014-01-01 variable energy price sek/mwh. yearly energy winter time/ use (mwh) fixed fee (sek/year) other time* 0−35 0 935/845 35−100 0 904/845 100−200 0 881/821 200−500 0 868/805 >500 0 812/756 * the higher price for energy apply during the period from november to march and the lower in april-october. 4.4. customer views on the qualities of a good price model in all focus group interviews the participants were asked to describe what qualities characterize a good price model for dh from a customer perspective. the responses resulted in a list that was written on the whiteboard. in four of the interviews there participants also made a priority of the qualities that they felt were the most important ones by giving two points to the most important characteristic and one point on the second most important. a compilation of the results from the six focus group interviews is showed in table 5. given that customers are coloured by their own past experiences of dh price models, it was interesting to see that the characteristics of what constitutes a good price model to the customers were repeated in the various focus group interviews. to summarize the result shown in table 5, the customer emphasized the following qualities in a good price model from a customer perspective: 1. energy efficiency must be worthwhile. customers want to feel that it pays to improve energy efficiency and to save energy in their own buildings. qualities that were listed on the white board that reflects on this were “stimulating energy efficiency”, “able to influence by behaviour”, and “variable cost”. 2. customers want to pay for “what they consume”, and they equate this with having a high share of variable cost in the price model. a high fixed cost means that the customer will have to pay regardless if any energy has been used or not. 3. predictability for budget work. the large customers emphasized that they wanted a price model that is easy to make a budget from. the customers particularly criticized components in the price model that was based on peak load behaviour. 4. customers must understand what they are paying for. this was expressed by qualities like that the price model should be “simple,” “understandable” and “be able to explain to others.” components that were perceived as difficult to understand and communicate was primarily flow demand components and load demand components. 5. fairness: the customers did not have the same view as the dh companies of the concept of fairness regarding price models of dh. dh companies referred to fairness in the meaning that no customer group should subsidize costs generated by other costumer groups. for the customers a “fair” price model should not punish international journal of sustainable energy planning and management vol. 13 2017 57 kerstin sernhed, henrik gåverud and annamaria sandgren table 5: compilation of customer preferences and priorities of the characteristics of a good price model. results from six focus group interviews öresundskraft sheab sfab housing associations / housing associations/homeowners homeowners community associations • pay for what you consume • variable cost (16 p) • variable cost • simple • be influenced by behaviour (6 p) • able to explain to others • understandable • understand what you pay for (1p) • measuring the installed • environmental choice (1p) capacity in a fair way • simple (0 p) real estate companies housing associations/industries real estate companies • stimulate improved energy • able to be influenced by behaviour (13 p) • understandable (11p) efficiency (14 p) • understand what you pay for (7 p) • predictable – to be • be influenced by behaviour (5 p) • simple (7 p) able to make calculations (8p) • predictable so that one can • fair (0p) • provide incentives to run make budget (3 p) district heating production • freedom of choice (2 p) better (2 p) • the company cost recovery (0 p) • fair (0 p) • freedom of choice (0 p) the customer for making investments in solar heat or an air heat pump, of for having a single high peak load demand some winter’s day. also, full fairness between customer groups did not seem to be a customer driven issue according to the answers given in the focus group interviews. the customers do not have sufficient insight in how district heating prices are set to be able to see if one customer group subsidizes another. as one representative from a large real estate company put it: “you can design a price model that is quite fair, but i think you have to find that golden middle ground in the choice between fairness and simplicity, were simplicity is the more important one. you must be able to explain the price model to the customer”. 6. optional price models. freedom of choice and environmental choices were raised in some cases as can be seen in table 5, although these qualities did not get any points when the participants were asked to prioritize the qualities. giving the customer a choice, simultaneously means that you expose the customer to the risk of making a choice which eventually proves to be the least advantageous to the customer. neither large nor small customers in the interviews seemed to demand the possibility to choose between several different alternatives. if you are to give the customer the option to choose, the options should be sufficiently differentiated and you should give the costumers some guidance in benefits and risks concerning the different alternatives. the responses from customers in the focus group interviews show that with a complex price model follows an increased need to inform and educate the customers. if incentive-based components are used the customers must be provided with information on how the customer can save money. it is also important to harmonize the price model with the company’s profile and the range of services the company provides. if an energy company sells energy efficiency services, a high share of fixed cost in the price model of dh would not benefit this kind of business. 5. conclusion the results show that several important customer requirements are actually suffering with the new price models. the most important issues for the customers are when price models are designed in a way so that energy savings do not provide any financial savings to the customer, when the costs for heat or load demand are hard to predict which makes it difficult for the customers to budget the costs and to develop accurate investment estimates for energy efficiency measures. the results from this study should be seen as one puzzle piece in the input in how price models for dh should be designed. factors like weather dependency, sunk costs from fixed assets and new competition on the heat market constitute challenges and business risks for the dh industry that must be considered, no doubt. but dissatisfied customers voting with their feet constitutes another financial risk for the dh business. acknowledgement this study was 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http://onlinelibrary.wiley.com/doi/10.1002/er.857/abstract http://www.sciencedirect.com/science/article/pii/s0301421509009148 http://www.sciencedirect.com/science/article/pii/s0306261908000299 http://www.sciencedirect.com/science/article/pii/s0301421511007208 http://www.sciencedirect.com/science/article/pii/s0378778805001106 http://www.varmemarknad.se/pdf/vis.pdf http://www.sciencedirect.com/science/article/pii/s0360544210001921 http://portal.research.lu.se/portal/files/3613449/1150982.pdf http://www.svenskfjarrvarme.se/global/fj%c3%84rrsyn/rapporter%20och%20resultatblad/rapporter%20omv%c3%a4rld/2009/fj%c3%a4rrv%c3%a4rmen%20i%20framtiden.pdf ttp://www.norrenergi.se/norrenergi-dig/foretag-fastighetsagare/priser-och-avtal-fjarrvarme/ https://www.karlstadsenergi.se/globalassets/fjarrvarme/prisdialogen/karlstads-energi-ab-prisandringsmodell-fjarrvarme-2015.pdf https://www.vastervik.se/globalassets/vastervik-miljo-och-energi/fjarrvarme/pdf/ny-prismodell-foretag-webb.pdf 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 04. 1963-6919-1-le.qxd international journal of sustainable energy planning and management vol. 15 2018 21 aabbssttrraacctt renewable energy generation depresses electricity spot prices, which is often used as argument to justify incentives provided to renewables. in the so-called “merit-order effect”, renewable power reduces the load available for conventional power and displaces higher marginal cost generation out of the market. in this study, we estimate the value of the “merit-order effect” due to wind power generation in the iberian market, in the period between 1st january 2008 and 31st october 2016. this value, representing consumers’ potential cost savings, is compared with the direct costs of the financial incentives in portugal and in spain. the accumulated “merit-order effect” amount is estimated to be 26.1 billion €, whilst the total values for the financial incentives reported is 23.9 billion €. the value of the “merit-order effect” explains the existing lower returns by conventional generation and might have additional impacts on future res projects, subject to normal electricity market risks. 1. introduction electricity spot markets rank electrical energy suppliers through the so-called “merit-order” of generators, depending on their marginal costs. renewable energy source electricity generation (henceforth referred to as res-e), having high capital costs and small operational costs, generate as much electrical energy as the applicable renewable resource available, depressing electricity spot prices significantly [1]. the changes in the european electricity systems are profound and ongoing. new challenges arise from the high level penetration of res-e, both in the technical sense and in the market design, due to the known res-e intermittency and non-dispatchability [2]. simultaneously, electricity markets in europe are being restructured in face of a number of european policies intending to guarantee the supply of electricity, reduce costs, foster competition, ensure security of supply and protect the environment [3]. alongside, unbundling and privatisation of the electricity supply industry has been achieved in most of the eu member states, together with the creation of independent national regulatory agencies, and introducing competition at the different market levels [4]. energy-only markets remunerate electrical energy, based on the traded volume and price. therefore, increasing res-e create a depression in spot electricity prices, due to the “merit-order effect” of zero marginal cost bidding, and diminishes the available load for the remaining non-zero bidding technologies [5]. * corresponding author e-mail: nuno.carvalho.figueiredo@gmail.com international journal of sustainable energy planning and management vol. 15 2018 21–30 the price of wind power generation in iberia and the merit-order effect nuno carvalho figueiredoa,b,d,* patrícia pereira da silvab,c,d a efs initiative, university of coimbra, sustainable energy systems – mit-p, coimbra, portugal b inescc, coimbra, portugal c ceber, coimbra, portugal d faculty of economics, university of coimbra, coimbra, portugal keywords: merit-order effect; wind power; renewables financial incentives; url: dx.doi.org/10.5278/ijsepm.2018.15.4 22 international journal of sustainable energy planning and management vol. 15 2018 the price of wind power generation in iberia and the merit-order effect lower spot electricity prices are often used as argument to justify incentives provided to renewables; however, a number of challenges are created related with failure of investment signals, capital cost recovery and other market design issues. additionally, in most cases, savings are not appropriated by consumers due to the pass through of renewable incentives in electricity bills. in the so called “merit-order effect”, renewable power bids shift the aggregated supply curve to the right, reducing the load available for conventional power (the “residual load”) and displacing high marginal cost generation out of the merit-order [6–8]. therefore, the electricity wholesale market fails to provide incentives to sustain adequate generation capacity, the “missing money problem”. this “missing money problem” not only impacts conventional generation, but also renewables, if fully integrated in the spot electricity market and exposed to market risks. there is a financial transfer from the wholesale market through the “merit-order effect” to end-consumer savings. however, end-consumers bear the costs of res-e financial support mechanisms through additional tax or directly in the electricity bill [6, 9–12]. currently, most of the res-e projects are financed through some kind of support mechanisms, such as, investment subsidies, tax credits, low interest loans, feed-in tariffs or feed-in premia (for a more comprehensive list and description of the support mechanisms used, the reader can refer to [13–16]). in this study, we estimate the value of the “merit-order effect” due to wind power generation in the iberian electricity market between the 1st of january 2008 and 31st of october 2016 and compare this value, which represents consumers’ potential cost savings, with the direct costs of the financial support mechanisms for res-e. the computation of the “merit-order effect” is done by estimating the new clearance price and energy quantities that would be achieved in the wholesale electricity market in the absence of wind power. our methodology is based on real bids and on a simple clearing price calculation, whilst sensfuß et al. [6] used simulated spot electricity prices through an agent-based model and felder [7] just established a methodology to calculate the “merit-order effect”. moreover, our calculation was made for iberia as an integrated spot electricity market for a time span of almost 8 years. ultimately, the goal is to verify if the amounts transferred from the wholesale electricity market are adequate to finance the res-e support mechanisms. in section 2 we present a literature review, followed by the data and methods used in this study in section 3. the results obtained and associated analysis is presented in section 4 and a brief conclusion can be found in section 5. 2. literature review 2.1. the rising importance of res-e the impact of res-e financial support on endconsumer electricity prices has been evaluated in several studies without any common conclusions. for example, in australia, gerardi and nidras [17] found that the res-e financial support decreased retail electricity prices, whilst roam consulting [18] calculated an increase of 5% in 2015. for some european member states, silva and cerqueira [10] estimated that an increase of 1% in res-e share of demand would increase 1 to 1.8% end-consumers’ electricity price. for spain, costa-campi and trujillo-baute [19] found that, at an aggregate level, an increase of about 9% in total production under the fit system leads to a fall of 2.61% in the wholesale price and an increase of 4.35% in the fit cost, which results in a 0.042% increase in the average retail price of final industrial consumers. europe’s ambitious target of 20% renewable energy sources in 2020 (or 33% renewable energy sources for electricity) prompted several member states to propose highly attractive support mechanisms. denmark, germany, portugal, spain, italy, ireland, and belgium, for example, have seen their share of renewable energy sources, mainly in wind and solar, increase drastically in a few years. among all renewable energy sources, wind and solar were the ones subject to the strongest research and development, based on clusters established in some regions of europe. all these efforts required financial instruments like feed-in tariffs, feed-in premia, fiscal incentives, tax exemptions and other [14, 20–22]. these financial instruments provided an initial incentive to invest in non-mature res-e technologies. one of the most successful examples of res-e incentive policies can be found in denmark, where a partnership between public and private institutions was established [23]. after a strong energy policy shift, denmark managed to reach 20% res-e share in 2008 [24, 25]. since then, res-e share in denmark continued to rise, reaching, in 2015, 41.4% of wind power and 13.8% of essentially biomass. this level of res-e is international journal of sustainable energy planning and management vol. 15 2018 23 nuno carvalho figueiredo and patrícia pereira da silva possible due to the cross-border interconnections that allow electricity trading in the nord pool and smooths production profiles. in iberia, both portugal and spain had an outstanding increase in wind power, whilst, in spite of the existing solar potential in portugal, only spain developed significantly solar power. moreover, hydropower generation share is historically high in iberia. in germany, the “energiewende” policy prescribed the end of nuclear power and the growth of res-e to replace fossil generation. in result, germany has currently the largest wind and solar power in europe with 40.5 gw and 38.2 gw of installed capacity, respectively [26]. with the recent technology developments, wind and solar power became mature. with decreasing investment costs, the existing financial instruments became obsolete. furthermore, the financial burden of res-e incentives is significant and policies are being reviewed throughout europe. in germany and spain, for example, actions were already taken to reduce res-e financial support [27, 28]. 2.2. the merit-order effect electricity trading in europe is currently based on several types of markets: exchanges or spot markets, bilateral and over-the-counter markets, ancillary services markets, and retail markets [29]. presently, electricity exchanges in europe trade volumes of electricity at a clearing price, matching supply and demand. all market agents bidding lower than the clearing price, trade their bidding volumes at that price. these exchanges have day-ahead sessions for each of the day period (usually for each of the 24 hours) and intraday sessions to provide a first level for the electrical system balance. the electricity market price clearance is done for a specific geographical area, which depends not only on national borders, but also in some cases on internal transmission capacity, reflecting electricity flow constraints and allowing for distinct price signals in each area (e.g. sweden with four bidding areas). in europe, spot electricity markets bidding areas are then joined through a market coupling/splitting mechanism, where bidding areas with lower prices export electricity to markets with higher prices through the interconnections. if the interconnection capacity is large enough to accommodate the exported electricity flows (without congestion), then the price is the same in both markets, otherwise market splitting occurs and two regional market prices are cleared [30]. on the supply side, the so-called “merit-order” of generators depends on marginal costs of each market agent bidding in the spot electricity market. these marginal costs of market agents depend mainly on the generation technology in their electricity production portfolio and related operational costs [31]. each generating plant operational cost presents several components like fuel, variable consumables, variable maintenance, emissions and transmission costs. generally, in the bottom of the supply curve one can find market agents bidding electricity produced with low marginal cost technologies, like nuclear or hydro. this is the also the case of renewable generation technologies with high capital costs and small operational costs, which will produce as much electrical energy as the applicable renewable resource available [22]. therefore, electricity spot prices are significantly dependent on the available renewable electrical energy in the market, given that renewable power comes first in the merit-order, lowering spot electricity prices and potentially causing zero, or even negative, price periods in the case when demand is fully covered [7, 32, 33]. confirmation of the above is obtained through the analysis of data extracted from the iberian electricity spot market (omie), from the 1st of july 2008 to the 15th of march 2014, where the volume of bids at zero price is found to be positively correlated with the available res-e power generation (correlation factor of 0.733 with a 95% confidence interval [0.728, 0.737]), as seen in figure 1. clearly, the spot electricity price is also correlated with the volume of bids at zero price; however, negatively (correlation factor of –0.413 with a 95% confidence interval [–0.420, –0.406]), with significant amount of market periods with zero spot electricity price (figure 2), confirming the statements of several authors [7, 32, 34]. 10000 20000 30000 40000 50000 res-e load [mwh] 2008-07-01 to 2014-03-15 e le ct ri ca l e n e rg y b id s a t ze ro [ m w h ] 0 10000 20000 30000 figure 1: omie electrical energy bids at zero [35] vs. renewable power generation [29, 36, 37] 24 international journal of sustainable energy planning and management vol. 15 2018 the price of wind power generation in iberia and the merit-order effect renewable power bids shift the aggregated supply curve to the right and displace high marginal cost generation out of the merit-order. this, as abovementioned, is the so-called “merit-order effect”, causing a reduction in the spot electricity price and reducing the load available for conventional power, or the so-called “residual load” [6–8]. the residual load is positively correlated with the spot electricity price (correlation factor of 0.553 with a 95% confidence interval [0.547, 0.559]), as observed for the omie in figure 4. figure 3 shows the aggregated supply and demand plot for the hour with the highest res-e generated in iberia in the considered data sample extracted from the omie (28th january 2014, hour 20). considering the aggregated supply curves with, and without res-e bids, it is possible to compute the meritorder effect, which for this hour alone amounted to 2.1 million euros. felder (2011) actually stated that by providing incentives to “out-of-market” technologies, such as most renewables, spot electricity prices would fall to zero. lower spot electricity prices are often used to justify the incentives provided to res-e; however, they create a number of challenges related with the investment signals and capital cost recovery. additionally, wealth fails to shift from producers to consumers [6, 9, 11], as in most cases, savings are not obtained by consumers due to the inclusion of renewable incentives in their electricity bills. additional concerns and challenges of high generation shares of res-e are reported both in the technical sense and in the market design [29]. on the technical sense, it is possible to list the following: generation variability and uncertainty, adequate transmission capacity, flexibility and standby of dispatchable generation, electrical system regulation and frequency control, demand-side response, res-e curtailment, energy storage, adequate transmission grid and cross-border interconnections [38–41]. concerning the market design, one can enumerate electricity market integration, cost allocation of transmission grid and cross-border interconnections, intraday and reserve power markets, res-e financial support schemes and capacity support mechanisms [2, 40, 42, 43]. vis-à-vis market design, the reduced residual load and the depressed spot electricity prices, along with the technical challenges and costs of peaking conventional thermal power plants, are currently stressing utilities income [44]. the failure of the market to provide signals to investors for adequate generation capacity levels is the so called “missing money problem”. this “missing money problem” not only impacts conventional generation, but might also affect res-e 0 40 80 120 10000 20000 30000 40000 50000 e le ct ri ca l e n e rg y b id s a t ze ro [ m w h ] spot electricity price [€ /mwh] 2008-07-01 to 2014-03-15 figure 2: omie electrical energy bids at zero vs. spot electricity price [29, 35] electrical energy [mwh] 2014-01-28 hour 20 p ri ce [ € /m w h ] 0 20000 40000 60000 80000 0 50 100 150 figure 3: omie aggregated demand and supply curves (with rese bids solid and without res-e bids dashed) [29, 35] spot electricity price [€ /mwh] 2008-07-01 to 2014-03-15 r e si d u a l l o a d [ m w h ] 0 40 80 120 10000 20000 30000 40000 50000 figure 4: omie residual electrical energy vs. spot electricity price [29, 35] international journal of sustainable energy planning and management vol. 15 2018 25 nuno carvalho figueiredo and patrícia pereira da silva market integration, if exposed to normal market risks. the development of res-e to comply with the increasing eu targets (45% res-e generation share by 2030), might only be viable if market design is carefully assessed and financial incentives kept, notwithstanding reasonable levels depending on technology maturity. 2.3. the challenge of market integration with the incentives provided coming to an end or reduced substantially, the renewables integration in the electricity market and their subsequent exposure to market risks becomes a prominent issue. it is unanimous throughout the literature that flexibility is the key to obtain an efficient electricity market with high levels of renewable generation. in the literature several strategies to achieve this flexibility are proposed: implementation of a premium system to allow res-e to recover investment; implement demand-side response; develop storage technologies; integrate spot, balancing and ancillary electricity markets; improve grid flexibility through reinforcing transmission and distribution networks; flexible and efficient generation mix; capacity guarantee mechanisms; subsidies for electrification of transport and heating [29, 33]. policy makers should tailor the mix of strategies that fits best each regional specificity. 3. data & methods real bid data was extracted for electricity offers and demand from the omie website [35], from the 1st of january 2008 until the 31st of october 2016. furthermore, wind power generation was obtained from redes energéticas nacionais [36] and red eléctrica de españa [37], for the same period. a new equilibrium for electricity price and quantity that would be achieved in the wholesale iberian electricity market in the absence of wind power is estimated to obtain the “merit-order effect”. figure 6 illustrates this in a stylised way where we can observe the difference in supply curves, with and without wind power electricity, solid and dashed lines respectively. without wind power generation, the supply curve shifts to the left, causing an increase of the market clearing price. the consumer surplus is thus increased with higher wind power in the wholesale electricity marginal market and the “merit order effect” is the difference between both consumer surpluses, with and without wind power. a simplified clearing price algorithm, without considering interconnection congestion, market splitting or grid constraints, is used to re-calculate the spot electricity market quantities and price. this algorithm is used to calculate a simplified clearing price with all the bids extracted from the omie electricity spot exchange. this initial clearing price is then compared with a second clearing price, considering the absence of wind power, therefore a higher price depending on the amount of wind power bids found in each particular hour. this simplified algorithm might present some limitations, namely the calculated price does not follow the algorithm used in the omie, therefore, clearing prices will certainly be different from the obtained in the real spot market. in fact, the restrictions imposed in the real spot price calculation increase the price in relation to the simple matching of supply and demand bids (figure 5). nevertheless, given that our objective is to find price and energy quantity relative differences, the assumed simplification may be acceptable. 0 50 100 150 2008 2010 2012 2014 2016 date – time e le ct ri ci ty m a rk e t p ri ce [ € ] figure 5: electricity spot prices (simple clearing – solid and omie algorithm – dashed) 0 2500 5000 7500 10000 0 50 100 150 electrical energy [mwh] mibel (q1, p1) (q0, p0 ) p ri ce [ € /m w h ] figure 6: aggregated demand and supply curves (with wind power – solid and without wind power – dashed) 26 international journal of sustainable energy planning and management vol. 15 2018 the price of wind power generation in iberia and the merit-order effect the “merit-order effect” is then calculated for each hour of the considered data sample, following felder, (2011) and sensfuß et al., (2008) through the following equation: (1) where, (q0, p0) is the estimation of the initial market equilibrium energy and price with all market bids (thus, including wind power) and (q1, p1) the estimation of the new market equilibrium energy and price considering all market bids with the exception of wind power bids (thus, without wind power). consequently, a consumer surplus difference is calculated (the reader should bear in mind that these consumers are wholesale market agents, e.g. electricity retailers or big industrial consumers). the financial cost of wind power financial incentives is also computed and then compared with the “merit-order merit order effect p p q p p q q = − + − −( ) ( )( )1 0 1 1 0 0 1 1 2hhour ∑ effect”. the annual average wind power financial incentives in portugal and in spain are inhere used. these incentives are calculated based on the annual total amount paid to wind power divided by the total wind generation. therefore, the estimation of the amounts spent in wind power financial incentives in each hour, is calculated based on the hourly wind power generation in each country, multiplied by the annual average values for the financial incentives (table 1). the incentives are reported by each country energy regulatory agency, i.e., erse in the portuguese case [45] and cnmc in the case of spain [46]. 4. analysis and results the estimation of the “merit-order effect” was made for each hour of the considered data sample. this is illustrated in figure 7 where it is observed that the calculated clearing price without the wind power bids is higher than the one calculated with all the bids. an expected negative table 1: wind power average financial incentives in euros/mwh [45, 46] year 2008 2009 2010 2011 2012 2013 2014 2015 2016 portugal 94.70 93.70 91.60 93.50 96.60 93.90 93.46 94.11 96.28 spain 100.41 80.09 78.01 87.38 84.83 77.23 58.95 70.7 53.45 2008 2010 2012 2014 2016e le ct ri ci ty m a rk e t p ri ce [ € /m w h ] 20 40 60 date – time clearing price without wind power clearing price with wind power 2008 2010 2012 2014 2016 4000 5000 6000 7000 8000 w in d p o w e r [m w h ] date figure 7: electricity market clearing prices with and without wind power international journal of sustainable energy planning and management vol. 15 2018 27 nuno carvalho figueiredo and patrícia pereira da silva correlation between the “merit-order effect” and the residual load (in our study the residual load is assumed to be the load without wind power) was confirmed (figure 8), supporting the “merit-order effect” theory. this is corroborated by the positive correlation found between the “merit-order effect” and wind power (figure 9). by adding all the discounted “merit-order effect” of the hours considered in the sample, the accumulated “meritorder effect” amount is estimated to be 26.1 billion € (annual amounts are presented in table 2). all amounts were discounted back to the year 2008 using the 3 months euribor interest rate (daily rates obtained from datastream [47]). the value of the “merit-order effect” represents the increasing wholesale consumer surplus and explains the decreasing returns by conventional generation. the decreasing returns obtained by wholesale electricity suppliers may also impact future res projects, which might be subject to normal electricity market risks. the increasing surplus observed in the wholesale electricity market does not necessarily mean that the retail end-consumers obtain savings. in this study, the amount of wind power financial incentives throughout the considered sample period is estimated to be 23.9 billion €, which is lower than the calculated “merit-order effect”. this result is confirmed by previous similar analysis conducted in the literature, in particular, with respect to spain [19, 48, 49], with respect to germany [6] and to several eu countries [10]. 5. conclusion the lower wholesale electricity prices are used quite often as argument in favour of res-e. in fact, the “merit-order effect” created by renewable generation and associated lower spot electricity prices, is often used to justify the incentives provided and according to the results obtained, the value estimated for the financial incentives is lower than the merit-order effect. however, in most cases, savings are not obtained by end consumers due to the inclusion of general res costs in electricity bills [6, 9–11]. additionally, a number of challenges are created related with the failure of investment signals and capital cost recovery, causing the so called “missing money problem”. the missing money problem not only impacts conventional generation, but also renewables, if integrated in the spot electricity market and exposed to normal market risks. without financial support and with the depressed short-term marginal pricing from an “energy-only” market, capital cost recovery would be problematic. thus, investment in renewables can be at risk, depending on the continued existence of financial incentives. additionally, endconsumers have to support the additional costs created by the incentives to wind power and renewables in general. in this study, we conducted the analysis considering the fully integrated iberian electricity system and not portugal and spain separately. also, this article constitutes a longer-term analysis than those currently available in the literature, which is an important aspect to consider as res-e incentives promote producers’ investments with long term contracts, having financial 0 1 2 3 4 merit-order effect [millions of € ] r e si d u a l l o a d [ m w ] 0 10000 20000 30000 40000 50000 figure 8: merit-order effect vs. residual load 0 5000 10000 15000 20000 wind power load [mwh] merit-order effect in iberia m e ri to rd e r e ff e ct [ m € ] –1 0 1 2 figure 9: wind power load vs. “merit-order effect” table 2 – annual calculated merit-order effect [million euros 2008] year 2008 2009 2010 2011 2012 2013 2014 2015 2016 merit-order effect 2920 2127 2617 2627 3182 3974 3616 3198 1901 28 international journal of sustainable energy planning and management vol. 15 2018 the price of wind power generation in iberia and the merit-order effect implications to the electricity market. it is demonstrated that the wholesale consumer surplus increase is higher than the financial incentives provided to wind power generation. a proper market design would transmit these benefits to end-consumers. however, the existing electricity market design is not providing the necessary signals to investors, creating an uncertain future with respect to adequate available generation capacity. policy makers have to address this 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1121-3601-1-le.qxd editorial this editorial introduces the fifth volume of the international journal of sustainable energy planning and management. in this volume, work is presented ranging from statistical analyses of the usage of electricity for heating, to energy policy for sustainable development. electricity use is a growing demand in most countries, but is also a demand that is associated with very high losses in the conversion system. electricity use should therefore optimally cover uses where there are no other alternatives or uses where the entire energy chain efficiency is high. low temperature heat demands for house heating of domestic hot water are typically demands that could be better covered by district heating [1–4]. in this volume, bidaj et al. [5] have performed a statistical analysis of the electricity demand in tirana, albania, showing that 21.6% of the electricity demand in the residential sector goes to cover heating demands. the demand for producing domestic hot water is the largest single demand, and – as the authors suggest – a demand that might be covered by e.g. solar collectors. international journal of sustainable energy planning and management vol. 05 2015 1 from statistical analyses of electric heating in albania, the discussion moves to norway and the planning of wind power. norway is a country of large potential wind resources, however these potentials are not exploited to a very high degree. blindheim [6] argues that a contributing factor to this situation is the handling of licensing and issues by the norwegian ministry of petroleum and energy which acts as a deterrent to potential investors. narula [7] investigates energy security in the residential sector in india by setting up an evaluation methodology consisting of four indices within availability, affordability, efficiency and environmental acceptability. six different fuel types used in the residential sector are hence assessed, coming to the conclusion that firewood ranks the highest in both urban and rural settings. a sensitivity analyses reveals that the result is relatively robust to changes in the weights of the different indices. finally, narula argues that policies should target the improved usage of biomass. abdallah et al. [8] probe into the energy sector reforms that have occurred in various industrialised countries and deliberate how these reforms have been imitated in 1 corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 05 2015 1–2 editorial international journal of sustainable energy planning and management vol 5 �������� ��� � ��� ��������� ������� � �������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� abstract this editorial introduces the fifth volume of the international journal of sustainable energy planning and management. topics include electricity for heating purposes based on a case study of tirana, the norwegian system for licensing wind power plants, analyses of energy security for the indian residential sector, the link between energy sector reforms, sustainable development and energy use and finally the transformation of the european power sector. keywords: electricity share for electric heating licensing systems for wind power energy security in the residential sector sustainable development and energy usage power sector transition url: dx.doi.org/10.5278/ijsepm.2015.5.1 2 international journal of sustainable energy planning and management vol. 05 2015 editorial international journal of sustainable energy planning and management vol 5 developing countries – irrespective of these countries having other and more pressing energy concerns. energy reforms should thus take local conditions into consideration to ensure a sustainable future. verbuggen et al [9] end this volume by looking into some of main factors compromising the evolution towards electricity systems living up to the ipccs recommendations of drastic carbon dioxide emission reductions. a carbon lock-in situation exists, which needs to be handled to reduce emissions and the authors probe into different options in this position paper. references [1] connolly d, lund h, mathiesen bv, werner s, möller b, persson u et. al. heat roadmap europe: combining district heating with heat savings to decarbonise the eu energy system. energy policy 65(0)(2014) pages 475–89. http://www.sciencedirect.com/science/article/pii/s030142151 3010574 [2] lund h, werner s, wiltshire r, svendsen s, thorsen je, hvelplund f et. al. 4th generation district heating (4gdh): integrating smart thermal grids into future sustainable energy systems. energy 68(0)(2014) pages 1–11. http://www.sciencedirect.com/science/article/pii/s036054421 4002369 [3] chittum a, østergaard pa how danish communal heat planning empowers municipalities and benefits individual consumers. energy policy 74(0)(2014) pages 465–74. http://www.sciencedirect.com/science/article/pii/s030142151 4004546 [4] connolly d, mathiesen bv a technical and economic analysis of one potential pathway to a 100% renewable energy system. international journal of sustainable energy planning and management 1(2014) pages 7–28. http://dx.doi.org/10.5278/ijsepm.2014.1.2 [5] bidaj f, alushaj r, prifti l, chittum a evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania. int j sustainable energy plan manage 5(2015) pages 3–14. http://dx.doi.org/10.5278/ijsepm.2015.5.2 [6] blindheim b gone with the wind? the norwegian licencing process for wind power: does it support investments and the realisation of political goals? int j sustainable energy plan manage 5(2015) pages 15–26. http://dx.doi.org/10.5278/ijsepm.2015.5.3 [7] narula k comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india’s residential sector . int j sustainable energy plan manage 5(2015) pages 27–40. http://dx.doi.org/10.5278/ijsepm.2015.5.4 [8] abdallah sm, bressers h, clancy js energy reforms in the developing world: sustainable development compromised? int j sustainable energy plan manage 5(2015) pages 41–56. http://dx.doi.org/10.5278/ijsepm.2015.5.5 [9] verbruggen et al. europe's electricity regime: restoration or thorough transition. int j sustainable energy plan manage 5(2015) pages 57-68. http://dx.doi.org/10.5278/ ijsepm.2015.5.6 http://www.sciencedirect.com/science/article/pii/s0301421513010574 http://www.sciencedirect.com/science/article/pii/s0360544214002369 http://www.sciencedirect.com/science/article/pii/s0301421514004546 http://dx.doi.org/10.5278/ijsepm.2014.1.2 http://dx.doi.org/10.5278/ijsepm.2015.5.2 http://dx.doi.org/10.5278/ijsepm.2015.5.3 http://dx.doi.org/10.5278/ijsepm.2015.5.4 http://dx.doi.org/10.5278/ijsepm.2015.5.5 http://dx.doi.org/10.5278/ijsepm.2015.5.6 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 19 2019 3 1corresponding author e-mail: sheillanyasha@gmail.com international journal of sustainable energy planning and management vol. 19 2019 03–12 abstract the objective of this study is to empirically examine the dynamic causal relationship between oil price and economic growth in kenya during the period from 1980 to 2015. in an effort to address the omission-of-variable bias, a trivariate granger-causality framework that incorporates oil consumption as an intermittent variable between oil prices and economic growth – is employed. using the newly developed autoregressive distributed lag (ardl) bounds testing approach to cointegration and the error-correction model-based granger-causality framework, the results of the study reveal that there is distinct unidirectional granger-causality flowing from economic growth to oil price in the study country. these results are found to apply both in the short run and in the long run. thus, it can be concluded that in kenya, it is the real sector that pushes oil prices up. further, it is possible to predict oil price changes in kenya – given the changes in economic growth. 1. introduction the quest to establish forces driving economic growth has left economists and policy makers digging deeper into various relationships between economic growth and other macroeconomic variables, energy included. the relationship between energy and economic growth has attracted a proliferation of empirical studies in recent years, from both the impact and the causality angles alike [1-7]. however, studies particularly on energy prices and economic growth have not only been scanty but they have also been biased towards the impact of energy prices on economic growth – leaving the causality between economic growth and energy prices in general and oil prices in particular little explored [8,9]. of the scanty studies on the latter, more than half have focused on the developed countries, developing asian and latin american countries, as well as selected oil producing countries. as a result, most african countries in general, and kenya, in particular, are left with little or no coverage, it is these often forgotten african countries that are, in most cases, hard hit by the oil price shocks [see 9]. in addition, the available studies on the causality between oil prices and economic growth have been far from being conclusive [4, 5, 10]. on the empirical front, studies on the causality between oil prices and economic growth can be conveniently grouped into four categories. the first group consists of studies that found granger-causality to flow from oil prices to economic growth (see 11–13); while the second group found the flow to be from economic growth to oil prices [see, among others, 3, 14]. the third group is of studies that found the feedback hypothesis to be predominant [see among others, 4, 15, 16], while the fourth group constitutes studies that are consistent with the neutrality hypothesis (see 17–19). moreover, some previous studies on this subject have been found to suffer from two major weaknesses. firstly, some of these studies have mainly used a bivariate causality test to examine this linkage; hence, they are prone to suffer from the omission-of-variable bias [see also 15, 20]. secondly, some of these studies have oil price and economic growth in kenya: a trivariate simulation nicholas mbaya odhiambo and sheilla nyasha1 department of economics, university of south africa, p.o box 392, unisa, 0003, pretoria, south africa keywords: kenya, oil prices, energy consumption; economic growth, granger-causality; jel classification code: o40, q43; url: http://dx.doi.org/10.5278/ijsepm.2019.19.2 4 international journal of sustainable energy planning and management vol. 19 2019 oil price and economic growth in kenya: a trivariate simulation mainly used the cross-sectional data to examine the causal relationship between oil prices and economic growth. this, unfortunately, does not address the country-specific effects. against this backdrop, the objective of this study is to empirically examine the dynamic causal relationship between oil prices and economic growth in kenya using the newly developed ardl-bounds-testing approach. by incorporating oil consumption in the bivariate model between oil prices and economic growth, a simple trivariate-causality model between oil prices, oil consumption and economic growth is examined. contrary to the results of some previous studies, our results show that there is a distinct unidirectional causal flow from oil price to economic growth in kenya. the study is expected to contribute to the body of knowledge in more ways than one. the results of this study may guide authorities in kenya on polices related to oil prices and economic growth and how best they can stimulate the real sector without fearing changes in oil price levels. another benefit of the study comes from the methodology utilised, that provides country-specific, hence reliable, results. in addition, the study will add to the scanty literature available on the causality between oil price and economic growth. the rest of the paper is organised as follows: section two covers the dynamics of oil prices and economic growth in kenya; while section 3 reviews the literature. section 4 presents the methodology used in the study, and section 5 presents and analyses the results. section 6 concludes the study. 2. oil price increases and economic growth in kenya according to omagwa et al. [21], the pricing of oil products in kenya is often controlled by the relevant government department, making it a complex process. in 2016, according to the kenya national bureau of statistics [22], the average crude oil price increased 20.3% compared to february prices of the same year. in the same period, the brent oil price increased by $5.9 per barrel, reaching $39.07 per barrel. historically, crude oil prices reached a maximum of $132.83 per barrel in july 2008, while record low prices of $1.17 per barrel were recorded in february 1946 [22]. a number of oil shocks have been experienced during the last +/50 years. most of these oil shocks have been somewhat linked to the disruption of oil production in the middle east due to conflicts [8]. according to hamilton [8], these conflicts include: i) the closure of the suez canal following the conflict between egypt, israel, britain, and france in october 1956 ii) the oil embargo implemented by the arab members of opec following the arab-israeli war in october 1973 iii) the iranian revolution beginning in november 1978 iv) the first persian gulf war beginning in august 1990. besides the oil shock, there are other events that were linked to the disruption of oil supply; and these were: i) the combined effects of the second persian gulf war and strikes in venezuela beginning in december 2002 ii) the libyan revolution in february 2011. furthermore, oil price increases were part of the world energy landscape. the notable historical factors that have led to the oil price increases include: i) the economic recovery from the east asian crisis in 1997 ii) the dislocations associated with post-world war ii growth in 1947 iii) the korean conflict in 1952-53. table 1 presents a summary of events that significantly affected the post-independence kenya. on the economic growth front, kenya’s economic growth has been significantly fluctuating since the 1970s. during the early years of independence, kenya achieved commendable economic growth compared to other ssa countries. between 1975 and 1985, the average annual percentage growth in gdp was 4.1% [23]. during the period 1985 to 1989, the average growth in gdp increased dramatically to 5.7% [23]. however, in 1991 the percentage change in gdp declined to 1.4%. in 1992, kenya recorded a historic low gdp growth rate of about -0.8% – the lowest since independence. however, between 1993 and 1995, the gdp growth increased considerably. the gdp growth rate increased from about -0.8% in 1992 to 0.4% in 1993, before further increasing to 2.6% in 1994 [23]. by 1995 the gdp growth rate had reached 4.4%. but this high growth rate did not last for long. the gdp growth rate declined again systematically from 4.1% in 1996 to 0.5% in 1997 but bounced back to 3.3% in 1998. just before the 2007 global financial crisis (gfc), kenya’s growth rate was above 6%. although the country was international journal of sustainable energy planning and management vol. 19 2019 5 nicholas mbaya odhiambo and sheilla nyasha into higher prices for consumer goods. this, in turn, lowers the consumption demand, which eventually leads to a contraction in real output [25]. however, according to supply-side effect, a rise in oil prices leads to higher production costs, which force producers to cut back their output – thereby lowering the country’s aggregate output [25]. while a number of studies have been conducted on the relationship between energy consumption and economic growth, the same cannot be said regarding the studies on the relationship between oil prices and economic growth – the latter are scanty. the empirical literature has four categories in which the energy-growth causality outcomes can be grouped – the growth hypothesis, the conservation hypothesis, the feedback hypothesis, and the neutrality hypothesis [see 4, 5, 10]. although the empirical literature on the causal relationship between oil prices and economic growth is still limited, each of the four categories established by empirical literature, regarding the possible causality outcomes, has found support – pointing to the conclusion that the causality results on the subject of study are mixed and inconsistent. most studies support the growth hypothesis and argue that it is energy consumption that granger-causes economic growth [see 11– 13, 18, 26 – 33, among others]. there is, however, another strand that supports the conservation hypothesis and argues that it is the growth negatively affected by the gfc, leading to faltering of economic activity – recording a growth rate of 0.2% in 2008 – it quickly recovered. by 2010, growth rate in kenya was 8.4% [23]. from 2014 to 2016, economic growth averaged 5.6%, while in 2016 alone it was at 5.8%, placing kenya as one of the fastest growing economies in ssa. according to the world bank [24], a stable macroeconomic environment, low oil prices, rebound in tourism, strong remittance inflows and a governmentled infrastructure development initiative were the key drivers of the high growth rate. however, gdp growth is expected to decelerate to 5.5% in 2017 as a result of the on-going drought and weak credit growth. the world bank [24] projects kenya’s gdp growth rate to rebound to 5.8% and 6.1% in 2018 and 2019, respectively, on the hopes of the completion of on-going infrastructure projects, a boom in tourism, resolution of slow credit growth and the strengthening of the global economy. 3. literature review on the theoretical front, an increase in oil prices is expected to have two effects – the demand-side effect and the supply-side effect [25, 26]. according to the demand-side effect, an increase in oil prices leads to an increase in transportation costs, which then translates table 1: significant post-independence events in kenya’s oil sector key factors business cycle peak gasoline shortages crude oil increase crude oil or gasoline price controls strong demands, supply constraints nov 48 nov 47–dec 47 nov 47–jan 48 (37%) no (threatened) strike, control lifted jul 53 may 52 june 53 (10%) yes suez crisis aug 57 nov 56–dec 56 (europe) jan 57–feb 57 (9%) yes (europe) — apr 60 none none no strike, strong demand, supply constraints dec 69 none feb 69 (7%) nov 70 (8%) no strong demand, supply constraints, oapec embargo nov 73 june 73 dec 73–mar 74 apr 73–sep 73 (16%) nov 73–feb 74 (51%) yes iranian revolution jan 80 may 79–jul 79 may 79–jan 80 (57%) yes iran-iraq war, controls lifted jul 81 none nov 80–feb 81 (45%) yes gulf war i jul 90 none aug 90–oct 90 (93%) no strong demand mar 01 none dec 99–nov 00 (38%) no venezuela unrest, gulf war ii none none nov 02–mar 03 (28%) no strong demand, stagnant supply dec 07 none feb 07–jun 08 145%) no source: adapted from hamilton [8] 6 international journal of sustainable energy planning and management vol. 19 2019 oil price and economic growth in kenya: a trivariate simulation hanabusa [44] finds that there is a feedback relationship between the price of oil and economic growth in japan. while examining the causal relationship between growth and oil price in small pacific island countries, jayaraman and choong [45] find that there is a unidirectional causal flow from oil price and international reserves to economic growth. although the bulk of the empirical studies support a negative relationship between oil price and economic growth, some recent studies have shown that this relationship may not be strictly negative for all countries. prasad et al. [46], for example, while examining the relationship between oil prices and real gdp nexus in the fiji islands, find that an increase in the oil price has a positive, albeit inelastic, impact on real gdp. the authors conclude that although their finding is inconsistent with the bulk of the previous literature, it is not a surprising result for the fiji islands. specifically, the authors argue that since the actual output in fiji has been around 50% lower than its potential output, it has not reached a threshold level at which oil prices can negatively impact on output. moreover, this finding, according to the authors, is consistent with the results from some emerging countries studied by the international monetary fund (imf) [52]. 4. estimation techniques and empirical analysis in order to empirically examine the causality between oil prices and economic growth in kenya, the study utilises a trivariate granger-causality model that incorporates oil consumption as an intermittent variable – so as to address the omission-of-variable bias associated with a bivariate model [see 53, 54). to further distinguish itself from other previous studies, the study used an autoregressive distributed lag (ardl) bounds-testing technique to examine this dynamic linkage between oil prices and economic growth in kenya. the ardl is a contemporary estimation technique that has been widely used of late because of numerous advantages it offers as compared to the its conventional counterparts – residual-based technique and the full-maximum likelihood test [55]. with the ardl approach, estimation can be carried out with variable integrated of order 0 or one or a mixture of both. thus it does not restrict the variables to be integrated of the same order. in addition, even with endogenous regressors, the technique provides unbiased long-run estimates and valid of the real sector that drives the demand for energy consumption [see, among others, 3, 14, 34 – 41]. between these two extremes, there are studies that support bidirectional causality; hence they maintain that both energy consumption and economic growth grangercause each other. studies that support this middleground view include saidi et al. [4], odhiambo [15], paul and bhattacharya [16], yang [32], glasure [42] and masih and masih [33]. though uncommon, there are also studies that support the fourth view the neutrality hypothesis – that contends that there is no grangercausality between oil consumption and economic growth [see 17–19, 25, 43]. unlike the causal relationship between energy consumption and economic growth, the causal relationship between oil prices and economic growth has not been fully explored. very few studies have fully examined the nexus between oil prices and economic growth. some of the studies that have examined the relationship between oil prices and economic growth include hanabusa [44], jayaraman and chooing [45], prasad et al. [46], rautava [47], glasure and lee [48], kim and willet [49] and darrat and gilley [50], among others. darrat and gilley [50], for example, find that oil price shocks are not a major cause of us business cycles. in addition, the study finds that both oil prices and real output cause significant changes in oil consumption without feedback causal effects. while examining the relationship between oil price and economic growth in the organisation for economic co-operation and development (oecd) countries, kim and willet [49] find that there is a strong negative relationship between oil price and economic growth. likewise, glasure and lee [48] find a significant negative relationship between oil price and economic growth for korea. using a vector autoregressive (var) model, rautava [47] finds that russia’s real gdp is negatively affected by oil price fluctuations. asafu-adjaye [51] estimated the causal relationships between energy consumption and income in asian developing countries – india, indonesia, the philippines and thailand – cointegration and error-correction modelling techniques. the results indicated the presence of bidirectional granger-causality between oil prices and economic growth in the case of thailand and the philippines in an attempt to investigate the causal relationship between the price of oil and economic growth in japan, international journal of sustainable energy planning and management vol. 19 2019 7 nicholas mbaya odhiambo and sheilla nyasha where: y = per capita real gross domestic product op = oil prices oc = oil consumption αo= respective constant; α1 – α3 = respective shortrun coefficients; α4 – α6 = respective long-run coefficients; ln = log operator; ∆ = difference operator; n = lag length; t = time period; and μit = white-noise error terms. 4.3. ecm-based granger-causality model following odhiambo [60] and based on the work of pesaran and shin [57] and pesaran et al. [59], the ardl-bounds testing approach adopted in this study can be expressed as: t-statistics [56]. unlike the conventional cointegration methods that estimate the long-run relationship using a system of equations, the ardl technique uses only a single reduced form equation, making the estimation process simpler and easier without compromising the quality of results flowing from the analysis (55, 57]. furthermore, with the ardl estimation procedure, a sufficient number of lags are generated in order to obtain optimal lag length per variable via the data-generating process within a general-to-specific modelling framework. a list of the numerous advantages offered by the ardl estimation procedure would not be complete without mention of its superior small-sample properties. this property enables the estimation of a model based on a limited dataset [3]. the ardl is, thus, considered the most suitable analysis method for this study. in order to overcome the traditional weaknesses associated with many conventional cointegration techniques, the study uses the recently introduced ardl-bounds testing approach to examine the long-run relationship between oil prices and economic growth – within a trivatiate setting. 4.1 data description in this study, key variables are economic growth and oil prices. to this end, economic growth (y) is proxied by gdp per capita while oil price is proxied by the crude oil price. oil consumption is the control variable and is proxied by energy use, as measured by kilograms of oil equivalent per capita. the choice of having this as a control variable was based on the theoretical empirical links it has with both key variables. on the one hand, oil consumption tends to drive economic growth [12, 58] while on the other hand, it may influence the price level of energy, inclusive of oil. the study used annual time-series data from 1980 to 2015 obtained from the world bank databank [23]. 4.2. ecm-based cointegration model following pesaran et al. [59], the cointegration equations associated with the trivariate granger-causality models in this study are expressed as: α α α α α α α µ = = = ∆ = + ∆ + ∆ + ∆ + + + + ∑ ∑ ∑ t n n i t i i t i i i n i t i t t i t t lny lny lnop lnoc lny lnop lnoc 0 1 2 1 0 3 4 -1 5 -1 0 6 -1 1 ��(1) α α α α α α α µ = = = ∆ = + ∆ + ∆ + ∆ + + + + ∑ ∑ ∑ t n n i t i i t i i i n i t i t i t t t lnop lny lnop lnoc lny lnop lnoc 0 1 2 0 1 3 4 -1 0 5 -1 6 -1 2 α α α α α α α µ = = = ∆ = + ∆ + ∆ + ∆ + + + + ∑ ∑ ∑ t n n i t i i t i i i n i t i t i t t t lnoc lny lnop lnoc lny lnop lnoc 0 1 2 0 0 3 4 -1 1 5 -1 6 -1 3 ��(2) ��(3) α α α α δ µ = = = ∆ = + ∆ + ∆ + ∆ + + ∑ ∑ ∑ t n n i t i i t i i i n i t i t t i lny lny lnop lnoc ecm 0 1 2 1 1 3 -1 1 1 α α α α δ µ = = = ∆ = + ∆ + ∆ + ∆ + + ∑ ∑ ∑ t n n i t i i t i i i n i t i t t i lnop lny lnop lnoc ecm 0 1 2 1 1 3 -1 2 1 ��(4) ��(5) 8 international journal of sustainable energy planning and management vol. 19 2019 oil price and economic growth in kenya: a trivariate simulation relationship between economic growth, oil prices and oil consumption – in a two-step process. the null hypothesis of no cointegration is tested against the alternative hypothesis of cointegration. first, the order of lags on the first differenced variables in the set of cointegration equations (1–3) is determined. the second step is the application of the bounds f-test to the same equations to determine the presence or absence of a long-run relationship between the variables under study. if the calculated f-statistic is above the upper-bound level of the critical values provided by pesaran et al. [59], the null hypothesis of no cointegration is rejected – and a conclusion that a long-run relationship exists, is reached. should the calculated f-statistic be below the lowerbound level, the null hypothesis of no cointegration cannot be rejected. however, in the event that the calculated f-statistic falls within the upperand the lower-bound levels, the results are deemed inconclusive. the results of the bounds f-test for cointegration are given in table 2. the cointegration results in table 2 confirm the existence of one cointegrating vector; hence, grangercausality can be tested. 5.3. ecm-based granger-causality results the short-run causality is established by the f-statistics on the explanatory variables derived from the wald test, while the long-run causality is determined by the negative sign and significance of the coefficient of the error-correction term. the results obtained from the estimation of granger-causality model (equations 4–6) are presented in table 3. as reported in table 3, the results of the grangercausality model show that there is a distinct unidirectional causal flow from economic growth to oil prices in where ecm is the error-correction term and δ is its coefficient. 5. results and discussion this section reports and analyses the results of the study and is subdivided into 3 parts. section 5.1 covers stationarity while section 5.2 is on cointegration; leaving section 5.3 to cover the ecm-based granger-causality. 5.1. stationarity test although the ardl-bounds testing approach does not require that the variables be tested for stationarity prior to analysis, the approach is not applicable if the variables are integrated of order two [i(2)] or higher. for this reason, stationarity tests were carried out using the phillips-perron (pp) and the dickey-fuller generalised least squares (df-gls) tests. these results are reported in table 1. the stationarity results confirmed that the variables where a mixture of those integrated of order zero and those integrated of order one – thereby fulfilling the ardl stationarity condition. 5.2. cointegration results having confirmed that all the variables included in the causality test are integrated of order not more than one, the next step is to test for the existence of a cointegration table 1: stationarity results phillips-perron (pp) variable stationarity of level variables stationarity of first differenced variables no trend with trend no trend with trend y – 0.71 –0.87 –5.51*** –5.72*** op 0.14 –1.53 –7.13*** –7.34*** oc –1.22 –1.73 –4.97*** –4.32*** dickey-fuller generalised least squares (df-gls) variable stationarity of level variables stationarity of first differenced variables no trend with trend no trend with trend y –1.88* –4.19*** – – op –0.15 –1.57 –7.71*** –7.34*** oc –1.19 –1.81 –5.51*** –5.24*** note: * and *** denote stationarity at 10% and 1% significance level, respectively. α α α α δ µ = = − = ∆ = + ∆ + ∆ + ∆ + + ∑ ∑ ∑ t n n i t i i t i i i n i t i t t i lnoc lny lnop lnoc ecm 0 1 2 1 1 3 1 3 1 ��(6) international journal of sustainable energy planning and management vol. 19 2019 9 nicholas mbaya odhiambo and sheilla nyasha economic growth in kenya during the period from 1980 to 2015. a trivariate granger-causality model, which incorporated oil consumption as an intermittent variable, is used. although the energy consumption and economic growth nexus is gaining attention from researchers of late, little has been done on the specific relationship between oil prices and economic growth, in general, and in kenya, in particular. in addition, a few of the studies available on the subject mostly suffer from a number of methodology-related weaknesses – such as the omissionof-variable bias emanating from the use of bivariate causality models, and use of cross-sectional methodologies that fail to incorporate country-specific issues. based on the ardl bounds testing approach to cointegration and the ecm-based granger-causality tests, results of this study reveal that there is distinct unidirectional granger-causality flowing from economic growth to oil prices in the study country. these results are found to apply both in the short run an in the long run. thus, it can be concluded that in kenya, it is the real sector that pushes oil prices up. further, it is possible to predict oil price changes in kenya – given the changes in economic growth. however, the reverse – predicting the changes in economic growth given the changes in oil prices – is not possible. hence, manipulation of the oil prices can be achieved without affecting the performance of the real sector – both in the short and long run. nonetheless, it is kenya. these results apply irrespective of whether the estimation is in the long run or in the short run. the short-run results are confirmed by the f-statistics of economic growth (∆y) in the oil price function (∆op) that is statistically significant – and the long-run results are supported by the error-correction term (ecmt-1) in the same function, that is both negative and statistically significant at 10% level. these results are consistent with the conservation hypothesis – one of the four hypotheses postulated in the energy-growth theoretical literature – that states that it is the increase in economic development that causes the demand for energy to increase. thus, in this case, it is the growth of the real sector that pushes oil prices, implying that kenyan consumers have the ability to thrive even when prices are high. these results are consistent with shahbaz et al. [14] and odhiambo [15], among others. the results further show that there is bidirectional causality between economic growth and oil consumption – but only in the short run – as firmed by the coefficients of oil consumption (∆oc) and economic growth (∆y) in the economic growth and oil consumption functions, respectively, that are statistically significant at 10% and 5% levels, respectively. 6. conclusion the objective of this study is to empirically examine the dynamic causal relationship between oil prices and table 2: bounds f-test for cointegration dependent variable function f-statistic cointegration status y f(y|op, oc) 2.76 not cointegrated op f(op|y, oc) 5.03** cointegrated oc f(oc|y, op) 0.46 not cointegrated asymptotic critical values pesaran et al. [59], p.300 table ci(iii) case iii 1% 5% 10% i(0) i(1) i(0) i(1) i(0) i(1) 5.15 6.36 3.79 4.85 3.17 4.14 note: ** statistical significance at 5% level table 3: results of granger-causality tests f-statistics [probability] ectt-1 [t-statistics] dependent variable ∆yt ∆opt ∆oct ∆y t – 0.363 [0.551] 4.005* [0.054] – ∆op t 3.294* [0.080] – 0.744 [0.978] -0.391* [-1.988] ∆oc t 6.497** [0.016] 0.002 [0.968] – – note: * and ** denote statistical significance at 10% and 5% levels, respectively 10 international journal of sustainable energy planning and management vol. 19 2019 oil price and economic growth in kenya: a trivariate simulation [12] odhiambo, n.m. energy consumption and economic growth nexus in tanzania: an ardl bounds testing approach. energy policy 37(2) (2009a) 617-622. https://doi.org/10.1016/j. enpol.2008.09.077 [13] narayan, p.k., smyth, r. energy consumption and real gdp in g7 countries: new evidence from panel cointegration with structural breaks. energy economics 30 (2008) 2331-2341. https://doi.org/10.1016/j.eneco.2007.10.006 [14] shahbaz, m., van hoang, t.h., mahalik, m.k., and roubaud, d. energy consumption: financial development and economic growth in india: new evidence from a nonlinear and asymmetric analysis. energy economics, 63 (2017) 199-212. https://doi. org/10.1016/j.eneco.2017.01.023 [15] odhiambo, n.m. electricity consumption and economic growth in south africa: a trivariate causality test. energy economics 31(5) (2009b) 635-640. http://dx.doi.org/10.1016/j. eneco.2009.01.005 [16] paul, s., bhattachrya, r.b. causality between energy consumption and economic growth in india: a note on conflicting results. energy economics 26 (2004) 977-983. http://dx.doi.org/10.1016/j.eneco.2004.07.002 [17] rahman, m.m., and mamun, s.a.k. energy use, international trade and economic growth nexus in australia: new evidence from an extended growth model. renewable and sustainable energy reviews, 64 (2016) 806-816. https://doi.org/10.1016/j. rser.2016.06.039 [18] cheng, b.s. energy consumption and economic growth in brazil, mexico and venezuela: a time series analysis. applied economics letters 4 (1997) 671-674. 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" � ��� #�� $�� ������� keywords: energy system modeling; transportation; electric transportation; biofuels and biomethane; stream model; url: dx.doi.org/10.5278/ijsepm.2017.14.2 4 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 assess various transportation scenarios [9]. the swedish energy system is headed toward a zero net ghg emissions, rendering the integration of energy sectors increasingly important [10–12]. energy production from an increased share of variable renewable energy (vre) sources for example, wind, which is characterized by a variable, as well as uncertain and location-specific power generation can be efficiently facilitated using various flexible resources along with energy system integration. flexible generation units, storage facilities, interconnectors, and demand-side management are flexible resources needed to cost-efficiently and effectively integrate higher vre penetrations in the future [13, 14]. the future transportation sector will enable stronger couplings between energy sectors and thereby, make the energy system more flexible; for example, electric vehicles (evs) can provide demandside flexibility in terms of charging from the grid (gridto-vehicle [g2v]). the potential benefit of the transportation sector substantially relying on bioenergy is the excess heat production from biorefineries [7]. combining a carbon source from, for example, biomass, with hydrogen from an electrolyzer to produce bioelectrofuels is one way of integrating the power, heating, gas, and transportation systems and can render a power system more flexible [15–17]. studies have demonstrated the potential flexibility benefits of integrating higher shares of evs in the energy and transportation system. kempton and tomic [18] explained the concept of v2g and the potential benefits of implementing v2g in the energy system. kiviluoma and meibom [19] investigated the influence of power system investments when integrating a higher penetration of wind power along with evs, and heat storages. they showed that evs enable the temporary storage of electricity for later use and thus, increase the flexibility of the power system. juul et al. [20] explored strategies for charging evs in the electricity market. evs can add demand-side flexibility. to this effect, tveten et al. [21] examined market effects on vre integration with increased demand-side flexibility. using a linear optimization model, juul and meibom [22] discussed the optimal configuration of an integrated power and transportation system. skytte et al. [23] and skytte and bramstoft [24] employed the energy system model, sustainable technology research and energy analysis model (stream), to compute and compare future transportation scenarios including high shares of electricity, hydrogen, and biofuels. decarbonizing the transportation sector requires the higher utilization of bioenergy resources [25–39]. börjesson et al. [25] conducted a comprehensive review of the future use of biofuels in the transportation sector using energy–economic modeling and included both national and international studies on the energy and transportation sector. the review revealed significant variations in the projected market shares of biofuels in future transportation scenarios. however, börjesson et al. conclude that biofuels play a key role in the medium term, while electricity is more favorable in the long run. börjesson et al. [26] and grahn et al. [27] documented the technical, economic, and potential benefits for future biofuels on the basis of studies performing life-cycle assessments, and grahn and hansson [28] presented prospects for biofuel utilization in the swedish transportation sector by 2030 using data on current and future production plants. their study highlights sweden’s plans and demonstration projects as well as the utilization of fuels such as ethanol, methanol, dimethyl ether (dme), methane, and biodiesel. börjesson et al. [29] conducted a modeling analysis of biofuels in sweden’s road transportation. adopting a bottom-up optimization model for the swedish energy system, they investigated the cost-efficient utilization of biofuels and found that methanol and biomethane are preferred fuels for the future. furthermore, they showed that the use of second-generation biofuel along with plug-in hybrids in the transportation sector could play a prominent role in achieving medium-term swedish climate targets. börjesson et al. [30] found high utilization of methanol, biomethane, and electricity in the swedish road transportation and börjesson et al. [31] suggested that high methanol utilization led to the most cost-effective, alternative transportation fuel pathway for swedish passenger cars. focusing on sweden’s bus fleet, xylia et al. [32] showed that the share of renewables in the public bus fleet was about 60% in 2014, with biodiesel and biogas as preferred fuels; however, they concluded that electric buses are a promising future technology. the literature overview indicates that the transition of the transportation sector has received broad attention in recent years. however, there remains a research gap in terms of holistic energy system analyses, which assess integrated energy and transportation systems. thus, there is a need for, more analyses on the socio-economic potentials for the cross-sectoral integration of the transportation sector. in particular, an investigation of the future role of fuels such as biomass-to-liquid (btl), international journal of sustainable energy planning and management vol. 14 2017 5 gas-to-liquids (gtl), electricity, and renewable gas, in the transportation sector is crucial. this study makes the following contributions to the research field. it adopts a holistic energy system perspective to investigate the transportation sector as an integrated part of the energy system, which could facilitate future interrelations between energy sectors. the analysis focuses on the future role of evs and biofuels and renewable gases in sweden’s transportation sector. the energy system model, stream, computes the socioeconomic value of the overall system cost and simulates the system integration of the transportation sector with the electricity and heating sectors with an hourly temporal resolution. this study develops two scenarios for the decarbonized swedish transportation sector in 2050. the first scenario (evs) includes a high percentage of electric transportation in the light transportation segment and the second scenario (bios) involves a high percentage of biofuel use in the transportation sector. the nordic energy technology perspective (netp) 2013 [2] is used to represent the swedish energy supply mix. this netp 2013 offers a potential carbon-neutral scenario (cns) that illustrates a pathway to an almost carbonneutral nordic energy system by 2050 while accounting for future developments in surrounding nordic countries. cns is also a reference scenario for the transportation sector in this analysis, thus allowing a comparative evaluation of two developed transportation scenarios, that is, electric vehicles scenario (evs) and bioenergy scenario (bios). the remainder of this paper is organized as follows. section 2 describes the energy system model used to conduct simulations of scenarios along with the main data assumptions. section 3 describes the power, heat, and transportation sectors in the 2050 scenarios. section 4 present the model simulation results and evaluates sensitivities regarding the main assumptions. section 5 concludes with findings. 2. stream model in this study, the energy system simulation tool, stream, is used to conduct simulations of future swedish energy and transportation scenarios. stream is a bottom-up energy system model that enables scenario analyses of an integrated power, heating, gas, fuel refinery, and transportation system (figure 1). by rasmus bramstoft and klaus skytte resources electricity import vre electricity hydropower with storage bioenergy or solid fossil fuels vre heat natural gas liquid fuels gas systems biomethane electricity and heat district heating system heat storage electrolysis power to heat electricity system flexible demand electricity export residential industry tertiary fuels used individually and/ or process heating transport conversion demand refinery figure 1: integrated energy system modeled in stream 6 international journal of sustainable energy planning and management vol. 14 2017 satisfying energy demand, the model simulates energy flows across the entire energy system. thus, stream is a tool suitable to simulate various energy and transportation scenarios and conduct comparative analyses of respective solutions [40, 41]. the stream model comprises two sub-models: the flow model and the duration curve model: the flow model accounts for the annual energy balance between demand and supply. it simulates couplings and interactions between the power, heating, gas, fuel refinery, and transportation systems. using metrics for economic growth, the model determines projections of energy demands and computes the final energy consumption. the results include socioeconomic costs, ghg emissions, energy resources, and fuel conversion. the duration curve model computes the energy balance between demand and supply on an hourly temporal resolution. it computes the optimal operation of the energy system by prioritizing vre vs. dispatchable electricity generation, combined heat and power vs. district heat boiler generation, and optimal utilization of storage facilities. in addition, it allows for varying amounts of flexible and non-flexible demand. by performing a systematic iterative process, the results obtained in the duration curve model are subsequently used as input parameters in the flow model. both sub-models in stream are utilized to obtain a solution that optimizes the annual operation of the energy system on an hourly basis [42]. stream simulates the energy system in an island mode in which electricity trades with adjacent markets on an hourly time scale only appears to balance the power system. furthermore, stream enables the modeling of flexible electricity demand. the following flexibility options are modeled on the basis of user-defined settings: 1) charging of electric vehicles (flexible or night charging), 2) demand-side flexibility (shift in electricity demand from peak to base), and 3) flexible production of electrofuels (e.g., hydrogen). flexible demand is modeled with the objective of minimizing residual peak demand and thus, limiting dispatchable power capacity or power transmission capacity. this study focuses on transportation as an integrated part of the energy system. figure 2 illustrates the conceptual modeling approach for the transportation system in stream. in stream, the transportation system consists of two independent sub-sectors, passenger and freight. the transportation work in the reference year is specified according to statistical data. to estimate future transportation work, stream uses metrics for economic growth along with specific energy intensity factors, which vary between the transportation subsectors. this modeling approach ensures that all simulated scenarios satisfy the same level of transportation work; however, the fuel used in each transportation scenario may vary by vehicle efficiency. to facilitate a more detailed modeling of the transportation system in stream, transportation work is specified in further detail: 1) specification of vehicle types used in sweden, for example, car, bus, train, plane, or bike; 2) utilization degree referring to stocking density; 3) scenario-specific composition of fuels, for example, electricity or biofuels, used for transportation of both passenger and freight. the stream modeling framework enables the computations of associated costs and emissions related to total fuel consumption in the entire energy system. moreover, using an hourly time resolution, stream allows the modeling of variable power production from, for example vre, as well as flexible charging of evs. 2.1. main data assumptions in this study, the reference scenario is the normative carbon-neutral scenario (cns) outlined in the netp 2013 project [2]. it includes both international and decarbonizing sweden’s energy and transportation system by 2050 specify fuel type passenger car bus train aviation & ferries bike freight trucks & cargo train shipping aviation freight passenger gdp energy intensity modal shift stock density technoeconomic parameters figure 2: conceptual model for transportation system in stream international journal of sustainable energy planning and management vol. 14 2017 7 rasmus bramstoft and klaus skytte national energy policy targets and thus, represents a scenario in which the aggregated emissions from the nordics can be potentially reduced by 85% by 2050 compared to 1990 levels. netp 2013 forms the data input for the future generation mix in the electricity, district heating, and process heating sector. the main data sources for powerand heat-generation technologies are from the technology data for energy plants catalog [43]. in terms of the transportation sector, the 2050 projections for passenger and freight work are based on metrics extracted from cns [2]. these projections are estimated using historical trends for economic growth and transportation work as well as assumptions for future transportation work, transportation demand, and efficiency improvements. in this way, transportation work for passengers and freights (passenger km and ton km) is satisfied; however, owing to varying vehicle efficiencies, the amount of fuel used in the transportation sector differs by future scenario. in the modeling framework, cargo vans and trucks are aggregated, although cargo vans account for 82% of vehicle activities and medium and heavy trucks constitute 7% and 11%. in all the scenarios, evs are charged as follows: 1) 40% evs are assumed to charge whenever it is best for the system and 2) 40% evs are assumed to charge their batteries during nighttime, that is, 23:00–6:00. in other words, a maximum 80% of evs can be charged during nighttime, potentially creating new peak consumption hours and indicating a shift in consumption from daytime to the nighttime. fuel and co2 prices fuel and co2 prices can significantly influence the results. table 1 presents the price levels of fossil fuels, biofuels, and co2 emissions by 2050. the price estimates by 2050 for fossil fuels, that is, hard coal, oil, and natural gas, are adopted from netp 2013 [2]. bioenergy price projections are estimated using the global assessment model (gcam) [44]. co2 price reflects the marginal abatement costs in the electricity system and shows a substantial increment toward 2050, which is encouraged by the ambitious energy targets [2]. production of fuels this study considers various types of fuels used in the transportation sector. the model includes fossil fuels such as gasoline, diesel, and natural gas since these fuels are heavily used in sweden’s current transportation sector. the transition toward a decarbonized transportation sector warrants fuels produced from renewable energy sources. thus, the model considers several biofuels, renewable gases, electrofuel, and electricity for transportation. the category of biofuels includes biodiesel, methanol, ethanol, and bio-jet fuels. bioenergy resources can be converted into fuels by utilizing biomass-to-liquid (btl) technologies. bioethanol is produced using fermentation technologies, where 1 g bioethanol is produced from energy crops such as corn, while 2 g bioethanol is made from lignocellulosic biomass, for example, straw. in this study, methanol and dme are modeled as one fuel since the energy balance is similar when considering both production process and vehicle efficiency [17, 36, 45, 46]; however, the cost of producing dme might be higher [45]. methanol or dme is synthesized using a bioenergy resource, where biomass gasification converts biomass into syngas and thereafter, from syngas to methanol through a catalytic synthesis process. thus, gas-to-liquid (gtl) fuels are an integrated part of the btl conversion. in this study, electrofuels have properties of methanol or dme, but are produced through biomass hydrogenation, where the carbon source is combined with hydrogen. this is an effective way to produce more transportation fuel using the same available biomass resources, and furthermore, increase the system integration of the power, gas, heating, and transportation system. second-generation biodiesel is produced from straw or wood using biomass gasification and fisher–tropsch (ft) synthesis. bio-jet fuel is kerosene produced from straw using a btl technology, where the production process includes the gasification of biomass and ft synthesis, among others. renewable gasses include upgraded biogas produced from anaerobe digestion, sng from biomass gasification, and hydrogen produced from electrolysis. table 1: fuel and co2 prices by 2050 fuel prices natural gas 6.02 €/gj nuclear – uranium 4.00 €/gj biomass (straw, wood waste) 9.10 € / g j biomass (energy crops) 9.78 €/gj biomass (manure) 0.00 €/gj coal 1.58 €/gj oil 16.40 €/gj co2 price 120.30 €/t co2 8 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 the costs of biofuel production technologies and energy balances implemented in stream are presented in table 2. 3. description of 2050 scenarios 3.1. power and heating sectors the composition of the power and heating sectors obtained in the cns are used as exogenous input parameters in all scenarios with certain adjustments: the future mix for the swedish power sector has been widely discussed, and in particular, the role of nuclear power remains uncertain given the vision of phasing-out nuclear energy [2, 5, 7, 49]. currently, nuclear power plays a significant role and constitutes approximately 42% of the total power generation and 53% of sweden’s electricity demand [50]. thus, the future prospects of nuclear power influence sweden as well as the surrounding countries’ generation mix. while netp 2013 [2] still considers nuclear power as a supply option, netp 2016 [7] promotes the phasing out of nuclear energy by 2050 and presents a sensitivity analysis on a fast phase-out in sweden. according to netp 2013, sweden will be a major electricity exporter by 2050, exporting 143 pj, while in netp 2016, electricity supply and demand appears to balance out. the phase-out of nuclear power in netp 2016 is facilitated by the increased capacity of low-cost onshore wind technologies and reduced net export of electricity. moreover, sweden’s nuclear power capacity is intended to be decommissioned by 2050 [51]. by excluding nuclear power generation from netp 2013 cns, a composition of an electricity mix similar to that in netp 2016 can be found. this study adopts this composition of electricity mix. the electricity generation mix is implemented in stream with emphasis on consistencies in the final electricity generation for all three future scenarios. however, because the electricity demand varies by future scenario, generation from onshore wind turbines is increased or decreased to meet demand. stream covers energy services in the residential, tertiary, and industrial sector. furthermore, stream computes endogenous demand from a district heat boiler. energy demands in the residential, tertiary, and industrial sector are satisfied by implementing an identical percentage allocation of supply configuration as in cns. the design of the transportation sector is implemented in stream according to the purpose of the specific scenario, that is, cns, evs or bios. table 2: fuel production-costs and energy balances used in stream energy balance: inputs per unit of fuel output distribution electricity heat investment o&m costs costs5 fuel production feedstock biomass (in) (net in) (net in) cost [€/gj/y] [€/gj/y] [€/gj] 1.g. bioethanol1 energy crops 1.72 0.03 0.38 18.6 2.05 3.9 2.g. bioethanol1 straw 2.44 –0.07 –0.60 69.0 5.3 3.9 2.g. biodiesel1a straw/wood 1.79 –0.05 –0.38 112.9 3.4 3.1 biomethane – manure etc. 2.5 64.8 2.0 7.8 biogas2 biomethane – sng1 wood 1.59 0.14 –0.25 118.0 3.5 7.8 methanol/ wood 1.89 –0.67 35.1 1.1 4.2 dme1 electrofuel – wood 0.75 0.53 0.10 4.2 methanol/ dme3 bio-jet4b straw 2.08 –0.02 –0.44 176.8 5.3 3.1 hydrogen1 1.47 –0.26 55.6 2.3 7.8 technology data are taken from several sources 1[45]; 2[47]; 3[15, 16]; 4[48]; 5[29]. production of certain fuels has bi-products such as, gasoline, diesel, and naphtha, which subsequently can be used in other transport means. the modeling approach applied in this study summarize the fuel output, however, the different end products are noted by the superscript later. a gasoline is produced as a by-product. the ratio between biodiesel and bio gasoline production is 2.3. b gasoline and naphtha are produced as by-products. an equal amount of bio gasoline and bio jet kerosene is produced. 2.67 units of bio jet kerosene are produced compared to naphtha. international journal of sustainable energy planning and management vol. 14 2017 9 rasmus bramstoft and klaus skytte 3.2. transportation systems current swedish transportation sector the swedish transportation sector highly depends on oilbased fossil fuels, that is, diesel and gasoline. diesel and gasoline account for approximately 85% of the final domestic consumption in the transportation sector, and the fuel mix in the sector is homogeneous. however, the share of biofuels in the transportation sector is rapidly increasing and accounts for approximately 10% of the final energy use in the domestic transportation sector [50, 52]. future transportation scenarios a literature overview of the transportation scenarios by 2050 is conducted to elucidate pathways that have shown promising results in previous studies. the overview includes both swedish [2, 28–31, 33] and danish [2, 34–39] studies, where each of the studies may assess more scenarios. while swedish studies present more aggregated results, for example, the road transportation sector, danish ones tend to distinguish between different types of transportation. the studies adopt simulation [34–39] and optimization [2, 29–31] models. furthermore, some studies do not include methanol/dme [2, 34, 35, 39]. the overview clarifies general trends in transportation scenario pathways, and the learnings are used to design transportation scenarios investigated in this study. there is a strong expectation from the roll out of evs in the literature. pathways for the car sector show that electric vehicles have a share of 60–95% in most scenarios. some studies suggest that the remaining proportion in the car vehicle fleet is accounted for by methanol or dme (10–85%) [29–31, 33, 36–38], biodiesel (up to 40%) [2, 34, 35, 39], bioethanol (25–50%) [2, 35], and renewable gas (up to 15%) [29, 30, 33, 34]. scenarios for the bus fleet show different pathways with a high utilization of electricity, methanol or dme, biodiesel, and renewable gas. the highest electrification of the bus fleet is estimated to be 50–75% [34, 35], while lower shares 10-25% are estimated in [36–38]. methanol or dme account for 60–90% [31, 36, 38] and biodiesel ranges from 67% to 75% [2, 35] and was even reported to be at 25% [34]. renewable gas is between 30% and 50% [2, 31, 34, 35]. the illustration for the bus fleet fuel composition is similar to that for vans in the freight transportation category. the literature included in this study suggests that electric trucks will not offer promising results by 2050 given their use of high energy-content fuels. a similar scenario is derived for sea transportation. some studies consider methanol or dme to be used in both categories [31, 36, 38], while other suggest the use of biodiesel [2, 34, 35]. renewable gas are also recognized with high shares in trucks (up to 75% [34], about 50% in [35], and 36% in [2]) but with lower shares in sea transportation (15–20%) [2, 35]. the literature review suggests three main pathways toward a decarbonized transportation sector: 1) biodiesel/renewable gas, 2) electrification of light duty vehicles, and 3) methanol/dme/renewable gas. thus, this study explores three scenarios in the context of the transportation sector: 1) cns (with high utilization of biodiesel); 2) evs (high electrification of the light transportation segment, while biofuels are used for heavy transportation), and 3) bios (high utilization of methanol/dme/renewable gas). the transportation categories in cns change the fuel mix from fossil to a much higher share of electricity, hydrogen, and biofuels. within the biofuels, biodiesel is used as the main substitute for traditional diesel. in evs, a high share of the transportation sector is electrified. this scenario pushes the limit of the highest shares of e-mobility in the literature. here, the entire car fleet as well as transportation by trains is electricity based. the future bus sector, cargo vans, and short-tomedium distance trucks sectors will primarily run on electricity, whereas the remaining fuel used is biofuels, that is, mainly methanol/dme and biomethane. the aviation sector is uses bio-jet as fuel. in bios, biofuel-based transportation can accelerate the path to a decarbonized transportation sector. only trains are electrified in this scenario, while the remaining transportation demand is met by biofuels, with methanol/dme and biomethane as preferred fuel choices. the design of fuel composition is inspired by findings from the literature overview. the three future transportation scenarios vary by fuel mix composition. figure 3 presents the fuel mix in the transportation sector by 2050 for the three scenarios. 4. results 4.1. simulated energy systems the present production of power and district heating in sweden is almost carbon-neutral. since the transformation toward a carbon-neutral transportation sector depends on the overall energy system configuration, the electricity and 10 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 figure 3: fuel use in transportation sector in cns, evs, and bios by 2050 (measured as fuel consumption in percent person transportation work (pkm) or percent freight transportation work (tkm)) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% car bus train aviation & ferries trucks & cargo vans train shipping aviation person goods electricity bio-jet electrofuel hydrogen biomethane sng biomethane biogas methanol biodiesel bioethanol natural gas diesel gasoline cns 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% car bus train aviation & ferries trucks & cargo vans train shipping aviation person goods evs electricity bio-jet electrofuel hydrogen biomethane sng biomethane biogas methanol biodiesel bioethanol natural gas diesel gasoline electricity bio-jet electrofuel hydrogen biomethane sng biomethane biogas methanol biodiesel bioethanol natural gas diesel gasoline 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% car bus train aviation & ferries trucks & cargo vans train shipping aviation person goods bios international journal of sustainable energy planning and management vol. 14 2017 11 rasmus bramstoft and klaus skytte district heating systems are designed in consistency with the description in section 3. figure 4 illustrates the configuration of the future electricity portfolio. an underlying assumption for the future scenarios is that the total annual national electricity generation equals the annual national electricity demand. in this way, the annual imported electricity equals the annual exported electricity. however, interconnectors to adjacent markets allow electricity trades on an hourly basis. in the base year (2010), the swedish electricity sector is primarily supplied by hydroand nuclear power, which accounts for 46% and 40% of the total electricity generation. biomass plants, wind turbines, coal plants, and gas turbines account for the remaining electricity production. according to cns, in the future swedish power system, nuclear power generation is phased-out and the major suppliers of electricity by 2050 will be hydropower and wind power. hydropower generation in 2050 will account for 41% of the total electricity production, which corresponds to an electricity production of 70 twh. the share of wind power in cns increases to 44% by 2050 corresponding to a production of 75 twh. figure 4 illustrates how the generation from wind is adjusted to meet the annual swedish electricity demand. high electrification of the energy system is key in evs, where a high share of electric transportation enters the market. consequently, this energy system requires 5% higher electricity demand compared to cns. the higher electricity demand is met by increasing the generation from onshore wind power by 9 twh, leading to a total wind generation of 84 twh in evs by 2050. in bios, the electricity demand is lower. thus, onshore wind generation is reduced accordingly, yielding a reduction in onshore wind generation by 13 twh compared to cns. in this scenario, the energy sectors in the future swedish energy system are more integrated. the district heating system is integrated with both the electricity system, through heat production from co-generation plants (chp) and heat pumps, and the transportation system, for example, through excess heat from biorefinery processes. furthermore, district heat boilers can be a part of the future district heating system as backup capacity, particularly in periods when heat production from other sources was insufficient to meet the district heating demand [53]. figure 5 presents the district heating production and demand in the base year and future scenarios. heat generation from co-generation plants is determined in the cns from netp, wherein a large proportion of the district heat production stems from cogeneration plants that either use biomass or municipal waste resources. heat pumps are introduced and allow efficient heat generation and increase power system flexibility. the highest utilization of heat pumps is introduced in evs and cns, where 31 pj and 20 pj heat is produced. since most of the heat production is predefined, the significant potential for cost-effective utilization of excess heat from biorefineries cannot be efficiently used base year cns evs bios -20 0 20 40 60 80 100 120 140 160 180 200 e le ct ri ci ty p ro d u ct io n ( t w h /y e a r) coal plant gasturbine nuclear waste incineration biomass hydro offshore wind onshore wind import figure 4: electricity generation portfolio in three 2050 scenarios compared to base year 12 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 in the energy system. relying on the assumption that biorefineries are connected to the local district heating system, excess heat production from the biorefinery processes can be utilized to replace traditional district heating supply technologies. the amount of excess heat from biorefineries varies by scenario and is related to the fuel use in the transportation system. the highest rate of excess heat production appears in bios with a value of 174 pj, followed by cns and evs with 63 pj and 48 pj. the potential utilization of excess heat might be overestimated owing to the aggregated spatial resolution, which allows all refineries to be connected to a district heating grid that supplies to the total swedish district heating demand. however, irrespective of scenario, the cost-efficient utilization of excess heat should be further investigated with a higher spatial resolution and information on local district heating grids [54–56]. in all the scenarios, heat production exceeds district heating demand. this indicates that overproduction of heat is cooled down. these periods appear, for example, when biomass co-generation plants are required to produce electricity and because of the fixed heat–power ratio in back-pressure plants the plants also produces heat. 4.2. simulated transportation systems actual fuel consumption in the transportation sector is computed in stream following the modeling approach (figure 2) and the defined transportation scenarios (figure 3). the sankey diagrams in figure 6 illustrate fuel use in the transportation sector for the three investigated scenarios divided by transportation type and indicating transportation of passengers or goods. in cns, the transition from fossil fuels toward a lowcarbon transportation sector is achieved by using 62% biofuels, 9% electricity, and 6% hydrogen. among the biofuels, biodiesel accounts for 28% of total fuel use in the swedish transportation sector by 2050. in cns, fossil fuels continue to be used in the transportation sector and account for 22% of the total transportation energy use. in evs, electricity accounts for 43% of the total fuel use. in particular, the light and medium road transportation segment as well as rail transportation is electrified in this scenario. since the transportation sector in evs is decarbonized, 57% of fuel used in the transportation sector stems from bioenergy resources. this indicates the key role of bioenergy resources in a future electrified transportation system. it is noteworthy that the energy use for car passenger transportation is lower in evs than in cns and bios because electric motors have higher efficiency than motors using fuels. bios is characterized by a high utilization of bioenergy resources in the transportation system and describes a potential future scenario in which bioenergy fuels account for almost 100% of the total fuel use in the transportation sector. methanol or dme accounts for 68%, while bioethanol is 12%. renewable gases enter the transportation system and account for 5% primarily because of its utilization in heavy and long-distance transportation. base year 0 50 100 150 200 250 300 350 400 cns evs bios biorefinery heat pump municipal waste wood pellet boiler oil boiler natural gas boiler coal boiler biomass chp municipal waste chp natural gas chp coal chp dh demand d is tr ic t h e a ti n g p ro d u c ti o n ( p j /y e a r) figure 5: technology mix in district heating sector in base year and three 2050 scenarios international journal of sustainable energy planning and management vol. 14 2017 13 rasmus bramstoft and klaus skytte energy system. in integrated energy systems, primary resources are converted into various energy services. thus, it is important to investigate the energy chain from primary resources to downstream energy services. by applying stream, the national swedish energy resources can be compared with actual resources used in the three future scenarios and accordingly, evaluated in terms of self-sufficiency. bioenergy resources can be used for various proposes in several energy sectors. in this study, bioenergy resources are assumed to be carbon neutral. thus, bioenergy resources will play a prominent role in sweden’s future energy system, which meets the longterm vision of zero net ghg emissions. expectations of higher bioenergy utilization are met in cns, in which by 2050, sweden will be importing biomass resources, straw and wood waste. in this study, importing bioenergy resources is allowed in the modeling framework. the national swedish techno-economical available resources estimated in cns are used to facilitate the resource utilization assessment. figure 7 compares the techno-economic potentials with the actual resources use both in the base and the three future 2050 scenario: cns, evs, and bios. figure 7 presents the transition from the current fossil fuel-based energy system to a future fossil-independent energy system. this transition is facilitated by an increase in wind power and the utilization of bioenergy resources, while the use of fossil fuel is significantly reduced. in cns, sweden is a net importer of biomass (i.e., straw and wood waste) and to a small extent, certain fossil fuels continue to be used in, for example, the transportation, industrial, and tertiary sector, by 2050. even though the evs suggests high electrification of the transportation sector, sweden will still import biomass resources. bios is evidently the scenario with the highest utilization of bioenergy resources. in this study, bioenergy resources are used in all energy sectors, with the highest utilization in the transportation sector, power and heating sector, and industrial sector. according to current knowledge, certain segments of the transportation sector, that is, aviation, sea transportation, and long-haul trucks, seem difficult to electrify. the present study does not include electric highways; however, this technology might be a game changer in the future. in other words, energy-dense fuels are needed, which in this study, are produced on the basis of biomasses. the transportation sector accounts unit: tj gasoline: 11 252 bioethanol: 35 285 electricity: 24 292 hydrogen: 16 233 biodiesel: 73 156 bio-jet: 40 729 diesel: 48 110 biomethane biogas: 15 510 car: 101 671 train: 5 084 bus: 18 120 trucks and cargo vans: 55 913 aviation and ferries: 48 837 air transport: 2 212 ship: 32 731 ship: 32 731 air transport: 2 212 bus: 11 199 trucks and cargo vans: 30 133 train: 4 420 aviation and ferries: 48 838 car: 41 353 electricity: 74 081 bio-jet: 41 282 biomethane biogas: 7 803 methanol: 44 447 biomethane sng: 3 273 bioethanol: 36 988 car: 147 952 bus: 18 120methanol: 209 744 trucks and cargo vans: 53 418 aviation and ferries: 48 837 bio-jet: 41 282 biomethane biogas: 7 803 biomethane sng: 7 452 electricity: 4 420 ship: 32 731 air transport: 2 212 train: 4 420 passenger: 215 946 freight: 91 744 passenger: 102 426 freight: 68 459 passenger: 169 821 freight: 94 747 cns unit: tj evs unit: tj bios figure 6: sankey diagram for fuel use in transportation sector for cns, evs, and bios by 2050 4.3. energy used and available resources resource management is increasingly important in the transition toward a cost-efficient and sustainable future 14 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 for 315 pj in cns, 195 pj in evs, and 575 pj in bios; this should be compared to the 555 pj national available biomass resources. this suggests that the swedish transportation sector can be decarbonized in cns and evs while still leaving room for bioenergy utilization in other sectors. the design of the industrial sector is identical in all scenarios and thus, yields identical bioenergy consumption, namely 204 pj. in addition, the power and district heating system is designed to consume the same amount of bioenergy in all scenarios, that is, 275 pj, which accounts for 50% of the national biomass potential. this energy system configuration could be redesigned by reducing biomass utilization in back-pressure plants. the utilization of biomass for electricity production has been investigated in the literature [57]. instead of importing biomass for electricity and heat production, cheap vre technologies such as onshore wind could be installed to ensure sufficient electricity generation, the district heating system could be electrified using heat pumps, and the use of excess heat from biorefineries can be increased cost-efficiently. some of these measures have also been implemented in the latest version of netp [7]. sweden is a country with high national biomass potential. sustainable carbon will be a scarce resource in the future, and thus, biomass, should be used in sectors with no alternative option. further, other countries may face a shortage in biomass in the future and sweden could potentially become a net exporter of biomass or a country where biofuels are produced and distributed to other countries, thus efficiently using excess heat from refinery processes. finally, the market price of bioenergy resources depends on global utilization; therefore, in case countries follows the scenario of overutilization of biomass resources, the prices of biomass are likely to increase significantly. 4.4. systems costs total annual system cost is used to evaluate the scenarios and is presented in figure 8. to identify elements causing the largest cost differences, total annual cost is disaggregated into the following five elements: investment in energy efficiency, capital cost, o&m cost, fuel cost, and co2 cost. the result from the stream simulation shows that the total annual system cost in cns is about €48.1 billion and in evs, it is approximately €43.8 billion. using cns as a reference, the value corresponds to a reduction of 9.1%. the stream simulation finds bios to be the most expensive with a value of €48.2 billion, thus corresponding to an increment of 0.2% compared to cns. these findings are in line with the results in börjesson et al. [25], who reviewed studies investigating future transportation scenarios and found that electricity may be the most preferred fuel, at least for light transportation, in the longer term. moreover, electrifying light transportation is shown as a costeffective solution [33–35, 37–39]. figure 9 illustrates a comparative assessment of the system costs in the future scenarios. 0 municipal waste manure and foodwaste biomass bios available resourcesevscnsbase year windhydropowernuclearnatural gascrude oilcoal 1200 1000 800 600 200 400 r e so u rc e s a va ila b le a n d u se d ( p j) figure 7: comparative analysis of available national resources and actual resource use in base year and three 2050 scenarios international journal of sustainable energy planning and management vol. 14 2017 15 rasmus bramstoft and klaus skytte this section identifies and further discusses the key factors driving discrepancies in each of cost parameter. figure 9 shows that evs is the most cost-effective for the future scenarios. the total capital costs are about €1.4 billion lower in evs compared to those in cns. the main driver for this reduction is the capital cost of transportation and fuel refineries, which are €1.6 billion lower in evs than in cns. the electrification of the transportation sector lowers the utilization of fuels for transportation. thus, a substantial reduction of 200% is achieved for fuel costs in the fuel refinery processes in evs compared to cns. this implies a significant reduction in total fuel costs, even though higher fuel cost is computed for district heat production technologies. in evs, the electrification of the transportation systems leads to higher demands for electricity. thus, increased generation capacity is needed to meet the growing electricity demand. as mentioned, the share of onshore wind increases according to the rise in electricity demand, yielding a higher capital cost. higher deployment of wind in evs increases the need for flexibility in the power system. electric vehicles can provide flexibility to the system; however, in evs, the required capacity of interconnectors is 20.3 gw, as opposed to the current 10.7 gw [7], 17.2 gw in cns, and 12.8 gw in bios. the costs of interconnectors as well as additional enforcements in the electricity distribution grid are not included in the stream modeling framework, which means that total system costs in evs should be increased accordingly. in bios, fuel costs are the key factor rendering the scenario the most expensive. given the high utilization of biofuels in the transportation sector, bios uses €1.75 billion more as fuel input costs for fuel refinery processes compared to cns. the capital cost expenditures are, however, lower compared to cns given that the lower capital costs in the power and heating sector are about €0.6 billion. finally, fossil fuels are, to a limited extent, used in the transportation sector in cns. thus, compared to cns, costs related to co2 emission reduce in both bios and evs. 4.5. sensitivities of main assumptions a sensitivity analysis is conducted to clarify the robustness of the model results. the effects on the total annual system cost are assessed by separately varying the four assumption parameters, that is, cost (investment and maintenance) of evs and methanol cars, bioenergy prices, and co2 price. stream is a scenario simulation tool where scenarios are exogenously specified. thus, changes in input prices, for example, fuel and co2 prices as well as capex and opex, will not affect the generation portfolio in the energy sectors, but will affect the total system costs. because of this modeling approach, linear relationships between input prices and total annual system cost become apparent. figure 10 illustrates the sensitivity results. the results show that total annual system cost in all three scenarios is sensitive to changes in bioenergy prices. changes in costs (investment and maintenance) of car types have varying effects on the scenarios. bios is sensitive to changes in the costs of methanol cars, while evs is sensitive to changes in costs of evs. in addition, cost reductions or costs higher than estimated in the car industry presumably follow those in other transportations segments, for example, cargo vans, and buses. finally, the model results in all scenarios seem to be robust to changes in co2 prices because the future energy system in all scenarios is almost carbon neutral. co2 cost fuel cost o&m cost investment in energy efficiency bios 10000 20000 50000 to ta l c o st ( m ill . € /y e a r) 40000 30000 0 evscns capital cost figure 8: total annual system cost in three scenarios by 2050 –2000 bios investment in energy efficiency evs 2000 1500 1000 500 0 –500 –1000 –1500c o st d iff e re n ce t o c n -s ce n a ri o (m ill . € /y e a r) co2 costfuel costo&m costcapital cost figure 9: cost difference in total annual system cost by 2050 between two alternative transportation scenarios and cns 16 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 the main model results highlight that evs yields the least expensive solution. furthermore, the sensitivity analysis shows that even when varying the sensitivity parameters ±50%, evs remains the most cost-efficient scenario in all cases. stream computes the socioeconomic value of the energy system. to achieve a pathway such as that in evs, the scenario should be feasible from both a socioand private-economic perspective. if, however, the private consumer is not directed toward investments in evs, policy instruments such as support schemes are necessary to promote such pathways. comparing evs with cns, the sensitivity analysis results shows that 50% higher costs of evs makes cns 4% more expensive than evs. while 50% lower costs of evs leads to a scenario where evs is 14.6% cheaper than cns. the model simulations showed that bios is 0.2% more expensive compared to cns. however, analyzing a situation in which the cost of methanol cars are reduced by 10%, the total annual system cost in bios is 1.2% lower than cns. bioenergy resources are widely used in all future scenarios; however, bios consumes more bioenergy resources and thus, is more sensitive to price changes. reducing prices of bioenergy resources by 10% leads to costs reductions in both bios and cns, although bios becomes 0.4% more cost-efficient than cns. comparing evs and bios, the costs of different car types are the most sensitive parameters and can lead to a shift in the best performing scenario, that is, from evs to bios. if the cost of evs are 60% higher than the estimated cost by 2050, the total annual system cost of bios is 0.3% lower compared to that of evs. 4.5.1. sensitivity scenarios in addition to the sensitivity analysis, sensitivity scenarios are conducted to clarify the impact of significant scenario parameters. three sensitivity scenarios are hence developed: 1. evs-night (night charging of evs – less flexible compared to the predefined settings in evs) 2. bios-biodiesel (biodiesel is used instead of methanol in bios) 3. electrofuel (electrofuel is used instead of methanol in bios and evs) evs-night-scenario: the evs-night-scenario is developed to investigate the impact of limiting demand-side management in terms of charging evs is a flexible manner. in this scenario, all evs are assumed to be charged during nighttime. today, since classic electricity demand is lower during night hours, this charging decision can be assumed as co2 price cns co2 price evs co2 price bios bioenergy price cns bioenergy price evs bioenergy price bios ev car cns ev car evs methanol car bios 35 –50% 50%40%30%20%10%0%–10%–20%–30%–40% 40 45 50 55 t o ta l s y s te m c o s t (b il li o n € /y e a r) percentage change in sensitivity parameter (%) figure 10: sensitivity analysis for three 2050 scenario (changes in total annual system cost (y axis) caused by those in the main assumption parameters, i.e., cost (investment and maintenance) of evs and methanol cars, bioenergy prices, and co2 price (x axis)). international journal of sustainable energy planning and management vol. 14 2017 17 rasmus bramstoft and klaus skytte flexible to a certain extent. however, as evs charging does not consider residual load, this scenario is less flexible compared to the settings in evs. the scenario results for the stream simulation show that the total annual system costs in the evs-night-scenario are 0.8% higher than that in evs. furthermore, the necessary power transmission capacity increases in evs-night-scenario to 22.2 gw, which is 10% higher than that in evs. since the costs of installing transmission capacity are not included in stream, these costs will further increase total annual system costs. these results complement existing findings [18–22] and indicate the potential benefit of applying demand-side management in energy systems with high vre penetration. to investigate the full value of flexibility in power systems, more sophisticated modeling tools are needed [22]. bios-biodiesel-scenario: in bios, methanol is the preferred fuel used in transportation, while cns uses biodiesel. a sensitivity scenario, bios-biodiesel, is assumed to elucidate the impact of relying on biodiesel instead of methanol in bios. bios-biodiesel obtains a total annual system cost that is 1.3% higher than that in bios. a potential benefit of using biodiesel is that 4% fewer bioenergy resources are used. the scenario results show that shifting between methanol and biodiesel do not cause significant changes. electrofuel-scenarios: electrofuels are produced by combining a carbon source from, for example, biomass with hydrogen from electrolyzes, and has, in this study, properties of methanol or dme. electrofuels based on biomass hydrogenation is an effective way to produce more fuel using the same available biomass resource. moreover, the production of electrofuels increases the integration of the power, gas, heating, and transportation system. in the electrofuel scenarios, methanolor dme-based transportation shifts to one using electrofuels. the results from the sensitivity scenarios show that less biomass is used in the transportation sector. in electrofuel-bios, the bioenergy utilization in the transportation sector reduces by 48% from 577 pj to 298 pj, while bioenergy use in electrofuel-evs is 138 pj, which is 29% lower. as biomass utilization in the electrofuel-scenarios decreases, electricity demand increases: it increases by 18% in electrofuel-bios and by 4% in electrofuel-evs, indicating similar demand levels in both scenarios. this evidently influences the required transmission capacity, which for both scenarios is 22.5 gw, and thus, an increase of 11% for electrofuel-evs compared to that for evs. however, hydrogen can be produced by flexibly operating electrolyzes, and as a result, could increase flexibility in the power system. 5. conclusions this study investigated the long-term role of electricity or biofuels in decarbonizing the swedish transportation sector by 2050. by adopting a holistic energy system perspective, it provided an in-depth discussion of the transportation sector while accounting for future interrelations between the power and heating sectors. the energy system model, stream, computed the socioeconomic system cost and simulated the system integration of the transportation sector with the electricity and heating sectors on the basis of an hourly resolution. a configuration of supply mix in the power, heat, residential, tertiary, and industrial sector was adopted from a known scenario (cns) outlined in the nordic energy technology perspective 2013. in this context, the study compared cns with two transportation scenarios: high percentage of electric vehicles (evs) or high percentage of biofuel use (bios) in the transportation sector. the result showed that a swedish transportation sector with a high share of evs by 2050 could lead to the most cost-effective solution under the given assumptions and reduce the total annual system cost by 9.1% compared to cns. the transportation configuration in bios achieved the highest total annual system cost, which was 0.2% higher than that in cns. in this study, bioenergy resources played a prominent role in the future transportation system, accounting for 57%, 62%, and 99% of total transportation final energy use in evs, cns, and bios, respectively. despite the considerable bioenergy resources appear in sweden, the use of bioenergy resources exceeds that of available domestic resources in all scenarios. further, this study discussed the high utilization of bioenergy resources in the power and heating sector. the results showed that the swedish transportation 18 international journal of sustainable energy planning and management vol. 14 2017 decarbonizing sweden’s energy and transportation system by 2050 sector accounted for 57%, 35%, and 104% of the national biomass resources in cns, evs, and bios, respectively. the market price of bioenergy resources depends on global utilization. then, the robustness of the scenario results was tested by changing bioenergy prices in a sensitivity analysis. each scenario was highly sensitive to changes in bioenergy prices; moreover, the results did not offer different bestperforming solutions even in the case of same bioenergy prices in all scenarios. evs and methanol cars are key technologies in the two transportation scenarios. the scenario results demonstrated sensitivity to changes in the costs (investment and maintenance) of different vehicle types. thus, the future development of these two vehicle technologies seems important. three additional sensitivity scenarios were assumed to identify the impact of charging all evs during night hours, using biodiesel instead of methanol or dme in bios, and using electrofuels instead of methanol or dme in evs and bios. the 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<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> /sve <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> >> >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1412-5904-1-le.qxd abstract energy infrastructures in north-central nigeria are inadequate and grid electricity is unable to meet suburban housing electricity demand. the alternative power-supply options proposed by governments in the region require appropriation analysis for selection. four public housing estates in suburban abuja are selected for electricity demand analysis under conventional and energyefficient lighting scenarios; then techno-economic parameters of two off-grid electric power supply systems (pv and diesel-powered generation) to meet these electricity demands are evaluated. an energy techno-economic assessment methodology is used. the study determines the energyefficient lighting system is appropriate with 40% energy savings relative to the conventional lighting systems. the diesel generator alternative power-supply option has life cycle costs almost 4 times those of the pv option. the study established the pv-energy-efficient lighting system as the most feasible off-grid electric power supply alternative for implementation. 1. introduction this introduction provides background information on electricity generation in nigeria, the rationale behind the study/statement of the problem, the study area (north central nigeria and abuja, fct), and the objectives of the study. 1.1. electricity generation patterns in nigeria nigeria is a country richly endowed with energy resources including petroleum, natural gas, coal, wood and hydroelectricity [1]; however the country is faced with acute electricity problems, demand far outstrips supply and more often than not, the supply is epileptic in nature. the acute electricity problems are in part international journal of sustainable energy planning and management vol. 12 2017 47 because of mismanagement in the government agency overseeing energy production [1, 2, 3, 4]. access to electricity is particularly crucial to human development as electricity is, in practice, indispensable for certain basic activities (such as lighting, refrigeration and the running of household appliances) and cannot easily be replaced by other forms of energy [5]. the access to electricity by individual citizens is one of the most clear and un-distorted indications of a country’s energy poverty status [6]. nigeria’s national electricity demand is estimated to be in excess of 10,000 mw at peak demand, however total installed electricity capacity is less than 7,000 mw [3, 4], and electricity availability is usually only about half the installed capacity (between 2,500–3,000 mw) 1 corresponding author e-mail – ibikhunle@yahoo.co.uk; ibikhunle_ogundari@oauife.edu.ng international journal of sustainable energy planning and management vol. 12 2017 47–64 suburban housing development and off-grid electric power supply assessment for north-central nigeria ������� ���� ��� � ��������� ���� �� � �� ������� �� �� � �� ������ �� �� ������ �������� ���� ���� ��� ��� ��!�� "������ ���������� �� ������ � � � � � ��� ���� �� ������ � � � ��� �� � ������� ������� � ������ �� �������� ������� �� ��� !�� � ������ �� ��� ������ �� �� �� �� "� �� ��� #�� ����� $� ����� %��"&#&$'� (������ $� �� �� �� ���� �� � � #�� ������ �$) *+,� ������� ������� � ������ �� �������� ������� keywords: electric power supply; off-grid electric power systems; pv systems; diesel generator systems; url: dx.doi.org/10.5278/ijsepm.2017.12.5 figure 2: sectoral electricity demand in nigeria source: akinwumi et al. [3]; atoyebi et al. [10] 48 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria and power outages ifrequently occur [3, 4]. a wide gap between the installed capacity and available electricity capacity started emerging in 1978 and has increased significantly ever since [3, 4]. the acute electricity problems noticed in nigeria have been attributed to several problems including very poor management capacity by the former government agency overseeing electricity production and distribution, theft of electric power equipment, poor gas supply to power turbines, non-installation of purchased electric power equipment, very poor maintenance of power equipment, high prevalence of accidents and incidents at electric power facilities, limited funding of the sector, and very low human capabilities and capacity utilisation for power generation, amongst others [2, 3, 4, 5, 6]. electricity in nigeria is provided from two major sources–conventional thermal power plants (which provide 48% of electric power) and hydroelectric power plants (which provide 52%) [7, 8]. however, only a small percentage of the country’s potential hydroelectric capacity has been developed [3]. thermal power generation for the national grid is dependent on gas supply from the niger delta region [3]. off-grid power generation is almost wholly dependent on petrol/diesel generators, as other sources of power are negligible in the national energy mix [6]. petrol generators tend to be used at single housing units with low power demand, diesel generators tend to be used in industrial settings and housing estates which have considerably large power demands [9]. figure 1 illustrates installed capacity and total generation of electricity in nigeria from 1970 to 2012. a wide gap between the installed capacity and actual maximum electricity generation capacity started emerging in 1978 and has increased significantly ever since [10]. only about 40 percent of nigerians have access to public electricity [11, 12]. this is shared between three key sub-sectors (see figure 2) – the residential sector (59.6 per cent of total electricity supplied), the commercial sector (29.1 per cent) and the industrial sector (11.3 per cent) [6, 10, 12]. it is estimated that based on total electric power demand in the country, the national power infrastructure can only supply uninterrupted power to the whole nation for just 50 minutes per day [13]. to compensate for power outages, these sectors are increasingly using privately operated petrol/diesel generators for power supply [14]. 1.2. rationale for the study the provision of adequate and affordable energy, being a critical component of sustainable national economic planning in nigeria has had a number of government policy roundtables, seminars, conferences and policy researches carried out for its successful actualization. in the aftermath of the science, technology and innovation (sti) policy developed in 2012, and the drive for the realization of the national development agenda, the federal government of nigeria produced various energy masterplans and policy documents including the renewable energy masterplan (2013) and the national renewable energy and energy efficiency policy (2014) [15]. the objectives of these energy initiatives include guaranteeing the development of nigeria’s renewable energy resources, guaranteeing adequate, reliable and sustainable supply of energy at appropriate costs and in an environmentally friendly manner to the various commercial residential industrial total 1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 2 0 1 0 2 0 1 2 0 200 400 600 800 1000 1400 1200 1600 1800 2000 g w h 8000 7000 6000 5000 4000 3000 2000 1000 m w 0 1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 2 0 1 0 2 0 1 2 installed capacity generated figure 1: electricity availability in nigeria (1970 to 2012) source: atoyebi et al. [20] international journal of sustainable energy planning and management vol. 12 2017 49 ibikunle o. ogundari, yusuf o. akinwale, adeyemi o. adepoju, musiliyu k. atoyebi, and joshua b. akarakiri sectors of the economy for national development, amongst others. several policy and political risks confront reliable energy provision in the country and some of them include non-adoption of outlined policies; policy inconsistencies, instability and contending interests in government; the risks of inadequate policy implementation; lack of continuity of government policies; and socio-cultural conflicts [16]. state governments in nigeria have not been left out of the development of appropriate science & technology (s&t) policies for the economic development of their various states, or the development of policy initiatives for sustainable energy solutions [17]. in spite of all efforts, the provision of adequate and affordable alternative energy solutions in the country has been difficult to achieve [6, 7, 8, 9]. the state governments in northcentral nigeria have interest in developing renewable energy solutions to address their energy challenges, and have taken into cognizance the high solar irradiation (figure 3) in the region to focus on the pv option as an appropriate alternative energy source [6, 8, 9]. traditionally, off-grid electric power is generated using petroleum products like petrol and diesel [11, 12, 13]. the states in the north-central region of nigeria are within the distribution zones of three electricity distribution companies, namely, abuja electricity distribution company ltd, aedc or abuja disco, for niger, kogi, nassarawa states and the fct; jos electricity distribution company ltd, jedc or jos disco, for plateau and benue states; and ibadan electricity distribution company ltd, iedc or ibadan disco, for kwara state [18, 19]. despite past investments in expanding the electricity infrastructure, demand in the discos’ service zone far exceeds supply [18, 19]. increasing population continues to add to that demand. the new electricity tariff introduced by the nigerian electricity regulatory commission (nerc) under the multi-year tariff order (myto) 2015, became effective on the 1st of february, 2016. under the new power tariff regime, electricity consumers in residential customer category (r2) class, pay approximately $0.12 per kwh in abuja and ibadan, and $ 0.13 per kwh in jos [18].2 the north central region of nigeria, just like other regions, has witnessed rapid population and socioeconomic expansion over the last two decades, and municipal infrastructure (including housing and power provision) have been found inadequate to meet the huge population demand [19, 20, 21, 22]. housing estates in the suburbs of the major cities in the region have been < 800 1000 1200 1400 1600 1800 >kwh/m2 average annual sum (4/2004 3/2010) direct normal irradiation nigeria 0 100 200 km figure 3: map of nigeria showing direct normal irradiation source: sambo [9] 2 the study utilized an exchange rate of n200 = us$1, obtained from the cbn as at march 1, 2016 constructed or encouraged for construction by respective public and private concerns (federal and state governments as well as private housing consortiums) to meet the housing demand [23, 24, 25]. however grid electric supply has been found inadequate to meet the suburban housing electricity demand, and suburban housing residents have resorted to using environmentally-polluting diesel and petrol generating plants to meet their housing and commercial electric power demands [26]. the regional development strategy of establishing environmentally-friendly, and energy-efficient suburban housing estates has had limited implementation. many of these suburban housing developments have been based on the design of existing housing estates in the suburbs of abuja, fct. 1.3. statement of the problem various alternative energy options have been advocated for states in the region as appropriate solutions for suburban residential estates (including the pv option and the energy efficiency lighting option), and in several system combinations [27, 28, 29]. state policy on appropriate power-supply system development and adoption in the region has however been ineffectual, and alternative-lighting plans and projects in the region have had very limited success [15, 16]. this limited capacity has been attributed to the non-availability of an appropriate techno-economic assessment of the existing power-supply system, and the viability determination of the alternative options. this techno-economic assessment is critical, being an appropriate evaluation tool for the selection of government alternative-lighting plans in the region. this study provides a viable assessment using selected suburban housing developments in abuja, fct as case study. 1.4. objectives of the study the specific objectives of this study are to: i. determine the electricity consumption in the housing estates under two energy consumption scenarios (conventional and energy efficient electric lighting systems). ii. determine energy savings (if any) between the two energy consumption scenarios. iii. calculate techno-economic specifications of photovoltaic (pv) and diesel generator systems as off-grid electric power supply options for the energy consumption scenarios. iv. establish the viability of pv system adoption as the off-grid electric power supply option. 2. perspective on solar energy utilization in nigeria the utilization of solar energy as a renewable energy source in nigeria has been widely reported, with studies on solar energy availability in nigeria, its potential for sustainable energy development and the constraints to its use as a sustainable energy source, and its adoption in rural communities in the country [9, 10, 16, 27, 28, 30, 31]. identified solar energy projects in the country include street lighting in ekiti state, village electrification and tv viewing in enugu, jigawa and sokoto states, water pumping schemes across the geographical northern regions, solar rice and solar forage dryers in enugu and kebbi states, and solar farms in katsina and bauchi states [32, 33]. these projects were aimed at reducing the acute energy poverty in nigeria, reduce greenhouse gas emission from use of diesel generators, and enhance sustainable energy use in nigeria. oparaku [34] analysed the costs of the photovoltaic, diesel/gasoline generator and grid utility options of rural area power supply in nigeria and determined that the pv option was more viable than the diesel/gasoline generator option. akinpelu and eng [35] also determined the pv option as more viable than the diesel generator option as energy supply in nigeria’s telecoms industry. jesuleye et al [16] reported that contributions of the pv option in the energy mix of rural areas of nigeria was very low (about 14% of the total lighting requirement and less than 2% of the total requirement for energy services) in spite of the best efforts of government, while ukwuoma et al [15] acknowledged the viability of the pv option in nigeria, but noted the limited adoption of the technology in industrial and domestic situations on the country. they attributed this to the huge cost of pv acquisition and deployment. in evaluating the demand management based design of residential solar power systems in nigeria, oladokun and adeshiyan [36], determined reduced costs of designing and installing solar power systems by as much as 62–65% by adopting an integrated demand management approach. atoyebi et al [10] however observed that most pv – diesel/petrol generator – grid utility comparison studies in nigeria were conducted based on energy demand in single housing units or single infrastructural projects, with very little reportage of comparison analysis based on multiple housing or infrastructural sites. they argued for these analyses, noting the limited development of various public and 50 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria international journal of sustainable energy planning and management vol. 12 2017 51 ibikunle o. ogundari, yusuf o. akinwale, adeyemi o. adepoju, musiliyu k. atoyebi, and joshua b. akarakiri to be 25.4 million people [21]. although the region forms the agricultural centre of the nation and its major occupation is farming, there are considerable commercial, manufacturing, and transportation activities [20]. abuja, nigeria’s federal capital located in the fct is the region’s central settlement [20]. some twenty years ago, the population of the region was only an estimated 12 million people [22]; the huge population growth over the years (from 12 million to 25.4 million) is not unconnected to the massive influx of people into abuja and the neighbouring states for economic reasons [21]. 2.2. abuja, federal capital territory abuja, the capital city of nigeria, is a planned city located in the centre of nigeria, within the fct [23]. the city was built mainly in the 1980s and officially became nigeria’s capital on 12 december 1991, replacing lagos, which remains the country’s most populous city and economic capital [23, 37]. the city is located in a relatively undeveloped, ethnically neutral area. a large hill known as aso rock provides the backdrop for the city’s government district, which is laid out along three axes representing the executive, legislative, and judicial branches. government agencies began moving into the new capital in the early 1980s, as residential private residential housing projects in the country due to the challenge of providing appropriate analysis and advice on acceptable off-grid power supply options. momodu et al [44] pointed out that the adoption of energy efficient lighting in residential buildings in nigeria could reduce national electric power demand by as much as 6,000 mw, which is almost twice the electricity supply in the country. regional development initiatives in nigeria generally, and the north-central region in particular, have been less than successful in incorporating energy efficiency schemes in multiple housing or infrastructural sites [29, 36]. 2.1. the north-central region of nigeria the north-central region of nigeria (or the middle belt as it is commonly called) is a human geographical area covering 242,425 km2 comprising six states (kwara, niger, nassarawa, plateau, benue and kogi) and the federal capital territory (fct) stretching across the country longitudinally (figure 4) [19]. the region is made up of largely minority ethnic groups like the nupe, ibira, idoma, tiv and the gwari people, although there are hausa and yoruba ethnic groups present [20]. major towns include ilorin, minna, lokoja, jos, makurdi, lafia, and abuja [19]. the total population is estimated e n w s 4002000200 north-west north-east north-central south-west south-south south-east figure 4: map of nigeria showing the north-central region source: national population commission [22] 52 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria neighbourhoods were being developed in outlying areas [37]. abuja has experienced huge population growth, as much as 20 – 30% per year. in 1991, the population was about 380,000; in 2006 it was an estimated 1,406,239, making the city one of the top ten most populous cities in nigeria at that time [24]. the huge influx of people into abuja has led to the rapid emergence of satellite towns, squatter settlements and other suburban districts such as nyanya, karu, kubwa, jabi, suleja, gwagwalada, lugbe, mpape and kuje to which the planned city is fast sprawling towards and in which about 75 percent of residents reside [24, 37, 38]. jibril and garba [25] estimated that that the abuja metropolitan area would have a population well over three million, making it the fourth largest urban area in nigeria after lagos, kano and ibadan. 2.3. housing and power infrastructure deficits in abuja, fct the abuja city master plan made provision for the development of residential estates for the city’s residences [25]. initially, due to the desire to encourage people to move in and settle in the new city, the federal government took up the responsibility of developing residential houses. by the early 1990s, after clear and significant private sector interests and investments in real property development, the federal government withdrew from direct involvement in housing development and the responsibility shifted to the private sector [25, 39]. many private housing estate developments have sprung in the city and its suburbs to cater for the ever growing population; however, after more than twenty years of huge influx of people into the abuja metropolitan area these private sector investments have been overwhelmed and there is a huge deficit in housing in the city and its suburbs [25, 39]. similarly, electric power demand to the fct far outweighs the supply. the shortage of power supply in fct has been attributed to load shedding from the national grid. the fct is reported to require about 400 to 500 mw for the residents to enjoy uninterrupted power supply, but what is being released for distribution is between 200 and 300 mw only[18, 19, 40]. thus, as the private sector has striven to provide houses for the residences through the development of suburban housing estates, they have also striven to provide alternative power supply to these estates in the form of off-grid electric power devices and energy efficient technologies [18, 19, 40]. 3. methodology four public housing estates in the suburbs of the abuja metropolitan area are considered for the study. each housing estate consists of 400 housing units built as a single development. each housing unit is a 4-bedroom apartment and the electrical load demand in each of the housing units is assumed to be the same. the housing estates are government approved, and duly registered with the abuja municipal area council (amac). residents in the housing estates are predominantly middle-income public servants, who are well-educated (with at least the master’s degree), and have maximum family size of four children per family. note 1. the energy planning is based on maximum possible electric power demand. thus, the maximum possible electric appliance daily time use of 24 hours is assumed in the housing units in the estates. the nigerian scenario is quite unique as most housing units are not metered, and the power distribution companies tend to issue arbitrary, estimated electricity bills which do not necessarily reflect actual power consumption as determined by meter reading, but by the approved revenue targets set by the firms. these bills have been noted to be based on a 24-hour per day, maximum possible electric power consumption template. consequently, nigerians have developed the inclination for indiscriminate use of electricity as they know they will pay very high bills, whether they use the power or not. nigerians tend to leave their electric appliances on to use up as much electric power as possible when they do have grid electricity. electric power demand planning is therefore based on maximum power demand, rather than actual power demand. furthermore, as most nigerian residents generate their own power through the use of petrol/diesel generators, there is very little cautiousness to limit electric power usage. 2. the public housing estates have matching designs, and identical basic electric appliances installed in each housing unit. 3. 10 housing units in each estate were randomly visited to affirm the authenticity of matching housing designs and basic electric appliance installations. international journal of sustainable energy planning and management vol. 12 2017 53 ibikunle o. ogundari, yusuf o. akinwale, adeyemi o. adepoju, musiliyu k. atoyebi, and joshua b. akarakiri to achieve objective i, an energy audit of the housing estates is conducted. this entails three steps: (a) walkthrough audit entailing appliance inventorizing, (b) detailed appliance wattage measurement, and (c) appliance time of use measurement. under the conventional scenario, 60w incandescent bulbs are utilized in the housing estates while under the energy efficient scenario, the 60w bulbs are replaced with 15w compact fluorescent lamps (cfl). to achieve objective ii, the power rating and energy consumption data for the housing estates under the energy efficient scenarios are tabulated and compared with each other, and energy savings determined by calculation. to achieve objective iii and iv, data on life cycle costs (lcc) over a 25-year period for the two off-grid power systems are obtained from primary and secondary sources. the first step entailed designing the stand-alone pv system for the electrification of the estate. the peak power of the design of the pv generator is determined from the estimated total energy consumption per household. other parameters for the calculation are obtained from literature. the next steps are to determine the size of the battery, the size of the charge regulator, and finally the size of the inverter. similarly, for the diesel electric generator, the maximum demand on the generator and generator set ratings are calculated from the estimated total energy consumption per housing unit, the diversity factor, and the power factor. the associated costs of the components of the stand-alone pv system and the diesel generator are obtained from electric power vendors and these costs are fed into the lcc formulae to determine the lcc of each power option. the cost evaluation of the energy supply systems are determined by the following formulae: life cycle cost analysis capital cost: these are the one time fixed cost of purchasing and installing the plant non recurring cost: this is a form of fixed cost used for replacement of parts and may be referred to as life replacement cost (1)lrc ic g d e r ry = × + + + ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ ⎛ ⎝ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎡ ⎣ ⎢ ⎢ ⎤ ⎦ ⎥ ⎥ ∑ 1 1 1 where lrc is the non-recurring costs (life replacement costs), ic is the cost of the item, ge is the general escalation value and is 10.8% as at december 2015 [46], dr is the discount rate and is 4.25% as at december 2015 [46] and ry is the item replacement year which is 10 years. recurring cost: these are the regular cost which account for fuel cost and servicing cost (2) where lfc is the life cycle fuel cost, fe is the fuel escalation which is assumed to be 25% per year because the fuel price has increased by approximate 25% per year over the last 3 years and p is the life cycle of the pv system which is 25 years. (3) lmc is the life cycle maintenance cost and amc represent annual maintenance cost. life cycle costs are determined by the equation: (4) the costs and ghg emissions for the housing estates using the two power system options were computed and comparative analysis used to determine the viability of the pv option relative to the diesel generator option. 3. results the calculations of the study are presented in this section. the study is based on 24-hour power supply as has been explained in the methodology. evidence is available that the power distribution companies bill customers by the highest maximum possible demand per 24 hours. this affects energy planning in nigeria as there is a dearth of research on energy billing in the nigerian market. electricity planning and billing in nigeria is on the 24-hour power supply template and thus is used in our study.3 lcc($ / kwh) = cc + lfc + lmc + lrc period kwh day× ×365 / lmc = amc 1 + g d g g d e r e e r p × − ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ × − + + ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ ⎛ ⎝ 1 1 1 ⎜⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎡ ⎣ ⎢ ⎢ ⎤ ⎦ ⎥ ⎥ lfc = afc f d f f 1 + d e r e e r p × + − ⎛ ⎝⎜ ⎞ ⎠⎟ × − +⎛ ⎝⎜ ⎞ ⎠⎟ ⎛ ⎝ 1 1 1 ⎜⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎡ ⎣ ⎢ ⎢ ⎤ ⎦ ⎥ ⎥ 3 it is important to note that the researchers have had to install personal alternative energy systems in their homes (generator sets, on-grid inverter and battery systems, and solar panel+inverter+battery systems in order to guarantee 24 hours uninterrupted power supply in their homes). 54 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria 3.1. electricity consumption in the housing estates under two energy consumption scenarios (conventional and energy-efficient electric lighting systems) electricity consumption in the housing estates under conventional lighting scenario shows that the total power rating per housing unit would be 2630 w while energy consumption would be 40,120 wh/day (14.64 mwh/year) based on certain assumptions (table 1). table 2 depicts that total energy consumption per estate would be 16,048 kwh/day (5,856 mwh/year) while total energy consumption for the four estates would be 64,192 kwh/day (23,424 mwh/year). under the energy-efficient lighting scenario (table 3), the power rating per housing unit was determined to be 1955 w while energy consumption calculated to be 23,920 wh/day (8.73 mwh/year). total energy consumption per estate would be 9,568 kwh/day (3,492 mwh/year) while total energy consumption for the four estates would be 38,272 kwh/day (13,968 mwh/year (table 4). 3.2. energy savings using energy efficient lighting system in place of conventional lighting system in the housing estates the energy savings determined by using energy efficient lighting points in place of conventional lighting points are shown in table 5. power rating savings are 675 w, 270 kw and 1080 kw per house, per estate and for the four estates respectively. similarly, estimated energy consumption savings are 16.20, 6480 and 25920 kwh/day per house, per estate and for the four estates respectively. furthermore, the conventional lighting system (cls) has an estimated power rating 1.35 times that of the energy-efficient lighting system (eels). cls also shows energy consumption 1.68 times that of eels. table 6 shows the estimated on-grid maximum energy costs and cost savings using conventional and energy efficient lighting in the abuja suburban housing estates from the projected electricity consumptions in the housing estates. under the cls, on-grid energy costs from aedc were estimated to be $ 4.85 per housing unit, $ 1,940 per estate, and $ 7,760 for the four estates. table 1: energy consumption per house using conventional lighting power total power energy electrical rating/unit rating daily use consumption no of items appliances (w) (w) (h) (wh/day) 3 fans 65 195 24 4680 15 lighting units 60 900 24 21600 2 tv set 45 90 24 2160 1 pressing iron 1000 1000 1 1000 1 sound system 45 45 24 1080 2 fridge/freezer 200 400 24 9600 2630 40,120 table 2: total energy consumption in the estates using conventional lighting energy energy consumption energy consumption consumption for per housing unit per estate the 4 estates daily (kwh) 40.12 (40.12*400) (16,048*4) 16,048 64,192 yearly (mwh) (0.04012*365) (14.64*400) (5,856*4) 14.64 5,856 23,424 table 3: energy consumption per housing unit using energy-efficient lighting power total power energy electrical rating/unit rating hourly consumption no of items appliances (w) (w) consumption (h) (wh/day) 3 fans 65 195 24 4680 15 lighting units 15 225 24 5400 2 tv set 45 90 24 2160 1 pressing iron 1000 1000 1 1000 1 sound system 45 45 24 1080 2 fridge/freezer 200 400 24 9600 1,370 1955 23,920 table 4: total energy consumption in the estates using energy efficient lighting points energy energy consumption energy consumption consumption for per housing unit per estate the 4 estates daily (kwh) 23.92 (23.92*400) (9,568*4) 9,568 38,272 yearly (mwh) (0.02392*365) (8.73*400) (3,492*4) 8.73 3,492 13,968 table 5: energy savings using energy efficient lighting system in place of conventional lighting system in the housing estates power rating energy consumption per per housing for the four housing for the four unit per estate estates unit per estate estates (w) (kw) (kw) (kwh/day) (kwh/day) (kwh/day) conventional lighting (2.630*400) (1052*4) (40.12*400) (16,048*4) systems (cls) 2630 1052 4208 40.12 16,048 64,192 energy efficient lighting systems (1.955*400) (782*4) (23.92*400) (9,568*4) (eels) 1955 782 3,128 23.92 9,568 38,272 energy savings 675 270 1080 16.20 6,480 25,920 cls:eels 1.35:1 1.35:1 1.35:1 1.68:1 1.68:1 1.68:1 table 6: estimated on-grid maximum energy costs and cost savings using conventional and energy efficient lighting systems in the abuja suburban housing estates (aedc energy costs = $ 0.12/kwh) housing unit estate four hostels $ $ $ conventional lighting system (cls) 4.85 1,940 7,760 energy efficient lighting system (eels) 2.90 1,160 4,640 cost savings 1.95 780 3,120 cls:eels 1.68:1 1.68:1 1.68:1 international journal of sustainable energy planning and management vol. 12 2017 55 ibikunle o. ogundari, yusuf o. akinwale, adeyemi o. adepoju, musiliyu k. atoyebi, and joshua b. akarakiri 56 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria adopting the eels gives estimated on-grid energy costs from aedc to be $ 2.90 per house, $ 1,160 per estate, and $ 4,640 for the four estates. energy costs saving are estimated to be $ 1.95 per housing unit, $ 780 per estate, and $ 3,120 for the four estates. these calculations show a 40.4% costs reduction by replacing the cls with eels in the estates. 3.3. comparative techno-economic specifications of the off-grid photovoltaic (pv) and diesel generator power supply options in this section, the design specifications of the pv system are determined. 3.3.1 . design of the pv for electrification of the estate there are 400 housing units in the estate, and 1.25 is thus diversity factor [47, 48]. the total required power in the estate based on their load is the total energy consumption in the estate is 40120 * 400 = 16,048 kwh/day 3.3.2. designing a stand-alone pv system for electrification of each housing unit in the estate the peak power (wp) of the pv generator (ppv) for a household is obtained from the following equation: (5) where ppv = peak power of pv, el is the daily electricity consumption in each housing unit and is equal to 40.12 kwh, psh is the peak sun hour duration in nigeria which is approximately 6 hours [49] sf is the safety factor, for compensation of resistive and pv-cell temperature losses = 1.15 nr is the efficiency of charge regulator = 0.92 ni is the efficiency of inverter = 0.9. substituting these values in equation (5), the peak value of the pv is obtained as: ppv = 9.974 kw, approximately 10 kw to install this power, a polycrystalline-60 rectangular cells module type cs6-p-230-p of a 1.61 m2 cross sectional area, rated at 12 vdc, and peak power of pmpp = 230w is selected. the angle/direction of installation in nigeria is estimated to be 20 – 28°s [48, 49] p el sf nr ni psh pv = × × × 2620 400 1 1 25 838 400 × × = . , w the number of pv modules (no.pv) is obtained as: (6) no.pv = 43.37 modules, approximately 44 modules selecting the voltage of the pv generator to be v nominal = 96v, the numbers of the pv modules in series is given as: (7) (vpv and voc are the nominal voltage and the open circuit voltage of the pv respectively). the open circuit voltage and the short circuit current of cs6-p-230-p at standard condition are: voc = 29.6v, isc = 8.34a respectively. no.pvs = 3.24 ~~ 4, thus 4 modules will be connected in series in order to build 9 strings in parallel. the actual number of pv generator modules is 4 * 9 = 36 modules. the open circuit voltage and the short circuit current for the array can be obtained as: voc = 4 × 29.6v = 118.4v isc = 8.34a × 28 = 233.52a therefore, the maximum actual power obtained from this pv array is 27.65 kw 3.3.3. determining the size of the battery a large storage capacity is required for this pv arrays system. thus, a special lead-acid battery (block type) with long lifetime (more than ten years) and higher capability of deep discharge period is selected for this design. the ampere hour capacity (cah) of the block battery, necessary to cover the load demands of each building for the period of 1.5 days when there is no sun [51] is calculated as: (8) where dod is the depth of discharge of a cell and is 0.75, vb is 96v and nb and ni are the efficiency of battery and efficiency of inverter respectively and are 0.85 and 0.9 respectively. substituting these values, the ampere hour capacity of the battery block is obtained as: c ah = 1092.6 ah and the watt-hour capacity is calculated as: c ah = × × × × 1 5 96 0 75 0 85 0 9 . ( . . . ) 40120 c ah = × × × × 1 5. el dod nb nivb no. v v pvs pv oc = no. ppv pv = . pmpp international journal of sustainable energy planning and management vol. 12 2017 57 ibikunle o. ogundari, yusuf o. akinwale, adeyemi o. adepoju, musiliyu k. atoyebi, and joshua b. akarakiri c wh = cah × vb (9) cwh = 1092.6 × 96 = 104,889.6 wh installing this capacity required 62 battery blocks in series (each rated at 2v/1000 ah) in order to build a battery block with an output rated voltage 124 vdc/1000ah. 3.3.4. determining the size of charge regulator the charge regulator is used to normalize the output of the pv generator going to the inverter and also protect the battery against overcharge and deep discharge. the rating of the charge regulator is determined by output of the pv array and its nominal voltage. the vinput is equal to voc which has a range from (4 × 12) to (4 × 29.6) thus the range of voc is 48 to 118.4 vdc the rated power of the charge regulator is equal to the peak power of pv and is equal to 9.974 kw. in this case the appropriate size of the charge regulator is 10 kw. 3.3.5. determining the size of inverter the power of the inverter is determined from the total required power in the household and this should match the battery block voltage. the required power in each building is where 1.25 is the diversity factor this is estimated to 1.415 kva at 0.8 power factor. for this design the appropriate rated power of the inverter is 1.8 kva 3.3.6. the diesel electric generator the diesel generator is the combination of an electrical engine called alternator and the diesel engine to generate electrical energy. in nigeria, diesel generators are p = × = 1415 1 1 25 1132 . widely used to supply electrical energy to the villages without connection to the power grid. sizing of the generator is critical to avoid low-load or shortage of power. the power rating of the diesel generator is determined by the size of the load. the estimated connected load of the each housing unit in the estate is 2630 w as shown in table 1. applying the diversity factor of 1.25, the demand/ connected load is thus estimated as: maximum demand= 2630 w × (1/1.25) maximum demand = 2104 w percentage loading = 70% therefore, the generator set rating = at 0.8 power factor, the diesel set rating is 3.75kva. 3.3.7. lcc for the pv system capital cost = $ 12,485 annual maintenance cost is 2% of capital cost = $ 249.70 using equation 10 above, lmc = $ 15,159.03 non-recurring cost of pv system capital cost of replacing batteries, inverters and charge controller = $ 4120 annual replacement cost is 30% of capital cost = $ 1236 lrc = $ 11945 therefore, life cycle costs (lcc) for the pv system are: the load demand per housing unit is 40.12 kwh/day lcct for pv per housing unit = $ 0.11/kwh lcc kwhspvc ($ / ) = + + + × × cc lfc lmc lrc period kwh365 // day maximu.demand percentage loading = 3005.7w table 7: the associated costs of stand-alone pv system life time total price item components quantity unit price ($) (years) $ 1 pv module(cs6p-23 0-p) 10000 w 1.16/w 25 yrs 11600 2 inverter 1 160 10 160 3 battery 2v 1000ah 62 60 10 2880 4 charge controller 1 240 10 240 5 circuit breaker and switches 1 100 5 100 6 installation materials 75 7 installation cost 250 total system cost 12485 note: the associated costs for the stand-alone pv system and the diesel generator are obtained from energy systems vendors in the fct. 58 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria lcct for pv per estate of 400 houses = $ 44/kwh lcct for pv for the four suburban housing estates = $ 176/kwh 3.3.8 . lcc for the diesel generator the generator considered in the study is the firman fpg 3800 e2 3.8 kva diesel generator with capital cost of $ 475 the recurring costs are the fuel costs and the maintenance cost the life fuel cost (lfc) fuel cost: the system is designed at 24hrs/day as the generator duty cycle and the fuel consumption is 1.1 litres/hr therefore, the cost of fuel/year = $ 7057 assuming the fuel escalation of 25% per year over 3 years. lfc = $ 27,168.17 lfc over 25 years = $ 244,513.50 the life maintenance cost (lmc) annual maintenance cost (amc): $ 50 lmc = $ 152.30 lmc over 25 years = $ 1,370.70 the non-recurring cost (lrc) lrcminor overhaul = $ 436.05 lrcmajor overhaul = $ 536.09 generator replacement = $ 8592.75 lrctotal = $ 9564.89 therefore, life cycle costs (lcc) for the diesel generator are: the load demand per housing unit is 40.12 kwh/day lcct for diesel generator per housing unit = $ 0.7/kwh lcct for diesel generator per estate of 400 housing units = $ 280.00/kwh lcct for diesel generator for the four suburban housing estates = $ 1120/kwh table 9 represents the life cycle costs (lcc) of the two off-grid power supply options under the various energy consumption scenarios. taking the cls scenario in perspective, under the pv option, lcc were estimated to be $0.11/kwh per housing unit, $44/kwh per estate, and $176/kwh for the four estates. for the diesel generator lcc kwhdg ($ / ) / = + + + × × cc lfc lmc lrc period kwh d365 aay table 8: associated costs of diesel generator unit price total price no components quantity $ life time $ 1 3.8 kva diesel generator 1 475.00 2,3/4.years 475 2 diesel fuel 10 litres 0.73/l 9 hours 7,057/yr 3 engine oil 2 litres 5/l 1 month 120/yr 4 diesel filter 1 7.50 500 h 45 5 air filter 1 3.50 2500 h 7 6 maintenance/overhaul 1 50 1 year 50 note: the diesel generator fuel consumption is estimated to be 1.1 litres/hour using a fuel consumption calculator [50] and actual observation using a brand new diesel generator4. table 9: life cycle costs of off-grid power systems and energy consumption scenarios in the four estates (conventional lighting system) (energy efficient lighting system) $/kwh $/kwh off grid power system per housing unit per estate the estates per housing unit per estate the estates pv 0.11 44 176 0.07 28 112 diesel generator 0.70 280 1120 0.42 168 672 cost differences 0.59 236 944 0.35 140 560 pv: diesel gen 1:6.36 1:6.36 1:6.36 1:6 1:6 1:6 4 a new 3.8 kva diesel generator was purchased. the estimated connected load of each housing unit in the estate (2630 w) was applied to the generator. 10 litres of diesel was poured into the fuel tank and the diesel generator was switched on and operated over time. after operating for 9 hours, the generator ran out of diesel. this process was carried out once a day for 5 days with the same result. thus the diesel generator fuel consumption was established to be 1.1 litres per hour. international journal of sustainable energy planning and management vol. 12 2017 59 ibikunle o. ogundari, yusuf o. akinwale, adeyemi o. adepoju, musiliyu k. atoyebi, and joshua b. akarakiri option, lcc were estimated to be $ 0.70 per housing unit, $280 per estate, and $1120 for the four estates. similarly, lcc under the eels scenario were estimated. under the pv option, lcc were estimated to be $0.07 per housing unit, $ 28 per estate, and $112 for the four estates. for the diesel generator option, lcc were estimated to be $0.42 per housing unit, $168 per estate, and $672 for the four estates. diesel generator lcc is approximately 6 – 6.36 times the lcc for the pv system. 4. discussion on the results the inability of the nigerian state to provide uninterrupted electric power for the use of the nation’s citizenry is well documented. the ineffectual alternative energy planning by state governments in nigeria’s north-central region has been attributed in part to the inadequacy of the planning premises and energy consumption profile of the housing estates in the region. tables 1–4 show that the maximum estimated power consumptions in the suburban housing estates under the cls should not be less than 40.12 kwh/day per housing unit, 16,048 kwh/day per estate, or 64,192 kwh/day for the 4 estates. under the eels, it should be 23.92 kwh/day per house, 9,568 kwh/day per estate, or 13,968 kwh/day for the 4 estates. these therefore become the upper limits for the energy planning framework for the suburban housing developments in the north-central region. the adoption of eels relative to the cls shows power rating energy savings of 45w. this translates to 18kw over the 400 houses in the estate, and 72kw over the four estates. these results show a 3% reduction in power ratings. the energy savings calculated for energy consumption in the suburban housing developments by using eels in place of cls (16.20 kwh/day per house, 6,480 kwh/day per estate, and 25,920 kwh/day for the four estates) show a 40.4% reduction in energy consumption. this energy consumption reduction is significant and not only justifies the switch over from cls to eels, but offers critical information to benchmark planning criteria for this switch-over. the results further provide critical empirical corroboration to the arguments of momodu et al.[44], jesuleye et al. [16], akinwale et al. [43], and akinwale et al. [44], that the adoption of energy-efficient lighting would enhance nigeria’s energy mix. table 6 shows the estimated maximum energy costs in the abuja area from the projected electricity consumptions in the housing estates. these costs are critical to energy planning development and implementation in the estates. none of the state governments in the north-central region of nigeria have reported determining these maximum energy costs to residents in the estates. it is not expected that any household would actually have such high electricity bills, but that these figures would provide the benchmarks for planning and regulation. the results further provide empirical evidence for electricity endusers to switch from conventional lighting systems to energy-efficient lighting. an agglomeration of energyefficient light system adoption in nigeria could drastically reduce the need to build huge power generation systems for the country as pointed out by momodu et al [44]. diesel generating sets are the most dominant central off-grid power supply systems in nigeria’s housing developments [16]. the decision to choose diesel generators is mostly dependent on the cheaper purchase costs in the short term relative to other central off-grid power supply systems like pv systems. the long term financial and environmental effects however are not taken into consideration in this energy supply system purchase decision-making process. this is not ideal. sovacool [41] has reported that diesel generators have lifecycle greenhouse gas (ghg) emissions of 778gco2/kwh while a pv system made from polycrystalline silicon emits 32gco2/kwh. thus, the diesel generator has lifecycle ghg emissions more than 24 times the pv system. this huge difference is critical for planning on the appropriate alternative energy system to adopt in the housing developments in the area. adopting the life-cycle cost analysis (lcca) method for alternative power systems selections, requires looking at the long term financial and environmental effects in decision making. the results showed that the diesel generator option lcc costs were approximately 6 times those of the pv option. the consequent calculations define the project parameters the north-central regional governments need in determining the appropriate alternative-energy option for their suburban housing developments. table 7 showed quite clearly that adopting the pv option under the energy efficient lighting system had the lowest costs of the four possible options and should be selected for the housing developments. this indicates regional governments have the ability to improve overall efficiency of an energy system of a metropolitan area with its suburbs by the high penetration of the pv option under the energy efficient lighting system [42]. 60 international journal of sustainable energy planning and management vol. 12 2017 suburban housing development and off-grid electric power supply assessment for north-central nigeria 5. summary, conclusions and recommendations this study examined alternative lighting systems and offgrid electric power options for suburban housing developments in north-central nigeria, and paid attention to estates in suburban abuja, fct, which were being considered as templates for housing suburban developments in the rest of the north-central region. four housing estates in suburban abuja consisting of 400 housing units each were examined to determine their electricity consumption and energy savings under two energy consumption scenarios (conventional and energy efficient electric lighting systems). the techno-economic specifications of two off-grid electric power supply options (photovoltaic (pv) and diesel generator systems) were calculated in order to establish the viability of the pv system relative to the diesel generating system as the offgrid electric power supply option. the study determined electric power demands of 40.12 kwh/day/housing unit, 16,048 kwh/day/estate and 64,192 kwh/day/4 estates for the conventional lighting scenario and 23.92 kwh/day/housing unit, 9,568 kwh/day/estate and 38,272 kwh/day per the 4 estates for energy efficient lighting scenario respectively. these power demands are to serve as decision benchmarks for policy-makers in the states in nigeria’s north-central region. the energy savings calculated for energy consumption in the suburban housing developments by using eels in place of cls (16.20 kwh/day per housing unit, 6,480 kwh/day per estate, and 25,920 kwh/day for the four estates) show a 40.4% reduction in energy consumption. comparing household electricity bills also showed a 40.4% reduction in the bills if the energy-efficient lighting system was adopted over the conventional lighting system. the diesel generator alternative powersupply option had life cycle costs approximately 6 times those of the pv option. these calculations indicate that the pv option is a more viable off-grid power supply option compared to the diesel generator option. furthermore, the calculations in the study provided the project parameters the north-central regional governments need for the planning and development of appropriate alternative-energy options for their suburban housing developments. finally, the study showed that adopting the pv option under the energy-efficient lighting system provides the lowest techno-economic costs and would be considered the most viable option for off-grid alternative-energy system for suburban housing developments in the northcentral region of nigeria. it is recommended that suburban housing developers in nigeria’s north-central region be encouraged to invest in the development and deployment of pv and energy efficient lighting systems in the region as they have been found to be more techno-economically viable relative to diesel generator and conventional lighting systems. references [1] akarakiri, j.b. wood energy in nigeria. energy, vol. 16, no.5, 1991; pp 875-678. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 18 2018 81 1corresponding author e-mail: luca.tricarico@nestaitalia.org international journal of sustainable energy planning and management vol. 18 2018 81–94 abstract the debate on distributed energy systems is evolving in a way that enlarges the domain of traditional energy policy, especially regarding urban and regional development priorities and community engagement aspects. the present article discusses on the possibility to adopt community energy enterprises as a specific organizational model that may represent a crucial and not yet explored tool to enhance the diffusion of a distributed energy geography, promoting new approaches for community-based energy systems. the crucial issue here is that in the discussion of the current energy system we may refer not only to production unit, but also to ownership, decisionmaking and local responsibility as regards new forms of provision, infrastructures and organizations. with these objectives, the paper discusses in a multi-scalar perspective the role of these organizations may innovate the governance of the current energy market, as part of a bottom-up based socio-material transition in the energy market: mobilizing local factors, institutions and approaches in users and citizens’ engagement. 1. introduction the present article focuses on the role of community energy enterprises (cee) on contributing to the diffusin of the distributed energy2 system [1], by triggering various processes of mobilization of local resources. this contribution argues that these two aspects are partially intersected: the role of these organizations may reverse the way we are used to thinking about urban and regional planning practices and responsibilities related to energy issues. therefore, this article intends to answer the following research questions: how we define and distinguish cee organizations within the technological category of community energy? which regional planning and development policy issues they may contribute to re-discuss and which “bottom-up” activation policies and tools may be worthy to make their developments both inclusive and viable? the present discussion on distributed energy hinges mainly on questions of technology and engineering; at most, some reflections on the management perspectives are thrown in for good measure. meanwhile, it’s recently become increasingly clearer the need to widen the view on energy policy, especially regarding issues such as institutional, organizational, social and psychological aspects. the available literature is therefore focused on methodologies and themes that combine the concept of community with the experimentation of renewable technologies and sources [2,3,4]; on the barriers and incentives capable of triggering local cooperation processes [5,6,7]; on the socio-economic and political conditions that favor local participation and mobilization of community energy initiatives [8,9]. the present article is focused on the institutional and organizational implications involved, which may be crucial and to date have received only limited attention (as community energy enterprises in the distributed energy geography: a review of issues and potential approaches luca tricarico1 nesta italia, via maria vittoria 38, 20132 turin, italy keywords: community energy; distributed energy; urban and regional policy; community-based enterprises; url: http://dx.doi.org/10.5278/ijsepm.2018.18.6 http://dx.doi.org/10.5278/ijsepm.2018.18.6 82 international journal of sustainable energy planning and management vol. 18 2018 community energy enterprises in the distributed energy geography: a review of issues and potential approaches underscored by [10,11]). in this regard, friedrichsen et al. [12] observe that “the institutional set-up of the [distributed] smart system is still uncertain”. johnson and hall [13] likewise observe that: “the systemic institutional transformation necessary to support the adoption of community/decentralized energy schemes …[has] received limited attention to date”. the issue here is that a distributed energy system ‘distribution’ may refer not only to energy generation units but also to ownership, decision-making and local responsibility as regards energy supply [14]. in this perspective, this work intends to be part of the recently born disciplinary framework on energy and social sciences, arising to cast a wider net and include socialorganizational and institutional issues alongside the more technical aspects of distributed energy production [11]. this results from what some scholars [15] have underlined as an evident lack of governance innovation to promote the diffusion of a distributed energy system, disrupting the top-down techno-centric structure of the current institutional layout within markets, infrastructures and regulations (that are going to be discussed in-depth in the next sections). the hypothesis is that cee may be considered as a major attempt to innovate the governance of the current energy system, as part of a socio-material transition, involving innovative organizations, institutions and approaches in users and citizens’ engagement [16]. the paper is structured into 4 parts: section 2 is devoted on the description of the taxonomy of cee, according to specific ownership, management and proximity features; section 3 highlights three problematic dimensions of cee in the urban and regional policy debate; section 4 describes one example of cee highlighting the policy frameworks in which it has developed its activities, section 5 is devoted to final conclusion on advantages and risks to take into account in cee policy-making and planning competences. the choice to combine a theoretical discussion with the description of a specific example is in the idea of providing a multi-scalar perspective on the topic, in particular to observe the different dimensions of the development processes: highlighting both the policy dimension and the practical aspects that may be jointly considered as necessary conditions to discuss on a ceebased distributed energy system. this choice was also driven by the need to affirm a definition of a new interpretative category such as cee, practically undefined in literature. the reason of this choice also lies in the need to debate of new sociotechnical definitions within the community energy sector, that include as far as possible aspects of systemic innovation that this new category implies. to some readers this may seem like a daring choice, but the breadth of issues raised by the case and its final policy implications will make a serious attempt to discuss these aspects. 2. a taxonomy of the organizations among the various organizations that can be found within the broadest category of community energy, the framework of cee is defined as follows: private organizations, set up according to contracts and participatory and collaborative governance, born as a result of local processes of interest aggregation, exchange and confrontation between actors, resources and production of local advantages [17]. community energy it is to be understood as an integrated approach to supplying a local community with its energy requirements from renewable energy or high-efficiency co-generation energy sources. the approach can be seen as a development of the distributed generation concept. the introduction of this interpretative category is driven by the need to focus on their potential role to promote entrepreneurship and society’s learning abilities, facilitative governance and territorial practices that may support the emerging distributed energy scenario. these motivations can be clarified by looking at three features related to the spatial dimension and social organization of their action, evident in their three main feature: ownership, organization and management principles and proximity. ownership: community energy structures may assume a variety of organizational forms. these may include different technologies used to generate energy as well as varying degrees of community participation [18]. as highlighted by walker et. al [19], each type may include a variety of financial, organizational and governance forms and may entail, for example, cooperatives of energy infrastructures (the most diffused), but also co-ownership between local charities, enterprises and local governments [20]. in this contribution, the investigation is focused on what may specifically framed as cee, namely where ownership is shared between local-based individuals (or international journal of sustainable energy planning and management vol. 18 2018 83 luca tricarico markets and renewable energy developments; three highly interconnected points in the field of urban and regional development policy. 3.1. questioning infrastructure planning in strategic planning, for instance, the recognized contribution of networks and infrastructures to local economic development can be considered a “mantra” in regional and urban policy-making [26]. the organizational and spatial dimension of energy networks and infrastructures influence the shape of urban systems [27] and they may have strong implications for governance schemes and institutional arrangements [28,29]. the framework in which cee works may represent an attempt to question the arguable centralized organization in energy and infrastructures in general, comparing its contradictions and outdated institutional setting with an emerging polycentric energy scenario based on these organizations [30]. in this view, a possible diffusion of cee can directly influence the infrastructures’ power in connecting material and immaterial urban elements from people to objects and information [31], determining future trajectories of urban and regional development strategies. in a global perspective, energy infrastructures often remain largely outside the control of local communities [15,24], under the supervision of national regulators and large private companies (service providers, producers, network developers) who in return are paying little attention to community development strategies and initiatives. from a governance perspective, energy infrastructures are relevant, and even major, items, characterized by a strategic nature [32]. they provide the necessary support for diverse urban practices and may also represent a new tool for strategies, referred to specific stakeholders and a larger spectrum of players. these mechanisms can work at different levels since networked spaces across all infrastructural sectors are being constructed, legitimized and maintained – politically, socio-technically, legally and geographically – in different ways [33]. but the greater challenge perhaps is to understand how intertwined networked spaces fit more broadly into what harvey [34, p. 260-261]. called the ‘co-gradience’ of contemporary metropolitan life – “the way in which multiple processes flow together to construct a single consistent, coherent, though multifaceted time-space system”. these aspects may represent shareholders): private investors or associates in a collective investment scheme for energy production, management and/or distribution. other typologies of mixed ownership (i.e. energy service company) can be excluded from this group within the renewable energy sector, also if these have been implemented through community engagement process and related benefits [19]. organization and management principles: community enterprises [21, 22, 23] can be defined as the form of enterprise in which the community is treated as “completely endogenous to the enterprise and the entrepreneurial process” [23, p.310]. these enterprises are keen on developing local energy projects in an open and participatory manner, aiming to deliver benefits (social and economic) to the local community. the key organizational aspect relies on the role of local communities “which create collective business ventures and, through them or their results, aim to contribute to both local economic and social development” [23, p.315]. proximity: the territorial dimension of cee is evident during the development process, a complex combination of resources and partnerships that determine their implementation. given the difficulty of small local players in developing a local energy project, these enterprises are keen on engaging local actors such as local authorities, associations, and other local private actors [21, 24]. the local dimension of a community of investors, local actors and the technologies is an essential factor for the community engagement in exchanging both tangible (i.e. financial resources and physical assets) and intangible assets (i.e. trust, social capital, contextual knowledge). a multiform proximity [25] between the stakeholders forming the enterprise is an essential feature and reveals the relevance for urban and territorial policy analysis to better understand this kind of initiatives. according to this definition, in the present article it is not consider as cee the aggregation of consumers in an ethical purchasing group, neither energy services based on virtual community relationships, such as peer to peer exchange platforms of energy cooperatives. 3. theoretical background: dealing with regional planning and development policy issues the theoretical relevance of the cee is given by their role in the re-discussion of infrastructure planning practices, community engagement in technological 84 international journal of sustainable energy planning and management vol. 18 2018 community energy enterprises in the distributed energy geography: a review of issues and potential approaches investment schemes. moving from an expert-cantered process to a platform approach increases diversity, leads to high quality results, and generally results in successful outcomes [38]. this observation highlights an overlooked and under-appreciated aspect of digital market platforms and that the reasons why such technologies, services, and business models are welfare-enhancing is precisely due to the possibility to produce incremental benefits through the aggregation of diffuse and local knowledge at lower cost [39,40]. 3.3. dealing with sustainable development and renewable energy agendas the third relevant point is to explore the implications and benefits of enhancing local community access in the energy sector as a crucial factor for the “low carbon challenge”, promoting different forms of energy efficiency and as a measure to contrast climate change [42]. in urban areas, commercial, industrial and residential buildings are still highly dependent on traditional energy resources such as oil, coal or gas over 80% of total primary energy demand still relies on fossil fuels and a significant share of this goes into our cities built environment [43, p.25–27]. the promotion of an institutional environment able to spread sustainable production and efficiency based on cee initiatives [44, 45] can also influence built environments, usually organized according to energy resources and energy power systems [46]. the form of the built environment is influenced also by the nature of its fuel supply3 [47], buildings consume about 30% of global energy production [46]. contemporary cities are actually largely based on fossil-fuel technologies. urban areas and residential use are therefore responsible for a large part of greenhouse gas emissions. as droege [47, p.89–90] writes: “all modern cities have mushroomed on their … fossil nutrient supply… it is appropriate to refer to contemporary urban constructs as fossil cities”. the transition from centralized systems based on fossil fuel to more decentralized ones based on renewable resources will therefore also have an important effect on spatial configurations. the pursuing of a cee agenda can hardly be accomplished without a wider policy reform in the field of energy: overcoming monopolies, promoting regulations that may enable disintermediation from a passive energy society to an active one. this process is currently occurring in different sectors, reducing intermediaries in the supply chain, and cutting the middlemen in connection with a transaction or a series of crucial challenges regarding the current organization of the energy infrastructure paradigm, historically conceived in a fixed centralized model, with hardly any citizen engagement in energy generation [4]. 3.2. dealing with community engagement in energy markets and innovation policy mainstream innovation theory suggests that economic growth and technological change are strongly intertwined, where technological progress elicits new industrial development trajectories and disruptive technologies contributing to the creation of new market opportunities and wealth. the introduction of a community-led agenda able to enhance cee as a new actor in the energy sector must put together these considerations with the developments of the platform economy and digital market-place, a totally new field of action for community-based organizations, with both opportunities and threats. the capacity of digital tools and new technologies may be able to promote disintermediation, fostering businesses specialized in innovative supply chains able to reduce the distance and transaction costs. following the global path of disruptive technologies, a cee agenda can consider the opportunities of the declining cost of distance and the transformation in the supply chain [35, p. 2]: “a significant change in the cost of distance would prompt millions of economic actors to rethink their strategies and investments, and cause individuals to reassess where they work, live and raise their families. the costs of moving goods, raw materials, people and information— all are declining, with some items already in a steep and rapid descent”. moreover, the creation of networks between different practices, new financial and engagement tools (i.e. crowdfunding) and also the unexpected effects given by the combinations of new products and services related to cee. these factors can on one hand grant rooms for new entrepreneurial opportunities tapping into latent demand, on the other must take into account the asymmetries of information: given from the lack of skills needed to develop these highly innovative projects in certain contexts [36]. in this scenario a major policy objective will be on the need of promoting diffused local capabilities [37] in order to promote inclusion to use exploit the opportunity to connect consumption and production, delivering innovative projects [41]. crowdfunding, for instance, shows that platforms can also serve as an inclusive basis for lasting businesses and important innovations for cee international journal of sustainable energy planning and management vol. 18 2018 85 luca tricarico was hypothesized by the german researcher and parliamentarian hermann scheer in the famous essay “the imperative energy: 100 percent renewable now,” scheer [59,60], argued that extensive use of renewable sources can only be implemented through many independent initiatives in many different places, by re-organizing the entire system of energy infrastructure to reach decentralization opportunities. 4. an analytical framework for cee: the banister house example in order to provide the analytical framework for cee, we refer to a process analysis methodology in order to uncover its implementation strategies and the definition of the management scheme: which stakeholders and resources were mobilized during the cee engagement process and what types of interests have been instigated and promoted through a certain policy framework. the decision to look at a british example is also due to the considerable attention that has been given by the coalition government to these of initiatives, therefore it should be taken into account that this example refers to an advance for cee experimentation. the process analysis considers the stakeholders’ interactions that have mobilized tangible and intangible resources and have been necessary to establish the community enterprise (tab.1). the development of these initiatives can be considered as a complex interplay of different forms and dimensions of problems, networks, interests, duties and powers [21, 61, 62, 63]. in light of stakeholder theory [64]., an enterprise can be considered as the result of interaction with different stakeholders, namely any “group of individuals who can affect or is affected by the achievement of the organization’s objectives” [65, p.46]. in this case, the process analysis is essential to analyze how different stakeholders have reached the feasibility conditions of these initiatives. this includes a combination of different local and national actor’s factors: energy policies and interactions between local authorities, project managers (pm), local organizations (lo) and the community of investors (coi). the las are the municipalities involved in the process, providing spatial assets and financial resources in order to assure the technical feasibility of the electricity production plant. the los are the stakeholders that have facilitated the community engagement before and during the share offer, to support the communication and the implementation of the project and its organizational transactions. some countries have understood the potentiality of this energy transition and the consequent increase of opportunities related to distributed units of energy productions based on renewable resources. in the united states, for instance, some local authorities are working to secure the solar grid parity of local production initiatives [48]. the institute of local self-reliance work in partnership with administrations by elaborating balanced policies that can promote efficient markets, economic autonomy and fair competition for large-scale diffusion of community energy enterprises. some interesting ideas are also arising from the united kingdom context, where the research consortium realizing transition pathways has established a permanent observatory on distributed productions and the transition to what they call the “civic energy future” [49]. the study carried out on the english context has observed the technical feasibility of a possible 50% increase in local primary energy production by 2050, compared to the current 1% (ibid). this observatory has been developed the new government framework on the community energy strategy [50], a policy agenda designed to promote incentives and regulation to foster the spread of community energy enterprises. considering the european picture, in the german [51] and danish [52] contexts the cooperative production model is the most widespread and is the most financed model by lending institutions. the success of this model has been recognized in the effectiveness of the proposed initiatives, in some countries enabling cee initiatives able to deal with large renewable energy projects (eg. the middelgrunden in copenhagen), with significant economic implications for the communities and local authorities involved. the attempt to ensure fair competition for cee through ad hoc policies is threatening the margins of profits of some large active operators in the energy market [53], which is reflected in intense lobbying and pressures on european legislators to preserve their position [54, p.18].. compared to this issue, the crucial node is represented by the repositioning of large-utilities in the local energy production and distribution market, threatened by the potential entry of new competitive players and technology [55]. with respect with this analysis, thanks to the recent advances on the use of integrated technology sets, citizens and local authorities may have now the possibility to disruptively enter in the energy market, revolutionizing the way that energy is generated and used today [56,57,58],. the same scenario 86 international journal of sustainable energy planning and management vol. 18 2018 community energy enterprises in the distributed energy geography: a review of issues and potential approaches produced for the national grid are the main part of the cee revenues. a part of the energy is also sold under a discounted ‘power purchase agreement’ with hackney council to be used on-site to power the banister house communal areas. the bhs initiative arises from the decision of the hackney council (la) to commission to repowering london (in 2013) the project management (pm) with the local group of hackney energy (lo). this engagement process and the technical expenses to set up the energy production plant were sustained by the policy framework of the community energy strategy, a department of energy and climate change (decc) strategy set up in order to “supply enough electricity for up to 1 million homes by 2020 and make significant contributions to reducing energy bills and poverty – and includes measures to help communities and local authorities to scale up activity” [50]. the project management expertise provided by repowering london has been the combination of: – technical knowledge: the ability to set up and design the solar panel arrays on the roofs of the housing blocks and preparing the application for the feed-in tariff and the purchase agreement; – engagement of the local community and key local stakeholders in the process, setting up a crowdfunding campaign; – the creation of a community benefit society, preparing the documents for the social investment scheme; 4.2. the banister house solar project management scheme bhs was registered as a community benefit society (cbs), an enterprise based primarily for the benefit of the community at large, rather than just for members of the society. this means that it must have an overarching community purpose that reaches beyond its membership. cbss are a replacement of the industrial provident society [71] in the uk social enterprise regulation. to access this kind of legal arrangement the enterprise must have certain specific features, such as a democratic decision-making built into its structure. although a community benefit society has the power to pay interest on members share capital, it cannot distribute surpluses to members in the form of dividends. to do so the community benefit society can opt to have a statutory asset lock, which has the same strength as the asset lock for a charity and for a community interest company [71]. features. the pms are the technicians who have led the implementation of the project in terms of technological and financial requirements, producing technical knowledge in order to achieve investor engagement. within this stakeholders’ framework, we can specify two different assets exchanged during the process: structural and intangible assets. for structural assets, we consider national policies, such as tax relief and incentives; local policies, such as purchase agreements (or other forms of collaboration and project funding) with local authorities and also financial schemes, technologies, spatial resources (i.e. roofs surfaces) and communication campaigns. for intangible assets [66, 67] we consider organizational and relational capabilities (i.e uncodified human and organizational capital) and intellectual competencies (i.e. technical, financial and communicative skills) and also different forms of trust between the coi and stakeholders that have fostered mobilisation to overcome the barriers that hinder community energy initiatives [68,69]. the process analysis has been conducted through two tools: stakeholders’ interviews and qualitative investigation. the interviews were conducted with the project managers, about their experience in devising and managing the projects. these were integrated with an additional investigation conducted through enterprise reports and statues and local authorities policy reports4. 4.1. the banister house solar project organization banister house solar (bhs) is a community energy enterprise based in the borough of hackney, north-east of london. the enterprise has been developed thanks to the experience of the pm repowering london, a non-profit organisation specialized in facilitating the production of community-owned renewable energy projects. in particular, the banister project follows the successful experiences of brixton energy solar co-operatives 1, 2 and 3 where repowering london experimented with specific community engagement procedures for cee within the urban context of brixton, south london. the enterprise’s main activity is the production of energy through a rooftop solar panel plant on the 14 buildings at the banister house estate for 101.76kwp of total capacity installed, producing 82.000 kwh per year. to assure the use of the rooftop, the enterprise has signed a 20-year life leasing agreement from the la hackney council, the same period of the government’s feed-in tariff5 (fit). the tariff together with the selling of the energy surplus international journal of sustainable energy planning and management vol. 18 2018 87 luca tricarico minimum shareholding is £50 for banister house investors, the external investors between £250 and 42.600 (30% of the total share offer value). enterprise revenues are composed of: (i) feed in tariff on kwh installed; (ii) export tariff; (iii) the electricity sold to hackney council through a power purchase agreement (ppa); (iv) interests on deposits. the fit introduced by the uk government in april 2010 [72, 73] is the principal source of income for bhs. the fit scheme requires electricity suppliers to pay small-scale renewable energy generators, both for all the electricity they generate (the generation tariff) and for any surplus of electricity they export to the grid (the export tariff). the access to fit has provided long-term price security, payments under the scheme are guaranteed for 20 years from the date when the installation is commissioned. the tariff is inflation-linked, increasing each year by the rate of inflation (using the retail price index) of the previous calendar year. the realization of 16 separate arrays on 14 roofs guarantee a total installed capacity of up to 102 kwp. the generation tariff for installation is for up to 4 kwp is £ 0.1388/kwh generation on preaccreditation, the generation tariff for systems upon to 10 kwp is £ 0.1257/kwh. in addition, under provisions of the fit, because each of the eighteen installations is under 30 kwp installed capacity, 50% of the energy generated will be deemed to be exported at an initial rate £0.0477/kwh (inflation adjusted annually). while it possible to install export meters on this project, the financial and administrative cost for their installation and maintenance would outweigh any increase in revenue under the export tariff and, accordingly, no export meters have been installed. the sale of electricity used on-site for communal areas to the council estate borough agency (hackney homes) will be measured through on-site consumption meters. the power purchase agreement is for 8p/kwh, annually adjusted for energy price inflation. part of the revenues to consider is also the interests on deposits for the repayment of capital. according to the estimation done by bhs in anticipation of earning an average interest of £676 per year over the life of the project. according to these revenues, other costs like operation and maintenance of solar pv equipment, administrative costs, reports drafting, distribution of interest payments and insurance to cover the potential to date, the bhs statute includes a democratic system of management and decision, where each member has one vote regardless of the number of shares held (figure i). they meet at banister house community hall, part of the council estate. the discussion is made with banister house solar interns, residents and hackney energy members. the final decision will be taken at banister house annual general meeting. the board of directors has the authority to pay annual interim interests’ payments without the approval of a general meeting of the society. the current directors do not presently intend to make any interim payments without approval from a general meeting of society members. the division and distribution of the income generated from the project are in accordance with 4 simple rules: i) provision for payback of initial capital investment; ii) general reserve, payback for the continuation and new investments for the enterprise development iii) pay and share interest to members’ iv) make payments for social purpose. according to the community benefit society guidelines, the payment for social purpose in bhs is transferred to a community benefit fund. this fund aims to benefit tenants and resident living in banister house in a broad sense, not only within the mutual interest of the project shareholders. the amount of profit set aside for the community fund is the 20% of the net profit throughout the life of the project. in addition, bhs invites the shareholders to allocate even the whole of their annual share interest payment to the banister house community fund. the capital cost of the project consists in £142.540 (this cost was based on the results of the competitive tendering process) entirely provided by the share offer through 126 individual investors (coi), conducted also by an online crowdfunding campaign. each share has had a nominal value of £1, the a community benefit fund + an annual interest payment for shareholders administration costs the society installs new renewable energy projects on local buildings it generates income to pay for: the community invests in a society (1 member = 1 vote) £££ figure 1. the enterprise scheme and its tasks [75] 88 international journal of sustainable energy planning and management vol. 18 2018 community energy enterprises in the distributed energy geography: a review of issues and potential approaches revealed common critical points with the next policy agendas have already been included in similar “urban innovation” practices as part of their priorities, most notably in the new eu urban agenda [77]. the main obstacle is, on one hand, the economic sustainability of these initiatives and on the other the inclusiveness in terms of accessibility of such agendas within different territories. as underlined by pasqui [78, p.55], the spread of these highly innovative community developments can be strongly dependent on a “high standard of economic performances and urban infrastructures needed to support these new form of production” rather than eventually “promoting new asymmetries and spatial inequalities”. cee may be limited in exchanging knowledge and information, as any community-based organizations based on private individuals’ contractual community agreements. as ostrom [79, p.659] underlined, “the assumption that individuals have complete information about all actions available to them, the likely strategies that others will adopt, and the probabilities of specific consequences that will result from their own choices, must be rejected in any but the very simplest of repeated settings.” furthermore, even if contractual community agreements may be considered an effective tool to promote communities’ economic empowerment and freedom of action, these communities may lead social groups into insulation: ignoring inequalities, disadvantages and asymmetries given by unbalanced power and conflicts that are a matter of fact in certain geographical contexts (i.e. gated communities). looking at the analysis developed on the theoretical contribution (section 2 and 3) and at the specific process outcomes (section 4), it is possible to advance reflections on (1) the policy recommendations that may enlarge the feasibility of cee initiatives in any territorial setting; (2) new planning competencies and local capabilities that may be able to favour the development of new initiatives. regarding the first aspect, the diffusion of cee seems to suffer from the unclearly defined regulatory framework in which they operate. besides the serious effort given by the example of the community energy strategy in the uk, this point is particularly true for the country [24], characterized by the ambiguity of the principles and laws that define the activities of community-based organizations [80], and the lack of specific policies that support community engagement processes. as clearly observed in the example above described, the engagement process requires time and expertise, facing monetary costs that may be dependent on the social capital and the loss of revenue in case of technical issues must also be considered. in addition to the annual costs, the society must ensure the repayment of the initial principal investments at the end of the fit (or in event of a withdrawal of shares). according to this estimation done by bhs [74] the general roi is hence on the approximate value of 4.0%. this allows for 20% of net revenue from the project to be set aside annually for the banister house community fund. additional aspects on individual investor revenues given from the national tax relief schemes, dependent from department for business, innovation & skills must also be considered. the legislation giving effect to sitr is at schedules 11 and 12 of the 2014 finance act, amending the income act 2007 [70]. these policies are the result of the coalition government political action for the “big society” through the enhancement of social investment market [75]. the tool available for bhs investors is the seed enterprise investment scheme (seis), for the 50% of the investment. the seis recognize the particular difficulties which every early-stage company face in attracting investment, by offering tax relief at a higher rate than that offered by eis, which will continue to offer tax reliefs to investors in higher-risk small companies. the income available for seis company tax relief is the 50% of the cost of the shares on a maximum investment of 100.000 £ (or 30% of stake in a society). the relief is given by way of a reduction of tax liability, providing there is sufficient tax liability against which to set it. social investment tax relief (sitr) is designed to support charities in accessing equity finance and individual investors offering them 30% income tax relief. 4. concluding remarks with respect to the analysis proposed in the two previous sections, we can make some reflections on which possible policy recommendations for policy-makers interested in making cees development viable and inclusive, promoting contexts and competences capable to diffuse this kind of initiative. regarding the first question we have to acknowledge the potential cee role in sharing and aggregate community assets, promoting local innovation through certain local and national community development frameworks [76]. as in the case studies analysed, the role played by these organizations requires certain local preconditions in terms of competencies, resources and capabilities needed to develop the cee. aspects that international journal of sustainable energy planning and management vol. 18 2018 89 luca tricarico fair distribution of the benefits generated by collectively owned assets. from this point of view, the example recalls these issues with particular concern. the conditions of feasibility have been built thanks to the development of these competencies, in which they’ve based the acquisition of intangible and tangible assets essential to the sustainability of the whole community energy enterprise initiative. these competencies in addition to recent technological advances highlight a promising horizon for these organizations within the reorganization of the energy market, where they can establish the spread in many different territories. through the contributions of the present work, it is finally possible to affirm the wide possibilities opened by the innovative perspectives on cee in urban and regional policy design, resumed in these three final considerations: first, the perspective on the policy “scalability” of community enterprises, considered as “democratic turn” of the “traditional formulas” in capitalist production [84] or as civic action practices in the administrative context of “localism” [85]; enterprises in which are compared local and general interests through institution building processes and social capital production [86], becoming producers of “de facto” territorial policies [87]. second, the new perspectives on social innovation given by cee to the whole distributed energy debate, meant as a cultural and paradigmatic change in the production of economic value [88]. a process that starts with local resources and innovative products, production processes, technologies or the combination of these factors [89]. this framework includes collaborative production formulas based on the sharing of services and resources by pooling approaches (es.sharing economy), on innovation in service design (eg. userfriendly), and the overall rediscovery of the local dimension (i.e. prosuming) in the production of services that traditionally are conceived as centralized: from energy to manufacturing, culture and welfare. third, the general regulation legitimacy of new public asset transfers towards cee, with the aim to promote collaborative governance and arrangements in energy infrastructures: promoting innovation in agreements between citizens and local governments, as well as innovation in collective and community ownership schemes [90]. the limit of the present article is the lack of an in-depth analysis of technological strategies in re-driving “civic infrastructures” present in community localities. with respect to this analysis, two crucial points may represent helpful tools to promote new developments: first, the possibility to set up a loose framework of cee sectors in terms of activities allowed, leaving the emphasis of their “social purpose” leaving it to thirdparty assessment based on analysis of monitoring and controls by sampling, on the british model of community benefit society. second, the definition of policy tools and indicators to describe the local accountability of community energy enterprises activities, in order to show the ability to achieve and monitoring the relationship between the activity and territorial outcomes in terms social and economic local impacts. it would make it possible to turn the community enterprises as equivalent to a legal non-profit organization, with related tax benefits, policy advantages [81] and donation procedures, eliminating the differences in treatment with other non-profit organizations. an example of this model is given by the british legislation on the instruments of social investment tax relief proposed by the department for business, innovation & skills in the 2014 finance act [70], for such enterprises as defined in the co-operative parameters and community benefit societies act [71]. regarding the second aspect, the analysis of the specific example of cees calls to promote new competences and capabilities from and for potential policy-makers, entrepreneurs and individuals able to develop, invest and activate cees. in particular, regarding three specific competencies: first, the capacity of “systematizing” the involvement of individuals into the entrepreneurial initiative: the ability to set up a contractual tool that may be able to share responsibilities among the members of a local community, drawing rules that define relationships and responsibilities; second, the ability to ensure a sustainable investment model in projects. this is necessary both in the sense of social capital [82] as the ability to mobilize the network of relationships between local actors and share capital, as the ability to promote investments related to horizontal subsidiarity or entrepreneurial participation of citizens in the planning of services and spaces for local communities [83]; third, the ability to manage priorities and interests of a plurality of individuals; considering the effective participation and representation of needs and expectations in decision-making processes, especially regarding the 90 international journal of sustainable energy planning and management vol. 18 2018 community energy enterprises in the distributed energy geography: a review of issues and potential approaches [8] süsser, d., döring, m., & ratter, b. m. 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(2006). the process of social innovation. innovations, 1 (2), 145–162. https://doi.org/10.1162/itgg.2006.1.2.145 http://doi.org/10.1257/aer.100.3.641 http://doi.org/10.1257/aer.100.3.641 http://doi.org/10.18352/ijc.50 http://doi.org/10.18352/ijc.50 https://doi.org/10.1007/978-1-349-62397-6_12 https://doi.org/10.1007/978-1-349-62397-6_12 https://bit.ly/2yciwgg https://bit.ly/2yciwgg https://doi.org/10.1553/isr_fb047s23 https://doi.org/10.1553/isr_fb047s23 https://doi.org/10.1016/j.apenergy.2015.01.075 https://doi.org/10.1016/j.apenergy.2015.01.075 http://dx.doi.org/10.2139/ssrn.2653084 http://dx.doi.org/10.2139/ssrn.2653084 http://doi.org/10.3280/tr2011-057019 http://doi.org/10.3280/tr2011-057019 01_1021-3120-1-le editorial this editorial introduces the fourth volume of the international journal of sustainable energy planning and management. in the volume, lund et al. [1]; investigate the role of heat savings in future smart energy system through energy systems analyses using the energyplan model on a danish case. they find that energy savings in existing buildings aren’t economically feasible while new buildings and renovated buildings should cut energy demands by approximately 50% cunha & ferreira [2] apply a mean-variance approach (mva) to design renewable energy portfolios for portugal through a) output maximization and through cost optimisation. results indicate that optimal portfolios combine a variety of renewable energy sources and that an mva approach is appropriate for designing energy portfolios. sorknæs et al. [3] investigate the role of small-scale cogeneration of heat and power (chp) plants participation on the german electricity market, finding that they need to increase their flexibility for optimal performance. international journal of sustainable energy planning and management vol. 04 2014 1 margaritis et al. [4] investigate possible substitutions for lignite-based district heating systems in greece finding good prospects for both boiler and chp-based district heating based on biomass. rygg [5] investigates how 14 local norwegian governments act in respect to advancing renewable energy projects, finding that that they all act within innovation, infrastructure, regulation and public engagement, and that they despite differences in size and other conditions act similarly. finally, gendebien et al. [6] propose a methodology for characterising the building stock, apply it to a belgian case and investigate the potential for primary energy consumption reductions through extensive retrofitting of the belgian building stock. references [1] lund h, thellufsen jz, aggerholm s, wittchen kb, nielsen s, mathiesen bv et al. heat saving strategies in sustainable smart energy systems. international journal of sustainable 1 corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 04 2014 1–2 editorial – ijsepm vol 4 �������� ��� � ��� ������������ � ��� �������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� a b s t r a c t this editorial introduces the fourth volume of the international journal of sustainable energy planning and management. topics include mean-variance approach of energy systems design, the role of heat savings in smart energy systems, analyses of the german secondary reserve market, options for replacing lignite-fired district heating in plants in greece with biomass-fired district heating plants based on boilers or cogeneration of heat and power. topics also include how local norwegian governments engage in local energy planning and how they differ in approach. finally, this volume addresses characterisation of the building stock with a view to assessing savings potentials with a case from belgium. keywords: heat saving & smart energy mean-variance approach german secondary reserve market biomass district heating in greece local governments characterisation of the building stock url: dx.doi.org/10.5278/ijsepm.2014.4.1 2 international journal of sustainable energy planning and management vol. 04 2014 editorial ijsepm vol 4 energy planning and management 4(2014). http:// dx.doi.org/10.5278/ijsepm.2014.4.2 [2] cunha j, ferreira p designing electricity generation portfolios using the mean-variance approach. international journal of sustainable energy planning and management 4(2014). http://dx.doi.org/10.5278/ijsepm.2014.4.3 [3] sorknæs p, lund h, andersen an, ritter p small-scale chp as a balancing reserve for wind – the case of participation in the german secondary control reserve. international journal of sustainable energy planning and management 4(2014). http://dx.doi.org/10.5278/ijsepm.2014.4.4 [4] margaritis n, rakopoulos d, mylona e, grammelis p introduction of renewable energy sources in the district heating system of greece. international journal of sustainable energy planning and management 4(2014). http://dx.doi.org/10.5278/ijsepm.2014.4.5 [5] rygg bj paving the way for heat. local government policies for developing bioenergy in norway. international journal of sustainable energy planning and management 4(2014). http://dx.doi.org/10.5278/ijsepm.2014.4.6 [6] gendebien s, georges e, bertagnolio s, lemort v methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium. international journal of 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 01. 2297-7630-1-le_editorial.qxd:1953-6976-1-le abstract this editorial introduces the 16th volume of the international journal of sustainable energy planning and management, which addresses different angles of district heating ranging from the planning of district heating systems and economic incentives for flexible district heating plants to comparisons between low and ultra-low-temperature district heating systems and methods for determining thermal conductivity in district heating pipes. 1. introduction this editorial introduces the 16th volume of the international journal of sustainable energy planning and management. this volume is a special issue from the 3rd international conference on smart energy systems and 4th generation district heating, held in copenhagen, denmark in september 2017. papers from previous conferences have been published in three previous special issues in this journal [1–3] as well as in the elsevier journal energy [4]. the conference series international conference on smart energy systems and 4th generation district heating is organized as an annual joint effort between the 4dh strategic research centre in collaboration with aalborg university, denmark, with venues alternating between aalborg and copenhagen. international journal of sustainable energy planning and management vol. 16 2018 1 2. district heating and smart energy systems in this volume, knies [5] explores the dichotomy between individual buildings and over-all energy systems development from a planning perspective. based on spatial data and fuzzy logic, knies develops suitability areas that may be used in the process of planning for instance district heating systems. sneum & sandberg [6] investigate economic incentives for flexible district hearting in denmark, norway, sweden and finland. using energypro simulations and energy market optimisation, they determined that cogeneration of heat and power (chp) plants combined with electric boilers were preferable in the norwegian, swedish and finish energy systems. in denmark however, framework conditions are so that biomass boilers are preferable. * corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 16 2018 01–02 editorial — smart energy systems and 4th generation district heating systems poul alberg østergaard*a, henrik lunda and brian vad mathiesenb adepartment of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark bdepartment of planning, aalborg university, a.c. meyers vænge 15, 2450 copenhagen sv, denmark keywords: 4th generation district heating; spatial analyses; economics of district heating; district heating pipes; url: dx.doi.org/10.5278/ijsepm.2018.16.1 2 international journal of sustainable energy planning and management vol. 16 2018 editorial smart energy systems and 4th generation district heating systems best et al. [7] compare low-temperature (forward 70 °c – return 40 °c) and ultra-low-temperature district heating (forward 40°c – return 25 °c) for the specific case zum feldlager in germany. with half the δt for ultra-low-temperature district heating than for lowtemperature district heating, flows increase calling for twice the pumping power and slightly larger pipe dimensions. investments costs change marginally and the added auxiliary energy demand is small compared to the reduced district heating pipe losses and the improved operation of heat pumps supplying district heating. finally, schuchardt et al. [8] investigate methods for determining the thermal conductivity of district heating pipes including both experimental work and numerical simulations of losses in their work. acknowledgements the work presented in this volume of the international journal on sustainable energy planning and management stems from the international conference on smart energy systems and 4th generation district heating. this conference is organised as an activity in the strategic research centre for 4th generation district heating (4dh), which has received funding from innovation fund denmark (0603-00498b). as editors of the journal and as organisers of the conference, we acknowledge and appreciate the contributions from the reviewers that have assisted in improving the articles to the standard they have today. references [1] østergaard pa, lund h. smart district heating and electrification. int j sustain energy plan manag 2017;12. http://dx.doi.org/10.5278/ijsepm.2017.12.1. [2] østergaard pa, lund h. editorial smart district heating and energy system analyses. int j sustain energy plan manag 2017;13. http://dx.doi.org/10.5278/ijsepm.2017.13.1. [3] østergaard pa, lund h, mathiesen bv. smart energy systems and 4th generation district heating. int j sustain energy plan manag 2016;10:1–2. http://dx.doi.org/10.5278/ijsepm. 2016.10.1. [4] lund h, duic n, østergaard pa, mathiesen bv. smart energy systems and 4th generation district heating. energy 2016;110. http://dx.doi.org/10.1016/j.energy.2016.07.105. [5] knies j. a spatial approach for future-oriented heat planning in urban areas. int j sustain energy plan manag 2018. http://dx.doi.org/10.5278/ijsepm.2018.16.2. [6] sneum dm, sandberg e. economic incentives for flexible district heating in the nordic countries. int j sustain energy plan manag 2018;16. http://dx.doi.org/10.5278/ijsepm. 2018.16.3. [7] best i, orozaliev j, vajen k. economic comparison of lowtemperature and ultra-low-temperature district heating for new building developments with low heat demand densities in germany. int j sustain energy plan manag 2018;16. http://dx.doi.org/10.5278/ijsepm.2018.16.4. [8] schuchardt gk, kraft s, narften m, bagusche o. development of an empirical method for determination of thermal conductivity and heat loss for pre-insulated plastic bonded twin pipe systems. int j sustain energy plan manag 2018;16. http://dx.doi.org/10.5278/ijsepm.2018.16.5. http://dx.doi.org/10.5278/ijsepm.2017.12.1 http://dx.doi.org/10.5278/ijsepm.2017.13.1 http://dx.doi.org/10.1016/j.energy.2016.07.105 http://dx.doi.org/10.5278/ijsepm.2018.16.2 http://dx.doi.org/10.5278/ijsepm. 2018.16.3 http://dx.doi.org/10.5278/ijsepm.2018.16.4 http://dx.doi.org/10.5278/ijsepm.2018.16.5 http://dx.doi.org/10.5278/ijsepm.2016.10.1 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice advances in structural engineering 5•4 abstract this paper investigates the effect of increased demand-side flexibility (dsf) on integration and market value of variable renewable energy sources (vre). using assumed potentials, systemoptimal within-day shifts in demand are investigated for the northern european power markets in 2030, applying a comprehensive partial equilibrium model with high temporal and spatial resolution. increased dsf is found to cause only a minor (less than 3%) reduction in consumers’ cost of electricity. vre revenues are found to increase (up to 5% and 2% for wind and solar power, respectively), and total vre curtailment decreases by up to 7.2 twh. increased dsf causes only limited reductions in ghg emissions. the emission reduction is, however, sensitive to underlying assumptions. the study shows that increased dsf has the potential of improving intergration of vre. however, low consumers’ savings imply that policies stimulating dsf will be needed to fully use the potential benefits of dsf for vre integration. 1. introduction the northern european power system is experiencing an extensive growth in electricity generation from variable renewable energy sources (vre) like solar, wind and run-of-river (ror) hydropower, a growth that is expected to continue in the coming decades [1, 2]. in previous work, [3, 4] point out that vre technologies have three main characteristics that influence the value of produced electricity: the supply is uncertain (i.e. subject to forecast errors), they are location specific (plants must be located where the primary energy carrier is available), and the supply is variable (determined by weather conditions). these characteristics cause challenges and costs related to integrating vre into the power system. international journal of sustainable energy planning and management vol. 11 2016 33 based on thorough literature reviews, [4–6] quantify the contribution from the uncertain, locationspecific and variable supply of renewable energy, and find that about two thirds of the vre integration costs are caused by the variability in supply of vre. the variability in supply causes challenges related to excess vre supply, curtailment and security of supply [5, 7, 8], as well as a downward effect on electricity prices through the merit-order effect [9–12]. the merit order effect not only influences consumers’ costs and revenues of conventional production technologies, it also reduces the market value, or profitability, for existing and future vre producers [3, 4, 13, 14]. as the vre market shares increase, the market value of vre is reduced considerably through the merit order effect. market modeling studies report that at a * corresponding author e-mail: asa.grytli.tveten@nmbu.no international journal of sustainable energy planning and management vol. 11 2016 33-50 increased demand-side flexibility: market effects and impacts on variable renewable energy integration åsa grytli tveten1*, torjus folsland bolkesjø1 and iliana ilieva2 1 norwegian university of life sciences, department of ecology and natural resource management, 2 nce smart energy markets, 1783 halden, norway keywords: electricity markets demand-side flexibility renewable energy integration url: dx.doi.org/10.5278/ijsepm.2016.11.4 34 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration 25 –35% wind market share, the revenue per produced unit wind power (i.e. the “received price”) corresponds to about 70 –80% of the average electricity price. for solar power, the reduction in market value is even more distinct: at a 30% market share, the price “received” by the solar producers corresponds to 40–70% of the average price [4, 14, 15]. reduced vre market value caused by the merit order effect is hence expected to become an increasingly important vre integration cost factor, and a possible obstacle for achieving further increases in vre market shares. a flexible power system that could adjust to changes in availability of supply is advantageous for cost-effective integration of high vre market shares. a variety of measures could be adopted to increase the flexibility of the power system, and hence improve vre integration (see, e.g. [16] for an overview). one way of obtaining increased flexibility in the supply-demand balance, is to increase the demand-side flexibility (dsf), also known as demand-side management (dsf) [17]. the possible benefits of dsf for improved vre integration are investigated in several previous studies. most of these studies focus on potentials, residential loads, microgrids and single households, changes in peak load, balancing costs, and grid-related costs [16]. no previous studies are found to quantify the impacts of dsf on the vre market value. furthermore, the effect of dsf on producers’ revenues and consumers’ costs is sparsely studied. studies investigating flexibility measures in relation to the vre market value focus mainly on supply-side flexibility, through storage [4, 14] or grid extension [13, 15, 18]. the effect of short-term demand-side flexibility (i.e. within-day) on the vre market value has, to our knowledge, not previously been quantified. from a methodological viewpoint, few existing studies investigate the dynamics between regional dsf and vre supply for power regions constrained by transmission capacities. this study aims at filling some of the methodological and knowledge gaps identified above, by quantifying the effects of short-term dsf, in the form of within-day demand-shifting, on the vre market value, on vre curtailment, and on consumers’ costs and producers’ revenues. a high-resolution model is applied to simulate the northern european power markets in the year 2030 under different scenarios for demand-side flexibility. northern europe is chosen as the study region, since this region is expected to eventually have one of the world’s largest shares of vre. list of symbols symbol definition s, s week of the year, s = {s1, s2, ..., ss}, s = 52 (total weeks of the year) n, n day of the year, d = {d1, d2, ..., dd}, d = 364 (total days of the year modeled) t, t hour of the week, t = {t1, t2, ..., tt}, t = 168 (total hours of the week) h, h hour of the day, h = {h1, h2, ..., hh}, h = 24 (total hours of the day) c, c country, c = {dk, fi, ge, ne, no, se, uk}, c = all model regions. (r, r), (a,a) region, r = {denmark1, denmark2..., uk}, r = all model regions. (a,a) is alias for (r,r) d consumer’s utility function d electricity demand (mwh) g electricity generation (mwh) g, g_ maximum and minimum power generation level for groups of generation units (mw) x(a,r) electricity transmission from region a to region r (mwh) x transmission capacity limits between regions (mw) dpump energy used for pumped storage (mwh) wpump water amount pumped back to the hydro reservoirs by pumped storage (mwh) hpump pumped storage energy efficiency (fraction) i,i power generation technology type, i = {ihy, ire, ith, inuc, ichp} ivre subset of i, variable renewable energy sources ire = {iror, iwin, isol} ith subset of i, thermal (gas, coal and oil) power generation groups ith = {ingas1, ingas2,..., ioil4} j,j thermal power operating mode based on cycling condition j = {low, medium, high} ramp, ramp maximum capability of hourly upor down power ramping (fraction of total installed capacity) kp, kt, kd electricity production, transmission and distribution cost (€/mwh) kd th , kc th direct production costs and cycling costs of thermal power technologies (€/mwh) v water amount in reservoir at end of time period s (mwh) w water inflow in time period s (mwh) v, v maximum and minimum level of hydro reservoir (mwh) vo__, vo __ maximum and minimum initial levels for the hydro reservoirs (mwh) dd upor downward shift in demand triggered by demand-side management (mw) dmax maximum and average diurnal electricity demand g potential for demand shifting (percentage) the rest of the article is organized as follows; section 2 discusses dsf in relation to vre integration. section 3 presents the balmorel modeling framework and the scenarios investigated. section 4 summarizes the key results from the analysis, and a sensitivity analysis is presented in section 5. section 6 discusses the study’s findings and closes with a conclusion. 2. demand-side flexibility for improved vre market value 2.1. a considerable, but unexploited potential different measures and methods can be used for describing flexible electricity consumption. one common measure is price elasticity, and the price elasticity of electricity consumers in real time has been quantified in several previous studies [20–23]. for the future energy system, however, the price elasticity is generally hard to predict since estimates based on historical data will exclude the impacts of new smart appliances and systems. a common approach for estimating future dsf potentials is therefore in the form of a gw load increase or reduction. considerable gw potentials for demand-side flexibility from european consumers are reported in previous studies. ref. [24] finds a 61 and 68 gw potential for load reduction and increase, respectively, from demand-side management in europe. ref. [25] finds a 8.8 and 35.8 gw potential for load reduction and increase for german households and industry, respectively. by also including trade and service sectors and municipal utilities, the potential increases to 11.3 and 46.7 gw, respectively. ref. [26] finds that the german peak consumption could be completely shifted to off-peak hours only by utilizing intrinsic thermal storage capacities in electricity devices. ref. [16] summarizes the demand shifting potentials found in previous studies for residential, service sector and industry loads for germany between 2010 and 2012. they report potentials for load reduction and increase corresponding to 3–4 times the maximum wind power production in 2010 (29 gw). ref. [27] and [28] present estimates for the percentage of peak load in the nordic region that can be moved from one period of the day to another. they find that about 18% of the peak load in the nordic region, on average, may be moved from peak to off-peak hours. the estimates from [27] and [28] are used as case study scenarios in this study, which are described in more detail in section 3.2. 2.2. demand-side flexibility for vre integration several previous studies investigate dsf as flexibility measure for vre integration. ref. [29] identifies demandside management as the power system flexibility option with the highest benefit to cost ratio for vre integration. this is supported by [30], who find that dsf is more promising than both storage and interconnection for reducing total system costs at high vre market shares. ref. [31] and [32] find that more wind power enters the market when the consumer flexibility increases. ref. [33] studies dsf in a small autonomous power system and finds that a higher share of vre in the power mix could be handled by deploying demand-side integration in the form of load-shifting. these findings are supported by several previous studies on small-scale implementation of dsf, reporting a 20% reduction in vre integration costs and a 10–20% increased vre generation [16]. ref. [34] considers a small stand-alone renewable energy system for a single residential home, and finds that dsf, in the form of demand shifting, limits the need for balancing and back-up power, improves the overall system efficiency and the utilization of the resources. although dsf is identified as a valuable flexibility source for vre integration in previous work, few studies investigate dsf in relation to the vre market value. figure 1 gives a simplified illustration of a international journal of sustainable energy planning and management vol. 11 2016 35 åsa grytli tveten, torjus folsland bolkesj and iliana ilieva rdt+1 rdt+1 rdt rdt rd*t+1 rd*t high vre low vreprice capacity pt +1 p*t +1 p*t pt . ∆p low vre demand response (t) demand response (t+1) ∆p high vre figure 1: the effect of price responsive demand on market clearing prices in two subsequent time-periods; 1) a situation with low vre supply and high demand, causing a high residual demand level and a high price, 2) a situation with excess vre supply causing a low residual demand level and low price. merit-order curve and market clearing between supply and the short-term (assumed to be inelastic) electricity demand. the effect of demand-side flexibility on the market-clearing price is illustrated for two situations: 1) high demand, low vre supply and a high price level: reduced consumption from flexible consumers in this situation causes a leftward shift in the residual demand curve and a price reduction. 2) low demand, high vre supply and a low price level: increased electricity consumption from flexible consumers in this situation causes a rightward shift in the residual demand curve and a price increase. in this way, demand is shifted according to vre supply and vre producers benefit from increased received prices in hours with high vre supply. the vre producers will be less affected by the reduced prices, since the demand decrease occurs in hours with low vre supply. demand-side flexibility hence causes increased received price for vre producers (p –vre), and thus improves vre integration through reduced merit order effect and increased vre market value†. 3. methodology and scenario description 3.1. the equilibrium model balmorel the balmorel model is a comprehensive partial equilibrium model simulating generation, transmission and consumption of electricity under the assumption of competitive markets (see, e.g. [35, 36]). ref. [37–40] are examples of previous scientific contributions applying earlier versions of the balmorel model included. the current model version covers the power markets of germany, the netherlands, the united kingdom, and the nordic countries, with a specifically detailed representation of the nordic countries (15 regions for norway, 4 regions for sweden and 2 for denmark). as a benchmark, regionalized data for the year 2012 for installed capacity, demand, vre production, hydro inflow, transmission capacities, export balance, and fuel and carbon prices are applied for calibrating the model. using observed hourly spot prices and other market data, the model is calibrated for the calendar year 2012. the updated model offers a number of important features that enable detailed analysis of a power system with high shares of vre. it includes a more detailed modeling of reservoir hydropower and pumped storage, limitations in thermal flexibility, and a high degree of detail in technologies, time and space. to study the future energy system a “most likely” baseline 2030 scenario is defined, where the future annual consumption levels and investments in new generation and transmission capacity are determined exogenously based on energy market forecasts, transmission grid development plans and planned energy market investments. the model calculates the electricity generation per technology, time unit and region, maximizing a consumer’s utility function minus the cost of electricity generation, transmission and distribution. mathematically, this can be expressed by an objective function subject to a number of linear constraints: (1) in the baseline scenario, the total power demand is determined exogenously for each region. the hourly variation in power demand is set equal to the observed hourly consumption profiles in 2012, scaled according to the total annual power demand of the year to be studied. an energy balance constraint ensures that power supply must equal demand in every time step: (2) the model includes costs and losses of electricity distribution within each region, with the assumption of no constraints on the electricity flow within a region. hourly trade with third countries is determined exogenously, while the power exchange between regions is determined endogenously, with restrictions on transmission capacities between regions: (3) the supply side consists of various generation technologies, with a specified fuel type, fuel efficiency, variable and fixed costs, heat/power combination factor (chp units) as well as environmental characteristics for each technology. the maximum capacity level constraint for a specific generation technology is defined by (4) each thermal technology type is divided into four groups, with different fuel efficiency levels and variable production costs, representing the cost of old, average, max� ( ) � ( ) (, , , , , , , , ,d d k g k xr s t r s t i p r i s t a r t s− + tt a r a r a ri i r i s t i i k g( , ) , , , ,) ∈ ≠∈ ∈ ∑∑ ∑+         d             ∈∈∈ ∀ ∑∑∑ r rt ts s r a i s t( , , , , ) g x xr i s t i i s t a r s t r a a r a r , , , , ( , ) , ( , ) ,∈ ∈ ≠ ∑ ∑+ −( ) = dd r a i s tr s t, , � ( , , , , )∀ x x r a r a i s ts t a r a r , ( , ) ( , ) ( )� ( , , , , )≤ ≠ ∀ g g r i s tr i s t r i, , , , � ( , , , )≤ ∀ 36 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration † in situations with (i) high demand and high vre supply or (ii) low demand and low vre supply, the effects illustrated in figure 1 will be less pronounced. vre sources (ivre) (wind, solar power and run-of-theriver hydropower) have exogenously given production profiles varying on an hourly level according to variations in wind speed, sun light intensity and water flow: (8) in situations of congestion, the model allows for solar and wind curtailment instead of generating negative prices. this is rationalized by the assumption that the stringency of the current renewable energy priority dispatch rules is gradually reduced across europe as the share of vre increases. (note that in the presence of feed-in tariffs or other premium systems, there will only be solar and wind curtailment once the negative power price exceeds the tariff level. due to high uncertainty about future tariff levels such premiums are not considered in this study, which may cause a moderate overestimation of the price, and an underestimation of vre production, in situations with vre curtailment). for reservoir hydro, the power generation is also limited by a reservoir equation (equation 9), stating that the hydro storage level in the end of time period s is equal to the hydro resource in the end of the previous time period plus the inflow minus the total hydropower production during time period s. in addition, there are minimum and maximum restrictions on the hydro reservoir storage level (equation 10), the starting levels for the hydro reservoirs (equation 11) and the seasonal restrictions on the water flow through the hydro turbines (equation 12): (9) (10) (11) (12) pumped storage is included in the model by adding the following sections to equations 2 and 9: g g r i s tr i s t r i s t vre vre vre , , , , , , � ( , , , )≤ ∀ v v gr i s t r i s r s r s r s hy t t hy , , , , , , � � ( , , , ≤ + − ∀− ∈ ∑1 ω tt) v v v r sr r s r≤ ≤ ∀, � � � ( , ) v v v ror r or≤ ≤ ∀, � � � ( )1 g g g r i s t r i s r i s t r i s hy hy hy hy , , , , , , , � � ( , , , )≤ ≤ ∀ new and future power plants. plant-specific costs related to thermal power plant cycling (i.e. power plant start up, shut down, or operating at sub-optimal levels) are not modeled directly since all thermal power technologies are represented on an aggregated level. instead, a novel approach is applied, where average cycling costs are included on an aggregated level. the marginal costs of thermal power technologies are divided into direct costs (k ‚ th · d) (fuel, co2 and other variable costs) and cycling costs (k ‚ th · c) . when the power ramping of a technology group is high from one hour to the next, power plant cycling is more likely to occur and will increase the marginal costs of the technology group. the cycling costs are modeled piecewise linearly by letting each technology group be able to operate in j=3 different operating modes gjr,ith,t (j={low, medium, high}) based on the cycling condition. (5) in each operating mode the technology group will have different capability of ramping power up or down from one hour to the next, with increasing cycling cost for increasing ramping capability. (6) an increased need for ramping up or down from one hour to the next will then force the model to select a more expensive operating mode of the technology, and hence induce increasing cycling costs for increasing levels of ramping. the cycling costs for each technology group are determined partly on the basis of cycling costs reported in the literature [41] and partly through a thorough model calibration for the base year 2012 against observed historical market data for prices and hourly changes in production levels. the resulting average cycling costs give a conservative approximation compared with numbers found in the literature, which could be explained by the omission of cycling costs for units modeled as must-run technologies (i.e., nuclear power, chp and other thermal must-run technologies), for which seasonal minimum and maximum production levels are defined as (7) ( )kth p g gr i s t r i t medium g g th th r ith t high r i , , , , , , , , = 2 3 tth t low th th where g g r i t j j j r i , � � � � � , , ,     = ∈ ∑ �� � � � � ( , , , , )∀r i s t jth ramp g g g i j r i r i s t j r i s t j th th th th � . , , , , , , ,≤ − ≤−1 rramp g r i s t ji j r i th th th . ( , , , , ), ∀ ( )kth p g g g r i i i s r i s r i s t r i s nuc chp, , , , , , , � ( , { , }, ,≤ ≤ ∀ = tt) international journal of sustainable energy planning and management vol. 11 2016 37 åsa grytli tveten, torjus folsland bolkesj and iliana ilieva (2.2) (9.2) where wpumpr,s is the water amount (measured in energy units) pumped back to the hydro reservoirs and d pumpr,t is the energy used for pumping in hour t, such that (13) hpump is the assumed pumped storage energy efficiency, which is set to 75% in this study. finally, we have the non-negativity restrictions: (14) market clearing-conditions are analyzed by applying two different modes of the model: i) a long-term (one year) optimization horizon where the total regulated hydro generation is allocated to specific weeks, and ii) a short-term (weekly) optimization horizon with an hourly time resolution where the weekly hydropower supply is allocated on an hourly basis. a detailed presentation of the mathematical model and the data sources is provided in [42]. 3.2. endogenous modeling of demand shifting in this study, dsf is analyzed in the form of within-day load shifting, by assuming that a certain share of the demand may be shifted from one hour to another on a diurnal basis. ref. [16] discusses dsf in relation to vre integration, and argues that load shifting is the most beneficial type of dsf, since it enables the same quality and continuity of the energy service offered. furthermore, v v r s w gr i s tr s r s r s pump hy t t , , ,, , , ,≤ + +( ) − =− ∈ ∑1 ω vv w gr i s tr s r stotal hy t t , , , , ,− ∈ + − ∑1 ωr s pump pump r s t pump t t n d r s t, , , . � ( , , )= ∀ ∈ ∑ x g g d ds t a r r i s t r i t j r s t r s t p th , ( , ) , , , , , , , , , , , , , uump r s r s r s pumpv r a i s t i, , , � ( , , , , , ), , ,ω ω ≥ ∀0 gr i s t x x i i s t a r s t r a a r a r , , , �, ( , ) , ( , ) ,∈ ∈ ≠ ∑ ∑+ −( ) == + =d d dr s t r s tpump r s ttotal, , , , , , as opposed to energy storage, which is subject to losses,no energy conversion is needed for demand shifting, and a 100% efficiency could hence be achieved [43]. dsf is modeled by adding a variable representing an hourly shift in demand (dd1(r,s,t)) to the energy balance, where ddr,s,t could have either positive or negative value, depending on whether there is an upwards or downwards shift in demand. limitations on the maximum allowed shift in demand, as a share of the maximum demand (specified by g for each region), are included as a model constraint: (15) where dr,n,h is the baseline demand in region r, day n and hour h, d maxr,n is the diurnal peak (or maximum) electricity demand for region r in day n and g is the assumed potential for demand shifting in region r, in percentage. since this study focuses only on short-term shifts in demand, keeping the total daily demand constant, a constraint is added, stating that the sum of all shifted power within a day equals zero: (16) the system optimal dsf is determined endogenously based on the potential reported by [27] and [28]. as discussed in section 2.1, future dsf potentials are associated with a high degree of uncertainty. to account for this uncertainty, a baseline scenario, where no dsf is assumed, is compared with two dsf scenarios: 1) a moderate dsf scenario, where a 50% realization of the maximum potential reported by [27] and [28] is assumed, and 2) a full dsf scenario, where the total potential is assumed implemented. table 1 reports the scenario assumptions that have been investigated (i.e., the dsf potentials (g) for all modeled countries) and the corresponding possible average gw ∆d d r n hr n h r n, , , max .� ( , , )≤ ∀γ r ∆ ∆d dr n h h r n h up h , , , ,� � � � �=∑ ∑0 or,� analogously : == − ∀ ∑ ∆d r n h r n h down h , , � ( , , ) 38 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration table 1: overview of the dsf potential (g) for each scenario, and the corresponding possible average shift in demand in gw. the potential is given in proportion (percentage) of the peak demand (defined as the daily maximum demand level) that can be shifted on a diurnal basis. scenario dk fi no se ge uk ne baseline (no flexbility) 0 0 0 0 0 0 0 moderate flexibility (50% of potential realized) share of peak demand (%) 4.0% 10% 12% 7.5% 6.0% 6.0% 6.0% average possible shift in load (gw) 0.2 1.0 1.9 1.4 4.5 2.8 1.0 full flexibility (all potential realized) share of peak demand (%) 8.0% 19% 24% 15% 12% 12% 12% average possible shift in demand (gw) 0.4 2.0 3.8 2.7 8.9 5.7 2.0 international journal of sustainable energy planning and management vol. 11 2016 39 åsa grytli tveten, torjus folsland bolkesj and iliana ilieva shift in demand. the potential percentages are interpreted as the share of peak consumption that may be moved on a diurnal basis. 4 results and discussion 4.1. production mix and consumption figures 3.1-3 show the change in modeled average diurnal consumption profiles when assuming increased dsf, for germany and norway, all year (figure 3.1), five winter weeks (weeks 2-6) (figure 3.2) and five summer weeks (weeks 34-38) (figure 3.3). for norway, a considerable smoothening of the consumption profile is found, and a complete shift towards a slightly higher consumption in low-demand nighttime hours, both for the summer and winter seasons. for germany, the impacts are found to be different for different seasons. during winter weeks, the pattern is similar to the norwegian one, with shifts in demand from peak hours to low-demand nighttime hours (figure 3.2). during summer weeks, on the other hand, dsf causes increased consumption in high-demand daytime hours between 1 and 6 p.m. (figure 3.3). this is explained by the peaking supply of solar power during mid-day hours, causing low prices. there is a general trend of reduced production from mid-merit/peak technologies (natural gas, reservoir hydro and pumped hydropower), while production from baseload/mid-merit coal and lignite technologies is increased (figure 3 and table 2). during peak hours, power generation from natural gas and coal is substantially reduced, but the total coal power generation increases with increasing dsf, due to increased production in off-peak periods. production from mid-merit/peak technologies, providing supply side flexibility (reservoir hydro, pumped hydro and natural gas), declines during daytime and increases at nighttime. dsf reduces the curtailment (i.e. increases production) of vre technologies by 7.2 twh (full flexibility scenario). the increased vre production is caused by two main effects: 1) increased wind (5.8 twh/year) and ror (0.6 twh/year) power generation in off-peak hours, due to fewer hours with excess power supply, and 2) increased solar power table 2: average production levels in the baseline scenario and change in production for the different dsf scenarios, total for all modeled countries and for germany and norway. baseline scenario dr scenarios (change in gwh) (total production in twh) moderate full total chp, biomass and nuclear 391 +323 +386 coal and lignite 313 +3219 +5033 natural gas 91 –8234 –13513 fuel oil 0.1 –125 –140 reservoir hydro and pumped storage 145 –1997 –2929 vre 554 +4213 +7151 of which ror hydro 106 +424 +566 of which wind 383 +3330 +5847 of which solar 64 +459 +738 germany chp, biomass and nuclear 113 0 0 coal and lignite 219 +1239 +2084 natural gas 8 –2590 –3755 reservoir hydro and pumped storage 8 –1848 –2783 vre 241 +1400 +2172 of which ror hydro 22 +244 +346 of which wind 163 +862 +1314 of which solar 56 +294 +512 norway chp, biomass and nuclear 0.6 0 0 natural gas 0.0 +159 +151 reservoir hydro and pumped storage 86 –139 –137 vre 57 +25 +27 of which ror hydro 49 +22 +24 of which wind 8 +3 +3 40 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration generation (0.7 twh/year) in peak hours. due to the general switch in production from mid-merit/peak gas and hydropower to baseload coal power, the reduced vre curtailment causes only a 1.1 mtonne reduction in total ghg emissions when comparing the full flexibility and the baseline scenarios, which corresponds to 157 grams reduced ghg emissions per kwh of increased vre generation. 4.2. prices and consumers’ costs of electricity although using the total assumed dsf potential will cause substantial changes in the consumption profiles (figure 3.1-3), the impact on the average electricity price is found to be low (reported for germany and norway in table 3). the low influence on the average price results in only small changes in consumers’ cost of electricity (-0.5-3%) for all countries (table 4). summed up for all countries, we find a cost saving of 1.4 g€ for the consumers (full flexibility scenario), which is only a 1.8% reduction of the consumers’ total cost of electricity. figures 4.1-3 depict the change in average diurnal electricity prices for norway and germany for all year (figure 4.1), winter (weeks 2-6, figure 4.2) and summer (weeks 34-38 figure 4.3). summer prices are generally found to increase with increasing dsf. the price increase during summer is explained by the shape of the supply curve at low load levels. at nighttime, the combination of a high vre market share and low demand causes hours with low or zero night prices. by increasing the demand in these hours, the market will clear at thermal plants with higher srmc, causing a considerable price increase. the price increase from dsf during summer is somewhat counter-intuitive, but will likely be a general effect in energy markets with large shares of vre. despite the small influence on the average price level, the intra-day price variation (defined as the standard deviation of the price within a day) is reduced considerably with dsf, by more than 28% and 48% for all countries (moderate and full scenario, respectively) (reported for germany and norway in table 3). for norway, the daily price profile is almost entirely smoothened out (figure 4.1). in the thermal power dominated countries, the average daily maximum price also decreases substantially by 9-19% (full response). a more significant reduction in maximum price is observed for the thermal-power-based countries than for the countries with high shares of regulated hydropower and hence less short-term price variation. 4.3 producers’ revenues and vre market value the impacts of increased dsf on producers’ revenues for the different power technologies are shown in table 5. 9 a ve ra g e c h a n g e in e le ct ri ci ty g e n e ra tio n ( g w ) 7 5 3 hour of the day 1 01 03 05 07 09 11 13 15 17 19 21 23−1 −3 −5 −7 wind solids reservoir hydro natural gas solar figure 2: change in the diurnal northern european production mix caused by dsf, full flexibility scenario (all modeled countries, allyear average). table 3: average prices, daily maximum price and price variation in the baseline scenario, and changes for the different dsf scenarios, all modeled countries. baseline scenario dr scenarios percentage change country all results in (€/mwh) moderate full (full flexibility) germany average prices 53.0 +0.2 +0.4 +0.8% consumption weighted price 54.7 –0.5 –0.9 –1.7% daily maximum price 66.8 –3.7 –7.0 –10.4% intra-day price variation 10.6 –3.5 –6.1 –58.1% norway average prices 55.2 +2.9 +1.7 +3.1% consumption weighted price 56.6 –0.3 –0.5 –0.8% daily maximum price 60.7 –1.0 –3.2 –5.2% intra-day price variation 4.2 –3.0 –3.8 –90.3% international journal of sustainable energy planning and management vol. 11 2016 41 åsa grytli tveten, torjus folsland bolkesj and iliana ilieva though total production increases. common for all the vre production technologies is an increase in both total revenues (+1.5 + 3.6%) and revenues per unit produced power (+1.5-2.2%). table 6 presents wind and solar market value relative to the time-average price (hereby denoted “value factor”‡) for all modeled countries in the baseline scenario, and the percentage point change in value factor for the demand-side flexibility scenarios. increased dsf is found to increase the wind value factor by between 1-5.9 percentage points in all modeled countries. in thermal regions with high wind deployment levels (a 27-40% market share), the wind value factor increases with increasing dsf level. in hydro regions with lower wind deployment levels (a 59% market share), on the other hand, the highest increase in wind value factors is observed in the medium response scenario. at higher dsf levels, the reduction in revenues caused by reduced peak prices exceeds the increase in revenues in baseload hours. a similar trend is found for the solar value factor. for germany, the high solar market share is causing a price drop (i.e. a merit order effect) in high-demand mid-day hours. increasing dsf reduces this price drop and the solar value factor increases. for the netherlands and the united kingdom, on the other hand, the solar market share is too low to cause any significant merit-order effect in peak hours. instead, increased dsf reduces the price in peak hours with high solar supply, and hence causes a reduced solar value factor. 4.4. system benefits and vre integration to investigate further the possible role of dsf for improved vre integration, the changes in residual table 4: changes in annual consumers’ costs, total and for each modeled country. percentage change in change baseline costs (m€) (full country scenario moderate full flexibility) denmark 1.7 –8 –15 –0.9% finland 4.6 –30 –37 –0.8% germany 30.1 –284 –513 –1.7% netherlands 6.6 –65 –119 –1.8% norway 7.1 –41 –60 –0.8% sweden 7.8 –40 –64 –0.8% uk 18.7 –293 –554 –3.0% total consumers’ costs in g€ 76.5 –761 –1 360 –1.8% 80 e le ct ri ci ty c o n su m p tio n g e ( g w ) 70 60 50 40 30 20 10 01 03 05 07 09 11 13 hour of the dayfigure 3.1. ge and no, all year 15 17 19 21 23 − 30 25 20 15 10 5 e le ct ri ci ty c o n su m p tio n n o ( g w ) − 80 e le ct ri ci ty c o n su m p tio n g e ( g w ) 70 60 50 40 30 20 10 01 03 05 07 09 11 13 hour of the dayfigure 3.2. ge and no, winter 15 17 19 21 23 − 30 25 20 15 10 5 e le ct ri ci ty c o n su m p tio n n o ( g w ) − ge baseline ge moderate ge full no moderate no full no baseline ge baseline ge moderate ge full no moderate no full no baseline figure 3.1-3: hourly variation of the daily electricity consumption for all dsf scenarios, on an all-year basis (3.1), winter weeks (3.2) and summer weeks (3.3) for germany and norway. ‡ the value factor is a measure of the market value of a power technology relative to the average market price, defined as the received price for the specific power technology divided by the time-average electricity price. see also, e.g. hirth (2013) 80 e le ct ri ci ty c o n su m p tio n g e ( g w ) 70 60 50 40 30 20 10 01 03 05 07 09 11 13 hour of the dayfigure 3.3. ge and no, summer 15 17 19 21 23 − 25 20 15 10 5 e le ct ri ci ty c o n su m p tio n n o ( g w ) − ge baseline ge moderate ge full no baseline no moderate no full reduced need for peak power production, together with reduced peak-hour prices, causes a significant decrease in total and per-unit revenues for natural gas producers ( 23 and 9.3%, respectively) and regulated hydropower producers (-3.6 and -1.6%, respectively). due to increased demand in low-demand nighttime hours, the total revenues for baseload power producers are slightly increased (about 2%) when dsf increases. since coal and lignite production is moved from high to low demand hours, revenues decrease for these technologies, even 42 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration demand (rd), defined as the total demand minus production from vre, are analyzed. the daily maximum rd is found to decrease with dsf by almost 19 gw (about 15%), on average (all countries, full response scenario) (table 7). the maximum rd level on an annual basis is also reduced by more than 23 gw (all countries). for germany alone, dsf reduces the annual maximum rd by 4.4 gw, and the average daily maximum by 7.5 gw. the reduced maximum rd implies that the need for peak-load technologies is reduced considerably with dsf. hourly illustrations of the dynamics between dsf and vre are presented in figures 4.1-4. figures 4.1-2 show market clearing conditions for a winter week (week 2) in germany, with varying wind power availability and relatively low solar power production. figures 4.3-4 show modeling results for a summer week (week 28) in germany, with high levels of solar power production and low wind power production. for the winter week, table 5: revenues from power production for the different technologies, measured in total annual revenues and revenues per mwh of produced power baseline dr scenarios (change from baseline) percentage change technology change in revenues scenario moderate full (full flexibility) nuclear total (g€) 7.2 +0.3 +0.1 +1.9% per unit produced (€/mwh) 54.1 +2.1 +1.1 +2.1% coal and lignite total (g€) 19.2 –0.0 –0.0 –0.2% per unit produced (€/mwh) 61.5 –0.7 –1.1 –1.8% natural gas total (g€) 6.7 –1.0 –1.5 –22.7% per unit produced (€/mwh) 73.7 –4.6 –6.9 –9.3% reservoir hydropower total (g€) 8.4 –0.1 –0.3 –3.6% per unit produced (€/mwh) 58.2 +0.1 –0.9 –1.6% variable renewable energy sources ror hydropower total (g€) 5.5 +0.1 +0.1 +1.5% per unit produced (€/mwh) 51.3 +1.0 +0.8 +1.5% wind total (g€) 16.0 +0.5 +0.8 +4.8% per unit produced (€/mwh) 38.6 +1.2 +1.8 +4.8% solar power total (g€) 3.4 +0.0 +0.1 +2.2% per unit produced (€/mwh) 52.1 +0.6 +1.2 +2.2% baseline moderate full 60 58 56 54 52 50 a ve ra g e e le ct ri ci ty p ri ce ( € /m w h ) 48 46 44 42 40 01 03 05 07 09 11 hour of the day 13 15 17 19 21 23 figure 4.1: hourly intra-day variation of the electricity price for norway (in €/mwh) and the influence from increased dsf. (note varying scale on the y-axis). baseline moderate full 55 54 53 52 51 50 a ve ra g e e le ct ri ct y p ri ce (€ /m w h ) 49 48 0301 05 07 09 11 hour of the dayfig 4.2. norway, summer 13 15 17 19 21 23 figure 4.2: hourly intra-day variation of the electricity price for norway in summer weeks (in €/mwh) and the influence from increased dsf. (note varying scale on the y-axis). international journal of sustainable energy planning and management vol. 11 2016 43 åsa grytli tveten, torjus folsland bolkesj and iliana ilieva consumption is generally shifted from high to low demand hours. when wind power supply is high, the consumption could, however, also be shifted from lowto high-demand hours (figure 5.1), smoothening the short-term price variation and to some extent counteracting the prices from dropping to zero (figure 5.2). in the summer weeks, when much solar power is available, demand is also shifted to high-demand hours (figure 5.3), counteracting reductions in the electricity price in solar hours (figure 5.4). 5. alternative market assumptions in this section the benefits of dsf for improved vre integration are investigated for different assumptions for the future development of the power market: a) consumption level (±20%), b) wind power supply (±50%), c) nuclear power generation level (-100%), d) fuel price level (±50%) and e) carbon price level (±100%). the influence of dsf is analyzed by comparing the baseline scenario with the moderate scenario for three main indicators: i) total wind and solar profit and german wind and solar value factors, ii) total vre curtailment and iii) total ghg emissions. the results from the sensitivity analysis are summarized in table 8. vre curtailment. dsf is found to reduce vre curtailment independent of the underlying assumptions. the isolated effect of dsf for reducing vre curtailment is found to be highest for low rd levels (i.e. for low consumption or high wind supply). in these situations there are more hours with excess vre, and the benefit from increased dsf for reducing vre curtailment will hence be higher. a somewhat surprising finding is that there is a higher reduction in vre curtailment for low than for high carbon prices. one possible explanation is that high carbon prices cause high peak-hour electricity prices, which cause more demand to be shifted according to consumption levels rather than according to vre production levels. the lowest reduction in curtailment is found for low figure 4.4: hourly intra-day variation of the electricity price for germany in summer weeks (in €/mwh) and the influence from increased dsf. (note varying scale on the y-axis). 40 45 50 55 a ve ra g e e le ct ri ci ty p ri ce ( € /m w h ) 60 65 01 03 05 07 09 11 13 hour of the day 15 17 19 20 23 full moderate baseline figure 4.3: hourly intra-day variation of the electricity price for germany (in €/mwh) and the influence from increased dsf. (note varying scale on the y-axis). 01 45 50 55 60 65 70 75 a ve ra g e e le ct ri ci ty p ri ce ( € /m w h ) 03 05 07 09 11 hour of the dayfig 4.2. germany, summer 13 15 17 19 20 23 full moderate baseline table 6: wind and solar market share and value factors in the baseline scenario, and the percentage points change in value factor for the moderate and full demand-side flexibility scenarios. percentage value percentage change market factor points change (full share (%) baseline medium full flexibility) wind value factors denmark 38% 0.90 +1.3 +1.8 +2.0% finland 5% 0.98 +5.9 +3.9 +4.0% germany 28% 0.77 +1.0 +2.1 +2.7% netherlands 27% 0.74 +1.4 +2.7 +3.6% norway 5% 1.01 +3.7 +2.7 +2.7% sweden 9% 0.98 +4.1 +2.8 +2.9% uk 40% 0.62 +2.5 +4.3 +6.9% solar value factors germany 9.5% 0.97 +1.0 +1.9 +2.0% netherlands 0.6% 1.04 –0.5 –1.2 –1.1% uk 2.0% 1.05 –0.3 –0.4 –0.3% 44 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration table 7 : key parameters for the rd level on an annual basis for norway and germany and for all countries. baseline dr scenarios (gw change) percentage change residual demand (gw) scenario moderate full (full flexibility) all countries average residual demand level 95.9 –0.5 –0.8 –0.9% annual maximum 211.8 –15.1 –23.4 –11.0% average daily maximum 128.5 –11.2 –19.0 –14.7% short-term variation 20.7 –7.3 –11.8 –57.2% germany average residual demand level 35.6 –0.2 –0.2 –0.7% annual maximum 82.7 –3.3 –4.4 –5.3% average daily maximum 51.6 –4.2 –7.5 –14.5% short-term variation 10.1 –2.8 –4.8 –47.4% norway average residual demand level 7.9 –0.0 –0.0 –0.0% annual maximum 19.6 –0.1 +0.9 +4.4% average daily maximum 9.4 –0.4 +0.2 +1.9% short-term variation 1.2 –0.6 –0.2 –15.2% t001 0 20 40 e le ct ri ci ty c o n su m p tio n ( g w ) 60 80 100 0 20 40 60 80 100 v r e s u p p ly ( g w ) t013 t025 t037 t049 t061 t073 hour of the week t085 t097 t109 t121 t133 t145 t157 solar supply wind supply consumption b consumption f t001 0 10 20 30 40 50 60 70 80 0 20 40 60 80 100 t013 hour of the week v r e s u p p ly ( g w ) e le ct ri ci ty p ri ce ( € /m w h ) t025 t037 t049 t061 t073 t085 t097 t109 t121 t133 t145 t157 solar supply wind supply price b price f 0 20 40 60 80 100 0 20 40 60 80 100 hour of the week v r e s u p p ly ( g w ) p o w e r co n su m p tio n ( g w ) solar supply wind supply consumption b consumption f t001 t013 t025 t037 t049 t061 t073 t085 t097 t109 t121 t133 t145 t157 hour of the week t001 t013 t025 t037 t049 t061 t073 t085 t097 t109 t121 t133 t145 t157 0 10 20 30 40 50 60 80 70 e le ct ri ci ty p ri ce ( € /m w h ) solar supply wind supply price b price f v r e s u p p ly ( g w ) 0 20 40 60 80 figure 5.4: left axis: hourly power price for the baseline and full flexibility scenarios in week 28. right axis: solar and wind power production. figure 5.1: left axis: hourly power consumption for the baseline and full flexibility scenarios in week 2 of the year. right axis: solar and wind power production. (note different scales on left and right axes) figure 5.2: left axis: hourly power price for the baseline and full flexibility scenarios in week 2. right axis: solar and wind power production. figure 5.3: left axis: hourly power consumption for the baseline and full flexibility scenarios in week 28. right axis: solar and wind power production. (note different scales on left and right axes). international journal of sustainable energy planning and management vol. 11 2016 45 åsa grytli tveten, torjus folsland bolkesj and iliana ilieva wind supply levels and for high consumption levels. in these situations, there are less hours of excess vre, and dsf will hence have lower impact on vre curtailment. ghg emissions. the ghg effect of dsf is found to be sensitive to the future development of the parameters a) to e). when consumption is low and wind levels are high, demand will be adjusted more according to vre supply than according to consumption levels. a consumption pattern that to a less extent shifts demand to off-peak hours will reduce the tendency of increased coal power generation in off-peak hours. an increased carbon price will cause a fuel switch to less carbonintensive technologies, which will mitigate the increased coal power production in off-peak hours when dsf increases. when wind supply is low, vre curtailment is also lower, and dsf has less influence on vre curtailment. simultaneously, the tendency of higher coal power production in off-peak hours will be stronger, causing increased emissions. summed up, these results suggest that if wind power growth towards 2030 is low and the carbon price stays at a low to moderate level, increasing the dsf will either increase ghg emissions or have no significant effect on them. if, on the other hand, wind market shares increase significantly towards 2030, energy efficiency measures cause low consumption growth, and carbon prices increase, implementing dsf will likely significantly reduce ghg emissions. wind market value. the wind value factor is found to increase for all market assumptions a–e. the most significant increase in the wind value factor is found at high electricity demand levels. when demand levels are high, lower levels of demand shifting will be needed for preventing the prices from dropping to zero. however, an interesting finding is that, while the value factor increases considerably with dsf at high consumption levels, the profit for wind producers decreases. at high consumption levels, high electricity prices cause high profit for wind producers. since dsf in this situation will reduce peak prices considerably, profit is decreased with dsf for all production technologies, including vre. a general, and somewhat surprising, finding from the sensitivity analysis is that when the value factor increases considerably with dsf, the total profit is less influenced. a possible explanation is that when the value factor increases significantly from demand shifting to low load hours, the resulting reduction in peak prices will be considerable. solar market value. while the wind value factor is found to increase more with dsf for high consumption levels than for low, the solar value factor increases significantly more from dsf for low consumption levels than for high. this difference could be explained by the correlation between solar power and demand: for low consumption levels, the merit-order effect of solar power in mid-day hours causes significantly reduced mid-day prices and hence reduced solar value factor. when increasing dsf in this situation, more consumption is moved to solar hours, which benefits the solar profit and value factor considerably. at high consumption levels, the same is observed for solar profit and value factor as for wind power; without dsf, solar profit is high because of high electricity prices. with dsf, solar value factor is increased, but total solar profit decreases considerably, because of reduced peak prices. table 8 : change in vre curtailment, ghg emissions, wind and solar revenues and value factor, caused by increased dsf (medium flexibility scenario), under the different power market assumptions a) to e). vre curtailment ghg emissions wind revenues wind value solar revenues solar value vre integration indicator (twh) (mtonnes) (m€) factor (m€) factor baseline, medium flexibility –4.1 –0.7 +0.5 +0.9 +0.04 +0.01 low carbon –4.9 –1.3 +0.2 +1.4 +0.01 +0.01 high carbon –3.9 –1.8 +0.6 +1.0 +0.09 +0.01 low consumption –6.3 –4.2 +0.2 +1.0 +0.11 +0.05 high consumption –2.3 –0.8 –0.4 +2.8 -0.16 +0.02 low fuel price –3.9 –1.4 +0.3 +1.0 +0.04 +0.01 high fuel price –4.2 –0.6 +0.4 +1.0 +0.06 +0.01 no nuclear –3.4 –0.1 +0.0 +0.9 +0.06 +0.02 high wind –0.6 +1.4 +0.1 +0.8 +0.03 +0.01 low wind –7.9 –2.9 +0.3 +1.3 +0.03 +0.01 46 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration 6. discussion this study finds a 7.2 twh reduction in total vre curtailment from an 8 to 24% increase in dsf. this is somewhat higher than the findings reported by [44], who find a 3 twh reduction in total european vre curtailment from increasing the dsf from 5 to 20%. while the current study models optimal dsf considering interaction with both vre supply and crossregional trade, [44] model dsf by modifying only the local demand according to available vre supply. not considering the interplay between regional vre supply, regional pricing and cross-regional interconnection could possibly underestimate the potential of dsf for increasing the use of the vre supply. while the current study finds a 3.3 gw reduction in maximum german peak power demand (medium response), ref. [25] finds a somewhat higher reduction of about 8.5 gw towards 2020. the different results in peak-demand reduction in the two studies could be explained in two ways: first, this study includes costs and limitations related to thermal power plant cycling. limited flexibility in thermal plants could constrain some of the potential for peak reduction relative to the assumed potential. second, the current study applies an hourly time resolution, while [25] model representative days with non-consecutive time slices. a low resolution model will be less capable of capturing the multiple time series of the power system. limiting temporal resolution could hence cause a bias towards overestimating the performance of demand shifting for reducing peak load demand, analogously as reported for the value of vre in [15]. nevertheless, both studies conclude that dsf has a significant potential for contributing to improved vre integration. despite considerable potentials, the short-term dsf in electricity markets has so far been limited, for two main reasons. first, most consumers are not exposed to realtime pricing (rtp), and have no economic incentives to move consumption to periods with low prices. second, technical solutions for automatic adjustment of consumption are today limited, meaning that flexible or smart energy usage requires the user’s action [20, 45]. there are reasons to expect that these obstacles may become less important in the future [46]. advanced metering systems (ams) are currently introduced on a large scale in most european countries, and research and development projects related to their optimal operation and efficient use are currently of high interest [47]. automation and communication technologies and devices assisting dsf are already becoming available on the market. consequently, the possibility for electricity consumers to adjust their consumption and contribute to private and system benefits is increasing. because of small changes in the average price, the consumers’ savings from dsf are found to be very moderate in this study (less than a 3% reduction in consumers’ costs). the small price influence supports the argumentation of [48], that introducing dsf will not affect the electricity price level much. a rough estimate of the cost savings for a german household, with a 3500 kwh annual power consumption, corresponding to an annual electricity cost of €198, suggests very small annual savings per household, about €2.7 per year. furthermore, the model applied in this study does not reflect the capital expenditures associated with implementing dsf. the limited economic benefit for the consumers is supported by [25], who find that, under the existing market regulations, only a very limited share of the technical potential for demand-side management will be realized by 2020. from a thorough cost analysis, they find that the existing technical capacity for demand-side flexibility is only to a limited degree economically feasible by 2020. when modeling dsf under the existing market regulations, the reduction in peak load decreases from 8.5 to 0.8 gw. despite the limited consumers’ savings, dsf is found to provide considerable system benefits, in terms of reduced short-term variation in residual demand and reduced need for peak capacity. from a methodological viewpoint, it should, however, be noted that this study investigates the effect of dsf in relation to the variable supply of vre, while balancing costs, and grid-related costs are outside the study’s scope. previous studies also report significant system benefits from dsf in terms of reduced balancing costs, and grid-related costs (e.g. [25, 34, 44, 45]). the total system benefit of dsf for improved vre integration is hence likely to be higher than reported in this study. on the other hand, the model implementation assumes no limitations on the duration of the load shift, as long as it occurs within the day. this assumption may give a too optimistic modeling of the demand shifting potential, and may work in the opposite way. the total annual load shift found in this study is, however, well in line with the technical potential found in [25]. they find a total annual demand shift of about 30 twh in 2020, which is the same level as in the medium response 2030 scenario in the current study. this implies that the modeling approach in this study gives realistic levels of demand shifting, and provides useful insights into the market effects of the assumed potentials. nevertheless, implementing a more detailed representation of demand shifting in the model will be an interesting topic for further analysis of market and system effects of dsf. the present study shows that the system benefits of dsf – in terms of reduced peak residual demand and better vre integration is substantially higher than the modest cost reductions for consumers. however, in light of the limited savings for consumers, policies and market designs that stimulate increased flexibility on the consumer side will likely be needed to fully use the benefits, both for vre technologies and on system level [9, 49]. rtp combined with automatic control systems would be a first step for realization of the potential. since the societal benefits are far larger than the private economic ones, additional policy measures should be considered. adjusting grid tariffs to stimulate system friendly consumption, beyond the modest incentives from the spot price, is one option which has been addressed in previous literature [50-53]. large commercial consumers such as industries and district heating plants with electric boilers are more likely than households to find provision of dsf interesting from an economic viewpoint, and modification of grid tariffs for such consumers may have a substantial impact. household consumers may demand not only a slightly lower electricity bill, but also additional services, to install smart devices allowing for a more flexible consumption. 6.1. conclusion this study investigates the effects on power markets, and on the market value of vre, from utilizing the total assumed dsf potential in the future (2030) northern european power markets in a system-optimal way. dsf is generally found to cause only moderate reductions in the consumers’ cost of electricity (less than a 3% cost reduction). producers’ revenues for vre technologies are, however, found to increase for all types and locations of vre generation when dsf increases, with the most significant increase in revenues found for wind power. the influence from increased dsf on the solar market value is, however, found to depend highly on the solar market share in the modeled country. the curtailment of vre caused by excess supply is found to decrease by up to 7.2 twh. dsf is also found to reduce the need for peak power technologies. however, reduced revenues for peak/midmerit power technologies imply that increased dsf comes at the cost of less supply-side flexibility. because of increased coal power production in baseload hours, dsf is found to cause only a limited reduction in ghg emissions. the emission effect is, however, sensitive to assumptions regarding the future development in the power market: in a future power market with increasing wind market shares, low consumption growth, and increasing carbon prices, dsf is likely to significantly reduce ghg emissions. although dsf should not be regarded as the single solution, we conclude that short-term dsf has the potential of improving integration – and increasing the market value – of vre technologies. yet, the results suggest that the benefits on system level, and for vre technologies, are more important than the modest economic benefits for the consumers. policies that stimulate increased flexibility on the consumer side will therefore likely be needed to fully use the potential benefits of dsf for vre integration. acknowledgements the research leading to this study was 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[53] bartusch, c., et al., introducing a demand-based electricity distribution tariff in the residential sector: demand response and customer perception. energy policy, 2011. 39(9): p. 5008-5025. http://www.sciencedirect.com/science/article/pii/s030142151 100468x. 50 international journal of sustainable energy planning and management vol. 11 2016 increased demand-side flexibility: market effects and impacts on variable renewable energy integration http://www.sciencedirect.com/science/article/pii/s0360544215014358 http://dx.doi.org/10.1108/ijesm-08-2012-0005 http://www.sciencedirect.com/science/article/pii/s030142151100468x http://www.sciencedirect.com/science/article/pii/s0360544215014358. 02. 1960-6896-1-le.qxd aabbssttrraacctt this paper takes a closer look at eu crowdfunding platforms offering investment in renewable energy (res) projects, how they are exposed to and lead with investor risk. the platforms’ business model and the resulting risk types are analyzed, as well as their assessment, mitigation and communication based on an in depth document review and on a survey taken among the platform’s representatives. the resulting overview shows that res-crowdfunding activity thrives on stable long-term policy support schemes for small and medium scale projects, as well as on comprehensive financial regulation that exempts crowdfunding from traditional financial service regulatory obligations. when combining the offered financial instruments and underlying remuneration of res-projects, a considerable exposure to credit risk can be verified. risk awareness among platforms can be considered high. however, confidence in the investor’s capability to deal with risk is high as well. 1. introduction crowdfunding has presented itself as an alternative to finance companies, non-profit organizations and projects in the aftermath of the 2008 financial crisis, compensating for credibility loss of traditional financial services [5, 17] over the same period renewable energy (res) projects have been greatly affected by a funding gap that had its origin in the financial crisis, but was widened by the reduced policy support [6, 20] as a consequence, crowdfunding initiatives have surged that couple support for renewables by the public [19], the historical low interest on savings accounts [2], the need for financing felt by res-project promotors due to decreasing public support [8, 20] and lacking private finance [21] or the risk-return characteristics of smaller res projects that do not fit traditional lending conditions [4]. this paper will (1) identify the risks that rise from the financial mechanics used by the crowdfunding international journal of sustainable energy planning and management vol. 15 2018 3 platforms offering res-projects and (2) give an overview of how platforms assess, mitigate and communicate the risks that can affect their investors. therefore, three questions have to be answered: (1) which are the business models used, (2) how are these models exposed to risks that lead to credit/default risk for the crowdfunding investor and (3) how are platforms assessing/mitigating/communicating those risks? the document review will permit us (1) to detect significant relations between the number of platforms, the type of projects and the given res-regulation in each country, thus laying bare implications for liquidity, credit or default risk to the crowdfunding investor, (2) to identify the financial regulatory framework in which res-crowdfunding platforms operate, the financial instruments they offer, with the adopted regulation as a benchmark for the level of protection. the paper is divided in the following sections: section 2 will give background on res-crowdfunding 1 corresponding author e-mail: wouterdebroeck@gmail.com international journal of sustainable energy planning and management vol. 15 2018 03–10 crowdfunding platforms for renewable energy investments: an overview of best practices in the eu wouter de broeck1 faculdade de economia da universidade do porto (fep), rua dr. roberto frias, 4200-464 porto keywords: crowdfunding; renewable energy; risk analysis; jel classification: g23, g31, g32, l31; url: dx.doi.org/10.5278/ijsepm.2018.15.2 4 international journal of sustainable energy planning and management vol. 15 2018 crowdfunding platforms for renewable energy investments: an overview of best practices in the eu activity in the eu, the business models crowdfunding platforms use and the perceived risk of crowdfunding investors. section 3 lays out the methodology for breaking down those business models and conducting the survey on risk among the platforms representatives. section 4 gives an overview of the results of both document review and survey. in section 5, conclusions and suggestions for future research are presented. 2. background crowdfunding platforms offering res-projects are a relatively new phenomenon, with the dutch pioneer de windcentrale going back to 2010. in majority these platforms rely on equity and debt they collect from the crowd to finance the projects [7, 9, 14, 20].the energy production of the funded res-projects generates steady cash flows coming from policy support schemes, energy sales or energy saving costs. the projects use a variety of financial instruments such as loans, bonds or securities to materialize the financial return for their investors. as future cash flow is feeding the investment return, ‘robustness and stability of cash flow’ works as a proxy for the liquidity, default and credit risk that weighs upon the investor [15]. cash flow robustness is determined by the policy and financial de-risking instruments that set out the frame (in time and amount) for the res-project revenues [1, 15, 16]. these policy schemes now face uncertainty because governments have been scaling back the initially generous support in the aftermath of the financial and economic crisis. meanwhile the european state aid guidelines require that renewable energy should be progressively exposed to market competition. as a consequence, an overall tendency of fading out or cutting back feed-in-tariffs (fit) can be verified, thus creating pockets of legal uncertainty [1, 3, 10, 11, 15, 18]. therefore, focus will lie on the transfer from the project’s business/policy risk to the crowdfunder’s credit/default risk. as crowdfunding models offering financial return attract investors with financial motivations, they show an increasing risk/return intensity [14, 20]. this leads to a ‘risk paradox’ in the res-crowdfunding environment. the res-projects that serve as an underlying asset are highly complex to evaluate due to regulation and technical viability assessment [4, 20], while crowdfunding platforms typically attract non-specialist investors, thus creating an additional gap where low preparedness stands against high complexity. moreover there are indications that the financial, but also causerelated motivation of res-crowdfunding investors [14, 20, 22] may relate positively to perceived risk. the particular motivation and perceived risk of the rescrowdfunding investor has to be weighed against the crowdfunding platform’s exposure, awareness, mitigation and communication of risk, in order to draw any conclusion on its attitude towards investor risk. 3. methodology in order to break down each business model in its respective regulatory frame, a qualitative field study [8] was conducted, consisting of a document review and a survey. information was obtained via an in depth review of all information made available by active rescrowdfunding platforms in the eu, breaking down the business models into; type of res-project (technology and remuneration), financial regulation of platform activity and financial instruments (type and characteristics). simultaneously a survey was taken among platform representatives (c-level) on their attitude towards risk. the sample frame was established at 23 active crowdfunding platforms offering resprojects on december 31st 2016, in both mature (volume, number of platforms, years of activity) and upcoming markets; of those 10 responded the survey. these 23 platforms most likely do not coincide with all active platforms offering res-projects, as the crowdfunding market is still an early stage there is a constant flow of new platforms, platforms that cease activity or that stop offering res projects. the sample selection is based on crossing data of databases such as crowdsurfer.com, eurocrowd.org (european crowdfunding network), citizenergy.eu, crowdfundres.eu, recrowdfunding.eu, crowdfunding.de and the cambridge centre for alternative finance. excluded were one off crowdfunding campaigns by project promotors or energy companies, as well as cooperatives and community energy projects, mainly because they use fundamentally different business models. the survey is based on the same dual approach, focusing on both underlying asset and the financial instruments that are used. at res-project-level representatives are questioned about impact and probability of nine risk types affecting the project [6]. in regard to the financial instruments, the survey questions the platform’s compliance and attitude towards risk mitigation and communication. international journal of sustainable energy planning and management vol. 15 2018 5 wouter de broeck 4. results first an overview of res-crowdfunding activity is given (number of platforms, age, volume, per capita volume), then a relationship is established between platform activity and regulation. finally risks resulting from the platform’s business models are reviewed. 4.1. the eu res-crowdfunding market in numbers out of the 23 active platforms, seven are german (30.4%), five are dutch (21.7%), four are french (17.4%) and two austrian (8.7%). the uk, sweden, belgium and finland each have one platform (4.3%). germany and the netherlands have the eldest active platforms, with german platforms counting on average 1,721 days of activity and the dutch 1,542 days. germany has the largest volume of crowdfunded res-projects (61,744,080 euro), followed by the uk (49,340,000 euro — including the projects from the trillion fund that stopped funding res in 2015) and the netherlands (42,968,648 euro). at a distance come france (14,982,875 euro), austria (3,160,046 euro), finland (889,992 euro), sweden (440,000 euro) and belgium (150,000 euro). when considering rescrowdfunded volume per capita the netherlands clearly come first (2.52 euro/person), then germany (0.77 euro/person), the uk (0.75 euro/person), austria (0.37 euro/person) and france (0.23 euro/person). the netherlands have two major platforms each representing 37% of total volume, with the other 26% split evenly over the remaining three platforms. in contrast, germany and france count each one platform that represents respectively 72% and 75% of the total rescrowdfunded volume. the netherlands thus stand out as the most mature res-crowdfunding market, having the most and the eldest platforms, as well as the most equalized market and the highest volume per capita. 4.2. relation between regulation and rescrowdfunding activity 4.2.1. res-policy support-res-crowdfunding activity countries with the most res-crowdfunding platforms have a res-policy based on premium tariff and/or feed-in-tariffs (fit), which enables and guarantees long term foreseeable cash flows necessary for the investment return. platforms in those countries in majority offer res-projects based on small to medium scale solar pv systems (74% of all platforms) and wind turbines (52% of platforms), selling produced electricity to the grid. in comparison, energy efficiency projects (chp –in 17% of platforms, relighting — 17%, insulation — 9%) are less frequent as underlying asset. the dutch and german platforms rely on market premium schemes that are based on market-oriented tender procedures, in order to cover the costs of (nonmature) res-technologies and ensure their profitability. while being exposed to a market of electricity producers, the premium tends towards a minimum risk premium. coinciding with the largest res-crowdfunding markets, the stable market premiums of germany and the netherlands emerge as the policy instrument that most favors platform activity (table 1). policy changes towards a market-oriented market premium — as in france — have not hampered res-crowdfunding development. while policy uncertainty (uk) or abruptly scaling back (spain) have an immediate negative effect on activity. 4.2.2. financial regulationres-crowdfunding activity res-crowdfunding platforms in the netherlands all operate under different regulatory frameworks and have benefitted from a tolerant regulatory environment. german platforms initially chose lightly regulated instruments that fitted their purposes (subordinated loans), but were forced to adopt a heavier framework when those loans were considered investment products. the uk has regulated lending based crowdfunding under the existing regime for financial services, forcing platforms towards a compliance with the markets in financial instruments directive (mifid). france has created a specific status for investment based platforms, but nonetheless the larger ones prefer a mifid authorization. austria, belgium, finland and sweden show a regulatory landscape with non-specific or unfinished regulation not favoring res-crowdfunding (table 2). 4.2.3. business model/amount of fees-res-regulation a review of res-regulation/support schemes and the amount of the management and funding success fees reveals that platforms relying on cash flows from older fit-policies, practice lower management and success fees than platforms relying on market premium or energy saving costs. there are some exceptions, with ecrowd (es) practicing the lowest fees on the market (2-4%+1-1.5% annually) in spite of having no access to support. 6 international journal of sustainable energy planning and management vol. 15 2018 crowdfunding platforms for renewable energy investments: an overview of best practices in the eu 4.3. risk types surging from the business models used by res-crowdfunding platforms 4.3.1. res-regulation and risk eight platforms (four de, three fr and one uk) have res-projects alimented by fit-schemes, making these projects the least exposed to business risk. with the major res-crowdfunding markets (nl, de, uk, fr) tending to market premium schemes and phasing out fit’s, business risk is likely to rise. four platforms offer projects relying on cash flows only from sales, exposing them to a comparative higher business and default risk. also, the type of financial instrument determines the level of credit risk for the investor. nine platforms (39%) offer lower risk instruments such as secured business loans, bonds/debentures and senior bond loans. differences exist across countries and even within the same platform; dutch senior bond loans and secured business loans are offered next to unsecured business loans. the bonds issued by the projects on the french platforms are not secured; they are senior to shareholders and junior to the bank. finally, the subordinate profit participating loans that are used by six german rescrowdfunding platforms, put crowdfunders junior to all other company/project-creditors, exposing them to huge credit risk. knowing that both underlying res-remuneration and financial instrument type are steering credit risk, data crossing shows that four platforms (17%) are combining low risk fit-support with low risk instruments, while another four benefit from fit/market premium offering higher risk instruments (table 3). overall 13 platforms (56.5%) include additional bank financing. especially the french platforms (75%) highly rely on extra bank financing; with the same three platforms offering complex products (portfolio, refinancing existing projects or crowdfunding as a part of a complex debt structure). german (57%) and dutch (50%) platforms show average additional bank financing, with only two dutch and two german platforms offering complex products. when it comes to risk, bank/third party financing is a sword that cuts both edges. it can be an extra guarantee for the project quality — as additional due diligence is carried out — but when investors are junior to bank financing (as with the bond-type used by three french platforms), they are exposed to credit risk. nine platforms (39%) offer instruments that are transferable. only three of them have a secondary table 1: remuneration feeding return of res-projects/number of platforms per country name platform country feed-in-tariff market premium energy saving cost product sales trine se/uk* x abundance uk x x x greencrowding de x x bettervest de x x x greenvesting de x x wiwin de x x greenxmoney de x x leihdeinerumweltgeld de x x x econeers de x x x lumo fr x x wedogood fr x lendosphère fr x x x enerfip fr x x x windcentrale nl x x greencrowd nl x x x wesharesolar nl x x duurzaaminvesteren nl x x oneplanetcrowd nl x conda at x greenrocket at x ecconova be x ecrowd! es x x invesdor sf x *trine works under an uk/fca authorization, source: author’s own construction based on platform’s websites international journal of sustainable energy planning and management vol. 15 2018 7 wouter de broeck market where they can be traded on, thus exposing the investors to liquidity risk. finally, all platforms but trine, base their revenues on the funded capital (success fee) and some kind of management fee for the duration of the project. depending largely on the funding success of the project promotor, platforms do not depend directly on the project’s performance and are thus exposed to moral hazard. 4.4. the platform’s attitude towards risk the risks that platforms judge most probable to affect their res-projects are; finance risk (60%), technical and management risk (50%) and administrative risk (40%). finance risk affects both smaller and bigger platforms, all kind of debt instruments (bonds, debentures and (un)secured business loans), but is more frequent among platforms that are not/no longer benefitting from fitsupport schemes. also, platforms in the large crowdfunding markets such as france, germany and the netherlands, think a sudden change in policy is highly unlikely. even after the brexit vote the uk platform abundance calls a market design and regulatory risk ‘unthinkable’ and a sudden policy change ‘unlikely’. as for the impact of these risks, the technical and management risk is considered by a majority to have a considerable (60%)-very high (20%) impact. financing risk (30% considerable impact and 30% very high) emerges as the most likely risk with the highest estimated impact on the project. whereas policy design, market design and sudden regulatory changes are considered of considerable/very high impact by half of the platforms (30% considerable, 20% very high). when it comes to risks that affect the investor, platforms are confident that fraud, loss or theft of client data will not happen (80% calling it ‘unlikely’). interestingly 70% consider a loss of invested capital (all or part) unlikely, while only the swedish platform specializing in projects located in developing countries table 2: authorization of platform activity/number of platforms per country authorization domestic for services bespoke and activities regime in relation to authorization under mifid non-mifid outside the authorization art. 3 financial mifid name platform country under mifid exemption instruments framework trine se/uk* x abundance uk x greencrowding de x bettervest de x greenvesting de x wiwin de x greenxmoney de x leihdeinerumweltgeld de x econeers de x lumo fr x wedogood fr x lendosphère fr x enerfip fr x windcentrale nl x greencrowd nl x zonnepanelendelen nl x duurzaaminvesteren nl x oneplanetcrowd nl x conda at x greenrocket at x ecconova be x ecrowd! es x invesdor sf x sources: author’s own construction based on survey, (esma 2015), platforms’ websites 8 international journal of sustainable energy planning and management vol. 15 2018 crowdfunding platforms for renewable energy investments: an overview of best practices in the eu and a german platform call a default risk ‘probable’. about loss of interest there is no consensus, with 40% saying it is ‘probable’ — against 50% calling it ‘unlikely’. all 23 platforms conduct a form of due diligence before accepting res-projects to be published for offering, making it the most important risk mitigation instrument. the most complete due diligence (project/promotor/regulation) is carried out by seven platforms. among this group, four mitigate risk upfront beyond compliance obligations. these platforms operate under four different authorization categories. two of them (de-uk) have projects relying on fit-schemes and all have projects benefitting from market premiums (de-uk-nl), among them both complex portfolio products and simple subordinated loans based on one project. when it comes to credit and liquidity risk only the investor is exposed to, we find that of three platforms offering higher risk instruments (subordinated participatory loans, unlisted shares), only one mitigates beyond compliance. all platforms communicate risk upfront, five out of ten platforms make available information of which the content goes beyond compliance. within this group, three are mitigating risk beyond compliance, resulting in 30% of platforms that are outperforming the rules on both aspects. when compared to the fairly high confidence of platforms regarding risks that affect the investor, we could state a possible conflict of interest arises. comparing results of a 2013 global environmental awareness index (eia) [12] and the latest yale environmental performance index [13], poorly performing countries (de-nl) seem to have a more environmental aware population, that in turn is more willing to crowdfund res-projects. or, as is shown by the uk and france, there is no apparent link between environmental awareness and res-crowdfunding activity, confirming the financial motive as the most probable. the survey results confirm this complex investor profile, with 90% of platforms calling their investors’ motives both ‘financial’ and ‘causerelated’. when it comes to investors’ competence, 70% of platforms think they deal with ‘well informed investors’ (against 20% poorly informed) and people ‘capable to deal with risk (against 20% vulnerable to risk). table 3: remuneration feeding return/type of financial instruments/country energy saving market secured bonds unsecured subordinate royalcountry sales cost premium fit loans debentures loans loans shares ties se/uk* x x x x uk x x x x de x x x de x x x x de x x x de x x x de x x x x de x x x x de x fr x x x fr x x fr x x x x fr x x x x x nl x x x nl x x x x x nl x x x nl x x x nl x x x x at x x at x x x be x x es x x x x sf x x sources: author’s own construction based on survey, platforms’ websites international journal of sustainable energy planning and management vol. 15 2018 9 wouter de broeck 5. conclusions and future research stable market premium schemes emerge as the policy instrument that most favors platform activity. germany and the netherlands have been identified as the markets with the eldest and the most platforms, as well as the largest crowdfunded volumes. both countries have stable market premium schemes in place. in contrast, policy uncertainty (uk) or abruptly scaling back (spain) have an immediate negative effect on activity. the overview shows that there is a predominance of small to medium scale solar pv systems and wind turbines that benefit from policy support schemes. survey-results showed that financing risk is considered more probable by platforms offering projects that no longer benefit from the — long term, predictable — feed-in-tariffs (fit). comparing the evolution of financial regulation of crowdfunding, it shows that a loose financial regulatory framework leads to a range of business models and financial instruments (nl), while a more specific framework tends to reduce res-crowdfunding to one business model/one instrument (de). restrictions on crowdfunding (fr) or levelling it next to traditional financial services (uk), tend to force platform adopting mifid in order to enter the level playing field. business and credit risk affecting the rescrowdfunding investor are highly dependent on the remuneration/support scheme of the underlying project. with the phasing out of fit and decreasing of market premium, business risk is expected to increase. only one in five platforms offer res-projects combining low risk fit-support with low risk instruments. thus, credit risk exposure for investors can be considered high, making platforms dependent on their mitigation policy to reduce risk. platforms seem to be aware they are offering a highrisk investment. mitigation through due diligence is generalized, even when the 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sciencedirect.com/science/article/pii/s0959652615007489 [21] yildiz, ö.. “financing renewable energy infrastructures via financial citizen participation — the case of germany.” renewable energy, vol. 68, (2014) pp. 677-685. http://www.sciencedirect.com/science/article/pii/s0960148114 001293 [22] zhao, q., c-d. chen, j-l. wang and p-c. chen. “determinants of backers’ funding intention in crowdfunding: social exchange theory and regulatory focus.” telematics and informatics, vol. 34, nº1, (2017) pp. 370-384. http://www.sciencedirect.com/ science/article/pii/s0736585316300582 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice microsoft word ijsepm titelblad vol 20 editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    rendsburggade 14, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands  dr tao ma, shanghai jiao tong university, china    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark (front page & logo)  ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, and emd international 07.1032-3854-1-le.qxd 1. introduction the formulation of the 20-20-20 targets by the leaders of the eu in 2007 was later followed by the adoption of the “klima 2050” plan by the danish government, which set an ambitious roadmap for denmark towards a low carbon society.1 it is commonly acknowledged that a shift from a high-carbon society to a low-carbon society is unachievable through product innovations alone, but also necessitates increases in efficiency and the realisation of saving potentials. these are equally important pillars in the transition process, a fact recognised in the targets of both plans. international journal of sustainable energy planning and management vol. 07 2015 79 this applies especially to the energy sector which causes about 40% of total co2 emissions in denmark. a characteristic trait of the danish energy system is that it has a large number of district heating networks, many of which are supplied by combined heat and power (chp) stations. given the technological path dependency which is inherent to energy systems, a radical technological change is not only unrealistic, but would also be an overly expensive solution. therefore, besides technical progress, incremental process improvements that lead to increases in environmental efficiency [1], international journal of sustainable energy planning and management vol. 07 2015 79-98 the development of environmental productivity: the case of danish energy plants ������� � �� � � � ���� �� � �� � � � �� �� ��� �� ���������� ���� ������� a department of management engineering, technical university of denmark, productionstorvet 426, 2800 kgs. lyngby, denmark. b department of food and resource economics, university of copenhagen, rolighedsvej 25, 1958 frederiksberg c, denmark. abstract the danish "klima 2020" plan sets an ambitious target for the complete phasing-out of fossil fuels by 2050. the danish energy sector currently accounts for 40% of national co2 emissions. based on an extended farrell input distance function that accounts for co2 as an undesirable output, we estimate the environmental productivity of individual generator units based on a panel data set for the period 1998 to 2011 that includes virtually all fuel-fired generator units in denmark. we further decompose total environmental energy conversion productivity into conversion efficiency, best conversion practice ratio, and conversion scale efficiency and use a global malmquist index to calculate the yearly changes. by applying time series clustering, we can identify high, middle, and low performance groups of generator units in a dynamic setting. our results indicate that the sectoral productivity only slightly increased over the fourteen years. furthermore, we find that there is no overall high achiever group, but that the ranking, although time consistent, varies between the different productivity measures. however, we identify steam turbines and combustion engines for combined heat and power production as potential high performers, while combustion engines that only produce electricity are clearly low performers. jel classification: c50, d22, d24, o30 keywords: environmental productivity; energy sector; productivity analysis; co2 emission mitigation; renewable energy; transition: url: dx.doi.org/10.5278/ijsepm.2015.7.7 * corresponding author e-mail: gehe@dtu.dk 1 more information on the 20-20-20 targets can be found at http://ec.europa.eu/clima/policies/package/ (may 5, 2014). the “klima 2050” plan describes the roadmap for the complete phasing-out of fossil fuels in denmark by the year 2050. 80 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants and rescaling generator unit capacities to increase scale efficiency [1, 22] are equally important elements in the transition of the energy system towards lowcarbon targets. based on a panel data set of production data from virtually all fuel-fired danish electricity, heating, and chp units, we analyse the performance of the industry over a period of 14 years by using a distance function as a benchmarking tool that accounts for co2 emissions [1, 26, 24, 25]. similarly to [1] and [24], we use an extended farrell input distance function with two desirable outputs (heat and electricity), one undesirable output (co2), and one input (fuel), while we disregard other inputs such as labour, capital, and materials. traditional and environmental total factor productivity measures that are commonly applied in studies on the performance of heat and power production take into account all production inputs so that, e.g., investments in fuel-saving and/or co2-reducing technologies can lower productivity measures, because the increase of the productivity measure due to reduced fuel-use and/or co2 emissions can be smaller than its decrease due to increased capital costs. in contrast, investments in fuelsaving and/or co2-reducing technologies necessarily result in higher productivity measures in our analysis. as our productivity measure can be improved both by a more efficient conversion of fuel into heat and/or electricity (energy conversion efficiency) and by changes of the fuel composition towards less co2 emitting fuels (environmental efficiency), we call our obtained productivity measure “environmental energy conversion productivity”. we divide the environmental energy conversion productivity into three subcomponents: conversion efficiency, best conversion practice ratio, and conversion scale efficiency, and use the global malmquist productivity index proposed by [18] to quantify yearly changes in the three subcomponents, e.g., changes in conversion efficiency, changes in the best practice conversion technology, and changes in the conversion scale efficiency. this enables us to derive a comprehensive picture of the productivity development over time. table 1 demonstrates how our measures correspond with the transition pillars innovation and efficiency. as our benchmarking measure is based on individual generator units, we are able to investigate the relationship between the performance and various characteristics of the generator units. these characteristics are, for instance, age, capacity, technology, output, and the role within the energy system. based on these criteria, we address the following questions: (a) is there a high performing group and if so, who are the high performers given the transition pillars innovation and efficiency; (b) are high performers consistent (i) over time and (ii) over both transition pillars; and (c) what characterises a potential low performance group. this information allows a comprehensive analysis of the sectoral performance and may contribute to understanding the environmental efficiency of a complex energy system. the ongoing reform of the emissions reference document for large combustion plants [13] stresses the relevance of this topic. our study helps to underpin the specificities of the chp-intensive danish energy system in this context. in order to answer the above-mentioned questions, we perform a feature-based time series cluster analysis [23] over all three subcomponents of environmental energy conversion productivity to identify and describe different performance groups. finally, a multinomial logit regression analysis provides more detailed information on how the above mentioned characteristics affect the attribution of a generator unit to one of the identified performance groups. a detailed analysis of the performance of different generator unit groups completes the analysis. the article is organised as follows: section two provides a brief overview of the danish energy sector and its development over the last 40 years; section three describes the data; section four provides a comprehensive description of the methodologies used in the analysis; section five presents and discusses the results, and section six concludes. abbreviations: eecp = environmental energy conversion productivity; ce = conversion efficiency; bcpr = best conversion practice ratio; cse = conversion scale efficiency; mtr = meta technology ratio. table 1: correspondence between productivity measures and transition pillars pillars productivity measures innovation ⇒ changes in the best practice conversion technology efficiency gains ⇒ changes in conversion efficiency, changes in conversion scale efficiency 2. the danish heat and power generation sector the danish energy sector has some unique characteristics that are important for the interpretation of the results of this study. in contrast to other countries, denmark decided already in the late seventies to become more independent from fossil fuel imports. the decision was not based on climate concerns, but rather on a desire for political independence and a secure national energy supply. except for the former soviet union countries, no other country pursued district heating as consistently as denmark. nearly 100% of municipal solid waste and a large share of industrial waste are burned for energy supply in smaller, local district heating plants and in medium-sized chp plants. furthermore, denmark uses a large proportion of its domestic natural gas resources to produce heat and power. many of the district heating plants have chp units whose construction and operation have been promoted by a number of governmental support actions throughout the years. chp units have an inherently higher total efficiency than electricity-only or heat-only units. this effect is reinforced by dimensioning and sizing the generation units for the respective local heat demand, leading to economies of scope in comparison to generator units with only one output. hence, the focus on small local district heating plants and chp plants has led to a sector that today contains only a limited number of larger stations—of which many are chp plants in urban areas. the danish energy sector is divided into four main classes of plants: • centralised plants are situated in 15 legally defined areas. the generator units of these plants are predominantly chp units, although they also comprise the largest electricity-only stations. usual fuels in this category are natural gas and coal. despite a huge increase in wind energy generation, these units still produce about 50% of the electricity in denmark [12]. • decentralised plants comprise a larger group of plants with large and medium-sized mainly chp units fuelled by natural gas, waste, and biomass. • industrial plants are mainly medium-sized chp units that together with the decentralised plants represent about 20% of the electricity supply in denmark [12]. • district heating plants are mostly small-scale generators producing chiefly heat and only to a very limited extent contribute to the electricity supply. • other plants, which mainly comprise smaller local units with a specific supply function (e.g., supply of hospitals) and emergency backup generator units. 3. data our empirical analysis is based on a full sample of all fuel-fired electricity and heat producing generator units in denmark from 1998 to 2011.2 tables 2 and 3 describe the composition of the data set and present descriptive statistics of relevant variables, respectively. the capacity of the generator units with regards to electricity production, heat production, and fuel input is measured in megawatts (mw), while the actual electricity production, heat production, and fuel use are measured in terajoules (tj). co2 emissions are measured in metric tons (t) and are calculated using an engineer’s approach based on the fuel input using conversion coefficients published by the [11].3 as several generator units use a mix of different types of fuel, e.g., a mix of fossil fuels and renewable fuels, the ratios between co2 emissions and fuel use are not limited to the used conversion coefficients, but have a nearly continuous distribution (see figure 1). this shows that reductions in co2 emissions can not only be achieved by radical changes such as new technologies that use different fuels, but also by stepwise changes of the mix of fuels. as all generator units in our sample—no matter whether they produce no co2 or strictly positive amounts of co2—produce heat and electricity by burning some kind of fuel and as the share of renewables can be incrementally increased to 100% so that the co2 emissions are gradually reduced to zero (see figure 1), it is reasonable to assume that generator units that produce no co2 and generator units that produce strictly positive amounts of co2 use the same or a very similar technology so that we do not need to separate between international journal of sustainable energy planning and management vol. 07 2015 81 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig 2 the data set also includes electricity and heat producing generator units that use other sources of energy. in order to focus on generator units with a similar technology, we decided to only analyse fuel-fired generator units. this covers a very large share of the generator units in the data set and implies that we do not include generator units in our sample that use solar cells, solar thermal collectors, hydro energy, geothermal energy, heat pumps, or excess heat from industrial production. 3 the conversion coefficients are presented in appendix table a.1. 82 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants table 2: composition of data set variable # number of observations 24411 number of years 14 number of generator units 2488 number of plants 1415 frequency of generator technologies boiler 1840 combustion engine 518 steam turbine 80 gas turbine 31 other 19 frequency of embeddedness types decentralised plants 656 district heating plants 647 industrial plants 73 centralised plants 39 frequency of production types electricity only 126 heat only 1387 chp 1061 number of generator units producing no co2 649 co2 emissions (t) / fuel input (tj) f re q u e n cy 0 20 40 60 80 100 0 1 0 0 2 0 0 3 0 0 4 0 0 coal (221) gas oil (3330) nat. gas (12987) waste (530) renewable (5176) fuel oil (766) figure 1: histogram of ratios between co2 emissions and fuel input. the truncated columns mostly correspond to generator units that only use a single fuel type. the fuel type and the frequency are indicated above these columns. table 3: descriptive statistics mean median stdv min max start of operation 1990 1994 11.61 1900 2011 operating time in years 19 17 11.61 0 110 electricity capacity in mw* 11.67 0.96 55.48 0.0010 640.00 heat capacity of in mw** 12.29 3.50 40.07 0.0100 585.00 input capacity in mw 22.46 5.00 98.07 0.0250 1582.00 yearly electricity production in tj* 147.92 11.02 850.84 0.0001 14795.92 yearly heat production in tj** 83.71 11.13 406.79 0.0001 9798.09 total fuels in tj 210.35 16.00 1470.19 0.0010 37545.39 co2 emissions in t 14.5 0.30 127.02 0 3560.33 note: * = only generator units that produce electricity, ** = only generator units that produce heat. all figures are rounded to two decimals, except for the minimum values, which are rounded to four decimals. international journal of sustainable energy planning and management vol. 07 2015 83 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig two distinct technologies—technologies with no co2 emissions and technologies with strictly positive co2 emissions—in our analysis. the discrepancies between the arithmetic means and the median values in table 3 reflect the focus of the danish energy sector on small-scale local generator units. this is particularly the case for electricity producers. in 2011, the 1% largest electricity producers accounted for 51% of total electricity production. likewise, the top 1% district heating producers accounted for 37% of total heat production. so, despite the political effort to decentralise energy production, the contribution of small local generator units is still limited and raises the question of how efficiently the sector operates on the whole. 4. methodology our analysis of the environmental energy conversion productivity of the generator units takes into account one traditional input (fuel), two desirable outputs (heat and electricity), and one undesirable output (co2) as described in the previous section. conducting efficiency analysis means that a choice has to be made regarding the “direction” in which the deviation from the best available “frontier” technology should be measured. different approaches to account for undesirable outputs in productivity and efficiency analysis exist [e.g., 20]. in general, inefficiency could be measured as the potential reduction of the traditional inputs, the potential increase of the desirable outputs, the potential reduction of the undesirable outputs, or any combination of these three “directions” where the directional vector could be either defined in absolute quantities (as often done with directional distance functions) or in relative terms (as done in farrell distance functions). in our analysis, we use an extended farrell input distance function, where we measure inefficiency in terms of the potential proportional reduction in both the traditional inputs and the undesirable outputs, while holding the desirable outputs unchanged: (1) where y is a vector of desirable output quantities, b is a vector of undesirable output quantities, x is a vector of input quantities, and t denotes the technology set. as briefly outlined in the introduction, the generator units have two (not mutually exclusive) basic pathways to increase their environmental energy conversion productivity (for constant output quantities): (i) fueld y b x y b x t b x, ( , , ) min{ ,( , , ) },= > ∈γ γ γ0 saving measures that proportionally reduce fuel use and co2 emissions and (ii) changes of the fuel composition towards less co2 emitting fuels, which reduce co2 emissions, whereas the total fuel use is expected to remain approximately constant. the direction of the distance function that we use in our analysis corresponds to the first pathway but it also takes into account the second pathway. for instance, if a given generator unit changes its fuel composition so that its co2 emissions decrease by 10%, while the total fuel input and the output quantities remain unchanged, our distance function approach indicates that the environmental energy conversion productivity has improved. however, the improvement of the environmental energy conversion productivity is less than it would have been if the same generator unit had reduced both its co2 emissions and its fuel input by 10%, while leaving the fuel composition and the output quantities unchanged. hence, our distance function approach rewards reductions of co2 emissions that go along with fuel reductions (first pathway) more than reductions of co2 emissions that keep the total fuel input constant (second pathway). the directional distance function defined in (1) corresponds to a traditional farrell input distance function, where the undesirable output is treated as an additional input [specification “inp” in 20]. hence, an alternative interpretation of the model is that energy production uses clean (non-co2 polluted) air or co2 quota as an additional input. there are three reasons for using this “direction”. first, for many generator units in our data set, the quantity of one of the desirable outputs, heat, is exogenously determined by the demand of the respectively supplied consumers. as the ratio between the (two) desirable outputs is technically predetermined for many generator units in our sample (at least when we only consider efficient points of production), for these generator units, the other desirable output (electricity) is also exogenously determined by the demand for heat. hence, these generator units cannot increase their environmental energy conversion productivity by increasing the desirable output quantities (y), but they have to reduce the traditional input quantities (x) and/or the undesirable output quantities (b). second, some generator units in our data set can only use a specific type of fuel. as the ratio between fuel and co2 is given for a specific fuel type, the only possibility for these generator units to increase environmental energy conversion productivity is to proportionally reduce the fuel input and the undesirable output (co2), if the output quantities are given. third, we do not assume that the desirable outputs are null-joint with the undesirable outputs, because in our empirical application, some generator units produce strictly positive quantities of heat and/or electricity by exclusively using renewable fuels so that they— according to our way of calculating co2 emissions—do not emit co2, e.g., (y, b, x) can be in the technology set for b = 0 and y > 0. in contrast to the directional distance function suggested by [9], our approach, the extended farrell input distance function, does not require nulljointness between the desirable outputs and the undesirable outputs. in contrast to [14], we do not explicitly assume weak disposability. weak disposability means that desirable and undesirable outputs can be reduced proportionally, e.g., if (y, b, x) is in the technology set and 0 ≤ θ ≤ 1, then (θy, θb, x) is also in the technology set [14]. we cannot be sure that the (true) production technology of the analysed generator units fulfils this assumption. for instance, it could be the case that after changing the fuel mix so that co2 emissions are reduced from b to θb with 0 ≤ θ ≤ 1, while keeping total fuel input constant at x, the maximum possible output quantities are reduced from y to ψy with 0 ≤ ψ ≤ θ, which means that weak disposability is not fulfilled. as we use fuel as the only input and disregard other inputs such as labour, capital, and materials, our production model is based on an environmental energy conversion function rather than on a traditional production function. the best practice frontier that we obtain in our analysis does not describe the best practice technology for energy production, because it ignores nonfuel inputs. as non-fuel inputs are costly, energy producing companies should not use this frontier technology to assess their productive performance. however, our analysis indicates the best practice frontier for environmental energy conversion, e.g., the conversion of fuel to heat and electricity taking into account co2 emissions. thus, we can use the obtained frontier to assess how the environmental energy conversion would improve if the generator units switch to the best available technology for environmental energy conversion (not taking into account the costs of changing the technology). this is what we want to investigate in our analysis. in the example illustrated in figure 2, a producer invests in a co2-reducing technology which increases the firm’s capital stock from k0 to k1 and reduces co2 emissions from b0 to b1, while (for simplicity) the producer’s fuel input and output quantities remain unchanged. in figure 2, the relative distance from the point of production to the frontier of the technology set is not affected by the investment. when considering both capital and fuel as inputs (as in a traditional production function framework), this means that the environmental technical efficiency of this producer remains unchanged. however, in the case of our environmental energy conversion function, which ignores the capital input, the investment in co2reducing technology illustrated in figure 2 clearly increases the environmental energy conversion efficiency, because the point of production moves closer to the frontier of the set of possible energy conversions (densely dashed horizontal line). the argumentation based on the example in figure 2 also holds for investments in fuel-saving technologies that as a consequence reduce co2 emissions. we only present the simpler example that assumes an unchanged fuel input, because simultaneously looking at the capital stock, co2 emissions, and fuel input requires a 3-dimensional graph, which would make the illustration more complex than necessary. we follow [3] and [20]4 and assume that the technology set in a specific time period s can be obtained from the observations in our data set by: (2) t y b x y y b b x x e s s s s = ≥ ≤ ≤ ≥ = {( , , ) | , , , , } λ λ λ λ λ � � � �0 1 ,, 84 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants 4 our definition of the technology set corresponds to the technology set t [inp] in [20]. k (capital) b (co2) technology set k 0 b 0 k 1 b1 figure 2: investments in co2-reducing technology where λ is a vector of weights, e is a vector of ones, and ys, bs and xs are the matrices of desirable output quantities, undesirable output quantities and input quantities, respectively, of all observations in our data set for time period s. a superscript g instead of s indicates that the observations from all time periods are taken to obtain the “global” technology, e.g., yg ≡ {y 1,...,yk}, bg ≡ {b1,...,bk }, xg ≡ {x1,...,xk}, where k indicates the number of time periods in the data set [18]. given the definition of the technology set in equation (2), we can use data envelopment analysis (dea) [6, 3] to measure the environmental energy conversion productivity of an energy generator unit i at time t relative to the best practice conversion technology at time s as defined in equation (1): by removing restriction λ�e = 1 from equation (2), we obtain a technology set that exhibits constant returns to scale. thus, by removing restriction λ�e =1 from the linear programming problem in equation (3), we obtain distance measures that are benchmarked against the so-called cone technology [2]. we indicate these distance measures by a checkmark (e.g., ďsb,x (y t, bf, xt )). given the specification of the dea model in (3), the best practice frontier for generator units that produce no co2 is only constructed by the 649 generator units that produce no co2. however, due to the convexity assumption in our dea model, the best practice frontier for generator units that produce (small) strictly positive amounts of co2 can be constructed by a combination of generator units that produce no co2 and generator units that produce strictly positive amounts of co2. as the generator units can gradually change the share of renewables in the fuel composition until it reaches 100% (3) d y b x b x s i t i t i t , ( , , ) ,= min γ γ λ, . . ,s t λ λ γ � � y y b s i t s ≥ ≤ bb x x i t s i t , ,λ γ� ≤ , . λ λ ≥ = 0 1�e (see section 3, particularly figure 1), the convexity assumption is also reasonable between generator units that produce no co2 and generator units that produce strictly positive amounts of co2. based on the obtained distance measures, we assess the environmental energy conversion productivity of danish energy generator units. we measure the environmental energy conversion productivity of a generator unit i at time t by: (4) e.g., using the (hypothetical) global cone technology as a benchmark. this productivity measure can be decomposed into three components: (5) where (6) is the conversion efficiency indicating the productivity of the observation relative to the best contemporaneous technology, (7) is the best conversion practice ratio5 indicating the productivity of the best contemporaneous conversion technology relative to the best global conversion technology at the observation’s scale of production, and (8) is the conversion scale efficiency indicating the optimality of the observation’s scale of production, e.g., the productivity of the best actual global technology relative to the best (hypothetical) global cone technology at the observation’s scale of production.6 although the levels of environmental energy conversion productivity and their components are certainly relevant for our analysis, their changes over time cse d y b x d y b x i t b x g i t i t i t b x g i t i t i t≡ ˇ , , ( , , ) / ( , , )) bcpr d y b x d y b x i t b x g i t i t i t b x t i t i t i t≡ , , ( , , ) / ( , , )) ce d y b x i t b x t i t i t i t≡ , ( , , ) eecp ce bcpr cse i t i t i t i t= ⋅ ⋅ , eecp d y b x i t b x g i t i t i t≡ ˇ , ( , , ), international journal of sustainable energy planning and management vol. 07 2015 85 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig 5 in the productivity and efficiency literature, this term is usually called “best practice gap” [e.g. 18]. however, in the case of a farrell distance function (rather than a directional distance function), increases in the (best practice) ratio imply decreases in the gap between the contemporaneous frontier and the global frontier [see also 17, footnote 4]. to avoid confusion, we call this ratio “best conversion practice ratio” rather than “best conversion practice gap,” which is analogous to [17] who propose renaming the “technology gap ratio” as “metatechnology ratio” in the “metafrontier” literature. may be even more relevant. therefore, we additionally calculate and analyse changes in environmental energy conversion productivity and their components using a global malmquist productivity index [18]:7 (9) where (10) is the ratio between the environmental productivities in years t and t – 1, (11) is the ratio between the environmental technical efficiencies in years t and t – 1, (12) is the ratio between the best conversion practice ratios in years t and t – 1, and (13) is the ratio between the conversion scale efficiencies in years t and t – 1. in order to systematically approach the dynamic aspects of questions (a)–(c) in section 1, we run a time series cluster analysis to distinguish groups of the generator units that have similar characteristics of the three time series ce, bcpr, and cse. three main dcse d y b x d yi t t b x g i t i t i t b x g i t − − ≡1 1 , , , ( , , ) ( , ˇ ˇ bb x d y b x d i t i t b x g i t i t i t b x g− − − − − ⋅ 1 1 1 1 1 , ) ( , , ) , , (( , , )y b x i t i t i t dbcpr d y b x d y bi t t b x g i t i t i t b x g i t − − ≡1 1 , , , ( , , ) ( , ii t i t b x t i t i t i t b x x d y b x d− − − − − − ⋅ 1 1 1 1 1 1 , ) ( , , ) , , tt i t i t i ty b x( , , ) dce d y b x d y bi t t b x t i t i t i t b x t i t − − − ≡1 1 1 , , , ( , , ) ( , ii t i tx− −1 1, ) deecp d y b x d yi t t b x g i t i t i t b x g i t − − ≡1 1 , , , ( , , ) ( ˇ ˇ ,, , )b x i t i t− −1 1 deecp dce dbcpr dcse i t t i t t i t t i t− − − −≡ ⋅ ⋅1 1 1 1, , , ,tt , approaches to times series clustering exist: (i) raw data time series clustering, (ii) model-based time series clustering, and (iii) feature-based time series clustering [15]. as technology sets obtained by dea generally shift non-smoothly between time periods, the observed time series of productivity measures also shift non-smoothly over time, which makes the application of raw data time series clustering problematic. furthermore, as our panel is rather unbalanced, the model-based time series clustering approach is infeasible. therefore, we follow [23] and apply a feature-based time series clustering approach. as suggested by [23], we reduce the time dimensionality by describing each individual time series through a number of distributional parameters: (i) the arithmetic mean of the time series for all time series, and for time series with more than two observations also (ii) the standard deviation of the time series, (iii) the slope of a linear time trend (fitted by ols), and the (iv) standard deviation, (v) skewness and (vi) kurtosis of the de-trended time series. as these distributional parameters contain missing values, we apply a k-medoid clustering algorithm. this is a modified version of the well-known k-means clustering algorithm, but unlike k-means clustering, the k-medoid algorithm forms the clusters around one “medoid” observation in each cluster, which makes this algorithm robust to missing values. 5. results and discussion all calculations and estimations were conducted within the statistical software environment “r” [19] using the add-on packages “benchmarking” [4, 5] for data envelopment analysis, “cluster” [16] for cluster analysis, “nbclust” [7] for obtaining the optimal number of clusters, and “mlogit” [10] for estimating the multinomial logit model. 5.1. overall environmental productivity the four subfigures ((a)–(d))8 in figure 3 display the development of the median environmental energy 86 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants 6 it would be possible to use a metafrontier approach with a separate frontier for each production technology so that the term ce t i would be decomposed into tce t i × mtr t i , where tce t i is the conversion efficiency with respect to the frontier of the corresponding conversion technology and mtr t i is the metatechnology ratio. however, we decided not to use the metatechnology approach in our analysis for two reasons. first, we want to use a common benchmark to assess the environmental energy conversion efficiency of the generator units so that a decomposition of ce t i into tce t i and mtr t i does not provide information that we could use to answer our research questions. second, some technologies (e.g. gas turbines) are only used by a few generator units in denmark so that the frontier of these technologies cannot be reliably determined by data envelopment analysis (dea) due to the curse of dimensionality. 7 as [18] assume that the actual technology exhibits global constant returns to scale, the term dcse i t–1,t is not included in their decomposition. international journal of sustainable energy planning and management vol. 07 2015 87 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig 1998 2002 2006 2010 0.5 0.6 0.7 0.8 0.9 1.0 (a) (b) (c) (d) year p ro d u ct iv ity all < 20 mw > 20 mw > 20 years < 20 years 1998 2002 2006 2010 0.5 0.6 0.7 0.8 0.9 1.0 year p ro d u ct iv ity all boiler comb.eng. steam gas 1998 2002 2006 2010 0.5 0.6 0.7 0.8 0.9 1.0 year p ro d u ct iv ity all district central decentral industrial 1998 2002 2006 2010 0.5 0.6 0.7 0.8 0.9 1.0 year p ro d u ct iv ity all plants heat electricity combined figure 3: yearly median values of environmental energy conversion productivity conversion productivity (eecp) over the period of our analysis (1998-2011), subdivided by (a) age and input capacity, (b) generator technology, (c) embeddedness type, and (d) production type. all in all we can observe a slight increase (2.7%) in the median environmental energy conversion productivity. as the smaller generator units (< 20 mw) dominate the sector in terms of numbers, it is not surprising that the median environmental energy conversion productivity is mainly driven by this group. over time, the productivity gap between older generator units (> 20 years) and younger generator units (< 20 years) decreases by 37%. however, this effect is unfortunately not primarily driven by strong increases in the environmental energy conversion productivity of older generator units, but rather by the stagnating or even slightly decreasing environmental energy conversion productivity of younger generator units after 2005. hence, despite an overall small but positive trend over time, the younger generator units stand out due to their less positive development, particularly after 2005. these generator units are mainly smaller combustion engines, whose main purpose is to level out fluctuations in the electricity system which can be induced by wind power. this is confirmed by sub-figure (d), where we find an opposing trend in the environmental energy conversion productivity of pure electricity producers whose environmental energy conversion productivity plummeted by 13% over the period of our analysis. 5.2. time series cluster analysis according to [21], cluster validation can be based on three approaches: (1) using external validation criteria; (2) using internal validation criteria based on information obtained during the clustering process to evaluate how well the result fits the data; and (3) using relative validation criteria, that compare the outcomes of different cluster structures. our initial aim is to identify three performance groups, high performers, middle performers, and low performers. but in order to check the validity of our initial assumption of three clusters, we also use internal and relative validity criteria provided in the “nbclust” package [7] [see 8, for a more detailed description of the validation criteria]. we evaluated the optimal number of clusters based on 28 different criteria. given the distribution of the 28 validation criteria over the number of optimal cluster, the centre of the distribution and the highest frequency (9 out of 28) occurs at an optimal number of three clusters.9 as three clusters fit well with our initial external validation criterion, we follow the suggestion despite the fact that, given the size of our dataset, the classification into only three clusters is rather coarse. in order to identify the three performance groups, e.g., clustering generator units whose productivity development shows comparable profiles over time, we base the cluster analysis entirely on the productivity development profiles of the three performance measures and do not include time-invariant characteristics of generator units. by following this approach, we ensure that the group formation is only based on the productivity development profiles, while we in the second stage of our analysis (see section 5.3) look at the performance patterns across generator unit groups that are formed on the base of time-invariant characteristics. figure 4 illustrates, using boxplot diagrams, the development over time of all three components of the environmental energy conversion productivity measure, e.g., bcpr, ce, and cse, for each of the three clusters, where the red line marks the smoothed development of the median over time. although there is a considerable overlap between the full ranges of the three different clusters, the median development over time and the median levels of the productivity measures (with the exception of the cse of clusters 2 and 3) are surprisingly distinct. this is especially the case for ce. hence, we can conclude that for each productivity measure there is a moderate to strong consistency in the ranking of the clusters over time. furthermore, our findings suggest that there is no consistently high performing group over all three productivity measures, e.g., the ranking of the levels of the clusters changes between the three productivity measures. in section 5.3, we take a more detailed look at different producer groups to confirm this finding. 88 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants 8 a more detailed version of figure 3(d) can be found in the appendix (figure a.1). 9 these criteria are not solid statistical tests and should only be used as indicators. given the ambiguous results of the different validation criteria, the final decision regarding the number of clusters remains with the analysts. international journal of sustainable energy planning and management vol. 07 2015 89 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 cluster 1 (blue) cluster 2 (orange) best conversion practice ratio conversion efficiency conversion scale efficiency cluster 3 (green) 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 1998 2001 2004 2007 2010 0.5 0.6 0.7 0.8 0.9 1.0 figure 4: development over time for the three different clusters 90 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants 0.00 0.20 0.40 0.60 0.80 1.00 boiler steam gas comb. other ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● (b) technology ● ● ● ● ●● ● ● ●● ● ● ● ● ● ● ● ●●● ● ● ● ● ● ● ● ● ● ● ●● ● ●● ● ●● ●● ●● ● ● ●● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●● ● ● ● ● ● ● ● ● ●● ●● ● ● ● ● ● ● ● ● ● ●● ●● ● ●● ● ● ● ● ● ● ● ●● ● ● ● ●● ● ●● ● ● ● ● ●● ●● ● ● ●● ● –5 0 5 10 (d) input capacity in mw (in logs) (c) production type 0.00 0.33 0.67 1.00 heat el both ● ● ● ● ● ● ● ● ● (e) age ●● ● ● ● ● ●● ● ●●● ● ● ● ● ●● ● ●● ● ● ● ● ● ●●● ● ● ● ●● ● ● ● ● ● ● ● ● ●● ●●● ●● ●●●●●● ● ●●●●●●●●●●●●●● ●● ● ●● ● ●●● ●● ● ● ● ●● ●● ● ● ● ●●●●●●●● ● ● ●● ● ●● ● ● ●● ● ● ●● ● ●●●●●●●●● ●● ●● ● ● ● ● ● ● ●●● 1 9 0 0 1 9 2 0 1 9 4 0 1 9 6 0 1 9 8 0 2 0 0 0 (a) embeddedness 0.00 0.20 0.40 0.60 0.80 1.00 centr district decentr industrial other ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● figure 5: cluster characteristics figure 5 gives an overview of the composition of the three clusters. although, as mentioned before, the classification into three clusters is rather rough, we see a pattern emerge in that, on the one hand, the larger and newer chps and the large electricity producers group together (cluster 1, blue), while on the other hand, the smaller district heating and small electricity producers form a cluster (cluster 3, green). the middle group (cluster 2, orange) is a conglomerate of medium-sized district heating and decentralised chp and heat producers. in order to identify the generator unit specific variables that drive the classification into the different clusters, we run a multinomial logit regression on the five characteristics, input capacity (size), age (age), sectoral embeddedness (emb), generator technology (tech), and production type (ptype), as well as on the median of the utilised input capacity (util) and the median of the share of renewables in the fuel composition (renewratio). the results are displayed in table 4. we test several model specifications by means of a likelihood ratio test and find no significant effect for size and renewratio, so we drop these variables from the regression analysis. furthermore, we find that ptype and tech correlate to a degree that including both variables leads to extremely large standard errors. therefore, we also remove ptype from the regression analysis. given the descriptive results in figure 5, it is surprising that size has no explanatory value. a very likely reason is that size is correlated with other explanatory variables and at the same time, the separation between the clusters is not sufficiently distinct (see the wide and overlapping ranges the size of the three clusters in figure 5(d)). the same applies to age which, although relevant in the model context, is itself not statistically significant. this counter-intuitive finding might follow from the fact that our data set only contains information on the age of the unit but not on the age of the technology actually in use. therefore, the estimate of the effect of our variable age may not be an accurate measure of the real effect of the age of the technology. not surprisingly, utilised capacity, util, is a large driver of group membership. an increase in util by ten percentage points increases the probability of being included in cluster 1 (blue) by 3.1 percentage points and decreases the probability of being included in cluster 3 (green) by 6.4 percentage points. as the variables tech and emb are categorical variables, their marginal effects must be seen in relation to the basic level, which is ‘boiler technology’ in the case of tech and ‘centralised plant’ in the case of emb. hence, the probability of being included in cluster 1 is 26 percentage points higher for a gas turbine than it is for a generator unit with boiler technology. by and large, the marginal effects of emb and tech reflect the results displayed in the radar plots 5(a) and 5(b), respectively. 5.3. grouping of generator units by type table 5 summarises our findings on a more detailed level. we form groups for all combinations of the embeddedness type, technology, production type, age and size. the characteristics “age” and “size” are divided into three age classes and three size classes, respectively (see table 6). groups which include less than five generator units are not included in table 5. we calculate the respective group median values for all productivity measures, eecp, ce, bcpr, and cse, international journal of sustainable energy planning and management vol. 07 2015 91 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig table 4: results of the multinomial logit estimation me1 β2 se(β2) me2 β3 se(β3) me3 (intercept) 9.70 16.48 2.10 17.05 util 0.31 −2.51*** 0.34 0.21 −5.18*** 0.44 -0.64 age 0.00 −0.00 0.01 −0.00 0.00 0.01 0.00 tech: steam turbine 0.26 −2.77*** 0.54 −0.24 −2.28*** 0.57 -0.01 tech: gas turbine 0.26 −2.66*** 0.53 −0.17 −2.59*** 0.61 -0.06 tech: combustion engine 0.27 −2.60*** 0.25 −0.07 −3.34*** 0.31 -0.21 tech: other technology 0.24 −2.82*** 0.62 −0.34 −1.70*** 0.55 0.11 emb: district heating −0.15 2.09*** 0.75 0.39 0.53 0.60 -0.21 emb: decentralised −0.05 1.20* 0.71 0.40 −0.71 0.54 -0.32 emb: industrial −0.13 1.89*** 0.71 0.36 0.46 0.55 -0.20 emb: other plant −0.34 3.74*** 0.73 0.37 2.73*** 0.59 -0.05 note: βj are the estimated coefficients that correspond to cluster j, where the coefficients of cluster 1 are normalised to zero; se(βj) are the standard errors of βj ; mej are the median marginal effects on the probability of belonging to cluster j. 92 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants t ab le 5 : r es u lt s fo r d if fe re n t gr ou p s of g en er at or u n it s em b ag e te ch p t yp e si ze n o b s n g u el 1 cl 2 cl 3 u ti l p ro d d p ro d t e d t e b p r d b p r s e d s e de ce nt ra l m ed co m bi c h p la rg e 10 8 8 91 0 9 51 .4 0. 85 5 -0 .0 02 4 0. 95 5 0. 00 00 0. 96 4 -0 .0 00 8 0. 91 7 -0 .0 00 2 de ce nt ra l ne w co m bu st c h p la rg e 29 6 48 52 0 0. 8 0. 80 8 -0 .0 00 1 0. 87 2 0. 00 47 0. 97 1 -0 .0 05 9 1. 00 0 0. 00 00 de ce nt ra l m ed co m bu st c h p la rg e 98 7 10 0 0 0 45 .5 0. 81 8 -0 .0 00 1 0. 92 0 -0 .0 01 4 0. 95 9 -0 .0 02 5 0. 91 5 0. 00 05 in du st ry m ed ga s c h p la rg e 60 5 77 0 23 60 .8 0. 73 8 0. 00 04 0. 84 1 0. 00 09 0. 94 1 -0 .0 03 2 0. 92 5 0. 00 14 in du st ry ne w st ea m c h p la rg e 83 8 10 0 0 0 87 .8 0. 73 2 0. 01 36 0. 83 8 0. 00 00 0. 91 5 0. 00 10 0. 94 2 -0 .0 00 5 ce nt ra l m ed st ea m c h p la rg e 98 7 10 0 0 0 57 .4 0. 76 4 -0 .0 02 3 0. 91 4 0. 00 00 0. 95 5 0. 00 17 0. 88 8 0. 00 15 de ce nt ra l m ed st ea m c h p la rg e 87 7 10 0 0 0 60 .4 0. 74 1 -0 .0 02 7 0. 90 7 0. 00 00 0. 90 0 0. 00 55 0. 92 6 -0 .0 00 1 in du st ry m ed st ea m c h p la rg e 64 6 83 17 0 75 .2 0. 73 0 0. 00 18 0. 85 9 0. 00 00 0. 92 3 0. 00 43 0. 94 4 -0 .0 00 8 ce nt ra l ol d st ea m c h p la rg e 15 8 16 58 9 33 34 .9 0. 74 2 -0 .0 03 8 0. 84 0 -0 .0 11 1 0. 95 4 0. 00 28 0. 93 1 0. 00 21 in du st ry ol d st ea m c h p la rg e 52 5 65 17 17 38 .8 0. 73 9 0. 01 23 0. 88 3 0. 00 00 0. 92 3 -0 .0 03 4 0. 93 5 -0 .0 01 6 de ce nt ra l ne w co m bu st el ec la rg e 24 7 0 25 75 0. 1 0. 74 3 -0 .0 22 8 0. 75 1 -0 .0 11 9 0. 98 2 -0 .0 06 7 1. 00 0 0. 00 00 ce nt ra l ol d st ea m el ec la rg e 39 5 8 8 85 1. 2 0. 58 8 0. 00 94 0. 60 6 0. 01 29 0. 97 1 -0 .0 04 2 0. 99 5 -0 .0 00 0 di st r he at ne w bo il er he at la rg e 11 8 16 1 18 81 0. 8 0. 73 0 0. 00 00 0. 75 8 0. 00 67 0. 96 9 -0 .0 01 8 1. 00 0 0. 00 00 di st r he at m ed bo il er he at la rg e 16 8 12 0 67 33 0. 9 0. 73 1 0. 00 00 0. 77 3 0. 00 06 0. 95 9 -0 .0 00 6 1. 00 0 -0 .0 00 0 di st r he at ol d bo il er he at la rg e 91 4 72 0 62 38 0. 9 0. 73 2 0. 00 00 0. 78 0 0. 00 07 0. 95 4 -0 .0 01 6 1. 00 0 -0 .0 00 0 in du st ry ol d bo il er he at la rg e 12 1 9 55 23 22 5. 3 0. 67 2 0. 00 01 0. 75 4 -0 .0 00 9 0. 95 3 0. 00 13 1. 00 0 0. 00 00 de ce nt ra l ne w co m bu st c h p m ed 62 3 76 93 5 2 39 .1 0. 83 4 -0 .0 00 1 0. 91 5 0. 00 06 0. 94 1 -0 .0 04 8 0. 97 2 0. 00 00 in du st ry ne w co m bu st c h p m ed 23 7 28 76 24 0 36 .1 0. 79 2 -0 .0 00 0 0. 87 0 -0 .0 00 5 0. 93 4 -0 .0 06 1 0. 98 2 0. 00 00 lo ca l ne w co m bu st c h p m ed 68 7 63 37 0 32 .6 0. 78 0 -0 .0 00 0 0. 85 0 0. 00 53 0. 93 0 -0 .0 09 8 0. 99 5 0. 00 00 de ce nt ra l m ed co m bu st c h p m ed 24 82 20 5 89 10 0 43 .1 0. 81 6 0. 00 09 0. 89 3 0. 00 33 0. 94 4 -0 .0 04 5 0. 97 2 0. 00 02 in du st ry m ed co m bu st c h p m ed 40 3 32 76 24 0 40 .4 0. 78 9 0. 00 01 0. 85 9 -0 .0 02 0 0. 94 3 -0 .0 01 4 0. 98 0 0. 00 08 lo ca l m ed co m bu st c h p m ed 34 9 26 83 17 0 40 .9 0. 77 8 -0 .0 00 6 0. 84 5 0. 00 34 0. 93 5 -0 .0 05 9 0. 99 1 0. 00 02 de ce nt ra l m ed ga s c h p m ed 64 5 78 22 0 33 .1 0. 74 0 -0 .0 06 3 0. 80 5 -0 .0 08 5 0. 94 7 0. 00 12 0. 97 6 0. 00 08 in du st ry m ed ga s c h p m ed 64 5 22 66 12 83 .4 0. 70 8 0. 00 03 0. 80 4 0. 00 32 0. 95 3 -0 .0 00 7 0. 93 1 0. 00 03 de ce nt ra l ne w bo il er he at m ed 15 7 26 6 85 8 14 .6 0. 79 4 0. 00 00 0. 82 2 0. 00 10 0. 95 8 -0 .0 00 5 1. 00 0 0. 00 00 di st r he at ne w bo il er he at m ed 80 2 12 9 6 58 36 15 .6 0. 74 4 0. 00 00 0. 78 6 -0 .0 02 2 0. 95 5 -0 .0 01 2 1. 00 0 0. 00 00 in du st ry ne w bo il er he at m ed 31 6 52 45 3 61 .0 0. 72 9 0. 00 01 0. 79 7 -0 .0 00 3 0. 94 0 0. 00 57 0. 97 8 -0 .0 00 0 de ce nt ra l m ed bo il er he at m ed 14 09 11 6 2 56 42 2. 5 0. 74 8 0. 00 00 0. 78 8 0. 00 11 0. 95 9 -0 .0 01 2 1. 00 0 0. 00 00 di st r he at m ed bo il er he at m ed 18 57 16 3 5 52 42 2. 2 0. 73 2 0. 00 00 0. 77 6 0. 00 12 0. 95 5 -0 .0 01 4 1. 00 0 0. 00 00 in du st ry m ed bo il er he at m ed 22 4 22 35 24 42 27 .2 0. 67 8 0. 00 00 0. 74 8 0. 00 05 0. 94 8 -0 .0 00 5 1. 00 0 0. 00 00 de ce nt ra l ol d bo il er he at m ed 30 5 30 0 67 33 3. 2 0. 78 5 -0 .0 00 1 0. 81 7 0. 00 11 0. 95 9 -0 .0 01 8 1. 00 0 0. 00 00 di st r he at ol d bo il er he at m ed 11 88 12 8 3 39 58 0. 7 0. 71 6 0. 00 00 0. 75 2 0. 00 20 0. 95 8 -0 .0 01 3 1. 00 0 0. 00 00 in du st ry ol d bo il er he at m ed 68 7 54 34 12 50 .3 0. 65 3 0. 00 00 0. 73 5 -0 .0 10 8 0. 93 3 0. 00 36 1. 00 0 -0 .0 00 0 de ce nt ra l ne w co m bu st c h p sm al l 45 6 84 16 0 56 .0 0. 80 6 -0 .0 00 0 0. 87 7 -0 .0 00 8 0. 93 5 -0 .0 07 8 0. 99 9 0. 00 00 in du st ry ne w co m bu st c h p sm al l 23 2 27 54 40 6 43 .2 0. 78 5 -0 .0 00 0 0. 85 3 -0 .0 09 5 0. 91 2 0. 01 35 1. 00 0 0. 00 00 lo ca l ne w co m bu st c h p sm al l 41 4 50 28 51 21 38 .9 0. 77 0 0. 00 00 0. 82 0 0. 00 01 0. 92 8 0. 00 36 1. 00 0 -0 .0 00 0 de ce nt ra l m ed co m bu st c h p sm al l 64 7 51 82 15 2 43 .5 0. 82 2 -0 .0 00 0 0. 88 3 0. 00 39 0. 92 6 -0 .0 06 2 1. 00 0 -0 .0 00 0 in du st ry m ed co m bu st c h p sm al l 33 1 25 31 69 0 46 .6 0. 77 5 -0 .0 00 0 0. 83 4 -0 .0 00 2 0. 93 0 -0 .0 02 0 1. 00 0 -0 .0 00 0 lo ca l m ed co m bu st c h p sm al l 11 89 10 2 7 74 19 48 .6 0. 77 0 -0 .0 00 1 0. 81 5 0. 00 26 0. 93 5 -0 .0 06 2 1. 00 0 -0 .0 00 0 de ce nt ra l ne w co m bu st el ec sm al l 15 5 20 80 0 20 .4 0. 76 8 -0 .0 11 8 0. 79 1 -0 .0 09 8 0. 98 2 -0 .0 06 0 1. 00 0 0. 00 00 in du st ry ne w co m bu st el ec sm al l 15 5 0 0 10 0 0. 7 0. 67 9 0. 00 41 0. 72 1 -0 .0 06 1 0. 96 5 -0 .0 05 0 1. 00 0 0. 00 00 lo ca l ne w co m bu st el ec sm al l 58 16 40 10 50 38 .2 0. 59 7 -0 .0 18 3 0. 65 5 -0 .0 48 4 0. 89 6 -0 .0 14 5 0. 99 9 0. 00 00 lo ca l m ed co m bu st el ec sm al l 52 20 8 35 58 43 .5 0. 47 0 -0 .1 70 8 0. 53 2 -0 .0 91 8 0. 91 8 -0 .0 03 1 1. 00 0 0. 00 00 de ce nt ra l ne w bo il er he at sm al l 73 11 1 4 95 9. 7 0. 70 4 0. 00 00 0. 72 5 0. 00 04 0. 96 4 -0 .0 01 5 1. 00 0 0. 00 00 di st r he at ne w bo il er he at sm al l 30 9 38 0 47 53 20 .4 0. 72 0 0. 00 00 0. 75 6 -0 .0 00 8 0. 95 9 -0 .0 01 6 1. 00 0 0. 00 00 de ce nt ra l m ed bo il er he at sm al l 46 7 39 2 47 51 3. 0 0. 73 8 -0 .0 00 0 0. 76 6 0. 00 12 0. 96 0 -0 .0 00 6 1. 00 0 0. 00 00 di st r he at m ed bo il er he at sm al l 22 9 20 0 62 38 47 .7 0. 72 3 -0 .0 00 0 0. 76 3 -0 .0 01 1 0. 95 3 -0 .0 03 2 1. 00 0 0. 00 00 di st r he at ol d bo il er he at sm al l 93 12 0 30 70 1. 0 0. 74 4 0. 00 00 0. 76 3 0. 00 01 0. 96 6 -0 .0 01 3 1. 00 0 0. 00 00 n ot e: t he a bb re vi at io ns a nd c ol ou rs u se d in t hi s ta bl e ar e de sc ri be d in t ab le 6 international journal of sustainable energy planning and management vol. 07 2015 93 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig table 6: abbreviations and colours used in table 5 column explanation the first five columns define groups of generator units emb embeddedness type of the plant: central = centralised plant, decentral = decentralised plant, distr heat = district heating plant, industry = industrial plant, local = local plant age age of the generator unit: new = built 1998 or later, med = built between 1983 and 1997, old = built 1982 or earlier tech technology of the generator unit: boiler = boiler, combi = combined generator unit, combust = combustion engine, gas = gas turbine, steam = steam turbine ptype type of production: chp = combined heat and power generation, elec = electricity production only, heat = heat production only size the size of the generator unit: large = 20 mw or more input capacity, med = 2 mw or more but less than 20 mw input capacity, small = less than 2 mw input capacity the remaining columns provide information on the groups of generator units nobs number of observations in our data set that belong to the group of generator units ngu number of generator units in our data set that belong to the group of generator units; only groups with at least five generator units are shown in table 5 cl1 percentage of observations in the group of generator that are in cluster 1 cl2 percentage of observations in the group of generator that are in cluster 2 cl3 percentage of observations in the group of generator that are in cluster 3 util median value of the capacity utilisation of the observation in the group of generator units in percent eecp, median values of the environmental energy conversion productivity, the conversion efficiency, the best conversion ce, practice ratio, and the conversion scale efficiency as defined in equations (4), (6), (7), and (8), respectively, of bcpr, all observations in the group of generator units; values above the median value in this column are highlighted cse by a green background colour, while values below the median value in this column are highlighted by an orange background colour, where the intensity of the colour increases with the difference to the median; as the median value of the column of the median conversion scale efficiencies is virtually one, we used the threshold 0.98 instead of the median for colouring the column with the conversion scale efficiencies deecp, median value of the change of the environmental energy conversion productivity, the change in conversion dce, efficiency, the change in the best conversion practice ratio, and the change in the conversion scale efficiency dbcpr, as defined in equations (10), (11), (12), and (13), respectively, of all observations in the group of generator dcse units; a one has been subtracted from these values in order to improve readability; values above zero indicate increasing productivities and are highlighted by a green background colour, while values below zero indicate decreasing productivities and are highlighted by an orange background colour, where the intensity of the colour increases with the difference from zero as well as their changes, deecp, dce, dbcpr, and dcse, where an orange background indicates poor performance, a white background indicates moderate performance, and a green background indicates a good performance (for details see table 6). eecp & deecp. all chps with combustion engines show high and consistent levels of environmental energy conversion productivity, while not surprisingly we find the lowest environmental energy conversion productivity levels amongst electricity-only generator units. a more concerning finding is that nearly all electricity-only generator units show high rates of productivity decline over the observation period. another concerning result is that the majority of the groups do not experience any progress in their environmental energy conversion productivity over time. however, this seems not to be the case for several groups of industrial plants that considerably improve their environmental energy conversion productivity over time. ce & dce. concerning environmental energy conversion efficiency, the chp units are again superior to units which only produce electricity or heat. regarding technologies, most groups of combustion engines and steam turbines exhibit high levels of environmental energy conversion efficiency. a positive result is that a number of groups experienced increases in environmental energy conversion efficiency over the observation period, which means that poorly performing generator units in particular improved their performance during the sampling period. this is especially the case for groups of combustion engines and boiler technologies. however, new electricity-only units stand out as they not only have a low median level, but also some of the highest regression rates in environmental energy conversion efficiency. bcpr & dbcpr. while the change of the best conversion practice ratio over time indicates change of the best practice conversion technology, the median (or average) value of the bcpr over the entire sampling period is of minor relevance. a low median value of bcpr indicates that there were large changes to the technology over time, e.g., strong technical progress or strong technical regress. therefore, we only look at the median values of the changes in the best conversion practice ratio (dbcpr). all groups of electricity-only producers and most groups of combustion engines (chp and electricity-only) experience a declining best conversion practice ratio. this does not necessarily mean that there is in fact technical regress, but it means that the most productive generator units that define the technology frontier become less productive over time. two groups of new small combustion engines (chp) and most groups of steam turbines (chp) experience significant technical progress. boiler technologies in general experience technical stagnation. cse & dcse. most groups of large chp generator units and some groups of medium-sized generator units are conversion scale inefficient due to decreasing returns to scale at these size classes. this finding implies that they are oversized. at first glance, this does not seem to apply to boiler technologies, but a closer look reveals that all groups of large boilers have very low levels of capacity utilisation. hence, we cannot assess the conversion scale efficiency of large-scale production with boiler technologies. on the other hand, all groups of small generator units are virtually fully energy conversion scale efficient. this result indicates that there are no significantly increasing returns to scale even for the smallest generator units, meaning that small generator units do not reduce the sectoral environmental productivity while large generator units may do so (this finding coincides with the results of the cluster analysis, see the bottom row of graphs in figure 4). table 5 confirms that there is no overall best performance group of generator units, but that the performance of each group differs between productivity measures. on the one hand, most groups of steam turbines and combustion engines for chp perform quite well in most productivity measures. on the other hand, combustion engines that only produce electricity are clearly low performers because they have extremely low environmental energy conversion efficiencies and virtually all their productivity measures decline over time. the industrial units among them are operated as peaking units as illustrated by the low utilisation. therefore, they do not constitute a major environmental concern. in contrast, the decentralised and local units exhibit utilisation rates of up to 43.5%. this point illustrates that they have their own operational patterns and are not used as peaking units as may be expected for electricity-only generators in a system with high shares of fluctuating renewable generation. with the increasing amount of small generators, this issue should be addressed by improved system integration and economic signals that prevent island operation. 6. conclusion based on a data set of virtually all fuel-fired electricity and heat producing generator units in denmark, we have analysed the development of their environmental energy conversion productivity by an extended farrell input distance function that takes co2 emissions into account. we have decomposed the environmental energy conversion productivity measure into its three subcomponents: conversion efficiency, best conversion practice ratio, and conversion scale efficiency. our results show that the ranking of the performance groups is constant over time, but clearly differs between the different productivity measures. steam turbines and combustion engines for chp tend to have a high performance according to most productivity measures, as is demonstrated by the cluster with predominantly new chp units performing best. opposing this aspect, combustion engines that only produce electricity clearly belong to the poorest performance group. it is striking that they are predominantly newer units with many hours of operation. their lack of conversion efficiency indicates that their economic benefits come from an island operation mode to cover e.g., predominantly industrial demand. our results support the argument about the high environmental energy conversion efficiencies of chp units by another dimension: their conversion scale efficiency is suboptimal for almost all groups above 2 mw. however, we do not expect that this effect outweighs the environmental gains due to co-generation. all in all, our findings reveal that despite a comprehensive climate policy portfolio in denmark, the 94 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants sectoral improvement of co2-based environmental energy conversion productivity is depressingly low and it seems that the transition of the energy system is being mainly driven by the inclusion of new technologies like wind power or solar panels and only to a lesser extent by the realisation of conversion efficiency gains. on the one hand, for the time period analysed, this may have been a rather costly path to follow. on the other hand, the study shows that a complex, chp-dominated conventional electricity generation system can adapt to a changing environment in times of increasing fluctuation of electricity generation. as the energy sector is one of the main contributors to denmark’s co2 emissions, a more thorough and comprehensive understanding of the effects of climate policies on the development of environmental productivity at the sectoral level as well at the firm level is absolutely essential. acknowledgements the authors are grateful to uwe jensen, mette asmild, sebastian petersen, and giovanni millo for their valuable suggestions that were very helpful for improving this paper. furthermore, we want to thank kaj stærkind from the danish energy agency for providing access to the data. geraldine henningsen and simon bolwig are indebted to the danish council for strategic research for financial support. of course, all remaining errors are the sole responsibility of the authors. references [1] agrell, p. j., and bogetoft, p. economic and environmental efficiency of district heating plants. energy policy 33 (2005), 1351–1362. 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[21] theodoridis, s., and koutroubas, k. pattern recognition. academic press, 2008. [22] tovar, b., ramos-real, f. j., and de almeida, e. f. firm size and productivity. evidence from the electricity international journal of sustainable energy planning and management vol. 07 2015 95 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig distribution industry in brazil. energy policy 39 (2011), 826–833. [23] wang, x., smith, k., and hyndman, r. characteristic-based clustering for time series data. data mining and knowledge discovery 13 (2006), 335–364. [24] yang, m., yang, f.-x., and chen, x.-p. effects of substituting energy with capiatal on china’s aggregated energy and environmental efficiency. energy policy 39 (2011), 6065–6072. [25] zhang, n., and choi, y. total-factor carbon emission performance of fossil fuel power plants in china: a metafrontier non-radial malmquist index analysis. energy economics 40, 0 (2013), 549–559. [26] zhou, p., ang, b. w., and han, j. y. total factor carbon emission performance: a malmquist index analysis. energy economics 32 (2010), 194–201. 96 international journal of sustainable energy planning and management vol. 07 2015 the development of environmental productivity: the case of danish energy plants appendix a. additional tables and figures table a.1: co2 emissions of different fuel types fuel type co2 [kg/tj] coal 95 petro coke 92 orimulsion 80 fuel oil 78 waste oil 78 gas oil 74 refinery gas 56.9 lpg 65 natural gas 56.74 waste 32.5 electricity 140.27 biogas 0 straw 0 wood chips 0 wood and biomass waste 0 wood pellets 0 bio oil 0 fuel free 0 source: [11, p. 59] 1998 2002 2006 2010 0.70 0.72 0.74 0.76 0.78 0.80 0.82 year p ro d u ct iv ity all plants heat combined figure a.1: detailed view of figure 3(d) (yearly mean values of environmental energy conversion productivity) table a.2: cluster characteristics cluster centralised district decentralised industrial other boiler steam gas combustion other heat electricity combined plant turb turb tech 1 36 54 391 181 83 102 67 25 531 22 103 17 627 2 7 411 252 140 152 650 13 7 292 6 650 11 307 3 16 433 159 57 104 615 13 6 117 18 619 26 124 international journal of sustainable energy planning and management vol. 07 2015 97 geraldine henningsen, arne henningsen, sascha schröder, simon bolwig table a.3: summary statistics over cluster performance measure cluster mean(bpcr) se(bpcr) slope(bpcr) mean(ce) se(ce) slope(ce) mean(cse) se(cse) slope(cse) size age mean 1 0.9324 0.0296 0.0003 0.8569 0.0480 −0.0001 0.9680 0.0099 0.0009 501 1995 mean 2 0.9469 0.0299 0.0024 0.8133 0.0595 −0.0018 0.9959 0.0050 -0.0001 45 1991 mean 3 0.9545 0.0254 0.0020 0.7076 0.0843 −0.0009 0.9942 0.0039 -0.0009 31 1988 sd 1 0.0279 0.0161 0.0119 0.1172 0.0361 0.0195 0.0386 0.0127 0.0080 2246 8 sd 2 0.0170 0.0165 0.0147 0.0376 0.0379 0.0253 0.0107 0.0147 0.0069 291 13 sd 3 0.0249 0.0133 0.0123 0.0718 0.0657 0.0621 0.0471 0.0201 0.0264 265 16 median 1 0.9394 0.0274 −0.0012 0.8827 0.0375 0.0011 0.9775 0.0071 0.0003 57 1995 median 2 0.9485 0.0289 0.0027 0.8094 0.0495 −0.0012 0.9999 0.0002 0.0000 12 1994 median 3 0.9599 0.0250 0.0025 0.7261 0.0677 −0.0014 0.9997 0.0003 0.0000 2 1993 mad 1 0.0108 0.0058 0.0020 0.0352 0.0108 0.0045 0.0197 0.0050 0.0009 43 3 mad 2 0.0088 0.0053 0.0023 0.0257 0.0183 0.0056 0.0001 0.0002 0.0000 11 6 mad 3 0.0060 0.0051 0.0012 0.0270 0.0322 0.0080 0.0003 0.0003 0.0000 2 9 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1225-5138-1-le.qxd abstract the present paper focuses on the energy system of the municipality of bressanone-brixen, located in the north of italy. the aim of this paper is to investigate various possible energy scenarios for this case study in order to improve the overall efficiency of the system. the different scenarios include high penetration of photovoltaics at urban level, considering the maximum rooftop pv potential of the local area. different solutions have been analyzed in order to study the handling of the consequent excess of electricity production. electric storage and a solution combining heat pumps and thermal storage have been evaluated to maximize the local use of the generated electricity. a deterministic approach (without the use of an optimization algorithm) and a heuristic optimization approach have been applied to evaluate the different possible configurations. the present analysis can be of interest for other cities in a mountain environment where the production from renewables is limited by orographic constraints, energy consumption per capita is higher and stronger resiliency to climate change is needed. 1. introduction the european 20-20-20 targets, defined in 2006, together with a 20% reduction in greenhouse gases emissions and a 20% improvement in energy efficiency, set up the objective of 20% energy generation from renewables within 2020. european countries have chosen different strategies to achieve these goals. italy has set up its targets per sector in the pan document (patto d’azione nazionale) and has implemented a national legislation based on subsidies for renewable energy sources (res). municipalities, on the other hand, have different instruments to implement renewable energy support strategies. the covenant of mayors is a european movement, involving regional international journal of sustainable energy planning and management vol. 10 2016 33 and local authorities that want to increase energy efficiency and res integration in order to achieve the 20% co2 reduction objective by 2020 [1]. the aim of this paper is to develop different future scenarios with high penetration of renewable energy for the municipality of bressanone and develop a methodology that can be replicated in many other similar settlements present in mountain areas. the area is handled as a single node. each quantity of electricity exchanged with the grid is considered import/export. although this can be seen as a strong assumption, this type of analysis is of importance for two reasons. the first one is that, at the moment the grid is used to balance production surplus and deficits (hence avoiding the need for storage) while in the future there might be situations * corresponding author email: matteogiacomo.prina@eurac.edu international journal of sustainable energy planning and management vol. 10 2016 33-52 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen �������� � ����� ������������� ������ � ���� �� ���� ����� ������ ������ ��� �� ��� � �� � !� ���� ���"�!� ���#� � �� ����$��% ���&�� !� � � �������� �� � � ���� �� ��� ����� � � � ��� ���� � ��� �� ��� �!! "��#���� ����� $ ��%� ��& ��� '� � ���� (���� ����� '� )������ ��� *�&� �������� +� $!�,)����� .)�/� ����� keywords: energy scenarios; district heating; photovoltaics; energyplan; optimization; url: dx.doi.org/10.5278/ijsepm.2016.10.4 34 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen in which several neighboring regions simultaneously experience excess photovoltaics (pv), thereby saturating the balancing possibilities of the grid. the second one is that, in order to achieve the objectives of the covenant of mayors, the single municipalities have to implement local future scenarios studies and practical interventions. the municipality of bressanone-brixen is a small town with about 20000 inhabitants and an alpine climate (elevation: about 560 m). it has joined the covenant of mayors in 2013 and already prepared a sustainable energy action plan (seap [2]), where information concerning its current energy system and possible future actions can be found. the considered area is particularly interesting due to the good availability of data – as a direct consequence of the seap preparation – and to the existence of a widespread district heating (dh) network. moreover, it is located within the alpine region, recently addressed by a specific eu strategy involving, among other aspects, climate change and energy challenges. in literature there are several studies analyzing energy scenarios at regional or urban level, showing the interest of investigating more sustainable energy systems with finer granularity than at national scale [3–5]. for example, wänn et al. [6] have inspected the importance of energy scenario analysis at regional level in ireland, highlighting the enhanced importance of data accuracy at this scale. the reference scenario used in this paper is based on energy consumption and production data for the year 2010. the analysis of the reference baseline allows for the evaluation of different solutions to increase the overall system efficiency. different res high penetration scenarios are implemented with the objective to increase res production and to reduce co2 emission, at the same time taking into account economic costs. solar energy, for its intrinsic characteristics, is the renewable source that most suits city constraints (e.g. the small availability of space) [7, 8]. in particular, here a strong increase of pv is considered. as a consequence, the study of the role of storage systems, thermal and electric, becomes of high importance, in order to deal with the possible excess electricity production caused by the mismatch between solar availability and energy demand [9–11]. when considering excess electricity production, the most direct solution to avoid res curtailment is of course to take into account electric storage [12]. related technologies, especially batteries, are the subject of continuous research, also due to their high potential for the transportation sector [13]. however, in spite of these efforts, associated costs are still very high. it is therefore important to look for alternative solutions, possibly involving hybrid electric-thermal solutions. thanks to the much lower costs of thermal storages, this can indeed be convenient, provided efficient conversion technologies are used. this is a direction already mentioned in several papers, but still far from being explored in detail. hedegaard et al. [14] provide an example of this approach to enhance the integration of wind energy, where a coupling with large heat pumps and different thermal storage options is analyzed. other combinations of hybrid solutions are given by mohammadi et al. [15], investigating the optimum size of electric and thermal energy storages for a micro-grid, østergaard et al. [16], investigating solutions that couple the electric and the thermal sector for the municipality of aalborg (wind energy, lowtemperature geothermal resources, biomass, district heating, and energy saving), and kiviluoma [17], proposing a model that combines heat and power production and simulates electric vehicles. in this paper, beyond the exchange of electricity with the grid, both electric and thermal storages are considered, contributing to highlight the significant potential of solutions coupling the electric and the thermal sector. of course, the amount of electricity which can be conveniently transformed into heat depends on the thermal energy demand, which is hence analyzed in detail. as far as the electric-thermal interaction is concerned, this article combines pv with large heat pumps and a seasonal thermal storage, in connection with a district heating network. this is different from previous studies, where seasonal storages were considered only in connection with solar thermal energy [18]. in terms of methodology, the paper proposes a comprehensive approach, combining different models and optimization algorithms. the starting point is the energyplan software, used to evaluate the reference scenario of bressanone-brixen. this allowed to check energy balances and validate the consistency of seap data. then, an ad-hoc developed model was used, to evaluate the coupling between electric and thermal sector with a slightly higher level of detail than feasible in energyplan (a few additional parameters for the description of thermal storage systems are included, see below). finally, an optimization algorithm has been applied to the model (see [19] for a similar approach with energyplan), thereby identifying the best combinations of installed capacities (including the possibility to sell/buy electricity to/from the grid) in order to minimize co2 emissions and costs. these are conflicting objectives, so that the framework of multi-objective optimization has to be used, where solutions are given by the set of optimal (i.e., non-dominated) configurations lying on the so-called pareto front [20]. in this way, this paper aims at identifying combinations of technologies which bring the considered system closer to a smart energy system, exploiting the synergies between electric and thermal sector in order to maximize efficiency and reduce costs. the article is structured as follows: section 2 presents the adopted methodology, describing the reference scenario, the pv potential in the studied area, the technologies taken into consideration, the developed models and the parametric and optimization approaches. section 3 deals with the results of the work and the pareto front of the best solutions on the two chosen objectives: total annual costs and co2 emissions. in section 4 conclusions are drawn. 2. methodology the reference scenario of the municipality of bressanone-brixen has been built using a bottom-up approach [21]. a large number of models for simulating and analysing the integration of renewable energy into various energy systems have been analysed in detail by connolly et al [22]. the energyplan software has been chosen for this study considering its intrinsic characteristics [23] and the considered problem. energyplan is a deterministic input/output model that permits to integrate the three main sectors of any national energy system, i.e. electricity, heat and transport [24, 25]. for this reason it is particularly suited to study high penetration of renewables with possible exchange of energy between sectors. the program is a descriptive and analytically programmed computer model for hour-by-hour simulation of a regional or national energy system. as a result, it is appropriate for the paper’s purpose because the hourly time step allows for a better evaluation of the non-programmable renewable energies production and the operation of electric and thermal storage. the main inputs of the energyplan model are the installed capacity of each source and the hourly distribution of energy demand and of renewable energy availability during the whole year. the main outputs are total costs, co2 emissions and hourly production for each source. studies on future sustainable energy systems including 100 percent renewable systems using energyplan are constantly being published within academic journals [26, 27]. studies using energyplan applied at local or urban level are also available [28]. h. lund et al. [29] have analyzed two different models: energyplan and another one, h2res, specifically designed for island energy system. they have evaluated the results of the two models on the same case, the island of mljet, croatia, concluding that both models come to more or less the same results. p. a. østergaard et al. have analyzed the case study of the municipality of aalborg concluding that it is possible to cover all the energy needs through the use of locally available sources and thus through low-temperature geothermal heat, wind power and biomass [30]. the reference scenario shows different opportunities to increase the efficiency of the energy system: (i) increasing pv capacity in order to reduce the import from the grid, (ii) increasing pv capacity and electric storage in order to reduce both the import from and the export to the grid, or even (iii) replacing gas boilers within the district heating network with seasonal thermal storage and large heat pumps that exploit the excess electricity production by pv systems [31–37]. the cases (ii) and (iii) are peak shaving techniques, as they allow for the storage of energy and the later use during peak hours of the load. considering the pv potential on the reference area, different capacities of pv, large heat pumps and electric and thermal storage have been inspected with the aim of finding the best technology mix to reduce co2 emissions and total costs of the system. in order to describe in more detail the behavior of a small case study like this one, a model has been designed to depict the connections between photovoltaics excess electricity production, large heat pumps (hps) and thermal storage (sto). as explained below, the model closely follows the energyplan approach, but, while focusing on a restricted number of technologies, adds a few variables that provide more flexibility for the storage analysis. following the energyplan approach means international journal of sustainable energy planning and management vol. 10 2016 35 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber using the same assumptions on two main topics: costs analysis and internal priorities. energyplan cost analysis is characterized by the conversion of all the investment costs into annual cost thanks to a specific formula. the same formula is used in the developed model. in order to satisfy any energy demand a mechanism of priority is used by energyplan. this order is given as following: renewable energy sources are the first to satisfy the demand followed by traditional sources ordered by efficiency. the same internal logic is used in the developed model. a combination of different software tools has been chosen in order to better analyze an urban case like this one. the order in their operation is the following: 1. the energyplan software has been used to describe the reference situation. it produces as outputs the values of co2 emissions and total annual costs of the system, the distribution of residual heat demand in the district heating network (i.e., the part of dh demand not satisfied by cogeneration and hence covered by back-up boilers) and the distribution of the residual electricity demand (i.e., the part of electricity demand not satisfied by cogeneration and by the existing renewable generation, hence the part currently covered by the grid). in practice, the term residual here refers to the part of demand that is not satisfied through cogeneration and the existing renewable generation, both on the thermal and the electric side. it is only this residual part which is included in the optimization process described below, where a larger share of renewable energy sources is considered in order to reduce overall emissions. 2. another model, called pv-stoth, is then used to describe the interactions between photovoltaics, large heat pumps and thermal storage and to consider new parameters not existing in energyplan, such as storage transmission capacity, storage initialization and storage efficiency. the pv-stoth model takes as inputs from energyplan the residual distributions mentioned above, as well as the partial values of co2 emissions and total annual costs calculated for the rest of the energy system. other inputs (not taken from energyplan) are the values of the capacity of pv, large hps and thermal storage. with these ingredients, the developed model permits to calculate the interactions hour by hour between pv, large hps and thermal storage and also the total co2 emission and annual costs. the pv-stoth model is composed by different steps executed in the following order: i) thermal demand analysis, ii) excess electricity analysis, iii) electricity demand analysis, iv) co2 emissions analysis and costs analysis. this latter phase calculates the emissions and costs of the overall system considering the contributions of the reference system found through energyplan and the new contributions of the solution composed by pv, hps and thermal storage found through the pv-stoth model. 3. the connection of pv-stoth with an optimization tool permits to find the best configurations under co2 emissions and total annual costs minimization, figure 1. actually, before applying a numeric optimizer, a deterministic approach has been used to analyze the different possibilities to use the excess electricity production from pv: exchange to the grid, electric storage or shift to the thermal side with large heat pumps and thermal storage. the optimization approach focuses only on the optimization of this latter scenario, composed by high pv penetration, large heat pumps and seasonal thermal storage. the optimization tool recalls iteratively the pv-stoth model recalculating for each new configuration the values of the total annual costs and co2 emissions of the system. the output of this model is hence the best technology mix in terms of capacities of pv, hps and thermal storage for the analyzed case study. 2.1. reference scenario the reference scenario is based on energy consumption and production data for the year 2010. all information has been taken from the sustainable energy action plan of the city of bressanone-brixen [2]. currently about 65% of bressanone’s electricity demand which is about 110 gwh is supplied by the national grid. the local production of electricity is covered, mainly, through methane and biomass cogeneration with a small share of electricity produced by res. the heat sector is divided in two parts: the district heating (dh) network and the individual consumption. the district heating network is 36 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen table 1: main input and output of the simulation made through energyplan of the bressanone’s reference scenario [2]. variables values units electricity demand 110.13 gwh/year main inputs heat demand 217.60 gwh/year transport demand 172.70 gwh/year res electricity prod. 11.06 gwh/year main outputs res share of elec. prod. 10 % co2-emission 113 kt total annual costs 60000 k€ 2.2. pv potential the estimation of the pv potential in south tyrol, which includes the municipality of bressanone has been already analysed in detail. moser et al. [38, 39] found out a rooftop maximum pv potential of 155 mw for the municipality of bressanone-brixen. considering only rooftops areas with an annual insolation higher than 1200 kwh/m2, the value reduces by 61% resulting to 60 mw. filtering out the historical town center accounts for a further reduction of 12% with a final real pv potential of 53 mw. another study has been carried out by eurac research within the solar tyrol project [40]. this work analysed the rooftop pv potential of the area through satellite data with a resolution better than 1 m. the final results have shown a final rooftop pv supplied by methane and biomass cogeneration for the 64.5% of the total demand, the rest is provided by methane back-up boilers. individual consumers (i.e., consumers not connected to dh) rely on oil, methane (industrial users only) and biomass boilers, with a little share of solar thermal and a small production from heat pumps. the district heating network has a thermal storage of 30 mwh. the combined heat and power (chp) plants used to supply the network are operated with a production profile as constant as possible, where some units are switched off during summer and thermal storage or back-up boilers are used to cover the peaks. this is because, thanks to the experience acquired by the company running these plants in these years, their operation is planned on half day basis and the result is a constant profile of production on monthly basis for economic purposes. within the industry sector the two main used fuels are oil and natural gas. the transport sector presents a predominance of diesel with smaller shares of petrol, lpg and natural gas. the reference scenario was built and validated using the energyplan model [23]. the final results of the reference scenario are shown in table 1. the validation has been done on the annual co2 emissions value. indeed the value of the co2 emissions calculated in the seap document (112.47 kt) differs by less than 0.5% from the value found with the energyplan software. international journal of sustainable energy planning and management vol. 10 2016 37 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber (1) energyplan (2) model pv-stoth (3) moea (optimization tool) cpv annual co2 emissions total annual costs chps csto dd, dh (t) dp, pv (t) dd, el (t) co2energyplan cenergyplan figure 1: interaction, inputs and outputs of the used models. dd,dh(t) and dd,el(t) are the distribution of residual heat demand in the district heating (dh) network and the distribution of the residual electricity demand (see text on how residual is intended). co2energyplan and cenergyplan are the co2 emissions and total annual costs of the part of system that remains constant (i.e., it is not included within the optimization). the quantity dp,pv(t) is the distribution of pv production during the year and is an input of the pv-stoth model. cpv, chps and csto are the installed capacity of pv, heat pumps and thermal storage that are optimized through the multi objective evolutionary algorithm. potential of 55 mw. hence, it is safe to assume a rooftop pv potential for the city of bressanonebrixen of approximately 50 mw. the reference scenario presents a total share of electricity produced by res equal to 10% of the overall electricity demand (table 1). in order to analyze res integration at the increasing of the pv capacity, two parameters have been considered: the generation factor γ and the integration function re(γ). here, γ is the average renewable power generation factor. at γ = 1 the installed capacity of res is able to satisfy the electricity demand without taking into account contemporaneity of production and demand. on the other hand when both γ = 1 and re(γ) = 1 , a perfect integration and a 100% renewable energy system is achieved, thanks to contemporaneity of production and demand and/or an ideal storage with no losses [12, 41]. figure 2 shows the increasing of the renewable integration function re(γ) at the increasing of the γ factor and so at the increasing of the pv capacity. each 10 mw of installed power of photovoltaic produces an increase of γ equal to 0.1 using a final annual yield of 1100 kwh/kwp. hence, each 10 mw of installed power of photovoltaics produce 11 gwh of annual electricity production, exactly 10% of the total annual electricity demand. the curve rises linearly until γ < 0.29 because there is no overproduction in this phase. with increasing γ, overproduction (i.e. export to the grid) occurs more and more frequently (no storage devices are assumed to be present). from the hourly exports one can estimate the required storage capacity and hence the total costs connected to the implementation of a storage system. figure 3 shows the evolution of the total annual costs and co2 emissions of the system at the increasing of the pv capacity. each point presents an increase of 1 mw of pv capacity. starting from the reference scenario the increasing of pv capacity produces a very steep decrease of the co2 emissions and a slight decrease of the total annual costs. with higher values of pv capacity overproduction occurs more and more and the installation costs are no more contrasted by the savings in reduced imported electricity. for this reason, the overall costs start rising and the environmental benefits of increasing the installed capacity by 1 mw decrease. 2.3. new technologies in order to study possible uses of the excess electricity production, three technologies have been taken into consideration: large heat pumps, seasonal thermal storage and batteries [42]. heat pumps are a relatively mature technology. their scope is to move heat from a low-temperature source to a warmer one. large heat pumps usually take heat from the ambient (input heat) and convert it to a higher temperature (output heat) through a closed process. compression heat pumps can operate in different temperature ranges depending on the fluid used in the internal thermodynamic cycle. at the moment, one of the most interesting technologies for large heat pumps is represented by co2 heat pumps. these heat pumps operate in a trans-critical cycle. heat pumps exploiting co2 (refrigerant r-744) or similar refrigerants (e.g., tetrafluoroethane, r-number r134a, a refrigerant with negligible ozone-depletion potential) can be used to 38 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen 0 .1 0 0.00 0.20 r e n e w a b le in te g ra tio n f u n ct io n r e ( γ) 0.40 0.60 0.80 1.00 1.20 0 .1 9 0 .2 9 0 .3 9 0 .4 9 0 .5 9 0 .6 9 γ 0 .7 9 0 .8 9 0 .9 9 1 .0 9 1 .1 9 re (γ) re (γ) perfect integration figure 2: renewable integration function re(υ) for the case study of bressanone-brixen compared to the perfect integration case. 95 100 to ta l a n n u a l c o st s (k € ) 105 50 mw 40 mw 30 mw 20 mw 10 mw 59500 60000 60500 61000 61500 62000 62500 63000 co 2 emissions (kt) 110 115 results, pv (0,50 mw) reference scenario (rf) figure 3: total annual costs and co2 emissions of the whole energy system of bressanone-brixen increasing the pv capacity from 0 to 50 mw with a 1 mw step. cover relatively high-temperature ranges. for example, existing models of co2 heat pumps can exploit a source at about 20 °c to deliver heat to a sink at about 80 °c with a nominal coefficient of performance (cop) of about 4 [43]. of course, depending on the refrigerant type, the machine size, and the operating temperatures, cop values can vary. in general, it can be considered a reasonable estimate to assume an average cop of 3 for the large heat pumps considered here [44, 45]. one of the best seasonal thermal storage fluids is water for its intrinsic characteristics. it is cheap, nontoxic and has a high heat capacity. the cost of a water thermal storage depends on the container of the water. there are two main possibilities: a thermally insulated steel tank and a water pit storage. an insulated steel tank has lower thermal losses and is mostly used for small sizes (up to 5000 m3). a pit heat storage is instead substantially cheaper per cubic meter of water (approximately 25% of a steel tank) and for this reason is used for larger sizes. the task 45 of the international energy agency (iea) on seasonal pit heat storages [46] presents different case studies for thermal storage solutions with an estimation of the annual losses of the storage systems. in the considered systems, annual losses are found to be of the order of 30 % of the overall storage capacity. in order to convert these annual losses into hourly losses (as necessary for our model), 5000 hours of operation have been assumed per year. this is of course a very simplified model that roughly corresponds to the yearly losses identified in task 45. lithium-ion batteries have reached high penetration levels into the portable consumer electronics markets and are rapidly diffusing into hybrid and electric vehicle applications. they have also high potential regarding grid storage modulation. the biggest barrier to their diffusion in this sector is the high cost while the high efficiency (η = 0.8) and the absence of particular territory constraints are definitely advantages [43–49]. table 2 shows a summary of the costs of the three considered technologies and their values used into the analysis [43–49]. 2.4. the model pv-stoth a model has been developed in order to describe the interactions between pv, large heat pumps and seasonal thermal storage. it is directly inspired by energyplan, implementing priorities with equations of the same type, but it is restricted to the technologies directly related to the present case study. on the other hand, with respect to energyplan the model adds a few variables that allow to manage the storage with a higher flexibility. in particular, the model gives the possibility to set few parameters that energyplan does not consider and that permit to handle the thermal storage system with higher flexibility: (i) an initial content of the thermal storage system, (ii) a parameter for thermal storage losses, and (iii) the charging and discharging power of the thermal storage system. 2.4.1. assumptions and chp modelling the inputs of the pv-stpth model, the terminology, units and descriptions for each input are shown in table 3. the main inputs are hourly electricity demand, hourly heat demand of the district heating and hourly pv production followed by the absolute variables like capacities and overall annual production, the costs and economic variables and the co2 emissions factors. the main outputs are the hourly shares of power supplied by large heat pumps (generically called heat pumps below), boilers, thermal storage and the contribution of the grid. the used time step for the simulation is the hour. as a consequence, at each hour, the content of the storage is updated in relationship to the excess of electricity production. the model is based on three main blocks, managing in sequence thermal demand, excess electricity and electricity demand. each block is accurately described in a dedicated subsection (see below), but a general summary of the underlying prioritization strategy is provide here. the first block carries out the analysis of the dh thermal demand. the latter is covered, in order of priority, by thermal storage, heat pumps and boilers. this determines a “lower bound” (minimum value) for international journal of sustainable energy planning and management vol. 10 2016 39 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber units heat pumps thermal storage batteries type co2 pit heat storage lithium-ion cinv €/kwhp or €/kwhsto 3430 0.76 500 lifetime years 25 20 10 o&m % 2 0.7 0 table 2: summary of the parameters' costs of the new considered technologies. for the heat pumps, the investment cost unit is €/kw–el [43–49]. heat pump electricity consumptions. once this is known, the second block can perform the excess electricity analysis, by comparing pv production to the sum of residential electricity demand and heat pump electricity consumptions. whenever pv production exceeds this quantity, provided the thermal storage is not full, heat pumps are further exploited to load the latter. the last block can finally complete the electricity demand analysis, where the overall electricity demand (including the additional heat pump consumptions) is covered, in order of priority, by pv and electric grid. as far as the chp units are concerned, some clarifications are useful. from the general point of view of the energy balance, they have been included through 40 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen variables types abbreviation description units values dd,dh(t) heat demand of the dh network kw per hour — distributions dd,el(t) electricity demand kw per hour — dp,pv(t) pv electricity production kw per hour — ed,dh total heat demand within the dh kwh 30247193 ed,el total electricity demand kwh 70091797 cpv pv capacity kw variable chps hps capacity kw variable absolute variables cop cop of the hps — 3 cboil boilers capacity kw 10000 csto thermal storage capacity kwh variable isto,dh initial content storage kwh variable psto,dh loading power of the storage kw chps, th lsto,dh thermal storage annual losses % 30 cgrid cost of buying electricity from the grid €/kwh 0.16 cgrid,exported value of exported electricity €/kwh 0.06 cgas cost of buying natural gas €/kwh 0.103 cinv,pv investment cost per unit €/kw 2000 lpv lifetime years 20 costs and economic o&mpv operation and manteinance costs (%of the inv. cost) % 2 variables cinv,hps investment cost per unit €/kw 3430 lhps lifetime years 25 o&mhps operation and manteinance costs (%of the inv. cost) % 2 cinv,sto investment cost per unit €/kwh 0.76 lsto lifetime years 20 o&msto operation and manteinance costs (%of the inv. cost) % 0.7 i interest rate % 3 co2 emissions egrid specific emissions of the electricity imported from the grid tco2/kwh 0.483 egas specific emissions related to the combustion of a unit of natural gas tco2/kwh 0.202 dp,hps(t) distribution of heat production of hps kw per hour dp,boil(t) distribution of heat production of boilers kw per hour technical variables dp,grid(t) distribution electricity imported from the grid kw per hour dp,sto(t) distribution of heat contribution from the thermal storage kw per hour dsto,history(t) distribution of heat content of the thermal storage kw per hour economic and total_annual total annual co2 emissions kt environmental output _emissions total_annual _costs total annual costs k€ ou tp ut in pu t table 3: main inputs and outputs of the developed model, terminology and values [43–49]. international journal of sustainable energy planning and management vol. 10 2016 41 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber thermal demand storage available storage sufficient? storage heat pumps hps sufficient? y y y y n n n n boilers priority: (1) thermal storage (2) heat pump (3) boiler figure 4: thermal demand analysis. the energyplan reference scenario. here they are assumed to operate with a fixed constant profile during each single month. this assumption is justified by the small variance of the real observed data, which is of the order of 10% in a typical winter month. indeed, these units operate at constant load to optimize their performance and duration, a specific choice of the case of bressanone. for this reason, even if having a flexible operation of these units could improve the overall energy balance of the system, they are not included in the pv-stoth and in the optimization tool of this paper. in a future study it would be interesting to analyze the energy balance of the system if the chp cogeneration plants could operate in a more flexible way. 2.4.2. thermal demand analysis starting with the thermal demand analysis, figure 4, the content of the thermal storage is initialize to the value of the initial content of the storage, eq. (1): (1) the thermal storage has priority in satisfying the need of heat power within the district heating network. the quantity of heat power, taken from the storage, used to cover the demand (d1p,sto(t)) is equal to the minimum between the heat power demand, the content available content (0) =sto available isto, dh in the storage and the loading power of the storage, eq (2): (2) the available storage content is now the difference between the old content of the storage and the heat used to satisfy the demand, eq (3). the storage content is updated after the previous possible discharge within the same time step: (3) the residual quantity of heat power demand that hasnot been satisfied yet ( , , ) is covered by heat pumps and if their capacity is not enough by boilers eq. (4,5,6,7,8): (4) (5) (6) (7) (8) 2.4.3. excess electricity analysis the excess electricity analysis presents only one priority: heat pumps cover the share of excess electricity production generating heat that is stored in the thermal storage. the theoretical scheme is shown in figure 5. the excess electricity production (del,ex(t)) is given by the difference between the production by pv, the p t p t d tres res p boil 3 20( ) max , ( ) ( ).= −( ) d t p t cp boil res boil. ( ) min ( ),= ( )2 p t p t d tres res p hps 2 1 10( ) max , ( ) ( ),= −( ) d t t c copp hps hps, ( ) min( ( ), ) 1 = pres 1 ⋅ pres 1 ( ) max( , ( ) ( )), ,t d t d td dh p sto= −0 1 pres 3 ( )tpres 2 ( )tpres 1 ( )t ( ) max ( ,content t content sto s available = 0 ttoavailable ( ) ( )),t d tp sto− 1 d t d tp sto d dh, ,( ) min( ( ), 1 = contentstoavvailable ( ), )t psto,dh electricity demand and the necessary quantity requested by the heat pumps to cover the thermal load (calculated through cop), eq. (9). there is no transmission limit to the grid: (9) the electricity supply that the heat pumps can use in order to produce heat to load the storage is given by the minimum between the excess electricity available and the minimum between the capacity of the heat pumps available yet, the available capacity of the thermal storage and the loading power of the storage (using cop to properly convert from thermal to electric and vice versa), eq. (10): (10) indeed, if the storage is full (capacity limit), or it cannot be loaded fast enough (loading power limit), or the heat pumps were already exploited at maximum during this time step (hp capacity limit), or there is not excess electricity, then no additional use of heat pumps is feasible. the consequent heat production by the heat pumps is obtained multiplying the value of the cop with the one found at the eq. (10). the thermal storage is loaded by an equal share, eq. (12): (11)d t t copp hps p hps el, , ,( ) ( ) 2 2= ⋅d d t d t c cop d p hps el el ex hps p hp , , , , ( ) min ( ), min 2 = − ss sto sto sto dht c content t pavailable 1 ( ), ( ), ,−( ))⎛ ⎝ ⎜ ⎜ ⎞ ⎠cop d t d t d t d t el ex p pv d el p hps , , , ,( ) max , ( ) ( ) ( ) = − −0 1 ccop ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ (12) the remaining excess electricity is given by the difference between the total excess electricity and the quantity used by the heat pumps. it could be different from zero if the remaining exploitable capacity of the heat pumps (also taking into account the current storage level) is not enough to cover all the excess, eq. (13): (13) it is now necessary to update the content of the storage with the quantity produced by the heat pumps, eq. (14). it is necessary also to consider the losses of the storage. (14) the overall production by the heat pumps is obtained adding the first and the second contributions, eq. (15): (15) 2.4.4. electricity demand analysis the electricity demand analysis, theoretical scheme shown in figure 6, presents as priorities: pv and the grid to cover the electricity demand. the value of the d t d t d tp hps p hps p hps, , ,( ) ( ) ( )= + 2 1 content tstoavailable ( ) min (, , + =1 2c d tsto p sto )) ( ) , +( ) − −⎛ ⎝ content tstoavailable 1 5000 lsto dh ⎜⎜ ⎞ ⎠ ⎟ d t d t d tel ex res el ex p hps el, , , , ,( ) max , ( ) ( )= −(o 2 )) d t d tp sto p hps, ,( ) ( ) 2 2= 42 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen electricity excess? y y n n storage full? use hps load storage priority: (1) heat pump figure 5: excess electricity analysis. imported electricity (dp,grid(t)) is given by the sum between the electricity demand and the share used by the heat pumps deducted by the pv production, eq. (16): (16) in a well-balanced system, the storage content at the end of the year must be identical to that at the beginning of the year. indeed simulations are based on a “standard” year, which is assumed to repeat identically in time. this periodicity is required to ensure the correct energy balance: a higher content at the end of the year would correspond to wasted energy, while a lower content would correspond to generating energy from nothing. in this model, periodicity can be ensured adjusting the initial storage content. the matching value can be automatically calculated with a single (properly designed) trial simulation. within this approach, the performance analysis of a given configuration hence requires to run the model twice. 2.4.5. co2 emissions analysis it is now possible to evaluate the annual co2 emissions of the system and perform the economic analysis. in order to estimate the annual co2 emissions, the inputs are egrid (the average emissions of a unit of electricity imported from the grid) and egas (the average emissions of the combustion of a unit of natural gas). d t d t d t cop dp grid d el p hps p pv, , , ,( ) max , ( ) ( ) = + −o (( )t⎛ ⎝ ⎜ ⎞ ⎠ ⎟ the total annual co2 emissions, eq. (19), are given by the sum between the emissions originated by the imported electricity, eq. (17), and the ones produced by consuming gas through the use of boilers, eq. (18): (17) (18) (19) the co2energyplan contribution is the quantity of co2 emissions calculated through energyplan that are produced by the remaining whole system. 2.4.6. costs analysis as previously mentioned, the developed model pvstoth follows the energyplan approach, using the same formula for the actualization of the investment costs that are thus converted in annual costs. the total annual costs, eq. (29) are given by the sum of different contributions: cgas is the cost of the natural gas used by boilers, eq. (20), cgrid is the cost of the electricity imported from the grid (21), cgrid,exported is the income for selling excess electricity to the grid, eq. (22), cpv,annual,invc is the investment cost of pv amortized during its lifetime, eq. (23), cpv,annual,o&m is the annual operation and maintenance cost of pv, eq. (24), chps,annual,invc is the investment cost of hps amortized during their lifetime, eq. (25), chps,annual,o&m is the annual operation and maintenance cost of hps, eq. (26), csto,annuual,invc is the investment cost of storage amortized during its lifetime, eq. (27), csto,annual,o&m is the annual operation and maintenance cost of the storage, eq. (28). (20) (21) (22) c c t d tgrid orted grid orted el ex res, , , , (exp exp= δ )) t ∑ c c t d tgrid grid p grid t = δ ∑ , ( ) c c t d tgas gas p boil t = δ ∑ , ( ) co co co cotot grid gas energyplan2 2 2 2= + + co e t d tgas gas p boil t 2 = δ ∑ , ( ) co e t d tgrid grid p grid t 2 = δ ∑ , ( ) international journal of sustainable energy planning and management vol. 10 2016 43 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber figure 6: electricity demand analysis. electricity demand use grid use pv pv sufficient? pv available? n n y y y n priority: (1) pv (2) grid (23) (24) (25) (26) (27) (28) (29) the cenergyplan is the value of the total annual costs calculated through energyplan that are produced by the remaining whole energy system. 2.5. deterministic and optimization approach two different approaches have been chosen to inspect the possible res high penetration scenarios on the considered area. a deterministic approach has been chosen for a first analysis of different extreme solutions. the pv scenario with incremental increase of pv capacity has been compared with a pv + electric storage scenario, c c c c c tot annual gas grid grid orted pv a , , , = + − +exp nnnual invc pv annual o mc c , , , & + + hps,annual,invc ++ + +c c c hps,annual,o&m sto,annual,invc sto,annuual,o&m _energyplan+ c c c c o msto annual o m inv sto sto sto, , & , &= ⋅ ⋅ c c c i i sto annual invc inv sto sto lst, , , = ⋅ ⋅ − +( )−1 1 oo c c c o mhps annual o m inv hps hps hps, , & , &= ⋅ ⋅ c c c i i hps annual invc inv hps hps lhp, , , = ⋅ ⋅ − +( )−1 1 ss c c c o mpv annualinvc inv pv pv pv, = ⋅ ⋅, & c c c i i pv annualinvc inv pv pv lpv, , = ⋅ ⋅ − +( )−1 1 implemented with the energyplan software and a pv + thermal storage scenario, evaluated through the model pv-stoth. by inserting manually the data in energyplan, it is possible to inspect for each configuration the output parameters of co2 emissions and total annual costs. the two scenarios pv+electric storage and pv+thermal storage describe extreme cases where pv capacity – and hence all the pv generated excess electricity production (eeppv) – is the only driver to set the others parameters (capacity of the virtual pump cp, capacity of the virtual turbine ct, capacity of the electric storage csto,el, capacity of the heat pumps chps, capacity of the thermal storage csto,th and initial content of the thermal storage isto,dh). for this reason, this approach is useful to analyze the extreme cases. in the pv+electric storage the capacity of the storage is sized to cover all the excess electricity production, therefore not even a single kwh of electricity is wasted or sold to the grid (see [19] for a similar approach). this scenario has been implemented in energyplan. for this reason the electric storage parameters that have been considered are: capacity of the virtual pump cp, capacity of the virtual turbine ct, capacity of the electric storage csto,el. indeed energyplan models all the types of electric storage as a virtual pumped hydro storage system where the charging capacity is the virtual capacity of the pump and the discharging capacity is the virtual capacity of the turbine. in this scenario lithium-ion batteries have been considered as electric storage. their characteristics are shown in table 2. in the pv+thermal storage scenario the maximum of the excess electricity production allows for the estimation of the heat pump’s size. this latter value permits to estimate the capacity and the initial content of the thermal storage with the same strategy used for the electric storage. in other words, the capacity of the thermal storage is sized to cover all the heat generated by the heat pumps. in order to inspect the best mix of technologies for the pv+thermal storage scenario, an optimization algorithm has been implemented [50, 51]. indeed, the optimization approach permits to inspect not only few extreme configurations but also among all the solutions choose the best one in terms of co2 emissions and total annual costs. the problem is, thus, characterized by two objectives that have to be minimized. the two objectives are the minimization of the annual co2 emissions of the system and the minimization of the total annual costs. the problem is 1a multi objective problem (moo). the choice of the optimization model has fallen upon an evolutionary algorithm (ea). an ea is a metaheuristic optimization algorithm that is inspired by the 44 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen principle of natural selection. a heuristic optimization algorithms is particularly suited for finding solutions in a fast and easy way [20]. multi-objective evolutionary algorithms (moea) [52–53] are a version of eas for moo problems. figure 7 shows how this optimization model works interacting with the developed model (see [19] for a similar approach with energyplan). the model starts generating a number of random solution that compose the initial population. each individual, within the evolutionary algorithm, corresponds to a given configuration in terms of the capacity of pv, heat pumps and thermal storage and by the initial content of the storage itself. in order to evaluate each individual or solution the model pv-stoth is launched with the input variables of the considered individual. the outputs of the model pv-stoth, co2 emissions and total annual costs are used to evaluate each individual. there is a constraint in the optimization model that permits to select only solutions with a surplus, eq. (29), lower than the 1% of the storage capacity. eq. (30) shows this constraint (in energyplan the year is considered a leap year and is hence composed by 8784 hours): (29) (30) the moea allows for the evaluation of the best solutions through the pareto front. it is composed by all the non-dominated solutions that are characterized by the fact that no one of the objectives can be improved without degrading some of the other objective values. 3. results 3.1. deterministic approach the results of the deterministic approach are presented in figure 8. the use of electric and thermal storage enables to save more co2 emissions compared to the “pv” scenario, but with a high cost increase that corresponds to the growing pv installed power. in this way, a deterministic approach to estimate the possibility to save excess electricity production has been developed. the considered cases are the extreme ones and do not considered intermediate possibility. a solution in which a part of the excess electricity production is stored and a part is sold to the grid could be cost-effective compared to these ones, where all the overproduction is stored. 3.2. optimization approach the results of the optimization approach are presented in figure 9, where it is possible to see the results of the moea’s optimization analysis and the pareto front of the best solutions. figure 9 shows also the comparison with the reference scenario and the results obtained with the deterministic approach. surplus csto≤ 0 01. surplus = −content contentsto stavailable ( )8784 ooavailable 0( ) international journal of sustainable energy planning and management vol. 10 2016 45 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber electric storage thermal storage cpv eeppv [gwh/year] cp [kw] ct [kw] csto,el [kwh] chps [kw] csto,dh [kwh] vsto,dh [m3] 0 0 0 0 0 0 0 0 10 0.06 2043 3866 8431 2161 8200 131 20 2.17 9386 10240 58406 9504 416554 6665 30 8.40 17452 13400 122826 17512 10991626 175866 generate initial population input variables – pv capacity – capacity of hps – capacity of thermal storage – initial content of the storage output (annual) – annual costs – co2 emissions – surplus stop no developed model yes generate new population – parent selection – crossover – mutation stopping criteria met rank each individual: fitness function evaluate each individual (on total costs and co2 emissions) table 4: increase of pv capacity and consequent increase of capacity of the electric and thermal storage. figure 7: moea’s flow chart. the identified pareto front permits to highlight that there are solutions that dominate the reference scenario. only one solution found with the deterministic approach for the pv+thermal storage scenario belongs to the pareto front. after this solution, all the others are intermediate solutions that present a part of the excess electricity production that is sold to the grid and the other part that it is stored into the thermal storage. a solution on the pareto front has been analyzed deeper, figure 10. the point p1 is the point on the pareto front that is closest to the total annual costs of the reference scenario. it doesn’t increase the total annual 46 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen 30 mw 50 mw 40 mw 30 mw 20 mw 10 mw ref. scen. 58000 59000 60000 61000 62000 63000 64000 65000 66000 67000 68000 115110105 co2 emissions (kt) to ta l a n n u a l c o st s (k € ) 10095 pv + electric storage pv+ thermal storage pv 10 mw 10 mw 20 mw 30 mw 20 mw 58000 co2 emissions (kt) to ta l a n n u a l c o st s (k € ) 62000 64000 66000 68000 70000 72000 60000 93 98 103 108 113 118 moea’s individuals pareto front pv reference scenario pv + thermal storage pv + elecrtric storage figure 8: comparison between the pv scenario, pv+electric storage scenario and pv+thermal storage scenario. figure 9: multi objective evolutionary algorithm results and comparison with reference scenario and results of the deterministic approach. co2 emissions (kt) to ta l a n n u a l c o st s (k €) 1181131081039893 58000 60000 62000 64000 66000 68000 70000 72000 moea’s individuals pareto front reference scenario p1 figure 10: multi objective evolutionary algorithm results and comparison with the reference scenario and the p1 solution. cost and allows for a significant reduction of the co2 emissions (about 15%). the p1 solution is characterized by a pv capacity of 35 mw, a hps capacity of 3 mwel, a thermal storage capacity of 750 mwh and an initial content of the storage equal to zero. figure 11 shows the trend of the capacity of pv, heat pumps and thermal storage of the solutions on the pareto front. until 30 mw of pv installed power, a large capacity of the heat pumps and of the thermal storage is not required. after 30 mw of pv installed capacity the excess electricity production greatly increases and the capacities of the heat pumps and of the thermal storage consequently rise. figure 12 shows the trend of the electricity consumption and production and the trend of the thermal storage content for two different weeks of the year, one in spring and one in summer. in spring the seasonal thermal storage content is very low and if the pv production is not relevant during the central hours of the day there is no heat available in the storage to cover the demand during the other hours. for this reason the grid+pv curve differs from the electricity demand one because the heat pumps require additional electricity to cover the thermal load. the electricity demand curve does not include hps electricity demand while the grid+pv curve consider this share. on the other hand, in summer, the thermal storage content is very high and is able to cover the heat demand. 4. conclusions the municipality of bressanone-brixen was selected as case study as it has joined the covenant of mayors in 2013 and baseline information is available in the bressanone sustainable energy action plan. moreover, this municipality can be considered well representative of several cities in the alpine region, recently addressed by a specific eu strategy. thanks to this, it has been possible to create the reference model and to validate it into the energyplan software, comparing the obtained total annual emissions with the value given by the seap. a model to describe the interactions between pv, large co2 heat pumps and seasonal pit thermal storage has been developed. it is directly inspired by energyplan, implementing priorities with equations of the same type and following the same calculations for the estimation of the co2 emissions and total annual costs, but it takes into account only the mentioned technologies. on the other hand, with respect to energyplan the model adds a few variables that allow to manage the storage with a higher flexibility. in particular, the model gives the possibility to set (i) an initial content of the thermal storage system, (ii) a parameter for thermal storage losses, and (iii) the charging and discharging power of the thermal storage system. international journal of sustainable energy planning and management vol. 10 2016 47 matteo giacomo prina, marco cozzini, giulia garegnani, david moser, ulrich filippi oberegger, roberto vaccaro and wolfram sparber figure 11: analysis of the solutions on the pareto front. co2 emissions (kt) 93 98 103 108 113 118 co2 emissions (kt) 93 98 103 108 113 118 co2 emissions (kt) 93 98 103 108 113 118 co2 emissions (kt) 93 98 103 108 113 118 to ta l a n n u a l c o st s (k € ) c p v ( kw ) c h p s (k w ) c s t o ( kw h ) 60000 50000 40000 30000 20000 10000 0 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 72000 70000 68000 66000 64000 62000 60000 58000 cpv chps csto moea’s individuals pareto front reference scenario p1 48 international journal of sustainable energy planning and management vol. 10 2016 smart energy systems applied at urban level: the case of the municipality of bressanone-brixen a deterministic approach has been used to compare different peak shaving solutions: thermal (analysed with the created model) and electric storage (inspected with energyplan). the two scenarios have been created varying only the installed capacity of pv and calculating the size of the other variables (like capacity of the heat pumps, thermal storage, virtual capacity of the pump and of the turbine and capacity of the batteries) in order to cover the entire excess electricity production without exchanges to the grid. for this reason the two scenarios describe the extreme cases. the results have shown that, with these types of assumptions, the most cost-effective mean to perform peak shaving is given by the heat pumps coupled to seasonal thermal energy storage. however, the volume required by the storage to cover all the excess electricity production increases extremely fast beyond a certain pv capacity and the total annual costs rise correspondingly. for this reason, it is advised to inspect the intermediate solutions between storing all the excess electricity production and selling it to the grid. a multi-objective evolutionary algorithm has been used to study the best intermediate solutions of the pv + thermal storage scenario, finding out the pareto front of best technology mix. a solution on the pareto front (p1) has been chosen as solution that permits to save more annual co2 emissions without increasing the annual costs of the energy system compared to the reference scenario. a future development can focus on the extension of the optimization analysis not only on the considered sources but also on a more flexible operation of the existing cogeneration power plants that have a high potential in the integration of renewable energy sources. it is worth recalling that the current analysis relies on a few requisites and assumptions. in particular, the proposed energy configuration relies on the existence or on the feasibility of a dh network and on the availability of a reasonable solar fraction for pv. moreover, the installation of a seasonal storage require favorable conditions in terms of ground availability and costs, an aspect which was not investigated in detail for the present case study. finally, the energy source and the temperature levels used by heat pumps should be properly analyzed for a full feasibility study. the overall energy balance proposed here, however, is already sufficient to clearly highlight the interest of hybrid electric-thermal applications, showing that extending the analysis of storage solutions beyond the purely electric sector can be highly beneficial. electricity analysis electricity analysis storage analysis storage analysis storage content storage content hours e le ct ri ci ty ( kw ) e le ct ri ci ty ( kw ) s to ra g e c o n te n t (k w h ) s to ra g e c o n te n t (k w h ) hours hours hours 760000 740000 720000 700000 680000 660000 640000 750000 650000 550000 450000 350000 250000 150000 50000 –50000 2 5 0 0 2 5 0 7 2 5 1 4 2 5 2 1 2 5 2 8 2 5 3 5 2 5 4 9 2 5 5 6 2 5 6 3 2 5 7 0 2 5 7 7 2 5 8 4 2 5 9 1 2 5 9 8 2 6 0 5 2 6 1 2 2 6 1 9 2 6 2 6 2 6 3 3 2 6 4 0 2 6 4 7 2 6 5 4 2 6 6 1 4 0 0 0 4 0 0 7 4 0 1 4 4 0 2 1 4 0 2 8 4 0 3 5 4 0 4 2 4 0 4 9 4 0 5 6 4 0 6 3 4 0 7 0 4 0 7 7 4 0 8 4 4 0 9 1 4 0 9 8 4 1 0 5 4 11 2 4 11 9 4 1 2 6 4 1 3 3 4 1 4 0 4 1 4 7 4 1 5 4 4 1 6 1 4 0 0 0 4 0 0 7 4 0 1 4 4 0 2 1 4 0 2 8 4 0 3 5 4 0 4 2 4 0 4 9 4 0 5 6 4 0 6 3 4 0 7 0 4 0 7 7 4 0 8 4 4 0 9 1 4 0 9 8 4 1 0 5 4 11 2 4 11 9 4 1 2 6 4 1 3 3 4 1 4 0 4 1 4 7 4 1 5 4 4 1 6 1 2 5 0 0 2 5 0 7 2 5 1 4 2 5 2 1 2 5 3 5 2 5 4 2 2 5 4 9 2 5 5 6 2 5 6 3 2 5 7 0 2 5 7 7 2 5 8 4 2 5 9 1 2 5 9 8 2 6 0 5 2 6 1 2 2 6 1 9 2 6 2 6 2 6 3 3 2 6 4 0 2 6 4 7 2 6 5 4 2 6 6 1 30000 25000 20000 15000 10000 5000 0 30000 25000 20000 15000 10000 5000 0 pv electricity demand grid+pv pv 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 18 2018 29 1corresponding author e-mail: kartono.sani@sbm-itb.ac.id and kartsani@yahoo.com international journal of sustainable energy planning and management vol. 18 2018 29–52 abstract indonesia is facing tremendous challenges in bridging the broadening gap of demand and supply prior to developing a steady energy vision. this paper is to introduce system dynamics in solving the problematic national energy management, share an initial stage of the modelling and discuss the challenges. a literature review defines the preferred modelling, empirical data demonstrates the supply mix trends and used in developing the initial model to represent the past behaviour prior to be enhanced, upgraded and simulated towards the vision. the initial simulation runs succeed in imitating the historical trends and suggests that its engineering to the envisaged patterns may offer viable solution. the use of system dynamics in indonesia is unprecedented and the results are noteworthy in supporting the formulation of the national energy mix vision. 1. introduction worldwide, a wide range of energy technologies exist, and each country has developed vastly different core competencies to generate their unique portfolios and sustainable energy vision. many countries signed the kyoto protocol (1997), an international treaty whose critical features aim to prevent climate change, reduce greenhouse gas (ghg) emissions, and accelerate renewable energy use. the tradition of energy modelling had seemingly begun when the world was urged to develop energy system models for a sustainable supply and national energy security due to the 1970s energy crisis [1]. all countries have since been competing to develop their own unique energy portfolio to ensure their respective domestic energy supply. in the 1990s, the focus shifted toward the interactions between energy, the environment, and climate change issue, and various new features have then been developed as the existing models were updated and expanded. indonesia has depended heavily on fossil fuels to maintain sustainable growth, despite having considerable energy resources, worked hard to maintain its declining domestic oil supply and to increase the amount of renewable energy resources in its national energy mix. for those reasons, in the presidential regulation no.5/2006 [2], a different mix was promoted, and a much higher share would be coming from renewables, while coal uses would be suppressed due to environmental issues, as its share is projected to be multiplied to substitute the severe shortage of oil (figure 1). the u.s. energy information administration’s (eia) short-term outlook [3] shows a broadening gap for petroleum and other liquid supplies versus consumption in indonesia, after more than a decade of being a net oil importer (figure 2). an energy shortage is forecasted by 2022, as indonesia’s crude production continues to fall as its domestic demand is climbing. business monitoring international ltd. [4] projected that production will only indonesia energy mix modelling using system dynamics kartono sani*, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto school of business and management, institut teknologi bandung, jakarta campus, graha irama, 12th floor jl. hr rasuna said kav.1–2 jakarta 12950, indonesia keywords: comparative overview; empirical data; system dynamic modelling; initial model of indonesia today; modelling challenges; url: http://dx.doi.org/10.5278/ijsepm.2018.18.3 http://www.dx.doi.org/10.5278/ijsepm.2018.18.3 30 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics be about half of domestic consumption in 2020, and most believe that with the current trend, indonesia may only produce oil for another 10 years. according to the eia, indonesia’s gas production will peak in 2018, after rising approximately 25 percent since 2005; production will then decline sharply [3]. ramping up indonesia’s per capita gdp requires a sustainable energy supply to maintain growth, while the fossil fuels heavily dependent energy supply portfolio caused a rapid increase in emissions. empirical data on the primary energy supply (figure 3 and 4) suggest that the current trends will not lead the country to the desired optimum energy mix. the over produced coal is a strong negative indicator in the country’s performance for the kyoto protocol’s clean development mechanism. likewise, the under-performed oil and gas production suggests weak capital stewardship in the upstream ventures. so does the ironic story of the clean geothermal resources for the country that is the majority shareholder of the world’s potential. even though the new presidential regulation no.79/2014 [6] replaced the older one and regulated more ambitious energy mix goals for 2050, the trends remain opposite, and the country is facing tremendous challenges in energy management prior to developing a steady energy vision. this paper aims to introduce system dynamics modelling as a preferential approach to portrait the past behavior state of indonesia’s energy supply mix performance in the way to understand and develop a new model to support the formulation of the national energy mix vision. it discusses the energy statistics in the background, an early stage of the modelling with a unique causal-loop diagram reflecting the country energy supply model today, an initial simulation run and the modelling associated challenges. 1.1. scope and structure this research is began with the finding of the most suitable modelling approach to be used in developing new model to portray the performance of the energy supply mix implication in the past. it is then expected to be able to simulate the behavior of the supply mix in the energy mix 2011 (hydro 2.1%, geothermal 1.2%, other 0.9%) rken target energy mix 2025 rken target energy mix 2050 nre 4% coal 26% oli 50% gas 20% nre 23% coal 30% oli 25% gas 22% nre 31% coal 25% oli 20% gas 24% 6.9 ej (165 mtoe) 15.9 ej (380 mtoe) 41.0 ej (980 mtoe) figure 1: the past and targeted energy mix of indonesia [5] 2000 2002 2004 2006 2008 2010 2012 2014 g j /y e a r broadening consumption indonesia becomes net imported oil source: u.s. energy information administration, short term energy outlook, september 2015 production 0 30 25 20 15 10 5 figure 2: petroleum and other liquids supply and consumption in indonesia after more than a decade of being a net oil import [7] international journal of sustainable energy planning and management vol. 18 2018 31 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto more comprehensive models that incorporate a larger number of economic components, and new models that include the interactions between energy, society, economy, and environment as a major innovation, e.g., geme3, t21 and mcm. and only 12 of which discuss a causal loop diagram or a stock and flow diagram in the presentations [1]. in their two-step comparative overview of models covering energy systems, [9] concluded that “the bottom-up accounting type of framework appears to be more appropriate for developing country contexts for their flexibility and limited skill requirement, they can capture rural-urban differences, traditional and modern energies and can account for non-monetary transactions, the models do not look for an optimal solution, can take non-price policies prevailing in developing countries enhances their suitability, their inability to analyze price-induced effects is the main weakness though; however, given the regulated nature of prices in many developed countries and incompleteness of markets, this weakness is not a major concern for modelling”. however we argue that this weakness would be fatalistic for developing countries because of their less regulated nature; thus, an alternative model is needed that can analyze the priceand many other exogenously-induced effects. although the best non-simulation model can take non-price policies prevailing in developing countries and enhance their suitability, a good model should look for an optimal solution. both weaknesses of the bottom-up accounting model can be covered by system dynamics modelling [1]. according to [9] the hybrid models come next and followed by the optimization and econometric models, the latest “use price-driver which play a limited role in developing countries and cannot capture informal sector or traditional energies adequately,” besides having “difficulties in capturing the technological diversity that require high skill levels.” so most of the essentially global models are not suitable for developing countries contexts and so inappropriate as the essential features are not explicitly covered, developed from different perspectives applying entirely those features common to developed countries and fail to capture specific needs of developing countries [1]. [10] argue “a simple distinction is often made between a bottom–up approach, which is more data intensive and more appropriate for detailed analysis of individual energy policies and a top–down approach, which has a more econometric approach and uses less future under certain selected terms and conditions towards the desired destination. empirical data solicited from the corresponding energy departments is used to examine the past behavior trends (2000–2016), whereas the energy mix vision will be determined and engineered in defining the envisioned behavior modelling (2017-2050). the modeling is to be focused on energy supply system, confronts the dominated fossil energies against the new and renewable energies (nre), their impact to environment and so development as well as the regulatory instruments. the oil and gas sectors are separated, so are coal and biomass, while the renewable sector is simply represented by geothermal, biofuels, hydropower and solar photovoltaic energy. the simulation programs vensim ple 7.1 is used in the building of the qualitative and quantitative modelling. the paper is structured as follows. section 2 summarized the background literature which have been discussed in more detailed in the author’s previous publication on this topic [1], whereas sub-section 2.1 highlights the advantages of using system dynamics as research approach. section 3 outlines the approaches used in this study: (a) analyses the background statistics, (b) energy supply preferred model and its uniqueness, and (c) regulatory instruments and the supply mix dynamics. section 4 discusses the initial system dynamics model of indonesia today: (a) causal loop model, (b) stock and flow model, and (c) results of the initial simulation run. finally, discussion and conclusion are given in section 5. 2. literature review some tabulation structured using energy selection parameters developed on energy portfolio management [8] reveals that none of the articles reviewed discuss the energy supply mix vision is about indonesia and discuss the energy supply mix quality [1]. the article review was subsequently focused on energy supply system modelling and concentrated on a theoretical justification of why system dynamics is needed to answer the main research questions. of the 35 articles reviewed on energy system modelling, some papers are categorized as comparative overviews, while the rest discuss the applications of specific system dynamic models for certain energy case studies. they include bottom-up optimization/ accounting models, hybrid models, electricity system models, causal-descriptive (system dynamics models) or correlation (top-down econometric). there are also 32 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics for the development of renewable energies and a sustainable economy in general, the environmental issue and its impact on the financial statements is no longer an ecological question. for those reasons, [14] “investment in renewables can be at risk, depending on the continued existence of financial incentives.” policy makers have to either prolong financial incentives to renewables (in spite of the recognized maturity), capacity payments to dispatchable power generation, or by any other design change to provide adequate signals for existing and new generation capacity. 2.1. system dynamics as a suitable energy modeling approach system dynamics is generally understood as an approach to understanding the non-linear behavior of complex systems over time using stocks, flows, internal feedback loops, table functions and time delays. it is a mathematical modeling technique to frame, understand, and discuss the complex issues and problems. in this methodology, a problem or a system is qualitatively represented as a causal loop diagram, a simple map of a system with all its constituent components and their interactions. two types of feedback loops are the positive reinforcement labeled as r and the negative reinforcement (b or balancing). a causal loop diagram is then transformed to a stock and flow diagram to perform a more detailed quantitative analysis. a stock is the term for any entity that accumulates or depletes over time, a flow is the rate of change in a stock, while time delay is a shift in the effect of an input on an output dynamic response. thus, system dynamics modeling is most suitable for modeling in the energy realm because it is: • reliable for large, complex subsystems, nonlinear and dynamic problems. [15,16,17,18,19] emphasize that such problems can only be properly represented or solved by a reliable model of the system dynamics approach. the present models have considered the factors that influence the oil and gas exploration/exploitation industry, along with their effects on the system. a system dynamics model with numerous interconnected variables forming loops is particularly suitable and can be used with relative ease and convenience by following the methodology without sacrificing the basic character of the problem. • can replicate world patterns. [20] “a system dynamics model that uses energy as the describing medium of all socioeconomic activity has been technology explicit data.” [5] finally suggest “despite the distinction being widespread, both categories are not mutually exclusive, there also exists a ‘hybrid’ class where the two approaches are combined; one of the main contributions of the hybrid approach is the detection of missing information and dynamics that simple top– down or bottom-up models cannot detect on their own.” based on the literature review, the discussion comes to a conclusion that non-simulation models are not suitable for this research since the models “inadequately capture the developing country characteristics, the level of data requirement and the theoretical underpinning of these models, as well as their inability to capture specific developing country features,” [97] concluded. subsequently [1] emphasize when the best model of these conventional approaches is applied to developing country like indonesia, the problems are increased. thus, it is certain that a very large, complex and dynamic energy portfolio management with feedback of many subsystems in a non-linear fashion cannot be simply represented or easily solved by known or extended mathematical optimization models. nevertheless [11] presents “two key questions should have been at the top of policy makers’ agenda: (a) can the government develop a national energy system that will provide security and jobs and also leave a heritage of clean air, clean water, and pristine wilderness areas for the children and grandchildren? (b) can the nation reduce carbon dioxide emissions, which threaten to destabilize the global climate, by developing a truly balanced portfolio of clean energy solutions that would allow to also having economic growth?" this is a very idealistic view that an energy supply system may be built and maintained at zero cost to the environment and is contradicted considering the arguments of [12] that “if the rest of energies are likely to come on-stream fast enough to offset conventional oil decline, what would be the new scenarios of greenhouse gases if this would happen.” he continued “the results show that even strongly optimistic rhythms of substitution have a hard time to continue the growing demand of energy that characterizes today’s pattern.” and concludes that if the present relationship between energy and the economy is maintained these results lead to a long economic stagnation period in the most optimistic scenarios. [12] whereas ironically [13] emphasizes that international accounting standards do not differentiate between low and carbon intensive investment and do not take into account climate risks beforehand.” this is a critical issue international journal of sustainable energy planning and management vol. 18 2018 33 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto • widely used and has abundant achievements. [17] “system dynamics is widely used in the study of sustainable development and has plentiful research achievements from macroperspective but few studies in the microcosmic project systems. studies that take a look at the complete picture, paying attention both to the economical, the geological and the technological aspects are not frequent in the literature.” in addition, [22] concluded that “the challenge of doing business in development of biofuel in developing countries, such as indonesia, is that the market suffers from a lack of information, infrastructure and institutions. with inadequate assessment and a poorly equipped infrastructure (local scale policy, market, science and technology and public acceptance), any initiative for a large-scale introduction of biofuel will be premature. assessing the present governmental policy may help to identify the barriers and at a later stage to find the solutions to ease the penetration of biofuel into existing energy systems.” while [23] highlight the problems associated with public policy using traditional nonsimulation approaches, which have several characteristics that impede resolution. further from most recent publications [24] concludes that “large shares of renewable energy sources are decreasing energy prices in spot markets due to the merit order effect. this is good news for the consumer welfare,” meanwhile in crowdfunding platforms for renewable energy investments [25] argues that renewable energycrowdfunding activity thrives on stable long-term policy support schemes for small and medium scale projects, as well as on comprehensive financial regulation that exempts crowdfunding from traditional financial service regulatory obligations.” interestingly, comparing the evolution of financial regulation of crowdfunding, it is concluded that “a loose financial regulatory framework leads to a range of business models and financial instruments, while a more specific framework tends to reduce res-crowdfunding to one business model/one instrument,” [25]. however, back to the merit-order effect, it is argued that in fact the value estimated for the financial incentives is often lower than the merit-order effect. 3. research approaches to conduct this research, at the initial phase, a model is built to delineate the existing system as baseline to demonstrate the strengths and weaknesses of the existing possible to replicate the world patterns as the result of the interplay of the industries that extract and refine primary energy and compete to provide the driving force of socioeconomic society.” • can lead to develop effective policies to achieve sustainability and be used to analyze possible threats and design optimal adaptation strategies. [19] explain that from a policymaker perspective, a system dynamics model of the automotive sector can lead to the development of effective policies, while from an energy company’s such a model could be used for the analysis of a highly volatile and market that is always on the edge of starting a new major transition. “the model presented can serve both purposes, and the results obtained show how a similar instrument can really make the difference in highly dynamic sectors with ongoing major transitions.” [19]. • a good method for a holistic approach, “since it enables the integration of several aspects and is designed to take into account all sorts of feedbacks among those aspects.” [13] • a valuable tool to forecast supply and consumption. [12] argue that the simulation results allow the model to forecast fuels supply and consumption that making it “a valid alternative to the most known and used forecasting techniques in the context of energy-economics.” this model “can be used to investigate the factors influencing the long-term supply and demand of energy and to determine the nature of system behavior as well as examining the effectiveness of various policies in softening the transition from self-sufficiency to energy importdependence in the long term.” [12]. • a sophisticated modelling method, which is needed for the supply side. [21] state that “the wide array of current and proposed production technologies, each with different costs and benefits and different greenhouse gas emissions levels, makes electricity production the most complicated element of the supply-side.” and so needs the sophisticated system dynamics modeling. • useful for gaining insight into the underlying behavior [16], “system dynamics modeling is useful for understanding the underlying behavior of complex systems over time, taking into account time delays and feedback loops” and 34 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics resolution, formulation of which will subsequently be examined and fine-tuned through focused group discussions. under this scenario, the concerned parties will have a better understanding of the concept and so a higher sense of belonging and will therefore buy in and be interested to participate with a stronger sense of urgency to implement the envisioned energy mix goals. the model may subsequently be improved to obtain the ultimate energy mix vision through further feedback from energy industry practitioners [1]. in those regards, the following discusses the background statistics, the regulatory instruments, and the energy supply preferred system dynamics models for this study as well as the uniqueness of the new model. 3.1. background statistics this empirical data [5] is presented as comparison to the modelling outcomes of the past behavior and used as baseline in engineering the model to the envisaged future. the total of supply of primary energy in barrel oil equivalent (boe) shown on figure 3 appears to have a steady increase from approximately one billion boe in 2000 to approximately 1.6 billion boe in 2015. when the presidential regulation no.5/2006 was issued [2], the total was still less than 1.2 billion boe. in terms of volume, the graphs also indicate that each energy technology shows significant increases, except in the case of biomass, which appears to remain flat. this apparently corresponds to the steady ramping up of indonesia’s population, per capita gdp, as well as the intensity of the final energy consumption per capita. system based on the system behavior today, the trends and the potential pitfalls to which it is heading toward, its impacts to sustainability of the national energy supply and its capability in leading the country to a securer energy supply system. along with the statistics in the background, the system dynamics modelling are structured and assembled based on the past constrains and situations. the developed simulation model is then processed and run sequentially to obtain the outcomes that a) closely represent the past realities or statistics and b) would have represented the past if all the variables representing best practices were well implemented. so the objective of this initial modelling is to delineate the past situation that led to the current problematic behavior, and take lessons learned to be used in developing new model that can lead to the desired behavior. this is with respect to the research question how system dynamic modelling will be able to simplify the complex and dynamic realm and be reliable as an alternative model in the development of the energy mix vision. in the next phase of this research, the model will be upgraded and engineered to accommodate more key variables or feedback loops that potentially constrain the future and be directed to the desired energy journey and destination. the following proposition may eventually be developed: through studying the structure, statistics and policies of the past energy supply system, it is expected that the historical barriers may be identified, mapped and subsequently used in developing alternative models. the model is in turn will be used as basis in the formulation of a new energy mix vision and policy frameworks of p ri m a ry e n e rg y su p p ly [t w h ] 3,000 2,500 2,000 1,500 1,000 500 20 00 year coal excl. exported crude oil & product natural gas & product hydro power geothermal biomass biofuel total 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 *) 20 14 ** ) 20 15 0 figure 3: indonesia supply of all primary energy in barrel oil equivalent [5] international journal of sustainable energy planning and management vol. 18 2018 35 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto when using traditional non-simulation approaches into account. and marking the uniqueness of the new model, new variables are developed from the common characteristic impediments [19] as new criteria as shown in table 1. in this case, the ghaffarzadegan’s factors will affect the delay of policy designing and communication and the delay of policy implementation which are along with government ability & capability will in turn cause delay in power development for additional capacity of nre (figures 5 and 6). the delay in policy designing and communication is contributed by under estimated policy maker (gf1), scapegoat-minded perspective (gf2) and political link & lobbying (gf3), while the delay in policy implementation is composed by policy acceptance (gf4) and rate of trials and errors (gf5). see appendices a and b. the new approach focuses not on discrete decisions but on the potential impediments and the policy structure underlying the decisions, and emphasizes a continuous view that strives to look beyond events to see the dynamic patterns underlying them as partly represented by the additional criteria [1]. so it would be a combination of the different energy supply models, with all those endogenous and exogenous variables to be selectively integrated into the model. some novelties of the new model may be claimed by the following: 1) the complex realm of energy supply system is modelled using system dynamics, an unprecedented modelling effort for indonesia to help policymakers to gain insight the system and subsequently use it in policy making consideration, 2) the new modelling includes new variables developed from the common characteristic impediments in public policy those assumptions will soon be changed when the graphs are presented in terms of share percentages of each technology (figue 4). at the time that the presidential regulation no. 5/2006 was issued, the national energy mix was oil 39.24%, gas 17.51%, coal 16.72%, biomass 23.51%, while all renewables contributed only 3.02% (hydropower 2.06%, geothermal 0.95% and biofuel only 0.01%). the question is, what have been happening since the issuance of the presidential regulation and the national energy mix goals were regulated? the shares of oil and biomass have continuously been declining, gas remains relatively stable, while coal has agressively been ramping up, maintaining the previous robust trends, whereas renewables remain at a crawl. it is probably for those reasons that the presidential regulation no. 79/2014 [6] has subsequently been issued. the gaps between those envisaged by the energy mix vision 2025 (oil 25%, gas 22%, coal 30% and new and renewables 23%) and reality remained unbridged after almost a decade, as the role of oil remained dominant at 38.35%, gas is unchanged at 17.03%, coal increased to 22.21% and biomass remained high at 18.86%, while new and renewables were stagnant at only 3.56%. there appears no clue with the current trends that the energy journey is heading to the desired destination. 3.2. system dynamics model of preference the new model will be focused on the energy supply system dynamics that take the unique factors of the developing archipelagic country and the common characteristic impediments of public policy development s h a re [ % ] 50 45 40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 year 2008 2009 2010 2011 2012 2013*) 2014**) 2015 the issuance of presidentail decree no. 5/2006 the issuance of presidentail decree no. 79/2014 oil coal gas hydropower geothermel biomass biofuel 41.74 42.42 42.32 40.37 43.52 42.32 39.24 38.5 38.08 37.28 37.57 38.91 37.32 36.79 39.41 38.35 28.8 25.83 25.25 24.05 23.75 23.15 23.51 22.37 22.03 21.71 19.03 18.64 19.04 18.51 19.49 18.86 16.54 16.53 17.65 18.05 16.39 16.39 16.77 14.92 18.7 19.3 19.84 17.23 16.43 16.33 17.06 17.03 9.42 11.44 11.48 14.58 13.24 14.89 17.51 20.97 17.8 18.18 22 23.92 24.56 20.21 22.21 2.54 2.82 2.34 2.03 2.13 2.32 2.06 2.31 2.3 2.2 3.1 2.06 2.04 2.58 2.4 2.15 0.96 0.96 0.96 0.92 0.97 0.94 0.95 0.93 1.06 1.26 1.08 1 0.96 0.92 1.02 1 0 0 0 0 0 0 0.01 0.02 0.03 0.06 0.1 0.15 0.29 0.32 0.42 0 figure 4: indonesia supply of all primary energy in percentage [5] 36 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics with the many ministerial policies and regulations have since been prevailing, it does not seem obvious that the legal instruments have succeeded in influencing the past trends of any technology or energy resource. the most distinctive is the case of renewable technologies, although in volume (figure 3) they have shown significant increases, their shares in percentage are almost flat or even decrease (figure 4). only coal’s supply demonstrates a progressive increase and has seemingly substituted the steady drop of oil supply and the stagnant growth of the gas share. biomass continuously declined from 23.5% in 2006 to 18.86% in 2015, possibly suggesting more development when using traditional non-simulation approaches as shown on table 1. 3.3. regulatory instruments and the energy supply mix dynamics an overview to the corresponding ministerial regulatory instruments that were issued during the same period as governmental efforts to manage the energy mix performance nationally and to influence the ongoing trends is performed and finds that at least 76 relevant ministry regulations have been enacted since the issuance of the presidential regulation no.5/2006. interestingly, table 1: new variables developed from the five characteristics that impede resolution in public policy development and their relations to the policy making process (modified after sani, k. et al, 2017) tradition non policy making simulation approach system dynamics (simulation approach) process characteristic impedences to resolution in public policy development (ghaffarzad egan et al, proposed new commuimplemen 2007) criteria new variables designing nication tation over-confident under-estimate confidence level of policy makers  policymakers policymaker complexity & difficulty of the policy challenges  potential delay & degree of uncertainty of policy making  policymakers' assumptions, model of thinking & strategies  need to have an scapegoat minded potential of undesirable events to endogenous perspective occur from the policy  potential self-serving bias  ability to learn from the environment  the tendency to looking for scapegoat  need to persuade different political link and general agreement among diverse stakeholders lobbying stakeholders  potential merits of policy to  broader public consensus behind the policy  effective means to inform & persuade stakeholders  policy resistance from the policy acceptance public resistance against the policy  environment delay between policy action & result  immediate impact of policy to the industry  immediate benefits brought by the policy  need to experiment & the rate of traols and cost of the policy experimentation  cost of experimenting errors attempt to improve future performance  implement, observe and adjust policy  experimentation attitude  international journal of sustainable energy planning and management vol. 18 2018 37 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto 4.1. causal-loop model as shown on figure 5, the following three major causal loops were demonstrated in this qualitative model of the past that resulted in the behavior: 1. reinforcing loop a (government policy fossil energy dominated system economics power demand). 2. balancing loop b (government policy supply and demand gap fossil dependence system). 3. balancing loop c (the energy vicious circle or supply and demand gap oil gas coal biomass nre). reinforcing loop a, in which all relationships are positive, is typical of the past system characterized by the fossil energies dominated regime in which various incentives for fossil energies development were regulated and maintained. therefore, the government had since been growing a fossil energy-based economic system for economic growth with the impact on greenhouse effects, besides gdp and then power consumption/demands and dependence of fossil power system. loop a was supported by or resulted in balancing loop b in which, besides the positive relationships, some are negative, by which the government policies primarily encouraged and were dependent upon imported refined oil in countering the supply and demand gap that in turn increased the country’s dependence on fossil energies. next at the very core of the system dynamics model is balancing loop c, or the energy vicious urbanization as people from the villages crowded the major cities and metropolises, or the aggressive expansion of cities in indonesia. 4. results initial system dynamics model of indonesia today according to the handbook of energy and economic statistics of indonesia 2016, from 2000 to 2015, the population of indonesia has increased from 205,843,000 to 255,462,000. this was followed by gdp growth from 1,390 to 3,042 trillion rupiah, the primary energy supply increases from 726,687,000 to 1,332,242,000 boe, and primary energy supply per capita from 3.53 to 5.22 boe/capita. this will be used as the basis in developing the system dynamics model of the past. in this model, the core is surrounded by at least six major causal loop feedbacks that are tapped into it, i.e., the oil sector, gas sector, coal sector, biomass, new & renewable sector, and the regulator. the oil and gas sectors are usually treated as one sector in the upstream during the exploration, drilling and exploitation, and separated as they are transported and enter the middownstream industry. the coal sector is usually divided into two subsectors, the strip-mined coals and undergroundmined coals from which the national coal productions are derived. in a much smaller scale, the renewable sector is traditionally supported by the subsectors of geothermal, biofuels, hydropower and solar photovoltaic energy. reinforcing a balancing b cbalancing population gdp lng exported economic growth greenhouse effects issues fossil energies base economic system depreciation of fossils energy system delay of policy desigining & communication power consumption government ability & capability ghaffarzadegan’s factors delay of policy implementation additional power capacity power capacity needed dependency4 dependency1 dependency5 power generation by nre total power availble energy vicious circleunder-developed nre co2 emission from fossils power generation dependence on fossil power system domestic supply and demand gap coal exported crude exported power generation by coal dependency2 dependency3 refund oil imported public investment power demand power shortage pln tariff barriers robust fossil energies development limited nre power system traditional nre power system various incentives for fossil fuels investment power generation by gas government policy in favor of fossil energies power generation by hydro power generation by biomass power generation by oli power generation by geothermal oil import cartel + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + figure 5: causal loop diagram for energy portfolio management in indonesia today 38 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics and market optimization, energy production efficiency, and energy diversity.” thus, given the present conditions of the energy portfolio management formulated above, the key variables deriving the current system are identified, and their possible relations and interconnections are analyzed, the initial principal causal-loop diagram is subsequently generated to represent the system’s view of the present conditions. after the model structure is determined, assessed, and defined at the very core of the system’s thinking, the potential feedback loops of various subsystems with the many variables that potentially influence and shape the system’s behavior will then be progressively expanded and included. various incentive for fossil fuels investment, pln tariff barriers, oil import cartel of reinforcing loop a are less relevant, whereas expansion of the power generations by various renewables is a must to get rid of the energy vicious circle. as more renewables can substitute the fossil energies the balancing loop b will be weakening while a new balancing loop associated with the growing renewable energies to grow, on which a new energy system are relied on. 4.2. stock and flow model in this quantitative model, six major and five minor stocks are developed, the major levels consist of population, power generation by oil, gas, coal, biomass and oil generation by imported, while the minor ones are composed of power generations by biofuel, hydro, geothermal and conceptually solar photovoltage and nuclear. gwh is used as the unit of power (electric or non-electric) produced and gw is used for the unit of power capacity. while government ability and capability is set at approximately 0.4 to fulfill the additional power plant capacity needed, this is based on the government budget readiness in building new power plants that according to [7], required an investment of us 2 million/gw. subsequently, power electric growth per capita and non-electricity growth per capita are defined as ramp to represent the demand growth of electricity per capita of 930 kwh/person, and a growth of electricity of 8.6% per year. the power capacity needed is derived from the domestic supply and demand gap multiplied by factor 1.3, first used by pln to cope with the demand, as the power capacity has to be maintained higher than the growing demand. appendix a describes all the key variables, units and equations used in the quantitative modelling resulted in circle, as introduced by [1], who developed this initial model based on early observations “of the way the government has since been handling the energy supply portfolio management to cope with the continuously increasing energy demand in supporting sustainable economic growth, while the energy resources of preference, the top-priority oils are not always sufficient to meet the vital requirements.” except for several or a couple of developed countries who have made breakthrough policies, like germany and france [1], national energy management has been dragged down by the classical global energy practices, so that its characteristics, trends, and patterns are very similar in many countries and may be described as follows: • the system treats the oil sector as a top priority in meeting the national energy demand regardless of the localities of the resources, its impact on environment, and the volatility of its prices. “this is seemingly due to the well-established oil-based energy utility systems in most sectors throughout the world.” • therefore, the gas sector resides in the second level despite being more environmentally friendly and more stable, having longer-term pricing, and recently having more discoveries made and new reserves booked. • the coal sector, whose reserves are abundant and easy to explore and extract is in the next level. it holds a larger portion in the supply system to meet the electricity demand, and substitutes the shortage of oil despite its environmentally unfriendly technology characteristics. • last is the new and renewables sector, which has indeed been treated as the last resort in energy supply portfolio management. this sector has been left behind in terms of exploration, exploitation and utilities despite their abundance and environmental friendliness, “this position is seemingly due to the old premise that the technologies are expensive, for the long-term externalities costs of their competitors are not taken into account, and thus their ability to be a primary energy supply is deteriorated by their intermittence and scattered characteristics.” • “the current national energy policy and strategy have not taking into account the externality costs of the energy technologies, the localities of the energy resources concerning modes of transport international journal of sustainable energy planning and management vol. 18 2018 39 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto the second scenario still occurs during the past time frame (2000–2015) but considers if the energy mix policy and green energy policy were fully committed, dependency on imported oil was minimized, although government ability and capacity remained the same, public investment in nre was very high as the government improved the business process resulting in insignificant time delays, which attracted investors. the energy portfolio performance would have been totally different. in the quantitative model (figure 6), at the very core is the total domestic power available, in which the balancing loop c is controlled by many stocks (power generation by oil, gas, coal, biomass and most importantly the renewable energies) and including the various energy exported as well as imported, each of which possess internal feedback loop that behaves independently in non-linear fashions over time. the difference between the energy supply mix targets and the total domestic power available result in the domestic supply and demand gap. under the current system, the gap is short-termly solved by the variable of additional of imported oil and energy strategy and policies in favor of the fossil energies, that is combined poor energy mix and uncommitted green energy policies. resistance on the balancing loop b leads to the problem of system dependent on fossil energies. the domestic supplydemand gap should be managed through committing the various energy strategy and policies in long terms, by which the shares or additional capacities of nre and fossil energies are regulated to produce an increasingly improving environmentally friendly energy supply balances. besides the variables of government ability and public investment that determine the additional power capacity, the reinforcing loop a involves time delays that lead to the delay of policy implementation and delay of power development. both delays are accumulation of the ghaffarzadegan’s factors or variables. this positive reinforcement feedback loop is to determine the balance of additional capacity of nre against additional capacity of fossil producers, the energy mix that in turn dictates the co2 emissions and defines independency of the energy supply system. the simulation results are quite encouraging. compared to the past statistics (black, dotted line), the old model during the past time (scenario 1 old past, blue) obviously shows similar trends, both graphs resemble one another, and the model simulation moderately succeeded in delineating the historical data. meanwhile, the behavior of indonesia today, while appendix b shows the initial value of the variables for the initial simulation. the delay time is usually delaying time for construction of a power plant, in this case, because pln needs to plan, design and budget approximately 2 years before obtaining permits from the government. in this modelling, the delay time is separated into delay time1, which is associated with the delay of power development, whereas delay time2 is associated with policy implementation. delay time1 and delay time2 both correspond to common characteristic impediment in public policy designing, communication and implementation [23]. next is the capacity factor (cf), which is the ability of the power plant to supply energy in a year, the ratio of an actual electrical energy output over a given period of time to the maximum possible electrical energy output over the same amount of time. their values are very dependent upon the technology and thus differs for different kinds of power plants. [23] uses the average values from pln 2016, but an average of various sources is used here. all the initial value of stocks (for the year of 2000) are quoted from [5]. meanwhile, it is important to note that the energy mix policy here is prefixed with the adjective “poor” and is defined as if then else (energy mix <0.25, 0.12, 0.12) to suggest that in the past, although the policy had already been issued early with the government regulation no.5/2006, in practice the derivatives regulations are still in favor of fossil fuels. similarly, the green energy policy has the adjective “uncommitted,” as it defined at a higher threshold of co2 emissions under the function of if then else (co2 emission of fossil power generation >50, 0, 0), which is still in favor of fossil fuels. 4.3. initial simulation run in this initial experimentation, two scenarios were developed, the simulation period is set for 15 years, i.e., from 2000 to 2015, in accordance with the data available to delineate the past. figure 6 shows the flow and stock diagram, and the scenarios are summarized in table 2 as follows: the first scenario represents the past behaviour, although the energy mix policy and green energy policy were regulated earlier, following the government regulation no.5/2006 commitment to implement the policies were still low, dependency on imported oil was robust and ruled by the oil import cartel, the government’s ability and capacity to grow energy capacity was low, while public investment in nre was almost zero, and significant time delays occurred as the government struggled to overcome the bureaucracy. 40 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics p ow er ge ne ra tio n by so la r c s po w er p ow er ge ne ra tio n by hy dr o po w er p ow er ge ne ra tio n by ge ot he rm al p op ul at io n ad di tio na l e ne rg y fro m s ol ar c s pp ad di tio na l e ne rg y fro m h yd ro p p ad di tio na l e ne rg y fro m g eo th er m al p p fra ct io n of so la r c s fra ct io n of hy dr o fra ct io n of ge ot he rm al p p n r e to ta l p ow er ca pa ci ty bi rt hs bi rt h ra te ad di tio na l o f so la r p p ad di tio na l o f hy dr o pp ad di tio na l o f ge ot he rm al p p cf o f s ol ar cf o f h yd ro cf o f ge ot he rm al de at hs de at h ra te p ow er ge ne ra tio n by bi of ue l ad di tio na l e ne rg y fro m b io fu el ed p p cf o f b io fu el ad di tio na l o f bi of ue l p p fra ct io n of bi of ue l p ow er ge ne ra tio n by nu cl ea r ad di tio na l e ne rg y fro m n uc le ar p ow er cf o f n uc le ar po w er ad di tio na l o f nu cl ea r p p fra ct io n of nu cl ea r p p p ow er ge ne ra tio n by o il p ow er ge ne ra tio n by g as p ow er ge ne ra tio n by c oa l do m es tic s up pl y an d de m an d ga p en er gy s up pl y m ix ta rg et s en er gy s tr at eg y an d po lic ie s cf o f g as su pp ly cf o f c oa l su pp ly ad di tio na l o f o il pr od uc er s ad di tio na l o f g as pr od uc er s ad di tio na l o f c oa l pr od uc er s to ta l p ow er de m an d el ec tr ic ity g ro w th pe r c ap ita no n el ec tr ic ity gr ow th p er c ap ita to ta l d om es tic po w er a va ila bl e fo ss il fu el s to ta l ca pa ci ty po w er c ap ac ity ne ed ed ad di tio na l p ow er ca pa ci ty ca pa ci ty co nv er si on go ve rn m en t a bi lit y & c ap ab ilit y pu bl ic in ve st m en t de la y of p ow er de ve lo pm en t de la y tim e1 ad di tio na l c ap ac ity of fo ss il pr od uc er s c o 2 em is si on o f fo ss il po w er ge ne ra tio n em is si on b y co al em is si on b y ga s em is si on b y oi l fa ct or em is si on o il fa ct or em is si on g as fa ct or e m is si on co al gr ee n en er gy po lic y en er gy m ix po lic y en er gy m ix ad di tio na l e ne rg y fro m c oa l ad di tio na l e ne rg y fro m g as ad di tio na l e ne rg y fro m o il cf o f o il su pp ly to ta l e le ct ric ity de m an d to ta l n on e le ct ric po w er d em an d to ta l c oa l ex po rt ed to ta l b io fu el ex po rt ed to ta l l n g ex po rt ed to ta l c ru de ex po rt ed fra ct io n of bi of ue l ex po rt ed fra ct io n of c oa l ex po rt ed fra ct io n of c ru de ex po rt ed de la y of p ol ic y im pl em en ta tio n de la y tim e2 gf 1 gf 2 gf 3 gf 4 gf 5 p ow er ge ne ra tio n by bi om as s ad di tio na l e ne rg y fro m b io m as s pp cf o f b io m as s ad di tio na l o f bi om as s pr od uc er s em is si on b y bi om as s fa ct or e m is si on bi om as s < en er gy m ix > o il ge ne ra tio n by im po rt ed ad di tio na l e ne rg y fro m im po rt ed o il cf o f i m po rt ed oi l ad di tio na l o f im po rt ed o il fra ct io n of im po rt ed o il ad di tio na l ca pa ci ty o f n r e < ad di tio na l ca pa ci ty o f n r e > g ha ffa rz ad eg an 's fa ct or s de pe nd en cy fr ac tio n of o il pr od uc er s fr ac tio n of g as pr od uc er s fr ac tio n of c oa l pr od uc er s fr ac tio n of bi om as s < de pe nd en cy > o il su pp ly ch an ge ti m e to o il su pp ly c ha ng e h ei gh t t o oi l su pp ly c ha ng e o il im po rt ed ch an ge ti m e to o il im po rt c ha ng e h ei gh t t o oi l im po rt c ha ng e g as s up pl y ch an ge ti m e to g as su pp ly c ha ng e h ei gh t t o ga s su pp ly c ha ng e c oa l s up pl y ch an ge b io m as s su pp ly ch an ge b io fu el s up pl y ch an ge g eo th er m al su pp ly c ha ng e ti m e to g eo th er m al su pp ly c ha ng e h ei gh t t o ge ot he rm al su pp ly c ha ng e h yd ro po w er su pp ly c ha ng e so la r p v su pp ly ch an ge ln g e xp or te d fra ct io n ch an ge fra ct io n of l n g e xp or te d ln g e xp or te d fra ct io n a vg f ig ur e 6: s to ck a nd f lo w d ia gr am f or t he s tu dy table 2: initial scenarios of the simulation (2000–2015) green fraction of government public energy mix energy oil ability & investment delay delay scenario policy policy imported capacity on nre time1 time2 scenario 1 old (energy mix past <0.25, 0.12, 0.12) (co2 emissions >50, 0, 0) 35% 40% 10% 2 2 scenario 2 new (energy mix past <0.75, 0.3, 0.3) (co2 emissions >10, 0, 0) 15% 40% 60% 0.5 0.5 international journal of sustainable energy planning and management vol. 18 2018 41 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto of the banyu urip oil field in 2008 is moderately delineated. an integration error tests that held by means of repetitiously cutting the time step in half and running the model from original time step of one year to only 0.03125 year when the results are no longer sensitive to the choice of time step. [26] argues “the integration error test should be the first simulation test you carry out, since failure here renders all model results meaningless.” subsequently each decision rule on table 2 in the model are examined for extreme condition tests by simulation and asked whether the output of the rules are feasible and reasonable even when each input to the equation takes on their maximum and minimum values (table 3). if the two scenarios are compared, it is obvious that under the second scenario (scenario 2 new past, green, bold line) great improvement could have been achieved in all sectors of the national energy realm if the second scenario was well implemented. figure 7 demonstrates that under the scenario 2, although the total capacity of fossil fuels still increase significantly, the total power capacity of nre increased drastically (green) from the previously almost flat curve (blue) under the old energy regime (figure 8). these changes can be also seen in the oil sector (figure 9–11), whereby imported oil (figure 11) was drastically forced to decline as the domestic crude production (figure 9) and crude exported (figure 10) naturally declined under both scenarios. the presence 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 f o ss il e n e rg ie s [t w h ] statistics scenario 2 new past scenario 1 old past year figure 7: comparing statistics [5] with simulation results (scenario 1 and 2) for total capacity of fossil energies by means of exporting table time down data from the simulation run into the same excel spreadsheet with the empirical data 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 1,600 1,400 1,200 1000 800 600 400 200 0 n e w & r e n e w a b le s [t w h ] statistics scenario 2 new past scenario 1 old past year the issuance of ppno. 5/2006 on energy mix policy figure 8: comparing statistics [5] with simulation results (scenario 1 and 2) for total capacity of new & renewable energies by means of the same as in figure 7 42 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics maximum, but not power generation by coal and its export that approach zero. under this scenario, only oil imported drop to almost zero, oil and gas production and in the extreme high case production of nre goes to maximum capacity (includes biofuel, geothermal, hydro and solar powers), total domestic of power available also 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 1000 900 800 700 600 500 400 300 200 100 c ru d e p ro d u ct io n [t w h ] statistics scenario 2 new past scenario 1 old past year banyuurip oil onstream (2008) figure 9: comparing statistics [5] with simulation results (scenario 1 and 2) for total capacity of crude production by means of the same as in figure 7 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 450 400 350 300 250 200 150 100 50 0 e xp o rt e d c ru d e [t w h ] statistics scenario 2 new past scenario 1 old past year figure 10: comparing statistics [5] with simulation results (scenario 1 and 2) for total exported crude by means of the same as in figure 7 400 350 300 250 200 150 100 50 im p o rt e d o il [t w h ] statistics scenario 2 new past scenario 1 old past 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 year figure 11: comparing statistics [5] with simulation results (scenario 1 and 2) for total imported oil by means of the same as in figure 7 international journal of sustainable energy planning and management vol. 18 2018 43 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto back to the simulation, the same trends occur in the gas sector (figure 12–13), the performance of power generation by gas shows slightly decline under both scenarios, which is in turn also affect the total of lng exported, despite more lng exported under scenario 2. nevertheless, for the time period, this simple initial simulation poorly reveals the incoming of tangguh gas field (figure 12) with the associated tangguh lng biomass go flat at their initial values. meanwhile in the extreme low case, production of nre immediately drop to zero, total domestic of power available also go to zero, so does power generation by coal and its export. under this scenario, only oil imported steady high, while oil, gas and biomass remains flat at their initial values. the extreme condition tests suggest that the model is fine, no implausible behavior generated and no flaws uncovered. table 3: extreme condition scenarios of the simulation (2000–2015) green fraction of government public energy mix energy oil ability & investment delay delay scenario policy policy imported capacity on nre time1 time2 scenario (energy mix (co2 extreme <1, 1, 1) emissions high >0, 0, 0) 0% 100% 100% 0.01 0.01 scenario (energy mix (co2 extreme <0, 0, 0) emissions low >100, 100, 100) 100% 0% 0% 100 100 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 1350 1300 1250 1200 1150 1100 1050 1000 g a s p ro d u ct io n [t w h ] scenario 2 new paststatistics scenario 1 old past year tangguh gas onstream (2009) figure 12: comparing statistics [5] with simulation results (scenario 1 and 2) for total gas production by means of the same as in figure 7 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 330 310 290 270 250 230 210 190 170 150 l n g e xp o rt e d [t w h ] statistics scenario 2 new past scenario 1 old past year tangguh gas onstream (2009) figure 13: comparing statistics [5] with simulation results (scenario 1 and 2) for total lng exported by means of the same in figure 7 44 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics this is followed by the total coal exported which demonstrates the same trends. the simulation however missed some deflections on the statistics of both graphs that mark the beginning of global coal prices drop in 2012 since feedback loops for coal prices fluctuates as well as the global market have not been taken into account. the biomass, the power generation by this old, traditional and rural fueling system shows an obvious drop in scenario 2 from previously inclined to increase under scenario 1 and statistically (figure 16). otherwise, during the same period of time, the nre, including power generation by biofuel (figure 17), power generation by geothermal (figure 18) and power generation by hydro (figure 19), are strongly leveraged and demonstrate drastic increases under scenario 2 (after being suppressed under scenario 1) thanks to the government policies that regulated various incentives in exported on stream in 2009 (figure 13), as the stock fluctuates cannot be captured by the curves of both scenarios. this can be understood as the onstream of new oil and gas fields or green fields and the shutdown of brown fields as separated feedback loops have not been included in the quantitative model. similarly, this initial simulation model has also missed the complexity of indonesia’s annual imported refined oil (figure 11), as it is believed that more nonlinear feedback loops are involved in its system dynamics. this may include oil and gas prices fluctuates, available supply from spot markets, domestic oil demands as well as the oil production. in the coal sector (figures 14 –15), the power generation by coal keeps increasing under both scenarios in line with the existing energy mix goal to manage the share of coal to ramping up from 26% in 2011 to 30% in 2025 while the contribution of oil and gas decreases, and 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 *) 20 14 ** ) 20 15 8000 7000 6000 5000 4000 3000 2000 1000 0 c o a l p ro d u ct io n [t w h ] statistics scenario 2 new past scenario 1 old past year figure 14: comparing statistics [5] with simulation results (scenario 1 and 2) for total coal productionby means of the same as in figure 7 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 *) 20 14 ** ) 20 15 6000 5000 4000 3000 2000 1000 0 c o a l e xp o rt e d [t w h ] statistics scenario 2 new past scenario 1 old past year figure 15: comparing statistics [5] with simulation results (scenario 1 and 2) for total coal exported by means of the same as in figure 7 international journal of sustainable energy planning and management vol. 18 2018 45 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto building a more appropriate, long-termly viable energy system is needed to ensure a sustainable energy supply. the literature review revealed that a limited number of publications are available on this topic, and identified that the energy supply quality system with the unique factors of developing country like indonesia constitutes a research gap, to which the work was subsequently directed to find a more reliable modeling. subsequently, assessing the present government policy helped identify the barriers, and at a later stage, find the solutions to ease the penetration of renewable energies into existing energy systems. system dynamics modeling is recognized as an excellent methodology with strong advantages for such holistic approaches in energy supply management, all of which makes it a valid alternative to the most well-known favor of nre investment and took firm side with the environmentally friendly energies. 5. discussion the statistics, the causal loop diagram and the discussion in chapter 4.4 reveal that the challenges and opportunities in the energy portfolio management in the country are real and quite complicated. the current supply system, which is exposed openly to free market in striving to meet uncontrollable and disintegrated sectorial demands, is obviously problematic. the current energy mix vision with the supporting policy instruments issued to date have not succeeded in taking the energy journey of indonesia to the desired destination. this is partly due to the absence of a clear model of the ongoing system and a traceable origin of the current energy mix vision. 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 600 550 500 450 400 350 b io m a ss p ro d u ct io n [t w h ] statistics scenario 2 new past scenario 1 old past year figure 16: comparing statistics [5] with simulation results (scenario 1 and 2) for total biomass power production by means of the same as in figure 7 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 *) 20 14 ** ) 20 15 1,200 1,000 800 600 400 200 0 b io fu e l p ro d u ct io n [t w h ] statistics scenario 2 new past scenario 1 old past year the issuance of ppno. 5/2006 on energy mix policy figure 17: comparing statistics [5] with simulation results (scenario 1 and 2) for total biofuel power production by means of the same as in figure 7 46 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics involving the government policies that treated fossil energies as preference and to have caused strong dependence on it. this situation was driven by the major loop a, which also begins with the government policies that regulated various incentives in favor of fossil energy investment, pln tariff barriers, oil import cartel that led to robust fossil energies development and otherwise hindering the growth of nre power systems. this fossils-based economic system is in turn resulting in environmentally unfriendly economic growth, with the associated green-house gas issues and has impeded the country in building its sustainable and self-sufficient power system, even though it is geologically blessed many types of renewable energy potential. the initial simulation of the stock and flow model is quite encouraging in that, through the 2 scenarios developed, and used forecasting techniques in the context of energy economics and confirmed the superiority of system dynamics modeling compared to the traditional nonsimulation approaches. so, this modelling approach itself and its focus on the unprecedented energy supply quality mix of an archipelagic country and in the inclusion of a series of new variables discussed early make this research are interesting and rather unique. the principle causal-loop diagram illustrated in figure 5 demonstrates the complexity of the energy supply realm, the balancing loop c at the core of the system has apparently been dragging the entire causal loop feedbacks tapped into it and involved in the problematic energy circle. this old circle has traditionally been maintained by the supporting balancing loop b 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 15 20 13 *) 20 14 ** ) 200 180 160 140 120 100 80 60 40 20 0h yd ro p o w e r p ro d u ct io n [t w h ] statistics scenario 2 new past scenario 1 old past year the issuance of ppno. 5/2006 on energy mix policy figure 19: comparing statistics [5] with simulation results (scenario 1 and 2) for total hydropower production by means of the same as in figure 7 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 *) 20 14 ** ) 350 300 250 200 150 100 50 0g e o th e rm a l p ro d u ct io n [t w h ] statistics scenario 2 new past scenario 1 old past year the issuance of ppno. 5/2006 on energy mix policy figure 18: comparing statistics [5] with simulation results (scenario 1 and 2) for total geothermal power production by means of the same as in figure 7 international journal of sustainable energy planning and management vol. 18 2018 47 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto old past) obviously shows similar trends, both graphs resemble one another, and the model simulation moderately succeeds in delineating the historical data. however, it is recognized that this simple initial simulation failed to capture some deflection points shown by historical data trends that is believed to corresponding to more non-linear feedback loops involved in the energy supply system. meanwhile, if the two scenarios are compared, it is obvious that under scenario 2 new past, great improvement could have been achieved in all sectors of the national energy realm if the second scenario was well implemented. this model is potentially reliable as an alternative approach for policy design and in the efforts to build a new and more viable energy supply mix vision. future work recommendation: engineering of the model to the envisaged patters and subsequently examined and fine-tuned through focus group discussions may offer a more viable solution. ideally, the energy demands and economics are explicitly included to get more holistic understanding and representative behaviors. meanwhile new energies such as tidal turbines, second and third generation biofuels, solarpanel positioning robots, photovoltaic transparent glass, space-based solar power, micro-nuclear reactors, and thorium reactor are more relevant in the future to include as the race and challenges for energy supply increase and the technology evolve rapidly. acknowledgements this research was supported by school of business and management, institut teknologi bandung and research and technology center of pertamina (persero). references [1] k. sani, m. siallagan, u. s. putro, and k. mangkusubroto, “policy development for the energy mix in indonesia using system dynamics. global journal business social science review 2017,” 2017. 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https://www.sciencedirect.com/science/article/pii/004016259290018o https://www.sciencedirect.com/science/article/pii/004016259290018o http://dx.doi.org/10.1108/20408021111185394 http://dx.doi.org/10.1108/20408021111185394 http://dx.doi.org/10.5278/ijsepm.2018.15.1 http://dx.doi.org/10.5278/ijsepm.2018.15.2 http://dx.doi.org/10.5278/ijsepm.2018.15.2 https://www.amazon.com/businessdynamicssystems-t https://www.amazon.com/businessdynamicssystems-t international journal of sustainable energy planning and management vol. 18 2018 49 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto table of key variables, units and functions in the initial quantitative modelling of indonesia today variable unit function population person birth death birth person/year population * birth rate death person/year population * death rate electricity growth per capita kwh/person 930 + ramp(7.998.e-05, 2000, 215) total electricity demand gwh electricity growth per capita * population total demand for non-electric power gwh non-electric power growth per capita * population total energy demand gwh total electricity demand + total demand for non-electric power fossil fuel total capacity gwh power generation by oil + power generation by gas + power generation by coal nre total capacity gwh power generation by biofuel + power generation by geothermal + power generation by hydro + power generation by solar pv + power generation by nuclear dependency dmnl fossil fuel total capacity/ (fossil fuel total capacity nre total capacity) energy mix dmnl nre total capacity/ (fossil fuel total capacity + nre total capacity) total power generated gwh fossil fuel total capacity + nre total capacity total domestic power available gwh (nre total power capacity-total biofuel exported)+ (power generation by coal-total coal exported)+ (power generation by gas-total lng exported)+(power generation by oil-total crude exported)+oil generation by imported+power generation by biomass total power exported gwh total crude exported + total lng exported + total coal exported + total biofuel exported total crude exported gwh fraction of crude exported * power generation by oil total lng exported gwh fraction of lng exported * power generation by gas total coal exported gwh fraction of coal exported * power generation by coal total biofuel exported gwh fraction of biofuel exported * power generation by biofuel oil generation by imported gwh additional energy from imported oil = cf of imported oil*additional of imported oil additional of imported oil gwh fraction of imported oil*domestic supply and demand gap oil imported change dmnl step (height to oil import change, time to oil import change) domestic supply and demand gap gwh total energy demand total domestic power available power capacity needed gw capacity conversion * domestic supply and demand gap *1.3 additional power capacity gw power capacity needed * (government ability + public investment) delay of power development gw delay1(additional power capacity, delay time1) delay time1 year gf4 + gf5** delay of policy implementation year delay3(energy strategy and policies, delay time2) delay time2 year gf1 + gf2 + gf3** additional capacity of fossil producers gw (delay of power development additional capacity of additional capacity of nre gw (energy mix policy + green energy policy) * delay of poor energy mix policy dmnl if then else (energy mix <0.25, 0.12, 0.12) uncommitted green energy policy dmnl if then else (co2 emission of fossil electric generating > 50, 0, 0) appendix a (continued) 50 international journal of sustainable energy planning and management vol. 18 2018 indonesia energy mix modelling using system dynamics table of key variables, units and functions in the initial quantitative modelling of indonesia today (continued) additional of oil producers gw (fraction of oil producers*additional capacity of fossil producers)*(1+oil supply change) oil supply change dmnl step (height to oil supply change, time to oil supply change) additional of gas producers gw fraction of gas producers * additional capacity of fossil producers gas supply change dmnl step (height to gas supply change, time to gas supply change) fraction of lng exported dmnl lng exported fraction avg*(1+lng exported fraction change) lng exported fraction change ramp(–0.01, 2000, 2015) additional of coal producers gw fraction of coal producers * additional capacity of fossil producers coal supply change dmnl ramp (0.392, 2009, 2015) additional of biomass producers gw (fraction of biomass*additional capacity of fossil producers)* (1+biomass supply change) biomass supply change dmnl ramp (0.8, 2009, 2015) additional of biofuel pp gw (fraction of biofuel * additional capacity of nre)*(1+biofuel supply change) biofuel supply change dmnl ramp (3.5, 2005, 2015) additional of geothermal pp gw (fraction of geothermal * additional capacity of nre)*(1+geothermal supply change) geothermal supply change dmnl step (height to geothermal supply change, time to geothermal supply change) additional of hydro pp gw (fraction of hydro * additional capacity of nre)*(1+hydropower supply change) hydropower supply change dmnl ramp (1.5, 2005, 2015) additional of solar pv pp gw (fraction of solar pv * additional capacity of nre)*(1+solar pv supply change) solar pv supply change ramp (1.5, 2005, 2015) additional of nuclear pp gw fraction of nuclear * additional capacity of nre additional energy from oil gwh/year additional of oil producers * cf of oil supply additional energy from gas gwh/year additional of gas producers * cf of gas supply additional energy from coal gwh/year additional of coal producers * cf of coal supply additional energy from biofuel pp gwh/year additional of biofuel pp * cf of biofuel additional energy from geothermal pp gwh/year additional of geothermal pp * cf of geothermal additional energy from hydro pp gwh/year additional of hydro pp * cf of hydro additional energy from solar cs pp gwh/year additional of solar cs pp * cf of solar additional energy from nuclear power gwh/year additional of nuclear pp * cf of nuclear power co2 emission of fossil power generation mmtonnes emission by coal + emission by oil + emission by gas emission by coal mmtonnes power generation by coal * factor emission coal emission by oil mmtonnes power generation by oil * factor emission oil emission by gas mmtonnes power generation by gas * factor emission gas ** = contributors of delay time variables corresponding to ghaffarzadegan's characteristic impediment in policy designing, communication and implementation gf1 = "under estimated policymakers" variable in policy designing gf2 = "scapegoat minded perspective" variable in policy designing gf3 = "political link & lobbying" variable in policy designing and policy communication gf4 = "policy acceptance" variable in policy implementation gf5 = "rate of trials and errors" variable in policy implementation international journal of sustainable energy planning and management vol. 18 2018 51 kartono sani, manahan siallagan, utomo sarjono putro and kuntoro mangkusubroto table of initial values of variables for simulation modelling of indonesia’s past energy (2000–2015) variable unite initial value population person 205,840,000 birth rate 1/year 16.72/1000 death rate 1/year 6.73/1000 capacity conversion gw/gwh 1/(365*24) government ability dmnl 0.4 public investment dmnl 0.6 gf1+gf2+gf3** year 0.5+0.2+0.3 gf4+gf5** year 0.4+0.6 fraction of oil producers dmnl 581 fraction of oil exported dmnl 0.43 height to oil supply change dmnl -0.5 time to oil supply change year 2008 fraction of gas producers dmnl 193 height to gas supply change dmnl -1.1 time to gas supply change year 2008 lng exported fraction avg dmnl 0.27 fraction of coal producers dmnl 75 fraction of coal exported dmnl 0.793 fraction of biomass dmnl 50 fraction of biofuel dmnl 0.1 (0.3) fraction of geothermal dmnl 0.032 height to geothermal supply change dmnl 4 time to geothermal supply change year 2006 fraction of hydro dmnl 0.248 fraction of solar pv dmnl 0.001 (0.131) fraction of nuclear dmnl 0.0001 cf of oil supply (gwh/gw*year) -0.525 cf of gas supply (gwh/gw*year) -0.674 cf of coal supply (gwh/gw*year) 62 cf of biomass (gwh/gw*year) 5.25 cf of biofuel (gwh/gw*year) 0.1 cf of geothermal (gwh/gw*year) 0.032 (0.32) cf of hydro (gwh/gw*year) 0.248 cf of solar pv (gwh/gw*year) 0.001 cf of nuclear (gwh/gw*year) 0.0001 factor emission coal mmtonnes/gwh 318.37/106 factor emission oil mmtonnes/gwh 249.65/106 factor emission gas mmtonnes/gwh 181.08/106 power generation by oil gwh 879,426 power generation by gas gwh 1,167,010 power generation by coal gwh 624,025 power generation by biomass gwh 437,233 power generation by biofuel gwh 0 power generation by hydro gwh 42,908 power generation by geothermal gwh 16,308 power generation by solar pv gwh 0 power generation by nuclear gwh 0 oil generation by imported gwh*year 133,599 height to oil import change dmnl 1.1 time to oil import change year 2005 appendix b international journal of sustainable energy planning and management vol. 23 2019 55 *corresponding author e-mail: vivekkumarsingh22@gmail.com international journal of sustainable energy planning and management vol. 23 2019 55–68 abstract we combine the use of the economic input-output lifecycle assessment with multiobjective interval portfolio theory to arrive at two model formulations which can support public decisionmakers on the design of programs to promote the investment in energy efficient technologies. each model contains two objective functions. the first one is the maximization of the savings to investment ratio as a proxy of return maximization. the second one is the maximization of the minimum deviation of greenhouse gas avoided emissions (energy savings) of the portfolio over its lifetime from the expected greenhouse gas emitted (energy embodied) in the manufacture of its components as a proxy of risk minimization. the first and second formulations might be more suitable for countries with higher and lower emission factors regarding their electricity mix, respectively. in order to ensure a certain diversification level of the technologies to be subsidized, constraints are imposed on the maximal amount of funding assigned to the energy efficient technologies under consideration, also assuring a given energy payback time/greenhouse gas payback time. finally, conservative (leading to a lower number of subsidized devices), aggressive (leading to a higher number of subsidized devices) and combined strategies are taken into consideration in the computation of the efficient portfolio solutions. overall, we were able to conclude that, for the case-study under consideration, it is always worth promoting the investment in tubular fluorescent lamps and water electric pumps, while incentives to purchasing more efficient television sets, computers and refrigerators should never be considered. additionally, the most aggressive investment options always attain a higher technical energy savings potential and a higher impact on gross value added vis-à-vis the investment in business-as-usual technologies. finally, the number of jobs generated are, as it would be expected, higher with more aggressive strategies whereas conservative strategies lead to lower job creation. 1. introduction energy efficiency (ee) is becoming an important policy tool in india to deal with the substantial growth in energy demand [1]. a report by the international energy agency points out that 35% of the cumulative co2 savings would come from end-use energy efficiency [2]. globally, buildings and construction together accounted for 36% of final energy use in 2017 [3]. like many developing countries, in india there has been a rapid growth of its building stock, where it accounted for 41% of its total final energy use in 2013 [4]. therefore, the need of policy options for minimizing the energy a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india vivek kumar singh* 1,5, carla oliveira henriques2.4,5 and antónio gomes martins3,4,5 ¹ mit-portugal program, university of coimbra, coimbra, portugal ² coimbra business school iscac, polytechnic institute of coimbra, quinta agrícola – bencanta, 3040-316 coimbra, portugal ³ department of electrical engineering and computers, university of coimbra, r. silvio lima, 3030-290 coimbra, portugal ⁴ inesc coimbra, pólo ii, r. sílvio lima, 3030-290 coimbra, portugal ⁵ energy for sustainability initiative, university of coimbra, portugal keywords: multiobjective portfolio theory; interval programming; energy efficient technologies, economic input-output lifecycle assessment; energy payback time; greenhouse gas payback time; url: http://doi.org/10.5278/ijsepm.2408 mailto:vivekkumarsingh22@gmail.com http://doi.org/10.5278/ijsepm.2408 56 international journal of sustainable energy planning and management vol. 23 2019 a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india investments through the integration of a bottom-up approach into a top-down model was made by [12]. in their work some results are reported regarding the implementation of a methodological framework for assessing the impacts of energy saving measures in the building sector based on a multiobjective linear programming (molp) model and on input-output (io) analysis. consistent estimates for depicting important impacts, namely on environment, energy security of supply and other relevant economic indicators were provided through this type of methodology. furthermore, [13] implemented an io methodological framework which provides estimates regarding the contribution of some energy saving measures in the portuguese building sector (residential, private services and public services) in net employment generation. more recently [14] also quantified the economic, environmental and social benefits of large-scale energy efficiency programs in qatar by means of detailed parametric and optimization analyses using lifecycle cost analysis for both new and existing buildings. consequently, the use of traditional optimization models which rely on the single concern of cost minimization become less reasonable, thus requiring the development of more suitable optimization tools. in this context, modern portfolio theory has been broadly employed in finance in the evaluation of electricity power assets (see [15] for a review on this topic). demand is equally important for india, namely promoting the adoption of ee of end-use technologies in the residential sector [5]. the national action plan on climate change (napcc) in india was launched in 2008 and it identified a set of measures that simultaneously accounted for the gdp’s growth and climate change objectives of adaptation and mitigation [6]. the napcc was an initiative framed under the country’s specific circumstances, especially incorporating ee concerns [7]. ee penetration in india’s industries and other sectors varies widely and has an acknowledged role as an effective catalyser for reducing energy consumption and greenhouse gas (ghg) emissions, without impairing the access to energy services. several studies focusing on ee highlight the absence of awareness/information, financial reasons, and split incentives as some important barriers to ee improvement in buildings (see e.g. [7–10]). the policies endorsing ee in the residential sector are significantly associated with energy efficient advances in buildings and lighting end-use [11]. since ee programmes usually make use of subsidizing programs sought to elect highly efficient actions, energy policy decision-makers should have at their disposal sound optimization tools to make better informed decisions. to our knowledge the first attempt to obtain a global overview of the impacts of some energy efficient retrofit acronyms bat – best available technology iea – international energy agency bau – business as usual io – input-output cf ceiling fan lca – lifecycle assessment com – computer molp– multiobjective linear programming e3s economic, energy, environmental and social mp – motor pump ee – energy efficiency napcc – national action plan on climate change eera – energy efficient retrofit actions o&m – operation and maintenance eet – energy efficient technology rac – room air conditioners eg – electric water heater/geyser res – renewable energy systems epbt – energy payback time sir – savings to investment ratio fr – freezer tesp – technical energy savings potential gdp – gross domestic product tfl – tubular fluorescent lamp ghg – greenhouse gas wep – water electric pumps gpbt – greenhouse payback time wm – washing machine gva – gross value added international journal of sustainable energy planning and management vol. 23 2019 57 vivek kumar singh, carla oliveira henriques and antónio gomes martins threshold is reached by the robust solution for each uncertainty scenario considered. [21] also used modern portfolio theory in the appraisal of the risks and returns related with payments for ecosystem services (pes) for private forestland. in this study, pes schemes for biodiversity conservation and climate change mitigation were explicitly addressed. additionally, portfolio optimization theory has also been used to support public bodies in investment planning for ee programs (see e.g.[22-23]), although less abundant publications still exist on this topic. it becomes clear from the literature review that comprehensive approaches which encompass environmental and socioeconomic concerns are viewed as fundamental pillars in the design of more sustainable energy efficiency programmes. in this context, io analysis can be regarded as a suitable methodological technique for the assessment of the inter-relations among distinct industrial sectors, which has been applied to assess economic, energy, environmental and social (e3s) interactions [24]. therefore, despite the limiting hypotheses inherent to the application of the io approach, specifically the assumption of the constancy of the model’s coefficients, the level of data aggregation and the fact that it does not include any mechanism for price adjustments, an essential interest of io analysis is associated with the possibilities of its practical application. in fact, on the one hand, the importance of the io leontief approach comes from its ability of depicting the technology and its changes with sufficient precision to allow presenting a real empirical analysis [25]. on the other hand, io analysis entails structural information and satisfies a number of laws and identities of conservation, namely general interdependency. furthermore, io analysis is an adaptable tool for theoretical or empirical studies of a broad range of problems, which enables assessing any type of environmental burden caused by changes in the output of industrial sectors once reliable economic data is used. therefore, taking india’s residential sector as a case study, this work is aimed at suggesting a new modelling tool to support public investors in the appraisal and selection of distinct energy efficient technologies (eet) based on portfolio theory combined with io analysis. this work provides new fertile grounds for this field of application, in particular: 1) we have adapted the from the investor’s stance, portfolio theory aims at selecting the portfolios of electricity power technologies with the lowest risk and highest return, taking into consideration the economic, technical and social concerns at stake, in addition to resources scarcity [16]. in this case, [17] proposed two possible mean-variance approaches for the design of optimal renewable electricity production portfolios. the first one is aimed at maximizing the portfolio output and the second one is aimed at minimizing the portfolio cost. a set of renewable energy sources (res) portfolios was computed, integrating three res technologies, namely hydro power, wind power and photovoltaic (pv). furthermore, modern portfolio theory has also been adjusted to address other types of environmental investment problems, including in conservation investment decision cases, in agroecosystems planning, land allocation and forest management, among other fields of application. with this regard, [18] considered conservation investments which are assigned to distinct sub regions of a planning area. the percentage of the total portfolio investment in a particular sub region is viewed as that sub region’s weight. the portfolio model thus considered computes the portfolio weights that minimize the variance of the total ecological value of the chosen investments for a given expected value of the portfolio. this optimization problem is then solved for multiple levels of expected ecological value (or return) in order to compute a set of efficient portfolios. [19] suggested a portfolio optimization model which covers three sustainability dimensions: the economic sphere, given as the maximization of the average annual income over the considered time horizon, defined as the average net present value of the yearly revenue from the agricultural production; the maximization of biodiversity referring to the portions of available area occupied by each species; and the social dimension of sustainability, given by the stability of annual economic income, as a proxy for the economic risk considered as the minimization of the monthly income variance within a year. [20] dealt with scarce land to various land-use options by means of portfolio theory, which proposes a variant of robust portfolio optimization as an alternative to the classical stochastic mean-variance optimization model that requires less pre-information. in their model, the maximization of the economic return of the land-use portfolio is subject to a set of constraints that impose that a pre-defined return 58 international journal of sustainable energy planning and management vol. 23 2019 a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india 2.1. energy payback time and greenhouse gas payback time the epbt is an indicator used in lca which has been applied in several studies in the evaluation of the energy obtained through res, such as photovoltaic systems [26–31] , wind power [32], fuel cell stacks [33] and biofuel [34]. this type of metric can be adjusted to encompass the evaluation of energy efficient retrofit actions (eera) [35, 36, 37]. in this framework, the gpbt can also be helpful since it allows expressing the ghg mitigation potential of eera [38]. when considered in the context of res, the epbt is mainly dependent on the energy incorporated in the manufacture of its components [39]. in fact, the epbt is the time (in years or months) required to regain the total energy invested in the manufacture of the materials incorporated into res (i.e. embodied energy) and it is given by the ratio of embodied energy to annual energy output from the system [40]. embodied energy inputs usually include the energy requirements in different stages that go from manufacturing, to installation, energy use during operation and maintenance (o&m), eventually considering the energy demanded for decommissioning, while the energy output corresponds to the annual energy avoided from other sources due to electricity generated from res [26]. the application of the epbt in the particular case of eera is the time (in years or months) needed for the retrofit action to recuperate the total energy spent in the manufacturing of the materials used in it and it is the ratio of the embodied energy to the annual energy savings obtained [31]. when applied to the assessment of eera, the epbt should also consider the energy used in the deployment and installation of the device, additionally to its embodied energy. the epbt will, thus, allow to assess to what extent energy savings compensate all the upstream energy used, up to the moment when the device is ready to provide the energy service for which it was designed. in our analysis we have followed the economic io lca approach (for further details see appendix a) which is a methodological framework sought to simplify lca based on an io matrix with the economic flows between industries that can be extended with information regarding the environmental discharges to the environment, creating additional columns and rows that energy payback time (epbt) and the greenhouse gas payback time (gpbt) indicators typically used in lifecycle assessment (lca) to quantify the energy consumption and ghg emission patterns of each eet, respectively, based on national io data different from the approach normally found in traditional lifecycle inventories; 2) then, besides the traditional epbt and gpbt which only account for direct energy saving effects, new epbt and gpbt concepts are introduced which consider both indirect and induced energy savings and ghg emission effects; 3) we suggest a new multiobjective interval optimization portfolio (miop) framework which encompasses new surrogate measures of return and risk minimization based on the epbt and gpbt concepts previously developed; 4) finally, a comprehensive assessment of the anticipated e3s impacts regarding the adoption of the different portfolios selected according to distinct model formulations is also provided. the remaining of this paper is structured as follows. section 2 presents the approach herein followed to arrive at epbt and gpbt, the underpinning assumptions to the miop model formulation and the methods to obtain the possibly efficient portfolios according to the investor’s strategies. section 3 delivers the main assumptions concerning data collection. in section 4 the main outcomes of this study are conveyed. finally, in section 5 the main conclusions are drawn, and possible future research opportunities are also indicated. 2. methodology in this section, a brief description of the necessary adjustments required to obtain the epbt and gpbt in the framework of the io approach is provided (see appendix2 a for further explanations regarding the io methodology). the underpinning assumptions and notations considered in the model formulations herein developed are also described (for further details on the interval programming approach see appendices b and c). moreover, a comprehensive presentation of the objective functions and constraints used in the miop models is also given. finally, distinct surrogate mathematical models are proposed according to distinct investor’s standpoints. figure 1 portrays a schematic representation of the main steps followed in the application of the methodological framework herein proposed. all the appendices of this paper are available at: http://dx.doi.org/10.5278/ ijsepm.2408 international journal of sustainable energy planning and management vol. 23 2019 59 vivek kumar singh, carla oliveira henriques and antónio gomes martins setting system’s boundaries economic io lca phase portfolio theory phase link the domestic output of each activity/componentof the technologies under analysis to the corresponding industry in the io table compute the multiplier effects of each activity/component two multiobjective interval portfolio problems solution approach considering different investment strategies max return and min risk in each portfolio with a certain epbt/gbpt assess return vs risk in each portfolio with a certain epbt/gbpt obtain the possibly efficient percentage of investment assigned to each technology and the total number of appliances/end-uses build the adjusted io table compute the io type i and type ii multipliers-see appendix a compute embodied ghg emissions and avoided energy consumption and obtain the epbt and gpbt for each technology divide the lifecycle phases into their activities/components obtain total output of each activity/ component data collection on average rated power and operating time for each technology under consideration e.g. washing machines components: glass, metal, rubber, plastics, insulation material and electronic components data collection on the average cost at basic prices of all the technologies under study gather information on the bat/bau technologies costs and material shares (as a %). assign total expenditurs to each component and obtain domestic output. choice of bat/bau technologies figure 1: steps followed in the application of the methodological framework proposed 60 international journal of sustainable energy planning and management vol. 23 2019 a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india therefore, the following problem is obtained: where xi is the percentage of funds allocated to the i th eet; yi is a binary variable discriminating the ith eet belonging to the portfolio; [r l it, r u it ] refers to the projected energy savings or ghg emissions avoided across the lifetime of the eet i per unit funding invested (an interval value), respectively (depending on the mathematical formulation considered); [r li, r ui ] are the energy or ghg emissions embodied in the ith eet per unit budget input, respectively (depending on the mathematical formulation selected); sir is the savings to investment ratio which is also given as an interval value, where 1 (1 )+∑ t it u tt= l i u i es d sir i and sir u i= 1 (1 )+ = ∑ t it l tt= u i l i es d sir i are the lower and upper bounds of the savings to investment ratio, dl and du are the lower and upper bounds of the discount rates (reflecting lower and higher opportunity costs, respectively) and i l i and i u i are the lower and upper values of the level of public support regarding the investment in energy efficient projects; [hl, hu] is an interval range of the number of eet the public investor wants to consider in the portfolio; the upper acceptable limits to the epbt and gpbt are considered within the intervals [epbt l i, epbt u i ]and [gpbt l i, gpbt u i ], respectively (according to the mathematical model used); the upper bounds on the investment in each eet are also given within a range of values, [uli, uui ], and yi is a binary variable that allows identifying if the bat i either belongs to the portfolio (i.e. assuming the value “1” if it belongs or “0” if it does not belong to the portfolio). let v be the minimum difference between the energy savings across the lifespan of a portfolio of lighting (1) 1 1 1 1 1 i , ,max min , ,max , : 1, , , (or ) (or ) 1 , [ ] 1 0, 1, ,    −       =  ≤    ≤   = ≥ = … ≤ ∑ ∑ ∑ ∑ ∑ n nl u l u it it i i ii= i= i n l u i i ii= n ii= n l u ii= l l u u i i i i i l u i i i i i r r x r r x sir sir x s.t x y h h y gpbt gpbt epbt ,gp ... bt epbt ,i= , ...,n x u ,u y , i , , n, x i n { }0,1 , 1, , ∈ = …i , y i n. represent the environmental impacts per each activity sector/industry [41, 42]. nevertheless, the use of the economic io lca approach in the framework of eera also involves a challenging exertion, since the io tables officially published do not possess the required detail to identify the prospective economic impacts that can be attained because of the demand for a typical best available (bat) or business as usual (bau) technology. in this context, the disaggregation of the eera’s components is not straightforward, requiring the explicit use of supplementary data, exogenous to the information provided in currently available io tables. hence, following the methodology given in [42] – see figure 1 – the lifecycle of each bat/bau technology has been divided into their related activities/components. 2.2. the portfolio optimization problem with interval coefficients consider that the public decision-makers are interested in subsidizing n eet and that energy savings per unit funding invested is a proxy of return [23]. portfolio selection problems are usually specified as biobjective optimization problems that seek to attain an acceptable compromise between the expected rate of return and risk [43]. in here, we consider that the risk of adopting an eet is gauged by the risk of the energy savings (ghg avoided) obtainable during the lifetime of the technology not compensating the energy use (ghg emitted), i.e. the embedded energy (embedded ghg) in the manufacturing and deployment of that technology [23]. young [44] proposed as an alternative measure for risk the maximization of the minimum return (or minimization of the maximum loss) demanded by the investor. this risk measure is relatively simple, but some authors argue that it might lead to an infeasible solution if all assets yield a negative return. however, only occasionally, an ill-conceived eera intervention could cause a higher lifetime energy consumption, making the overall energy saved negative. hence, the risk measure herein tackled is the maximization of the minimum deviation of energy savings (ghg emissions avoided) of the portfolio from the corresponding energy (ghg emissions) embodied in it. international journal of sustainable energy planning and management vol. 23 2019 61 vivek kumar singh, carla oliveira henriques and antónio gomes martins where 0 < β, α < 1, are weights which indicate the decision-maker’s preferences regarding each objective function, and ρ, δ, μi, ω and δi are indexes of pessimism varying on a scale from 0 (an aggressive strategy) to 1 (a conservative strategy). 3. data and assumptions we have used the national io tables for india available from the world io database to appraise the energy and environmental impacts of several eet in india’s residential sector (see [45] and [46]). the year 2011 was selected to be the base year of our study since the methodology herein developed is based on the classification of households considered in the latest census published by the government of india which dates back to 2011. distinct data sources have also been used in order to set up a large size structured repository of real data for india’s residential sector (see, e.g. [47– 57]). tables d1 and d2 (appendix d) provide specific information regarding the features of each technology under evaluation and the average annual operating hours according to the average operation data available for india, the lifetime and the investment cost of each eet under analysis. table d3 (appendix d) provides the average shares of materials and the costs considered for each bat, which were based on [42]. finally, the energy balances of india have also been used to account for the energy consumption and then they were coupled with the world io database. 4. illustrative results since the epbt is linked to the yearly useful energy saved by the eet under analysis, while the gbpt depends on the emission factors of the electricity mix within the country, two distinct formulations were herein considered. these modelling formulations either account, respectively, for the embodied ghg emissions or the embodied energy during the manufacturing phase, which are mainly dependent on the manufacturing processes and on the availability of the raw materials [52–53]. therefore, the modelling framework suggested is consistent with the ee policies which usually address the residential sector in developing countries, where the promotion of the investment in appliances with low embodied energy [54] and low embodied co2 emission [55] is particularly relevant. projects and the corresponding energy incorporated in it, such that 1 1 , ,min . n nl u l u it it i i ii= i= i v r r x r r x   = −   ∑ ∑ the risk function maximizes the minimum gain (i.e. minimizes de maximum loss) or alternatively it maximizes v, where 1 1 , , . n nl u l u it it i i ii= i= i r r x r r x v   − ≥   ∑ ∑ this last equation guarantees that v will be upper bounded by the minimum portfolio gain; because this is the only constraint on v and since v is being maximized, it will take on the value of the maximum minimum gain, or the minimum maximum loss. then, problem (1) has the following surrogate multiobjective interval integer linear programming problem: 2.3. the solution approach problem (2) can be straightforwardly replaced with a surrogate linear interval objective optimization problem through the weighted-sum method [42]. distinct optimization models for portfolio selection can thus be considered following different kinds of investment standpoints, namely, a conservative strategy (leading to a lower number of subsidized devices), an aggressive strategy (leading to a higher number of subsidized devices) and a combined strategy. (2) ( ) i1 1 1 i 1 1 max , ,max , : 1, , , or ) (or 1 , , , [ ] 1 , 0,    =  ≤      ≤        − ≥    = ≥ ≤ = ∑ ∑ ∑ ∑ ∑ n l u i ii= n ii= n l u ii= l u l u i i i i i i n nl u l u it it i i ii= i= i l u i i i i i v sir sir x s.t x y h h y gpbt epbt gpbt gpbt epbt epbt ,i= , ...,n, r r x r r x v x u ,u y , . . x .i , ,n i { } 1, , , 0,1 , 1, , . … ∈ = …i n y i n 1 1 1 1 u u 1 y max ( ) (1 )( ) : 1, ( ), (or ) (or ) ( (or ) (or )), 1, ..., , (( ) (( ) ( n nl u i i i ii i n ii n u u l ii u u i i i i i u u l l i i i i i n u l l it i it i it ii= sir x v sir x v s.t x h h h y gpbt epbt gpbt epbt gpbt epbt gpbt epbt i n r r r r r r = = = = β + α + − β + α = ≤ − − ≤ − − = − + − − − ∑ ∑ ∑ ∑ ∑ ρ ρ δ µ ϖ { } l ))) ( ( )) , 1, ..., , 0, 1, , , 0,1 , 1, , , i u l u i i i i i i i i x v, x u u u y i n x i n y i n ≥ ≤ − − + = ≥ = … ∈ = … δ (3) 62 international journal of sustainable energy planning and management vol. 23 2019 a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india 1) aggressive strategies always lead to less diversified portfolios with similar solutions both for the individual optimization of return and risk, respectively. in this situation (solutions 2, 4 and 6), the funding is evenly distributed between tfl (suggesting the replacement of 363.8 million of lamps) and wep (proposing the substitution of 59.4 million of water pumps). the highest performance of tfl and wep both regarding the sir and the highest difference between embodied emissions regarding avoided emissions justify these results (table d4). 2) conservative strategies always lead to the most diversified portfolios, but with distinct technology choices for return and risk. in the maximization of return (solution 1) the portfolio contains tfl (139.1 million lamps), rac (2.6 million devices), wm (4.7 million machines) and wep (22.7 million water pumps), while in risk optimization (solution 3) the portfolio incorporates eg (12.6 million devices), tfl (139.1 million lamps), wm (4.7 million washing machines) and wep (22.7 million water pumps). under this conservative scenario it is interesting to see that tfl, rac and wep are considered as a good investment option in both cases. 3) under a conservative strategy, if both risk and return have the same weight, solution 5 is different from solution 1, replacing the investment in wm with the investment in cf (28.7 million ceiling fans); in contrast, a balanced approach towards risk and return under an aggressive strategy (solution 6) allows obtaining the same portfolio of solutions 2 and 4. 4) a combined approach with average pessimistic coefficients (solution 7) leads to the even investment in tfl (239.6 million lamps) and wep (39.1 million pumps) (37.5% of investment allocated to each technology), while wm (4.7 million washing machines) takes 25% of the investment. 5) according to this modelling formulation, tv, fr and com are never selected for a public program for supporting eet (table e1a)). 4.2. max min deviation of energy savings from the embodied energy the solutions herein computed were obtained by considering [gpbt l i, gpbt u i ]=[2.65, 4.13], i.e. the while the formulation relying on the maximization of the minimum deviation of the ghg avoided emissions from the ghg embodied emissions might be more helpful for countries with higher emission factors regarding the electricity mix within the country, the second formulation which accounts for the maximization of the minimum deviation of the energy savings from the embodied energy might be more useful for countries with lower emission factors regarding their electricity mix. 4.1. max min deviation of avoided emissions from embodied emissions the solutions herein presented were obtained by considering [epbt l i, epbt u i ] = [1.13, 2.30], i.e. the epbt should be below the average epbt of the technologies under assessment in a conservative strategy and below the greatest epbt if an aggressive strategy is assumed. the maximum number of technologies being held in the portfolio is assumed to be [hl, hu] = [4, 5], while the maximum funding allocated to each technology is [uli, uui ] = [25%, 50%], in order to ensure a certain level of diversification. the number of devices targeted for funding in india (table e1 b), d) of appendix e) can be computed both considering as a reference the world ee investment as a percentage of gdp which was about 0.3% in 2016, according to the iea ee market report published in 2016 [56] and world energy investment 2017 [57] and to the statista the statistics portal [58] and the share of energy consumption by the residential sector in india, which was about 25% in 2015 [59]. this allowed us to estimate that a reasonable investment value on eet would be 1,466 million dollars at constant prices of 2011. the results depicted in figure 2 a), b) illustrate the consistency of the strategy type considered with the level of risk assumed by a certain decision maker (higher return corresponding to a higher risk solution, i.e. a solution with a higher number of subsidized devices and vice-versa). table e1 a) and b) provides information regarding the eet chosen in each solution (although other search strategies could be considered). figure 2 a) presents the values obtained for return (sir) and risk in each portfolio. under this formulation the trade-off between risk and return is reduced. several conclusions can be gathered based on a certain epbt: international journal of sustainable energy planning and management vol. 23 2019 63 vivek kumar singh, carla oliveira henriques and antónio gomes martins table e1 c) and d) provides information regarding the eet selected according to distinct strategies (other search strategies could also be investigated). based on a certain gpbt several conclusions can be drawn: 1) once more, aggressive strategies always lead to the less diversified options with similar technology portfolios for return and risk (solutions 2, 4 and 6), equally suggesting tfl and wep for funding (the same results were also attained with the previous formulation). gpbt is considered to be below the average gpbt of the technologies under assessment in a conservative strategy and below the greatest gpbt if an aggressive strategy is considered. the maximum number of technologies being held in the portfolio and the maximum funding allocated to each technology are identical to the previous formulation. figure 2 b) presents the values computed for return (sir) and risk in each portfolio. under this formulation the trade-off between risk and return is reduced. b) return vs. risk with a certain gpbt 58 93 100 161 55 88 100 161 57 91 100 161 79 127 195 195 247 247 201 201 247 247 193 193 247 247 232 232 0 50 100 150 200 250 300 0 20 40 60 80 100 120 140 160 180 sol 1 sol 1 sol 2 sol 2 sol 3 sol 3 sol 4 sol 4 sol 5 sol 5 sol 6 sol 6 sol 7 sol 7 ri sk re tu rn return risk a) return vs risk with a certain epbt 58 93 100 161 57 91 100 161 58 93 100 161 79 127 340 340 435 435 354 354 435 435 340 340 435 435 407 407 0 50 100 150 200 250 300 350 400 450 500 0 20 40 60 80 100 120 140 160 180 sol 1 sol 1 sol 2 sol 2 sol 3 sol 3 sol 4 sol 4 sol 5 sol 5 sol 6 sol 6 sol 7 sol 7 r is k r e tu rn return risk figure 2: return vs. risk obtained in each portfolio with a certain epbt/gpbt 64 international journal of sustainable energy planning and management vol. 23 2019 a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india 5. conclusions in this paper a methodological tool developed to help public decision-makers in the choice of several eet to be subsidized in india’s residential sector is presented, which can help shaping the design of ee programs in this country. a new overarching framework was also suggested for obtaining the epbt/gpbt for eet based on the economic io lca approach, which allows assessing the direct, indirect and induced epbt/gpbt of bat technologies. the importance of this new epbt/ gpbt modelling structure might be ascertained by the fact that positive direct effects regarding the adoption of eet can be overcompensated by indirect impacts on other activity sectors, in particular in the upper industrial supply chain. the fact that the energy/ghg incorporated in each eet under consideration has been obtained through the use of india’s national io data, enabling to overcome one of the major drawbacks regarding truncation problems typically encountered when an approach based on the traditional lifecycle inventories is followed, is one of the main advantages of this new modelling proposal. based on the data obtained, it was possible to establish that the epbt for domestic bat appliances in india is always lower than the corresponding expected lifetime. although opposed conclusions were drawn regarding several renewable electricity systems, namely for pv [26-31],wind power [32] and fuel cell stacks [33], our results are consistent with the ones obtained for low concentrating solar pv-thermal (cpvt) systems [60] and for several eera [36]. overall, the epbt relies on the yearly ratio (energy consumed/yearly energy saved) by the system under analysis, while the gbpt is mainly explained by the emission factors of the electricity mix within the country. two modelling formulations based on interval portfolio theory were also proposed, where the objective functions used are adapted to the appraisal of distinct eet generally held in india’s residential sector. the objective functions which allow evaluating the trade-off between the return and risk of the portfolio of eet are the sir and the maximization of the minimum deviation of the energy savings (ghg avoided emissions) of the portfolio from the expected energy embodied (ghg emissions) in the materials used for its manufacture, respectively. the diversification of the portfolio is ensured by the consideration of upper bounds on the maximal funding that can be assigned to the various eet also imposing a given epbt/gpbt. 2) conservative strategies always lead to the most diversified policies, but once more with distinct technology portfolios for return and risk. in solution 1 (maximization of return) the portfolio contains tfl, rac, wm and wep (the same results were also obtained with the previous formulation). in solution 3 (maximization of the minimum deviation of the energy saved regarding the energy embodied during the manufacturing stage) the selected appliances differ from the previous ones because the portfolio now includes cf (28.7 million of fans) instead of eg. when compared to solution 3, if both risk and return have the same weight, solution 5 leads to include wm (4.7 million washing machines) and rac (2.6 million devices) in the portfolio, instead of cf. 3) the solution obtained with this formulation with a combined approach (solution 7) leads to a different portfolio than the one obtained under the same assumptions with the previous formulation, replacing the investment in wm with the investment in rac. 4) according to this modelling formulation, eg, tv, fr and com appliances are never selected under the auspices of a public program for supporting eet (table e1c)). 5) overall, it can be concluded that it is always worth endorsing the investment in tfl and wep with both modelling formulations. finally, the promotion of more efficient tv, fr and com is never considered in both modelling formulations. indices of robustness have also been computed, which allow assessing the technologies which are more often selected irrespective of the investment strategy followed – see tables e2 and e3 (appendix e). according to the values obtained, tfl and wep should have the highest support in terms of funding no matter the dm’s stance or the modelling formulation considered. the investment in cf, rac and wm should also be contemplated in terms of support with both modelling formulations. the investment in eg should be considered when a certain epbt is imposed, while the investment in cf is only selected if a certain upper bound on gpbt is introduced (following the most conservative strategies). finally, tv, com and fr should never be considered in terms of support for funding with either formulation. further information on the evaluation of the anticipated e3s impacts regarding the adoption of the different bat selected in each portfolio is given in appendix f. international journal of sustainable energy planning and management vol. 23 2019 65 vivek kumar singh, carla oliveira henriques and antónio gomes martins both on the supply and on the demand sides of the energy value chain: in fact, aspects such as the trend to always increasing efficiencies of end-use equipment and the evolution of the generation mix are not captured by the model. acknowledgements this work was partially supported by the european regional development fund in the framework of compete 2020 programme through project uid/ multi/00308/2019, the fct portuguese foundation for science and technology within project t4enertec (poci-01-0145-feder-029820) and the european regional development fund and programa operacional regional do centro e do programa operacional regional de lisboa through project n.º 023651, learn2behave (iia 02/saict/2016). references [1] sorrell s. reducing energy demand: a review of issues, challenges and approaches. renew sustain energy rev 2015;47:74–82. https://doi.org/10.1016/j.rser.2015.03.002. 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[63] henriques co, coelho d. multiobjective interval transportation problems: a short review. optim. decis. support syst. supply chain., 2017, p. 99–116. https://doi.org/10.1007/978-3-31942421-7_7. https://doi.org/10.1016/0377-2217(91)90169-v https://doi.org/10.1016/0377-2217(91)90169-v https://doi.org/10.2307/254261 https://doi.org/10.2307/254261 https://doi.org/10.1002/ep.10613 https://doi.org/10.1007/978 international journal of sustainable energy planning and management vol. 22 2019 121 1corresponding author e-mail: zlatina.dimitrova@mpsa.com international journal of sustainable energy planning and management vol. 22 2019 121–132 abstract the priority of the automotive industry is to reduce the energy consumption and the emissions of the future passenger cars and to deliver an efficient mobility service for the customers. the improvement of the efficiency of vehicle energy systems promotes an active search to find innovative solutions during the design process. engineers can use computer-aided processes to find automatically the best design solutions. this kind of approach named “multi-objective optimization” is based on genetic algorithms. the idea is to obtain simultaneously a population of possible design solutions corresponding to the most efficient energy system definition for a vehicle. these solutions will be optimal from technical, economic and environmental point of view. the “genetic intelligence” is tested for the holistic design of the environomic vehicle powertrain solutions. the environomic methodology for design is applied on d-class hybrid electric vehicles, in order to explore the techno-economic and environmental trade-off for different hybridization level of the vehicles powertrains. for powertrain efficiencies between 0.25 and 0.35 the electrification of the powertrain reduces the global co2 emissions. hybrid electric and plug-in hybrid electric vehicles are reaching these levels. the break point of the electrification effect on the gwp occurs on 0.35 % of powertrain efficiency.for battery capacity value higher than 13 kwh the global reduction of the co2 emissions is not obvious. the method gives also an overview of the evolution of environmental categories indicators as a function of the cost of the vehicles. a direct relation links the economic and the environmental performances of the solutions. 1. introduction decarbonisation and emission reduction from road transport are the main drivers for the electrification of the vehicles. around 2030 electric vehicles are expected to increase their market penetration and to bring evolution concerning the main technologies for energy storage and conversion, the drive train components and the energy management [1]. the industrialisation of those components on high scale and volume contributes to the reduction of the high cost of the electrification and to its democratisation on all vehicles segments. hybrid electric vehicles with different levels of hybridisation are adapted for the different vehicles segments. they are designed for urban and peri-urban drives, and allow zero emissions drives from thank-to-wheels perspective for 25 km or 50 km. hybrid electric vehicles with zero emission vehicles (zev) modes are supported by incentives for circulation in the big cities centres. the scarcity of not only fuel resources but also the adverse effects of the operation of energy intensive systems on the environment (pollution, degradation) have to optimal designs for efficient mobility service for hybrid electric vehicles zlatina dimitrova1,a and françois maréchalb a groupe psa, 78943 vélizy-villacoublay, france, zlatina.dimitrova@mpsa.com becole polytechnique fédérale de lausanne, 1950 sion, switzerland, francois.marechal@epfl.ch keywords: environomics; hybrid electric vehicles; multi-objective optimization; vehicles powertrains; url: http://dx.doi.org/10.5278/ijsepm.2473 mailto:zlatina.dimitrova@mpsa.com http://efficiency.for mailto:zlatina.dimitrova@mpsa.com mailto:francois.marechal@epfl.ch http://dx.doi.org/10.5278/ijsepm.2473 122 international journal of sustainable energy planning and management vol. 22 2019 optimal designs for efficient mobility service for hybrid electric vehicles because advantages of both evs and lightweight design could be combined to reduce environmental impacts even further. alegre et al. showed in [8] a modelling of electric and parallel-hybrid electric vehicle using matlab/ simulink environment which allows us to access different aspects of the vehicle such as engine power, type and size of the battery or weight and to observe how changes can affect the performance and the distance travelled. the model was simulated in order to obtain the electric vehicle’s autonomy. through the use of a geographic information system together with a mathematic algorithm based on genetic algorithms the planning of charging stations was obtained, where the installation investment cost was minimized and the geographic distribution was improved in order to increase the quality of the service by improving reliability. electric-drive vehicles, including hybrid electric vehicles, plug-in hybrid electric vehicles, battery electric vehicles, fuel cell electric vehicles and fuel cell hybrid electric vehicles are emerging as less polluting alternatives to internal combustion engine vehicles. therefore, it is important to assess their penetration in the vehicle market in the future. a ‘twostep’ approach is used in [9] to estimate the optimum market penetration of lightweight and electric-drive vehicles in the long-term and the impact on the light-duty vehicle fleet, focusing on japan. first, an optimization model is used to estimate the vehicle market composition in 2050. then, a vehicle stock turnover model is used to be taken into consideration. thus, the system can be properly designed and operated. the systematic consideration of thermodynamic, economic and environmental aspects for this purpose is called environomics [2]. environomic analysis is an extension of thermo-economics [3]. in addition to flows of energy, exergy and costs, flows of other resources consumed as well as flows of pollutants enter in the picture. environomic design of electric and hybrid electric vehicles are studies in [4, 5]. the automotive product is increasingly restricted by environmental regulations, including reducing emissions of co2 and pollutants in exhaust pipes of vehicles. one solution implemented in the automotive industry is plug-in hybrid electric vehicle (phev) that use an electric traction battery. to help vehicle manufacturers in their choice of traction battery from an environmental point of view, a simulation method of environmental impacts generated by the phase where the vehicles is used is proposed in [6]. this method takes into account the possible usages of the vehicle and potential developments of electric mix, with the formulation of a constraint satisfaction problem solved using constraint programming techniques. delogu et al. investigate in [7] the lightweight design and electrified powertrain as important strategies in the automotive industry to reduce fuel demand and break down emissions respectively. lightweighting of electric vehicles (evs) is considered a step forward abbreviations bev battery electric vehicle cvt continuous variable transmission hev hybrid electric vehicle hvb high voltage battery gwp global warming potential ice internal combustion engine mgb manual gear box moo multi objective optimization lca life cycle assessment odp ozone depletion soc state of charge phev plug-in hybrid electric vehicle f force, n mfuel fuel rate, kg/s p power, kw qbatt battery capacity, kwh tx torque, nm v speed, m/s zev zero emission vehicle greak letters γ gear ratio η efficiency, ω rotation speed, rpm subscripts and superscripts bt battery em electric machine ice internal combustion engine s shaft sc supercapacitor w wheels international journal of sustainable energy planning and management vol. 22 2019 123 zlatina dimitrova and françois maréchal design and operation parameters of the vehicle energy system. methods, techniques to analyze, improvement and optimizations of energy systems have to deal not only with the energy consumption and economics, but also with the environmental impacts. the word environomics includes all this activity. 2. methodology the methodology used in this article combines in a computational platform models of technologies, techniques of energy integration, evaluation of the economics and assessment of the life cycle impacts. the superstructure possibilities are explored by using multiobjective optimization techniques and allows defining optimal design solutions. genetic algorithm governs the master optimization and mixed integer nonlinear programming solves discontinuous mathematical problems. this approach is holistic and innovative in comparison of the traditional heuristic design engineering method, based on iterations of designs and their cost evaluation. the generic computational framework for environomic design of a vehicle energy system is illustrated on figure 1. the vehicle simulation model contains dynamic and thermal layouts. the economic model is presented by the cost equations. the optimization is based on a genetic algorithm. the set of decision variables includes the types and the size of the equipment. the problem is solved by an evolutionary algorithm with 3 objectives: the minimization of the fuel consumption, the minimization of the investment cost and the environmental impacts for the technologies (figure 1). the results of the multiobjective optimization converges on the pareto frontier curve. the energy integration model uses the results from the dynamic and thermal flows calculations. the energy estimate light-duty vehicle fleet energy and material consumption, co2 emissions and cost. in [10] the authors analyse different charging strategies for a fleet of electric vehicles. along with increasing the realism of the strategies, the opportunity for acting on the regulating market is also included. they test the value of a vehicle owner that can choose when and how to charge. particularly, strategies are chosen from uncontrolled charging through deterministic optimization, to modelling the charging and bidding problem with stochastic programming. the authors analyse in [11] the scenario of development by the danish climate commission. in the short term, it is investigated what the effects will be of having flexible or inflexible electric vehicles and individual heat pumps, and in the long term it is investigated what the effects of changes in the load profiles due to changing weights of demand sectors are. the results show that even with a limited short-term electric car fleet, these will have a significant effect on the energy system; the energy system’s ability to integrated wind power and the demand for condensing power generation capacity in the system. alternative scenarios for energy planning are proposed for the transportation sector in [12]. the analysis of the projection of energy demand and greenhouse gas emission, in the form of co2, nox, and ch4, was conducted. the results show that by implementing an efficient vehicle scenario, global warming potential can be reduced by 15.80%. the implementation of an integrated scenario reduced global warming potential by 24.76% compared to the reference scenario. the novelty of the present study is the application of the environomic optimization methodology for optimal multi objective optimization evolutionary genetic algorithm (moo) economic model environmental (lca) model decisions variables (thermo−dynamic targets) decisions variables (thermo−dynamic targets) performances state variables thermo-environomic model state variablesstate variables (osmose) energy integration model utilities energy flow model (dynamic vehicle model simulink )® figure 1: computational framework of environomic optimization 124 international journal of sustainable energy planning and management vol. 22 2019 optimal designs for efficient mobility service for hybrid electric vehicles main characteristics of the hybrid electric simulation model are summarized in table 1. the initial model represents a commercial d class diesel hybrid electric vehicle. figure 2 illustrates the generic units that constitute the vehicle powertrain and the backwards approach to estimate the energy consumption. the presentation of the hybrid electric vehicle model including the energy distribution strategy is presented in [17]. 2.2. cost model the cost of the vehicle is evaluated for each run as a function of the size and efficiency of the energy converters and energy storage devices. the cost of the equipment comes from the literature and is related to the size of the components. table 2 presents the cost equations – eq. (1) – eq. (5). the car shell is defined as a completely equipped vehicle (body, interior equipment, wheels), except the powertrain. a simplified objective cost function is constructed eq. (7), taking into account the vehicle powertrain cost (production) eq. (6) and vehicle nominal cost eq. (5). costpowertrain =costice + costem + costbattery+ costsupercapacitors costvehicle = costpowertrain + costcar_shell in [€] 2.3 environmental model: in this article, the life cycle assessment method is applied as an indicator for the evaluation of vehicle energy system design. the functional unit used for the study, for lca vehicle study is to transport persons on 150000 km for 10 years. this study refers to the cml short impact. this impact is used from the most part of the automotive industry. the categories included in the impact are: the global warming potential (gwp for 100 years of perspective), the eutrophication, the acidification and the ozone depletion. the impact category gwp100y considers the impact for 100 years, and presents the advantage to be largely used. usually the life cycle of a (6) (7) integration is not applied in this article. applications and results from the energy integration method are available in [13, 14, 15]. 2.1. hybrid electric vehicle simulation model the vehicle is modelled under simulink®. the vehicle model is based on mechanical and electrical flows. the thermal layout of the internal combustion engine is constructed from measurement maps and included in the vehicle model. the technique of the modelling is quasistatic. the vehicle follows dynamic profiles generated from a library of driving cycles. the model is controlled by an energy management structure in loop, linked to the required mechanical power, to follow the dynamic cycle. this energy management loop is called “back and forward”. thanks to it, for a given design of the vehicle powertrain the model estimates the energy consumption of the vehicle, on the given driving profile. the energy flow is computed backwards from the wheels to the energy sources. the backwards mode insures the flexible and fast nature of the simulations. this is an important advantage for an optimization study. however the quasistatic modeling level is limited in its non-causality. the table 1: dclass vehicle characteristics sub-system characteristic value vehicle nominal mass [kg] 1660 gear box cvt efficiency [–][16] mgb efficiency [–] 6 gears 0.84 0.95 engine displacement [l] 2.2 number of cylinder 4 rated power [kw] at 4000 rpm 120 max. speed [rpm] 4500 max. torque [nm] at 2000 rpm 380 idle speed [rpm] 800 idle fuel consumption [l/h] 0.33 deceleration fuel cutoff yes fuel type diesel density [kg/l] 0.84 lower heating value [mj/kg] 42.5 electric motor power [kw] 27 battery ni mh capacity [kwh] 1.2 driving cycle v v . mv = ∑ f vehicle estimator transmission ratio γ and efficiency η converter p = ƒ(t,w,ƞ(t,w)) wwheel wheelt wshaft p energy storage shaftt . αv t figure 2: quasistatic model of the parallel thermal electric hybrid international journal of sustainable energy planning and management vol. 22 2019 125 zlatina dimitrova and françois maréchal product, a system or a service has three distinct phases that succeed: the production phase, the use phase and the end-of-life phase. the unitary processes and the raw materials for the production of the parts come from the eco invent® database [18]. the automobile is divided into seven substructures, which allows distinguishing the powertrain: electric machine, low voltage battery, high voltage battery, power unit, thermal engine, gearbox, vehicle body (car shell). the use phase corresponds to the energy consumption of the vehicle. the inventory for the corresponding energy vector production (electricity and diesel) comes from the eco invent® database. the end-of-life phase is represented by the average car disposal process. they are also issued by the eco invent® database. the cars are considered to be operated in france with the french electricity mix and diesel produced in france. commercial vehicles are characterized on the normalized driving cycle – new european driving cycle (nedc). table 3 summarizes the characteristics of the nedc, which is well known and well referenced. 3. resultsmulti-objective environomic optimization 3.1 definition of the optimization problem a hybrid vehicle characterized with multiple propulsion systems can operate them independently or together. the model contents are the electric machine, battery, table 2: equations for the economic model [17] components costs [€] converters electric motor 30 [€/kw]*pem [kw] (1) thermal engine 15 [€/kw]* pte [kw] (2) storage system battery 600*[€/kwh]* (3) supercapacitor 15 [€/kw]* psc [kw] (4) body nominal cost (car shell) 17.3*car_shell_mass[kg]-3905.4 [€] (5) vehicle use in france 2013 electricity household 0.14269 [€ttc/kwh] electricity industry 0.07768 [€ttc/kwh] gasoline 1.645 [€/l] diesel 1.451 [€/l] 0.2477 log o(bat (battpe) 0.5126specifmass batq [kwh] ∗ + table 3: drive cycles characteristics cycle distance (km) duration (s) average speed (km/h) nedc 11.023 1180 32.26 supercapacitors, thermal engine and fuel tank, with diesel fuel. the thermal electric hybrid powertrain model characteristics are given in table 1. the model represents a commercial d-class [19] vehicle with a parallel thermal (diesel) and electric powertrain (figure 3). the target is to size the components of the hybrid powertrain: the converters and the storage tanks and to evaluate on a simultaneous way, the environmental and the economic impacts of the solutions. a multi objective optimization with three objectives is considered to define design solutions optimal from efficiency, economic and environmental point of view. for every iteration of the model, the mean powertrain efficiency in traction mode is calculated according eq. (8): wheel powertrain fuel bt sc p mean p +p +p η   =     (8) ft ice bt pe psd m ~ c1c2 g dt sc figure 3: parallel hybrid electric architecture: ft – fuel tank, ice – internal combustion engine, bt – high voltage battery, sc – super capacitor, pe – power electronics, m– electric motor, psd – power split device, g – electric generator, c1clutch 1, c2clutch 2, t transmission, ddifferential 126 international journal of sustainable energy planning and management vol. 22 2019 optimal designs for efficient mobility service for hybrid electric vehicles 3.2 multi objective environomic optimization the solutions of the three objective environomic optimization converged on a pareto frontier optimal curve. they are projected in the 2d total gwp – powertrain efficiency vision (figure 4). this represents the trade-off between the energy consumption and the total gwp impact of the vehicles. from this representation, it is visible that the gwp decreases with the powertrain efficiency. this is due to the reduction of the co2 emissions during the driving. for powertrain efficiencies between 0.25 and 0.35 the electrification of the powertrain reduces the global co2 emissions. this corresponds on the families of hybrid electric and plug-in hybrid electric vehicles. the break point of the electrification effect on the gwp occurs on 0.35 % of powertrain efficiency. this corresponds on a battery capacity higher than 13 kwh. from this battery, capacity value the global reduction of the co2 emissions is not obvious. figure 5 illustrates the correspondence between the high voltage battery capacity and the hybridization ratio of the vehicle. the hybridization ratio is defined as the as the ratio between the electric power and the total power and represents the power contribution of the electric side of the powertrain. where pbt and psc are respectively the battery and the super capacitors powers in kw and pwheel is the power on the wheels in kw. the vehicle cost is computed for each set of the decision variables, according eq. (7). the gwp is the category considered as environmental objective. the gwp has to be minimized. the gwp objective function for the environomic optimization considers the equivalent co2 emissions during the vehicle life cycle (production, use phase). it is defined over the life cycle functional unit of 150000 km. the end of life is neglected, because of the high recycling ratio in the automotive industry and the consideration that the high voltage battery has a second life as storage device in the electricity distribution grid. the eq. (9) defines the gwp objective function: gwptotal = gwpproduction + gwpuse_ phase in kg. co2 eq. in the case of hybrid electric vehicles, the use phase includes the gwp due of the co2 tank-to-wheels emissions emitted by the ice during the vehicle operation over 150000 km. the use phase contains also the gwp impact of the production of the energy vectors for charging the vehicles storage tanks – the diesel for the fuel tank and the electricity for the charging of the high voltage battery, over 150000 km. this is adding the well-to-wheels aspect of the study. the impact of electricity is considered only for the plug-in hybrid electric vehicles and the range extender vehicles. this means for vehicles equipped with high voltage battery capacity superior to 3 kwh. on that way, the eq. (9) is detailed in eq. (10). the environomic optimization is defined in eq. (11): min(–η powertrain (x))investment _cost(x)),gwp total(x)), x є xdecision variables the other three categories of the impact are introduced as well, as environmental objectives to be minimized. equations (9) to (11) are valid also for the other categories. the decision variables for the powertrain design are defined in table 4: (9) weel-to-wheel total vehicle_production tank-to-wheel_co2 diesel_production electricity_production gw p = gw p = gw p gw p + gw p , gw p 2eq.kg.co + + (10) (11) table 4: decision variables for powertrain design decision variables for design range ice displacement volume [l] [0.8-1-1.4-1.6-2.2] electric motor rated power [kw] [1-150] battery energy [kwh] [5-50] number of super capacitors [-] [1-10] gwp vs powertrain efficiencyx 104 powertrain efficiency [-] 75 70 65 60 55 50 45 40 35 4 3.8 3.6 3.4 3.2 3 2.8 2.6 2.4 2.2 0.2 0.25 0.3 0.35 0.450.4 0.5 in ve st m e n t co st ( x 1 0 0 0 € ) g w p [ kg c o 2 -e q ] figure 4: pareto curve – total gwp to powertrain efficiency, investment cost in color bar, nedc. international journal of sustainable energy planning and management vol. 22 2019 127 zlatina dimitrova and françois maréchal between the total gwp and the vehicle investment cost. the relation is given in eq. (13). the relation is valid in the domain of 25%-50% of powertrain efficiency. the total gwp decreases with the increasing of the total investment cost. vehicles with higher powertrain efficiency require higher investment cost. thus they are less fuel consuming in the operation phase and emit less co2 emissions. one can consider that if one maximizes the powertrain efficiency one minimizes the total gwp. the gwp can be considered as an indicator related to the other 2 objectives. this allows simplifying the optimization problem from 3 dimensional to 2 dimensional. the techno-economic optimization brings also optimal environmental solutions in the defined range of decisions variables for hybrid electric vehicles and so defines environomic solutions. the main interest of this conclusion is to simplify the optimization from 3d to 2d techno-economic with activated environmental model, which allows evaluating the environmental impacts of each solution of the techno-economic pareto curve. the vehicle use phase (including the operation co2 emissions and the emissions due to the energy vectors production) is clearly the major contributor to the total equivalent co2 emissions, in comparison of the equivalent co2 emissions for the vehicle production phase, for powertrain efficiencies between 25% and 35%. the design choices are visible on the impacts of the production phase. with the increasing of the powertrain efficiency over 35% and respectively the hybridization ratio (heavy (13). * in[kg co eq.]238428 0 18267= − vehiclegwp investment_cost the linear fit between the gwp and the powertrain efficiency is illustrated in figure 6. it is defined according to the linear eq. (12). this equation is valid for the domain 25% -50% of powertrain efficiency. a quadratic utility function with balanced weight of the coefficients a and b between the cost and the powertrain efficiency is applied on the pareto solution from figure 4. the maximum of the utility function is obtained for points concentrated around values of powertrain efficiency of 35% and investment cost of 45000 € (figure 7a and 7b). the positive quadratic utility function with balanced techno-economic coefficients shows that utility maximums are in the phev zone, between 30% and 35% of powertrain efficiency (figure 6 and figure7). gwp = 48749 – 59592*ηpowertrain in [kg co2 eq.] the total gwp is also related to the investment cost. figure 7 proposes a macroscopic linear fit of the relation (12) 0 5 10 15 0 10 20 30 40h v b a tt e ry c a p a c it y [ k w h ] hybridization ratio [%] hv battery capacity [kwh] hv battery capacity [kwh] figure 5: correspondence between the high voltage battery capacity and the hybridization ratio. pareto curve and utility function (a=0.5,b=0.5) 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.2 0.25 0.3 0.35 x1powertrain efficiency [-] (b)(a) 0.4 0.45 0.5 g w p [ kg c o 2 -e q ] 0.2 0.1 0 -0.1 -0.2 4 3.5 3 2.5 2 4 3.8 3.6 3.4 3.2 3 2.8 2.6 2.4 2.2 2 x 104 x 104 y vs. x1 data fit confidence bounds figure 6: evolution of the total gwp as a function of the powertrain efficiency a) gwp as a function of the powertrain efficiency, b) linear fit between the gwp and the powertrain efficiency, y = gwp and x1 = powertrain efficiency 128 international journal of sustainable energy planning and management vol. 22 2019 optimal designs for efficient mobility service for hybrid electric vehicles machine. orders of magnitude for the total gwp evolution and the repartition of the impact for the different subsystems and for the production phase are given in figure 8 for different sizes of high voltage battery –this means for different hybridization ratio. the major impact plug-in hybrid electric vehicles and range extenders) and the size of the electric part of the powertrain, the impact of the vehicles production phase increases. this is due to the increasing of the mass of the materials needed for production of the high voltage battery and the electric 0% 0% 10% 90% gwp contribution of the sub-systems, full ice 13% 5% 8% 74% gwp contribution of the sub-systems, 7 kwh hvb 6% 4% 9% 81% gwp contribution of the sub-systems, 3kwh hvb 21% 7% 7% 65% 13 kwh hvb gwp production high voltage battery gwp production electric machine + power electronics gwp ice gwp body gwp production high voltage battery gwp production electric machine + power electronics gwp ice gwp body gwp production high voltage battery gwp production electric machine + power electronics gwp ice gwp body b) c) d) gwp contribution of the sub systems, gwp production high voltage battery gwp production electric machine + power electronics gwp ice gwp body a) figure 8: gwp contribution for the production phase of the vehicles sub-systems a)full ice, b) 3 kwh of hvb, c) 7 kwh of hvb, d) 13 kwh of hev pareto curve and utility function (a=0.5,b=0.5) 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 0.2 0.25 0.3 0.35 powertrain efficiency [-]investment cost [€] (b)(a) 0.4 0.45 0.5 g w p [ kg c o 2 -e q ] in ve st m e n t co st [ €] u til ity [ -] u til ity [ -] 0.2 0.1 0 -0.1 -0.2 0.05 0 -0.05 -0.1 4 3.5 3 2.5 2 8 6 4 2 x 104 x 104 x 104 pareto curve and utility function (a=0.5,b=0.5) figure 7: evolution of a) the total gwp as a function of the vehicle investment cost b) the investment cost as a function of the powertrain efficiency.. international journal of sustainable energy planning and management vol. 22 2019 129 zlatina dimitrova and françois maréchal vectors are thus estimated for an optimistic scenario. the operation of the plug –in vehicles in countries with high carbon percentage use in the electricity generation (germany, poland, and china) will increase the contribution of the equivalent co2 emissions, coming from the electricity generation. the functional unit is 150000 km. 3.3 life cycle impact categories and relations the environmental model of the computational superstructure uses the cml_01 short impact as explained in section 2. the gwp is one of the categories of this impact but there are also three other categories – the acidification, the eutrophication and the odp. figure 11 illustrates the evolution of these categories as a function of the investment cost, thus the powertrain efficiency. the eutrophication is following the same tendency and increases with increasing hybridization ratio. these two categories are influenced from the vehicles is due to the body production. the second contributor to the gwp is the production of the high voltage battery and its part increases with the increasing of the on board battery capacity. with the increasing of the electrification of the powertrain, the vehicle mass increases and so the power range of the machine and the associated power electronics also increases. thus the part production impact of the electric machine and the power electronics increases. as the thermal engine is downsized, its impact decreases with the increasing of the hybridization ratio. the environmental model uses the cml short impact as explained in section 2.3. orders of magnitude for the total gwp evolution and the reparation of the impact of the different life cycles phases are given in figure 9 for different sizes of high voltage battery –this means for different hybridization ratio. the vehicles are considered to be operated in france with european diesel and french electricity mix production. this means that the emissions due to the energy d-segment ice 2,2l diesel, full ice gwp over 150000 km d-segment plug-in hev 7kwh li-lon battery gwp over 150000 km, plug in hev with 25 km zev mode d-segment plug-in 13 kwh li-lon battery gwp over 150000 km, heavy plug-in hev with 50 km zev mode car production 21% car production 36% fuel production 10% fuel production 6% electricity generation 17% operation 69% operation 41% total: 30590 kg co2 eq. total: 21242 kg co2 eq. car production 40% fuel production 5% electricity generation 18% operation 37% total: 21000 kg co2 eq. d-segment hev 3 kwh li-lon battery gwp over 150000 km, hev car production 29% fuel production 9% operation 62% total: 24033 kg co2 eq. figure 9: evolution of the total gwp and repartition of the contribution of reach phase as a function of the hybridization ratio, d –class vehicles 130 international journal of sustainable energy planning and management vol. 22 2019 optimal designs for efficient mobility service for hybrid electric vehicles b) a) b) c) eutrophicatoin vs investment cost odp vs investment cost acidification vs investment cost investment cost [€] x 10 4 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 investment cost [€] x 10 4 x 10−3 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 investment cost [€] x 10 4 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 40 35 30 25 500 450 400 350 300 250 200 10 9 8 7 6 5 4 3 e u tr o p h ic a tio n [ kg p 0 4 -e q ] a ci d ifi ca tio n [ kg s 0 2 -e q ] o d p [ kg c f c -1 1 -e q ] figure 11. evolution of the cml impact categories a) eutrophication, b) acidification c) odp as a function of the investment cost gwp use phase electric gwp use phase hev 3 kwh hvb, over 150 000 km gwp use phase phev 7 kwh hvb french el. mix, over 150 000 km 15% 27% 87% 13% kg c o 2 e q . 0% 4% 11% total gep use phase over 150 000 km 70000 60000 50000 40000 30000 20000 10000 0 ice hev (3 kwh battery) phev (7 kwh battery) mix elec france phev (13 kwh battery) mix elec france phev (7 kwh battery) mix elec pologne phev (13 kwh battery) mix elec pologne gwp use phase phev 7 kwh hvb polish el. mix, over 150 000 km gwp use phase diesel combustion gwp diesel production gwp use phase electric gwp use phase diesel combustion gwp diesel production gwp use phase electric gwp use phase diesel combustion gwp diesel production 69% 74% figure 10: use phase: gwp evolution as a function of the hybridization ration and contribution of the energy vectors (diesel and electricity production) international journal of sustainable energy planning and management vol. 22 2019 131 zlatina dimitrova and françois maréchal production phase (figure 11). on the opposite the odp category decreases with the investment cost, thus the hybridization ratio (figure 11). the acidification is increasing with the powertrain efficiency (hybridization ratio). the main contributors are the increasing material extraction need for bigger size of the high voltage battery and the electric machine. the materials used in the high hybridization ratio vehicles definitions increase and their impact on the acidification impact is visible. the eutrophication is following the same tendency and increases with increasing hybridization ratio. these two categories are influenced from the vehicles production phase. on the opposite the odp category decreases with the investment cost, thus the hybridization ratio. the odp is related exactly as the gwp with the vehicle use phase and the use of fossil fuels and prime energy for the energy vectors production. thus, when the gwp is minimized, the odp is also minimized. in the environmental model for hybrid electric vehicles, one can consider that the gwp 100 years is the main impact category and thus simplifies the environmental impact evaluation of the environmental pareto frontier curve. the gwp is one of the categories of this impact but there are also three other categories – the acidification, the eutrophication and the odp. figure 11 illustrates the evolution of these categories as a function of the investment cost, thus the powertrain efficiency. the acidification is increasing with the powertrain efficiency (hybridization ratio). the main contributors are the increasing material extraction need for bigger size of the high voltage battery and the electric machine. the materials used in the high hybridization ratio vehicles definitions increase and their impact on the acidification impact is visible. the gwp can be considered as an indicator related to the other 2 objectives. this allows simplifying the optimization problem from 3 dimensional to 2 dimensional. the techno-economic optimization brings also optimal environmental solutions in the defined range of decisions variables for hybrid electric vehicles and so defines environomic solutions. the main interest of this conclusion is to simplify the optimization from 3d to 2d techno-economic with activated environmental model, which allows evaluating the environmental impacts of each solution of the techno-economic pareto curve. this simplified optimization approach is applied for the definition of environomic designs of hybrid electric vehicles on the customers driving cycles – urban and holiday. the main interest is the reduced computation time. the relation between the economic investment and the environmental performance was demonstrated through the multi-objective optimization. the investment in the technology improves the efficiency and the reduces the co2 emissions. the correlation confirms the link between the economy and the environment. the effort done for the development of efficient energy storage and conversion technologies is sustainable from environmental point of view. 4. conclusion this paper presents a powertrain design study on hybrid electric vehicles, considering different vehicle usages through adapted driving profile – normalized cycle. the optimal environomic configurations are researched by using multi objective optimization techniques. the optimization methodology is based on a genetic algorithm and is applied for defining the optimal set of decision variables for powertrain design. the analysis of the environomic pareto curves on nedc illustrates the relation between the economic and the environmental performances of the solutions. the life cycle inventory allows calculating the environmental performance of the optimal techno-economic solutions. the environmental and the economic trades-off are defined for the different impact categories. their impact for the production phase and the use phase of the vehicle is studied. the sensitivity of the impacts categories on the electricity production mix is as well studied. in a second step the optimization is extended to a three objective optimization, integrating the environmental impacts as objective. the analysis of the evolution of the four impacts categories allows choosing one main environmental category, the gwp, to be minimized. the analysis of the environomic pareto curves on nedc illustrates the relation between the economic and the environmental performances of the solutions. the optimization problem is then simplified from 3 objectives to 2 objectives optimization. the life cycle inventory allows calculating the environmental performance of the optimal techno-economic solutions. the solutions in the lowest emissions zone show that the maximal powertrain efficiency on nedc is limited on 132 international journal of sustainable energy planning and management vol. 22 2019 optimal designs for efficient mobility service for hybrid electric vehicles design in a sustainability perspective, in materials today communications, 13, 2017, pages 192–209, https://doi. org/10.1016/j.mtcomm.2017.09.012. 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[7] delogu m., zanchi l., dattilo c.a., pierini m., innovative composites and hybrid materials for electric vehicles lightweight table 5. parameters and performances bands for the optimal designs on nedc cycle parameters& indicators nedc co2 emissions [g/km] [140–30] powertrain efficiency [-] [0.25–0.45] battery capacity [kwh] [5–50] em power [kw] [20–50] ice displacement [l] [2.2–0.8] gwp [kg co2 eq] [3.6 104–2.3 104] investment cost [€] [30000–70000] d o i . o r g / 1 0 . 5 2 7 8 / ijsepm.2015.7.8 https://doi.org/10.1016/j.mtcomm.2017.09.012 https://doi.org/10.1016/j.mtcomm.2017.09.012 https://doi.org/10.1016/j.rser.2017.03.041 doi.org/10.5278/ijsepm.2015.7.6 doi.org/10.5278/ijsepm.2019.19.4 https://doi.org/10.1016/j.energy.2015.02.060 https://doi.org/10.1016/j.energy.2015.02.060 https://doi.org/10.1016/j.applthermaleng.2015.08.094 https://doi.org/10.1016/j.apenergy http://www.nissanglobal.com/en/technology/overview/cvt.html http://www.nissanglobal.com/en/technology/overview/cvt.html https://doi.org/10.1016/j.energy.2015.08.073 https://doi.org/10.1016/j.energy.2015.08.073 https://www.ecoinvent.org/database/database.html https://www.ecoinvent.org/database/database.html http://www.lacentrale.fr/fiche http://www.lacentrale.fr/fiche http://bva6-2014.html http://www.ertrac.org/uploads/documentsearch/id31/electrification_roadmap_june2012_62.pdf http://www.ertrac.org/uploads/documentsearch/id31/electrification_roadmap_june2012_62.pdf https://doi.org/10.1016/j.energy.2014.09.019 https://doi.org/10.1016/j.energy.2014.09.019 https://doi/org10.3303/cet1439080 https://doi.org/10.1016/j.jclepro.2017.04.035 https://doi.org/10.1016/j.jclepro.2017.04.035 doi.org/10.5278/ijsepm.2015.7.8 doi.org/10.5278/ijsepm.2015.7.8 _ref413763256 _ref422725636 _ref422725960 _ref417388472 international journal of sustainable energy planning and management vol. 20 2019 1 international journal of sustainable energy planning and management vol. 20 2019 01–04 1corresponding author e-mail: poul@plan.aau.dk abstract this editorial introduces the 20th volume of the international journal of sustainable energy planning and management. papers included are all from the conference on 4th generation district heating and smart energy systems, aalborg, 2017, treating the control of heat systems, technical and non-technical barriers to low-temperature district heating. temperature levels are also keyparameters in an investigation of heat pumps and heat sources for heat pumps in tallinn. in parallel to apps focusing on electricity systems, an app focusing on heat systems is presented. 1. introduction the 4th generation district heating [1,2] and smart energy system [3–5] approaches are becoming wellestablished terms within the energy research community and is also the cornerstone of the annual conference on 4th generation district heating and smart energy systems that is alternating between aalborg and copenhagen, denmark. the 2018 conference in aalborg follows successful events from previous years documented in this journal with special issues from 2015 ([6–9]), 2016 ([10–18]) and 2017 ([19–23]) – as well as special issues in energy [24–26]. 2. contents in this special issue, roberto et al. [27] take a starting point in how district heating systems are developing in the same direction as electricity systems with more generators in the grid and how this leads to on the one hand better energy efficiency but also in a more complex energy system to control. the authors model the district heating system of turin finding that a system with distributed heat generation also benefits from a system of distributed heat storage. volkova et al. [28] develop a mobile app to increase district heating users’ awareness of the technology’s benefits compared to other heating solutions with the aim of strengthening district heating’s position. the app is intended to enable users to see the benefits of district heating, see how 4th generation district heating can impact fuel consumption, emissions and more as well as showing the operation of district heating systems. brange et al.[29] treat how lower temperatures while positive for losses and efficiencies in the district heating systems also may decrease transmission capacity of the same with bottlenecks as a result. in bottleneck situations, a variety of solutions exist including increased supply temperature, larger pipes, increased pumping power and/or new pumps, better cooling, local heat supply and demand side management. these are explored and a method for choosing among them is elaborated. this is a continuation of work by the same authors presented in [30]. pellegrini [31] stress the importance of heading for lower district heating temperatures, but also point to some issues encountered when performing the transition. developments in 4th generation district heating poul alberg østergaarda,*, henrik lunda and brian vad mathiesenb a department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark b department of planning, aalborg university, a.c. meyers vænge 15, 2450 copenhagen sv, denmark keywords: district heating; control systems; heat pumps; url http://dx.doi.org/10.5278/ijsepm.2019.20.1 mailto:poul%40plan.aau.dk?subject= http://dx.doi.org/10.5278/ijsepm.2019.20.1 2 international journal of sustainable energy planning and management vol. 20 2019 developments in 4th generation district heating the transition is meet by barriers of both a technical and non-technical nature to which the authors present advice for decision makers. pieper et al.[32] investigate heat pumps in district heating systems and the use of optimal low-temperature sources. analyses performed over the year probe into optimal heat sources over the year and optimal heat pump investment strategies with a view to minimising consumer costs. based on a case study of tallinn, they show how large-scale heat pumps based on sewage water, river water, ambient air, seaand ground water can play an important role in the local district heating system. references [1] lund h, werner s, wiltshire r, svendsen s, thorsen je, hvelplund f, et al. 4th generation district heating (4gdh). integrating smart thermal grids into future sustainable energy systems. energy 2014;68:1–11. http://doi.org/10.1016/j. energy.2014.02.089 [2] lund h, østergaard pa, chang m, werner s, svendsen s, sorknæs p, et al. the status of 4th generation district heating: research and results. energy 2018. http://doi.org/10.1016/j. energy.2018.08.206 [3] lund h, andersen an, østergaard pa, mathiesen bv, connolly d. from electricity smart grids to smart energy systems a market operation based 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22 2019 81 *corresponding author e-mail: paolo.lazzeroni@linksfoundation.com international journal of sustainable energy planning and management vol. 22 2019 81–94 abstract nowadays, district heating and cooling (dhc) networks represent a viable and efficient way to distribute energy for space heating and cooling in urban areas with high density demand. this is particularly true in a context characterized by higher fuel price and restrictive regulatory framework. dhc systems give the possibility to integrate energy sources available in the territory and supply thermal energy to a conveniently large number of end-users; these are thus potentially capable to cover the demand at lower costs, higher efficiency and reduced emissions compared to not centralized systems. in the european union, the energy efficiency directive 2012/27/eu promotes these systems to increase the use of renewable energy source (res) and the efficiency, by introducing the definition of ‘efficient dhc’: at least 50% of renewable energy, 50% of waste heat, 75% of cogenerated heat or 50% of a combination of such energy and heat should be used. polygeneration systems, as hybrid energy systems combining res and traditional generation units, are then crucial to supply dhc networks in a sustainable way for reducing fossil fuel dependencies and emissions. in this context, this paper presents the design assessment of the generation facilities for an existing dhc network located in the northern part of italy. the design stage considers traditional fossil fuel units like boiler and combined heat and power (chp), but also renewable ones like solar thermal, absorption/electric chiller and other low enthalpy sources as options of the case study. the sizes of the generation units are defined according to the heating/cooling demand of the buildings supplied by the dhc, the estimated network losses and the present regulatory framework. the plant management is identified through an optimization procedure capable to minimize the operational costs according to the technical characteristics and constraints of the plant. four different configurations with increasing costs saving, installation costs, renewable energy sources (res) generation and primary energy saving (pes) are presented. a preliminary economic analysis is also presented for the various configurations considering the italian incentive schemes. finally, an energy assessment is presented to highlight the share of the different sources in each configuration and to evaluate their compliance to the eu directive on efficient dhc. the results reveal how the integration of res within polygeneration systems can be sustainable from the energy and economic point of view thanks to the italian supporting scheme and the optimal management of the resources. 1. introduction the district heating and cooling (dhc) networks are recognized as efficient systems capable to distribute energy for covering space heating/cooling and domestic hot water (dhw) demand [1, 2]. this is particularly true in the northern part of italy where dh networks are widely diffused within cities to supply heat demand to buildings in area with high density demand [3]. on the design of a polygeneration system with optimal management for a district heating and cooling network paolo lazzeronia,*, sergio oliveroa, maurizio repettob, federico stiranoa and vittorio verdab a fondazione links, via pier carlo boggio 61, 10138 torino, italy b dipartimento energia “g. ferraris”, politecnico di torino, corso duca degli abruzzi 24, 10124 torino, italy keywords: design polygeneration system; efficient dhc network; optimal management; url: http://dx.doi.org/10.5278/ijsepm.2450 mailto:paolo.lazzeroni@linksfoundation.com http://dx.doi.org/10.5278/ijsepm.2450 82 international journal of sustainable energy planning and management vol. 22 2019 design of a polygeneration system with optimal management for a district heating and cooling network optimization approach for reducing co2 emissions and increase decarbonisation. under this general context and according to the existing literature, this paper intends to show the design stages of a case study of a polygeneration system supplying an existing dhc network in north of italy through an optimization tool. different possible configurations of a multi-energy system with increasing complexity and res integration are proposed and studied by means of an optimization tool named xems13 [17] capable to minimize the operational costs considering technical constraints, energy prices and the regulatory framework. the economic optimization presented in this paper is based on a mixed integer linear programming (milp) formulation of the problem as described in [18]. energy harvesting solutions are also taken into account as additional opportunity to increase the efficiency of the overall system, reducing emissions and operational costs. [19] finally, an evaluation of the investments planned for each configuration and a comparative analysis of the proposed solutions from economic and energy point of view are presented and discussed to evaluate the sustainability of res integration within a polygeneration system. 2. case study the case study presented in this paper refers to an existing dhc network located in the north-west of italy. the network is presently used to supply an area where different building typologies are connected to cover space heating/cooling and domestic hot water (dhw) energy demands. table 1 summarizes the yearly energy demands for the buildings connected to the dhc network as measured by the energy manager in 2016. it is noticeable that tertiary buildings are the larger energy consumers in the area, since they account for 78% and 70% of the whole demand for space heating/dhw and space cooling, respectively. the dh network is operated with a supply temperature of 80°c and a return temperature of 65°c, while supply and return temperatures for the dc network are 5°c and 12°c, respectively. notwithstanding, the unusual high return temperature could be potentially reduced to increase the performance of the dh network (e.g. reduction of heat losses). however, the above mentioned contrary, dc network are not still largely adopted [4], but the increasing energy demand of space cooling in buildings demonstrates how italy have a great potential for the development of dc due to the severe weather condition experienced in summer. nevertheless, the heat generation within dh and dhc network is usually based on fossil fuel [5] also in the italian context. thus, the introduction of renewable energy sources (res) in dhc represents a prospective for more sustainable multi-energy systems with a consequent increase of the primary energy saving (pes) and a reduction of the operational costs and greenhouse gases emissions [6]. similarly, energy harvesting solutions recovering heat at different temperature can also be potentially investigated to reduce energy losses, increase pes and the overall efficiency of the systems to move dh toward 4th generation [7]. in this light, the eu commission has recently released the directive to encourage efficient dhc networks [8] aiming at increase the diffusion of cogeneration and trigeneration systems integrated with res within hybrid system. however, the design of hybrid energy system is complex to be identified from the economic point of view. in fact, installation costs of res are typically expensive than conventional sources based on fossil fuel, but res integration ensures reduced operational costs [9]. moreover, hybrid polygeneration systems are complex since typically different energy vectors are involved at once, res generation is intermittent and thermal storage unit must be properly managed for maximizing the res exploitation and reduce operational costs [10]. for these reasons, the contribution of the different sources supplying the costumers demand, need to be optimally scheduled to minimize the operational costs of polygeneration plants and to increase the economic feasibility of res integration [9, 11]. a wide literature is focused on this particular aspect [12, 13]. for example, the possible installation of res production in an existing polygeneration system is discussed in [14] through the optimal scheduling of the sources: the integration of renewables reduces operational costs and emissions but it increases investment costs compared to solutions based on fossil fuel. an energy scheduling model is instead defined in [15] to evaluate economic feasibility for the energy transition of urban districts towards 100% of renewables. similarly, the integration of photovoltaic (pv) production is also evaluated at urban level in [16] through an heuristic international journal of sustainable energy planning and management vol. 22 2019 83 paolo lazzeronia, sergio oliveroa, maurizio repetto, federico stirano and vittorio verda • a unit with 1750 kw of cooling capacity and a seasonal cop of approximatively 4.5 • a unit with 550 kw of cooling capacity and a seasonal cop of approximatively 4.5 these electric chillers are supplied by a medium voltage (mv) grid connection also used to provide electricity to the pumping systems for moving the hot and the chilled water in dhc network as well as in the cooling towers. on the contrary, the hot water is not produced locally, but it is purchased through a supply contract from third party. in this case, the generation plant of hot water is only represented by a pumping system capable to pressurise and move the hot water in the dh network. figure 2 summarizes the present layout of the generation plant considered in this case study. the dhc network of figure 1 is presently formed by pre-insulated double pipes that connect the generation plant with the different users. a simplified mathematical supply and return temperatures were assumed as fixed in the analysis described later. this constraint is due to a pre-existing contractual agreement between the manager of the dhc network and the customers and it cannot be presently modified. figure 1 shows a simplified layout of the dhc network suppling the buildings presented in table 1, where g is the proposed location for the installation of the polygeneration systems. 2.1. present configuration the space cooling energy demand of the buildings currently connected to the dhc network area is met by the production of chilled water locally supplied through a generation plant consisting of two compression chillers equipped with the following characteristics: table 1: yearly energy demands of the buildings connected to the dhc network building id building typology yearly consumption for space heating and dhw (mwh) yearly consumption for space cooling (mwh) a1 residential 111.75 29.80 a2 residential 108.98 31.37 c1 commercial 110.53 35.12 c2 commercial 366.71 211.03 e tertiary 630.98 370.22 v tertiary 1761.00 239.10 m commercial 119.94 45.82 w tertiary 128.93 91.91 z tertiary 553.90 170.70 q residential 48.21 21.68 q a1 a2 e m c1 c2 v w z g 14 12 13 11 9 10 8 16 1819 17 15 7 6 5 3 2 4 1 0 figure 1: layout of the dhc network for the case study third parts heat dh user cooling dc user electric chiller user user electricityelectrical grid figure 2: present configuration of the generation units 84 international journal of sustainable energy planning and management vol. 22 2019 design of a polygeneration system with optimal management for a district heating and cooling network to 20% of the demanded energy, while losses of dc network are around 5% of the supplied energy (see figure 2). this difference is due to the gap between the water and ground temperature which is greater in the dh network compared to the dc one. 3. optimal scheduling the current configuration of the area presented in figure 2 is particularly stressed from economic point of view. the increasing energy supply costs of the hot water provision for the dh network purchased by third party is forcing the energy manager of the area to an upgrade of the present configuration of the energy production plant, including the introduction of res. a possible solution investigated in this paper is the upgrade of the existing configuration by locally installing a selfgeneration system to produce hot water. for this reason, a feasibility study with a technical and economic evaluation for implementing new possible poligeneration configurations was carried out. the study was performed through an optimization tool named xems13. this tool developed by the energy department of the politecnico di torino and links [11, 17, 18, 19] simulates polygeneration systems by means of an optimized management of the sources minimi zing operational costs by considering technical and operational constraints. according to the aforementioned characteristics of the optimization tool, the objective function of the proposed problem is represented by the operational costs of the poligeneration plant, calculated as follows: in practice, the time horizon is discretized by subdividing the simulation in ni intervals with equal length usually of one hour. in each time interval, the costs for generating energy by the different ng sources and the cost for purchasing electricity from the grid are summed up and then they are subtracted by the gains obtained by selling electricity into the grid. the price cg for producing each unit of energy pg, the prices for purchasing (i.e. cp) or selling (i.e. cs) each unit of electricity (i.e. pp and ps respectively) can be time dependent or independent according to the type of sources and the supply contract for buying and selling electricity. nn gi g i g i p i p i s i s i i= g= of = c (t )p (t )+c (t )p (t ) c (t ) p (t ) 1 1 ∆    −     ∑ ∑ τ (1) modeling was defined for calculating the thermodynamic quantities that describe performance of the system (i.e. yearly heat losses). the calculation of the heat losses in the dhc was performed by a simplified evaluation of the water flow rate and the temperature drops in each pipe. this assessment was carried out considering two different operating conditions during a day: a) a stationary condition when the set-point tem peratures of the dhc networks are reached b) a transient condition when temperatures decr ease/increase by shutting down/up the plants. the first condition (a), is substantially reached in the late morning and maintained approximatively for 8 hours until the plants shut down. in this case, the water flow rate in the pipes is based on the network topology and on the calculation of an average daily power consumption, which is derived from the energy consumption of table 1. for this stationary condition, the temperature drop of a pipe and consequently the heat losses are approximated through a inversely proportional function of the water flow rate (i.e. obtained as a first order taylor’s series approximation of the exponential function [20] for the evaluation of the temperature drop of a pipe in stationary condition). the second condition (b) is instead approximatively maintained for 16 hours. in this case the evolution of the temperature in the network is calculated considering the water flow rate close to zero. as a consequence the temperature drop in pipe is calculated as ones for a storage tank through exponential function (i.e. as obtained from the solution of the differential form of the fourier’s law). the evaluation of the heat losses through the heating and cooling seasons, estimates the overall efficiency of the dh and dc networks. in this condition, the yearly heat losses of the dh network are approximatively close 4500 4000 3500 3000 2500 2000 1500 1000 500 0 m w h /y e a r chilled waterhot water energy demand losses figure 3: yearly energy demand and losses of the dhc network international journal of sustainable energy planning and management vol. 22 2019 85 paolo lazzeronia, sergio oliveroa, maurizio repetto, federico stirano and vittorio verda normalized load profiles present in literature or derived from measurement in similar climatic zones [21, 22]. these normalised load profiles are grouped by building typology and period of the year. in fact, it is worth nothing that space heating and cooling demand change for different season and type of end-user. then, under the hypothesis that all the days in a given season have the same profile, the normalized load profiles were opportunely re-scaled by means of a correction factor fc, to ensure that the energy annually required by each building coincides with the measured data of table 1. in this way, the yearly energy ey consumed by a building can be calculated as follows: where pp.u. is the value of the normalised load profile in a given time interval and ∆t is the length of the time interval (i.e. one hour in this case). later, the profiles of the energy demand for the whole area were obtained by summing up each building load profile and the heat losses of the dhc network, under the approximation that the load profile of network losses is flat. the yearly aggregated load profiles for the heating and cooling demand were finally subdivided in 14 representative weekly profiles, since the heating season for the area starts at 15th october and stops at 15th april. thus, 12 weeks were defined to represent each month of the year, but two additional weeks were used to consider the no-heating period in the first half of october and in the last half of april. figure 4 shows two of the representative weekly load profiles of the area. these weeks refer to the periods in which the peak of heating/dhw demand and the peak of cooling needs are reached. in particular, figure 4a shows how the peak for space heating and dhw presently can y c p.u. i i e =f p (t ) t 8760 1 ∆ = ⋅ ∑ (2) the workflow of the optimization tool is substantially subdivided in three steps according to the description presented in [11, 18]. initially (step #1), the time profiles of the energy demand (i.e. heating, cooling, electricity), the time profiles of the energy prices (i.e. electricity, natural gas, etc.) and the time profile concerning the renewable generation (e.g. solar thermal) are acquired. then (step #2), technical and operational characteristics of the different sources as well as the connections between them are fixed. consequently, two different sets of equations (constraints) are identified: • balance equations representing the energy balance of each energy carriers in order to ensure feasible solution where demand is covered by production. • constitutive equations representing the rela tionship between the input and output power of a sources, as well as its operational limits. finally (step #3), the optimal scheduling for the different components of the plant is found by means of a solver for mixed integer linear programming (milp) formulation. so, all the aforementioned equations describing the problem have to be linear. in case of nonlinear functions and constraints, piecewise linear functions are used to approximate the system or components behaviour. 3.1. hourly load profiles as already observed, the time profiles of the energy demand for the whole area are needed to simulate the optimal management of the different energy sources in the upgraded configurations of the production plant. the heating and cooling demand of the area can be defined as the sum of the energy needs of the buildings and the heat losses of the dhc network. the hourly load profiles of each building supplied by the dhc network were identified through daily 4500 4000 3500 3000 2500 2000 1500 1000 500 0 h e a tin g d e m a n d ( kw ) 0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 2500 2000 1500 1000 500 0 c o o lin g d e m a n d ( kw ) 0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 time (h)time (h)(a) (b) figure 4: aggregated weekly load profiles of the area for: a) space heating and dhw in january, b) space cooling in july 86 international journal of sustainable energy planning and management vol. 22 2019 design of a polygeneration system with optimal management for a district heating and cooling network close to 65 €/mwh. for this reason, the upgraded scenarios proposed in this paper were compared with this current value considering also other fixed costs to be paid to the third parties which account for around 33k€ per year. since in the proposed new scenario electricity generation systems could also be introduced, the prices for the electricity sold to the grid were also identified. these prices refer to the historical data provided by the italian energy market operator (gme) [23] for the year 2015. figure 5 shows an example of these time profiles for some periods of the year. finally, the unit price of the natural gas for supplying the heat generation systems to be introduced in the upgraded scenarios was estimated at approximatively 0.37 €/nm3. this value, that does not include excises, is derived from the natural gas price database of the italian energy authority (arera) [24]. the price used refers to an estimated demand of around 1mm3/year obtained for polygeneration plants with an installed capacity similar to the existing one. the natural gas price was later increased by adding the excises value which reach approximatively 4mw, while figure 4b shows how the peak for space cooling can potentially reach 2mw. the latter condition evidences how the cooling demand is close to the maximum capacity of the present configuration. this situation shows potential bottleneck, which could be critical during adverse environmental conditions in summer. the electric load profiles for the pumping systems of dhc network were instead derived from the heating and cooling one, assuming that electric profiles follow the thermal one and the electricity consumption of the pumping systems is equal to 3.5% of the corresponding thermal demand, as resulting from electricity bills. 3.2. energy prices as in the analysis for defining the load profiles of the different energy vectors, the assessment of the present energy prices was performed to individuate the unit price for each energy carriers of the area. the electricity currently purchased by the mv distribution grid for feeding the compression chillers and the pumping systems refers to a time-of-use (tou) italian tariff. the electricity prices presented in table 2 include the variable access grid costs, variable general system costs and the excises. other fixed costs are not considered since this quota does not change in the upgraded scenario when compared to the reference present scenario. the hot water for suppling the buildings connected to the dh network is instead currently purchased by third parties at a price that can be considered approximatively table 2: electricity time-of-use tariff of the case study day on-peak mid-peak off-peak mon-fri 8–19 7–8; 19–23 23–7 sat – 7–23 23–7 sun – – 0–24 price (€/mwh) 151 146 136 0 0 20 40 60 80 100 120 12 24 36 48 60 72 84 96 108 120 132 144 156 168 s e lli n g e le ct ri ci ty p ri ce (€ /m w h ) april january july time (h) figure 5: trends of the italian selling electricity price in different periods of the year international journal of sustainable energy planning and management vol. 22 2019 87 paolo lazzeronia, sergio oliveroa, maurizio repetto, federico stirano and vittorio verda third party are forcing to an upgrade of the present configuration (see figure 2 in section 2) of the energy production plant. in this section, four different new configurations are presented in table 3 and figure 6 for producing hot and cold water by systems with incremental complexity where also res are involved. in the proposed configurations, all the generation facilities are located and connected in the same point of the network depend on how the use of natural gas is classified in each new configuration according to the definition introduced by arera. 4. proposed configurations as already described in section 3, the current energy supply costs of the hot water provision purchased by table 3: installed power capacities for the different configurations technical characteristics unit scenario 1 scenario 2 scenario 3 scenario 4 electric chiller #1 pn = 1750kwf cop = 4.5 pn = 1750kwf cop = 4.5 pn = 1750kwf cop = 4.5 pn = 1750kwf cop = 4.5 electric chiller #2 pn = 550kwf cop = 4.5 pn = 550kwf cop = 4.5 pn = 550kwf cop = 4.5 pn = 550kwf cop = 4.5 boilers pn = 6000kw η = 0.92 pn = 5000kw η = 0.92 pn = 5000kw η = 0.92 pn = 5000kw η = 0.92 chp – – pe = 635kw pt = 766kw ηe = 0.395 ηt = 0.476 pe = 635kw pt = 766kw ηe = 0.395 ηt = 0.476 pe = 635kw pt = 766kw ηe = 0.395 ηt = 0.476 absorption chiller – – pn = 500kwf cop = 0.7 pn = 500kwf cop = 0.7 pn = 500kwf cop = 0.7 thermal storage – – e = 3.5mwh v = 180m3 e = 3.5mwh v = 180m3 e = 3.5mwh v = 180m3 solar thermal – – – – pn = 180kwp s = 500m 2 pn = 180kwp s = 500m 2 heat pump – – – – – – pn = 390kwt cop = 2.5 scenario 1 scenario 3 scenario 4 scenario 2 boilers natural gas heat dh user user user electrical grid electricity electrical chiller cooling dc user boilers natural gas natural gas chp heat dh user user user electrical grid electricity electrical chiller cooling dc user absorption chiller thermal storage boilers natural gas natural gas chp heat dh user user user electrical grid electricity electrical chiller cooling dc user absorption chiller thermal storage solor panel (summer conf) boilers natural gas chp natural gas heat dh user electrical grid electricity electrical chiller cooling dc user user user absorption chiller thermal storage solor panel (summer conf) solor panel (summer conf) heat pump low enthalpy figure 6: proposed upgraded scenarios 88 international journal of sustainable energy planning and management vol. 22 2019 design of a polygeneration system with optimal management for a district heating and cooling network where e is the gross electricity yearly generated, h is the thermal energy yearly produced and f is the annual total energy of the natural gas used to fed the chp. • primary energy saving (pes) must be positive for small cogeneration units (i.e. size ≤1mwe): where chp hη and chp eη are the annual thermal and electric efficiency of the chp, while ref hη and ref eη are the reference value of the efficiency for separate production of heat and electricity [28]. the car qualification allows to obtain energy efficiency certificates (tee or white certificates) proportionally to the savings calculated as follows: where k is a factor based on the chp size, while ηt rif and ηe rif represent the average thermal efficiency of the italian heat production systems and the average electric efficiency of the italian electricity production systems, respectively. presently the average value of each energy efficiency certificate in the italian market is close to 220€ [23], but a peak of more than 250€ was also recently reached. however, a more prudent value of 150€ is used here. 4.3. scenario 3 scenario 3 (see figure 6) integrates res production within the scenario 2. in particular, heat production from solar thermal collectors was introduced to cover part of the heating demand of the dh network. for this reason, hot water production from solar collectors is supposed to be at the supply temperature of the network (i.e. 80°c), with a tilt angle of 50° and azimuth equal to 0° to ensure production also in mid-season. the total gross area of solar field was chosen so that the daily production meet approximately 50% of the daily heat losses of the dh network during the worst operating condition (i.e. summer period in july). this choice avoids large plant size of the solar field, unable to be feasibly realized. a gross surface of the modules equal to around 500m2 was calculated for generating the required energy by means of an analysis of the solar irradiation [11, 29] of the area considering the tilt angle, the azimuth angle and the supply temperature of the water. moreover, the scenario 3 benefits of an additional incentive for the chp h chp epes = ref h ref e 1 1 100η η η η   −   +    (4) e rif t rif e h tee = k f0.086 η η   ⋅ ⋅ + −    (5) (node g of figure 1) due to the fact that the network is spread over a small area. 4.1. scenario 1 in the first scenario presented in figure 6, the production of hot water for feeding the dh is obtained by means of a boilers unit supplied by natural gas. the size selected for the boilers group was 6mw with an estimated efficiency of 92%, since the peak of the heat demand is approximatively close to 4mw as already shown in figure 4a. in this scenario, the excises to be applied in addition to the cost for natural gas presented in section 3 are equal to 0.2118 €/nm3 following the italian regu lations [25]. this is due to the classification introduced by the italian energy authority which classify as “civil use” the natural gas used to supply the boilers in this configuration. 4.2. scenario 2 scenario 2 (see figure 6) represents an evolution of the scenario 1 where a cogeneration unit (chp) is added together to an absorption unit for recovering heat produced by chp and a thermal storage unit to increase the flexibility and the efficiency of the overall system. the installation of a chp unit benefits of reduced excises for the natural gas used to supply both boilers and the chp, if the following conditions are met: • the ratio between rated thermal power of chp and total installed thermal power (chp + boilers) must be ≥ 0.1 • the yearly electricity production of chp must be ≥ 10% of the thermal energy produced by the polygeneration system. in this case, the natural gas used to supply the poligeneration system is subjected to excises for “industrial use” equal to 0.018 €/nm3 [25]. however, part of the gas feeding the chp, that is calculated as 22% of the electricity produced by the chp, is subjected to reduced excises for “electricity production” equal to 0.0004433 €/nm3 [25]. scenario 2 can benefit of a further incentive related to the qualification as high-efficiency cogeneration (car) unit [26]. the car qualification is achieved when cogeneration respects the following limits [27]: • the global efficiency ng of the chp must be greater than or equal to 0.75 for chp consisting of internal combustion engines fed by natural gas: g e+h n = f (3) international journal of sustainable energy planning and management vol. 22 2019 89 paolo lazzeronia, sergio oliveroa, maurizio repetto, federico stirano and vittorio verda environment. this low enthalpy heat feeds the same water-to-water heat pump coupled by the solar collectors. 5. results the proposed scenarios were implemented in the xems13 optimization tool to evaluate the optimal scheduling of the difference sources in the four proposed configurations and the corresponding yearly operational costs, considering technical and operational constraints of each components of the polygeneration system. these results were compared to one obtained for the reference configuration of figure 2 to highlight the corresponding costs savings as shown in table 4. figure 7 shows an example of the xmes13 solutions concerning the scheduling of the hot water production for supplying the dh network in summer for scenario 4. it is noticeable that the tes unit reduces chp production (ptle) by storing its daytime overproduction (psttin) and realising it during night-time (psttout). moreover, the effect of the heat produced by the solar field (psh) contributes to cover the heat demand (ut) especially during daytime of the weekend. installation of solar thermal collector according to the italian scheme named “conto termico” [30]. the yearly incentive i is proportional to the annual energy production of a single module calculated as follows: where ci is the coefficient to economically valorise the thermal energy produced qu and sl is the gross area of the solar field. 4.4. scenario 4 the last scenario (i.e. scenario 4 as shown in figure 6) improves the scenario 3 where the high set-point (i.e. 80°c) of the supply temperature for the solar collector reduces the heat production during winter. the proposed solution is a reduction of the supply temperature, during the heating season (october 15th april 15th), down to 55°c and then use a water-to-water heat pump to warm-up the water up to the dh supply temperature of 80°c. instead, the solar collectors have a set-point of 80°c for the supply temperature outside the heating season. in this new configuration, low enthalpy heat (at 55°c) can be also recovered from the cooling system of the chp, which otherwise should be wasted in the i u li = c q s⋅ ⋅ (6) 1,000 500 0 −500 −1,000 30 60 90 120 150 t phple1 absin1 ptle1 dt ut psh1 psttout1 psttln1 bt1 figure 7: optimal scheduling of the different sources in the scenario 4 by xems13 table 4: economic results obtained for the different configurations scenario 1 scenario 2 scenario 3 scenario 4 capex (k€) 600 1385 1560 1638 o&m (k€/y) 12 29.6 31.3 35.2 costs savings (%/y) 3.63 34.9 35.9 36.1 pbt (years) >20 9.5 9.85 11.2 npv (k€) –305.3 1830.9 1808.9 1827.7 irr(%) –6 10.7 9.8 9.6 90 international journal of sustainable energy planning and management vol. 22 2019 design of a polygeneration system with optimal management for a district heating and cooling network due to the reduced heat production from the solar field during winter. reduced excises, car qualification and energy efficiency certificates can be also obtained for this configuration. in fact, the electricity produced in this scenario is equal to 33.3% of the heat produced by the whole systems, the pes is equal to 23% and the global efficiency is equal to 87%. scenario 4 modifies the configuration of scenario 3 by reducing the set-point of the supply temperature from 80°c to 55°c during the heating season (october 15th to april 15th). furthermore, low-temperature water (i.e. at 55°c) is also recovered from the cooling system of the chp in order to supply a water-to-water heat pump and to increase the overall efficiency of the plant. in this configuration, the economic indicators improve if compared to scenario 3, thanks to the increase of both heat production of the solar field and plant efficiency. again, reduced excises, car qualification and energy efficiency certificates can be also obtained for this configuration. in fact, the electricity produced in this scenario is equal to 35.9% of the heat produced by the whole systems, the pes is equal to 25.9% and the global efficiency is equal to 91.5%. scenario 2 and scenario 4 could therefore represent the possible solutions to be adopted, taking into account that scenario 4 could be reached at a later stage once scenario 2 was previously completed. finally, figure 8 shows the share of the different sources for covering of the load demand from end-users connected to the dhc network. these values define if each different scenario can be considered as an “efficient district heating and cooling” configuration following the definition introduced by the european directive [8]: ‘efficient district heating and cooling’ means a district heating or cooling system using at least 50% renewable energy, 50% waste heat, 75% cogenerated heat or 50% of a combination of such energy and heat. in this context, all the scenarios can be defined as efficient district cooling since the production of cold water comes from electric or absorption chillers. on the other hand, district heating can be defined as efficient only for the scenario 4 where more than 50% of the demand is covered by a combination of heat produced by cogeneration and renewable sources. 6. conclusion the paper presents the design stage of a polygeneration systems for supplying an existing dhc network located an economic analysis was also performed to calculate the economic indicators for evaluating the investment profitability of the different proposed scenarios. in particular, the net present value (npv), the internal rate of return (irr) and the pay back time (pbt) were used to compare the different solutions. in particular, a discount rate of 4% was considered for the definition of the npv, while a technical lifetime of 20 years was used for the evaluation of the irr. investment and the yearly o&m costs for the technologies proposed in the different scenarios derive from [31]. the former were used to evaluate the installation cost of the proposed upgrade in each scenarios, while the latter were added to the operational costs estimated by xems13 for calculating the yearly cash flows in the npv and irr. o&m costs are generally considered as a percentage of the investment cost, but in some cases (e.g. chp) this costs refer to the energy generated (i.e. expressed as €/kwh), so they are directly added in the objective function. finally, savings of operational costs were also evaluated considering the costs of the present configuration as reference. table 4 shows the results carried out by the economic analysis. in particular, scenario 1 is economically unsu stainable because of the impact of the excises on the natural gas used to feed the boilers, since this scenario is classified as “civil use”, according to the arera classification. on the other hand, scenario 2 is more economically attractive thanks to the introduction of a chp system combined with the boilers unit, which greatly reduces the excises on the natural gas. in fact, the electricity produced in this scenario represents 38.3% of the heat produced by the whole systems and the ratio between rated thermal power of chp and total installed thermal power is equal to 0.15. consequently, reduced excises are paid by scenario 2 according to the condition presented in section 4.2. moreover, the whole system could be qualified as high-efficiency cogeneration unit (car), since pes and the global efficiency are equal to 23.9% and 87.1%, respectively. thus, energy efficiency certificates can also be obtained to further support the investment. scenario 3 introduces hot water production from solar thermal collectors starting from the configuration of scenario 2. the investment cost for the installation of the solar field can be partially recovered thanks to the additional italian incentive named “conto termico”. however, the economic indicators obtained for this configuration are slightly worse than ones of scenario 2, international journal of sustainable energy planning and management vol. 22 2019 91 paolo lazzeronia, sergio oliveroa, maurizio repetto, federico stirano and vittorio verda costs saving and pes but reduce the usage of fossil fuel. the analysis also show how the incentive scheme are still relevant to make economically sustainable the investments in res and high efficiency solutions in the italian context. finally, the use of optimization tool also remarks the needs for introducing res and energy harvesting solutions capable to increase system efficiency and to be classified as ‘efficient dhc’ under the eu directive. references [1] s. werner, “international review of district heating and cooling,” energy, vol. 137, pp. 617–631, 2017. https://doi.org/10.1016/j. energy.2017.04.045 [2] o. pol and r.-r. schmidt, “development of district heating and cooling in the urban planning context,” in advanced district heating and cooling (dhc) systems, 2016, p. 319–337. https://doi.org/10.1016/b978-1-78242-374-4.00015-x [3] m. galindo ferna ́ndez, c. roger-lacan, u. gährs and v. aumaitre, “efficient district heating and cooling systems in the eu case studies analysis, replicable key success factors and potential policy implications,” eur 28418 en. http://dx.doi. org/10.2760/371045 [4] euroheat&power, “country by country statistics overview,” 2015. [online]. available: http://www.euroheat.org/wp-content/ in the northern part of italy. in fact, the present reference scenario is subjected to an increasing energy supply costs of the hot water provision for the dh network purchased by third party. a feasibility study for an upgrade of the current configuration for generating the thermal energy was analysed presenting four different solutions with increased complexity. the first scenario integrates a group of boilers to the existing cooling generation units. a chp, an absorption chiller and a tes were also added in the second one, while heat generation by a solar field is then imple mented in the third scenario. a water-to-water heat pump is finally included in the fourth scenario to better exploit the production of the solar collectors in winter and to harvest low temperature water from the cooling systems of the chp. costs and energy saving obtained by the different scenarios with respect to the existing situation were evaluated through an optimization tool to find the best scheduling of the sources for minimizing the operational costs. the optimal results were then used to evaluate the yearly cash flows obtained in each scenario and to perform an economic and energy analysis. these analysis show how the last scenario represent the best compromise between energy and economic point of view thanks to the combination of res generation and energy harvesting which increase scenario 2 scenario 3 scenario 4 boiler chp 47.0% 53.0% chiller abs 6.8% 93.2% boiler chp sh 3.8% 51.7%44.5% chiller abs 9.7% 90.3% boiler chp hp sh 3.0% 7.9% 39.9% 49.2% chiller abs 9.8% 90.2% bbbboileroiler cchphphhhhh hhhhpp sssssssssssshh cchillerrrrrrrrhillerrrrrrrrrrrrrrrrrrr aaabsbs figure 8: yearly energy share in the different configurations as evaluated by xems13 https://doi.org/10.1016/j.energy.2017.04.045 https://doi.org/10.1016/j.energy.2017.04.045 https://doi.org/10.1016/b978-1-78242-374-4.00015 http://dx.doi.org/10.2760/371045 http://dx.doi.org/10.2760/371045 http://www.euroheat.org/wp-content/uploads/2016/03/2015-country-by-country-statistics-overview.pdf 92 international journal of sustainable energy planning and management vol. 22 2019 design of a polygeneration system with optimal management for a district heating and cooling network vol. 50, pp. 1536–1542, 2013. https://doi.org/10.1016/j. applthermaleng.2011.10.041 [15] r. p. van leeuwen, j. b. de wit and g. j. m. smit, “energy scheduling model to optimize transition routes towards 100% renewable urban districts,” international journal of sustainable energy planning and management, vol. 13, pp. 19-46, 2017. https://doi.org/10.5278/ijsepm.2017.13.3 [16] m. g. prina, m. cozzini, g. garegnani, d. moser, u. filippi oberegger, r. vaccaro and w. sparber, “smart energy systems applied at urban level: the case of the municipality of bressanone-brixen,” international journal of sustainable energy planning and management, vol. 10, pp. 33–52, 2016. https://doi.org/10.5278/ijsepm.2016.10.4 [17] n. perez-mora, p. lazzeroni and m. repetto, “xems13: an hybrid-energy generation management system,” in ieee international conference on smart grid communications (smartgridcomm): workshop 2: efficient, intelligent and economic district heating and cooling systems, 2016. https:// doi.org/10.1109/smartgridcomm.2016.7778732 [18] n. pe ́rez-mora, p. lazzeroni, v. martínez-moll and m. repetto, “optimal management of a complex dhc plant,” energy conversion and management, vol. 145, p. 386–397, 2017. https://doi.org/10.1016/j.enconman.2017.05.002 [19] n. pe ́rez-mora, p. lazzeroni, v. martínez-moll and m. repetto, “optimal dhc energy supply harnessing its thermal mass,” applied thermal engineering, vol. 133, p. 520–531, 2018. https://doi.org/10.1016/j.applthermaleng.2018.01.072 [20] x. liu, j. wu, n. jenkins and a. bagdanavicius, “combined analysis of electricity and heat networks,” applied energy, vol. 162, p. 1238–1250, 2016. https://doi.org/10.1016/j.apenergy.2015.01.102 [21] e. macchi, s. campanari and p. silva, la microcogenerazione a gas naturale, polipress, 2006. 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[30] ministero dello sviluppo economico, “decreto interministeriale 16 febbraio 2016 aggiornamento conto termico”. [31] a. duffy, m. rogers and l. ayompe, “renewable energy and energy efficiency assessment of projects and policies,” wiley, 2015. economico 5 settembre 2011 – cogenerazione ad alto rendimento (car)”. [28] “commission delegated regulation (eu) 2015/2402 of 12 october 2015 reviewing harmonised efficiency reference values for separate production of electricity and heat in application of directive 2012/27/eu of the european parliament and of the council and repealing commission implementing decision 2011/877/eu”, [online]. available: https://publications. europa.eu/en/publication-detail/-/publication/394edc16-a61d11e5-b528-01aa75ed71a1/language-en http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php https://publications.europa.eu/en/publication-detail/-/publication/394edc16-a61d-11e5-b528-01aa75ed71a1/language https://publications.europa.eu/en/publication-detail/-/publication/394edc16-a61d-11e5-b528-01aa75ed71a1/language https://publications.europa.eu/en/publication-detail/-/publication/394edc16-a61d-11e5-b528-01aa75ed71a1/language _goback _ref191642245 08.1115-4054-1-le.qxd 1. introduction danish energy policy is committed to the short term objective of having more than 35% of the final energy consumption covered by renewable energy sources (res) by the year 2020, with the more detailed stipulations that 10% of the transportation demand should be covered by res and approximately 50% of the electricity demand should be covered by wind power [1]. by 2030, oil for heating should be phased out as well as the entire coal demand. by 2035, international journal of sustainable energy planning and management vol. 07 2015 99 electricity and heating should rely completely on res [2]. in the long term, the objective is to have a 100% res penetration in the energy and transport sectors by 2050 [1], with the aim of combatting climate change [3, 4]. denmark is a country of limited supply of storable res [5] so high res penetration is inevitably connected to large-scale exploitation of wind power and wind power has thus also hitherto played a pivotal role in the development of the danish energy system [4] with a 2013 share of 33.6% of domestic electricity supply [6]. *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 07 2015 99-116 energy systems scenario modelling and long term forecasting of hourly electricity demand �������� ��� � ��� ������ �� ����� ���� �� ��������� �������� ������� � ��� �������� � ��� ����� � ������������ �������������������� ���� � ����������������������� ���� !�"# �"���� ���������� ��� ����$�!�%��&� ��� � ��' �� ���� �����(�)��*���*����+����������� ���� abstract the danish energy system is undergoing a transition from a system based on storable fossil fuels to a system based on fluctuating renewable energy sources. at the same time, more and more of the energy system is becoming electrified; transportation, heating and fuel usage in industry and elsewhere. this article investigates the development of the danish energy system in a medium year 2030 situation as well as in a long-term year 2050 situation. the analyses are based on scenario development by the danish climate commission. in the short term, it is investigated what the effects will be of having flexible or inflexible electric vehicles and individual heat pumps, and in the long term it is investigated what the effects of changes in the load profiles due to changing weights of demand sectors are. the analyses are based on energy systems simulations using energyplan and demand forecasting using the helena model. the results show that even with a limited short term electric car fleet, these will have a significant effect on the energy system; the energy system’s ability to integrate wind power and the demand for condensing power generation capacity in the system. charging patterns and flexibility have significant effects on this. likewise, individual heat pumps may affect the system operation if they are equipped with heat storages. the analyses also show that the long term changes in electricity demand curve profiles have little impact on the energy system performance. the flexibility given by heat pumps and electric vehicles in the long term future overshadows any effects of changes in hourly demand curve profiles. keywords: scenarios analyses; energy system simulation; demand curve projections; heat pumps; electric vehicles; url: dx.doi.org/10.5278/ijsepm.2015.7.8 dx.doi.org/10.5278/ijsepm.2015.7.8 100 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand this introduces a complexity into the future danish energy system which has made denmark an interesting case for analyses of high-res energy systems as well as the centre point of a number of analyses focusing on high wind power scenarios [7-9], the role of electric vehicles in integrating wind power[10], the general role of the transport sector in future energy systems [11], limited biomass availability [5], large-scale use of cogeneration of heat and power (chp) for district heating (dh) supply [12-14], smart energy systems [15], the role of storage in integrating wind power [16] and means of integrating wind power into national energy systems [17, 18]. the ensymora project (energy systems modelling, research and analysis) has targeted the future challenges of the danish energy system through an integrated focus on methods and models for energy systems analysis including both methods and tools for supply scenario analysis as well as methods and tools for electricity demand projections. research has investigated and compared high-res scenarios [5, 19], short term projections of fluctuating res including wind power [20] and wave power [21], long term forecasting of electricity demand using a combination of econometrics and high resolution existing demand pattern [22, 23] as well as policy implications of the transition to high res energy supply [24, 25]. many national scenario analyses including [5, 19] however have been based on existing demand curve profiles combined with demand curve profiles from new electricity demands including electric heating through heat pumps and electric vehicles. electricity demand curve profiles will change though as a consequence of shifts between the relative weight of different demand sectors as well as due to the introduction of new technologies and behavioural changes over the coming decades. therefore energy scenario analyses cannot focus on designing and simulating energy systems capable of meeting the demand variations of today but must focus on designing and simulating energy systems that are sufficiently robust to meet the demand variations of the future. for this reason, this article simulates a highres energy scenario for denmark under different long term demand curve profile projections. secondly, with the required shifts in technology in vehicles and heating, the energy system is progressively becoming more and more based on electricity through electric heat pumps and electric vehicles. this introduces new and potentially controllable loads. in this article we thus analyse a; the energy system impacts of projected changes in hourly electricity demand variations in a long term scenario based on a 2050 100% res scenario for denmark. at this point in time, we assume that electric vehicles and individual heat pumps are flexible; i.e., may be dispatched according to momentary energy system needs , and b; the energy system impacts in intermediate 2030 of having flexible or inflexible electrical vehicles and individual heat pumps. research has already addressed future demand variations — e.g. based on price sensitivity of demands [26, 27] — however in this article we focus on system effects of changes in demand curve profiles. demand curve profiles change due to changes in the composition of demand and especially due to the introduction of electrical vehicles and individual heat pumps. if demand by electrical vehicles and individual heat pumps is flexible this may partly balance variations in supply from fluctuating res like wind power. however, today incentives for being flexible customers are lacking and if electrical vehicles and individual heat pumps are not flexible the integration of these new technologies may considerably increase the demand for peak capacity. section 2 introduces the tools and methods applied in the article; the hourly energy systems simulation model energyplan as well as a model for hourly demand curve forecasts. section 3 details the construction of forecasted demand curves. section 4 introduces a high res scenario developed by the danish climate commission and based on the scenario and demand curve forecasts introduced in section 3, the system responses to different demand forecasts are analyses in sections 5 and 6. finally section 7 concludes on the analyses. 2. methodology this section describes the main methodologies applied in this article; energy systems analyses using the energyplan model and electricity demand forecasting using the helena model. 2.1. energy systems analyses using the energyplan model a simulation model with a high temporal resolution is required for conducting simulations of an energy system like the danish with fluctuating energy sources playing a pivotal role in both the current and in the future energy system. secondly, the danish energy system is characterised by a very high degree of chp production for dh and electricity generation. thirdly, these chpdh systems are equipped with thermal storage allowing them to shift production of heat from times of increased electricity needs to times of reduced electricity needs. furthermore, the system is experiencing a slow but gradual transitions towards electric vehicles or vehicles based on synthetic fuels which in turn affects electricity demands and electricity demand patterns, heat production and biomass usage patterns. finally the energy system is becoming increasingly complex through exploitation of other synergies in the energy system – waste heat streams from industrial producers, use of heat pumps or resistance heaters in individual or dh applications. one simulation model that is capable of adequately handling these issues is the energyplan model (see comparison to other models in [28]). the energyplan has the following model characteristics: • focus on the integration of res in energy systems. the model gives particular attention to the various fluctuating energy sources that may be utilised to cover electric and heat demands including wind power, off-shore wind power, photo voltaics (pv), geothermal power plants, hydro plants with and without dams, solar collectors for heat production either individual or dh connected. • entire energy system. the model includes the entire energy system with electric, heat, cooling, transport and industrial demands as well as the technologies to supply the different energy streams • chp, dh, heat pumps, storages. the model includes chp plants of two types; back-pressure plants for small dh system as well as extraction plants for large-scale dh systems. • aggregated. all demands and productions are represented as one single unit with the average or total characteristics of the stock units of the various types. • dh is modelled in three groups to represent small-scale boiler-based systems (group 1), local chp plants (group 2) and large-scale systems based on extraction plants (group 3) • deterministic – as opposed to probabilistic. • one hour resolution / one year simulation horizon • endogenous priorities. the system gives highest priorities to production of a use-it-or-lose-it nature (wind, solar, wave) and minimum priority to the least efficient dispatchable units (boilers for heat generation and condensing mode power plants for power generation) • technical or economic optimisation. a range of technical operation strategies determine whether the model make chp plants follow heat demands, follow a fixed profile or produce in a way to match both heat and electricity needs in the best possible ways. with economic optimisation, energyplan dispatches dispatchable units in the optimal way on a userdefined electricity market. the model operates with a number of electricity demands. first and foremost what might be denoted the conventional electricity demand described with an annual aggregate and distribution indexes for each hour of the year. secondly inflexible electric heating and cooling demands that are also stated as an annual aggregate combined with hourly distribution indexes. thirdly electric vehicles which may be described in the manner of the two first categories – but which may also have flexible charging or even vehicle-to-grid (v2g) capability. lastly a number of energy system internal electricity demands – including heat pumps for dh, electrolysers for hydrogen generation, charging of electricity storages. in the analyses in this article, various means of flexibility are investigated, however it should be stressed that these analyses are performed using the onehour resolution of energyplan. the flexibility of e.g. heat pumps and electric vehicles is clearly limited by the frequency at which these can be turned on and off without efficiency losses or excessive wear and tear, however any such constraints are under the one hour level. outputs include yearly, monthly and hourly productions and demands of all energy carriers from all modelled units as well as res shares, carbon dioxide emissions and aggregated and annual investment costs, operation and maintenance costs, fuel costs and emission costs in case costs are included. it should be noted, that energyplan is a single-node (“copperplate”) model, thus any actual physical grid limitations within the system will not affect the operation as simulated in energyplan. this is a simplification, however as demonstrated in previous work [12,14,29,30], optimal operation of local chps and local integration lower demands of the transmission international journal of sustainable energy planning and management vol. 07 2015 101 poul alberg østergaard, frits møller andersen and pil seok kwon grid as well as transmission grid losses. the grid (transmission as well as distribution) will be affected by a move towards an energy system which relies more on electricity, however since this move is already undergoing and should occur, the grid will need to adapt. this however, goes beyond the current analyses. another potential shortcoming of the model and the school of models is represent is the fact that it does not endogenously handle probability or input variability; such variations must be handled exogenously if required. in particular, when performing long-term scenario analyses as in this case, with on the one hand expected climate changes and on the other hand naturally occurring shifts in demand, these have to be captured to be adequately reflected in the modelling. climatic variations affecting productions (wind power, pvproduction, wave power production, chp production) and demands (heating and cooling needs) would optimally be included, these expected changes caused by climate change are small compared to variations from year to year though. from 2010 to 2014, the average yearly danish wind energy varied from 89.6 % and 106.0% of the long-term average (see [31]). thus interannual variations are considerable and cause significant fluctuations in productions. since these analyses are tied to a certain scenario, this is not reflected here, as outputs are adjusted to reflect externally given scenario outputs (using the correction factor in energyplan, see [32] for details). in addition, previous analyses have revealed that the exact shape of the wind distribution profile is not pertinent for the evaluation of scenarios. scenarios that integrate wind power well with the distribution profile of one year will also perform well with a distribution curve from another year. demand changes inflicted by climate change, are not reflected in the modelling. as for the demand curve variations occurring through shifts in behaviour and through shifts between sectors, these are reflected though the helena forecasting (see section 2.2). energyplan has been used in a series of articles on supra-national energy scenarios (e.g. europe [33]), national energy systems scenarios (e.g. china [34], ireland [35] croatia [36] and romania [37]), regional or local energy scenarios[38,39] as well as in works detailing the performance of specific technologies in energy systems [40,41]. the model has been applied in nearly 100 peer-reviewed journal papers [42]. 2.2 hourly demand curve projections using the helena forecasting model from hourly metering of demand by individual customers we know that categories of customers have quite distinct demand profiles and contribute quite differently to the aggregate load. for one week in 2012 figure 1 shows the aggregate load profile and the contribution by categories of customers, and figure 2 shows the seasonal variation in the demand profiles by categories of customers. from figures 1 and 2, key observations are: • the total demand has two daily peaks, a daytime and an evening peak. • demand is high on workdays and lower in weekend. • production sectors mainly consume during the day-time on workdays and households mainly consume at evenings and in weekends. • the day-time peak is shortest for public services, industry has a longer day-time peak, and private services have the longest day-time peak. • public services also have a small evening peak all days. this is due to public lighting. • friday has a shorter aggregate day-time peak than other workdays. mainly industry and public services have a shorter day-time peak on fridays. • over the year the level of demand is high during winter and low during the summer. • the evening peak disappears during the summer. 102 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand 4 3 2 1 0 mon mon 0 1 2 3 4 5 6 tue wed thu c a te g o ri e s [g w ] to ta l [ g w ] fri sat sun agriculture public services industry total households private services figure 1: hourly electricity demand by categories of customers. january 16 to 22, 2012 (data source: panel data [54]). international journal of sustainable energy planning and management vol. 07 2015 103 poul alberg østergaard, frits møller andersen and pil seok kwon [gw] 2.5 2.0 1.5 1.0 0.5 0.0 1 4 7 10 households 13 16 19 22 jan feb mar apr may jun jul aug sep oct nov dec [gw] 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1 4 7 10 total 13 16 19 22 jan feb mar apr may jun jul aug sep oct nov dec [gw] 0.5 0.4 0.4 0.3 0.3 0.2 0.2 0.1 0.1 0.0 1 4 7 10 agriculture 13 16 19 22 jan feb mar apr may jun jul aug sep oct nov dec [gw] 1.6 1.2 1.4 1.0 0.8 0.6 0.4 0.2 0.0 1 4 7 10 industry 13 16 19 22 jan feb mar apr may jun jul aug sep oct nov dec [gw] 1.2 1.0 0.8 0.6 0.4 0.2 0.0 1 4 7 10 private services 13 16 19 22 jan feb mar apr may jun jul aug sep oct nov dec [gw] 1.0 0.5 0.6 0.7 0.8 0.9 0.4 0.3 0.2 0.1 0.0 1 4 7 10 public services 13 16 19 22 jan feb mar apr may jun jul aug sep oct nov dec figure 2: average hourly electricity demand on workdays in 2012 for different categories of customers in denmark. (data source: panel data [54].) • seasonal variation in the aggregate load is mainly due to variation within households and public services. (demand by industry and public services is low in july. this is mainly due to companies having closed for summer holidays 1 to 3 weeks in july). modelling hourly electricity demand for each of the categories of customers shown in figure 2 on data for 2010 we estimate the equation: (1) where ct is the electricity demand at hour t for a given category of customers and dtd, d t m, d t h, are a number of zero/one variables representing various types of days (d)†, 12 months (m) and 24 hours (h), respectively, and αd, αd,m, αd,m,h, are coefficients. the αd,m,h, coefficients describe the shape of the daily demand profile for a c a d a d a dt d d t d d m m m t d m t t= +∑ ∑ ∑, , ,h h h ε given month (the shape of one curve in figure 2), the ad,m, coefficients describe the monthly level of demand (the relative position/level of one curve in figure 2), and ad describes the average hourly demand (average over the year) for the type of day (the absolute level of one curve). that is, for a given hour, demand is determined as: ad • ad,m • ad,m,h. finally, coefficients are normalized by imposing the restrictions: that is, the arithmetic mean of the coefficients is 1.0 and for a given h and m, if the ad,m,h is 1.2, for this hour demand is 20% larger than the average demand of the month, and if the ad,m for this month is 1.5, demand in this hour and this month is 80% (1.2 • 1.5 = 1.8) larger than the annual average for the type of day d. for details on the estimations and the estimated coefficients see [22]. 3. forecasting hourly danish electricity demand using the model for projections we assume that the profile (that is the estimated coefficients) per category of customers is constant. as the weight of customers change, and as the categories of customers contribute differently to the aggregate load, the profile for the aggregate load will change. mathematically the aggregate load (hourly demand, hour t) in a future year t is calculated as: (2) where are the annual demand by category i in the base year b and the forecast years t, respectively, and cti is the hourly demand by category i modelled by eq.(1). kti expresses the relative change in demand by category i from the base year till the year of projection. projections of the annual electricity demand by categories of customers (eti in eq.(2)) are provided by the emma model [43]. emma forecasts annual energy demand by types of energy and links demand by categories of customers to economic indicators like prices, income and production in sectors. k e ei t e e i b i ti t i b= and and c k ct t i t i i t, = ⋅∑ for all and for all d d m m d and m d m h a a , , , = = = ∑ 12 24 1 12 hh= ∑ 1 24 it is an annual econometric model that describes general effects of population, gdp, production, income, prices, and substitution between goods and types of energy. the model distinguishes 22 production sectors, three types of households and seven types of energy, and has for many years been used for official forecasts of energy and electricity demand by the danish energy agency and the danish tso energinet.dk, respectively. the latest version of the model is documented in [43]. a typical equation in emma links the annual climate corrected demand of a specific type of energy to an activity variable (e.g. the production in a sector or the number of households and income per household), energy prices capturing the substitution between types of energy, and includes a trend variable to describe changes in energy efficiencies. equations are specified as log-linear with an error-correction-mechanism to describe long term equilibrium and annual adjustments towards the equilibrium allowing shortand long term elasticities to differ. the latest baseline forecast of the annual electricity demand by the danish tso, energinet.dk is shown in table 1. for conventional demand the baseline projection reflects a central projection of the economic development by the danish ministry of finance, the oil price projected by the international energy agency in world energy outlook 2013 [44] and a continuation of past trends and behaviour. from 2012 to 2020 gdp is expected to increase by 2% p.a. and from 2021 to 2030 by 1.3% p.a. the oil price is expected to increase from about 100$/bbl in 2013 to 140 $/bbl in 2035. the baseline also includes a projection of the introduction of electrical vehicles and individual heat pumps. clearly with a changing energy system and further focus on energy savings projection of conventional demand is uncertain and especially the introduction of new consuming technologies like electrical vehicles and individual heat pumps is uncertain. however, in this analysis the projections are mainly used to illustrate qualitative effects of likely changes in the aggregated demand profile. so, although the absolute level of demand is uncertain the baseline may serve to illustrate qualitative changes. from table 1 it is seen that demand by households and agriculture is expected to increase moderately, that demand by industry and private service is expected to increase considerably and that demand by public services is expected to decrease. in addition, it is expected that the introduction of electrical vehicles and 104 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand individual heat pumps in 2030 will add approximately 4% to the electricity demand. it should be noted that the data in table 1 are not comparable to the scenario by the climate commission from section 4 which is targeting a society fuelled 100% by res — and where transportation and individual heating to a large extent is shifted to electricity. looking at figure 2, industry and private services mainly contribute to the demand during day-time on workdays. assuming unchanged profiles per customer category the projected development in the annual demand implies that mainly the day-time peak increases. looking at conventional demand figure 3 shows the projected profiles for january and july for the years 2012, 2020 and 2030. although the day-time demand increases more than the evening peak, in january the projected daily peak is still the evening peak and in general the aggregated demand profile changes only marginally. including the new demands by electrical vehicles and individual heat pumps, and assuming that these demands are not flexible, individual heat pumps are expected to have a demand profile identical to a normal heating profile in denmark, and in the simple (but also most extreme) case electrical vehicles will be plugged in after work from 6 p.m. and be fully charged after 4 hours. however, as danish taxes on electricity consumed by households are considerably higher than taxes paid by companies, charging at work will be a perfect employer benefit. therefore, as an alternative we analyse a profile where 1/2 of the electrical vehicles are charged at work from 8 a.m. and the other 1/2 is charged at home from 6 p.m. that is, compared to the most extreme case demand by electrical vehicles is split between two periods reducing the peak demand by electrical vehicle to the half. for 2030 the effects on the hourly demand in january and july are shown in the figures 4 and 5. as seen from figure 4, while changes in the conventional demand changes the level of the demand profile, the introduction of new demand categories changes both the level and the hourly demand profile. international journal of sustainable energy planning and management vol. 07 2015 105 poul alberg østergaard, frits møller andersen and pil seok kwon projected electricity change consumption [gwh] [coefficient ki t] in eq. (2) 2012 2020 2030 2012–2020 2012–2030 households 9750 9774 10042 1.0025 1.0299' agriculture 1847 1818 1895 0.9841 1.0255 industry 7309 7983 8419 1.0922 1.1520 private service 9604 9937 10801 1.0346 1.1246 public service 2412 2272 2355 0.9418 0.9763 30922 31783 33512 1.0278 1.0837 electrical vehicles 0 140 660 individual heat pumps 73 431 778 total 30995 32355 34949 1.0439 1.1276 table 1: projected electricity demand for aggregated categories of customers in denmark. source: [45] and own calculations in [46]. 7 [gw] workday 6 5 4 3 2 0 5 10 15 20 25 2030 : jan 2020 : jan 2012 : jan 2030 : jul 2020 : jul 2012 : jul 7 [gw] non-workday 6 5 4 3 2 0 5 10 15 20 25 2030 : jan 2020 : jan 2012 : jan 2030 : jul 2020 : jul 2012 : jul figure 3: the hourly demand profile for existing categories of customers, 2012, 2020 and 2030, january and july 106 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand 7 [gw] workday 6 5 4 3 2 0 5 10 15 20 25 jan:conv + hp jul:conv + hp jan:conv jul:conv jan:conv + hp + elv jul:conv + hp+ elv 7 [gw] non workday 6 5 4 3 2 0 5 10 15 20 25 jan:conv + hp jul:conv + hp jan:conv jul:conv jan:conv + hp + elv jul:conv + hp+ elv figure 4: effects on the hourly demand from the introduction of individual heat pumps (hps) and electrical vehicles (evs) charged after work in 2030. jan:conv + hp jul:conv + hp jan:conv jul:conv jan:conv + hp + elv (alt.) jul:conv + hp+ elv (alt.) 7 [gw] workday 6 5 4 3 2 0 5 10 15 20 25 jan:conv + hp jul:conv + hp jan:conv jul:conv jan:conv + hp + elv (alt.) jul:conv + hp+ elv (alt.) 7 [gw] workday 6 5 4 3 2 0 5 10 15 20 25 figure 5: effects on the hourly demand from allowing half of the electrical vehicles to be charged at work (ev(alt)) in 2030. individual heat pumps mainly change the seasonal demand profile; demand increases considerable during the winter (represented by the profile for january, where demand is already very high) while the demand during summer is almost unchanged. electrical vehicles mainly change the daily profile while seasonal variations are limited. in the worst case where all electrical vehicles are charged after work the evening peak increases app. 10% (shown in figure 4), while this is reduced to an increase of app. 5% if half of the vehicles are charged at work (shown in figure 5). that is, seen from the perspective of the electricity system charging part of the vehicles at work is preferable, but this reduces the tax revenue considerably. combining figures 3, 4 and 5, table 2 shows the demand in january at 7 p.m. assuming different charging profiles for individual heat pumps and electrical vehicles. if heat pumps and electrical vehicles are flexible customers and therefore not using electricity c u rt a ilm e n t fr a ct io n [ % ] 0 10% 8% 6% 4% 2% 0% 2% ja n u a ry f e b ru a ry m a rc h a p ri l m a y ju n e ju ly a u g u st s e p te m b e r o ct o b e r n o ve m b e r d e ce m b e r 5 10 15 20 25 2050_dc12 2050_dc50 change figure 6: curtailment fraction for off-shore wind in cc2050 with electricity demand curves from 2012 (2050_dc12) and 2050 (2050_dc50). note, the change between the curves shown along the right axis is not in percentage point but in percent. at peak hours, due to increased conventional demand the peak in january at 7 p.m. is expected to increase about 5%, only. if individual heat pumps follow a standard heating profile in denmark, heat pumps are expected to increase the peak demand by additional 3%. in the worst case where all electrical vehicles are charged after work from 2012 till 2030 the average peak at 7 p.m. in january increases from 5.72 gw to 6.65 gw or about 16%. in july the daily peak at 7 p.a. increases from 3.85 gw to 4.60 gw or about 19%. that is, the %-change is larger in the summer than in winter, but the absolute change is 25% larger in the winter than in the summer. as is seen from table 1 the aggregate demand is expected to increase 12.8% from 2012 to 2030. that is, in the worst case the peak demand increases somewhat more. if only 1/2 of the electrical vehicles are charges after work the increase at 7 p.m. is reduced to about 12%. that is, depending on the flexibility of individual heat pumps and electrical vehicles the expected demand at 7 p.m. in january 2030 is between 5% and 16% larger than in 2012. for the subsequent analyses of 2050, we only apply the shape of the demand profile; not the actual size as we combine the shapes with the electricity demand of the mentioned scenario by the climate commission. one element which has not been included in the assessment of the demand profile is energy savings with an impact on the temporal distribution of the electricity demand; where some electricity demands like refrigeration, freezing and stand-by demands are relatively stable throughout the 24h of the day, other demands are more related to behavioural pattern — cooking, entertainment, domestic hot water (dhw) (if produced by electricity), ventilation and washing/drying or external factors such as the presence of daylight and thus notably indoor and outdoor illumination. savings in different areas will thus impact the demand profile differently. for the analyses of 2030, hourly variations curves for the classic electricity demand, the individual heat pumps and electric vehicles will be used. 4. high-res scenario for denmark denmark has a long-term objective of being independent of fossil fuels in the energy and transport sectors by 2050[1]. with that aim, the danish government established a so-called climate commission in 2008 given the task of making suggestions as to how this vision might be reached [47]. this work resulted in a series of suggestions including increasing deployment of res, transportation based on electricity and biofuels, focus on energy efficiency and a smart and flexible electricity system. the work also included holistic scenario design and energy systems simulations though only for limited simulation periods. 4.1. the danish climate commissions’ year 2050 100% scenario two different scenarios were established by the climate commission for 2050 (cc2050); the ambitious and the unambitious — labelled future a and future u respectively. in this article, we use future a as our reference system. this scenario has been adapted to the energyplan model in previous work [48] where it is described in detail, thus in this article, only the main parameters are included. one important aspect of the cc2050 scenarios; the scenarios do not detail the electricity demand by sectors nor by temporal distribution. in the cc2050 future a scenario, the electricity demand is 88.5 twh (see table 3) compared to 35.7 twh in 2010 for all demands [49]. the significant international journal of sustainable energy planning and management vol. 07 2015 107 poul alberg østergaard, frits møller andersen and pil seok kwon 2012 2030 conventional, conventional, individual heat individual heat pumps conventional and pumps and electrical and electrical vehicles total individual heat vehicles charged charged at work anf [gw] conventional [gw] pumps [gw] after work [gw] after work [gw] januar at 7 p.m. 5.72 6.03 6.20 6.65 6.42 %-change from 2012 5.4 8.4 16.3 12.3 table 2: aggregated demand january at 7 p.m. in gw assuming different demand profiles by individual heat pumps and electrical vehicles. increase is due to the electrification of new sectors. in table 3, the first two columns show the demand sectors as listed in the original scenario where the separate grid losses are a noticeable component. energyplan treats all electricity (and dh) demands as supplied ex works thus electricity demands must include grid losses. thus, the separately given grid losses are distributed proportionally on specific demands. in addition, certain categories are aggregated to reflect the aggregation level in energyplan. final demands modelled in energyplan are thus shown in the two last columns. dh demands amount to 36.9 twh including dh grid losses. individual heat demands (i.e. non-dh covered space heating and domestic hot water (dhw) production) amount to 16.74 twh covered by 1.95 twh of biomass boilers (η = 0.7) and 4.10 twh of electricity for hps (cop = 3.75). the production system is characterised by a large share of wind power both off-shore and on land. wave power and photo voltaics also play major roles — see table 4 for details. the scenario has a large increase in the interconnection capacity to neighbouring sweden, norway and germany, however since our goal is to analyse the impacts on the energy system performance and flexibility, the system is modelled in island-mode. one reasons is that including the planned 12 gw of 108 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand table 4: scenario parameters for cc2050. information based on [47,48,50,51]. installed capacity unit [mwe] characteristics off-shore wind 14600 production 59.7 twh ~ 4090 full-load hours on-shore wind 4000 production 14.3 twh ~ 3568 full-load hours wave power 450 production 1.00 twh/y ~ 2222 full-load hours photovoltaic 3250 production 3.00 twh/y ~ 923 full-load hours condensing mode capacity 15000 ηe=45%; sized to be able to function as backup chp capacity 2500 ηe=40%; ηh=50%. annual dh demand 36.9 twh (also covered by dh hp and waste incineration chp) waste incineration 365 fixed fuel input 12 twh/y. ηe=26.7%; ηh=77.3% dh hp 4500 cop 3.75 individual hp 837 cop 3.75. annual individual heat demand of 16.9 twh covered by solar 0.8 twh, biomass boilers 1.3 twh and hp 14.7 twh (the latter is based on the electricity demand in table 3 excl grid loss) electrolyser synthetic fuel 3100 η=68%. capacity is twice the capacity required for baseload production of the annual hydrogen demand interconnection capacity (12000) to norway, sweden and germany annual demand annual demand demand sector [twh] aggregated sectors [twh] electric vehicles and trains 20.5 electric vehicles & weighted grid loss 21.2 geothermal energy 0.5 district heating hp and absorption hp 5.6 district heating hp 4.7 (ahp) & weighted grid loss commercial hp 0.6 individual hp & weighted grid loss 4.1 residential hp 3.3 industrial processes 17.1 demands following a fixed curve. 48.4 industry other 6.3 including trains & weighted grid loss commercial other 11.8 residential other 9.9 biofuel production 8.7 biofuels (assumed hydrogen-based) & weighted grid loss 9.2 grid losses 5.1 — total 88.5 88.5 table 3: danish electricity demand in 2050 according to the ambitious scenario of the danish climate commission. ahps are absorption hps typically utilising low-temperature (60-80°c) geothermal reservoirs. based on [50]. interconnection capacity would not test the energy system’s flexibility to any extent and a second reason is that while nominal interconnection capacity might be significant, useable interconnection capacity would be significantly less during the relevant windy periods assuming similar developments in neighbouring countries. in energyplan terms, the system is thus modelled in a technical regulation strategy 3 where the model seeks to balance both heat and electricity systems without the use of import/export. the scenario lacks details on ev technology; charging, battery and potential discharging, hence the same ratio between aggregate annual demand and installed battery capacity/charging power as in the 2030 scenario are used (see next section). it is assumed that evs may discharge back to the grid (so-called v2g; vehicle to grid) with a cycle efficiency of 0.81 (=0.92). the sensitivity of using this ability is investigated further in the 2030 scenarios. while this scenario is a specific case with a specific composition of the energy system, it is very much aligned with independent work by researchers in e.g. the ceesa project [52,53], the danish society of engineers (ida)[54-56] as well as with official danish targets of having a 100% res-based electricity and heat supply by 2035 — primarily based on wind power, and a 100% res-based energy system by 2050. in all scenarios, wind power plays the dominant role, heating and transportation is switched to electricity where possible and biomass use is strongly restrained. thus, while results naturally apply only to the specific case, they do apply more generally to the danish energy future as well as to energy futures of countries with a similar composition as denmark. it is however impossible to make generally valid statements based on a case considering that all areas have different energy circumstances and that transition to 100% res-supply should be adapted to local conditions. 4.2. intermediate 2030 scenario in order to make the 2030 analyses, a corresponding scenario is set up for this year. electricity demands are based on the forecast described in section 3 — see table 5. as stated in section 1, by 2030 the ambition is to have phased out coal entirely and have phased out oil from heating. the projection in section 3 reveals a heat demand for individual heat pumps of 1.6 twh by 2030, however this projection is based on trends rather than the target of an oil-free heating supply in 2030. thus, we apply the hourly variation from section 3 but the aggregated total from the 2050 scenario — i.e. 4.1 twh cf table 3. the projection does not detail district heating heat pumps; the same level as the 2050 scenario is used. the evs demand for 2030 in table 5 is modest compared to the level in 2050; the remainder is assumed fossil-based and does not impact the workings of the rest of the energy system. the ev demand corresponds to 300 000 vehicles each using 2.2 mwh annually + 5.7% grid losses. for comparison, the number of personal vehicles in denmark january 1st 2015 was 2.33 million in addition to which comes 0.44 million vans/lorries/road tractors and 13408 busses[57]. for the analyses, a charging capacity of 10 kw and a battery capacity of 30 kwh is use, in line with[58]. thus, there is a total charging capacity of 3 gw and a total battery capacity of 9 gwh for the 2030 scenario. it should furthermore be noted, that it is assumed that the electricity demands are measured at the grid-side of the battery charger for both the 2030 and the 2050 scenario. it should be noted that the electricity demand for electric vehicles in the 2050 scenario is very large (20 twh[50] or 21.2 twh incl grid losses) compared to the 2030 scenario’s 0.7 twh. contributing factors include, that in the 2050 scenario, evs have a 90% penetration in terms of fuel demand for personal vehicles, and 70% for busses and lorries[50]. international journal of sustainable energy planning and management vol. 07 2015 109 poul alberg østergaard, frits møller andersen and pil seok kwon table 5: danish electricity demand in 2030 according to 2015 prognosis. including the same relative grid loss as in 2050. demand categories annual demand [twh] electric vehicles & weighted grid loss 0.70 district heating hp and absorption hp (ahp) & weighted grid loss – individual hp & weighted grid loss 0.91 demands following a fixed curve. including trains & weighted grid loss 38.51 biofuels (assumed hydrogen-based) & weighted grid loss 0 total 40.12 photo voltaics and wave power are modelled at half the level of the 2050 scenario — i.e. 1625 mw and 225 mw and as 2030 is close to year 2035 at which point all electricity should be res-based. the installed capacity of on-shore wind power is kept at 4000 mw in line with the 2050 scenario. off-shore wind power is 9000 mw, corresponding to an un-curtailed annual production of 36.81 twh. all other factors are identical to the 2050 scenario. furthermore, for both the 2050 and the 2030 scenarios, electricity production variation on wind turbines are based on actual 2014 data for off-shore and on-shore wind turbines respectively from the danish tso[6], while photo voltaic, and wave-power demand variations are generic danish variations from the energyplan library. newer data was regrettably not available. using generic data for solar and wave power does introduce an element of error as wind and wave clearly is strongly correlated though with a production up till six hours out of phase. wind and solar is also slightly correlated, but mainly in out-of-the-ordinary very highwind situations. for this work, distributions of wave power were available for measurements from 1999 and 2001 (see [59] for methodology). to test the impact of the choice, scenarios were modelled with three different distributions; the 2001 (which is used in all other analyses in this article), the 1999 distribution and a constant distribution. aggregated annual results were generally not affected by the choice of distribution. approximately 1 ‰ less off-shore wind power was curtailed when using a constant production from wave-power than when using the 1999 or 2001 distribution. observing individual hours, effects are naturally larger, however this article focuses on aggregated annual effects. a primary reason for this negligible effect of the distribution curve is the fact that wave power in the scenarios generate 0.5 twh per year while wind power generate approximately 50 twh per year, thus the share pales by comparison. district heating demand variations are based a case from aalborg with a 30% demand reduction in room heating demand (see [38]). 4.3. scenario overview the 2030 and the 2050 scenarios are modelled as listed in table 6. for individual houses using hps, the same heat demand curve is used across scenarios. in the 2030 fix, there is no flexibility thus electricity demands follows heat demand exactly (and the electricity demand is in fact included into the classic demand) – but for the other scenarios, hps are dispatchable from the 110 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand scenario demand production hourly variation profile 2050_dc12 as in cc as in cc 2050 ev and hp dispatched by energyplan 2050 100% re normal demand according to fixed hourly demand curve for 2012 2050_dc50 as in cc as in cc 2050 ev and hp dispatched by energyplan 2050 100%% re normal demand according to fixed hourly demand curve for 2050 2030 flex as in 2030 100% re in heat and ev and hp dispatched by energyplan prognosis electricity normal demand according to fixed hourly demand curve for 2030 2030 fixed as in 2030 100% re in heat and ev and hp according to fixed demand curves. prognosis electricity hp with one temperature-derived curve evs with three alternative demand curves: -charging during night -charging from 18-21 in the evening -charging half from 8 half from 18 normal demand according to fixed hourly demand curve for 2030 table 6: scenarios. dc12 and dc50 signify demand curve 2012 and 2050 respectively. international journal of sustainable energy planning and management vol. 07 2015 111 poul alberg østergaard, frits møller andersen and pil seok kwon energyplan model, which utilises a storage to minimise electricity exports. unless otherwise noted, the storage corresponds to seven days of average heat demand. mathiesen et al state “smart energy system focuses on merging the electricity, heating and transport sectors, in combination with various intra-hour, hourly, daily, seasonal and biannual storage options, to create the flexibility necessary to integrate large penetrations of fluctuating renewable energy”[53]. this is in line with the flex-scenario where evs and hp are dispatched according to momentary system needs. the traditional electricity demand is not flexible in this scenario, however as kwon & østergaard has determined, effects of this are very limited indeed[48]. 5. system response to demand forecasts for 2050 the energy plan model gives priority to electricity production made from use-it-or-lose-it res production and subsequently production in chp mode whereas electricity made in condensing mode is avoided if possible. the level of condensing mode operation is thus table 7: district heating production for cc2050 with 2012 electricity distribution (2050_dc12) and forecasted 2050 electricity distribution (2050_dc50). numbers 1–3 refer to the district heating groups in energyplan. district heating [twh] 2050_dc12 2050_dc50 boiler 1 2.68 2.68 heat pumps 2 5.96 5.96 boiler 2 0.05 0.05 chp 2 2.17 2.16 waste 2 3.32 3.32 solar 2 0.90 0.90 heat pumps 3 11.93 11.94 chp 3 0.00 0.00 waste 3 5.95 5.95 solar 3 1.62 1.62 boiler 3 0.01 0.01 industrial chp 3 2.45 2.45 sum 37.04 37.04 table 8: electricity generation for 2050 with 2012 electricity demand curve (2050_dc12) and forecasted 2050 electricity demand curve (2050_dc50). electricity [twh] 2050_dc12 2050_dc50 industrial chp 3.70 3.70 wind off-shore 55.95 55.94 wind on-shore 14.29 14.29 wave 1.00 1.00 pv 3.00 3.00 chp 1.74 1.73 condensing mode power plants 13.19 13.20 import 0.00 0.00 export 0.00 0.00 sum 92.87 92.86 112 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand table 9: electricity production and corrected fuel consumption for scenarios 2030 fixed and 2030 flex. import and export in all scenarios is zero. an indication on how well a system integrates fluctuating renewable energy sources, as also discussed in [60,61]. similarly, within heating, priority is given to use-it-or-lose-it technologies, followed by hp, chp and boilers. effects on the system performance according to choice of demand curve (dc12 or dc50) are marginal according to the energyplan simulations. heat production is practically unaffected on an aggregate annual basis and so is the electricity system (see tables 7 and 8). in the analysis, any excess that cannot be integrated through dispatching dispatchable units appropriately, is reduced through three chosen successive steps: a) chp is replaced by boiler production; b) boiler production is replaced by electric boiler production and c) off-shore wind power production is curbed. the first two steps render little assistance thus curbing or curtailing off-shore wind power production dominates. the curtailment fraction (see [42]) varies over the year with monthly averages ranging from nil to nearly 23% (see figure 5). one difference between the two scenarios is that the curtailment fraction tends to be higher with the 2050 demand profile during the winter months and vice versa higher during the summer months with the 2012 profile as a result of slight change in the annual distribution of the electricity demand. 6. system response to flexible or static operation of evs and hps in 2030 the second set of analyses take their starting point in a 2030 situation with less electric transportation and less electric heating. meanwhile, the system is analysed under four different circumstances as listed in table 6; with heat pumps and electric vehicles dispatched by energyplan and using three defined demand profiles; one fixed for heat pumps and two alternative ev charging patterns. furthermore, the scenarios where evs and hps are dispatched by energyplan are also analysed for sensitivity to key input factors; ev battery size, ev charging capacity, v2g ability and storages for heat pumps in individual dwellings. using a fixed demand profile for hps and evs reduces the off-shore wind utilisation while more electricity will be produced on dispatchable thermal plants – chp and condensing mode plants. the lowest utilisation of off-shore wind power – and thus the highest curbing – is in the case where evs are charged in the evening from 18-21 corresponding to a charging pattern where people return from work and plug in the vehicle. compared to this, off-shore wind power has a marginally higher utilisation with the other ev fixed charging profiles. for the flexible scenarios, utilisation is between 1.4% and 5.5% higher. the lowest effect is under the standard conditions as defined in section 4 and with 50% higher charging capacity (thus 4500 mw) and with 50% additional battery capacity (thus 13.5 gwh). adding seasonal heat storage enables a 2.9% higher utilisation of offshore wind power but even a storage with a contents of one average week, increases the utilisation of offshore wind power by 2.2%. note of course, that such storage need not be a fully conventional storage with a fluid storage liquid; the building mass in itself has a large storage capacity. what really increases the fixed hp and ev flexible hp and ev v2g + ev 4500 battery ev 18 ev morn+ standard heat heat battery 13.5 [twh] 21 evening v2g storage storage 13.5 v2g 4500 industrial chp 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 wind off-shore 18.8 18.82 19.07 19.55 19.35 19.8 19.07 19.07 19.83 wind on-shore 14.26 14.26 14.26 14.26 14.27 14.27 14.26 14.26 14.26 wave 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 pv 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 chp 1.44 1.44 1.41 1.41 1.41 1.41 1.41 1.41 1.41 condensing mode power plants 5.06 5.04 4.82 4.44 4.66 4.31 4.82 4.82 4.22 sum 45.26 45.26 45.26 45.36 45.39 45.49 45.26 45.26 45.42 corrected fuel consumption 56.44 56.41 55.86 55.04 55.52 54.75 54.75 55.85 54.54 international journal of sustainable energy planning and management vol. 07 2015 113 poul alberg østergaard, frits møller andersen and pil seok kwon integration of off-shore wind power is the utilisation of v2g, which also reduces condensing mode power generation significantly; up to 16.6% with additional charging/discharging capacity of 4500 mw and additional battery capacity of 13.5 gwh thus, even with the limited demands for evs and hps in this 2030 scenario, there is a significant flexibility to be harnessed and exploited for the purpose of optimising the integration of wind power which on the one hand decreases the curtailment of wind power and on the other hand decreases the use of condensing power generation another observation from table 9 is, that whether all evs are charged during the evening or half of the evs are charged at work from 8 a.m. has little effect for the system. however, allowing half of the evs to be charged at work considerably reduces the tax revenue from electricity taxes. in the systems analyses, condensing mode power production capacity is merely included at the level required to satisfy any discrepancy between electricity demands and productions based on fluctuating res and chp. thus, the installed capacity and thus associated costs vary between the scenarios. charging evs between 18 and 21 in the evening sets the highest requirement for condensing mode capacity at 5652 mw, followed by charging in the morning and evening at 5415 mw. the flexible hp and ev scenarios range from 5060 mw for the two scenarios with large heat storage to 5249 mw for the other flexible scenarios. thus, capacity reductions between 237 and 592 mw (4.2 to 10.5%) may be realised by a; spreading the fixed charging pattern of evs b; introducing flexible charging of evs and c; introducing flexible dispatch of individual heat pumps combined with heat storages. 7. conclusion this article has investigated the evolution of the danish electricity demand in the medium term (2030) and the long term (2050) based on energy systems simulations of an energy system with 100% res in heating and electricity (2030) and with 100% res in heating, transportation and electricity supply (2050). in the medium term, it is found that the flexibility of individual hps and evs may assist in the integration of wind power even though the individual heat pumps only cover the part of the heat demand (3.4 twh) that is not covered by district heating (36.9 twh) and that only 300 000 private vehicles are converted to electricity. curtailment of off-shore wind power is reduced, electricity production in condensing mode is decreased, installed capacity of same may be reduced as will primary energy supply. in condensing mode power generation, capacity reductions between 237 and 592 mw may thus be realised depending on how evs and hps are introduced to the energy system. in the worst of the cases analysed, only 18.8 twh out of an uncurtailed off-shore wind power production of 36.81 twh is used, while in the best case with v2g and extra battery this number is 19.83. thus, an extra twh of electricity is integrated by this means. it should be noted though, that the installed off-shore wind power capacity is not adjusted to match the annual demand; it does actually produce too much. thus, with a closed island system there will inevitably be off-shore wind power curtailment. changing the ev charging schedule from a fixed 18–21 in the evening to a morning plus evening charging decreases wind power curtailment and condensing mode power operation, but making them flexible to the extent of even enabling v2g operation maybe increase benefits considerably. of course, charging vehicles at work will have derived effects in the form of reduced tax revenues — assuming vehicles are charged at work with low-tax electricity. in the long term (2050), the entire personal vehicle fleet will be changed to electricity adding even more flexibility to the system. the changes in the traditional electricity demand coming as a consequence of shifts in the weights of consumption sectors will have very limited effects on the energy system performance – particularly since the energy system is characterised by such large flexible loads. using off-shore wind power curtailment as metrics for assessing the system’s ability to integrate wind power, results vary over the year. generally, the monthly curtailment share is within a 2% band when changing from the 2012 load curve (lc_12) to the 2050 load curve (lc_50). one month has a change of more than 8%, however this change is between two small numbers. observing annual production figures, slight differences in the order of 0.01 twh exists between some production and demand categories with lc_12 compared to with lc_50. this relates to off-shore wind power, chp, condensing mode power production and heat pump demand. with lc_12, off-shore wind power, chp production and hp demand are all 0.01 twh higher while condensing mode power generation is 0.01 twh less with lc_2012. these numbers should be taken with caution though, as 114 international journal of sustainable energy planning and management vol. 07 2015 energy systems scenario modelling and long term forecasting of hourly electricity demand differences represent the last significant digit in energyplan simulation outputs. acknowledgements this study is part of the ensymora project (www.ensymora.dk) funded by the danish council for strategic research. references [1] danish ministry of climate and energy. accellerating green 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 22 2019 5 *corresponding author e-mail: dominguc@ethz.ch international journal of sustainable energy planning and management vol. 22 2019 5–16 abstract: rural electrification projects are mostly listed as a priority in developing countries due to the numerous benefits it brings to improve people’s quality of life. the starting point for these projects is the accurate estimation of the households’ energy demand, but the large amount of resources that requires the on-site data collection makes this process unattractive to investors. this paper brings a potential solution to that matter, presenting a methodology for modelling the appliances ownership of rural households in developing countries to project their electricity demand. based on a statistical approach, and including training data from more than 1,100 household samples from nigeria and ethiopia, the correlation between household survey data of ownership of the most common electricity-consuming appliances in developing countries and different socio-economic, demographic and geographic variables are investigated. its accuracy is tested using other sets of validation data at a household, state, and national level. finally, the results are projected using a geographic information systems approach for identifying possible sites to be electrified. the high potential of using this approach for projecting the appliances ownership for rural areas was proven by obtaining a good overall accuracy in the results. as expected, the errors obtained at a household level were bigger than at a state or national level, these deviations are attributed to the presence of outliers due to the human behaviour incidence at household scale; which also affects the correlation patterns between the appliances ownership and evident socioeconomic factors. 1. introduction around 17% of the global population lacks access to electricity, 84% of this population is located in rural areas of developing countries; from which, more than 95% is in sub-saharan africa [1]. the relationship between rural electrification and development has been recognized by different studies, emphasising on the improvement of the economic productivity, among other health and education benefits [2-4]. consequently, rural electrification projects are mostly considered as a top priority for the national authorities in developing countries. to improve the planning of these projects, it is essential to have an accurate knowledge of the current electricity consumption of those areas, but not having records and explicit databases makes this a challenging task. while rural areas are characterised by having low income per capita and low energy consumption [5], national household surveys present evidence of their electrical appliances ownership even when they have limited or no electricity access at all. this fact gives a modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of subsaharan africa cristina domingueza,b*, kristina orehounigb and jan carmelieta a chair of building physics, swiss federal institute of technology zürich (ethz), stefano-franscini-platz 1, 8093 zürich, switzerland b laboratory for urban energy systems, swiss federal laboratories for materials science and technology (empa), überlandstrasse 129, 8600 dübendorf, switzerland keywords: appliances ownership; energy demand modelling; geographic information systems; rural electrification; url: http://dx.doi.org/10.5278/ijsepm.2564 http://dx.doi.org/10.5278/ijsepm.2564 6 international journal of sustainable energy planning and management vol. 22 2019 modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa developing countries; these were obtained by the living standard measurement study (lsms) held by the world bank [11]. it contains information at a household level that aims to support policymakers in developing countries; while it is not focused on the energy sector, it contains detailed data from a broad geographic scope that can be used for this research purpose. the collected data is then correlated using the multiple linear regression (mlr) method, creating a model for each of the four appliances chosen for this study (televisions, radios, mobile phones, and refrigerators). these models depend on different variables, such as household size, the proximity of the household to a major road, and electricity access; as well as specific information of the household head (age, literacy, religion, and employment situation). an analysis of the models’ selection and the variables used is presented, followed by the measurement of the models’ performance at different spatial scale. the results are projected using geographic information systems (gis) country maps and projections of the existing and planned electricity grid as an example of finding the potential areas to be listed as priority for future electrification projects. 1.1. case study areas being sub-saharan africa the region with the lowest electrification rates of the world [1], it was of particular interest to focus this research work on it. the selected countries from the region were nigeria and ethiopia due to the availability of recent data from the lsms household surveys [11], which cover the years 2015 – 2016. these countries are also considered as an interesting reference because of their differences in macroeconomic aspects and their similarities in natural resources (table 1). it is well known that rural areas depend mostly on agriculture and related activities for their livelihoods [11]; also, that appliances acquisition is related to their income [10]. the international institute for applied systems analysis (iiasa) and the food and sight of the potential of using these data to estimate their electricity demand. different studies have been done regarding the estimation of energy consumption in developing countries. some have included an analysis of fuels consumption patterns in developing countries, as the authors in [6] did with a time series analysis for ghana, kenya and south africa; other studies have focused on studying the energy consumption in residential buildings based on heating and cooling energy needs accounting for climatic constraints, as the authors in [7] for algeria. other authors, such as [8], have presented methods to model the load profiles of rural mini and micro-grids considering as one of the inputs the total number of appliances. conversely, scarce amounts of researchers have studied bottom-up methodologies to model the energy consumption based on the diffusion of appliances in the residential sector at a national level. for example, in [8] and [9] the authors consider macroeconomic variables such as income per capita, national urbanization and electrification rates in order to give an estimation of the diffusion of some electrical appliances in developing countries over time applying logistic regression. however, these macroeconomic drivers do not represent the households’ conditions in rural areas, ensuing an overestimation of the results when it comes to modelling their electricity demand. other studies have focused on modelling the trend of acquisition of electrical appliances based on historical data of household-level determinants in developing countries, such as in [10] for brazil, india and south africa. in the mentioned study, the authors use a machine learning algorithm (boosted regression trees) and logistic regression in order to analyse the acquisition trends in these countries at a national level dividing the population on income quantiles. nonetheless, they only consider high-power-consuming appliances (refrigerators, televisions, and washing machines) which most of the time only the population connected to the national grid can afford. in addition, none of these studies has included a geographical analysis to identify the differences of appliances ownership within the countries, and they are only limited to make comparisons with other countries at a national scale. the methodology proposed in this paper aims at filling in this research gap by applying a statistical and high spatial resolution data processing approach. the first step of the analysis is focused on gathering the most recent available data of appliances ownership and different indicators of living standards of rural areas in table 1. demographic, economic and geographic characteristics, data for 2016 [1,14,15] indicator nigeria ethiopia population, millions 185.99 102.40 gdp, billion us$ 404.65 72.37 rural electrification rate, % 34.10 20.20 aez range classification thermal climate (aez classification) 312–323 tropics 311–324 tropics international journal of sustainable energy planning and management vol. 22 2019 7 cristina dominguez, kristina orehounig and jan carmeliet the objective of this paper is to propose a methodology to estimate the current appliances ownership, defined in this context by the number of appliances owned per rural household. for example, in the case of the appliances chosen for this study, one household can have more than one mobile phone or radio; therefore, it is possible to obtain a value larger than one for the appliances ownership. the mlr function is given by (1): y = β0 + β1x1 + β2x2 + ...+βnxn + ε, (1) where y is the appliances ownership, β0 is the intercept (the value of y when all the variables are 0), β1...n are the regression coefficients, x1…n represent the independent variables, and ε is the error term. 2.1. driver variables the variables contained in the databases were classi fied as: • demographic: household size, sex and age of household head; • socioeconomic: aggregated annual income and electricity access of the household, employment situation, literacy, years of education, and religion of household head; • geographic: proximity to major road, proximity to population centre; • climate: average annual temperature and precipitation the correlation between all these variables was first tested in order to create a set of independent variables to be used in the model for each appliance. the selection of the independent variables was done by applying an analysis of variation (anova) f-static test. this test represents the ratio of the variation between means of the sample groups (external variance) and the variation within the samples (internal variance) [16], as described in (2). in (3), xi. represents the sample mean in the i-th group, ni the number of observations in the i-th group, (2)ki i. .. i,j i.i,j n x x kf x -x n k 2 0 0 2 ( 1) , ( ) = − − = − ∑ ∑ (3) n k ki ij i i. i. i ij i i x n x x , x n n n n1 1 1 ,.. , = = = = = =∑ ∑ ∑ agriculture organization of the united nations (fao) created the global agro-ecological zones methodology (aez) [14] to classify agricultural potential taking into account agro-climatic, soil and terrain conditions. both, nigeria and ethiopia are located in the same range of aez classification, having as a common characteristic their thermal climate. 1.2. data management to develop this methodology, the household-level information obtained for each country was divided in three sets of databases: training (used to formulate potential mlr models for each appliance), testing 1 (used for testing the potential models in order to select the best-fitting one) and testing 2 (used to test the selected model). the details of these sets are presented in table 2. each of them was chosen randomly, taking into account rural households from all the states; consequently, these sets were aggregated to a state and national level to test the methodology at different spatial scales. the data were cleaned from outliers and organised considering more than 10 variables related to demographic, socioeconomic, climate and geographic aspects. 2. methodology the mlr method was selected for the estimation of appliances ownership, using the training database with household-level information to find the correlation between each appliance ownership and multiple independent variables. the driver variables were found by applying an analysis of variation (anova) f-static test. these variables are divided in household-level (size, proximity to major road, and electricity grid access), and head of household (age, literacy, religion, and salaried employment situation) (see section 2.1). most appliances diffusion methodologies (used to project the diffusion of every appliance over time at a national level), apply logistic regression models for a binary choice projection, giving results ranging from 0 to 1 – where 1 represents the complete diffusion [8,9]. table 2. amount of samples per set of database database nigeria ethiopia total training 606 524 1130 testing 1 594 524 1118 testing 2 582 521 1103 total 1782 1569 3351 8 international journal of sustainable energy planning and management vol. 22 2019 modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa error distribution of the model when compared to the real values; also, it is considered as more reliable in statistics when having large sample sizes [17, 18]. 3. results and discussion in this section, the results from the appliances ownership model for each of the analysed appliances and the error distribution when the model is tested in the different aggregation sets (household, state and national level) are discussed. finally, the gis application is presented showing different examples of the implementation of this approach to identify potential locations of future electrification projects. 3.1. appliances ownership modelling the four appliances considered for this study are described in more detail below. to find the best-fitting model for each appliance, three different training sets were tested: one including training data from each individual country, and one combining both countries’ data. this process was done by comparing the fitting performance of the models measured by the r2 value. as presented in the table 5, using the training data from ethiopia gave a greater value of r2 in certain cases, however, the combined model was selected because the large sample size produces less uncertainty and more statistically meaningful results [17]. the parameters of the final models are presented in tables 6–9. 3.1.1. televisions previous studies have found that televisions are by far the most desirable electrical appliance among rural households, after lighting [8]. this appliance tends to increase its economic accessibility with the time, which is demonstrated in this study by obtaining a low correlation between the ownership of this appliance and the household’s income. as expected, televisions ownership presents a high dependency on the electricity the overall mean of the data, xij is the j-th observation in the i-th out of k groups, and n is the overall sample size. mlr models are used to test the individual effects of many explanatory variables on a response; and the collinearity of these variables often threatens their statistical interpretation [16]. it was found that a strong correlation exists between some of the variables selected for this methodology; for example, the household head literacy level is positively correlated with the electricity access of the household. by applying a global f test for each of the mlr models of the studied appliances, the individual effect of the considered variables on estimating the ownership of each appliance was tested. the selected variables are included in the tables 3–4. 2.2. model accuracy the accuracy of the models for each appliance was measured by applying the root mean square error (rmse). this method was chosen because the error of most of the models present a gaussian distribution centred at zero. it provides a complete picture of the table 3. description of variables at household level variable description type unit or range size number of people living in the household continuous people proximity to major road distance between the household and the closest major road continuous km electricity access only considering grid-connection discrete 0–11 1one indicating grid-connection, zero otherwise. table 4. description of head of household variables variable description type unit or range age age of the household head continuous years literacy the household head can read and write in at least one language discrete 0–11 religion the household head has a religion discrete 0–11 salaried employment the household head has been employed with a fixed salary over the last year discrete 0–11,2 1one indicating a positive answer, zero otherwise. 2without considering agriculture or home-productivity activities. table 5. comparison of values of r2 for each appliance’s model using different training sets appliance nigeria ethiopia combined television 0.40 0.78 0.54 radio 0.06 0.02 0.37 mobile phone 0.24 0.40 0.22 refrigerator 0.27 0.31 0.34 international journal of sustainable energy planning and management vol. 22 2019 9 cristina dominguez, kristina orehounig and jan carmeliet 3.1.3. mobile phones mobile phone usage has increased dramatically in developing countries over the last years independently of their electrification rate [19]. in this analysis, it was found that a positive correlation exists between the ownership of mobile phones and the household head employment situation (if head of the family has a salaried employment) and age, while a negative one for the household’s distance to the closest major road. generally, the telecom transmission towers are located near the major roads and large population centres; therefore, if the household is isolated from these, having a mobile phone will not be functional. 3.1.4. refrigerators refrigerators are considered as highly wanted but relatively expensive for rural households [8]; also, this appliance is considered as one of the most energy consuming in the global residential sector. however, the annual income of the household had a relatively low influence on its ownership and the overall performance of the model; therefore, it was decided not to include it. in this analysis, the variables evaluated in the model for televisions were also suitable to project the ownership of refrigerators. the models presented above were chosen based on the highest value of r2, even though if these were below 0.50 (with exception of the televisions model). in order to discard the possibility that the low r2 values were access of the household, showing also that households connected to the grid tend to have more than one television. another variable that affects the ownership modelling is the household head’s literacy, which is positively correlated to the electricity access. the household size is also considered in the model due to its significance on the model’s performance, even if it has less impact than the other two variables. 3.1.2. radios according to household surveys, radios are among the electrical appliances mostly owned in rural areas of developing countries mainly due to its low cost. in this study, it was found that the household size, the age and religion of the household head has an influence on the ownership of this appliance. the household tends to have more radios, if it has a large size, if the head is older and if he is not a religious person. it is important to highlight how having a religion in the rural areas of both countries has a negative correlation with the household size, the education level and employment situation of the household head. it was also found that the households located at a larger distance from the nearest population centre (considering as population a site inhabited by more than 20,000 people, according to [10]) and major road, tend more to have a religion. these isolated sites have limited access to signal transmission towers, so the radios can barely work or not at all, consequently, the radios ownership is lower. table 6. mlr model results for televisions r2 residual std. error intercept (β0) size (β1) electricity access (β2) literacy (β3) 0.54 0.26 –0.33 0.03 0.67 0.43 table 8. mlr model results for mobile phones r2 residual std. error intercept (β0) proximity to major road (β1) age (β2) salaried employment (β3) 0.22 0.36 –0.16 –0.01 0.02 1.06 table 7. mlr model results for radios r2 residual std. error intercept (β0) size (β1) age (β2) religion (β3) 0.37 0.36 0.55 0.02 0.002 –0.50 table 9. mlr model results for refrigerators r2 residual std. error intercept (β0) size (β1) electricity access (β2) literacy (β3) 0.34 0.14 –0.28 0.04 0.16 0.16 10 international journal of sustainable energy planning and management vol. 22 2019 modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa regression to obtain maximum likelihood estimates of the parameters [22]; • generalised boosted regression modelling (gbm): creates models in a sequence based on the training data attempting to correct deviations from the previous model until the best prediction is made [23]. in the figure 1 is shown that the fitting performance has almost no difference when applying the different methods, while the glm and mlr are giving as result the highest values of r2. this demonstrates the difficulty of finding clear drivers of the acquisition of these appliances at a household level, mainly for the cases of small appliances such as radios or mobile phones which can commonly be owned more than once in a household. this also explains why many studies are based on more aggregated data (state or national level) and are not focused on determining the appliances acquisition at a household level, which is mainly a function determined by human behaviour rather than evident drivers to find acquisition patterns. 3.2. error distribution the error distribution for each model tested at a household and state level is presented in the figures 2 and 3. as mentioned before, most of the models have a gaussian distribution centred at zero, which is a good indicator that the models generally produce accurate results without bias towards an under or overestimation obtained due to the limited capacity of the mlr method on estimating the appliances ownership, other linear and non-linear regression methods were tested to analyse their performance on fitting the training dataset. using the model for televisions as example, the comparison of these methods based on their r2 value is presented in figure 1. the methods used to compare the mlr’s results are the following: • bootstrap aggregating (bagging): generates multiple versions of a predictor using them to create aggregated averages to estimate a numerical outcome [20]; • support vector machine (svm): finds a nonlinear function that has at most a certain deviation from the obtained targets for the training data [21]; • generalised linear models (glm): includes iterative weighted linear, logistic and poisson 0 0.1 0.2 0.3 0.4 0.5 0.6 bagging svm mlr glm gbm 0.48 0.51 0.54 0.55 0.43 figure 1: sensitivity analysis of fitting performance of different methods based on r2 values for the televisions model f re q u e n cy f re q u e n cy f re q u e n cy f re q u e n cy 400 a) b) c) d) 300 300 200 200 100 0 −80% −40% 0% 40% 80% −80% −40% 0% 40% 80% −80% −40% 0% 40% 80%−80% error distribution error distribution error distribution error distribution −40% 0% 40% 80% 100 0 300 200 200 0 400 600 100 0 figure 2: error distribution of models tested at household level, a) televisions, b) radios, c) mobile phones, d) refrigerators. number of observations: 1,118 international journal of sustainable energy planning and management vol. 22 2019 11 cristina dominguez, kristina orehounig and jan carmeliet influence of each household. the accuracy of the models increased together with the spatial aggregation of the datasets (see figure 4). for the state and national level, the models presented a lower error, which proves that all the outliers from the household level were levelled out in the aggregation process. the television model applied at a household level had an error of 20.9%, at a state level of 11.6% and at a national level of 6%. in the case of the radios, the errors were of 40.5%, 15.3% and 7% respectively. the mobile phones models gave errors of 35.3%, 28.7% and 3.2% respectively, while the refrigerators presented the lowest errors at all levels with values of 12.6%, 7.7% and 2.8%. it is important to note that the errors obtained at a household scale might have an implication on the estimation of energy demand for distributed power generation projects at a community scale. the models for the ownership of televisions and refrigerators presented a high correlation with the electrification rate, which was expected due to the high electrical consumption that these appliances require. taking as an example the televisions model applied at a state level, in figure 5.a, the correlation can be observed for the case of nigeria (with a r2 of 0.88), which presents the highest ownership value and electrification rate. in the case of ethiopia, the dependency is very low, obtaining a r2 of 0.03. following the example of nigeria, figure 5.b gives a representation of the difference between the modelled ownership of televisions and the real values per observation, which demonstrates the accuracy of the estimation. of the ownership for the appliances studied. exemptions were found in the cases of the household level test for radios (in which most of the ownership was projected within an overestimation range of 11-35%), and in the state level test of the refrigerators (having more than 20 results with an error between 0-9%). this is attributed to the existence of outliers and lack of representativeness in the database. in nigeria the probability of rural households owning at least one radio and refrigerator is of 76% and 9% respectively; while in ethiopia is only of 23% and 2%, respectively. therefore, including nigeria in the models’ training databases sets a high expectation for these appliances ownership values, which leads to a small overestimation. as expected, the household level tests presented the least accuracy (measured by the rmse); this is attributed to the differences in human behaviour and particular f re q u e n cy f re q u e n cy f re q u e n cy f re q u e n cy 25 a) b) c) d) 20 15 10 5 −40% 0% 40% 0% 40% −40% 0%−80% error distribution error distribution error distribution error distribution −40% 0% 40% 80% 0.0 2.5 5.0 7.5 10.0 0 10 0 20 30 5 0 10 15 figure 3: error distribution of models tested at state level, a) televisions, b) radios, c) mobile phones, d) refrigerators. number of observations: 66. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% household televisions radios refrigeratorsmobile phones state national figure 4: errors estimated with rmse for the selected appliances ownership models at every spatial scale. 12 international journal of sustainable energy planning and management vol. 22 2019 modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa in both countries, it is observed that the ownership for televisions and refrigerators are concentrated in the regions with the highest electrification rates. however, in the case of the mobile phones and radios, the ownership values are more disperse and they are not necessarily located in places where the electrification rates are higher. this is attributed to the fact that these two small appliances are economically accessible to almost anyone and they do not consume a high amount of electricity. evidence has shown that people in rural areas are likely to use dry-cell/wet-cell batteries to 3.3. gis application the presented models can be used to geographically indicate in which places of a country the highest electrical appliances ownership values are located, and to analyse if these values are associated to the electrification rates in those places. this application can be very useful for the national authorities to identify potential sites for future electrification projects. figures 6 and 7 present the modelled ownership for each appliance showed by country and state, as well as the rural electrification rates for the year 2015-2016 of the country. 1.2 a p p lia n ce s o w n e rs h ip a p p lia n ce s o w n e rs h ip 1 0.8 0.6 0.4 0.2 0 1.2 1 0.8 0.6 0.4 0.2r 2 = 0.88 electrification rate 0 0.2 0.4 0.6 0.8 1 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 1. states modelled (nig) modelled real (nig) real 0 figure 5: example of nigeria: a) correlation between televisions ownership and electrification rate. b) difference between modelled and real televisions ownership rate values appliances ownership 1 dot = 1% 0% − 10% 11% − 20% 21% − 30% 31% − 40% 41% − 50% 51% − 60% 61% − 70% 71% − 80% 81% − 90% 90% − 100% television refrigerator electrification rate appliances ownership 1 dot = 5% 0% − 10% 11% − 20% 21% − 30% 31% − 40% 41% − 50% 51% − 60% 61% − 70% 71% − 80% 81% − 90% 90% − 100% radio mobile phone electrification rate figure 6: representation of the ownership for the modelled appliances for nigeria (left figure: televisions and refrigerators, right figure: radios and mobile phones) together with the rural electrification rates per state. the dots represent the percentage (stated in the scale) of ownership per household international journal of sustainable energy planning and management vol. 22 2019 13 cristina dominguez, kristina orehounig and jan carmeliet have rural electrification rates ranging from 10–30% (with the exception of oyo). in the case of cross river and katsina, some areas of these states have a good connection to the national grid; however, almost 50% of their rural population is not connected. moreover, it is shown that these people own a relatively high amount of televisions and refrigerators. for ethiopia, it can be easily noticed that the state of somali lacks of electricity network infrastructure (having up to 10% of rural grid connection), while it is presented that these households own large appliances (televisions and refrigerators). this is also the case for the state of benshangui-gumaz, which shows the largest television ownership with 38%, and refrigerators with 18%, while still approximately 64% of the rural households do not have a grid connection. the presented geographic information can give an insight of which electrification solution is the most appropriate for each of the highlighted states (considered as potential priority) from the countries analysed in this work. to give a representation of the number of appliances owned per state, the amount of rural households is estimated for cross river in nigeria (figure 8). this power these electronic devices [24]. it is important to mention that the number of observations in the state of imo and oyo (nigeria) were low, and the rural population surveyed had from zero to 10% of electrification, nevertheless these states are the ones with the highest electrification rates in the country, having 70% and 67% respectively [26]. in figure 8, the national transmission and distribution grid is projected against the appliances ownership per state for both countries. both national grids data were obtained from [27], in the case of ethiopia, it was collected in 2014, while for nigeria in 2015. planned transmission and distribution grids refers to these that are planned to be delivered by the years 2020–2025. potential states could be identified to be listed as priority for the development of future electrification projects. for nigeria, it is observed that in the states with the lowest ownership of high power-consuming appliances (televisions and refrigerators), the infrastructure of the national grid is poor (as it happens in the states of taraba and oyo, for example). there are exceptions, such as the case of borno, which has a relatively high ownership of televisions and refrigerators but the national grid is not well developed in this area yet. the states mentioned appliances ownership 1 dot = 1% television refrigerator electrification rate appliances ownership 1 dot = 5% radio mobile phone electrification rate 0% 1% − 10% 11% − 20% 21% − 30% 31% − 40% 41% − 50% 0% 1% − 10% 11% − 20% 21% − 30% 31% − 40% 41% − 50% figure 7: representation of the ownership for the modelled appliances for ethiopia (left figure: televisions and refrigerators, right figure: radios and mobile phones) together with the rural electrification rates per state. the dots represent the percentage (stated in the scale) of ownership per household 14 international journal of sustainable energy planning and management vol. 22 2019 modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa determining acquisition patterns at household level using evident drivers. in addition, it can be attributed to the existence of outliers in the databases, even if more than 1000 samples were removed from each country due to data discrepancies. the model for refrigerators was the most accurate, having errors ranging from 12.6% at a household level and 2.8% at a national level. on the other hand, the models for the radios and mobile phones had the highest errors mainly at a household level with 40.5% and 35.3% respectively. due to the high ownership rates of these appliances and their low correlation with the evident and well-known socioeconomic, demographic and geographic aspects, the precise projection of the ownership at a household level becomes a difficult task. in future research, the methodology will be improved by adding country scale variables to not only consider a bottom-up approach, analysing the changes in the models’ fit. it will be tested in other countries from sub-saharan africa with similar socioeconomic and geographic characteristics in order to reach its regional parameterisation, and then their current and future electricity demand will be estimated based on the expected future changes on acquisition patterns. in addition, the amount of households is then multiplied by the calculated ownership of each appliance. these estimations are presented in table 10. 4. conclusion rural electrification is a global priority for policymakers as it contributes significantly to the development of a country. the methodology presented in this paper gives a sight of the potential of using existing and widely available data from rural households’ surveys for societal benefits, such as supporting the planning of electrification projects. it estimates the number of electrical appliances owned by a rural household according to its socioeconomic, demographic and geographic characteristics – which can be used to calculate the electricity demand per household for a certain period, by considering the power rates and time of use (e.g. daily or yearly) of these appliances. the model for each studied appliance presented a relatively low error due to the amount of samples considered to create the linear regressions. the multiple coefficient of determination (r2) was low for most models; this demonstrates the difficulty on 115% 89% transmission and distribution grid app. ownership highlighted states existing planned television refrigerator radio mobile phone borno cross river katsina oyo taraba benshangul−gumaz somali figure 8: projection of the national transmission and distribution grid (existing and planned) and the appliances ownership per state (left figure: nigeria, right figure: ethiopia). the number next to the bar scale represents the value of the longest bar in the chart for each country table 10. estimation of the number of appliances for the state of cross river, nigeria rural population (2015) [10] average hh size in rural areas [27] number of hh televisions refrigerators radios mobile phones app. own. amount app. own. amount app. own. amount app. own. amount 2,865,429 5.10 561,848.82 0.54 303,398 0.2 112,370 0.83 466,335 0.84 471,953 international journal of sustainable energy planning and management vol. 22 2019 15 cristina dominguez, kristina orehounig and jan carmeliet forecasting_electricity_demand_in_developing_countries_ a_study_of_household_income_and_appliance_ownership [10] narasimha, d, ummel, k, white goods for white people? drivers of electric appliance growth in emerging economies, energy research & social science 27 (2017) pages 106–116. 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_ref2593807 _ref2593847 _ref2593892 _ref2593956 _ref2593969 02.1037-3829-2-le.qxd 1. introduction the purpose of this analysis is to gain insight into the dynamic response of electricity demand to price changes in the very short run. in particular, in this research we suggest a simple time series-based econometric approach to investigate whether hourly demand responds to hourly prices already within the same day. based on this we analyse hourly time series of electricity consumption and prices for the manufacturing industry in west denmark for the period 2007-2011. our analysis is performed on two levels: we consider both the aggregate manufacturing industry as international journal of sustainable energy planning and management vol. 07 2015 5 well as a single anonymous consumer. most of the electricity consumers in the considered group have hourly metering and the option of hourly pricing.1 moreover, in the very short run – say hours – some industrial consumers are able to postpone electricity consumption without influencing their output significantly. e.g. a cold store may cut electricity consumption for an hour or two when prices are high. however, in order to maintain the temperature within the acceptable limit, electricity consumption must increase later. other examples of industrial consumer flexibility relate to lighting, pumping and heating. international journal of sustainable energy planning and management vol. 07 2015 5-18 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. ������� � � ������� �� ���� ��������� ����� ���� �������� ����� ���� �� ����� �� ���������� ������� ��� � ������� ��� ���� ������ ��� !�" abstract the use of renewable energy implies a more variable supply of power. market effciency may improve if demand can absorb some of this variability by being more flexible, e.g. by responding quickly to changes in the market price of power. to learn about this, in particular, whether demand responds already within the same day, we suggest an econometric model for hourly consumption-and price time series. this allows for multi-level seasonality and that information about day-ahead prices does not arrive every hour but every 24th hour (as a vector of 24 prices). we confront the model with data from the manufacturing industry of west denmark (20072011). the results clearly suggest a lack of response. the policy implication is that relying exclusively on hourly price response by consumers for integrating volatile renewable electricity production is questionable. either hourly price variation has to increase considerably or demand response technologies be installed. keywords: demand response, electricity demand, day-ahead prices, econometrics, regarima. url: dx.doi.org/10.5278/ijsepm.2015.7.2 1 although no information about the share of consumers using this option exists for the period under study, this is most likely to be large. in particular, it appears from an analysis made by the danish energy agency in 2014 that, only around 25% of sales to the danish industry come from fixed-price contracts (see www.ens.dk/info/nyheder/nyhedsarkiv/ny-metode-goer-virksomhedernes-elpriser-mere-retvisende and the links to background notes (in danish) there). * corresponding author e-mail: nfmo@dtu.dk dx.doi.org/10.5278/ijsepm.2015.7.2 6 international journal of sustainable energy planning and management vol. 07 2015 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. analysing short-term demand response is important for at least two reasons: first, if customers observe and react to hourly electricity prices, the efficiency of the electricity market is likely to improve and thus a welfare gain can be obtained [1, p. 70]. second, production from renewable production technologies like wind and solar varies unsystematically and is only partly predictable. technical integration of these technologies therefore requires continuous reactions either within other parts of the supply system or in the demand (e.g. demand response to hourly prices). in light of the future increases in the production share coming from the more volatile renewables, these arguments clearly become more and more significant. the literature on short-term price response is extensive and estimated elasticities vary considerably reflecting both methodological differences and customer characteristics. concerning load shifting, e.g. moving consumption from daytime to nights, time-of-use rates where customers know when rates shift from high to low, estimated elasticities are often both significant and relatively large, see e.g. [2] and [3]. targeting periods with very high marginal production costs and market prices (either due to high demand or lack of production capacity), analyses of critical peak pricing schemes, where consumers are informed, typically a day in advance, that their rate will be extraordinary high in a specific period, also show significant and relatively large price elasticities. see e.g. [4] and [5]. for a successful integration of fluctuating renewable energy sources, customers need to react instantaneously to changing prices, typically hourly day-ahead market prices (plus taxes). consumption should be increased when renewable production is large and prices low and decreased when renewable production is limited and prices high. analyses of demand response to hourly prices show very mixed results with very large variations in the size of the price elasticity, but often reported price elasticities are fairly small and depend of specific customer characteristics [1, p. 88]. estimated own-price elasticities vary from approximately zero to 0.38 (in absolute value) for a few large customers in peak periods. the present research is based on standard econometric time series methods. however, the time series under study, in particular, the hourly nord pool prices, are a bit special, in that the information set of the agents is updated with new information on prices only every 24th hour and not every hour.2 it can be shown that, in general this has to be taken into account for the estimation results to be reliable. we suggest a simple solution to this problem which implies a rearrangement of the original time series of consecutive hourly observations. the basic idea, which builds on [6], is to divide the day into a number of sub-periods, for example (but not necessarily) the 24 hours. in this way each new observation should rather be viewed as a vector or a panel of 24 variables, namely the 24 sub-period price and consumption levels. thus, each new observation corresponds to a new day (rather than a new hour), i.e. when the information set updates with respect to prices. to analyse intra-day price responsiveness based on the rearranged time series we suggest a simple, albeit general, “structural” or behavioural framework from which we derive a regression model for each subperiod’s consumption level. the latter is regressed on prices from all sub-periods. in our empirical application, for example, we divide the day into 12 two-hour subperiods which implies that we estimate twelve separate regression equations. we assume that agents are price takers, in that, electricity prices are determined by aggregate demand and supply which are approximately uninfluenced by the consumption unit we look at. as is well known hourly electricity data display a rather pronounced degree of multi-level seasonality, i.e. periodic systematic patterns over the day, week and year, [7, chapter 2]. for simple regressions, involving only the levels of consumption and prices, it is inevitable that a large part of this seasonality remains in the error term. to accommodate this, the regression model we use is therefore allowed to have multiplicative seasonal arima errors. this model is denoted as the regarima, [8]. in addition to the seasonal dynamics, this model also allows for non-seasonal dynamics, i.e. the usual ar and ma terms. such terms are also required to capture the high degree of inter-day correlations for both consumption and prices. taking our model to the data, the results clearly suggest a lack of demand response to price changes at the intra-day horizon. this holds for both the aggregate 2 in general, the information set at time t, say ωt, has as elements the variables that are known to the agent at time t. econometrically these are the variables we condition on. manufacturing sector of west denmark as well as for a single anonymous consumer from this industry. this conclusion is obtained in statistically well-specified regarima models and is obtained independently of whether these are identified manually or by automatic arima modeling algorithms.3, 4 in the next section we first elaborate briefy on the above-mentioned temporal aspect of the price series. then we introduce the notation and technical details, present a structural framework and from all this, derive the regarima model to be estimated. we confront our regarima model with the data in section 3 and finally conclude and discuss our findings in section 4. 2. modelling hourly electricity demand based on dynamic time series models assume that the data at hand come in the form of time series data of electricity prices and load with an hourly resolution. if one is to apply standard statistical models to these time series, in order to analyse electricity demand as a function of electricity prices, there are a few fundamental characteristics to be taken into account. first, although electricity is priced on an hourly basis, the information set (with respect to prices) of the consumption unit is not updated each hour. instead, the 24 hourly prices, corresponding to electricity delivery for each of the 24 hours on a given day, have been determined simultaneously in an auction taking place the day before. that is, prices are determined in a dayahead market, in this case, the nord pool market.5 this is in contrast to the assumption underlying many applied time series analyses, namely that the information set is updated with new information each new period. this characteristic temporal property of day-ahead electricity prices has been emphasized before in connection with analyses of prices only, i.e. not jointly with electricity consumption, as is the case here, and different ways to deal with it have been suggested.6 for example, panel models have been suggested for which the price series is treated as a panel of 24 cross sectional units corresponding to the 24 hourly prices measured each day [9]. another way to handle day-ahead price series, which has been suggested by wolak, is simply to stack the 24 prices into a vector and then treat this vector as a time series process [6]. the present analysis builds on the latter idea and generalises it to apply to a structural model involving consumption and prices (and possibly other variables). in both of the above-mentioned studies the way to take the temporal property into account is to transform or rearrange the original time series so that it is amenable to standard time series models. this is also the approach here and within our approach an observation of prices is basically a vector of say 24 (hourly) prices. the same goes for consumption of course. for example, if we consider 3 days (hour 1, day 1 to hour 24 day 3), that is, 72 hours, we have a multivariate series with three 24-dimensional observations, instead of a univariate series with 72 observations. alternatively, if we divide the day into 12 sub-periods we would still have three observations but these would be 12-dimensional. in this setup intra-day effects from prices to consumption are thus formally treated as static or current effects. although these intra-day effects are of primary interest here the model must also allow for dynamic dependence, i.e. inter-day dependence, since consumers may be able to shift their consumption across days. moreover, expectations of prices are likely to be adaptive and thus related to past prices, and there may be physical restrictions which imply, for example, that reduced electricity consumption on a given day means increased consumption the following day. these aspects mean that the model must also allow for dynamic dependence beyond a day’s length. in addition to this time dependence there is also a strong multi-level seasonality in the original hourly series, that is periodicity over the day, the week and the year (see e.g. [7]). note that, in our transformed series (into multivariate daily series) only the weekly and yearly seasonality remain. in order to take account of all this, i.e. the special temporal property of prices series and both the seasonal and non-seasonal dynamics, we analyse the “sub-period transformed” time series by use of a linear regression model with a multiplicative seasonal arima error term. the latter regression model is often referred to as the regarima model [8]. the regarima is relatively general as it comprises a range of time series international journal of sustainable energy planning and management vol. 07 2015 7 niels framroze møller and frits møller andersen 3 by well-specified we mean that the most important residual-based diagnostics or misspecification tests were passed to a satisfactory extent. 4 see [17]. 5 see http://www.nordpoolspot.com/. 6 see e.g. [11] for a clear discussion and for further references. models used in the literature on short-term load forecasting. these include the linear regression model with white noise errors, pure ar models, pure ma, regression with ma-or ar errors, pure seasonal ma and ar models, and of course various combinations, such as a linear regression with seasonal autoregressive errors (see e.g. [7, section 3.4], for a survey). to a large extent our approach follows what has been a tendency in the literature on short-term load modelling and forecasting since [10], namely to have a distinct model for each hour (or sub-period) of the day. in particular, note that, although our analysis is akin to that of [10], these authors do not include prices as regressors but are concerned with load only. but clearly setting i = 24 and choosing a suitable arima structure this will reproduce their model. however, the regarima algorithm that we apply here allows us to estimate a richer dynamic structure for the error process. in the next section we first provide some technical details about the basic transformation underlying the econometric model. this serves the purpose of both introducing the notation but should also facilitate the exposition and make our analysis more transparent and thus easier for other researchers to apply. then we provide a general behavioural foundation for the econometric model (to facilitate the interpretation of the empirical results later on), and from this derive the regarima regression for sub-period consumption. 2.1. the econometric approach 2.1.1. the time axis, measurements and notation we consider a time axis where the unit of measurement is one day indexed by t, and divide day t into i nonoverlapping sub-periods, i ∈ {1, 2, 3, ..., 24}. day t =1, 2, 3, ..., do not necessarily have to be consecutive calender days, and may for example, exclude weekends and holidays. however, in the application below all calender days are analysed consecutively. the subperiods are not necessarily of the same length but their length is always an integer number of hours. for example, the first period could be the first hour and the second period could be the remaining hours of the day. but of course there are many other possibilities. we order the periods corresponding to i =1, 2, .., i, chronologically, but it is not required that these periods are adjacent. the sum of these periods can be at most 24 hours but may clearly be less. it thus follows that, if i =24, period i =1, 2, .., ι corresponds to the 24 consecutive hours of the day, and that, i > 1 is required, if we are to allow for intra-day effects which is the focus here. note, for example, that i = 1 could correspond to a whole day (24-hour period) or even a single given hour of the day. to keep the exposition simple we assume in the remainder of this section that i = 2, for example dividing the 24 hours into two 12-hour periods. in terms of the illustration here, there is no loss of generality in making this simplifying assumption. of course, in a given empirical application it may be preferable not to “aggregate too much over time” by letting each of the i periods correspond to several hours, since this is likely to hide potentially interesting dynamic effects. in the empirical analysis in section 3 we therefore allow for as many as 12 sub-periods (i =12), where each sub-period corresponds to a two-hour period. now, given hourly observations on consumption and prices of electricity for sub-period i of day t, we compute the variables, ci,t and pi,t. in general, these variables are thus functions of the original hourly series. for example, if sub-period i consists of three hours, ci,t could be the aggregate or average consumption for these three hours, and pi,t could be the average price. in the application in section 3, ci,t denotes the aggregate consumption over the hours corresponding to sub-period i, while pi,t is the average price for this period. in this paper, we let capital letters denote the original variables to be distinguished from the logarithmic values which we denote by small letters. the reason for the logarithmic transformation is that the regression models in section 3 can be viewed as log-linear approximations to more general non-log-linear equations. moreover, by use of a range-mean plot, based on sub-samples of the seasonal length = 7, we found that a logarithmic transformation of the variables was in fact clearly supported by the data. already now it should, to some extent, appear that there is some generality in our approach, in that there are a large number of possible (and interesting) combinations of the number and length of sub-periods, that one could experiment with. note also that, studies of the daily time series of consumption in a particular hour [11], or an average computed for the day, are examples implying i =1. 8 international journal of sustainable energy planning and management vol. 07 2015 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. 2.1.2. a structural econometric model for sub-period demand and the regarima to facilitate the interpretation of the empirical results we need a structural or behavioural model. we want it to represent different electricity consumption units and thus suggest here a relatively general formulation. its substantive structure is however straightforward: each period t (day), after the information set updates with respect to prices, consumption is planned for the current period, i.e. all the sub-periods of period t, and possibly a number of future sub-periods. given the past (lagged values of the relevant variables), planning is based on the current realized prices, which are treated as exogenous by the price taking assumption, and supposedly other exogenous variables, such as planned output and (expected) temperature etc. in addition, expected future values of prices and of the exogenous variables also influence the planning.7 as a simple illustration assume that planning only goes as far as one day ahead. that is, simultaneous planning for period t and t + 1 or rather the four subperiods, 1 and 2 of day t and 1 and 2 of day t +1. if we let the superscripts, p and e, refer respectively to, planned and expected values, to be distinguished from realized values, the planning equations can be written as, (1) where the f functions are differentiable. here, xt is a vector of exogenous variables (other than prices), i.e. those that are given in the planning problem. expected values of such variables as well as indictors for the type of the day (work day, holiday etc.), sinusoidal functions capturing annually seasonality etc. can also be included in xt (see section 3). we may think of this system of equations as sufficient first order conditions corresponding to some underlying representative optimization problem (e.g. cost minimization). there are a few additional aspects of eq. (1) to note. first, it is reasonable that lagged terms, c1,t−1 and c2,t−1, enter. this could for example reflect physical/technical constraints (fridge/cooling heating) and/or expected load requirements: what is used in the most recent period is c f c c c p p t p t p t p t p t e t1 1 2 1 1 2 1 1 1 2, , , , , , , , , ,= + + + +11 1 1 2 1 1 2 2 2 e t t t t t t p c c p p c f c , , , , , , , , , , , − −( ) = x′ 11 1 1 2 1 1 1 2 1 1, , , , , , , , , , , t p t p t p t e t e t c c p p c + + + + −11 2 1 1 2 1 1 3 1 , , , , , , , , , , , c p p c f c c t t t t t p t p − + ( ) = x′ 22 2 1 1 1 2 1 1 1 2 1, , , , , , , , , , , t p t p t e t e t t c p p c c + + + − − ,, , , , , , , , , , , , p p c f c c c t t t t p t p t p 1 2 2 1 4 1 2 1 x′( ) = + tt p t e t e t t t p p c c p p + + + − −1 1 1 2 1 1 1 2 1 1 2 , , , , , , , , , , , ,, , . t t x′( ) likely to influence consumption in the current period. secondly, note that for both past consumption and lagged exogenous variables (included in xt), additional lags are likely needed to obtain an empirically viable model. third, there is no direct effect on the plans from the lagged prices. clearly, as shown below, there may indeed be an indirect effect, working through the (adaptive) price expectations. fourth, note that, here the horizon for expectations is two sub-periods and hence coincide with the planning horizon, which is not generally the case. fifth, it is also an arbitrary assumption (made for the sake of illustration) that the consumption unit is planning only one day ahead (i.e. planning simultaneously for period t and t + 1). the planning horizon could be longer and, moreover, it could imply, say only half of day t + 1, for example. to close the model we assume that all expectations are adaptive. specifically, since prices for different subperiod of day t are correlated and prices may be correlated over days, we allow the expected price level for a given sub-period to depend on the prices in several sub-periods. for example, p e1,t+1 may depend on p1, t, p2,t, p1,t−1, p2,t−1 and p1,t−6 etc. moreover, current and lagged values of the other variables may also influence price expectations: the important assumption is that all expectations are functions of only current and lagged values of the observable variables. we assume furthermore that these functions are differentiable. to come from the planning equations in eq. (1) to the optimal planned levels, equations for the expected values, which fulfil adaptiveness, are inserted in eq. (1). assuming, by regularity, that the jacobian matrix of first-order derivatives is non-singular, the implicit function theorem ensures that the resulting system of equations can be solved with respect to c p 1 ,t ,c p 2,t ,c p 1 ,t+1 and c p 2 ,t+1 which gives the optimally planned values. see e.g. [12]. to come from these optimal planned magnitudes to the equations for the observable variables, which form the basis for the estimation equations below, we could assume the following observation mappings, c1,t = g1 (c1 p ,t ,v1,t) c2,t = g2 (c2 p ,t ,v2,t) (2) where the g functions are diferentiable and the v.,t terms in eq. (2) are unsystematic, i.e. white noise, error international journal of sustainable energy planning and management vol. 07 2015 9 niels framroze møller and frits møller andersen 7 thus, using the terminology of [18], a plan is here a mix of a contingent plan and a behavioral model (i.e. based on expected values). see [18, chapter 6]. components. we assume that the planned values, c p 1 ,t+1 and c p 2 ,t+1 in eq. (1), are not binding and are not used. they are discarded since the information set is updated and new plans can be made at the beginning of perio d t+1. instead of eq. (2) we shall allow for slightly more flexibility of the specification, by assuming realistically that the consumer is free to adjust his sub-period consumption when entering that sub-period. for example, as seen from the first equation in eq. (2), c1,t deviates from c p1,t due to the error term representing unforeseen events. since consumption c1,t is most likely influencing c2,t the deviation of c2,t from the planned level, c2 p ,t, is likely to depend also on the realised value, c1,t and not only v2,t. this leads us to the alternative recursive formulation, c1,t = g1(c1 p ,t,v1,t), c2,t = g2(c2 p ,t,c1,t,v2,t), (3) for which it is assumed that there are no effects of c1,t on c2,t when c1,t = c p 1,t . to derive the estimable regression equations, note first that it follows from the assumption of adaptive expectations that the solutions of eq. (1), c1 p ,t and c2 p ,t in eq. (3), depend only on lagged consumption, current and lagged values of prices and other exogenous variables. assuming a log-linear form of the g functions in eq. (3), or more generally, making a log-linear approximation, we take logs in eq.(3), c1,t = x1,t + β1,1p1,t + β1,2p2,t + β1,3p1,t−1 + β1,4p2,t−1 + β1,5c2,t−1 + u1,t (4) c2,t = x2,t + β2,1p1,t + β2,2p2,t + β2,3p1,t−1 + β2,4p2,t−1 + β2,5c2,t−1 + u2,t where x.,t comprise the observable variables in xt, including lagged variables as a result of adaptive expectations, and additional lagged observable variables, e.g. higher lags of consumption. the reason why we stress “observable” here is that, in practice data on many of the exogenous variables are not available/observable at an hourly resolution. hence, in the empirical application the influence from these variables is hidden in the error term. the u1,t and u2,t error terms are therefore allowed to be systematic, in particular to follow an arima structure describing both non-seasonal and seasonal dynamics (see below). in the general case, for which i is no longer restricted to 2, we may state the regression equation for sub-period i consumption, ci,t, in terms of the regarima (linear regression with arima error structure) formulation, ci,t = β ′i zi,t + ui,t, (5) for t = 1, 2, .., t and i = 1, 2, ..., i and where, we have stacked all indicators and deterministic terms, current prices and lagged prices, lagged consumption and exogenous variables into the vector zi,t. the equation for the arima error structure is, θi,p i (l)ψi,pi (ls)δdi δs diui,t = γi,qi (l)πi,qi (l s)εi,t, (6) for t = 1, 2, .., t and i = 1, 2, .., i, and where l is the lag operator, δdi ≡ (1 − l)di , δsdi ≡ (1 − ls)di with di and di being integers and s = 7 corresponding to the weekly seasonality. we assume that εi,t and εj,s are uncorrelated for t ≠ s for all i and j, and for i ≠ j when t = s. this implies that although all the i regression equations constitute a system one may still rely on single-equation estimation (i.e. equation by equation). see e.g. [13, chapter 12]. note that the uncorrelatedness between εi,t and εj,t for i ≠j results since the system has a recursive structure, in that c1,t does not depend on ci,t for i > 1, but c2,t depends on c1,t, c3,t depends on c1,t and c2,t, c4,t depends on c1,t, c2,t and c3,t and so forth. this recursive structure is due to the fact that sub-period i precedes sub-period i + 1, which precedes sub-period i + 2 etc. and the assumption that the consumer is able to adjust his sub-period consumption when entering that sub-period, i.e. the “ex post plans” adjustment as mentioned in connection with eq. (3).8 the various lag-polynomials can be divided into those describing the non-seasonal dynamics, θi,pi (l)≡(1−θi,1l−θi,2l 2−...−θi,pil pi), γi,pi (l)≡(1−γi,1l−γi,2l 2−...−γi,qil qi), and into those describing the seasonal dynamics, ψi,pi (l s)≡(1−ψi,1ls−ψi,2ls2...−ψi,pil spi), πi,qi (l s)≡(1−πi,1ls−πi,2ls2...−πi,qil sqi). 10 international journal of sustainable energy planning and management vol. 07 2015 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. 8 one may add that, at least to our knowledge, a fully developed software (including diagnostics test etc.) for estimating the corresponding regarima system, that is, a multiplicative varima with exogenous regressors, is not available. note that when an order index (pi, pi, qi, or qi) is zero the corresponding polynomial is equal to 1, and that in practice (including the present analysis) these indices are often found to be relatively low, so that a relatively flexible dynamic structure can be described by a few parameters. all four lag polynomials have (non-explosive) roots whose moduli are located in the complex plane such that the differenced process is stationary and invertible see e.g. [14]. the term, δdi , corresponds to di real unit roots, i.e. located in (1,0) in the complex plane. these roots imply non-stationarity of the integrated type, i.e. that can be removed by (first-) differencing (see e.g. [15]). the term δsdi corresponds to non-stationarity in the form of di × s unit roots, which are spread out evenly on the unit circle (see e.g. [16]). these are referred to as seasonal unit roots and they represent non-stationarity that can be removed by taking the seasonal difference di times. the regarima model can also be stated by inserting eq. (5) in eq. (6), i.e. θi,pi (l)ψi,pi(ls)δdiδsdi (ci,t −βi′ zi,t)=γi,qi(l)πi,qi(l s)εi,t, and is symbolically written as the multiplicative seasonal regarima denoted, regarima(pi, di, qi) × (pi, di, qi)s, resembling standard notation. finally, yet another way of interpreting the model, when taking differences is necessary, is by viewing it as a regression of involving the differenced variables only and where the error structure follows a stationary and invertible arma, that is, �ci,t = β′i �zi,t + ei,t, (7) where �ci,t ≡ δdiδsdici,t and �zi,t ≡δdiδsdizi,t and, θi,pi (l)ψi,pi(l s)ei,t = γi,qi(l)πi,qi(l s)εi,t . note that, the parameters of interest (i.e. in terms of the example in eq. (4), the price effects, β1,1, β1,2, β2,1 and β2,2) are individual coeffcients in the βi vector and in particular that these are retained under differencing. 3. confronting the data the regarima model of sub-period consumption, from the previous section, is now used to analyse price responsiveness at the intra-day horizon, based on time series consisting of hourly observations of electricity prices and hourly electricity consumption. the price series are the nord pool system-or market clearing prices plus taxes. although negative nord pool prices sometimes occur, for the present sample this almost never happened (35 out of 43824 hours), and as a short cut we therefore interpolated between the adjacent positive observations. for consumption we consider data corresponding to two consumption levels, the aggregate manufacturing industry consumption of west denmark and a single anonymous consumer from this industry (henceforth referred to as “consumer a”). in this way we may also get an idea of the impact of aggregation. although it is possible that in the aggregate there may be a low degree of “instantaneous price responsiveness”, consumer a could be expected to have at least some possibility of being flexible. this consumption unit, for which the bulk of consumption comes from refrigeration, was picked out since it had the lowest average expenditure per kwh on electricity. for the aggregate industry we consider the sample january 1st, hour 1 (00-01 am) 2007 through last hour (11-00 pm) of 2011, a total of 43824 hours (the year 2008 was a leap year). for consumer a the sample is january 1st, hour 1 (00-01 am) 2007 through last hour (11-00 pm) of 2010, as some observations were missing for 2011. international journal of sustainable energy planning and management vol. 07 2015 11 niels framroze møller and frits møller andersen 10 15 20 25 0.50 0.75 1.00 1.25 industrygwh 10 15 20 25 25 50 75 consumer a day number day number kw figure 1: hourly consumption data, for the aggregate manufacturing industry of west danmark, in gwh (upper panel) and consumer a in kw (lower panel) for weeks 2-4 in january 2007. a window (weeks 2-4 of january 2007) of the time series of consumption and prices are shown in figures 1 and 2. this relatively short window makes the mentioned multi-level seasonality more visible, as compared to a time series plot of the full sample. for example, for the consumption data, and in particular for the aggregate industry, both the weekly and the daily periodicity are strikingly clear. to have a model that is manageable yet still sufficiently detailed, i.e. time-disaggregated, we have chosen to divide the day into twelve sub-periods each of two hours length. in terms of the regression part of the regarima model, β ′i zi,t, or β ′i z�i,t when differencing is involved (see respectively, eq. (5) and eq. (7)), the specification we estimate always includes the 12 price levels from the 12 sub-periods of the current day and the consumption levels for the last 11 sub-periods. in addition, we include a cosine-sine term with frequency, 1/365, to account for the annual seasonality, as resulting from the combined influence from exogenous climatic conditions. impulse indicators or dummy variables are also included to account for the day (whenever there is no seasonal differencing involved), for the month, for indicating whether the day is a working day, and finally for the industrial holidays. the estimation is based on the x12-arima module for oxmetrics. see [8] and [17]. for all estimated models we have carried out a residual-based model check. following the time series analysis convention this includes a simultaneous assessment of normality and (lack of) serial correlation: the histogram of the residuals was compared against a corresponding normal distribution benchmark. however, since we have many observations the normality assumption is not vital for the statistical results and although the residual distributions are generally rather well-behaved, we accept some nonnormality as long as the underlying error distribution can be assumed (approximately) to be symmetrical. in the initial estimations there were often a pronounced degree of skewness (compared to the normal) but in this case this was always due to a (very) limited number of outliers, and hence was taken care of by a few impulse indicators. to check the assumption of no-serial correlation we have considered the significance of the auto-correlation-function (acf) for the first 65 lags, i.e. a conventional acf plot with critical values computed under the white noise assumption (see e.g. [16]). as a robustness check all models are also estimated by use of the automatic arima modelling implemented in oxmetrics [17].9 often, but not always, the automatic choice coincided with our choice of specification. in any case it was clear that the estimated price elasticities and their significance in the tables below were virtually independent of whether we chose the specification manually or automatically. it is well-known that there is a high degree of correlation between price levels corresponding to the different hours of the day, in particular for adjacent hours. this is an inherent and fundamental problem in light of the regression model and potentially it may lead to finding insignficant price elasticities although the true elasticities are non-zero. however, relative to price levels for adjacent hours, in our application correlations were reduced for two reasons. firstly, the aggregation into twohour sub-periods lowered correlation slightly. secondly, and more importantly the data indicated seasonal unit roots for almost all estimations (see below). therefore it was necessary to take the 7th difference of the (log-) prices to obtain stationarity and this also lowered correlation to some extent. as a result collinearity is less of a problem than initially expected. it should be mentioned that initially we did experiment with aggregation into a smaller number of longer sub-periods to see whether this would reduce collinearity. it turned out that not much was gained when increasing 12 international journal of sustainable energy planning and management vol. 07 2015 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. 9 see the references in [17]. 10 15 20 25 30 40 50 60 70 80 90 100 eur/mwh day number figure 2: hourly electricity prices for the aggregate manufacturing industry of west denmark for weeks 2-4 in january 2007. units: euros per mwh (including taxes). table 1: price elasticities for aggregate manufacturing industry consumption in the 12 sub-periods. for each sub-period consumption the first line gives the estimates while the second contains the t-values. own-price elasticities on the diagonal (emphasized with grey) and t-values numerically larger than 2 are bold faced. p1 p2 p3 p4 p5 p6 p7 p8 p9 p10 p11 p12 model c1 −0.01 0.00 0.00 −0.01 0.04 −0.01 −0.01 −0.02 0.03 0.03 −0.02 −0.03 regarima −1.16 0.19 0.30 −0.83 3.28 −0.53 −0.64 −1.72 2.49 −1.86 2.37 −1.95 (3,0,0)×(1,1,1) c2 0.00 0.00 0.00 −0.01 0.00 0.01 −0.01 0.01 0.00 0.01 −0.01 0.00 regarima −1.30 0.32 0.36 −1.36 −0.26 1.00 −1.38 2.07 −0.95 2.23 −1.21 0.16 (0,0,0)×(0,1,1) c3 0.00 −0.01 0.01 0.00 −0.02 0.01 0.01 −0.01 0.00 0.00 0.01 −0.01 regarima 1.31 −1.59 2.01 1.06 −2.44 0.82 1.25 −1.85 0.26 −0.32 1.30 −1.21 (0,0,0)×(0,1,1) c4 0.00 0.00 −0.01 0.01 0.02 −0.02 0.00 0.01 −0.01 0.02 −0.02 0.01 regarima 0.38 0.67 −0.31 0.84 1.75 −2.15 0.29 1.02 −0.94 1.73 −1.40 1.13 (2,0,0)×(0,1,1) c5 0.00 0.0 −0.01 0.00 0.01 0.00 −0.01 0.01 0.00 −0.01 0.00 0.00 regarima −0.13 1.46 −1.83 −0.43 1.27 0.27 −0.71 0.60 0.78 −1.55 −0.04 0.54 (3,0,0)×(0,1,1) c6 0.01 0.00 0.00 0.00 −0.01 0.00 0.00 0.01 −0.01 0.01 0.00 0.00 regarima 2.36 −0.49 −0.52 0.83 −1.40 0.33 −0.19 1.04 −1.20 1.09 −0.25 0.04 (0,0,0)×(0,1,1) c7 0.01 −0.01 0.01 −0.01 0.01 0.00 −0.01 0.01 0.00 −0.01 0.01 0.00 regarima 2.11 −2.60 2.06 −1.30 0.81 −0.45 −1.56 1.69 0.82 −0.93 1.51 −0.59 (2,0,0)×(0,1,1) c8 −0.01 0.00 0.00 0.01 −0.02 0.01 −0.01 0.01 0.02 −0.01 0.00 0.00 regarima −2.04 0.51 0.55 1.96 −2.63 1.21 −1.12 1.03 3.67 −1.81 0.04 −0.45 (4,0,0)×(1,0,1) c9 0.01 0.00 0.00 0.00 −0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.02 regarima 2.03 −0.83 0.53 0.14 −1.52 −0.34 0.10 0.14 −0.23 −0.46 2.44 −l.00 (0,0,0)×(1,1,1) c10 0.00 0.01 0.00 0.00 −0.01 0.01 −0.01 0.01 −0.01 0.02 −0.01 0.00 regarima 0.13 1.29 −0.93 0.05 −1.72 1.91 −1.56 0.82 −1.44 2.81 −1.05 0.14 (1,0,0)×(1,1,1) c11 0.00 0.00 −0.01 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.01 0.00 regarima 0.07 0.97 −1.70 0.72 −0.11 −0.35 0.54 0.14 −0.05 −0.04 0.65 −0.60 (1,0,0)×(1,1,1) c12 0.00 0.00 0.00 −0.01 0.02 −0.01 −0.01 0.00 −0.00 −0.01 0.00 0.01 regarima −0.68 −0.43 0.73 −1.83 2.44 −0.85 −0.75 0.76 0.65 −1.36 0.17 0.92 (1,0,0)×(0,1,1) the length of the sub-periods beyond two hours. for example, dividing the day into four 6-hour sub-periods, the price levels for the adjacent sub-periods were still relatively correlated. to some extent (though less) this was also the case even when dividing the day into two 12hour sub-periods. since such aggregation into fewer but longer sub-periods has the cost that potentially interesting information may be hidden by aggregation, we chose to keep the 12 two-hour sub-periods. table 1 reports the estimated short-run price elasticities along with their t-ratios, for the aggregate manufacturing industry. the table is read as follows: for example, in the first row corresponding to sub-period 1 consumption, we can see that this responds to the sub-period 1 price, negatively (as expected). the estimated (own-price) elasticity for this sub-period is -0.01 and this is insignificant (t-ratio = 1.16). note that, own price elasticities on the diagonal are emphasized with grey and t-ratios numerically larger than 2 are marked in bold face. the last column of the table shows the regarima specification for the model for the respective sub-period, and one may note that different sub-periods typically require different international journal of sustainable energy planning and management vol. 07 2015 13 niels framroze møller and frits møller andersen specifications although they share common assumptions, such as seasonal differencing, for instance. table 2 reports the results for consumer a and its design is otherwise identical to that of table 1. it is clear that both in the aggregate as well as for consumer a it is hard to find any convincing evidence supporting negative own-price elasticities and positive cross-price elasticities -a hypothesis which could seem reasonable a priori: in general, there are no significant negative own-price elasticities and t-ratios are relatively low throughout the tables. although insignificant there are five estimates on the diagonal that are negative and in a few cases for consumer a some positive and moderately significant cross-price elasticities exist close to the diagonal, which could indicate that some consumption is shifted between sub-periods that are close. an example of this is sub-period 6 for consumer a, for which there is some, albeit vague, indication that consumption in subperiod 6 goes up if the price in sub-period 7 is high. however, we investigated whether such results would stand out more clearly when removing insignificant regressors, but found that this was indeed not the case. although, as mentioned above, taking the 7th difference of the (log-) prices lowered the degree of correlation to some extent, it is inevitable that some of this remained. as a result of this, it could be expected 14 international journal of sustainable energy planning and management vol. 07 2015 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. table 2: price elasticities for consumer a in the 12 sub-periods. for each sub-period consumption the first line gives the estimates while the second contains the t-values. own-price elasticities on the diagonal (emphasized with grey) and t-values numerically larger than 2 are bold faced. p1 p2 p3 p4 p5 p6 p7 p8 p8 p10 p11 p12 model c1 0.01 0.02 0.01 −0.04 0.08 −0.10 0.13 −0.05 −0.03 0.05 −0.03 −0.07 regarima 0.41 0.53 0.15 −1.18 1.51 −1.76 1.86 0.84 −0.77 0.91 −0.39 1.18 (3,0,0)×(1,1,1) c2 0.00 0.04 0.02 −0.08 0.11 −0.01 −0.12 0.14 0.00 −0.07 0.08 0.00 regarima −2.23 0.98 0.40 −2.39 2.16 −0.19 −1.77 2.62 0.00 −1.39 1.30 −0.06 (3,0,0)×(1,1,1) c3 −0.09 0.00 0.07 −0.06 0.23 −0.19 0.05 0.06 −0.04 0.02 0.03 0.01 regarima −1.39 0.03 0.77 −0.96 2.31 −1.72 0.36 0.60 −0.51 −0.21 0.21 0.08 (2,0,0)×(0,1,1) c4 0.03 0.06 −0.08 −0.03 0.09 0.03 −0.02 −0.02 −0.01 0.07 −0.01 0.02 regarima 0.45 0.96 −1.14 −0.57 1.00 0.33 −0.20 −0.12 0.84 0.78 −0.07 0.25 (3,0,0)×(1,1,1) c5 −0.06 0.03 −0.03 0.12 −0.11 0.28 −0.28 0.07 −0.03 −0.05 0.09 0.12 regarima −1.06 0.41 −0.36 2.06 −1.29 2.99 −2.44 0.79 0.45 0.65 −0.83 1.31 (3,0,0)×(1,1,1) c6 0.01 0.02 −0.07 0.02 −0.04 −0.08 0.13 −0.02 −0.06 0.08 −0.08 0.05 regarima 0.48 0.63 −1.76 0.64 −0.92 −1.56 2.13 −0.36 −1.74 1.72 −1.31 0.93 (3,0,0)×(1,1,1) c7 0.00 0.03 −0.04 0.04 −0.01 −0.09 0.11 0.00 −0.03 0.03 0.04 −0.02 regarima −0.01 −0.77 −0.94 1.19 −1.32 −1.66 −1.75 −0.08 −0.79 0.68 0.77 −0.39 (2,0,1)×(1,1,1) c8 0.00 0.01 0.03 0.00 −0.09 0.09 −0.09 0.08 0.00 0.05 −0.03 −0.06 regarima −0.06 0.26 0.69 0.01 −1.99 1.73 −1.48 1.68 −0.08 1.00 −0.44 −1.50 (2,0,0)×(1,1,1) c9 −0.02 0.10 −0.13 0.01 0.01 0.05 −0.14 0.11 0.02 0.00 0.04 −0.03 regarima −0.84 3.11 −3.47 0.38 0.26 1.04 −2.29 2.29 0.54 −0.10 0.63 −0.58 (2,0,1)×(0,1,1) c10 0.01 −0.02 0.04 0.00 −0.08 0.05 −0.01 0.03 −0.01 0.04 −0.02 0.04 regarima 0.32 −0.67 1.26 0.00 −2.25 1.28 −1.32 0.95 −0.33 1.10 −0.37 1.02 (1,0,1)×(1,0,1) c11 0.01 −0.02 0.04 0.00 0.08 0.05 −0.01 0.03 −0.01 0.04 −0.02 −0.04 regarima 0.32 −0.67 1.26 0.00 −2.25 1.28 −0.32 0.95 −0.33 1.10 0.37 −1.02 (1,0,1)×(1,0,1) c12 −0.03 0.04 0.04 −0.02 0.02 0.04 −0.13 0.10 0.15 −0.22 0.25 −0.14 regarima −0.40 0.49 0.37 −0.30 0.15 0.31 −0.86 0.87 1.71 −0.02 1.79 −1.15 (2,0,0)×(0,1,1) that, for example the estimated own-price elasticities on the diagonals could be sensitive to the exclusion of prices from the other sub-periods (i.e. the off-diagonal regressors). for example, given that many of the offdiagonal estimates are marginally insignificant, and hence, supposedly could be excluded, it could be of interest to see whether the estimated own-price elasticities would become negative and significant if all other prices (i.e. from the remaining sub-periods) were removed. we investigated this further but found that this was not the case. furthermore, for the models with fewer but longer sub-periods, which, as mentioned, we experimented with, the general picture was the same and thus insignificance was a general finding. overall it seems safe to claim that, given the adopted modeling approach and the present data, there is no convincing evidence that demand is responding to price changes in the very short run, i.e. at the intra-day horizon. 4. conclusion and discussion the idea of demand response in power markets has attracted an increasing amount of attention during the last two decades. it has been widely argued that getting consumers to react to short-term variations in electricity prices will improve effciency of electricity markets and assist the integration of renewable production technologies (see e.g. [1], which includes a vast number of relevant references). a basic premise for this paper has been that demand response is essentially a (short-term) dynamic phenomenon, and hence, naturally lends itself to time series modelling. in fact, this dynamicity seems inherent in the usual definition of demand response, stating: “changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”.10 in this paper we have suggested an econometric model for analysing hourly consumption-and price time series. this allows for multi-level seasonality (i.e. daily, weekly and annual periodicity), which is an inherent characteristic of hourly electricity data [7]. moreover, the model also takes into account that the information set of agents is updated with new prices only every 24th hour and not every hour, which implies a transformation of the original series of consecutive hourly observations. essentially this amounts to treating all hourly observations from a given day as one multi-dimensional daily observation. to some extent this approach can be viewed as a generalisation (to a simple demand model involving price and consumption) of that in [6] who analysed price series. based on this transformation and a general structural model, we derived a dynamic time series model for consumption and prices corresponding to sub-periods of the day. in particular, we suggested a linear regression model with multiplicative seasonal arima errors (the regarima), where consumption of a sub-period of the day (e.g. a given hour) is regressed on prices from all sub-periods of that day, and other regressors. in our empirical analysis of price and consumption data for danish manufacturing industry for the period 2007-2011, we divided the day into twelve two-hour sub-periods and thus estimated 12 regarima models each of which is a regression of the respective subperiod consumption on prices from all sub-periods of the day and lagged sub-period consumption and prices, in addition to various deterministic variables to take account of annual seasonality, month and day etc.. the overall conclusion to be drawn from the empirical analysis is relatively clear: for the period under study consumer reactions to varying hourly electricity prices have been negligible if not absent. this seems to be the case for both the aggregate manufacturing industry in west denmark as well as for the single anonymous consumer from this area. this conclusion seems to be rather robust, in the sense that these findings were also obtained based on the automatic arima modeling algorithms as implemented in oxmetrics [17]. collinearity between prices from adjacent hours could be an issue. on the other hand, in our analysis we made two transformations, that is we aggregate into two-hour periods and, for almost all sub-period models, we take the 7th difference. both of these transformations reduce collinearity between price regressors. moreover, we experimented with fewer but longer sub-periods (four 6-hour periods and two 12hour periods) which a priori could be expected to reduce collinearity further. however, this turned out not to be the case to any notable degree. moreover, we obtained the same overall conclusion. in future research one could try to pay more attention to this, for example by considering other transformations of the sub-period international journal of sustainable energy planning and management vol. 07 2015 15 niels framroze møller and frits møller andersen 10 this is the definition used by many and it is due to the federal energy regulatory commission. variables, such as ratios of sub-period consumption and prices instead. the regarima is rather general, in that it nests a number of applied time series models in the literature, i.e. seasonal and non-seasonal ar, ma, regressions with white noise errors etc. [7, section 3.4]. however, other classes of time series models could also be applied with advantage in future research. examples include models with thresholds for (symmetric or asymmetric) adjustment of consumption to price changes, models with other non-standard (e.g. heavy-tailed or archtype) error distributions. furthermore, as extreme observations often occur in electricity time series data, a thorough analysis of the influence from such observations (or small groups of) on estimation, could also uncover potentially interesting results. we did not attempt to carry out any of such econometric analyses since that would be beyond the scope of this paper and, in our view, deserves a thorough treatment elsewhere. there are a number of possible explanations for the apparent lack of short-term response. first, it is possible that many of the industrial consumers are in fact too small and/or have too low energy intensity in their production to benefit from being more flexible. indeed, looking at danish industrial consumers many companies are small/medium sized companies with a relatively low energy intensity. that is, the total electricity bill is relatively low and constitutes only a minor share of total production costs. in addition, as taxes and grid payments are fixed per kwh and comprise about one half of the electricity bill, the gain from demand response may be quite limited for many companies. secondly, the hourly variations in electricity prices for these data may simply be too small for the potential gains to be of a significant order of magnitude. third, information costs implied by monitoring hourly prices may be perceived as relatively large. finally and perhaps most importantly, for many industrial consumers the costs associated with adjusting production are likely to be relatively large compared to what may be saved on the electricity bill when moving consumption to hours of cheap electricity. in particular, for many companies changing electricity consumption with short notice is likely to imply idle production capacity and workforce, lost production or reduced product quality. in addition to these explanations we also emphasize the fact that our findings do not exclude the possibility of demand response, as such. one has to add a little nuance here. what we investigate is an hour-by-hour, i.e. “continuous” response. however, it may well be the case that some consumers, although paying for hourly consumption, still choose not to follow prices in a continuous manner due to the costs associated with doing so. for example, agents may instead adhere to a pre-specified rule, such as to consume less during the day and more during the night when the average price is much lower. supposedly such a rule is only updated in the very long run or when large prices changes take place. this could explain our findings concerning the single consumer (consumer a). indeed, for this consumer, who was evaluated to have both the incentive and the ability to be flexible, simply plotting the time series of prices and consumption together against time, clearly suggests that this may well be the case. this is done in figure 3. in the future with increased production from renewable production technologies the volatility of prices and the need for flexibility is expected to increase. incentives for demand response may therefore increase, but other changes may be required for demand response to play a significant role. for example, grid payments and possible taxes may be changed to follow hourly market prices on electricity. this increases incentives for flexibility but may conflict with market efficiency. furthermore, technology and automatic control of consumption will decrease information and monitoring costs which currently could seem to hamper demand response. however, for mass market (e.g. household appliances) control technology is required to be cheap and acceptance of automated control may be a problem. for larger consumers automated control of part of the consumption (e.g. heating, cooling and pumping) may be acceptable, but potential gains are limited by production schedules and product quality. 16 international journal of sustainable energy planning and management vol. 07 2015 an econometric analysis of electricity demand response to price changes at the intra-day horizon: the case of manufacturing industry in west denmark. −10 0 10 20 30 40 50 60 70 80 40 45 50 55 60 65 70 75 80 85 8 9 10 11 12 13 priceconsumption consumption price figure 3: hourly consumption (first axis) and prices (second axis) for consumer a for 5 days in january 2007. to increase demand flexibility, focus areas should be consumers with a large potentially flexible consumption and the development of cheap information and control technologies. many argue that household appliances like freezers, coolers and water heaters may supply cheap flexibilities as the technologies may be shut off for shorter periods without notable consequences for the consumer. however, today household consumers face fixed short-term prices. still, exposing households to hourly prices, to harvest this flexibility, realistically automatic control is required. in addition, as the savings in the electricity bill are minor, control technologies have to become very cheap, and acceptance of automated control may be a barrier. lastly, we would like to emphasize that, at least to some extent, the present empirical analysis has also served the purpose of illustrating an application of our econometric model. it is also clear that more data sets have to be scrutinized in order to provide a more solid basis for making any generalisations. nevertheless, we believe that our econometric approach is relatively general, in that it allows for a large number of interesting combinations of number and length of sub-periods. despite the fact that the price data we have analysed supposedly do not exhibit the sufficient amount of variation to induce behavioural responses in the short run, it is therefore our hope that others will apply our method to data sets with more variation, the latter of which most likely will be widely available in the future. acknowledgement we would like to thank geraldine henningsen, helge v. larsen and three anonymous referees. funding from the danish council for strategic research is gratefully acknowledged. references [1] us department of energy, benefits of demand response in electricity markets and recommendations for achieving them, tech. rep., us department of energy (2006). 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[18] d. f. hendry, dynamic econometrics, oxford university press, 1995. international journal of sustainable energy planning and management vol. 07 2015 17 niels framroze møller and frits møller andersen http://econpapers.repec.org/repec:eee:econom:v:26:y:1984:i:1-2:p:179%e2%80%93203%20 http://econpapers.repec.org/repec:eee:jelect:v:18:y:2005:i:4:p:53%e2%80%9363 http://econpapers.repec.org/repec:nbr:nberch:8478 http://econpapers.repec.org/repec:wuu:hsbook:hsbook0601 http://econpapers.repec.org/repec:bes:jnlbes:v:16:y:1998:i:2:p:127%e2%80%9352 http://econpapers.repec.org/repec:ems:eureri:8289 http://econpapers.repec.org/repec:eee:econhb:1 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 22 2019 109 *corresponding author e-mail: jhuertas@itesm.mx international journal of sustainable energy planning and management vol. 22 2019 109–120 abstract currently, there is an increasing interest for driving cycles (dcs) that truly represent the driving pattern of a given region aiming to evaluate the energy efficiency of electric vehicles and identify strategies of energy optimization. however, it has been observed increasing differences in the energy consumption reported using type-approval dcs and the observed in the vehicles under real conditions of use. this work compared the micro-trips, markov-chains and the mwd-cp methods in their ability of constructing dcs that represent local driving patterns. for this purpose, we used a database made of 138 time series of speed obtained monitoring during eight months a fleet of 15 transit buses operating on roads with different levels of service, traffic and road grades, under normal conditions of use. then, we used 16 characteristic parameters, such as mean speed or positive kinetic energy, to describe the driving pattern of the buses’ drivers monitored. subsequently, we implemented three of the most widely used methods to construct dcs using this common database as input data. finally, we evaluated the degree of representativeness of the local driving pattern contained in each of the obtained dcs. toward that end, we defined that a dc represents a driving pattern when its characteristic parameters are equal to the characteristic parameters of the driving pattern. therefore, we used as criteria of representativeness the relative differences between paired characteristic parameters and observed that the mwd-cp method produced the dc that best represents the driving pattern in the region where the buses were monitored, followed by the dc produced by the micro-trips method. 1. introduction it has been hypothesized that differences in the observed energy consumption from electric vehicles (and fuel consumption and tailpipe emissions from diesel or gasoline-fueled vehicles) with respect to the measured during the type-approval tests are mainly due to the lack of representativeness of the local driving pattern contained in the type-approval driving cycles used in these tests [1]. this situation affects the dimensioning of the vehicle power train and of the energy storage system [2]. a driving cycle (dc) is a synthesized representation of the driving patterns in a given road network. in most cases, the dcs are displayed as a velocity vs. time series [3]. as it represents the driving pattern of the region under consideration, the dcs are frequently used to evaluate the energy consumption and the tailpipe emissions of the vehicles [4–6]. therefore, the dc representativeness should be understood as the dcs ability of representing the driving patterns of a region, and its capacity of reproducing the energy consumption comparison of driving cycles obtained by the micro-trips, markovchains and mwd-cp methods josé ignacio huertas1,*, luis felipe quirama², michael daniel giraldo¹ and jenny díaz³ ¹ school of engineering and science, energy and climate change research group, tecnologico de monterrey, eugenio garza sada 2501, monterrey 64849, nuevo león, mexico ² grupo de investigación en gestión energética, universidad tecnológica de pereira, cl. 27 #10–02, pereira 660003, risaralda, colombia ³ universidad de monterrey, av. morones prieto 4500 pte., san pedro garza garcía 66238, nuevo león, mexico keywords: driving patterns; vehicle energy consumption; tailpipe emissions; optimization of vehicle energy systems; url http://dx.doi.org/10.5278/ijsepm.2554 mailto:jhuertas@itesm.mx http://dx.doi.org/10.5278/ijsepm.2554 110 international journal of sustainable energy planning and management vol. 22 2019 comparison of driving cycles obtained by the micro-trips, markov-chains and mwd-cp methods energy demand, etc.) or energy consumption scenarios of a region, similar to the studies carried out by setiartiti et al. [14] and juul et al. [6]. dc representativeness is mainly affected by three factors: i) the quality and quantity of vehicle operation data used to construct the dc. ii) the method used to construct the dc. iii) the metrics used to evaluate the dc representativeness [15]. currently, the global position system (gps) allows obtaining reliable vehicles operation data with a sampling frequency higher than 1 hz. then, improvements in dc representativeness should be obtained through improvements in the methods used to construct the dcs and the metrics used to guarantee their representativeness. the existing dc construction methods can be classified as stochastics and deterministic. within the stochastics methods, the dcs are constructed splicing trips segments or states, which are quasi-randomly selected from trips segments or states database made from the trips sampled [16]. in the case of the determi nistic method, one of the many monitored trips is selected as the representative dc. in all methods, driving patterns and dcs are described by a set of metrics named characteristic parameters (cps). they are variables based on speed and time such as average speed, average positive acceleration, positive kinetic energy, etc. [3]. a dc is said to be representative of a driving pattern when the cps of the dc are similar to the cps of the driving pattern. therefore the dc representativeness is evaluated by the average relative differences of corresponding cps. no study has attempted to compare the existing methods in their ability of constructing dcs that truly represent the local driving patterns. we addressed this gap of knowledge and here we report the following contribution: using a common trips database, this study compares three common methods of constructing dcs: micro-trips, markov-chains and mwd-cp. the results obtained are useful for researchers who need to decide about the dc construction method to choose in order to obtain truly representative dcs. the use of representative dcs on the design and optimization of vehicle energy systems will lead to effective energy management strategies. this paper is arranged as follows. section 2 describes the approachr followed to evaluate the 3 dc construction methods. there, we describe: i) the monitoring campaign carried out to collect vehicle driving data in a region of and the tailpipe emissions from the vehicles that follow that dc. in this context, dcs are independent of the vehicle technology. the dcs for electric vehicles are the same that the dcs for gasoline or diesel-fueled vehicles. besides the use of dc in the energy and environmental assessment of vehicles, they are also used for the design of vehicle components and systems, especially those related to the vehicle powertrain. this is due to the fact that dcs contain the instant loads and energy demanded by the road to the vehicle in the given region [7,8]. consequently, dcs can be used to identify strategies to reduce energy consumption in vehicles. for example, they can be used to evaluate the potential reduction in ghg (green house gases) that can be attained by implementing public policies related to the use of electric vehicles or biofuels [9,10]. furthermore, they can be used to optimize the power train design of electric and hybrid vehicles in terms of battery size [11] since they capture the characteristics of the routes, congestion level, driving behavior, which are factors that affect the way that the stored energy is delivered. energy consumption models for powertrain optimization, like the vt-cpem, require of representative dc data to compute the instantaneous power consumed and the state of charge of electric batteries [12]. another important application of dcs is the study of variations in the driving behavior caused by the use of new vehicle motorization technology. berzi et al. [13] concluded that when people drive an electric vehicle, the frequency of strong accelerations events increased due to the absence of the engine noise, especially at lowspeed conditions. finally, dcs contain the energy consumption patterns and therefore they can be used to design energy logistics strategies (charging points, list of symbols and acronyms cp characteristic parameter dc driving cycle mk markov-chains method mt micro – trips method mwd-cp minimum weighted difference characteristics parameters method qof quality of fit sapd speed acceleration probability distribution ec energy consumption international journal of sustainable energy planning and management vol. 22 2019 111 josé ignacio huertas, luis felipe quirama, michael daniel giraldo and jenny díaz non-stop service. the buses were built between 2012 and 2014. they have cummins ism 425 diesel engines of 10.8 litters. their passenger capacity is 49 people and their gross vehicle weight is 13850 kg [18]. the buses location (altitude, latitude, and long itude) and speed were established using a global position system (gps) [19]. additionally, the operating variables of the vehicle's engine were extracted through the onboard diagnostic system (obd ii) vehicle port. table 1 shows the technical characteristics of the instruments used in this work. the variables listed in table 1 were recorded during eight months of regular operation of the instrumented buses. the buses were operated by regular drivers in order to minimize any impact on the bus operation and passenger transport service. the trips sampled were performed in both directions of the route. huertas et al. [8] concluded that a sample of 10 to 20 trips is sufficient to describe the driving patterns in flat regions. in this study we obtained 46 trips per region. figure 2.a illustrates the speed vs. time plot obtained from an arbitrary chosen trip. qa/qc analysis was conducted to eliminate atypical data and trip series with more than 5% of missing data. at the end of the measurement campaign, a database was constructed with 138 trips (54867 vehicle operation records)[19]. 2.2 implementation of the dcs construction methods stochastics methods: micro-trips and markov-chains micro-trips and markov-chains methods are two of the most accepted approaches to construct dcs [16]. as stated before, in these two methods a synthetic dc is general characteristics, ii) the three dcs construction methods, and iii) the methodology followed to compare the representativeness of dcs produced by each method. section 3 shows the results of comparing dcs in terms of their representativeness of the local driving pattern. finally, conclusions are summarized in section 4. 2. materials and methods we highlight that this research focuses on the comparison of the dcs obtained from three methods frequently used for constructing dcs, rather than obtaining a representative dc for a specific region. to do this, we used a common database of trips obtained monitoring the operation of a single vehicle fleet operating in a region with general characteristics and therefore it describes the driving pattern in that region. then, we implemented the three methods and finally, we evaluated the ability of the obtained dcs of representing the driving pattern contained in the database. next, we will describe how the database was built, the implementation of the methods for constructing dcs and the methodology used to assess the representatives of the dcs obtained. 2.1 trips database reference [17] describes the work that led to the construction of the trip database. that work aimed to describe the driving patterns in regions with diverse topographies. it consisted in monitoring a vehicle fleet during its normal operation for a long period of time (~8 months). next, we will summarize that work. authors in reference [17] looked for a region whose road network presents different types of topography, traffic, and level of service. these preferences were established in order to have vehicle operation data in regions of general characteristics. the mex 15d road, that connects toluca with méxico city, fulfills these requirements. the selected road has a length of 72.4 km. the first 17 km corresponds to urban driving conditions in mexico city where traffic flow is low due to frequent traffic jams. the next 41 km correspond to an extraurban road located in a mountainous region with altitudes between 2200 and 3100 meters above the sea level (m.a.s.l.). the last 14 km correspond to the extra-urban and urban area of toluca city which is characterized by medium vehicular traffic flow over a flat region. fifteen buses were used during the monitoring campaign. they cover the toluca-mexico city route on a table 1: technical characteristics of the instruments used in this study variable instrument technical characteristics position: • latitude • longitude • altitude speed and time gps position: 3-5 m, 95% typical frequency: 1 hz speed: 0.05 m/s root mean square (rms) steady state pulse per second (pps) time: 1 microsecond at rising edge of pps pulse engine operation variables obd ii registered through engine sensors signal extracted by ecu through obd2 112 international journal of sustainable energy planning and management vol. 22 2019 comparison of driving cycles obtained by the micro-trips, markov-chains and mwd-cp methods characteristic parameters of the driving pattern. i.e., when cpi* = cpi. thus, the degree of representativeness of a candidate-dc is evaluated as the relative difference between paired cps according to eq. 1. most researchers use, during the construction process, a threshold between 5% and 15% as the maximum acceptable difference among the paired cps [24,25] however, they use a reduced number of cps (2 or 3). the cps and the number of cps used depend on the researcher´s criteria. the most commonly used cps are average speed, average acceleration, average deceleration and percentage of idle time. initially, we used these four cps for both methods. however, the method based on markov-chains did not converge and therefore, for that case, the cps had to be limited to average speed and percentage of idle time. table 2 specifies the cps used in each method. the process of obtaining a candidate-dc is repeated until the acceptable threshold is obtained. the first candidate-dc that fulfills this threshold becomes the representative dc. as these two methods are stochastic, the output dc change every time the method is applied, making the method repeatable but not reproducible. in this work, we carried out two iterations per method. deterministic method: minimum weighted difference characteristics parameters the minimum weighted difference of characteristic parameters (mwd-cp) is a deterministic approach to construct dc [17]. in this method, an estimated value of energy consumption (ec) is obtained for each trip, and the trip with the closest ec to the average ec of all trips is selected as the representative dc. therefore, it uses ec as the assessment parameter to evaluate the representativeness of the dc. currently, the simultaneous measurements of speed, time and energy consumption in vehicle fleets under real-world driving conditions could result in an expensive process with high uncertainties. as an alternative, the mwd-cp estimates the ec as a linear function of the cps that most influence energy * i i i i cp cp rd cp − = (1) made by splicing a quasi-random selection of trip segments [20] or states [21,22]. figure 1 illustrates these methods. in the micro-trips method, the speed-time data, collected during the vehicle monitoring campaign, is partitioned in segments of trips bounded generally by vehicle speed equal to 0 km/h. these segments are named “micro-trips”. a clustering of micro-trips according to their speed and acceleration is frequently used. then, a set of micro-trips are quasirandomly selected based on their probability of occurrences [5,23]. the number of micro-trips selected depends on the desired duration of the dc. additional research work is required to determine the appropriate duration of the dc. usually it is near to 20 – 30 min. table 2 shows the time used in this work for each method. finally, the selected set of microtrips are spliced together producing a candidate driving cycle. in the case of the markov-chains method, the speedacceleration data is encoded into operational states. following up the work of shi et. al [22], we used 45 bins for speed and 9 for acceleration. hence, the frequency of the occurrences of the operational states is registered in a states matrix. then, from the same database, the probability for moving from state xi to state xi+1 is computed. results are recorded in a probability transition matrix [2]. hereafter, this matrix is used to make a quasi-random selection of states that form a states vector. finally, a candidate-dc is calculated decoding this states vector in terms of speed and time [22,24]. in these two methods, the representativeness of the driving pattern contained in the candidate-dcs is evaluated. toward that end, the driving patterns monitored in the region under consideration and contained in the trip database was described by a set cps. as described before, a cp is any variable formed starting from the speed and time variables, such as mean speed, positive kinetic energy, etc. table 3 shows the most recurrent cps used in the literature. then, the candidate-dc was also described by its characteristic parameters (cps*). finally, it was established that a dc represent a driving pattern when the characteristic parameters of the candidate-dc are similar to the international journal of sustainable energy planning and management vol. 22 2019 113 josé ignacio huertas, luis felipe quirama, michael daniel giraldo and jenny díaz in the previous equation, w0 is a constant value, wi is a weighting factor associated to the characteristic parameter i, cpi,j is the characteristic parameter i for the trip j. cpi is the average value of the characteristic parameter i for all the trips sampled. εj corresponds to the difference between the real ecj and the estimated . the representative dc is the trip j with ec a that minimizes the absolute difference respect to ec. the � jec consumption [17] such as mean speed and mean positive acceleration. the ec for each trip can be calculated using eq. (2) and eq. (3). then, the average ec of all the monitored trips is calculated by eq. (4). � j j jec ec= +ε (3) � 0j i ij i ec w w cp= +∑ (2) 0 ii i ec w w cp= +∑ (4) operation data of monitored trips operation data of monitored trips establish the cps of sampled trips establish the cps of sampled trips codify the operation states based on speed and acceleration data elaborate the matrix of states calculate the transition probability between states xi and xi+1 elaborate the transition matrix decodify the states vector in speed establish the characteristic parameters (cps) of the cdc quasi-random selection of states using mcmc simulation divide the trips into micro-trips clustering in function of speed and acceleration (optional) quasi-random selection, combination and assembly of micro-trips establish the characteristics parameters (cps) of the cdc ¿are the difference of cps less than established limits? ¿are the difference of cps less than established limits? representative driving cycle rdc representative driving cycle rdc database of micro trips clustering micro trips candidate driving cycle (cdc) cps of cdc no yes database of operation states states vector candidate riving cycle (cdc) yes no figure 1: illustration of the stochastics methods for constructing driving cycles: a) micro-trips and b) markov-chains method 114 international journal of sustainable energy planning and management vol. 22 2019 comparison of driving cycles obtained by the micro-trips, markov-chains and mwd-cp methods table 2. characteristic parameters used in each method to construct driving cycles. *the expression used to calculate the sfc is shown in eq. (7) input parameter micro-trips markov-chains mwd-cp duration of cycle (minutes) 105 ± 2 105 ± 2 depends on the selected driving cycle characteristic parameters selected to evaluate the driving cycle representativeness average speed average acceleration average deceleration percentage of time in idling average speed percentage of time in idling sfc* relative difference among paired cps 5% 5% not required other considerations clustering microtrips speed discretization in 45 bins and 9 bins for acceleration – ( a ) ( b ) ( c ) ( d ) 0 20 40 60 80 100 120 0 2000 4000 6000 s p ee d [ km /h ] time [s] 0 20 40 60 80 100 120 0 2000 4000 6000 s p ee d [ km /h ] time [s] markov 1 markov 2 0 20 40 60 80 100 120 0 2000 4000 6000 s p ee d [ km /h ] time [s] micro-trip 1 micro-trip 2 distance (km) s p ee d [ km /h ] 0 20 40 60 80 100 120 0 20 40 60 figure 2: a) speed vs. time obtained in an arbitrary chosen trip. driving cycles obtained by the b) mwd-cp, c) markov-chains and d) micro-trips methods international journal of sustainable energy planning and management vol. 22 2019 115 josé ignacio huertas, luis felipe quirama, michael daniel giraldo and jenny díaz representativeness of the dc but using all the cps listed in table 3. additional work is required to define the set of cps that fully describe a driving pattern and from there, the cps that need to be included in this assessment of representativeness. for the time being, we used the cps most frequently reported in the literature and listed in table 3, without any particular prioritization. the speed acceleration probability distribution (sapd) is another alternative to describe driving patterns. as described before, it classifies the instant speed and acceleration of the vehicles into bins of speedacceleration. therefore, the similarity between the sapd of the dcs and the sapd of the driving pattern is an indicator of representativeness of the dc. the quality of fit (qof), eq. (8), has been used to evaluate the degree of similitude between sapds [26]. in eq. 8, p*ij is the probability that the vehicle travels within the bin i of speeds, and the bin j of accelerations, in the states matrix obtained for the dc, and pij is the same variable obtained for the driving pattern. this metric is independent of the number of bins used in the discretization of the speed and acceleration ranges. it 2 1 1 ( )n m *ij i,ji jqof p p= == −∑ ∑ (8) representative dc using the methodology mwd-cp can be identified through eq. (5) and eq. (6). previous work on the same region found that w0 =0.208 and that the cps that most influence energy consumption in this region are the average road grade (θ), the number of accelerations per kilometer (na), and the positive kinetic energy (pke) [17]. therefore, eq. 2 becomes eq. 7 and this last equation estimates the ec of the transit buses monitored in this region. eq. 7 also defines the weighting factors (wi) for eq. 2. 2.3 evaluating the driving cycle representativeness once the three methods described above were implemented, we obtained their respective dc and evaluated how close the obtained dcs represent the monitored driving pattern. we extended the process used to evaluate the representativeness of the candidate-dc to evaluate the ( )ij i ij j i ec ec w cp cp− = − +∑ ε (5) { }min ( )ij i ij i c arg w cp cp= = −∑ (6) 0 208 4 149 0 0041 0 423a. . . n .c kee p= + + +θ (7) table 3: characteristic parameters that describe the driving pattern in the tol-mex road. mt: micro-trips. mk: markov-chains characteristic parameters -cps units cps of driving patterns mk 1 mk 2 mt 1 mt 2 mwd-cp s p ee d maximum speed km/h 28.1 28.2 28.2 30.8 27.8 28.4 average speed km/h 12.0 12.5 11.8 12.4 12.0 11.2 standard deviation of speed km/h 8.9 8.7 8.6 9.0 8.7 9.7 a cc el er at io n maximum acceleration m/s2 2.0 2.1 1.4 1.4 1.9 1.6 maximum deceleration m/s2 –2.5 –2.8 –2.1 –3.5 –1.9 –2.1 average acceleration m/s2 0.4 0.7 0.7 0.4 0.4 0.4 average deceleration m/s2 –0.5 –0.8 –0.8 –0.5 -0.5 -0.5 number of accelerations per km 1/km 7.3 8.8 9.2 6.5 7.2 7.4 standard deviation of acceleration m/s2 0.2 0.1 0.2 0.2 0.2 0.2 standard deviation of deceleration m/s2 0.4 0.3 0.3 0.3 0.4 0.4 o p er at io n m od e percentage of time in idling % 9.9 9.7 9.8 9.5 9.9 19.3 percentage of time accelerating % 29.5 18.9 18.7 31.3 28.2 27.2 percentage of time decelerating % 25.6 16.8 16.9 27.3 23.9 23.7 percentage of time in cruise % 34.9 54.6 54.6 31.9 38.0 29.7 d yn am ic s root men square of acceleration rms m2/s2 0.4 0.5 0.5 0.4 0.4 0.4 positive kinetic energy pke m/s2 240.2 241.5 239.5 252.0 224.8 241.3 116 international journal of sustainable energy planning and management vol. 22 2019 comparison of driving cycles obtained by the micro-trips, markov-chains and mwd-cp methods ranges between 0 and 2 and values close to 0 indicate perfect math. 3. results as described before, the driving patterns monitored in the region under consideration and contained in the trip database was described by the cpi listed in table 3. the values obtained for those cpi are also displayed in table 3. figures 2 c-d show the speed versus time profiles of the five dcs obtained using the micro-trips, markovchains and mwd-cp methods. figure 2.d shows that the two dcs obtained with the micro-trips method are different due to the quasi-random selection of the microsegments. although the global average value for the assessment cps remains constant, variations at the local time scale could produce variations in the energy consumption and tailpipe pollutant emission that not necessarily balance at the global scale. for example, although the relative differences between the average speeds of the two driving cycles obtained is small (0.6 km/h), the speed and acceleration observed at any local intervals of time are drastically different causing variations in energy consumption and consequently on pollutant emissions. the previous observations are also valid for the two dcs obtained via the markov-chains method (figure 2.c). when the cps that describe the dc are calculated and compared to the cps that describe the driving pattern (figure 3), we observed that the two dcs constructed using the markov-chains method represent accurately the cps associated to speed, percentage of idling and pke (rdi <20%), but they do not for the cps associated to acceleration, operational modes, and rms. in the case of the markov-chains method, we observed that the ( a ) ( b ) ( c ) ( d ) 0% 20% 40% 60% 80% 100% max. speed ave. speed sd of speed r el at iv e d iff er en ce [ % ] mk 1 mk 2 mt 1 mt 2 mwd-cp 0% 20% 40% 60% 80% 100% r el at iv e d iff er en ce [ % ] 0% 20% 40% 60% 80% 100% % idling % accel. % decel. % cruis. r el at iv e d iff er en ce [ % ] 0% 20% 40% 60% 80% 100% rms pke r el at iv e d iff er en ce [ % ] figure 3: evaluation of the representativeness of the driving patterns contained in the driving cycles obtained using the micro-trips, markov-chains and mwd-cp methods, expressed as relative differences of the characteristic parameters associated to: a) speed, b) acceleration, c) operational modes and d) vehicle dynamics international journal of sustainable energy planning and management vol. 22 2019 117 josé ignacio huertas, luis felipe quirama, michael daniel giraldo and jenny díaz obtained dcs represent accurately the average speed, standard deviation of speed (figure 3.a), average acceleration, operational modes (figure 3.c), rms and pke (figure 3.d), but they do not represent well the cps associated to maximum acceleration and maximum deceleration (figure 3.b). for the case of the mwd-cp method, the obtained dc represents accurately all the cps that describe the driving pattern, except the cp associated to the percentage of idling time (figure 3.c). this is due to the fact that the mwd-cp method does not include the percentage of idling time in the ec estimation function because this cp has a low contribution to energy consumption in the region considered in this study. in contrast, the micro-trips and markov-chains methods did consider idling time as an assess ment parameter. therefore, the dcs produced by the micro-trips and the markov-chains methods are forced to have relative differences in idling time below the defined threshold (5%). previous observations hold for the two dcs obtained by each method and reported in this manuscript. since the dcs change each time the stochastic methods are applied, previous observations need to be re-confirmed for the case of many other dcs (>1000) obtained using these dcs construction methods, starting from the same trips database. we foresee that results on relative differences will show a tendency towards stable values and therefore the comparison should be based on average relative differences and the dispersion of those relative differences. figure 4.a shows the sapds of the driving pattern obtained for the tol-mex region. figures 4.b-f shows the sapds of the five dcs obtained using the three dc construction methods. they show that all sapds look similar to the sapd of the driving pattern. using the qof metric (eq. 8), we confirmed that all methods produced dc with a similar level of representativeness of the driving pattern (qof < 0.008). the highest level of representativeness was obtained by the dc constructed by the micro-trips method (qof1= 0.0039 and qof2=0.0054), followed by the markovchains method (qof1= 0.0054 and qof2=0.0072) and the mwd-cp method (qof= 0.0082). as mentioned above, dcs are used mainly to evaluate the energy consumption and tailpipe emissions from the vehicles. however, the assessment criteria currently used to construct dcs has no included those two metrics. towards that end it is required the simultaneous measurements of speed, time, energy consumption and emissions from a large fleet of vehicles running under normal use, for extensive periods of time, which will be the focus of our future work. 4. conclusions we implemented three frequently used methods to construct driving cycles (micro-trips, markov-chains, and mwd-cp) and evaluated their capacity of producing driving cycles (dcs) that represent local driving patterns. toward that end, we used a common trip database obtained from monitoring the operation of 15 transit buses under normal conditions of use on the road that connects toluca city with mexico city. from that database, we obtained the driving pattern of this region and described it by means of 16 characteristic parameters (cps). then, we established that a dc represents a driving pattern when the cps of the driving cycle are similar to the cps of the driving pattern. thus, we evaluated the degree of representativeness as the relative difference between paired cps. we found that the mwd-cp method produced a dc that describes the driving pattern in that region with the highest level of representativeness. all of its cps were similar to the cps of the driving pattern (relative differences <20%), except for the case idling time. the mwd-cp method is a deterministic, repeatable and reproducible method designed to construct dcs that reproduce real energy consumption. these important advantages over the other methods of constructing driving cycles are opaque by its major drawback which is the need of weighting factors that depend on the region under consideration. previous conclusions need to be re-confirmed with a database made of simultaneous measurements of speed, energy consumption and tailpipe emissions on a large vehicle fleet running under normal conditions of use during extended periods of time. additionally, it is worth while to develop the present comparative analysis based on results of tendencies of the stochastics methods for constructing dcs (micro-trips, markov-chains) rather than on a single result, as it was done in the present study. 118 international journal of sustainable energy planning and management vol. 22 2019 comparison of driving cycles obtained by the micro-trips, markov-chains and mwd-cp methods ( a ) ( b ) ( c ) ( d ) ( e ) ( f ) -3.5 -1.2 1.1 3.5 0.0 0.1 0.2 0.3 0.0 22.2 44.4 66.6 88.8 p ro b ab ili ty [ ] -3.5 -1.2 1.1 3.5 0.0 0.1 0.2 0.3 0.0 22.2 44.4 66.6 88.8 p ro b ab ili ty [ ] -3.5 -1.2 1.1 3.5 0.0 0.1 0.2 0.3 0.0 22.2 44.4 66.6 88.8 p ro b ab ili ty [ ] -3.5 -1.2 1.1 3.5 0.0 0.1 0.2 0.3 0.0 22.2 44.4 66.6 88.8 p ro b ab ili ty [ ] -3.5 -1.2 1.1 3.5 0.0 0.1 0.2 0.3 0.0 22.2 44.4 66.6 88.8 p ro b ab ili ty [ ] -3.5 -1.2 1.1 3.5 0.0 0.1 0.2 0.3 0.0 22.2 44.4 66.6 88.8 p ro b ab ili ty [ ] figure 4: assessment of the representativeness of the driving cycles obtained using the mwd-cp, micro-trips and markov-chains methods using as criteria the speed acceleration probability distribution (sapd). a) sapd for the driving pattern on the tol-mex road. sapds for the driving cycles obtained using the b) mwd-cp, c) micro-trips first iteration, d) micro-trips second iteration, e) markov-chains first iteration, and f) markov-chains second iteration international journal of sustainable energy planning and management vol. 22 2019 119 josé ignacio huertas, luis felipe quirama, michael daniel giraldo and jenny díaz acknowledgments this study was partially financed by the national mexican council for science and technology (conacyt), and by the colombian administrative department of science, technology, and innovation (colciencias). references [1] fontaras g, zacharof ng, ciuffo b. fuel consumption and co2emissions from passenger cars in europe – 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[26] günther r, wenzel t, wegner m, rettig r. big data driven dynamic driving cycle development for busses in urban public transportation. transp res part d transp environ 2017;51:276– 89. https://doi.org/10.1016/j.trd.2017.01.009. https://doi.org/10.4271/2011-01-0880 https://doi.org/10.4271/2011-01-0880 https://doi.org/10.1016/ j.trd.2016.05.013 https://doi.org/10.1016/ j.trd.2016.05.013 https://doi.org/10.1016/j.egypro. 2012.01.286 https://doi.org/10.1016/j.egypro. 2012.01.286 https://doi.org/10.1016/j.trd.2007.01.002 https://doi.org/10.1016/j.scs.2017.05.001 https://doi.org/10.1016/j.trd.2017.01.009 a2 30j0zll _goback _1fob9te international journal of sustainable energy planning and management vol. 21 2019 3 1corresponding author e-mail: 2015017696.ahmad@dr.sharda.ac.in international journal of sustainable energy planning and management vol. 21 2019 03–18 abstract the relevance of energy in the growth and development process necessitates giving serious attention to the planning, production and consumption of energy. energy modelling carried out in recent years using sophisticated and computerized models has become an important tool in planning and analysis of energy systems. these models rely heavily on future assumptions regarding the expected economic conditions in consideration to the current and unfolding situations of the economies in question. however, due to uncertainty of the future economic conditions, informality of especially developing economies and too much reliance on technical expertise of development/collaboration partners, these assumptions are mostly not well formed, hence found untenable to adequately capture the evolving events. this is more evident if one looks at the alternative energy projections made by different organizations using different understandings and assumptions. this study compares the best energy demand and supply projections of necal2050 as the best and most recent energy model in nigeria with other alternatives projections and previous energy commission of nigeria ecn’s model to showcase the discrepancies and their economic consequences. it is found that in most cases of energy planning collaboration, modeling assumptions do not well capture the current and future economic realities of the assisted nations, resulting in misleading projections. policy implications and recommendations are discussed at the end. 1. introduction/background the transition to sustainable energy system at city, state, region, country and the world at large is crucial to achieving the goals of the global development agenda 2030 and paris climate agreement [1, 2, 3, 4 & 5]. effective transition to renewable energy system will directly depend on the comprehensiveness of energy planning [6, 7 & 5] including the analysis and projec tions of energy demand and supply as well as the targeted level of economic activities being envisaged for a given nations [8]. several methods and approaches to energy planning have been evolving over the years and computer-based energy modelling [9] has become the order of the day in modern energy planning [10, 11, 6, 12 & 13]. energy modelling relies heavily on huge amount of economic data and some economic assumptions regarding the future expected conditions of the economy whose energy demand and supply is being modelled. on the other hand, the economic data are mostly unreliable in developing countries, the future assumptions are not always perfect in the continuously dynamic world with a lot of unforeseen changes [14 & 15]. estimations with accuracy that stand the test of time are very difficult to arrive at leading to poor energy energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria ahmad garba khaleel1,a, prof. milindo chakrabartib,c a department of economics & international business, school of business studies, sharda university, plot 32,34 knowledge park iii, greater noida, uttar pradesh, india. b jindal school of government and public policy, o.p. jindal global university, sonipat, haryana-131001, ncr of delhi, india. c research and information system for developing countries, ihc, institutional area, new-delhi, india. keywords: energy modelling; necal2050; maed; message; projections; electricity url: http://dx.doi.org/10.5278/ijsepm.2019.21.2 mailto:2015017696.ahmad@dr.sharda.ac.in http://dx.doi.org/10.5278/ijsepm.2019.21.2 4 international journal of sustainable energy planning and management vol. 21 2019 energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria projections of necal2050, carries out a small comparative analysis of the electricity demand and supply from the model and other alternative projections estimated using similar or different assumptions for nigeria. policy implications and recommendations are discussed at the end, before which an overview of energy planning (modelling), nigeria’s modelling experience and brief review of necal2050’s features and weaknesses is given. 2. understanding energy modelling before dwelling on energy modelling, it will be good to take a look at the concept of modelling generally, its nature and associated terminologies. modelling is a method of studying or solving problems through a simplified systemic representation that enables system analysis and prediction from the observed and recorded behavior in a simulation of the original system. it involves evaluating and understanding the interaction of the components of a real or theoretical system by designing its representation (model) and executing it in real time. a model in this case is defined by singh and singh [11] as a simplified representation of a real or theoretical system at some particular point in time or space intended to provide understanding of the system. energy model is then a simplified representation of a real or theoretical energy system designed and run at a particular point in time or space with the aim of getting as much information and understanding as possible regarding the present or future energy variables of the replicated system [26]. energy modelling is the method of evaluating and understanding the interaction between the different components of a real or theoretical energy system through designing its simplified representation and executing it. modelling is important in that it enables one to choose and invest wisely by testing every aspect of the proposed changes or additions without committing resources [26 & 47]. it allows for compression and expansion of time, provides team training as it gives clear understanding of system behaviors or an aspect of it by allowing problem diagnoses, enables exploration of possibilities, identification of constraints, allows visualization of plans and systems as well as its requirement specification. on the other hand, it should be understood that, modelling is difficult and requires special and continuous training as the real life systems being modelled are constantly dynamic especially in the area of energy and related dynamic economic variables that serve as inputs planning that results in energy (electricity) crisis in most of the developing world particularly africa [16, 17 & 45]. this fault is not limited to african developing countries as noted in a report by oxfam international on the eve of 22nd conference of the parties to the kyoto protocol at morocco in 2016. the report claimed that “a year after the paris climate deal, most vulnerable are still not getting financial support they need” and also the “amount of net financial assistance going to help developing countries fight climate change has been miscounted by tens of billions of dollars” [18]. these errors, as recently studied and confirmed by [19], whether by developing countries or their advanced development partners have a dimension in creating serious economic imbalances. one such imbalance this paper intends to study is in the area of the persistence of energy crisis in nigeria despite the presence of modern energy modelling tools and their continuous upgradation. the failures of these models to adequately capture the local and changing conditions of the economies [14] they are intended for has been understood to be the root of the problems [20, 21, 22, 6]. nigeria is not only the largest economy in africa, it is also the most populous and having amongst the largest growth in populations and energy demand. in the estimates of the economist in 2015, nigeria will have the third largest population in the world by the year 2050 after india and china [23]. the combined effects of rapid population growth and urbanization in the developing world, particularly africa [17], on the growth of energy demand are unimaginably undermining climate action. this is even more important in africa with high energy intensity in gdp [24, 46] and low access to clean energy, that the share of people without access to is growing [25]. this is true because, the current energy crisis in africa – being either the result of poor energy planning or wrong estimates and assumptions – is a testimony to the fact that, unless something is done, the same result will be recorded for climate action in the continent, despite their long standing advanced development partners. one possible area of intervention is in improving energy planning by improving the relationship between energy projections and actual energy production and consumption as well as their effects on the economies [7]. this paper intends to use the case of nigeria energy calculator 2050 – necal2050 to showcase the evidence of these gaps by comparing its best projections with other projections from the local and some renowned international energy organizations for the same economy (nigeria). the paper, after highlighting the best energy international journal of sustainable energy planning and management vol. 21 2019 5 ahmad garba khaleel, & prof. milindo chakrabarti simulation evaluation model for india as the two national specific models developed based on the besom model [28]. other country level models developed in france are modele d’evolution de la demande d’energe (medee)/model for energy analysis and energy flow optimization model (efom). the econometric approach of linking growth to inter-industry models with endogenously determined inter-industry input-output coefficients was pioneered by [29] in the united states. in 1978 wien automatic system planning (wasp) was developed by international atomic energy agency as a response to calls for and attention given to integrated planning and coordinated modelling efforts, which was extensively used and modified over the years. in the 1980s focus shifted to energy-environment linkages to cater for environmental concerns, while in the 1990s other climate change related issues were further added to the modelling efforts. this new change required very long-term (100 years or more) understanding, making efforts looking beyond (normal 20-30) 100 to 200 years to cause the validity of assumptions to be complex due to high risks and uncertainty. the incorporation of the probabilistic risk analysis made the development of very long-term energy environment model initiative of the european union possible. along with these are models like asian-pacific model (aim), second generation model (sgm), regional air pollution information and simulation (rains)-asia model, global 2100, dynamic integrated model of climate and the economy, poles etc. existing models like markal are also expanded, while long-range energy alternative planning – leap system became national communications standard for unfccc reporting. these developments also witnessed the divergence of views between bottom-up (focusing on energy sector’s technical characteristics) and top-bottom (stressed on the price and markets) model builders that failed to be settled. [21, 22] further reviewed the categorization of energy models in the works of [27] based on modelling approach, [10] based on paradigm, space, sector and time, while [30] uses modelling approach and meta-net approach. within all the categorizations, models are found based on linear programming-based method, input-output approach, econometric method, process models, system dynamics and game theory, (top-down and bottom-up) methodology, partial equilibrium, general equilibrium or hybrid, modelling technology (optimization, econometric or accounting) and the spatial dimension (national, regional and global), sectoral coverage, time horizon and spatial focus. into the models. it is difficult for energy planners in developing countries with little to no training/experience to keep up with the changing situations. and so, the generated results mostly appear random, not in agreement with the current changing realities. as such, sometimes the process becomes time consuming, as is modelling generally, but even more without the right inputs and outputs. it is therefore expensive and the results are used inappropriately in generating energy policies that will not serve their own purposes. 2.1. historical evolution of energy modelling bhattacharyya and timilsina [21] observed that, the world dynamics of jay forrester and its application in meadows et al. (1972)’s limit to growth, despite their infamous and limited representation, was traced as the pioneering efforts towards global large-scale energy modelling as well as most of the national modelling initiatives. other key factors in this list are the collective effort of the us eia and international institute for applied system analysis in the 1977 workshop on alternative energy sources and the high prices of oil in the 1970s. one of the earliest approaches to energy analysis and modelling is the energy accounting framework that is used in generating energy balance as the most simplified energy system representations [22]. its comprehensive and consistent nature has been enjoyed as early as the 1950s in the usa [27] and is still popular in 21st century modelling practices and models [21, 22]. reference energy system framework, by hoffman, is an expansion of the accounting/energy balance approach that focuses on the actions involved in the entire supply chain. this is done by taking the technological characteristics as well as all possibilities of future technological improvements of the system into account thereby facilitating analysis of different energy scenarios, hence setting a new line of energy system modelling tradition. with the complexities brought by pictorial presen tations and the associated optimization techniques benefits, linear programming has been an integral part of reference energy system leading to several models being developed for many purposes and with different capabilities over the years including most electricity related models and the brookhaven energy system optimization (besom). other methods that followed it include the more generic and dynamic or multi-period market allocation (markal) model as the best of its days, the mexico’s energeticos and the energy research institute – teri energy economy environment 6 international journal of sustainable energy planning and management vol. 21 2019 energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria nigeria stands to benefit from these tools, as energy supply mechanism for any country has to look for the ways to provide for all categories of energy demand in the economy. the process of doing begins with energy modelling, but as iterated by numerous modelling and development studies, the needed skills & expertise are lacking or inadequate in the developing countries, hence the need for technical assistance. the business of international technical assistance is at the center of most interactions between developed and the developing countries and also mostly shapes the nature and conditions of bilateral, multilateral and international private, public as well as private public partnership-ppp collaborations. under normal conditions, the nature of these collaborations needs to take into account the mutual interests of both collaborators or partners to produce a win-win situation that promotes both partners, an ideal hardly met [20, 21, 22, 6]. this is because, solutions built while depending on the assistance of developed nations are mostly based partly on the realities and experiences of the developed nation helping to set it up. the usual issues faced are: down the road there will be mismatch between the solutions offered by the model and the realities on ground and the trained staff may not be able to effectively use it or address problems it may develop. at the end its overall purpose may be defeated in the sense that it may further complicate issues for the developing nation and the locally trained staff on what way to go about it. the model, despite its high level of capabilities compared to the previous models may just be there without achieving its target as is mostly the case. one typical example of such a recent collaboration is in the development of the newest and the best among the nigeria’s suite of energy modelling tools. the nigeria however with this long history, developments and all these differences, it will be interesting to know where nigeria stands as far as energy modelling is concerned. this is covered in the next section. 3. energy planning (modelling) in nigeria energy modelling in nigeria is part of the mandate of the ecn as the government’s strategic planner and coordinator of national policies in the field of energy and all its ramifications [31]. in fulfilling this mandate, the commission has over the years been utilizing many computer based tools of energy modelling, planning and analysis including; • model for analysis of energy demand – maed, • energy and power evaluation program – enpep, • wien automatic system planning – wasp for electricity, • model for energy supply strategy alternative and the general environmental impacts – messege for strategizing energy supplies, • simplified approach for estimating environ mental impacts of electricity – simpacts for projects and plants financial viability assessment • energy forecasting framework and emission consensus tools – effect the recent development of necal2050 is another milestone in this journey and addition to the suite of tools of energy analysis at its disposal as according to [32], it is still keenly utilizing message and maed. thus necal2050 is currently the best and most advanced energy modelling tools at the disposal of ecn because it has all the features of the two and even more as captured in table 1 as adopted from ecn’s necal2050 documentation. table 1: comparing necal2050, message and maed, source: [32] s/no. maed message necal2050 1. excel-based energy demand modelling framework or modelling tool. energy supply modelling framework based on dynamic linear programming. integrated energy demand and supply mode; excel and web-based. 2. simulation modelling framework. optimization model. both demand supply are simulation models 3. maed does not calculate emissions. calculates up to maximum five user defined emission types on the supply side based on input demand. calculates the emissions on the demand side for fuels (e.g. gas, petrol, fuelwood, etc.); calculates emissions from electricity at the supply side on the supply. 4. takes a very long time to run a single scenario. takes a very long time to run a single scenario. can run several scenarios within a very short time. international journal of sustainable energy planning and management vol. 21 2019 7 ahmad garba khaleel, & prof. milindo chakrabarti transition to a low carbon economy, as well as the choices available for clean modern energy access for all. the calculator is helpful in exploring a range of available pathways. however, it misses to point out the optimal one, which would instead be needed to allow policy makers to take the right decision promptly. this is of vital importance for an economy in a serious energy crisis that coincided with lack or inadequacy of energy modelling expertise, hence having an optimal option will reduce delays that would be caused by debates as to which of the available pathways to follow. iv. the model has been developed by focusing exclusively on nigeria and its options for ghg emissions reduction and energy security. v. the analysis under the model looks at what might be possible to deliver in the coming years up to 2050, but does not propose or identify the required policy decisions to ensure this future. in other words, the nigeria energy 2050 calculator does not provide a detailed policy framework and the trajectories should not be considered as projections based on policy decisions. vi. the necals2050 platform does not ‘recommend’ or ‘prefer’ any one scenario or pathways over the others. it merely provides the user a way to understand the realm of possible scenarios and their implications and post their preferences and choices as a contribution to the debate on sustainable energy development for nigeria. necal2050 is the best energy modelling tool nigeria has gotten till date, it is by far the most up-to-date equipped with energy and emission analysis tools. however, the weaknesses do not stop at those clearly stated in the model documentation as other key issues are neglected in its global economic assumptions on nigeria. key amongst which are: i. a major issue of consideration that was missed by necal2050 developers is the future role of agriculture not only in nigeria but in the whole region as contained in the agenda 2063 of the african union. the place of agriculture in the necal2050 was not explicit despite the fact that agriculture provides almost 18% of nigeria’s gdp and over 30% of employment as at 2015, energy calculator 2050 (necal2050) model is typical of the story line above in the sense that it did quite try to capture the urban sector of the economy, but as far as the nigeria’s rural sector is concerned, the model has not done its job well. one may not be right to this claim, given that, the developers of necal2050 were so honest and open to some of its fundamental weaknesses, all of which are discussed in the next section. 4. overview of necal2050 necal2050 is an integrated model of energy, emissions and land use in nigeria and aims to identify energy secure pathways for supply and demand of energy between now and 2050 [32]. it was developed by the nigeria energy commission with the assistance of united kingdom department of energy and climate change (based on the uk 2050 calculator) through the british high commission, abuja and launched in the year 2015 with the following three key objectives; i. to offer a platform to facilitate academic and policy debate about the possible future pathways for the nigeria’s energy sector and enable prioritizing some policy interventions for deeper analysis. ii. to help users (individuals, businesses and govern ment) understand the wide range of possible energy pathways available to the country from highly pessimistic to highly optimistic scenarios. iii. to provide indicative numbers for demand and supply, for each scenario in the range of possibilities, and potential implications on issues such as import dependence, cost and land requirement. as stated earlier, it would do justice to the developers of necal2050 to hail their honesty and openness in terms of some of its weaknesses they mentioned, which are summarized as follows: i. the model does not capture potential positive and negative feedback impacts on the economy from the levels of effort implied by the pathways. ii. it focuses on identifying the least-cost pathway to meet nigeria’s energy demand in a reduced emission manner up to year 2050, but in some cases questionable assumptions are used (e.g., unrealistically low cost of coal at some stage of the considered timeframe). iii. the necal2050 demonstrates the scales that are likely to be required for nigeria to make 8 international journal of sustainable energy planning and management vol. 21 2019 energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria 5. best necal2050 energy scenario/projection it is interesting to know that there are four levels of trajectories built-in on the model namely; least, determined, aggressive and heroic efforts scenarios that users can select from in using the model. these trajectories have different levels of potential implementation in energy technology improvement, behavioral, structural, lifestyle as well as fuel choices that affect the overall volume of energy demand and supply in the economy. among these levels of efforts, level four (4), which is termed as the ‘heroic effort’ scenario attempts the most highly laudable, elaborate and ambitious alteration of the energy system towards the highest physical and technical limits possible within the prevailing economic conditions. the results from this scenario are graphically portrayed in figure 1 showing the level of energy demand and supply possible as far as the models’ understanding and assumptions about the economy of nigeria including gdp, population and their growth rates, speed of urbanization etc. the graphical results of necal2050 (web version) best (heroic effort) scenario show selection of best possible options in all variables and assumptions as well as the final energy demand, primary energy supply and greenhouse gas emissions. tables 2 and 3 give similar best scenario results from the excel version of necal2050 that clearly and categorically shows the volume of the energy demand and supply on the five year intervals from 2010 to 2050. the tables also show the volume of energy demand and supply from various renewable and non-renewable energy sources and the totals of each of the five (5) year intervals. the percentages of the same are also given in the lower segment of each of the tables to show the relative significance of each source or vector of energy. nigeria’s energy projections from the best (heroic effort) scenario are presented in table 2 where it is clear that there is a steady overall increase in energy demand from 870twh in 2010 to 1448twh in 2050 (equivalent to 166.4% increase in total energy demand). it is interesting to see that this energy demand increase trend is not shared by all vectors in nigeria as transport, cooling, lighting and appliances recorded increase while decline is registered by industry and cooling vectors. the highest increase is recorded by lighting and appliances vector from 31twh to 679twh equivalent to almost 43.3% change in the share of the country’s energy demand. while the least increase is by transport the year the model was launched. the sector is being transformed by commercialization at the small, medium and large-scale enterprise levels that is evident by a significant simultaneous expansion and mechanization. the key role of agricultural energy demand in the largest african economy’s energy model cannot be overemphasized and the omission of which would be an unforgivable miscalculation. ii. undermining the nigeria’s capacity in the use renewable energies by including and capitalizing on a scenario where the current trend of refine petroleum products importation is extended to include electricity from sources out of the country. this is despite the estimations of the renewable potentials of before and recently after the model like [4]. iii. the recent developments in the international market for renewables was neither anticipated nor provided for while developing the necal2050, which would give us better scenarios than those projected in the model. iv. cooling energy demand especially in the household sector is overemphasized as the number of household that actually have cooling system and as such need energy for cooling is not that significant from the perspective of the overall population with majority below poverty line. these are important issues to the economy particularly with regards to sources and extent of energy demand and the renewable energy capability as well as potentials. wrong energy projections may result from such omissions further leading to underestimating the capabilities of existing infrastructure and some possibilities of technological improvements. the effect may also undermine the role of the available energy reserves and potentials of resources, existing and changing energy policy and regulatory environment and energy investment. this is also true for their combined effects on the production and consumption of energy and its market conditions as well as ultimately growth and development of the economy. it is observable in most future energy projections in both developed and developing countries, that while highlighting the current challenges and the unwanted results of inaction or right kind of action, they are explicit as to the highest positive outcomes that may follow the best course of action [26, 35, 36, 37, 38 & 39]. international journal of sustainable energy planning and management vol. 21 2019 9 ahmad garba khaleel, & prof. milindo chakrabarti from the energy supply side as shown in table 3, up till 2050 the bioenergy will be the dominant source of energy in nigeria with over 70% and over 38% shares of nigeria’s energy supply in 2010 and 2050 respectively. the relevance of oil, over 24% in 2010 will be reduced to a little over 5% in 2050, while coal currently relying on imports will become the second dominant source of energy in nigeria to the tune of over 33% in 2050, the year at which the world is ironically targeting carbon neutrality. gas share will be increased from 4.1% to 10% between 2010 and 2050 while nuclear fission will start from 128 twh to 189 twh corresponding to 1.7% change in the share of energy demand. it is ironic – though it may comply with the then nigeria’s economic conditions – that, the industrial demand for energy showed the highest and steady decline from 419 twh to 276 twh (a 29.1% decrease in the share of the total nigeria’s energy demand) over the period of the projections. this is contrary to the recent developments in the country in terms of industrialization and agricultural transformation that stand to be a major source of energy demand. final energy demand primary energy supply greenhouse gas emissions 358% percentage change compared to 2010 pj/yr 10000 8000 6000 4000 2000 domestic transport behaviour shift to low carbon emission transport technology fuel switch for internal combustion engine domestic freight cooling demand efficiency of cooling system residential lighting, appliances & cooking technology pathway (cooking) growth in industry with gdp energyintensity of industry service sector demand tor cooling efficiency of cooling system service sector lighting, appliances & cooking technology pathway (cooking) 2010 2020 2030 2040 2050 0 total cooking lighting & appliances industry pj/yr 10000 8000 6000 4000 2000 0 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 mtco2e/yr 1000 500 0 -500 oil total coal bioenergy total3 fuel combustion bioenergy credit natural gas power stations biomass power coal power stations nuclear power stations wind hydroelectric power stations small hydroelectric power stations grid connected solar pv concentrated solar power stand alone solar photo voltaic electricity imports land dedicated to bioenergy livestock and their management volume of waste and recycling bioenergy imports type of fuels from biomass lndigerous fossil-fuel: coal lndigerous fossil-fuel: oil lndigerous fossil-fuel production: gas question marks take you to one page descriptions of each choice. the least effort possible on this choice. viewed as ambitious, but reasonable by most experts. viewed as unlikely without significant change from the current system and/or significant technological breakthroughs. the upper end of what is thought to be physically plausible by the most optimistic observer. notes figure 1: best necal2050 energy scenario/projection using web version necal2050 model table 2: best necal2050 energy demand scenario final energy demand twh vector 2010 2015 2020 2025 2030 2035 2040 2045 2050 transport 128 143 149 151 153 164 172 180 189 industry 419 395 371 350 328 310 295 283 276 cooling 46 54 65 78 89 104 115 126 137 lighting & appliances 31 37 69 144 225 335 439 553 679 cooking 245 238 249 258 253 254 232 204 167 total 870 866 903 980 1048 1166 1253 1347 1448 final energy demand% twh% vector 2010 2015 2020 2025 2030 2035 2040 2045 2050 transport 14.8 16.5 16.5 15.4 14.6 14.0 13.7 13.4 13.1 industry 48.2 45.6 41.1 35.7 31.3 26.6 23.5 21.0 19.1 cooling 5.3 6.2 7.2 7.9 8.5 8.9 9.2 9.3 9.4 lighting & appliances 3.6 4.2 7.7 14.7 21.4 28.7 35.0 41.1 46.9 cooking 28.1 27.5 27.6 26.3 24.2 21.7 18.6 15.2 11.6 100 100 100 100 100 100 100 100 100 10 international journal of sustainable energy planning and management vol. 21 2019 energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria of the model. demand for electricity in lighting and appliances (46.9% of total energy demand) have the highest and dominant share of the country’s energy demand. hence the focus of our analysis here will be narrowed down to electricity demand and supply projections, where a comparison will be made between necal2050 and other three alternative projections to see the level of agreement or otherwise. this analysis is carried out in the next section. 6. alternative electricity projections for nigeria the closeness of the necal2050 projections to the realities in nigeria can be gauged by looking at other projections that focus on the same issues and used similar or different assumptions. this analysis will be useful in such a way that, where there is an agreement of focus or assumptions the two projections will be compared to see first, which is the best reflection of changing conditions in nigeria and second, which is better for nigeria’s future energy system. the scope of the analysis here is narrowed down to electricity as one of the energy vectors that regarded to have the least development in nigeria leading it to rely on imports to the tune of 16% of the total energy supply. three from 2025 at 25twh to reach 568twh by 2050 representing 1.3% and over 15% respectively. hydro, solar and wind combine currently supplying less than 1% of nigeria’s energy are expected to supply 2%, almost 12% and 0.6% respectively by 2050. the shortage of power supply in nigeria according to the projections is expected to continue and even increase to heavily rely on electricity imports from other countries to the tune of over 600twh by 2050 corresponding to over 16% of the total energy demand in the country. the overall energy supply will grow from 1214twh in 2010 to 3743twh in 2050, almost 310% increase over the period of the projections. key observation from tables 2 and 3 generally is the excess of energy supply over demand and simultaneously excess electricity demand over local supply due to low envisaged generation even in the most heroic effort of the necal2050’s scenarios leaving no option but the importation of electricity into nigeria. this is despite the fact that there exists a huge excess of energy supply 3743twh over demand 1448twh in 2050 coupled with massive renewable energy potentials and growing fossil energy reserves that are slowly being developed. one may not be wrong to argue that, from the projections of necal2050, electricity is one of the most important energy issues in nigeria and as reflected in the estimations table 3: best necal2050 energy supply scenario primary energy supply twh vector 2010 2015 2020 2025 2030 2035 2040 2045 2050 nuclear fission 0 0 0 21 41 79 152 294 568 solar 0 1 48 97 154 228 285 354 436 wind 0 0 4 7 11 15 15 18 22 hydro 10 10 17 29 38 47 56 65 75 electricity oversupply (imports) –1 –1 –1 –6 –69 –177 –277 –426 – 601 bioenergy 855 919 1016 1098 1156 1230 1295 1369 1441 coal –2 –3 20 117 277 507 752 994 1237 oil 301 309 221 188 191 198 198 196 192 gas 50 44 108 64 96 171 243 309 375 total 1214 1279 1435 1616 1893 2299 2719 3174 3743 primary energy supply% twh% vector 2010 2015 2020 2025 2030 2035 2040 2045 2050 nuclear fission 0.0 0.0 0.0 1.3 2.2 3.4 5.6 9.2 15.2 solar 0.0 0.1 3.4 6.0 8.1 9.9 10.5 11.2 11.6 wind 0.0 0.0 0.3 0.5 0.6 0.6 0.5 0.6 0.6 hydro 0.8 0.8 1.2 1.8 2.0 2.0 2.1 2.1 2.0 electricity oversupply (imports) 0.0 0.0 0.0 –0.4 –3.7 –7.7 –10.2 –13.4 –16.1 bioenergy 70.5 71.8 70.8 68.0 61.0 53.5 47.6 43.1 38.5 coal –0.2 –0.2 1.4 7.2 14.6 22.1 27.6 31.3 33.1 oil 24.8 24.2 15.4 11.7 10.1 8.6 7.3 6.2 5.1 gas 4.1 3.4 7.6 4.0 5.1 7.4 9.0 9.7 10.0 total 100 100 100 100 100 100 100 100 100 international journal of sustainable energy planning and management vol. 21 2019 11 ahmad garba khaleel, & prof. milindo chakrabarti different from those in necal2050, however, the basic observations is that there is a symmetry of pattern in the growth of demand over the period that the two estimations cover equally. that is from 2015 to 2030, the growth of cooling, lighting and appliances energy demand, which is usually provided using electricity, in necal2050 is about 245% and power demand growth is a little above 27% for [40]. the difference can be attributed to time, methods and economic assumptions of estimations, but overall they both indicated an ever growing demand for energy and the need for increased generation. however, while [40] projections were silent about the way and manner the excess demand over supply of electricity can be met, necal2050 predicted the import of electricity into nigeria. 6.2. comparison of electricity supply projections from the supply side, this study considered the work of pwc on the future of electricity in nigeria. the pwc’s projection targets increasing the generation capacity to projections were analyzed in comparison to the necal2050 best electricity demand and supply projections, one from demand side, the second from supply side and another from demand and supply sides. 6.1. comparison of electricity demand projections with the aim of determining the nature of electricity load demand for the purpose of planning future expansions of current network and also determine load distribution on the existing generating plants, [40] analyzed past load demand and estimated the future load till 2030. this was done using the forecasting method of stochastic/ probabilistic extrapolation based on time series analysis of past load demand curve and straight line graph/curve to make decisions for improving the power system balance to ensure more quality and reliability of power supply and its network. the nigeria’s demand load data for the years between 2000 and 2012 was used as the basis for the estimations to project load demand up-to 2030. the figures as shown in table 4 appear quite table 4: electricity demand projections based on real load demand data, source: [40] year 2013 2014 2015 2020 2025 2030 predicted load demand (mw) 14,812 15,093 15,373 16,774 18,175 19,576 53.9 gw 45.3 gw 55% 31% 5% 7% 30 gw 14 gw 28gw 13 gw capacity utilisation (% of installed capacity) transmission loss (% of generated) 8% 12% distribution loss (% of generated) 26gw 11 gw 982 kwh 433 kwh scenario 5 (2025) base case (2025) installed capacity generated transmitted distributed per capita annual power consumption leap 1 | accelerating growth in power generation capacity and improving utilisation leap 2 | expanding the power transmission network and driving better efficiencies leap 3 | establishing and scaling up efficient power distribution capabilities government and regulatory driven industry driven levers 1a. attracting investments through favourable policies 1b. implementing efficient power generation technologies 1c. faster execution of power projects 1d. maintenance and overhauling of failing infrastructure 2a. attracting investments via public private partnership 2b. rapidly scaling up transmission infrastructure 2c. improving efficiencies through adoption of new technology 3a. blocking revenue leakage through automation 3b. scaling up distribution infrastructure in alignment with transmission expansion 3c. reducing losses by improving distribution infrastructure figure 2: pwc’s future electricity roadmap to 2025 (scenario 5) source: [41] 12 international journal of sustainable energy planning and management vol. 21 2019 energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria with all other projections. the fact that, [41] showcased a better power projection for nigeria in demand, supply and sustainability or environmental concerns is a clear testimony to this. 6.3 combined energy supply and demand from other models (maed/message) to have a clearer view of the electricity projections from necal2050, the projections from previous models used by ecn were analyzed and compared with them. these models were secured through the international atomic energy agency’s sustainable energy development for sub-saharan africa as suite of energy analysis and planning tools. model for the analysis of energy demand (maed) and model for the energy supply strategy alternatives and their general environmental impact (message) are specific to the role they play in energy planning. maed is for energy demand while message is for energy supply and the associated alternative strategies and environmental issues. the two models were used in combination by [42] to generate the electricity demand and supply projections for nigeria till the year 2030. four scenarios used to generate the projections are discussed in details in [42] in addition to other energy analysis related 53.9 gw with 55% capacity utilization, 13% transmission and distribution (t&d) losses and about 1000 kwh annual per capita of electricity by 2025. their projections are divided into 5 scenarios in 3 leaps strategy based on 10 transformation levers to be driven by industry, government and its regulatory bodies. the best scenario (no. 5) is considered here for comparison with the electricity supply side of the best energy projections of necal2050, but limited to 2015 to 2025 figures as in the case of demand side comparison. unlike necal2050, the pwc projections saw the possibility of expanding of generation capacity, reducing t&d losses as the way of achieving higher energy access and consumption per capita. while necal2050 is not explicit about per capita kwh consumption in the country, the pwc projections factored that in relation to population growth to the year 2025. therefore, contrary to the case of electricity demand, the best necal2050 electricity supply and by implication all other energy projections may not be regarded as the true representation of the best future energy system of nigeria. the claim made in the necal2050 documentation that, the model tries to show the “scales of what are possible” by “exploring a range of available pathways” is not adequately achieved in the model’s best, and possibly true table 5: electricity projections from maed and message source: [42] demand mw scenario 2005 2010 2015 2020 2025 2030 reference (7%) 5,746 15,730 28,360 50,820 77,450 119,200 high growth (10%) 5,746 15,920 30,210 58,180 107,220 192,000 optimistic i (11.5%) 5,746 16,000 31,240 70,760 137,370 250,000 optimistic ii (13%) 5,746 33,250 64,200 107,600 172,900 297,900 supply mw scenario 2005 2010 2015 2020 2025 2030 reference (7%) 6440 15668 28356 50817 77450 136879 high growth (10%) 6440 15861 30531 54275 107217 192079 optimistic i (11.5%) 6440 15998 31235 71964 177371 276229 fuel type (%) 2010 2015 2020 2025 2030 coal 0.0 9.9 13.8 15.3 15.6 gas 78.6 48.5 53.5 53.0 59.0 hydro 21.3 18.9 13.6 10.7 8.6 nuclear 0.0 9.4 5.3 8.3 6.7 solar 0.1 13.1 11.0 10.4 8.3 wind 0.0 0.1 2.9 2.3 1.8 international journal of sustainable energy planning and management vol. 21 2019 13 ahmad garba khaleel, & prof. milindo chakrabarti tool of energy analysis in nigeria, some of the economic assumptions its best projections derived from are not in the best sustainability interest of the nigerian economy. the following table summarized the differences between the three projections and that of necal2050. it is obvious that the units in the tables (2, 3, 4 & 5) of the projections are quite different, specifically necal2050’s values are in energy units while others are in power. however, the focus of our analysis is on electricity projections in the models and their assumptions of the potential capacity of the energy system to adequately supply the needed power with considerable share of renewables. quantitative summary is attempted though may appear superficial as far as necal2015 is concerned because similar analysis is needed for other energy vectors to fully cover the model. necal2050 projections report over 66% growth of energy demand between 2010 and 2050 and 78% within similar period with other projections (2015-2030). power demand growth is 364% for sambo-2030, 27% for ezennaya-2030. on the other hand growth of energy supply for necal2050 is above 208% (2010–2050) and about 48% (2015-2030), while power supply growth is about 784% for sambo2030 & little above 331% for pwc–2025. the shares of renewables (hydro, solar and wind) in the supply side are also different specifically in the projections of sambo-2030 showing a decline from 32.1% to 18.7% between 2015 and 2030. this can mainly be due to the focus of then government in developing gas power plants as reflected by the projected rapid growth of the gas share of electricity supply from 48.5% to 59% within the same period. on the necal2050’s projections, there is also a steady projected growth of the same renewables’ share from 0.9% to 10% of the primary energy to be consumed within the same period, which is incomparable with that of sambo-2030 (that is on electricity generation only). information specific to nigeria and the models. the focus here is on the projected numbers generated using these models and how they compare with the figures in necal2050, as superficial observation showed the symmetric pattern of the trends in nigeria’s electricity demand from both projections. however, when attention is turned to the energy balance of the [42] projections, it is obvious that in all the scenarios, except optimistic i, there is excess of electricity demand over supply till around 2025. optimistic i achieved excess supply in 2020 while the supply side did not feature the optimistic ii scenario thereby making the analysis incomplete. however, while we will not be computing and comparing the exact volume of electricity between the two projections, the shares of different vectors or fuels will give insight to another more important dimension of the analysis – sustainability of the energy system. it is obvious that the share of coal in the primary energy supply by 2030 will be only 1% less in the necal2050 compared to its almost a decade old predecessors’ share in electricity supply. over all, the general concern raised in necal2050 of relying on electricity imports in nigeria is not there as far as the previous models are concerned. above that, the models are even showing that the excess of demand over supply will disappear by 2020 in the optimistic i scenario and 2025 in the high growth and reference scenarios. it will be misleading to pass judgements on the level of sustainability of the electricity systems between the two projections, but if we take all figures on pro-rata basis, the message projections are more sustainable for nigeria than the necal2050. this is because, putting aside bioenergy, the shares of modern renewables of solar, wind and hydro by 2030 are higher in message with 8.3%, 8.6% and 1.8% than in necal2050 with 8.1%, 2% and 0.6% respectively. on this considerations, while necal2050 is the most modern and advanced table 6: comparison of the four models differences in necal2050 ezennaya-2030 pwc-2025 sambo-2030 timing 2015 (35 years) 2014 (17 years) 2016 (14 years) 2008 (22 years) objectives integrated energy demand and supply projections with detailed fuel sources and emissions power demand projection based predicted load power supply projection with a targeted per capita kwh consumption combined power demand and supply projections with fuels sources. results steady growth of power demand, under capacity electricity generation and relying on power imports. steady growth of power demand. steady growth of power demand with ways to meet and improve upon the current situation. steady growth of power demand and supply, and the needed investment in generation without recourse to imports. 14 international journal of sustainable energy planning and management vol. 21 2019 energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria necal2050. that is to say, the problem is more with the modelling assumptions as the same model will produce far better projections than the current ones if the current and future conditions are well captured. similar projections are carried out for developed and developing countries alike in both medium and long term ranges with somewhat good results as can be seen in [6, 12, 2, 8, 43 & 44] with even more complex systemic challenges than simple electricity generation. it should however be in mind that, this work of ensuring the right assumptions are used rest more with the developing countries being helped than those assisting them. therefore the need for a better understanding as well as inclusion of these local conditions is the best way to go about, not only for energy modelling for developing countries but also for all other works that involve interactions between developed and developing countries. one way of doing that is introducing into the model the reflection of the local, regional, national and international policies, programmes and initiatives. another issue is increasing the role of renewable energy in the nigeria’s energy mix, particularly with the recent development of renewables in the global market that is forcing the parity of the renewables in an unprecedented manner. with these considerations, a more comprehensive modelling nature of necal2050 which includes growth, development and environmental concerns, will be much more appreciated in the energy modelling journey of developing countries, not only nigeria. the real impact of these suggestions will be much clearer in the new energy projections that result when they are applied to the model and run. this is however not achieved in this work; perhaps it provides an avenue for further studies that will be of special interest to researchers in the energy future of developing countries, particularly those in africa. references [1] oniemola, peter kayode. “powering nigeria through renewable electricity investments: legal framework for progressive realization.” journal of sustainable development law and policy (the) 6, no. 1 (2015): 83-108. https://www.ajol.info/ index.php/jsdlp/article/view/128008/117558 [2] un general assembly. transforming our world: the 2030 agenda for sustainable development, a/res/70/1, 21 october 2015, [accessed 18 january 2018] at: https://sustainabledevelopment.un.org/content/documents/21252030%20agenda%20 for%20sustainable%20development%20web.pdf. however, this would be highly appreciated, from sustainability viewpoint, if not for the presence of concurrent projected growth of coal’s share in the primary energy supply from –0.2 to 14.6% (surpassing the renewables) despite the global campaigns on climate action. though the units are different between the projections, the level of optimism shown in the supply potentials of the nigeria’s energy system is higher in other projections than those of necal2050. therefore, from these findings one may conclude that necal2050 projections as considered in this study may bring higher energy access to nigerians but not in a sustainable manner as compared to its previous as well as subsequent counterpart projections. hence, there is the need for improving some of its basic assumptions, particularly those regarding the changing local economic realities in building its scenarios, so that they will reflect the sustainable and self-reliant direction of the global and local development efforts. 7. conclusion: policy implications & recommendations the paper aimed at reviewing the conceptual and historical evolution of energy modelling and the nigeria’s modelling experience over the years with most important models in nigeria currently being maed, message and the latest necal2050. it is established in both literature and experience that most energy models do not capture the features and issues of developing countries. the study further analyzed the best energy projections of necal2050 with the view to finding out whether the model fully reflects the realities of the nigeria’s economy and that of similar developing economies in facilitating the transition to intensive renewable energy use in their development journey. based on the analysis carried out in this paper, it can be concluded that often at times, while trying to solve problems, more are created with even more complexities that further compound the situation. in this case, while trying to help countries solve their energy issues, more problems are created and compounded by developing models that do not pit their circumstances. the necal2050 is a good model that failed to cover some of the most important requirements of the nigerian economy. undermining the electricity generation capability of nigeria as well as the role of renewable energy in the energy system at the best scenario of the model are the pronounced flaws identified in the https://www.ajol.info/index.php/jsdlp/article/view/128008/117558 https://www.ajol.info/index.php/jsdlp/article/view/128008/117558 http://https://sustainabledevelopment.un.org/content/documents/21252030%20agenda%20for%20sustainable%20development%20web.pdf 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poul@plan.aau.dk international journal of sustainable energy planning and management vol. 18 2018 01–02 abstract this editorial introduces the 18th volume of the international journal of sustainable energy planning and management, which addresses the energy mix of indonesia, the water-energy nexus in the drina river basin, the effects of economic crises on electric utilities, the potential for biogas production in ukraine and the organisation and ownership of community energy projects. 1. contents in this volume, almulla et al.[1] probe into the waterenergy nexus of rivers through analyses of the impacts on water availability and hydropower. based on analyses of the river drina (running through montenegro, serbia and bosnia-hercegovina until flowing into sava) using the open source energy modeling system (osemosys), the authors investigate hydropower and untapped potentials – potentials that do not compromise upstream plants. in turn the authors also investigate the effects hydropower may have on the regional electricity landscape. in [2], sani et al. looks at the widening gap between energy demand and supply in indonesia, and investigate the historical evolution in this as well as in the energy mix with a view to providing inputs for an indonesian energy vision. using system dynamics, they model the energy mix. they find, that unfortunately, oil and other fossil fuel resources in indonesia are prioritized ahead of renewables. on the positive side, scenario modelling shows there is room for improvement. mota et al. [3] also turns to investigations of historical data to explain developments. taking a starting point in the global financial crisis (2008–2009), the debt crisis (2010–12) and the commodity price realignment (2014–2016) they investigate the effects on european electric utilities. at the same time of the crises, these were subjected to increasingly higher greenhouse gas reduction requirements. this contribution is a virtual contribution to the special issue on the 2017 conference on energy & environment [4]. kurbatova [5] investigate the potential for biogas generation in ukraine based on animal manure. at present, the utilisation rate is negligible, and one of the issues facing biogas utilisation in ukraine is that nearly half the animals are on farms too small for biogas plants. thus, in order to exploit the potential, common biogas systems are required. in fact, the economic feasibility of building these is favourable, with pay-back-times below five years finally, tricarico [6] follows up on the perspective of community projects – not from biogas but for the general editorial – international journal of sustainable energy planning and management vol 18 poul alberg østergaard* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords: water-energy nexus; indonesia; crises and electric utilities; biogas in ukraine; community projects; url: http://dx.doi.org/10.5278/ijsepm.2018.18.1 http://dx.doi.org/10.5278/ijsepm.2018.18.1 2 international journal of sustainable energy planning and management vol. 18 2018 editorial – international journal of sustainable energy planning and management vol 18 exploitation of distributed energy sources, where organisation and ownership may play an important role. references [1] almulla y. the role of energy-water nexus to motivate transboundary cooperation. int j sustain energy plan manag 2018;18. http://dx.doi.org/10.5278/ijsepm.2018.18.2 [2] sani k, siallagan m, putro us, mangkusubroto k. indonesia energy mix modelling using system dynamics. int j sustain energy plan manag 2018;18. http://dx.doi.org/10.5278/ ijsepm.2018.18.3 [3] mota mm, aquino tc, soares i. financial crisis: understanding effects on european electric utilities performance. int j sustain energy plan manag 2018;18. http://dx.doi.org/10.5278/ ijsepm.2018.18.4 [4] soares i, ferreira p, østergaard pa. energy markets, financing and accounting — special issue from 2017 international conference on energy & environment. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ijsepm.2018.15.1 [5] kurbatova t. economic benefits from production of biogas based on animal waste within energy co-operatives in ukraine. int j sustain energy plan manag 2018;18. http://dx.doi. org/10.5278/ijsepm.2018.18.5 [6] tricarico l. community energy enterprises in the distributed energy geography. int j sustain energy plan manag 2018;18. http://dx.doi.org/10.5278/ijsepm.2018.18.6 http://dx.doi.org/10.5278/ijsepm.2018.18.2 http://dx.doi.org/10.5278/ijsepm.2018.18.3 http://dx.doi.org/10.5278/ijsepm.2018.18.3 http://dx.doi.org/10.5278/ijsepm.2018.18.4 http://dx.doi.org/10.5278/ijsepm.2018.18.4 http://dx.doi.org/10.5278/ijsepm.2018.15.1 http://dx.doi.org/10.5278/ijsepm.2018.18.5 http://dx.doi.org/10.5278/ijsepm.2018.18.5 http://dx.doi.org/10.5278/ijsepm.2018.18.6 04. 1994-7469-1-le.qxd:1953-6976-1-le international journal of sustainable energy planning and management vol. 17 2018 31 abstract this study investigated the determinants of fossil fuel consumption for three sub-saharan african countries – ghana, kenya and south africa – to help manage the rising consumption fossil fuel consumption. the study employed the fully modified ordinary least square and canonical co-integration regression techniques using data from 1975–2013. among other results, the study revealed that income and urbanization increased fossil fuel consumption for all the countries. also, while trade reduced fossil fuel consumption for kenya and south africa, the opposite was found for ghana. in addition, the efficiency of the service sector reduced fossil fuel consumption for all the countries. the results of the study suggest efforts should be geared towards strengthening the energy efficiency system in each of these countries to help reduce fossil fuel consumption. also, it is necessary that tariff and non-tariff barriers on products that do not promote energy efficiency is raised and vice versa, inter alia. 1. introduction energy has become an engine that turns the wheels of economic activities in every country, because of its crucial role in the production process just like capital and labour. it also has a direct effect on the wellbeing of humans since it plays important role in a country’s transportation, industry, agriculture, communications, commercial and public services and other sustainability issues like education, health and alleviation of poverty [1]. a plethora of empirical studies have also underscored the important contribution of energy to economic growth [2–6]. owing to its importance, inadequate supply of energy does negatively affect the economic and social developments of countries. to avoid such situation, empirical investigations are carried out among other efforts to predict and regulate energy consumption. the evidence from such investigations indicates varied factors influence energy consumption for specific countries. moreover, high level of energy consumption is known to emit green house gases especially carbon dioxide that leads to climate change. as a result, empirical studies are also embarked upon to ascertain the drivers of energy consumption in order to curtail the emission of carbon dioxide (co2). among all forms of energy, fossil fuels are those whose consumption emits more carbon dioxide. this paper thus investigates into the drivers of fossil energy consumption for three sub-saharan african countries – ghana, kenya and 1 corresponding authors: e-mail: pauladkwa@gmail.com international journal of sustainable energy planning and management vol. 17 2018 31–44 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa paul adjei kwakwaa1 george adub and anthony kofi osei­fosub adepartment of business economics, presbyterian university college ghana, okwahu campus, p. o. box 59, abetifi, ghana bdepartment of economics, kwame nkrumah university of science and technology, kumasi. private mail bag university post office knust – kumasi, ghana keywords: energy; fossil fuel; ghana; kenya; south africa; url: dx.doi.org/10.5278/ijsepm.2018.17.4 32 international journal of sustainable energy planning and management vol. 17 2018 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa south africa. this is to unravel the possible factors behind the rising fossil fuel consumption in these countries in order to help reduce carbon dioxide emission while also bridging the gap between the rising fossil energy consumption and the inadequate supply in these selected countries. the share of fossil fuel in the total energy consumption for ghana, kenya and south africa has been increasing over the years. for instance, available data shows the share of fossil fuel in the total energy consumption in south africa has exceeded 84% for more than four decades. in the case of ghana, it has more than doubled from 16.5% in 1991 to 37.4% in 2011 and for kenya it has increased from 16.9% in 1991 to 19.7% in 2011 [20]. however, the above mentioned countries are unable to meet their fossil energy demand requirement which has dire consequences on households, firms and the entire economy. it has been suggested that failure to predict future energy demand has been a major factor for the inadequate energy supply in sub-saharan african countries [7]. predicting future energy demand requires the need to identify the forces of energy demand and thus to avoid a worsening energy security situation in the future, this paper seeks to identify the factors behind the increasing trend of fossil fuel consumption in ghana, kenya and south africa. countries that do not meet their domestic fossil energy supply import from other counties. the challenge however is that importation of fossil energy entails considerable fiscal planning since it is dependent on the price at which the energy is sold on the world market. the implication is, fluctuations of fossil energy price on the international market do have serious macroeconomic impact on the importing countries. it is imperative therefore, for countries that import fossil energy to reduce their consumption of fossil energy in order to lessen their exposure to international price shock [9]. global energy price shocks have had significant effects on macroeconomic variables such as inflation, gross domestic product, balance of payments and budget stances for the economies of ghana [see 10–12], kenya (see 13–15] and south africa [see 16–17]. moreover as stated earlier, the increasing level of fossil fuel consumption raises environmental concerns. this is due to the fact that the combustion of fossil fuel for energy releases greenhouse gases (ghg) that contribute to global warming and climate change whose effects sub-saharan african countries are vulnerable to [8;18–19]. this development has led many organizations, environmentalists and policy makers to campaign aggressively for countries to reduce the pollution effects of fossil fuel production and consumption. according to the world development indicators (wdi) [20], solid fossil fuel consumption has accounted for about 79%–91% of carbon dioxide emission in south africa while liquid fossil fuel constitutes between 70%–90% and 77%–91% of carbon dioxide emission in ghana and kenya respectively. figures 1, 2 and 3 show the trends of fossil fuel consumption and the share of co2 emission attributed to fossil fuels in ghana, south and kenya respectively as sourced from the wdi (20). it is seen from figure 1 that the share of fossil fuel consumption in ghana’s total energy consumption increased from a little above 20% in 1971 to above 50% in 2013. compared with the emission of co2 from liquid fuel, its share in ghana’s total co2 has remained above 80% over the years except 2013 where the figure dropped to 69.4%. from figure 2 it is seen that although the share of fossil fuel consumption reduced between 1984 and 2001 after which it began to rise again, it has been dominantly above 85% over the years. regarding the emission of co2 from solid fuels, the share has been fluctuating largely between 80% and 90% over the same period. the kenyan experience as shown in figure 3 is that co2 emission from liquid fuel has taken about 71%–90% of the total co2 emission while fossil fuel consumption increased its share of the total energy consumption from about 17% in 1991 to close to 20% in 2013. because the solution to the problem of ghg requires concerted efforts from all countries, ghana, kenya and south africa equally have a role to play (at least by reducing their fossil energy consumption). to this end, knowledge of the determinants of fossil energy consumption is crucial for ghana, kenya and south africa. although some studies exist on the consumption of (the various forms of)fossil fuel for the countries under study, [for example 18, 21–22] there is still room for further investigations since these previous studies have relied on cross sectional or short span time series data. such studies only offer estimates for the short-run which renders policy consequences inappropriate for long-term measures. cross sectional studies again are susceptible to subject bias, observer error, observer bias, low response and inability to measure long term change and development [24]. the study addresses these weaknesses associated with previous studies by using a relatively international journal of sustainable energy planning and management vol. 17 2018 33 paul adjei kwakwa, george adu and anthony kofi osei-fosu 10 20 30 40 50 60 70 80 90 100 1975 1980 1985 1990 1995 2000 2005 2010 carbon dioxide emissions from liquid fuel consumption (% of total) fossil fuel energy consumption (% of total) carbon dioxide emissions from solid fuel consumption (% of total) fossil fuel energy consumption (% of total) 76 78 80 82 84 86 88 90 92 1975 1980 1985 1990 1995 2000 2005 2010 figure 1: trends of fossil fuel consumption and co2 emission from liquid fuel consumption in ghana. data source: wdi [20] figure 2: trends of fossil fuel consumption and co2 emission from solid fuel consumption in south africa. data source: wdi [20] 34 international journal of sustainable energy planning and management vol. 17 2018 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa longer annual time series data spanning from 1975–2013 which is free from the biases associated with cross sectional data and also has the capacity to offer estimates that have long-term implications. we employ long-run cointegrating estimation techniques – the fully modified ordinary least square (fmols) by phillips and hansen [25] and canonical cointegration regression (ccr) by park [26] – to estimate the determinants of fossil energy consumption for each of the three countries. this current study also differs from other studies that have examined the long-run determinants of fossil energy consumption [27–34] in one unique way. this stems from the fact that such studies have focused on mainly the price and income effects on fossil fuel consumption. however, since energy is consumed by both residential and non residential sectors of the economy, it is important to consider other variables in addition to price and income when it comes to identifying the determinants of fossil fuel consumption. accordingly, the present study examines the effects of price, income, trade, urbanization, industrial efficiency and efficiency of the service sector on fossil fuel consumption for ghana, kenya and south africa. the inclusion of the service sector to the explanatory variables contributes to the energy consumption literature, since to the best of the authors’ knowledge previous studies on the drivers of energy have ignored the potential role of the service sector to energy consumption. the rest of the paper is organized as follows. section 2 deals with the empirical strategy, data type and source, and the method employed in the analysis. section 3 discusses the empirical results and section 5 concludes the paper with summary and policy recommendations. 2. empirical strategy and data this section deals with the methodological issues of the study under sub sections of theoretical and empirical specification, estimation strategy, and data source and description. 2.1. theoretical and empirical specification demand for fossil fuel at the national level has been modeled as a function of price and income in the literature (see 31–32]. for convenience, we assumed that the demand function takes the following multplicative form: (1) where f is fossil fuel consumption, a is constant term, p is price of fossil energy and y stands income. f ap y eit it it it it= β β ε1 2 figure 3: trends of fossil fuel consumption and co2 emission from liquid fuel consumption in kenya. data source: wdi [20] 10 20 30 40 50 60 70 80 90 100 1975 1980 1985 1990 1995 2000 2005 2010 carbon dioxide emissions from liquid fuel consumption (% of total) fossil fuel energy consumption (% of total) international journal of sustainable energy planning and management vol. 17 2018 35 paul adjei kwakwa, george adu and anthony kofi osei-fosu the βs are the parameters to be estimated, e raised to epsilon is the stochastic term, t is the time period and i stands for the individual countries. however, because both residential and nonresidential sectors use energy, it is important to take into consideration other variables in addition to price and income that may have influence on fossil fuel consumption at the national level. one of such variables is trade openness. the effect of trade on fossil fuel consumption can be positive or negative. trade openness can increase fuel consumption in three main ways as argued by sardosky [35]. first, energy including fossil fuel is involved in the production of manufactured export goods and the transportation of both manufactured goods and raw materials for export. second, after imported goods have arrived at the port, the transport system which relies on (fossil) energy would have to distribute the goods to the various parts of the country, and thirdly importation brings into the country goods such as automobiles and other manufacturing machines that use fossil fuel. however, trade openness can reduce (fossil) fuel consumption when high efficient equipments that consume less energy are made available to individuals and firms. another variable worth considering is urbanization. urbanization is argued to increase energy consumption in diverse ways. for instance, urban centres are associated with the concentration of manufacturing firms that depend on energy especially fossil fuel. such centres also experience heavy vehicular traffic and vehicular movements in and out of the centres which increase fuel consumption. again, urbanization increases the demand for infrastructure which relies on energy for construction; and lastly, urbanization does impact energy demand through private consumption patterns since individuals become wealthier in such centres and do acquire energy intensive machines [36–40]. we also include industrial efficiency to our explanatory variables. because the level of industrialization thrives on energy, it is argued to positively affect fossil energy consumption. this is because, a key feature of industrialization is the use of machines that rely on fossil fuel to operate. consequently, as industries expand in their production activities more fuel would be needed to power these machines [41] than does traditional agriculture or basic manufacturing [42]. however, since firms do change their technological characteristics in the long-run to become efficient with their energy consumption [43] industrial efficiency does reduce fossil fuel consumption. the economies of ghana, kenya and south africa have seen an expansion in the service sectors contributing greatly to their respective economic growth. this sector also relies on fossil fuel for operation and an expansion in its size suggests more fossil fuel would be consumed. like the industrial sector, firms in the service sector are expected to change their technological characteristics in the long-run to become efficient with their energy consumption thereby reducing energy consumption. consequently, we model demand for fossil fuel consumption for each of the three countries as a function of price of fossil energy, income, trade, urbanization, industrial energy efficiency and efficiency of the service sector. equation (1) is thus modified to take into account the several other factors described earlier and it is expressed in equation 2: (2) where t represents trade; u represent urbanization; n stands for industrial energy efficiency; and s represents energy efficiency of the service sector. taking the natural log of each variable in equation (2) gives: (3) where ln is natural logarithm operator, α = lna. 2.2. estimation strategy we begin our investigation into the determinants of fossil energy consumption for ghana, kenya and south africa by testing for the unit root of the series. we used the augmented dickey-fuller (adf) and the phillipsperron tests respectively developed by dickey and fuller [44] and phillips and perron [45] for the stationarity test. next, is to examine the long-run relationship among the variables for each country. to do so, the cointegrating estimators namely, the phillips and hansen [25] fully modified ols (fmols) and park [26] canonical cointegrating regression (ccr) models are employed. these models are chosen over others like the more commonly used ardl cointegration technique and the maximum likelihood based approach because they are more robust to the problems of serial in in in in in i f p y u t it it it it it = + + + + + α β β β β β 1 2 5 4 5 nn inn sit it it+ +β ε6 f ap y u t n s eit it it it it it it it it= β β β β β β ε1 2 3 4 5 6 36 international journal of sustainable energy planning and management vol. 17 2018 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa correlation and endogeneity. also these models are robust to both non-stationarity and endogenous regressors. following adom and kwakwa [52], the fully modified ols estimator is given as in the equation below: (4) where is the correction term for endogeneity, and λ ^ ox and λ ^ xx are the kernel estimates of the long-run covariances, is the correction term for serial correlation, and δ ^ ox and δ ^ xx are the kernel estimates of the one-sided long-run covariances. the approach by park [26], that is the canonical cointegration regression, is similar to the fmols. the ccr estimator is shown below: (5) where and denotes the transformed data, is an estimate of the cointegrating equation coefficients, 2 is the second column of and denotes estimated contemporaneous covariance matrix of the residual. stock and watson [46] dols is also estimated to check for robustness of the results. 2.3. data source and description the study used annual times series data for all the variables namely, fossil fuel consumption, income, price, efficiency of the industrial sector, urbanization, trade openness and efficiency of the service sector for each of the three countries. the period of study span from 1975–2013 and it is because of availability of data for the countries under consideration. all the data were sourced from the world development indicators [20] of the world bank except price which was from energy information administration. the dependent variable, fossil fuel consumption is measured as the fossil energy consumption as percentage of total energy consumption. the study uses price of crude oil as a proxy for the price ∑̂∧̂∧̂ β̂ yt t * ˆ ˆ ˆ [ ˆ ˆ ]' ˆ− ∑ ∧ +− −1 2 22 1 21β η ω ν y x d x xt t t t t t * * ' *( , ), ( ˆ ˆ ) ˆ= = − ∑ ∧ ∨−1 1 2 ˆ ˆ .. ˆ ˆj ox ox xx xx= δ − δ −λ λ 1 y y xt t ox xx t + −= − δˆ ˆλ λ 1 ˆ * * * *φccr t t t t t t t t z z z y= ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ = − = ∑ ∑1 1 1 1 φfme t t t t t t t t z z z y tj= ⎛ ⎝ ⎜ ⎞ ⎠ ⎟ − ⎛ ⎝ ⎜ ⎞ ⎠= − + = +∑ ∑' ˆ 1 1 1 ⎟⎟ of fossil fuel. from the literature, price is expected to negatively affect fossil fuel consumption. the income variable is measured by real annual per capita income. income is expected to have a positive effect on consumption of the fossil fuel. trade is measured as the sum of import and export as share of gdp and its effect is uncertain based on the literature. urbanization is expected to increase fossil fuel consumption and in this study it is measured as the annual population in the largest city. both efficiencies of the industrial and service sectors are expected to reduce fossil energy consumption. industrial efficiency is measured as the ratio of the valued added to gdp by the industrial sector to fossil fuel consumption. similarly, the efficiency of the service sector is measured as the ratio of the value added to gdp by the service sector to fossil fuel consumption. 3. empirical results and discussion this section discusses the results of the study under sub sections of unit root test of series, cointegration test and long-run determinants of demand for fossil fuel. 3.1. unit root and cointegration tests the study employed the phillip-perron (pp) and augmented dickey-fuller (adf) tests to ascertain the stationarity of the variables fossil fuel consumption, income, price, urbanization, trade openness, industrial efficiency and efficiency of the service sector. the results have been reported in table 1 below. from the adf and pp tests results, all variables are non stationary at their levels. however, based on the first difference, all variables become stationary rendering the variables as integrated of the order one or i(1) for each country under study. the unit root test results imply that regression analysis to establish the relationship between the fossil energy consumption and its regressors chosen for this study could be embarked upon without generating any spurious results. the co-integration test is carried out to determine whether long-term relationships exist among the variables. the study used the engel-granger and phillip-ouliaris tests which allow a single co-integrating relationship to be estimated. the results of the co-integrating tests for ghana, kenya and south africa reported in table 2 indicate there is a long-run relationship between the fossil fuel consumption and the explanatory variables for each country. this implies a long-run relationship exists among the variables and thus offers evidence that price, income, efficiency of international journal of sustainable energy planning and management vol. 17 2018 37 paul adjei kwakwa, george adu and anthony kofi osei-fosu industrial sector, efficiency of service sector, trade and urbanization are the long-run forcing variables explaining fossil energy consumption in ghana, kenya and south africa. 3.2. long-run determinants of fossil energy consumption the long-run impact of price, income, trade openness, urbanization, industrial efficiency and efficiency of the service sector on fossil fuel demand are analysed for ghana, south africa and kenya using the fmols, ccr and dols regression methods. the regression results for ghana, south africa and kenya are presented in table 3, 4 and 5 respectively. 3.2.1. the effect of price on fossil energy consumption price was expected to significantly have a negative relationship with fossil energy consumption for each country. however, we obtain a negative and significant effect of price on fossil consumption for the kenyan economy but insignificant effect for ghana and south africa. in the case of kenya, a one percent increase in the price of fossil fuel will reduce fossil fuel consumption by 0.0236–0.0346 percent. this suggests that a higher price displaces consumption, making the rich to invest more in efficient energy appliance and the poor cutting down on their energy use [47] in kenya. the inelastic price effect we found for kenya corroborates those established in earlier studies in the literature. for instance, tsirimokos [32] found a negative and inelastic price effect for ten iea countries, altinay [48] also established an inelastic price effect on demand for crude oil in turkey and zarimba [31] found similar effect for the south african economy. the outcome that price has not significantly influenced fossil fuel consumption in south africa over the period of table 1: adf and pp unit root test of variables for ghana, kenya and south africa ghana kenya south africa___________________________ ___________________________ ___________________________ variable pp-test adf-test pp-test adf-test pp-test adf-test variables in levels lnf –0.9582 0.1897 –2.1366 –2.0495 –1.4712 –1.4781 lnp –1.2739 –1.1550 –1.2739 –1.1550 –1.2739 –1.1550 lny –0.9568 –1.3469 0.2884 0.2878 –1.7679 –1.7929 lnt –1.0514 –1.2924 –2.3810 –2.2345 –2.3486 –1.7928 lnu –1.3371 –1.0398 0.0476 0.0179 –1.7985 –1.7970 lnn 0.9801 14.6951 1.4363 –1.8177 –1.3768 –2.0975 lns 0.67995 0.5034 –0.9782 –1.4895 –0.5824 –1.7712 variables at first differences dlnf –9.7586*** –7.2557*** –5.4686*** –5.4429*** –6.7816*** –6.8096*** dlnp –6.0697*** –6.0645*** –6.0697*** –6.0645*** –6.0697*** –6.0645*** dlny –4.2812** –4.8110*** –8.1775*** –7.9888*** –6.3778*** –6.1204*** dlnt –4.0884*** –4.1322*** –5.9587*** –5.9620*** –5.2747*** –5.1715*** dlnu –6.1548*** –5.6214 –1.8889 –4.1894** –0.9354*** –1.4298 dlnn –9.4488*** –9.1160*** –5.6403*** –5.6401*** –9.1333*** –7.1354*** dlns –2.0940 –9.0084*** –3.8223** –3.6968*** –3.8845** –4.0869** ***, **, * respectively represents 1%, 5% and 10% level of significance table 2: co-integration results of series for ghana, kenya and south africa ghana kenya south africa___________________________ ___________________________ ___________________________ test tau-stat z-stat tau-stat z-stat tau-stat z-stat engel-granger –6.206** –101.533*** –4.500** –65.506*** –4.635* –133.48 phillips-ouliaris –5.461** –26.321 –6.144** –29.566 –5.451 –59.235 note: ***, **, * respectively represents 1%, 5% and 10% levels of significance 38 international journal of sustainable energy planning and management vol. 17 2018 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa study contradicts earlier paper on fossil energy consumption in south africa by ziramba [31] which recorded a significant negative effect. the current result may differ from ziramba [31] due to the differences in the time span and the different estimation techniques of the two studies. ziramba [31] employed the johansen cointegration approach for data that covered 1980–2006 period which is quite shorter than the period this study employs. the additional explanatory variables added to price and income in this study could also be a contributory factor to the differences in the price effects for the south african economy. the insignificant effect we obtain for ghana is in line with observation in that it appears demand for energy no more depends on price because energy is also becoming a necessity in the country and irrespective of the level of the price, households and industries still demand energy, although amidst complaints. 3.2.2. the effect of income on fossil energy consumption real per capita income is found to be positive and statistically significant for all the three countries table 3: long-run estimates for ghana fmols ccr dols______________________________ ______________________________ ______________________________ variable coefficient std. error coefficient std. error coefficient std. error ln p 0.0253 (0.0431) 0.0263 (0.0454) –0.0680 (0.0530) ln y 0.0921* (0.0475) 0.0842* (0.0449) 0.1205* (0.0629) ln n –0.5370*** (0.0706) –0.5026*** (0.0629) –0.4781*** (0.1021) ln s –0.2944*** (0.0863) –0.3110*** (0.0753) –0.1479*** (0.1365) ln t 0.2318*** (0.0547) 0.2079*** (0.0548) 0.3041*** (0.0889) ln u 1.0378** (6.8453) 1.0248*** (0.4719) –0.3220 (1.1505) constant –12.8673* (6.8453) –12.5472* (6.7258) 4.7313 (15.9381) note: ***, **, * respectively represents 1%, 5% and 10% levels of significance table 5: long-run estimates for kenya fmols ccr dols______________________________ ______________________________ ______________________________ variable coefficient std. error coefficient std. error coefficient std. error ln p –0.0236* (0.0055) –0.0262*** (0.0024) –0.0349* (0.0169) ln y 0.1176*** (0.0056) 0.1075*** (0.0053) 0.2072*** (0.0376) ln n 0.0152** (0.0147) 0.0564*** (0.0183) 0.4403** (0.1737) ln s –0.7907*** (0.0127) –0.8072*** (0.0013) –1.2502*** (0.1657) ln t –0.0451*** (0.0065) –0.0335*** (0.0082) 0.0406 (0.0537) ln u 0.3443*** (0.0140) 0.3206*** (0.0128) 2.5920*** (0.6853) constant –1.3471*** (0.2193) –1.0101*** (0.2116) –31.399*** (9.1690) note: ***, **, * respectively represents 1%, 5% and 10% levels of significance table 4: long-run estimates for south africa fmols ccr dols______________________________ ______________________________ ______________________________ variable coefficient std. error coefficient std. error coefficient std. error ln p 0.0011 (0.0047) –0.0025 (0.0058) 0.0565 (0.0106) ln y 0.0397*** (0.0070) 0.0407*** (0.0093) 0.0441*** (0.0071) ln n 0.2945*** (0.0567) .3031*** (0.0605) 0.1711** (0.0715) ln s –0.0961* (0.0471) –0.1382** (0.0527) 0.0057 (0.0943) ln t –0.0448*** (0.0146) –0.0464** (0.0149) –0.0474** (0.0474) ln u 0.0717** (0.0312) 0.1071*** (0.0349) 0.0523 (0.0491) constant –0.6543 (0.8382) –0.4724 (1.2185) –0.0577 (0.0349) note: ***, **, * respectively represents 1%, 5% and 10% levels of significance international journal of sustainable energy planning and management vol. 17 2018 39 paul adjei kwakwa, george adu and anthony kofi osei-fosu consistent with a priori expectations. we record that for the ghanaian economy there will be about 0.0842–0.1205% increment in the consumption level of fossil fuel following a 1% increment in the income level. for the economy of south africa, a 1% increase in income level will cause fossil fuel consumption to also increase by about 0.0397–0.0441% while a 1% increase in income level will cause fossil fuel consumption to also increase by about 0.1075–0.2072% in kenya. from these estimations, fossil fuel can be classified as a normal good in ghana, kenya and south africa. in other words, an increase in the level of income results in a corresponding increase in fossil energy consumption although by lesser magnitude than the increase in income. the positive effect of income on fossil fuel consumption suggests that as per capita income increases in these countries, citizens and firms are able to afford appliances that rely on fossil fuel to operate thereby increasing the consumption of fossil energy. for instance, from the abysmal performance in the late 1970s and early 1980s ghana’s economy grew from a rate of 4.8% (in 1987) to 15% (in 2011) suggesting an increase in the overall wellbeing of citizens over the last three decades. this in a way has contributed to the country’s ability to reduce by half the people living in poverty. with such increase in income and reduction of poverty, individuals demand for items that thrives on energy has also increased contributing to the rising level of fossil fuel consumption. according to the driver and vehicle licensing authority (dvla) of ghana, there was about 50% increment in the number of registered vehicles between 2000 and 2010 alone. the effect of such development is the rising trend of fossil fuel consumption. kenya has also recorded important strides in its economic growth. from a negative 2.01% rate of per capita income in 1984, the country registered a 5.7% growth in per capita income for year 2013. such development has increased the demand for fossil fuel in the country. similarly, the south african economy has performed impressively well in the sub region over the years and has thus received the reputation for being among the richest economies in africa. the economic performance in terms of growth in per capita income has increased from us$ 5053.1 in 1972 to us$ 6090.4 in 2013 on the back of a thriving mining sector hence an increase in the demand for fossil fuel consumption over the period. studies abound on the income elasticity effect on fossil fuel (coal, gasoline and natural gas) consumption. a review of such studies indicates that generally, income has a long-run inelastic effect on fossil consumption. the current study then lends support to the inelastic effect of income of fossil fuel consumption that the literature suggests. the results of altinay [48] estimation of elasticities of demand for crude oil in turkey show a positive and an inelastic long-run income effect. also, ackah and adu [18] established an inelastic income effect of gasoline demand in ghana. ziramba [31] also found the long-run effect of income on crude oil to be inelastic and positive for the south african economy. hughes et al., [49] had positive inelastic income effect for coal demand in the us. lim et al. [28] had positive and inelastic demand for diesel in korea and sultan [33] study on demand for gasoline in mauritius found inelastic and positive effect of income. the few studies that had elastic income effect include tsirimokos [32] research on demand for crude oil for ten iea countries and ramanathan [27] paper on demand for gasoline in india. 3.2.3. the effect of efficiency of industrial and service sectors on fossil energy consumption the technological characteristic of the industrial sector (industrial efficiency) is found to have a negative effect on fossil fuel consumption in ghana but the opposite rather holds for south africa and kenya. this variable happens to be the one with the greatest impact on the consumption of fossil energy in south africa but the second most significant variable in ghana and kenya. for the ghanaian economy, a one percent increase in the efficiency of the industrial sector will reduce fossil fuel consumption by 0.4781–0.5370 percent. however, a one percent increase in the efficiency level of the industrial sector will increase fossil fuel consumption by 0.1711–0.3031 percent and 0.0152 and 0.0564 percent respectively for the south african and kenyan economies. this means that industrial efficiency has an inelastic effect on fossil fuel consumption in all the three countries. the results suggest that over the period of study, ghana’s industrial sector has invested in efficient technologies for their operations which have reduced the amount of fossil energy consume to produce an output. the positive effect of the industrial efficiency on fossil in south africa and kenya implies that as industrial firms become more efficient in their operations, they tend to use more energy than before. such a situation in the literature is known as the backfire rebound effect, 40 international journal of sustainable energy planning and management vol. 17 2018 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa commonly known as the jevons paradox. a review of the literature on the industrial efficiency elasticity revealed that the focus of such studies has been on electricity consumption. authors like lin [50] found a significant and negative inelastic effect of industrial efficiency for chinese electricity consumption. zuresh and peter [51] also had similar results for electricity consumption in kazakhstan. findings by adom and bekoe [43; 53] on electricity consumption in ghana were also negative and inelastic. however, keho [54] recorded a positive impact of the industrial sector on energy consumption in south africa. a significant negative relationship is established between the technical characteristics of the service sector and consumption of fossil fuel for ghana, south africa and kenya. from the results, a one percent increase in the efficiency of the service sector will decrease fossil fuel consumption by 0.1479–0.3110% in the ghanaian economy; 0.0961–0.1382% in the economy of south africa and 0.7907–1.2502% in the kenyan economy. the service sector for many decades has particularly been the backbone of the kenyan and south african economies offering the greatest contribution to the gdp of the two countries [20]. in the case of ghana, the sector became prominent following the commercial production of oil in 2011. it is now the second largest contributor to the country’s gdp next to the industrial sector. the negative effect of the service sector efficiency recorded for the three countries suggests that as the sector invests in efficient technology for production, their usage of fossil fuel decreases than before. it also implies that the negative effect the financial sub sector has on the consumption of fossil energy [55–58] outweighs the potential positive effects from the other components of the sub sector. this argument is premised on the fact that the service sector in ghana, kenya and south africa consisting of sub sectors such as hotels and restaurants, transport and storage, financial and insurance activities, education and health has the financial services as the leading sub sector for kenya and south africa while it occupies the third position in ghana’s service sector. the relative dominance of the financial activities affords firms and individuals the opportunity to access credit to acquire more energy efficient equipments reducing the use of energy per output of service produced. this therefore reinforces the idea that the technological feature of the service sector plays a major role in managing the rising level of fossil fuel consumption. 3.2.4. the effect of urbanization and trade on fossil energy consumption the level of urbanization is shown to have an elastic and positive effect on fossil fuel consumption for the countries under study. a 1% increase in the rate of urban population will increase consumption of fossil energy by about 1.0248–1.0378% in the ghanaian economy; and 0.3206–2.590% increase for the kenyan economy and 0.0717–0.1071% in the economy of south africa. this outcome is not surprising in the sense that over the period under study, urban population for the three countries has increased massively. for instance, figures from wdi [20] show ghana’s urban population has seen a tremendous increase from 2,575,314 in 1971 to 13,660,790 people in 2013. this thus has partly accounted for the positive effect on the consumption of fossil fuel. the reason is urban towns in ghana are characterized by heavy vehicular traffic and movement of vehicles that rely on fossil energy. ghana’s urban centres have also witnessed rapid infrastructural development made possible by using fossil fuel in the process of construction and other activities. these have contributed to the positive effect urbanization has on the consumption of fossil energy in the country. like ghana’s experience, urban population in kenya increased from 1,256,443 people in 1971 to 3,926,810 people in 1990 and then to 10,990,845 people in 2013. urban centres in the country have also been associated with vehicular traffic and rapid infrastructural development there by contributing to energy consumption. the urban population for the south african economy grew from 10,819,530 people in 1971 to 33,908,100 people in 2013. in addition, records indicate that over 80% of south africa’s gdp come from the cities and large towns. again, it is reported that 75% of all net jobs created in south africa between 1996 and 2012 were from the urban centres. thus, the urban centres in south africa have become the hub of industries that rely on fossil fuel and also the destination of many people in search of jobs [59]. the positive effect of urbanization on fossil fuel consumption obtained in this study gives support to earlier arguments by [36–40]. other studies on the demand for electricity by adom et al. [60] had similar positive results for the urbanization. also kwakwa and aboagye [61] had similar results for aggregate energy consumption; while adom and kwakwa [52] had a similar effect on energy intensity for ghana. also, holtedahl and joutz [62] found the effect of international journal of sustainable energy planning and management vol. 17 2018 41 paul adjei kwakwa, george adu and anthony kofi osei-fosu urbanization to be elastic for electricity consumption in taiwan and for the chinese economy. the effect of trade is found to be positive for ghana but negative for kenya and south africa. the negative effect of trade openness recorded for south africa and kenya suggests that opening up to trade has led to the promotion of efficiency in the usage of fossil fuel in the two countries. high energy efficient equipments that consume less energy have been made available to the south african and kenyan households and firms through trade. on the other hand, the positive effect of trade openness on fossil fuel consumption for ghana indicates opening up to trade has increased the consumption of fossil fuel for the country. previous studies including kwakwa [23], sadorsky [35] and cole [63] reported positive effect of trade on energy consumption. 4. conclusion and policy implications concerned about the high emission of carbon from fossil fuel consumption that contribute to climate change and global warming, as well as the rising levels in the consumption of fossil fuel but inadequate supply and future energy security, the study investigated the determinants of fossil fuel consumption for three subsaharan african countries namely ghana, kenya and south africa using annual time series data over the period of 1975–2013. the demand for fossil consumption for each of the countries was modelled as a function of price, income, trade, urbanization and the technical characteristics of the industrial and service sectors. results from the fmols, ccr and dols estimators revealed income, urbanization, trade, efficiency of the service and industrial sectors are the long-run drivers of fossil fuel consumption for ghana and south africa. in the case of the kenyan economy, price in addition to the variables mentioned earlier for ghana and south africa were found to influence fossil fuel consumption. on the direction of impact, ghana’s fossil fuel consumption was determined positively by income, trade and urbanization; and negatively by industrial efficiency and efficiency of the service sector. for kenya, fossil fuel consumption was positively affected by income, industrial efficiency and urbanization; but negatively affected by trade, price and efficiency of the service sector. lastly, for the south african economy, our results showed urbanization, industrial efficiency and income increase fuel consumption while price and trade reduce fossil fuel consumption. the findings above suggest efforts should be geared towards strengthening the energy efficiency system in each of these countries as income has significant effect on fossil consumption. achieving higher economic growth and development in the years ahead has been the concern for many countries including ghana, kenya and south africa. for instance, kenya plans to achieve 10% annual economic growth in order to eliminate absolute poverty by 2030. ghana has also set for herself 40 year development plan and south africa has the vision 2030. the goal of such growth and development agenda among other things is to reduce poverty of the citizens. since higher economic growth and development translate into higher income, it is important for policy makers and governments to factor the fossil fuel consumption effect into such (growth and development) agenda and design appropriate policies to both meet fossil fuel demand or/and reduce fossil fuel demand. also, the negative effect of price suggests kenya may be vulnerable to price shocks. thus, appropriate measures should be put in place to handle any future shock. again, because the effect of price changes on fossil fuel consumption is inelastic it is possible for authorities in the economy to reduce the subsidies on fossil energy. since it has the least effect for the kenyan economy it is essential that other policies apart from price related policies are given attention. at the industrial level, energy efficiency needs to be promoted in ghana to help reduce the amount of fossil fuel consumed for their activities. this is because even though industries rely on energy for their operation, there is also the need to promote efficiency to ensure that the industrial sector is efficient in its fossil energy usage. in this regard, it is important for the government of ghana to help reduce the obstacles or impediments that hamper industrial firms’ ability to adopt energy efficient technologies in their operation. this would require the government follows national policy frameworks geared towards equipping industries to be energy efficient. regarding the south african and kenyan economies, more efforts are needed in order to make the industrial sector reduce consumption of fossil fuel. intensive education on energy savings may come at handy for the economies in this regard. also adequate measures should be put in place to decentralize growth and other lucrative activities in ghana, south africa and kenya to reduce the population pressure in the urban centres so as to manage the high level of fossil fuel consumption in such urbanized areas. 42 international journal of sustainable energy planning and management vol. 17 2018 a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa as it stands now the urban centres in ghana, south africa and kenya have received the attention of governments and corporate bodies when it comes to developmental issues more than rural areas. other non urban towns should get similar attention. in addition to the above point, 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 259-1201-2-le.qxd 1. introduction combined heat and power (chp) or cogeneration is well known as a thermodynamically efficient way of energy conversion. all thermal power stations produce heat during electricity generation, which is, in conventional separate systems, released and lost into the environment. this waste of energy in the separate production of electricity can be avoided by using international journal of sustainable energy planning and management vol. 02 2014 33 cogeneration systems where most of this thermal energy is recovered as useful heat for a nearby client [1]. thus, cogeneration brings several advantages, such as, high overall efficiency in the energy conversion process, reduction of fuel consumption by 20-30% and environmental benefits (fig. 1). cogeneration was firstly implemented in large scale installations (>1 mwe), nowadays in some countries it * corresponding author e-mail: acferreira@dps.uminho.pt international journal of sustainable energy planning and management vol. 02 2014 33-46 technical-economic evaluation of a cogeneration technology considering carbon emission savings ������� ������������ �������������� ����� ��������������������� ������� ��������� ���� �� � ������� � ��� ���������� �� ������� ����������� �� �� ���� ���� ���������� ��� �������� ��!"##$#%"�&�� ��'������������ (������ � ��� ������ ������ �� ���� ����������� �� �� ���� ���� ���������� ��� �������� ��!"##$#%"�&�� ��'������������ a b s t r a c t the support of combined heat and power production systems has gained policy attention, because these are often considered to be less polluting and more efficient than conventional energy conversion systems. as a consequence, the potential market for these energy systems that contribute to reduce greenhouse gas emissions and to enhance energy security on a national level, is shifting from large-scale existing units to small and micro-size emerging technologies. this paper presents a numerical model based on a cost-benefit analysis used to design an optimal cogeneration system for a small-scale building application, considering the portuguese context and the comparison with the harmonized efficiency reference values for the separate production of electricity and useful heat. the model includes the identification of the objective function terms (i.e., the elements involved in the financial analysis across the system lifetime and the economic evaluation of costs) and benefits of the combined heat and power production system. the economic viability of cogeneration systems significantly depends on system technology, client energy requirements and support schemes implemented in the respective countries. a strategic approach is necessary to adequately embed the new technology as a feasible solution in terms of investment and operational costs. only by matching the energy supply to the needs and expectations of the energy users, it will be possible to improve the market competitiveness of these alternative power production plants. the optimal solution disclosed a positive annual worth, which is higher if the carbon emission savings are monetized. in addition, the optimal system represents a more efficient way to produce useful heat and electricity (i.e. a positive primary energy saving) and to reduce gas emissions. a cost-benefit analysis can be applied for the techno-economic evaluation of a chp system by assessing the monetary socio-environmental costs and benefits of a capital investment over its useful lifetime. keywords: techno-economic evaluation; chp power plants; carbon emission savings. url: dx.doi.org/10.5278/ijsepm.2014.2.4 34 international journal of sustainable energy planning and management vol. 02 2014 technical-economic evaluation of a cogeneration technology considering carbon emission savings already represents more than 40% of the total electricity produced. nevertheless, a large potential still exists for small-scale applications in the mediumsize building sector and for micro-scale applications in individual dwellings. building applications include: hospitals, institutional and office buildings, hotels, and single or multi-family residential buildings. for these buildings, the cogeneration systems have to satisfy both electrical and thermal demands [2]. in the last years, distributed power systems have gained some relevance, mainly due to the liberalization of the electricity market and environmental benefits [3–5]. the competitiveness of these systems has gained a greater expression with the recent policies, which largely promote efficiency improvements, the sustainable development of the energy sector and the capacity of matching electrical and thermal load profiles. the european directive 2004/8/ec [6] defines “small-scale cogeneration” as those units with an installed capacity bellow 1 mwe and “microcogeneration” as those with a maximum capacity bellow 50 kwe. this directive aims at the promotion of highefficiency systems led by useful heat demand and defines the primary energy savings (pes). pes is the index through which the power plant is classified. for largeand small-scale systems, a pes of at least 10% is required, so that the system can be classified as highefficiency and thus entitled for the legal support schemes. in the case of micro-scale systems, only a positive value of pes is required. the european energy performance of buildings directive (epbd) obliges all member states to ensure that (for new buildings with a floor area over 1 000 m2) the economic feasibility of alternative systems, such as, decentralized energy supply systems based on chp or renewable energy, is considered at the building design stage [7]. the directive also outlines that the net grid energy requirements for all the new buildings should be near to zero by 2020. nowadays, the reduction of greenhouse gas (ghg) emissions is one of the highest concerns in europe and cogeneration produce heat and power in such a way that, as less primary energy is required, therefore a reduction of ghgs emissions is also achieved. in 2010, the portuguese decree-law 23/2010 [8] finally established the guidelines for high-efficiency cogeneration based on useful heat demand, which is considered a priority due losses 23 units 51 units 28 units 44 units grid e = 0.55 e = 0.35 th = 0.55 = 0.90 th = 0.90 electricity heat chp electricity 49 units boiler losses 4.9 units losses 8 units heat energy input 100 units energy input 80 units η η η ηη figure 1: schematic representation of conventional power production versus chp. to its potential primary energy savings and consequently reducing co2 emissions. this decree-law also established the remuneration scheme for the cogenerated electricity. besides pes, another parameter commonly used to analyse the energy and environmental benefits from using cogeneration systems, is the equivalent co2 avoided emissions. however, for its calculation, the adopted mix of energy for that region/country must be considered [9, 10]. most european member states created support schemes based on electricity feed-in-tariffs (fit). these grid-selling tariffs are usually fixed throughout the day, and typically represent a premium comparatively to the buying-back prices. so, all the electricity produced can be sold to the national network, although the thermal energy produced should not exceed the required demand. in the portuguese scenario, the government has been promoting energy efficiency policies. the cogeneration has been benefiting from this political orientation, namely via feed-in-tariffs, and presently represents approximately 13% of the total national electricity production. according to the portuguese energy services regulatory authority (erse) [11], between january 2008 and may 2011, the average fit was 108 €/mwhe for large-scale chp systems. nevertheless, the fit is monthly calculated via a rather complex formula that involves, among other factors, fluctuations of the oil market prices. the fit for these large systems varies depending on the hour of the day, but is always higher than the buy-back electricity price. a recent law [12] guarantees a fixed fit at any time of the day or night, for microcogeneration systems with a grid power connection not exceeding 3.7 kwe in the case of single dwellings, or 11 kwe in case of apartment blocks. for renewable microcogeneration systems (e.g. using biogas), the fit is 280 €/mwhe during the first 8 years after commissioning, followed by 168 €/mwhe from years 9 to 15. in the specific case of non-renewable cogeneration, the corresponding fits are 160 and 96 €/mwhe (or market value if above). considering the portuguese scenario, it is expected that this fixed hourly fits will be soon extended to small-scale cogeneration systems up to 250 kwe. the current national energy scenario is characterized by a strong external dependency, with an energy sector heavily dependent on fossil fuels (e.g. fuel oil, natural gas and coal) as primary energy sources. in addition, a growth of the energy usage occurred until 2006, although portugal has a lower level of electricity consumption per capita when compared with the eu’s average [13]. however, the power consumer needs suffered an increase in recent years, mainly in the building sector. these two aspects lead to a growing dependence on foreign energy sources. in 2007, according to eurostat, portugal was one of the european union (eu) countries with the highest energy dependence, importing in that year 82% of the total primary energy consumed, when compared to the eu-27 average (of about 53%) [14]. energy demand has been increasing slightly faster than the rate of economic growth, and consequently the energy intensity is 4% higher than it was in 1991, being 10% above the eu 15-average. thus, the portuguese energy scenario is characterized by a huge import of primary fossil sources, which justifies the high energy dependence. in fact, the energy costs of imported fuel has been suffering a significant growth, and together with the external factors, notably those which cause variations of exchange rates in the international markets as well as the energy price variations, lead to the research and development of cleaner and more efficient alternatives of energy production. portugal has significantly shifted its electricity production system by introducing natural gas power plants, some new hydroelectric power plants and a huge investment in wind energy. electricity production from natural gas has increased from zero to near 12.3 twh between 1996 and 2006. the total installed capacity of production from all types of renewable energy sources has doubled from 1995 to 2009 and has reached 9.2 gw in march 2010. plus, in 2020, it is expected that renewable electricity will represent almost 60% of the total electricity generation [15]. the use of renewable sources, as well as the rational use of energy has become an important objective of many countries. they represent a sustainable approach to energy production, by helping to ensure the security of energy supply and contribute to the accomplishment of the kyoto protocol objectives. the appropriate policies and regulations on the rational use of energy are, therefore, very important to achieve a sustainable development [16]. considering the potential of cogeneration technology in producing energy through an efficient way and with environmental benefits, several studies and theoretical international journal of sustainable energy planning and management vol. 02 2014 35 ana cristina ferreira, manuel lopes nunes, senhorinha teixeira and luís barreiros martins approaches for their techno-economic optimisation have been developed. some of these approaches include a few key concepts of thermo-economics, such as, sizing constraints through component costing equations and the identification of thermodynamic variables (e.g. power, mass rate, heat rate, enthalpy, entropy, heat loss, efficiency, heat exchanger effectiveness) [5]. some authors established that the introduction of chp systems in the building sector requires the development of compact, cost efficient and systems of easy installation. in fact, it is believed that only with the development of more energy-efficient systems, which are able to reduce life-cycle costs, primary energy savings and co2 emissions, it will be possible to increase their market competitiveness [17]. lazzareto and toffolo [18] developed a study with the objective of identifying the best option to optimize thermal systems, where singleor multi-objective optimization approaches were discussed. the study was performed using evolutionary algorithms to optimize the design parameters of a chp plant, and by defining an assessment model based on energy, economic and environmental issues. de paepe et al. [19] compared different commercially available cogeneration systems and concluded that the system cost is the main obstacle against the introduction of these plants in the residential sector. pilavachi et al. [20] defend that the development, construction and operation of small and micro-chp systems must be evaluated according to economic, social and environmental aspects in an integrated way and that evaluation results should be compared by means of the sustainability scores. alanne et al. [17] presented a techno-economic strategy to evaluate the performance of different configurations for a stirling engine residential micro-cogeneration system in order to minimize the annual thermal losses of the system. in the evaluation procedure, the variables considered were the annual costs, primary energy use and co2 emissions. in their study, the economic viability of the system is based on the capacity to recover the capital investment cost by the annual savings during a certain period of time (i.e. payback period). pehnt [21, 22] studied the environmental impacts of distributed energy systems for micro scale applications. in his research, the potential of different cogeneration systems was investigated by evaluating their impacts throughout a life-cycle assessment. the author concluded that the performance of micro cogeneration with respect to environmental concerns depends mainly on the overall conversion efficiency and the type of energy sources that the chp plants work with. the main objective of this paper is the development of a numerical optimization model for a cogeneration system based on a micro-gas turbine. this technology was chosen because it is one of the most mature and has a high potential for cogeneration applications [23, 24]. the thermodynamic cycle of micro-gas is more complex than with conventional large-scale simple-cycle gas turbines. the low pressure-ratio compressor (typical of these machines due to cost reasons), implicates the inclusion of an internal regenerator to reduce fuel consumption (thereby substantially increasing efficiency), although it introduces internal pressure losses that moderately lower efficiency and specific power. the thermal energy contained in the exhaust gas improves system economics heat can be recovered and used to, for instance, water or space heating, which represents an economic gain. these power plants with internal regeneration can achieve 30% of electrical efficiency and the overall efficiency is in the range of 75–85% (based on low heating value – lhv). the numerical model should be able to get the optimal values for different physical variables (e.g., compressor pressure ratio, turbine inlet temperature, pre-heater effectiveness) providing the best economic output. a set of cost equations were defined for each system component, in order to compose the economic model. the thermo-economic model was based on a cost-benefit analysis, which is established on the economic balance between the incomes and the costs from the system operation. in the paper, two case studies are presented in order to understand the weight of the carbon emission savings and if its monetization is a relevant income in the thermal-economic model. the next section of this paper presents the description of the cogeneration system that was optimized. then, the third section describes the formulation of the mathematical model, including the definition of the objective function, decision variables, constraints and the optimization method. the two last sections correspond to the results and discussion and the main conclusions of the paper, respectively. 2. chp plant descritption the problem presented in this study aims to optimize and size a small-scale cogeneration system by producing electrical power, and simultaneously be able 36 international journal of sustainable energy planning and management vol. 02 2014 technical-economic evaluation of a cogeneration technology considering carbon emission savings to fulfil both the heating and the domestic hot water needs, for a building of residential apartments. for this scale of application, the system must operate, approximately, 4000 h which corresponds to a heat output of 125 kw. the building consists of a 52 individual dwellings with an individual floor area of 150 m2 (or 7800 m2 in total). the annual thermal power duration curve of the building was calculated according to the portuguese regulation for the thermal behaviour of buildings (rccte, decree law 78/2006) [25], by summing the hourly heating load and the hourly hot water needs. the domestic hot water needs calculations were performed considering an occupation of 4 people per dwelling with a daily domestic hot water consumption of 40 l per person, at a temperature of 60 °c. the building hourly heating loads were calculated considering a class b minus building and local climate (i.e. north of portugal). this study is based on a small-scale cogeneration system designed under the joule-brayton cycle. fig. 2 illustrates the layout of a micro turbine based chp system. the turbo machinery and the electric generator are connected to a common shaft rotating at high speed. an inverter decouples the high frequency of the produced current from that of the grid, thus enabling variable speed operation. for so small applications with a low-pressure compressor, gas turbines require an internal air pre-heater (iph) or regenerator, to provide a satisfactory electrical efficiency. the thermal energy of the exhaust gases (eg) is recovered as useful heat for heating water. atmospheric air is compressed (c) and fed to the iph before entering the combustion chamber (cc) where it is mixed with natural gas (ng). the high temperature combustion gases expand in the turbine (t). the eg, leaving the turbine, are firstly used in the iph to pre-heat the incoming compressed air and subsequently for the production of hot water in the external heat recovery system, before exiting to the atmosphere. the latter is a water heat exchanger (whe), where a fixed flow rate of water is heated from 313 k to 353 k. 3. development of techno-economic optimization model a fundamental basis for an economic assessment of a chp system is a complete methodology that takes into account all relevant decision variables. when assessing the potential of a chp system, it should be noted that both economic-environmental costs and benefits affect the decision-making process. therefore, the implementation of chp systems requires a cost-benefit analysis, which includes: investment, operation, maintenance and environment costs. the evaluation of the economic feasibility of a chp system can be processed in three main steps: (1) assessment of the technical data, (2) costing methodology, and (3) evaluating the economic viability of the chp residential system. the information on the economic costs and the environmental benefits shall lead to a decision concerning the economic viability. cost estimation has to be made considering the investment associated with the installation of the chp system. the cost methodology allows the user to define the costs in a transparent manner, so that options can be validated and compared in an equitable manner. firstly, there is the need to gather and validate the cost data. for this, one can collect cost data from literature, technology suppliers and consultants. secondly, the cost components have to be defined and allocated into: investment cost, operation and maintenance costs, revenues and avoided costs. finally, it is necessary to use some parameters (e.g. exchange rates, inflation, and discount and interest rates) in order to enable a fair comparison of different chp residential systems. these data are used to estimate whether the annual worth (aw) of the investment is positive or negative. a positive aw indicates that investment in the chp system is, actually, cost effective. thus, the maximization of the aw was defined as a nonlinear objective function with nonlinear constrains. international journal of sustainable energy planning and management vol. 02 2014 37 ana cristina ferreira, manuel lopes nunes, senhorinha teixeira and luís barreiros martins compressor 8 7 eg whe 9 6 5 2 3 4 5 turbine cc iph fuel 2 1air figure 2: schematic representation of the micro gas turbine chp system. most of those constraints account for the physical and thermodynamic limitations of system operation. six decision variables were selected for the optimization algorithm, which was solved in matlab® environment. in this section, the mathematical formulation of the optimization model is presented, as well as, the numerical solution adopted. the model is further described in [26]. 3.1. mathematical model formulation the optimization model comprises the definition of the objective function, the constraints and the decision variables. in this study, the objective function was defined as the maximization of the aw of the system operation, as expressed by eq. (1): (1) the aw value results from the balance between the revenues and the costs from the chp system operation. in terms of revenues, one of the main advantages of chp systems is the possibility of selling the energy to the power distribution network, which is appropriate to the “producer-consumer” profile. in this study, it is considered that the client sells all the produced electricity (eprod) to the grid, being the income (rsell) from selling power to the net grid by the chp system, expressed in eq. (2): (2) where pe represents the electricity price. accordingly to the current legal framework in portugal, the selling price of electricity to the grid (i.e. fit) of the microcogeneration energy systems (with the exception of biomass cogeneration systems) is equal to the purchase prices of the tariff applicable to the consumer. when the combined production, by the chp system, is compared with the conventional power generation, it is clear that a full separate system (typically a boiler) to produce heat is not required. in fact, one of the most important economic benefits of micro-chp systems, over conventional ones, is related to their capacity to use the waste heat from r e psell prod e= ⋅ max aw max r c r r c chp sell avoided co res inv ⇔ + + + − − ( 2 cc cfuel − maintenance ) electrical power generation. therefore, the avoided cost (cavoided) to produce the same useful thermal energy by the chp system (qchp), to fulfil thermal needs of the building (space heating or hot water), can be considered as an economic advantage in the model, as expressed by eq. (3): (3) where pfuel represents the fuel price for the boiler operation and ηb is the efficiency of reference for conventional boilers. the residual value of the equipment at the end of its useful lifetime (rres) should be considered as revenue. from the economic point of view, the residual value of equipment is usually estimated as a percentage (ψ) of the initial system investment cost, as in eq. (4). (4) as an environmental benefit, the monetization of the carbon emission savings from the chp unit was considered. the quantification of avoided carbon emissions was calculated by eq. (5), assuming a constant price (pco2) per ton of co2 that is saved [27]: (5) the reference values and co2 emission factors depend on the technology used to produce electricity and heat. so, considering that the ng is the fuel used to run the chp system, and according to data from dgeg, the ng emission factor (feco2) was assumed as 64.1 gco2/gj, during the micro-chp system working period (t). in terms of costs, the following elements may be considered: the purchase cost of each component of micro-chp system, which corresponds to the annualized investment costs (cinv) that should include the acquisition and installation of the cogeneration system; and the total operational costs (cop) resulting from the sum of the maintenance costs (cmaintenance) and the fuel costs for the micro-chp unit operation (cfuel). the annual system investment cost is calculated according to the annualized capital cost. annualizing the initial investment cost corresponds to the spreading of the initial cost across the lifetime of a system, while r p fe t eco co co prod 2 2 2 = ⋅ ⋅ ⋅ r cres inv= ⋅ψ c p q avoided fuel chp b = ⋅ ⎛ ⎝⎜ ⎞ ⎠⎟η 38 international journal of sustainable energy planning and management vol. 02 2014 technical-economic evaluation of a cogeneration technology considering carbon emission savings accounting for the time value of the money. the initial capital cost is annualized as if it was being paid off a loan at a particular interest of discount rate over the lifetime of the option. the capital recovery factor (crf) is used to determine the equal amounts of n cash transactions for an investment and can be expressed as in eq. (6): (6) where a is the annuity (a series of equal amount cash transactions); p is the present value of the initial cost; ie is the effective rate of return, and n is the number of years of the lifetime operation. for thermal-economic optimization, the effective rate of return can be approximated as: nominal rate of return (i.e. interest rate), minus inflation rate, plus owners’ risk factor and a correction for the method of compounding. thus, the cinv can be calculated according to eq. (7): (7) where ci is the purchase cost of each component of the chp system. the mathematical expression that defines the cost of each chp component ci→(cc; ccc; ct; ciph; cwh) accounts for the physical parameters, which are based on works from literature [28, 29], adjusted for small-scale units and real data from micro-turbines available in the market (capstone® 65). the physical model that calculates the thermodynamic relationships is fully described in [26]. this model allows the calculation of the temperatures evolution, the mass flow rates, the heat transfer areas and all parameters needed to build the numerical model that describes the power plant operation. cfuel is calculated through the cumulative fuel consumption during the micro-chp system working period, considering the fuel price per energy unit and the fuel mass flow rate (m . fuel), usually lhv basis. the cfuel can be expressed by the eq. (8): (8) the maintenance costs are usually defined as a percentage (ϕ) of the initial investment as in eq. (9): c p m lhv tfuel fuel fuel= & c c crfinv i i = ⋅∑ crf p a i n i i i e e e n e n = → = + + − ( , , ) ( ) ( ) 1 1 1 (9) the appropriated optimization models, in this type of application, are very complex and therefore, some assumptions have to be made for the success of the computational modelling: i. the heat provided by the cogeneration plant should never exceed the user demand; ii. the thermal efficiency of the boiler should be considered equal to the reference value of the conventional boilers (ηb = 90%) [7]; iii. the plant should operate in steady state, according to the thermal load profile of the user; iv. a period of 15 years is reasonable for the plant lifetime; v. the maintenance costs are assumed as a fraction of the annualized investment cost (ϕ = 0.15), roughly equivalent to 6 €/mwhe [26]; vi. the residual value of the power plant, at the end of its useful lifetime, was assumed as (ψ = 0.10) of the annualized investment cost of the cogeneration plant [29]; 3.2. decision variables six physical parameters were selected as decision variables of the optimization model: the compressor pressure ratio (rc); the isentropic efficiency of the air compressor (ηc); the isentropic efficiency of the gas turbine (ηt); the air temperature at the internal pre-heater (t3); the temperature of the combustion gases at the turbine inlet (t4) and the electrical production (w . ). the simulation was performed considering upper and lower bounds for the decision variables as eq. (10) to (15): (10) (11) (12) (13) (14) (15)90 120≤ ≤&w 1000 14004≤ ≤t 500 10003≤ ≤t 0 70 0 90. .≤ ≤ηt 0 70 0 90. .≤ ≤ηc 3 0 6 0. .≤ ≤rc c cinvmaintenance = ⋅ϕ international journal of sustainable energy planning and management vol. 02 2014 39 ana cristina ferreira, manuel lopes nunes, senhorinha teixeira and luís barreiros martins the limits for the electrical production variable were based on the actual heat-to-power ratio (λ) that defines the relationship between the amount of useful heat (considered to be a fixed value in this study) and the electricity produced by the chp system. typically, the heat-to-power ratio of micro-gas turbines is approximately 1.25. 3.3. constraints seventeen inequality constraints were formulated in order to give physical significance to the mathematical model. these constraints bound the variables within feasible limits of the system operation. for instance: the inlet temperature of the air (t1) is lower than the air temperature at ihp inlet (t2); the turbine inlet temperature (t4) is the highest temperature reached in the system; the high-pressure air is pre-heated upstream the cc, and hence, it is required that the temperatures (t2) and (t3) are lower than that of the exhaust gases (t5). the difference between the inlet and outlet temperatures in each heat exchanger flow should be limited to ensure the effectiveness heat transfer process between the fluids. in order to allow an effective heat transfer in the iph and in the whe, lower and upper limits were defined to guarantee a temperature differential between the two streams. moreover, it is also important to make sure that the exit gas temperature (t7) is above 363 k, in order to prevent condensation in the heat recuperating system. besides the constraints related to the evolution of the temperature in the system, pes was also included in the model as the eighteenth inequality constraint in order to guarantee that the system may be classified as highefficient chp power plant. thus, pes allows to estimate the total primary energy savings that are possible to achieve by a cogeneration unit (considering the combined electric and thermal efficiencies) when compared with the conventional power production process [3]. the amount of primary energy provided by cogeneration production (in percentage) is calculated according to the eq. (16): (16)pes th th e e chp ref chp ref = − + ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎟ 1 1 η η η η ⎟⎟ ⋅100 where ηthchp is the cogeneration heat efficiency, defined as the annual useful heat output divided by the fuel energy input. the terms ηthref and ηeref are the efficiency reference values for the separate production of heat and electricity, respectively. finally, ηechp is the electrical efficiency of the cogeneration production defined as annual electricity from cogeneration divided by the fuel input used to produce the sum of useful heat output and electricity from cogeneration power plant. 3.4. numerical solution the problem is solved with resource to the pattern search (ps) algorithm, a search method without the need of analytic derivatives. generalized pattern search (gps) algorithms are derivative free methods for the minimization of smooth functions [31]. at each step the algorithm generates a set of points, called mesh. the mesh is generated by creating a set of vectors based on the pattern (pk), multiplying each i th direction vector (pi k ) by a scalar that corresponds to the mesh size, δk. the pattern vector that defines a mesh point is considered its direction. the algorithm polls the points in the current mesh by computing their objective function. if the algorithm fails to find a point that improves the objective function, the poll is called unsuccessful, remaining the current point as the best for the next iteration. after polling, the algorithm changes the value of the mesh size, expanding or contracting its size. the mesh expansion depends on the polling step. chosen the initial point (xk), a trial step is defined considering at iteration k the convergence tolerance (ξ ), the length of search step and the initial direction. considering that the poll option controls how the algorithm “vote” the mesh points at each iteration, the simulation was carried out considering the complete poll “on” in order to choose the point with the best objective function value by checking all the points in the mesh at each iteration. the poll method chosen was the gps positive basis 2n algorithm and the search method was defined as the nelder-mead. the maximum number of function evaluations was defined as 20 000. a feasible initial point is required to start the iteration process, in this study the initial approximations for the six decision variables were: rc = 4.0, ηt = ηc = 0.85, t3 = 850 k, w . = 100 kwe and t4 = 1 200 k. 40 international journal of sustainable energy planning and management vol. 02 2014 technical-economic evaluation of a cogeneration technology considering carbon emission savings 4. results and discussion the results of the optimal solution are presented in this section. a base case scenario was simulated considering the natural gas with a lhv of 47 100 kj/kg and a price of 10 €/gj, an electricity fit of 0.12 €/kwh, and a price of 24 €/ton for the co2. in order to evaluate the economic benefit from including the carbon emissions in the optimization model, two case scenarios were studied with the corresponding results presented in table 1. case 1 corresponds to the optimal annual costs and benefits considering the carbon emission savings, while case 2 corresponds to the optimal solution when the bonus from carbons emissions is not considered in the calculations. according to table 1, it is possible to obtain a positive profit for both tested cases. it is observed that the maximum annual worth is relatively higher if the income from carbon emission is considered (a significant increase of 55.2%). for both cases, the predominant costs are operational, where the main contribution comes from the fuel costs. in terms of income, the revenue from selling electricity to the grid largely depends on the amount of electricity (sixth decision variable) that the system will produce. the more expensive system of case 1 is able to produce more electricity due to a better electrical efficiency. this result is also influenced by the relatively high fit. the avoided cost to produce heat (20 000 €) is constant and equal for both cases, once it is assumed that the system is able to deliver a fixed amount of heat flux, 125 kwth and that it operates 4 000 hours per year. the estimated cost of each plant component for both tested cases is presented in fig. 3. for obvious reasons, manufacturers do not reveal detailed cost information for separate components of their currently available micro-turbines. however, it is predictable that the iph, the compressor and the turbine will be the most expensive components of the power unit. results show that iph and turbine are the costlier components, representing 31.7% and 31.5%, of the total chp unit cost. comparatively, the case 2 scenario represents a lower-priced solution in terms of equipment purchase costs. the competitiveness of this technology is mainly due to their investment cost, which for micro turbine-based international journal of sustainable energy planning and management vol. 02 2014 41 ana cristina ferreira, manuel lopes nunes, senhorinha teixeira and luís barreiros martins table 1: optimal annual costs and incomes of the chp system for the two tested cases. annual costs and revenues (€/year) case 1 case 2 capital investment cost, cinv (14 770) (12 187) total operational costs cop (47 998) (39 488) revenue from equipment residual value, rres 1 477 1 219 revenue from selling electricity to grid, rsell 53 568 42 902 income from carbon emission savings, rco2 7 043 – avoided cost of separate heat generation, cavoided 20 000 20 000 annual worth of chp system 19 321 12 445 45 40 35 30 25 20 15 r e la tiv e c a p ita l c o st ( 1 0 3 € ) 10 5 0 c cc t iph whe case 1 38.328 4.4718 42.367 42.665 6.691 29.605 3.7716 33.698 36.652 7.274case 2 figure 3: optimal capital cost for each chp system component. chp applications is estimated to vary within the range of 1 000 to 1 700 €/kwe [24]. the optimization model disclosed, for each case scenario, an investment cost of 1 205 €/kwe (case 1) and 1 242 €/kwe (case 2). table 2 shows the optimal values for the six decision variables. the results for the decision variables corresponded to similar power plants, meaning that there is no significant difference for the optimal values of the decision variables. the main difference lies on the size of the micro gas turbine, larger in case 1, in order to deliver a higher electrical power (higher mass-flow of air affecting the size of all components and comparatively larger regenerator with higher t3 and lower t6 ). for instance, in case 1, the results show a compressor pressure ratio of rc = 5.74 and a turbine inlet temperature of t4 = 1 385 k. these two decision variables, together with the regenerator effectiveness, are the most important parameters in micro gas turbines cycles. both results are higher than the values for the models currently available in the market (an rc of 4 and a t4 of approximately 1 200 k). a possible explanation for this difference is the use of low cost materials in the equipment manufacturing, which imposes some boundaries to these operational variables. the compressor and turbine isentropric efficiencies (~84.0% and 86.9%, respectively) seem to be within the expected values for this kind of systems. according to the results for the optimal solution, the resulting chp system is able to produce about 111.6 kw of electrical power. considering the electricity production output, the optimal system has a heat-to-power ratio of λ = 1.12. in table 3, the results of efficiencies and the performance criteria for the optimized solution are revealed. considering the results for the various operational variables, an electrical efficiency of 35.1% was obtained that is slightly higher than the current values observed with the real micro-gas turbines (25–31%). the total efficiency of 74.4% is a reasonable value for the use of micro turbines on cogeneration applications. the performance of a cogeneration system can be evaluated by comparison with the separate production of heat and electricity. in this study, pes and ces were calculated considering the guidelines that established harmonized efficiency reference values for separate production in application of directive 2004/8/ec. the calculations included the correction factors regarding the average local climate and the avoided grid losses. the optimal configuration allows a pes of 13.7%. considering that the cogeneration reduces the amount of primary energy used to produce the same energy output (when compared with the conventional production), carbon emissions are saved and its quantification represents an environmental and economic benefit. also, it is possible to avoid ~29% of carbon emissions. thus, this result confirms that the cogeneration plants are systems that improve the efficiency in the energy production and that bring noteworthy environmental benefits. figure 4 presents the trends of carbon emission savings as a function of heat-to-power ratio and electrical efficiency. the carbon emission savings were calculated for different values of electric efficiency for the typical range of micro-gas turbines: 26%, 28%, 30% and 32%. results show that carbon emission savings are higher for turbines with higher heat-to-power ratios. also, the carbon emission savings increase for systems with higher electrical efficiencies. trends in co2 emissions from fuel combustion illustrate the need for a more sustainable energy paradigm. it seems that the use of more efficient energy conversion systems, such as cogeneration power plants, contributes for a more sustainable energy production scenario. 42 international journal of sustainable energy planning and management vol. 02 2014 technical-economic evaluation of a cogeneration technology considering carbon emission savings table 2: results for the decision variables of the small chp system. decision variables case 1 case 2 rc 5.743 5.630 ηc (%) 83.99 83.44 ηt (%) 86.92 86.67 t3 (k) 982.2 976.6 t4 (k) 1385.0 1381.8 w . (kwe) 111.6 89.4 table 3: efficiencies and performance results. efficiencies & performance criteria for case 1 (%) electrical efficiency, ηel 35.1 total efficiency, ηtotal 74.4 primary energy savings, pes 13.7 carbon emission savings, ces 28.7 5. conclusions a nonlinear constrained optimisation model was applied to simulate a small-scale cogeneration system based on micro-gas turbine technology, for a building application. it was numerically solved using a derivative free optimisation method. the results exposed the technical configuration that leads to the best economic output in terms of the maximized annual profit, including or excluding carbon emission savings. for both cases, the optimal solution disclosed a positive annual worth, being higher if the carbon emission savings are monetized. the case study proves that the cogeneration system represents a more efficient way to produce heat and power (positive pes) and allows a way to recover the investment costs by selling electricity to the grid. the results also prove that if the environmental benefits from using chp technologies are accounted economically, this type of technologies will become more attractive as an effective alternative for energy supply. obviously, the results of the optimal solution are deeply related to the constants assumed in the model, namely, the fuel price and the electricity fit. also, the optimal solution is strongly correlated with the components performance/cost equations included in the model. from a techno-operational perspective, the optimisation criteria include fuel savings, co2 emissions, and monetization of the energy surplus. all of these criteria can be applied to assess how well the system promotes the rational use of energy. in conclusion, this study showed that the use of optimisation models is an effective tool to perform a technical-economic evaluation of the cogeneration plant. the economic viability of chp mainly depends on the monetary operational savings to recover the investment costs, but it is evident that a more comprehensive assessment is required. therefore, a cost-benefit analysis can be used for the economic evaluation of chp systems by also including the assessment of the monetary socio-environmental costs and benefits of a capital investment over its useful lifetime. the principles of a cost-benefit analysis have to incorporate externalities into the mathematical model, i.e., the social and environmental impacts, as well as economic costs and benefits. in this way, costbenefit analysis can be used to estimate the social welfare effects of an investment. considering the climate characteristics in portugal, the viability of this energy power plants in small-scale applications is justified by the specificity of the portuguese energy policy in this issue, especially the figure of producer–consumer created by the decree-law 68/2002, the relative huge portuguese market potential for cogeneration of <150 kwe in size; and the cogeneration european directive 2004/8/ec that promotes the high efficiency cogeneration international journal of sustainable energy planning and management vol. 02 2014 43 ana cristina ferreira, manuel lopes nunes, senhorinha teixeira and luís barreiros martins 40 35 30 25 20 c a rb o n e m is si o n s a vi n g s (% ) 15 10 5 0 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 heat-to-power ratio electric efficiency 28% electric efficiency 32% electric efficiency 26% electric efficiency 30% figure 4: carbon emission savings versus heat-to-power ratio. development. plus, chp market competitiveness depends on interest taxes in the economical evaluation and sensibility analysis of the payback period, fuel price and fit. 6. acknowledgment the first author would like to express her acknowledgments for the support given by the portuguese foundation for science and technology (fct) through the phd grant sfrh/bd/62287/2009. 7. references [1] h. lund, a.n. andersen, optimal designs of small chp plants in a market with fluctuating electricity prices, energy convers. manag. 46 (2005) 893–904. 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[31] c. audet, j.e. dennis, pattern search algorithms for mixed variable programming, siam j. optim. 11 (2000) 573–594. international journal of sustainable energy planning and management vol. 02 2014 45 ana cristina ferreira, manuel lopes nunes, senhorinha teixeira and luís barreiros martins << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 22 2019 1 *corresponding author e-mail: jt@dem.uminho.pt international journal of sustainable energy planning and management vol. 22 2019 1–4 abstract the conference series international conference on efficiency, cost, optimization, simulation and environmental impact of energy systems – abbreviated ecos has been at the forefront of the scientific development in energy systems for over three decades. 2018 saw the 31st edition of ecos held in guimarães, portugal. the venue received the contribution of over three hundred papers ranging over 19 selected topics, covering aspects related to thermodynamics, energy systems integration and optimization, planning, cogeneration of heat and power, environmental issues, amongst others. a number of the contributions were invited to the present special issue of the international journal of sustainable energy planning and management, and eight of these were after the selection and reviewing process considered to bring the best contributions to the field. these articles address rural household appliance ownership, how much flexibility there is in the bolivian electricity system to accommodate wind power and photo voltaics, national exergy analyses of bolivia and thermal imagery of buildings to assess heat losses from these. other work focus on polygeneration system combining renewable energy sources, cogeneration of heat, cooling and power to supply district heating and cooling in a case area in italy. in the same area, a mobile thermal energy storage using phase change material is proposed as a way to connect heat sources and heat demands. for the future electrification of the transportation sector and for system design, reliable data on driving cycles are required thus methods for assessing these are presented, followed by analyses of high penetrations of electricity in the transportation system through various technological options. 1. electricity demand assessment the principal objective of energy supply is to improve of the quality of life, and this present a particular challenge if one considers rural communities in developing countries. the provision of energy – and here notably electricity – may be achieved through the dissemination of electrification projects. this however, requires accurate estimation of the households’ energy demand for proper system design. in order to avoid on-site data collection domingueza et al. [1] presents a methodology for modelling the appliance ownership of rural households in developing countries to project their electricity demand. based on data from more than 1,100 household samples from nigeria and ethiopia the region with the lowest electrification rates in the world the correlation between household survey data of ownership of the most common electricity-consuming appliances in developing countries and different socio-economic, demographic and geographic variables are investigated. using multiple development in efficiency, cost, optimization, simulation and environmental impact of energy systems josé carlos fernandes teixeira*, a and poul alberg østergaardb a mechanical engineering department, university of minho, 4800-058 guimaraes, portugal b department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords; appliance ownership; vres and exergy analysis; thermal imagery; polygeneration and heat storage; electric vehicles; url: http://dx.doi.org/10.5278/ijsepm.3359 mailto:jt@dem.uminho.pt http://dx.doi.org/10.5278/ijsepm.3359 2 international journal of sustainable energy planning and management vol. 22 2019 development in efficiency, cost, optimization, simulation and environmental impact of energy systems the analysis shows that the overall exergy efficiency is low (8.5% in 2016) although it also shows a steady increase during the timeframe. as a conclusion, a progressive change of the utilization of the colombian energy resources, favouring the use of electricity and natural gas instead of firewood is observed. this trend results from the development of a population from a rural to urban structure. 3. heat demand in buildings buildings account for a large share of the primary energy consumption. many initiatives at both european, national and municipal levels have mandated and promoted the increase in energy efficiency in buildings. monitoring is paramount to develop the correct policies. urquizoa et al. [4] developed an alternative method for mapping and monitoring heat loss from a group of buildings using imagery from an airborne thermal remote sensing and a building-based energy use framework to reduce energy use. the use of highresolution airborne sensors can be correlated with energy use to help interpret the imagery data and assess the influence of environment landscape, dwelling clustering in energy use. this method was applied to a low residential density location in newcastle, united kingdom, where the local area characteristics play an important part in the energy efficiency. the microclimate is likely to have affected the results due to vegetation, which in urban areas plays a significant role in regulating the climate. vegetation is an effective measure to create an “oasis effect’” and mitigate urban warming at micro levels. additionally, when vegetation is arranged throughout a city in the form of parks, the energy balance of the whole city can be modified by providing sources of moisture for evapotranspiration and more absorbed radiation can be dissipated in the form of latent heat rather than sensible heat. the results show that different buildings have similar energy usage. thermal imagery can be used for identifying heat losses and that vegetation regulate land surface temperature over the built environment. 4. advanced heating and cooling systems district heating and cooling (dhc) networks represent a viable and efficient way to distribute energy for space linear regression, the article investigates the number of electrical appliances owned by a rural household according to their socioeconomic, demographic and geographic characteristics, which can be used to calculate the electricity demand per household. 2. national energy systems in managing power grids, the variability and uncertainty of renewable energy sources (res) represent a major challenge. power systems must cope with uncertainty and variability in the demand, and supply of energy. candia et al. [2] evaluate the flexibility of the bolivian interconnected electric system against a high share of solar-pv/wind-onshore technologies taking into account the characteristics of the bolivian energy supply. the authors use the dispa-set tool developed for the european union power sector that focuses on the shortterm operation of large-scale energy systems by solving the unit commitment and energy dispatch problem. the study carried out shows that bolivian electric system flexibility depends mainly on the response capacity of its conventional units (mostly gas thermal, and hydrostorage), and on the interconnections between its internal areas. simulation results show that the power system in 2021 could integrate a much higher res share than usually believed. the system has enough flexible resources to accept between 25–30% of variable renewable energy sources (vres), which corresponds to about 964-1,240 mw of solar photo voltaics or 9681,244 mw of wind-onshore capacity in the bolivian electricity system. velasquez et al. [3] argue that economic models often take into account that resources are free and in most cases limitless. this leads to a growing scarcity of natural resources and a relentless rate of non-recoverable waste. the authors describe the application of 2nd law of thermodynamics to an energy performance analysis of colombia by analyzing the exergy mix in the energy consumption over a span of 40 years. this is focused on the characteristic irreversibility of each resource and the estimation of the irreversibility associated with each sector. based on statistical data published by the upme (energy and mining planning unit), the authors assume that the exergy performance of the economic sectors evolves at rates that, at least, reflect the same trend observed in the energy performance of the various energy sectors throughout the timeframe considered. international journal of sustainable energy planning and management vol. 22 2019 3 josé carlos fernandes teixeira and poul alberg østergaard concluded that a payback period of 7 years could be achieved which yields a 96.7% reduction in co2 emissions. 5. transportation systems the transportation sector is critical to the transition of the energy utilization. for the development of more effective solutions it is fundamental the definition of reliable and accurate driving cycles (dc). this will in turn will provide the best technical solutions for electric/ hybrid vehicles which include: battery sizing; powertrain specifications; strategies for efficiency and emissions reduction; energy logistics. driving cycles used for testing and development are based on driving patterns that should match in characteristic parameters (cp): speed, acceleration, operation mode, dynamics, speed acceleration probability distribution. for assessing the accuracy of a driving cycle to represent a driving pattern, stochastic (micro-trips, markov-chains) and deterministic (mwd-cp; minimum weighted difference characteristics parameters) methods can be used. huertas et al. [7] established that a dc represents a driving pattern when the cps of the driving cycle are similar to the cps of the driving pattern. they evaluated the degree of representativeness as the relative difference between paired cps. the authors find that for a typical route with a high variety of driving patterns, the mwd-cp method produced a dc that describes the driving pattern in that region with the highest level of representativeness. all of its cps were similar to the cps of the driving pattern with relative differences below 20% except for idling time. the mwd-cp method is a deterministic, repeatable and reproducible method designed to construct dcs that reproduce real energy consumption. these important advantages over the other methods of constructing driving cycles are mitigated by its major drawback which is the need of weighting factors that vary with the region under consideration. electrification of vehicles is the major route for decarbonisation and emission reduction in the transport sector. the development of solutions such as hybrid, plugin hybrid electric vehicles, and electric vehicles depends on the vehicle segment and utilization. in order to properly design the energy system one has to account for physical, economic and environmental variables, also known as environomic design. dimitrova and maréchal [8] present an application of the environomic heating and cooling in urban areas with high density demand. in the european union, the energy efficiency directive 2012/27/eu promotes these systems to increase the use of res and to increase the efficiency, by introducing the definition of ‘efficient dhc’ based on more sustainable multi-energy systems which require an increase of the primary energy saving (pes) and a reduction of the operational costs and greenhouse gases emissions. lazzeroni et al. [5] present the design stages of a case study of a polygeneration system supplying an existing dhc network in the north of italy through an optimization tool. different possible configurations of a highly complex multi-energy system with res integration are proposed and studied by means of the optimization tool xems13. this is able to minimize the operational costs considering technical constraints, energy prices and the regulatory framework. the economic optimization presented in this paper is based on a mixed integer linear programming (milp) formulation. four scenarios are considered for analysis. they range from separate heat and cooling supply, cogeneration of heat and power (chp) and various res and thermal storage. taking into consideration the energy utilization profiles, the authors show that by adjusting the set point of the solar collector the low enthalpy from the collectors and the chp cooling system could be coupled with a heat pump to supply heat at a higher temperature to the district heating. this configuration results in a pes of 25.9% and an overall efficiency of 91.5%. industrial facilities including power plants are potential sources of cheap and low-carbon waste heat, which is often not utilized due to lack of technoeconomically viable options. distance between the source and the user and mismatches between demand and supply, in addition to costs are the main limiting factors. innovative technologies and approaches may bring such low value sources to the end user. bose et al. [6] proposed a novel mobile thermal energy storage (m-tes) systems employing latent heat as an alternative to district heating. in this concept, the waste heat is stored as latent heat in a phase change material (pcm) container that is used to deliver heat to the end user. in the present study, a hotel resort is selected as a case study. heat is available from an energy crop anaerobic digestion (biogas) chp plant. the energy use is integrated with auxiliary existing thermal systems electrical boilers. for the various scenarios analyzed (of the m-tes and energy utilization patterns) it was 4 international journal of sustainable energy planning and management vol. 22 2019 development in efficiency, cost, optimization, simulation and environmental impact of energy systems assessment of high variable renewable energy penetration in the bolivian interconnected electric system, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi.org//10.5278/ijsepm.2659 [3] hi velasquez, cao loaiza, jc maya, d florez-orrego, and s lopera, exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi.org//10.5278/ijsepm.2552 [4] j urquizoa, c calderón, and p james, modelling the spatial energy diversity in sub-city areas using remote sensors, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi. org//10.5278/ijsepm.3324 [5] p lazzeroni, s olivero, m repetto, f stirano and v verda, design of a polygeneration system with optimal management for a district heating and cooling network, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi.org//10.5278/ ijsepm.2450 [6] a bose, ms ahmed, dd kuzeva, and j van kasteren, technoeconomic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi. org//10.5278/ijsepm.2544 [7] ji huertas, lf quirama, md giraldo, and j díaz, comparison of driving cycles obtained by the micro-trips, markov-chains and mwd-cp methods, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi.org//10.5278/ijsepm.2554 [8] z dimitrova and f maréchal, optimal designs for efficient mobility service for hybrid electric vehicles, int. j. sustain. energy plan. manag. 22 (2019). http://dx.doi.org//10.5278/ ijsepm.2473 optimization methodology for optimal design and operation parameters of the vehicle energy system that deals not only with the energy consumption and economics, but also with the environmental impacts. a multi objective optimization with three objectives is used to define solutions for optimal efficiency, economic and environment, measured in terms of global warming potential for a life span of 100 years. the model assumes the new european driving cycle (nedc) to model the energy flow of a hybrid-diesel vehicle. for energy storage, both batteries and capacitors are considered. the optimization methodology is based on a genetic algorithm and is applied for defining the optimal set of decision variables for powertrain design. the optimization solutions for the three objectives are presented in a pareto front, which shows that gwp decreases with efficiency albeit at an increasing cost. the solutions in the lowest emissions zone show that the maximal powertrain efficiency on nedc is limited on 45.2% and the minimal tank-to-wheel co2 emissions are 30 g co2/km. they have the maximal cost – 75,000 eur. references [1] c. domingueza, k. orehounig, and j carmeliet, modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa, int. j. sustain. energy plan. manag. 22 (2019). http:// dx.doi.org//10.5278/ijsepm.2564 [2] raj candia, jaa ramos, slb subieta, jgp balderrama, vs miquélez, hs florero, and s quoilin, techno-economic http://dx.doi.org//10.5278/ijsepm.2659 http://dx.doi.org//10.5278/ijsepm.2552 http://dx.doi.org//10.5278/ijsepm.3324 http://dx.doi.org//10.5278/ijsepm.3324 http://dx.doi.org//10.5278/ijsepm.2450 http://dx.doi.org//10.5278/ijsepm.2450 http://dx.doi.org//10.5278/ijsepm.2544 http://dx.doi.org//10.5278/ijsepm.2544 http://dx.doi.org//10.5278/ijsepm.2554 http://dx.doi.org//10.5278/ijsepm.2473 http://dx.doi.org//10.5278/ijsepm.2473 http://dx.doi.org//10.5278/ijsepm.2564 http://dx.doi.org//10.5278/ijsepm.2564 _goback international journal of sustainable energy planning and management vol. 20 2019 21 1corresponding author e-mail: anna.volkova@taltech.ee international journal of sustainable energy planning and management vol. 20 2019 21–36 abstract the consumers are considered to play one of the most significant roles in the district heating transition process towards the 4th generation (4gdh). unfortunately, the lack of information and widespread consumer ignorance of interconnections and dependencies in the district heating system (dhs) can lead to a situation where consumers are not interested in the development of the district heating system, or might even choose other heat sources. one of the possible solutions to provide information and educate consumers is a user-friendly, simplified mobile app that can show actual heat consumption structure, provide the possibility to compare the district heating supply with other heat supply solutions and provide information on how consumer behaviour affects the district heating system and how the district heating system transition towards the 4th generation will change the primary energy consumption and co2 emissions. in this article, the authors present the concept and algorithm of a dhs promo mobile app that will be used at the national level in estonia, that will allow consumers even with an insufficient amount of data available to each apartment/building owner to receive comprehensive information about the existing dhs and analyse how dhs improvements will affect the fuel mix and consumption amount required for heat supply per consume. 1. introduction the european union has made it a priority to become the leader in the clean energy transition by committing to reduce co2 emissions by at least 40% by 2030. the main goals within this framework include improving energy efficiency, expanding renewable energy use and providing a fair deal for consumers. district heating (dh) technologies could make a sufficient contribution to the implementation of these goals. as shown in the latest overview of the existing district heating systems (dhss), heat roadmap europe 2050, 60 million (12%) citizens, 141 (28%) cities, and 287 (57%) regions across the eu member states are connected to dh networks [1]. dh is considered one of the most energy efficient and environmentally friendly ways of supplying cities with heat, compared to individual solutions. individual heating solutions have been undergoing sufficient changes, providing consumers with energy-efficient and renewable energy based heat generation [2–4]. dh must be subjected to considerable changes to compete with other heat supply solutions, in accordance with the new conditions associated with renewable energy sources and buildings with low heat demand [5]. the concept of the 4th generation district heating (4gdh) clearly identifies the wide range of changes and trends required for the transition of the existing dhss into the future sustainable dhss [6]. according to this concept, future dhss must be able to supply low temperature (<50–60 ̊ c) for space heating and supply of domestic hot water in buildings, distribute heat through networks with low development of a user-friendly mobile app for the national level promotion of the 4th generation district heating anna volkova1,a, eduard latõšova, vladislav mašatinb and andres siirdea a deparment of energy technology, tallinn university of technology, ehitajate tee 5, tallinn, 19086, estonia b as utilitas tallinn, punane 36, 13619 tallinn, estonia keywords: eco-feedback; mobile app; consumers; buildings; 4gdh; uri: http://dx.doi.org/10.5278/ijsepm.2019.20.3 mailto:anna.volkova@taltech.ee http://dx.doi.org/10.5278/ijsepm.2019.20.3 22 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating heat losses, increase the share of renewable energy sources and waste heat recovery in heat generation, integrate into smart energy systems and ensure proper planning. as stated in [7], there is a clear understanding of technological aspects of the 4gdh but the biggest challenge faced by the researchers is understanding the implementation of the 4gdh with an emphasis on local conditions and legislation. the various barriers encountered by the existing dhs during the transition process towards the 4th generation have been explored in a previous study [8]. many of the barriers are related to consumers, consumer devices and consumer behaviour. first of all, low-temperature dh can be efficiently used when connected to buildings with low heat demand [9]. for successful implementation of low-temperature heat distribution systems, buildings lacking in energy efficiency must be renovated and additional refurbishment may be needed [10,11]. another factor that can be considered an obstacle to the transition towards lowtemperature heating is consumer heating devices. high radiator design temperatures as a barrier introducing lower supply and return temperatures have been discussed in many studies over the last years, for example in [12–14]. return temperature reduction can be achieved by replacing the existing heating devices with larger radiators [13], or by optimising radiator system control via a heat exchanger [15]. li and svendsen have considered improving in-house substations (an instantaneous heat exchanger and a special designed dh storage tank) to be another possibility to use low-temperature dh in existing buildings [16]. besides forced exhaust ventilation has a negative impact on dh by increasing return temperature and practically eliminating dh consumption during summer [17,18]. the domestic hot water (dhw) recirculation system in multifamily buildings is another source of high return temperatures. introduction of consumer dhw substations for each flat with a pipe volume of up to 3 litres and an instantaneous heat exchanger [19] or installation of micro hot water storage tanks [20] can be considered as possible solutions. all of the above-mentioned solutions depend on the consumer and require strong motivation [21]. consumers are assumed thought to play one of the most significant roles in the dh transition process towards the 4th generation. the consumers determine network growth and its parameters, and they can affect heat loss by the heat consumption density and average return temperature. one of the factors, that can serve as incentives to affect consumer behaviour is applying of dh tariff components (i.e. peak load component, flow component) [22]. dh tariffs can be successfully implemented, if consumers are well informed about dh system operating. a lack of information and widespread consumer ignorance of interconnections" and dependencies in the dhs can lead to a situation where consumers are not interested in the development of the dhs, or may even choose other heat sources. it has been proven that consumer knowledge and information availability concerning this topic are among the most important factors influencing long-term and short-term decisions [23]. in addition, there are many studies on eco-feedback that show how people’s behaviour changes when they observe daily energy consumption, i.e. [24,25]. most of these studies deal with electricity consumption [25–27] but some of them include heat consumption [28,29]. eco-feedback is usually based on online data obtained from remote energy meters. energy operators use it to communicate with consumers, inform them, and this helps developing the dhs. unfortunately, remote metering is not available for all dh networks. even if it is available for a dhs, a situation may arise where information is not available to the apartment owners, but only to the administration of the entire multifamily residential unit. in this case, a user-friendly mobile app that could inform, educate, as well as provide the consumer with approximate calculated parameters based on the real dhs (not building) input data could be offered as an option. in this article, the authors present the concept and algorithm of a dhs promo mobile app that will be used at the national level in estonia. the second section of this paper is devoted to background information on the state of dh and the necessity of a dh promo app in estonia. the third section describes the concept of the mobile app. the fourth section presents the application algorithm, how input-output data is received or calculated, including an example. the final section of the article includes conclusions and arguments about further development of the mobile app. 2. background there are two main reasons why consumer awareness is so important for the dh sector in estonia. first, dh is crucial for the estonian energy sector. the total annual heat consumption in estonia is 6700 gwh; in 2016, 69% of that amount (4700 gwh) was supplied by dh [30]. in accordance with the amendments made to the estonian district heating act in 2016, local governments have established 239 district heating regions (dhr) within the boundaries of their respective administrative territories [31]. the dhr are areas where consumer devices are provided with heat international journal of sustainable energy planning and management vol. 20 2019 23 anna volkova, eduard latõšov, vladislav mašatin and andres siirde by dh in order to ensure a secure, reliable and effective heat supply. when a dhr is established, connection to the network must be mandatory for all buildings within the dhr (except for buildings who did not have dh prior to and during the time the dhr was established), and the consumers may not choose an alternative heating source (e.g., local electric heating, geothermal heating, heating stoves, etc.). another reason is the fact that pursuant to the proposed revised renewable energy directive of the european union, dh operators will be obliged to inform their consumers about the fuel used in heating and the efficiency of the system. in accordance with the proposed directive, consumers must have the right to withdraw from inefficient systems. the authorities and energy companies are interested in ensuring that consumers are informed about the benefits of dh, as well as the impact of consumer behaviour on dh. it has been proven that when consumers have access to comprehensible visual information on energy consumption, it prompts them to learn about their energy habits and helps address energy usage information gaps [24]. one of the best solutions to provide consumers with data obtained using remote metering. due to the very rapid development of intelligent energy networks in recent years, smart metering has been implemented into dhss. smart metering can measure heat consumption, as well as exchange information on heat consumption and operation status through two-way communication between the dh operator and consumers. using the data obtained, dh operators can offer demand site manage ment platforms to customers via i.e. user-friendly monitors installed within dwelling [32], home heat reports, virtual customer environments, and mobile apps [33]. advanced mobile apps can provide consumers with personalised heat consumption information; historical comparisons of heat use; energy efficiency recommendations, etc. [34]. unfortunately, the use of smart heat meters is far behind that of smart electricity meters and remote metering is not available for every consumer [33]. not all dh systems can provide consumers with remote metering possibility. besides is a multifamily residential building, where most of the data provided by smart heat meters is not available to each resident, but only to the property management staff. calculationand assumption-based web systems and mobile applications can be used for educational, informational and promotional purposes. a mobile app was chosen to be developed for these purposes because a comparison of a mobile app and a web-based system has shown that the mobile app is more efficient in providing eco-feedback and improved system accessibility, which increases user engagement [35]. the goal of the mobile app is, based on the limited data that is available, to provide the user with comprehensive and rather detailed information regarding heat generation and fuel consumption. this can affect consumer decisions and behaviour in both the short and long-term. this study will introduce the concept of a mobile app that is aimed at promoting dh at the national level in estonia. 3. concept the working title for the mobile app is nutikk (nuti kaugkütte smart district heating). the main idea is to show the apartment/building owner that a particular apartment/building is a part of the dhs, show how much fuel is used to generate heat for that particular apartment, compare the current heating supply solution with other heating supply solutions available, show how dhs development (in the context of the 4gdh) would affect the primary energy consumption for that apartment and the co2 emissions from heat generated for that particular consumer. the calculated results are presented for 3 modules: the existing district heating module, individual heating (ih) (for mobile app development first stage natural gas based), and the 4th generation district heating (for the future dhs development scenario). it was determined what parameters should be entered by the consumer and what information can be uploaded online, what business logic, including workflows will be applied to the mobile app, and what database should be available. table 1 shows the input data that should be provided by the consumer/user. when the consumers are the owners of the building they receive bills with monthly building heat consumption information. if the consumer lives in a multifamily residential building, determining the amount of heat consumed by a single apartment is more complicated. usually, apartment owners receive bills where the cost of heat consumed by the apartment is indicated. typically, this cost includes the cost of heat consumed by the entire building, with the communal heating cost split between the apartments. dh tariffs are public information in each dhr, so knowing the cost and tariffs, it is possible to calculate the annual heat consumption for one apartment. if the 24 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating as regards daily/monthly consumption determination, it will be discussed in section 4.1. the data required for 3 modules is detailed in table 2. by putting in the data listed in table 1, the consumer will be able to receive the following information for all 3 modules (existing district heating, individual heating and the 4th generation district heating): • annual and today’s heat production required by the apartment/building (kwh)(this data will be identical to heat consumption in case of using an individual boiler) • annual and today’s primary energy consumption for heat production required by the apartment/ building (kwh) • annual and today’s fuel (by fuel type) consumption for heating the apartment (kwh and natural units) • annual and today’s co2 emissions caused by heat generation required by the apartment/ building (tonnes) • an example of an input and output form is shown in section 4.4. 4. calculation of annual and daily parameters the description of calculations and dependencies required for the operation of the mobile application can be found below. 4.1. calculation of today’s consumption the mobile app makes it possible to calculate not only the annual parameters, but also the parameters associated with today’s/daily heat consumption. this is important for a better understanding of the dhs processes, because consumer can see the relationship between outdoor consumer doesn’t have an opportunity to do so (for example, they are planning to buy a new apartment and don’t have access to the bills yet), they can get the annual consumption information by indicating whether it is a multifamily or single family house, whether domestic hot water is provided by dh or not, the energy efficiency class and heating capacity of the apartment/house. during the first stage of the mobile app development, the data obtained from the app prototype concerning annual consumption and energy efficiency class of 1239 consumers (tallinn dh system) was analysed. based on the collected data on annual heat consumption, a corresponding building energy efficiency class was determined. another input parameter is the location of the consumer. the location is used to provide information on the data, related to dhr and dh operators that supply heat to the region. in addition, depending on the location, it is possible to determine the daily heat consumption based on the outdoor temperature. the location is linked to the average outdoor temperature that is downloaded from the estonian state weather service website. there are 20 temperature measuring points throughout country that can be used to obtain data online. the mobile app’s business logic manages communication between the end user interface and the database, including various groups of data. the first group of data and dependencies is needed to determine daily/monthly consumption based on annual consumption. the second group includes existing data on heat generation for dhrs of estonia, as well as information on energy sources and consumption structure, based on the season, air temperature and heat load. the third group concerns individual heat consumption. the fourth group is associated with the dh development scenario evaluation. table 1: data provided by the consumer obtained input data manually other annual consumption from bills (12 months) via calculations, based on the following information: • multifamily/single family • domestic hot water use • energy efficiency class • floor area location from the list provided via geographical location today’s average temperature from the list downloaded from the estonian state weather service for various locations international journal of sustainable energy planning and management vol. 20 2019 25 anna volkova, eduard latõšov, vladislav mašatin and andres siirde table 2: mobile app initial data type of data dh ih 4gdh annual heat production in the dhr dh operators — the dhr development plan, scenario modelling annual heat loss dh operators — scenario modelling, dhr development plan, evaluation of the effects of reducing supply/return temperature annual fuel consumption, by fuel type dh operators, assumptions one type of fuel boiler energy efficiency in case of electricity use, national pef (primary energy factor) will be taken into account scenario modelling by adding new energy sources, replacing existing ones, district heating regions’ development plans, national development plan of the energy sector total co2 emissions co2 emission factors co2 emission factors future national co2 emission factors relative heat loss based on the outdoor temperature dh operators, modelling/ assumption — dh operators, future obligations, scenario modelling/assumption fuel share based on the outdoor temperature dh operators, in case of 2 and more fuel-based (base and peak heat plants) calculations, modelling — development scenario modelling temperature and heat consumption. daily heat consumption is easy to determine with the help of remote metering, but if smart metering is not available, it can be calculated based on annual consumption. this parameter is required for the 3 modules. hourly based heat load can be calculated using daily average outdoor temperature [36]. a degree days approach is used to calculate the daily heat consumption based on the average outdoor temperature. according to research conducted by loigu and kõiv, there were determined six regions in estonia with degree days diverse enough to cover the entire country [37]. estonia’s regions of the heating degree days and the centres whose outside temperatures were used to determine the heating degree days of the region, are jõhvi, tartu, tallinn, valga, pärnu, ristna. figure 1 shows the number of days when the temperature was below a particular degree for that year based on yearly averages (calculated based on 30 years of metering). it was assumed that when the average daily outdoor temperature is above 10 ˚c, there is no need for space heating in the building. the idea is that the amount of –25 –20 25 20 15 10 5 0 o u td o o r te m p e ra tu re ( °c ) –5 –10 –15 duration (days) 0 30 60 90 120 150 180 210 240 270 300 330 360 jõhvi valga tartu tallinn pärnu ristna figure 1: outdoor temperature duration curves for estonian regions 26 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating heat required for space heating per year will be consumed during the period when the outdoor temperature is below 10 ˚c. knowing the duration of each temperature, it is possible to calculate relative heat consumption coefficient based on the average outdoor temperature on a particular day using the eq. (1). where rqi is relative heat consumption coefficient, when average temperature per day is ti ti is average temperature per day, ˚c tb is base temperature, ˚c dti is ti duration per year; i is day number, i = 1….n. base temperature is the balance temperature at which a building doesn't need heating. base temperature values used for further analysis are indicated in table 3 this coefficient shows the percentage of the annual consumption value consumed per day based on the weighted average outdoor temperature for that day. the coefficient change for the average base temperature of 16˚c is shown in figure 2a an example of a coefficient calculated for tallinn for various base temperatures is shown in figure 2b heat consumption per day can be calculated by solving the eq. (2) where qci is heat consumption per day, when average outdoor temperature is ti, kwh qcy building/apartment annual heat consumption, kwh this method for determining daily heat consumption was validated, using real heat consumption data. daily data on heat consumption for space heating was collected via remote intelligent metering during 2017 from consumers in various dhrs (table 4). average outdoor ci qi cyq = r q (2) 1 100% ( ) = − = − ⋅∑ i b i qi n b i ti t t r t t d (1) table 3: base temperatures for multifamily buildings multifamily buildings base temperature average for dh consumers 16˚c old building, no renovation (natural ventilation) 17˚c old building, renovated (natural ventilation) 13˚c multifamily building (forced exhaust ventilation) 15˚c –25 –20 –15 –10 –5 50 10 –25 –20 –15 –10 –5 50 10 0.2% 0.0% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% outdoor temperature (°c) outdoor temperature (°c) re la tiv e c o n su m p tio n ( fr o m a n n u a l) p e r d a y re la tiv e c o n su m p tio n ( fr o m a n n u a l) p e r d a y 0.2% 0.0% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% a b 16 °c 15 °c 13 °c 17 °c jõhvi valga tartu tallinn pärnu ristna figure 2: coefficient rq depending on average outdoor temperature for average base temperature 16˚c in different regions (a) and for different base temperatures in tallinn (b) table 4: validation data collection location tallinn kärdla haapsalu region tallinn ristna pärnu number of consumers 51 43 51 consumer type multifamily, non-renovated, one city district, one building type multifamily, both renovated and non-renovated multifamily, both renovated and non-renovated international journal of sustainable energy planning and management vol. 20 2019 27 anna volkova, eduard latõšov, vladislav mašatin and andres siirde temperature for the regions was obtained from the estonian state weather service. the coefficients were calculated for all consumers by dividing daily heat consumption by annual heat consumption. the graphs used for the analysis are shown in figures 3a, 3b, 3c. first of all, a a correlation coefficient was calculated for each consumer to determine how the relative heat figure 3: relative heat consumption coefficient, calculated for consumers in tallinn (a), haapsalu (b), kärdla (c). a –15 –10 –5 0 5 10 r qi –15 –10 –5 0 5 10 –15 –10 –5 0 5 10 b c r qi r qi average outdoor temperature, t i , °c average outdoor temperature, ti, °caverage outdoor temperature, t i , °c average outdoor temperature, t i , °c 28 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating coefficient correlates with the average outdoor temperature. figures 4a, 4b, 4c show, that there is a strong correlation (>0.5) in almost all cases. for haapsalu, 6% of consumers have a weak correlation (<0.5), for kärdla 11%, and for all analysed consumers in tallinn the correlation is strong enough in all cases. this proves that daily heat consumption depends on the outdoor temperature, which is obvious. the fisher criterion was used to test the adequacy of the model. usually, the fisher criterion is used to test the figure 4: correlation coefficient for rqi (ti) for measurements in tallinn (a), haapsalu (b), kärdla (c) correlation coefficient 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 a b 31 1 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 consumers 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 31 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 4143 45 47 49 51 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43c consumers consumers correlation coefficient correlation coefficient international journal of sustainable energy planning and management vol. 20 2019 29 anna volkova, eduard latõšov, vladislav mašatin and andres siirde adequacy of regression models based on experiment data and how it was used, for example, for fuel or power consumption [38,39]. but another application of the fisher criterion is to test whether the model is adequate to reality, which can be used for analyses. fisher criterion has shown, that all measurements in tallinn and kärdla are adequate to the model for all cases, when fisher criterion is lower than critical value. fisher criterion analysis has shown that the selected method is not adequate and cannot be applied to only two consumers in haapsalu. it can be explained by the fact, that people are not living in these buildings during all the year and space heating is switched on and off for some periods. these two cases have been excluded for further analysis. the last parameter that was used to validate the proposed method is the coefficient of determination. the coefficient of determination indicates how close the calculated results are to reality or to the experimental results. the coefficient of determination is calculated by solving the eq. (3). where r2 is coefficient of determination ŷi is calculated parameter i yi is measured parameter i yi is average value of all measured pareters i experimental results of coefficient rq were compared with the results calculated using various base temperatures by eq. (1). the figure 5 shows that for consumers in haapsalu (figure 5b) and kärdla (figure 5c) there are cases where the highest coefficient of determination is related to the base temperature of 16˚c, but for some cases it is 17˚c. there are cases where the highest coefficient of determination is related to the base temperature of 13˚c, which can be explained by the fact that that consumer’s building is fully renovated. the analysis of tallinn consumers indicates that there are no cases where the highest coefficient of determination is related to the base temperature of 15˚c (figure 5a). this can be explained by the fact that there are no buildings with exhaust ventilation among the analysed consumers at all. many conclusions can be made based on the analysis of the coefficient of determination, but the key conclusion is that the base temperature could be used as another input parameter to provide more accurate results to the 2 2 2 ( ) 1 ( ) ^ − − = − − ∑ ∑ i i i i y y r y y (3) consumer. for the basic version of the mobile app, the average base temperature of 16˚c is used. but the pro version will include the possibility to use an additional parameter – building type parameter (according to the renovation degree and ventilation). in case domestic hot water is used, heat consumption necessary for dhw should be added. usually the daily consumption of hot water is the same throughout the year. according to the method for calculation the energy performance of buildings, that is used in estonia, the average heat consumption is 30 kwh/m2/year for multifamily buildings [40]. if domestic hot water is provided by dh, the daily heat consumption is calculated using eq. (4) where qci is heat consumption per day, when average outdoor temperature is ti, kwh a is floor area, m2 4.2. calculation of annual parameters the annual heat generation required for heating the 1st and 3rd modules was calculated by solving eq. (5) [41] where qpy is annual heat generation, kwh qhl is relative heat loss. it is assumed that the heat loss will be lower due to renovations and supply temperature reduction. for the 2nd module, if a gas boiler is used, the heat consumed will be equal to the heat produced. the annual fuel consumption required for heating a single apartment can be calculated by solving eq. (6) where qf y is annual fuel consumption, required for apartment heating, kwh j is heat plant, j=1…m sj is share of heat produced, by j heat plant; ηj is energy efficiency of j heat plant. 30 365 = +c i q i c y a q r q (4) 1 c y py q q qhl = − (5) m j f py jy j s q q n = ∑ (6) 30 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating annual fuel consumption by k fuel type for an apartment is calculated using eq. (7). f yf k fk q s q= (7) where qf k is annual fuel consumption of k fuel type, kwh; k is fuel type sf ky is share of k fuel in annual primary fuel consumption. figure 5: coefficient of determination of the consumer analysis in tallinn (a), haapsalu (b), kärdla (c). coefficient of determination coefficient of determination 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 a b c 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 coefficient of determination base temperature 13 °c base temperature 16 °c base temperature 13 °c base temperature 16 °c base temperature 16 °c base temperature 15 °c base temperature 17 °c base temperature 13 °c base temperature 15 °c base temperature 17 °c base temperature 15 °c base temperature 17 °c international journal of sustainable energy planning and management vol. 20 2019 31 anna volkova, eduard latõšov, vladislav mašatin and andres siirde furthermore, annual fuel consumption is calculated in natural units using data about fuel lower heating value. the following variations are available for fuel consumption in existing dhss: • for single-fuel dhss, information on the energy efficiency of the heating plants should be provided; • for dhss with one type of fuel used for base load and a different type of fuel used for peak load, information on the heat capacity of the plants should be obtained or assumed; • for district heating systems with a complex mix of fuel, precise information should be obtained from the district operator. however, in estonia, there are few dhss of this type, in fact, the most complex system is located in the tallinn dhr, where wood chips, peat, waste, and natural gas are used for heat generation. the same data should be provided for the 4gdh module. the data is based on district heating development plans that are available to the public. based on the methodology presented in the paper the most optimistic scenarios will be available in the first version of the app. in the future, various possible development scenarios will be provided for consumers. for individual heating, in the case of using a gas boiler, the energy efficiency of individual boilers should be known; however, average values can also be used. annual co2 emissions are calculated by solving the eq. (8) where co2y annual co2 emissions, kgco2/kwh co2k is emission factor for k fuel type, kgco2/kwh 4.3. calculation of today’s parameters as mentioned above, it is very important to provide consumer data related to daily heat consumption, since this information is not as abstract as the annual parameter, and thus more consumer-friendly. today’s heat consumption based on the average outdoor temperature per day was discussed in section 4.1., and is calculated by solving eq. (2) when dhw is not provided by dh, and by solving eq. (4) when the water is supplied by dh for all three modules. 2 2 l y kk f k co q co= ∑ (8) today’s heat generation required for heating the 1st and 3rd modules is calculated using eq. (9). where qpi is today’s heat generation, kwh qhli relative heat loss when average outdoor temperature is ti for both the first and third modules, the relative heat loss was plotted for each dhr. an example of the relationship between the relative heat loss and outdoor temperature for tallinn is shown in figure 6. for the second module, today’s heat consumption is equal to today’s heat production. to assess the relationship between fuel consumption and temperature, fuel share diagrams were created for the first and third modules using eq. (10). where ski share of k fuel, when average outdoor temperature is ti skj share of k fuel in fuel consumption, by heat plant sji is share of heat produced, by j heat plant when average outdoor temperature is ti examples of diagrams for the existing and projected situations for tallinn are shown in figure 7a and figure 7b. fuel consumption is calculated using eq. (11) where qf i is today fuel consumption, required for apartment heating, kwh the principles for calculating annual emissions are used to calculate daily co2 emissions, and they are related to fuel consumption. 4.4. example the example used in the paper assumes that the consumer lives in one of the apartments of a multifamily residen tial building in the tallinn dhr. remote metering data is not available for the apartment owner. the only 1 i p i qc q qhli = − (9) m k j j i k i pi j j s s s q n = ∑ (10) sm ji f k p i jii j q s q n = ∑ (11) 32 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating information available for the apartment owner comes from bills where the costs of dh and domestic hot water are indicated. summing up the cost of heating and dividing it by the heating tariffs makes it possible to determine that the heat consumption per apartment is 10450 kwh. if the consumer doesn’t have access to bills, but they provide information about the efficiency class (d), building type (multifamily residential), hot water (dhw is provided by dh), and floor area (65 m2), the annual consumption will amount to 10075 kwh. for further calculations, the information obtained from the bills will be used. it is assumed that today’s outdoor temperature is -5˚c. the consumer input data and the results presented to the consumer are shown in figure 8. as it can be seen, even with an insufficient amount of data available to each apartment/building owner, it is possible for the consumer to receive comprehensive information about the existing dhs, compare it with individual heating solutions, and analyse how dhs improvements will affect the fuel mix and consumption amount required for heat supply per consumer. it is also possible to compare these parameters with other dhrs. the information is presented in a consumer-friendly format. as a result, the consumer will be more educated and aware of the information. it is planned that by the end of 2019 this mobile app will be available to every resident of estonia. at the time of writing this paper, the first prototype for 3 dhrs is undergoing testing. 5. conclusions improving and promoting dh is very important for the successful development of the energy sector in estonia. due to government support, connection to dh is mandatory in almost all estonian cities. the dh sector must be drastically improved and modified during the transition process toward the 4th generation dh. consumers are considered to be one of the main factors associated with barriers encountered in this process. buildings with high heat consumption, high return temperatures, non-efficient communication and cooperation between consumers and dh operators prove to be one of the most crucial a b 100% 80% 60% 40% 20% 0% daily fuel share natural gas wastes biomass natural gas wastes biomass solar average outdoor temperature average outdoor temperature –24 –21 –18 –15 –12 –9 –6 –3 0 3 6 9 12 15 18 21 24 –24 –21 –18 –15 –12 –9 –6 –3 0 3 6 9 12 15 18 21 24 daily fuel share 100% 80% 60% 40% 20% 0% figure 7: fuel share by type, based on average outdoor temperature in tallinn for existing dhs (a) and for 4gdh scenario (b) relative heat loss, % outdoor temperature, °c –25 –20 –15 –10 –5 0 5 10 15 20 30 35 40 45 15 25 20 0 5 10 existing dhs 4gdh figure 6: relative heat loss based on outdoor temperature for existing and future dhss in tallinn. international journal of sustainable energy planning and management vol. 20 2019 33 anna volkova, eduard latõšov, vladislav mašatin and andres siirde barriers. the situation can be improved by affecting consumers, changing consumer behaviour and influencing consumer decision-making in the short and longterm. the mobile app can be viewed as one of the possible options to educate and inform consumers, promote the 4th generation dh, and improve cooperation between consumers and operators. typically, mobile apps and web applications are based on data obtained via remote metering systems. but in the case of multifamily residential buildings, not all dhss are equipped with remote metering systems, and even if remote metering is available, only the building administration has access to this data. the consumer won’t be able to obtain accurate results using the mobile app, but they will get approximate data on dhs operation and the structure of fuels used for heat production. presented concept and algorithm of a dhs promo mobile app or some concept components, such as data processing and presentation approach can be used for web-based or mobile-based user-friendly applications in other countries, where data regarding dh systems/utilities and outdoor temperature duration are available. based on the annual consumption, daily heat consumption is calculated using the degree days’ approach, which varies for different regions of estonia. by changing the base temperature for different types of buildings, it is possible to get more accurate results regarding the daily heat consumption based on the outdoor temperature. for the app to function properly, rather detailed information on the dhr should be provided. for sure there are risks that not all dh operators will be ready to cooperate and provide data, related to dhs operation. but usually, dh operators are interested in educating consumers and providing this my consumption heat supply 10 450 kwh 14.1 kg 21.9 kg 2.8 kg 0.44 kwh 2.2 m3 7.2 m3 3.8 kg 9.7 13.5 1.0 * * * * * * * * location results confirm data results change location heat supply my consumption location energy wood chips natural gas wastes peat solar emissions kg district heating 4g district heating individual per year fule consumed todayconsumption is known consumption is not known domestic hot water from district heating input data per year per year annual heat consumption 10 450kwh 60.60 1620 today december 1 2 3 figure 8: example of mobile app nutikk input/output 34 international journal of sustainable energy planning and management vol. 20 2019 development of a user-friendly mobile app for the national level promotion of the 4th generation district heating information, because the mobile app would partially fulfil the obligation to inform consumers about the fuel used for heat generation and the efficiency of the system, in accordance with the proposed revised renewable energy directive of the european union. besides, rather detailed information about dhs operation in estonia is public. it is planned, that mobile app will be free of charge and available for all dh consumers in estonia. the mobile app may include additional features to provide more accurate and detailed information, i.e., the analysis of high return temperature impact on the dhs efficiency. the best data presentation format should be determined regarding heat production bye chp, as well as the use of the centralised thermal energy 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the resident-user engagement into the national energy strategy is pivotal to the project as it is considered to be one of the most important challenges. the italian minister of economic development and enea has entered into a programme agreement for the execution of the research and development lines of general interest for the national electricity system. in particular, as part of the “development of an integrated model of the urban smart district” a smart home network experimentation has been carried out in centocelle, in the south-eastern outskirt of rome. this project aims to develop a replicable model able to monitor energy consumption, indoor comfort degree and safety in residential buildings. then raw data are transmitted to a higher level ict platform where they are analysed and aggregated to provide the user and the community with a series of constructive and valuable feedback. all this information can shed light on the user’s behaviour patterns and what ought to be improved to increase their energy awareness. the heart of the system is the energy box (eb) that allows to control all the devices (sensors and actuators) and to transform each and every home into an active node of a smart network. it lets the user share data and information with the outside world as well as to increase residents’ sense of involvement and belonging to the community, providing them with new forms of interaction. in perspective, the system architecture aims to transform each user from a mere consumer into an active participant in the energy market, able to control demand (demand-side management). finally, the brand-new home digital infrastructure is paving the way to a series of additional services, such as assisted living and home security. 1. introduction growing awareness of the world’s energy scarcity and environmental issues has introduced new conditions within the energy system. an emblematic example is an electrical system, which, in the future, will have to accommodate a share of production much greater than today. this issue poses new challenges to the power generation system and end-user energy consumption behaviour. the current trend points to the direction of changing the network to manage future challenges, such experimental demonstration of a smart homes network in rome sabrina romano*,a, martina botticellib and francesca dionisia,c a smart cities and communities laboratory, enea – smart energy division, casaccia, 00123 roma, italy b department of information engineering marche polytechnic university, 60131 ancona, italy. c pdta, la sapienza university, 00185, rome, italy. keywords: smart home; users’ energy awareness and feedback; energy aggregator; smart services; wireless sensors; url: http://doi.org/10.5278/ijsepm.3335 as energy storage availability and flexibility, and as well as improving the balance between energy production and consumption. also it is thought to support the transition towards zero energy emission districts (zeed) in the near future [1]. as a result of this development, a large number of programmes have been implemented in europe and the world over. the first generation of these projects was focused on technology and electrical grids, while social and behavioural issues were overruled or not sufficiently detailed. in recent years, as several case studies have shown, behavioural supporting measures http://doi.org/10.5278/ijsepm.3335 108 international journal of sustainable energy planning and management vol. 24 2019 experimental demonstration of a smart homes network in rome guidelines for more efficient and energy-aware behaviour. shn enables the exchange process between homes and the aggregator to manage user flexibility and benchmarking. nowadays, smart home market and particularly iot is constantly growing (185 million euros, + 23% compared to 2015) [6] but, until now, it has been mainly driven by security issues, despite technology rapid progress promises to make more features available in the near future [7]. smart homes use technologies like smart thermostats, appliances, and lighting to enhance residents’ comfort and convenience in their homes. these technologies connect to one another through home wireless networks and to the larger world through the internet. using software, sensors, and other hardware, they monitor and control the home’s systems and allow residents to access them when they are away. the heart of the system is the energy box (eb) that continuously collects data on energy performance. it can communicate wirelessly with other devices installed at home through standard and open communication protocols and acts as a gateway for the information transfer to the external i-cloud via wifi and/or ethernet. the connection architecture is described in the following figure. the smart toolkit is made up of sensors that adopt a single communication protocol, z-wave, for monitoring electricity consumption and indoor comfort. they can also control some thermal and electrical utilities. in particular, the following devices have been installed as shown in figure 2: • electric smart meter, installed in the apartment electrical panel underneath the general switch for monitoring the overall apartment electricity consumption; • smart switch for monitoring consumption and controlling air conditioners; • smart plug for monitoring and controlling several electrical devices (e.g. appliances); proved valuable to make users feel more involved in the project and help them gain an advantage in terms of energy savings. for this purpose, in december 2015 the public consultation process was dedicated to the 2nd energy union research, innovation and competitiveness common priority, for “facilitating the participation of consumers in the energy transition through smart grids, smart home appliances, smart cities, and home automation systems” [2]. this paper aims to describe enea smart home model developed to increase awareness on energy-saving issues throughout the adoption of iot technologies. not only do smart technologies help people save energy, but they can also improve comfort and convenience at home by offering innovative services. it examines the experimentation of a smart home network, describing the technological solution and giving a brief outline of the methodology. drawing from available studies, we estimate household energy savings relative to average energy consumption for each household. additional research will improve these estimates in the next years. furthermore, the experimentation was evaluated in terms of people’s satisfaction with the technology in use from a social and psychological point of view. 2. system technological infrastructure prior to the start of the experimentation, a study was conducted on the state of the art in order to define the necessary requirements and identify the best technological solutions. the snh system design is based on those requirements that the identified technological solutions are able to supply, i.e. the use of standard and open communication protocols or the adoption of wireless devices, easy to install and quite inexpensive [3][4][5]. in collaboration with apio company, enea has designed a smart home system and aggregation platform [5] to provide acknowledgement of value the added value of the “experimental demonstration of a smart home network in rome” for areti is the first, needful and concrete step toward the inclusion of end-users into the optimised management of the grid, with the scope to foster decarbonisation and avoiding an unnecessary investment on wiring as much as possible. this goal is reached by increasing the capability of the actual network to transfer energy to end-user by harmonising and balancing the customer’s load throughout the day: this can be only achieved having, simultaneously, dsos equipping their network with proper “flexibility management systems” and customers adopting “smart home” philosophy/technology. ercole de luca, innovation – grid flexibility & dispatching, areti http://technology.kjerstin international journal of sustainable energy planning and management vol. 24 2019 109 verena heinisch, lisa göransson, mikael odenberger and filip johnsson transmitted to a higher level platform where they are stored, analysed and aggregated. in coming years, efforts in data analytics to disaggregate smart technology–generated data into meaningful, actionable findings will be also quite useful to streamline data processing. the goal is to reduce the final domestic energy consumption leading users through a path of growth of energy awareness as well as offering additional services. in addition, the smart home infrastructure can enable the home user to demand response services. in perspective, users can modify their energy demand in response to requests from an aggregator, receiving a reduction of the energy cost in return. a. energy feedback a dashboard was designed to provide users with valuable feedback [9]. it guides users towards more ener• opening and closing sensors on doors and windows; • integrated comfort/presence sensors for monitoring indoor temperature, brightness and user presences. • smart valve for monitoring and controlling the radiator set point. each device matches a web-app, accessible from a computer or mobile phone, for real-time display of sensors’ acquired data. the web-app controls the actuators, such as the smart plug and smart valve. 3. data collection and analyses this project aims to develop a system of shn able to monitor energy consumption, the degree of comfort and safety in residential buildings. all acquired data are then figure 1: connection architecture city monitiring/planning smart district platform district level diagnostics optimization active demand managment city/grids interaction low lavel control user gui network interaction energy box sensors monitoring actuation 1° centocelle smart homes 3° smart district platform 2° centocelle platform actuators aggregator aggregator level home level utenti data data kpi feedback richieste ad commands figure 2: smart home toolkit router with internet access users remote control apps heating on/off household appliances tmp liminosity presence accelerometer smart meter: energy box • electricity smart valve smart plug sensor open/close motion sensor cloud aggregator 110 international journal of sustainable energy planning and management vol. 24 2019 experimental demonstration of a smart homes network in rome • estimated monthly electricity consumption for the date of access to the app in both kwh and €. each and every user may choose whether to compare their results with themselves or other participants. in the dashboard section called “my consumption”, for the chosen reference time interval, you can view: • daily energy consumption: using a bar chart showing the consumption in kwh and the costs in €, and comparing them with the average value, as to easily identify in which day or hour the higher consumption was recorded. it shows the user when and where their consumption is. • distribution of consumption among monitored household appliances. in this way, it is feasible to identify for which users the highest consumption is recorded and the respective incidences on the bill costs. • comparison of monthly consumption for the current year with the previous one. the comparison makes it possible to monitor whether there has been an improvement in the user’s behaviour or if there are savings compared to the previous year when no control system was going on. gy-efficient behaviour to help them better understand how much energy they are using in their daily activities. as users become more aware of their energy consumption they can change their energy-related behaviour as well as shift their operation to off-peak hours when, for instance, there is higher availability of energy from renewable sources. as a result, residents who use feedback from these devices can further adjust their energy use, reducing their energy footprint. in fact, providing the user with information about their past and present energy consumption has the ambition of modify their behaviour. to support users during the process, technical vocabulary has been translated into terms easier to understand, such as cost or bill. finally, a web-app was developed to give users real-time feedback and an overview of their energy consumptions [8]. the following set of information is provided within the app: • generic information: map position, house size and family unit composition; • weather conditions, external temperature compared with the average internal temperature, window opening percentage; table 1: user interface: my progress comparison with others http://1.user international journal of sustainable energy planning and management vol. 24 2019 111 verena heinisch, lisa göransson, mikael odenberger and filip johnsson the additional services offered are described below: • security – services which provide, when an enduser is away, home detection or the break-in of the locking systems. the system is able to provide a warning notification to the end-user or third party specifically enabled; • safety – services which monitor specific environmental parameters (smoke detectors, co2, flood sensors, etc.) and to detect particular risk situations to prevent injuries and disasters; • assisted living services to support vulnerability and to improve quality of life. 4. experimental demonstration beginning in may 2018, pilot testing [10] of the smart homes network was started in centocelle, a suburb in the south-eastern district of rome [11]. during the recruitment phase, to reach out to a wider range of neighborhood inhabitants, a series of meetings were organized with active social groups. in addition, various multimedia tools were used to convey the project [12]. the table 2 below describes the characteristics of the apartments and users’ profile. • in the section called “with others”, the consumptions of the selected time interval are compared with families similar by composition. in this case, the provided set of information is: ° comparison with the average and the most efficient among similar users: the comparison is carried out in percentage. a comment follows that can be “attention” you are consuming more than the average of similar users or, “congratulations” if the consumption is lower. ° comparison between the consumption of household appliances of the single user with the users’ average consumption of the same category. b. additional services from the very beginning home users were offered a bunch of additional services. thanks to local processing capabilities, it looks feasible to manage situations of potential risk [9]. incorporating heterogeneous data is vital to decision support, with a consequent reduction in costs and user satisfaction. table 2.building typology and users’ profile http://2.building 112 international journal of sustainable energy planning and management vol. 24 2019 experimental demonstration of a smart homes network in rome 5. results discussion data colleting method of electricity consumption made it feasible to verify the results of the experimentation in terms of families’ savings on electricity bills. the following graph shows the average monthly consumption and the percentage of savings. results suggest that the average savings were about 10% for each household, even though the greater incidence was found in single or two-component families, where the effects of the individual user lifestyle changes and habits are more evident. generally speaking, the results can be regarded as positive, especially considering that it is mainly due to a change in the users’ behaviour, given that no automatic control was on, not to mention the real-time feedback and competition naturally spreading among users. furthermore, we carried out a comprehensive survey of technology user-friendliness. for this purpose users were given a questionnaire with the result that the technology in use has gained a widespread acceptance, even if improvements have been requested especially in terms of product customisation. to realise the full potential of smart technologies, consumer acceptance must evolve beyond early adopters [17], and reach the broader population even if the survey showed that mounting cyber security threats and breaches were one of the most during the trial period, 10 families spontaneously joined the project. at first, participants were given a questionnaire on the basis of which simulations were carried out. results made it possible to estimate home consumption [13][14], to profile the type of user and allow evaluation and benchmarking. simply comparing the actual bill electricity consumption and the estimated consumption based on the information provided by participants, it was found that in most cases users consume more than it was expected, and this percentage was approximately 30%. this analysis, carried out even before the experiment started, confirmed the lack of awareness the majority of users involved in the trial project had. furthermore, the 2017 electricity bills related data, based on real consumptions, were then compared with the typical electricity consumption available in italy, issued by the electricity and gas energy agency (aeeg)[15] and by the italian institute of statistics (istat)[16]. the comparison was carried out among homogeneous groups, i.e. families similar in terms of the number of components. this process has helped identify the most energy-consuming users and those in need of efficiency improvements. however, findings suggest that families involved in this experimentation presented lower levels of energy consumption compared to the italian average values, as shown in the following graph. graph 1: comparison of real annual electricity consumption estimated by the user compared to the national average by type of family bills eb-c4 eb-c10 eb-c8 eb-c2 eb-c9 eb-c7 eb-c6 eb-c1 eb-c3 eb-c5 kw h4500 4000 3500 3000 2500 2000 1500 1000 500 0 user estimate national average 2500 2000 1400 2700 http://1.comparison international journal of sustainable energy planning and management vol. 24 2019 113 verena heinisch, lisa göransson, mikael odenberger and filip johnsson be taken into account when evaluating the energy performance of any smart technology system. acknowledgements this article was invited and accepted for publication in the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come [19]. references [1] pinna r, costanzo e., romano s., parways to zeed, techne special issue 012018;1. http://www.fupress.com/techne doi: 10.13128/techne-22736 [2] https://setis.ec.europa.eu/implementing-integrated-set-plan/ smart-solutions-consumers-ongoing-work [3] s. aman, y. simmhan, v. k. prasanna, university of southern california, “energy management systems: state of the art and emerging trends”, rivista ieee communications magazine – (s.l.) ieee, january 2013 -1: vol 51, pp: 114–119 [4] l.liu, y. liu, l. wang, a.zomaya, s.hu, “economical and balanced energy usage in the smart home infrastructure: a tutorial and new results”, ieee transactions on emerging topics in computing (volume:3, issue: 4) pp: 556–570. [5] https://www.smarthome.enea.it/ [6] politecnico di milano, “internet of things: oltre gli oggetti, verso i servizi” : milan, italy, april 21, 2017. https://www. osservatori.net/it_it/catalogsearch/result/index/?format= 102&q=internet+of+things%3a sensitive issues. users have been reassured in this regard. home data are acquired anonymously and are not sold to third parties, but exclusively used for benchmarking as well as the tracing of user energetic profile and behaviour was rendered unfeasible to one another. 5. conclusion the deployment progress has shown the possibility to actively engage home users. the average saving was approximately 10% on electricity consumption per household due to the technological solution in place. several dsos and electric utilities have currently shown interest in this experimentation as it allows the use of flexible resources that lie among residential users, while the technological solution has proved to enable the active involvement of the end-users in the advanced network management. in coming years, further step will have to be taken to build up strong foundations of a real energy community, integrating smart sensors and a brand-new type of energy meters with accounting and exchange certification systems. the aim is to maximise the use of renewable sources by exploiting storage and energy exchange within the same smart energy community [18]. nevertheless, it should be considered that many smart home technologies are wireless, which means they need their energy requirements to support their sensing, communication and control capabilities always being in network standby mode. this could diminish any incremental energy savings and it should graph 2: comparison of the average monthly electricity consumption before and after the trial project before c4 c10 c2 c8 c7 c9 c1 c3 c5 c6 comparison of the average monthly electricity consumptionkwh/month 400 350 300 250 200 150 100 50 0 after http://www.fupress.com/techne http://10.13128/techne-22736 https://setis.ec.europa.eu/implementing-integrated-set-plan/smart-solutions-consumers-ongoing-work https://setis.ec.europa.eu/implementing-integrated-set-plan/smart-solutions-consumers-ongoing-work http://l.liu http://a.zomaya http://s.hu https://www.smarthome.enea.it https://www.osservatori.net/it_it/catalogsearch/result/index/?format=102&q=internet+of+things%3a https://www.osservatori.net/it_it/catalogsearch/result/index/?format=102&q=internet+of+things%3a https://www.osservatori.net/it_it/catalogsearch/result/index/?format=102&q=internet+of+things%3a http://2.comparison 114 international journal of sustainable energy planning and management vol. 24 2019 experimental demonstration of a smart homes network in rome procedura semplificata per la valutazione del potenziale di aggregabilità di utenze residenziali”. report rds / par2016 / 009 http://www.enea.it/it/ricerca_sviluppo/documenti/ricercadi-sistema-elettrico/adp-mise-enea-2015-2017/smart-districturbano/rds_par2016_009.pdf [14] p. cannavò, c. de angelis, e. de nictolis, c. iaione, a. noce, a. palladino, s. parlato, c. prevete, c. rocca, b. sdao. libera università internazionale degli studi sociali guido carli (luiss),“la pratica e la prototipazione della co-governance per uno smart district urbano”, report rds/par2016/026. http://www.enea.it/it/ricerca_sviluppo/documenti/ricerca-disistema-elettrico/adp-mise-enea-2015-2017/smart-districturbano/rds_par2016_026.pdf [15] agenzia per l’energia elettrica e gas (aeeg). https://www. autorita.energia.it/it/index.htm [16] istituto nazionale di statistica, istat. http://www.istat.it/it/ [17] botticelli m, dionisi, f. monteriù a., romano, s. , a smart home network for proactive users. real corp 2019 – is this the real world? perfect smart cities vs. real emotional cities. proceedings of 24th international conference on urban planning, regional development and information society. pp. 55-62. issn 2521-3938 [18] heinisch v, göransson l, odenberger m, johannson f. a city optimisation model for investigating energy system flexibility. int j sustain energy plan manag 2019;24. http://doi. org/10.5278/ijsepm.3328. 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progettazione di un dimostrativo pilota”. report rds/par2016/006. http://www. enea.it/it/ricerca_sviluppo/documenti/ricerca-di-sistemaelettrico/adp-mise-enea-2015-2017/smart-district-urbano/rds_ par2016_006.pdf [11] cassinadri e, gambarini e, nocerino r, scopelliti l. sharing cities: from vision to reality. a people, place and platform approach to implement milan’s smart city strategy. int j sustain energy plan manag 2019;24. http://doi.org/10.5278/ ijsepm.3336 [12] meloni c, cappellaro f, chiarini r, snels c. energy sustainability and social empowerment: the case of centocelle smart community co-creation. int j sustain energy plan manag 2019;24. http://doi.org/10.5278/ijsepm.3339 [13] l. de santoli, f. mancini, m. cecconi, c.i.t.e.r.a centro di ricerca interdipartimentale territorio edilizia restauro ambiente sapienza università di roma”sviluppo di una 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http://doi.org/10.5278/ijsepm.3328 http://doi.org/10.5278/ijsepm.3328 http://doi.org/10.5278/ijsepm.3450 http://doi.org/10.5278/ijsepm.3450 https://aceee.org/research-report/a1801 https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/energy https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/energy https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/energy http://doi.org/0.5278/ijsepm.3338 http://doi.org/0.5278/ijsepm.3338 http://www.enea.it/it/ricerca_sviluppo/documenti/ricerca-di-sistema-elettrico/adp-mise-enea-2015-2017/smart-district-urbano/rds_par2016_006.pdf http://www.enea.it/it/ricerca_sviluppo/documenti/ricerca-di-sistema-elettrico/adp-mise-enea-2015-2017/smart-district-urbano/rds_par2016_006.pdf http://www.enea.it/it/ricerca_sviluppo/documenti/ricerca-di-sistema-elettrico/adp-mise-enea-2015-2017/smart-district-urbano/rds_par2016_006.pdf http://www.enea.it/it/ricerca_sviluppo/documenti/ricerca-di-sistema-elettrico/adp-mise-enea-2015-2017/smart-district-urbano/rds_par2016_006.pdf http://doi.org/10.5278/ijsepm.3336 http://doi.org/10.5278/ijsepm.3336 http://doi.org/10.5278/ijsepm.3339 _ref21006983 international journal of sustainable energy planning and management vol. 24 2019 33 *corresponding author e-mail: maria.ancona2@unibo.it international journal of sustainable energy planning and management vol. 24 2019 33–42 research and experimentation abstract in order to reduce fossil fuels consumption and pollutant emissions, high contribution is given by district heating. in particular, the integration with renewable energy may lead to a significant increase in energy conversion efficiency and energy saving. further benefits can be achieved with low temperature networks, reducing the heat dissipations and promoting the exploitation of low enthalpy heat sources. the aim of the paper is the analysis of the potential related to the conversion of existing district heating networks, to increase the exploitation of renewables and eliminate pollutant emissions in the city area. further aim, in this context, is the optimization – from both energy production and operation management viewpoints – of a low temperature district heating network for the fulfillment of the connected users’ energy needs. to this respect, a traditional network with a fossil fuel driven thermal production plant has been considered and compared with a low temperature district heating scenario, including geothermal heat pumps, photovoltaic panels and absorption chillers. these scenarios have been analyzed and optimized with a developed software, demonstrating the reduction of primary energy consumption and co2 pollutant emissions achievable with low temperature networks. in addition, a preliminary economic comparative evaluation on the variable costs has been carried out. future studies will investigate the economic aspect also from the investment costs viewpoint. 1. introduction recently, energy grids became a central issue for the achievement of the standards imposed by international regulations on environmental impact [1]. with this purpose, the integration between renewable generators and traditional production systems has been promoted [2, 3]. relating to the thermal energy field, district heating networks (dhns) are largely diffused [4, 5], allowing to reduce both pollutant and thermal emissions within the city area, as demonstrated for the case study of great copenhagen in [6]. in recent years, efficiency improvement has been reached thanks to the integration of dhn with renewable energy sources (res) [7] and cogeneration units. in europe, some instances of integrated thermal grids are present, considering the integration of different technologies with res for the production of thermal energy [8, 9]. as an example, at the delft university of technology the 17% of thermal and cooling needs is currently provided by a system which includes chp units, geothermal systems and aquifer thermal storage [10], allowing an energy saving equal to the 10%. particularly, the positive effect of the introduction of heat pumps (hps) in dhns has been confirmed [11, 12]. furthermore, low temperature district heating (dh) has been recently recognized as a viable solution to low-temperature district heating networks for complete energy needs fulfillment maria alessandra ancona*, michele bianchi, lisa branchini, andrea de pascale, francesco melino and antonio peretto università di bologna – din, viale del risorgimento 2, 40136 bologna, italy keywords: district heating; optimization; low-temperature networks; thermodynamic analysis; energy saving; url: http://doi.org/10.5278/ijsepm.3340 http://doi.org/10.5278/ijsepm.3340 34 international journal of sustainable energy planning and management vol. 24 2019 low-temperature district heating networks for complete energy needs fulfillment further increase the energy efficiency in the heating sector [13]. the main advantages of low temperature dhns stand both in the reduction of the heat losses through the network and in the efficiency increase for the production systems. in particular, renewable heat sources, such as hps, geothermal systems, etc., can achieve important efficiency improvements if the temperature of the network is lowered [14]. as an example, it has been estimated that – with a reduction in dh supply/return temperatures from 80°c/45°c to 55°c/25°c – the coefficient of performance (cop) of industrial waste-based hps can be increased from 4.2 to 7.1, while the cost of solar thermal can be reduced of about the 30 % [15, 16]. currently, reductions in the temperature levels down to 10–20°c [17] are investigated in order to further decrease the heat dissipations through the network and exploit very low heat sources. in this context, the innovative aspects of the study stand in the definition of a low temperature dhn, coupled with renewables, which enables to completely avoid fossil fuel consumption and pollutant emissions at a district/city level, guaranteeing the fulfillment of the whole thermal and cooling users’ needs. considering the will of converting existing dhns without modifications in the heat emission systems of the final users, this result can be obtained thanks to the introduction of booster hps: despite a consequent increase in the electricity consumption (partially covered by photovoltaic system), this set-up (low temperature dh + booster hps) has been proven as a promising solution [18]. finally, a preliminary economic evaluation on the variable costs has been carried out in this paper, while future studies will deeply investigate also the investment costs. in detail, the structure of the manuscript is organized as it follows. in section 2 the methodology applied for the analysis is discussed, highlighting the users’ energy needs, the considered scenarios and assumptions and describing the developed software used for the analysis. instead, in section 3 the results are presented and discussed, while in section 4 the concluding remarks are highlighted. 2. methodology to evaluate the possibility of converting existing dhns into low temperature dhns for electrical, thermal and cooling energy fulfillment, a network composed by a centralized thermal production and three users of different typology has been considered. the hourly based energy needs profiles for each user has been evaluated for three typical days separately. then, the reference case has been set, representative of a traditional network operation: the heat is produced by natural gas (ng) boilers and provided to the users via dh with temperature levels of 90°c/60°c (respectively for the supply and the return of the network), while the electrical and cooling needs are fulfilled by electricity purchase. the reference case has been compared with a low temperature dhn, in which the network is operated with temperature levels of 20°c/10°c, with a centralized geothermal system and providing heat to fulfill both the users’ thermal and cooling needs, via hps and absorption chillers respectively. in addition, photovoltaic (pv) panels are considered as decentralized production system. the optimization has been carried out with a developed software and preliminary economic evaluations have been assessed. in the following paragraphs, the methodology will be discussed. 2.1. energy needs profiles the electrical, thermal and cooling needs hourly profiles for the three typical days representative of winter, middle season and summer are shown in figure 1 as acknowledgement of value the study provides an original and innovative approach in the research field of low temperature district heating coupled with renewables. the strong novelty stands in the conversion of existing traditional district heating networks into low temperature networks completely avoiding the use of fossil fuels without reducing the energy service to final users. furthermore, the proposed conversion allows also to fulfill the cooling energy without modifying existing networks. the approach represents a real action in the direction of reducing co2 emissions, dependency on fossil fuels and their use in the city area. finally, this methodology increases the efficiency in the energy sector and represents a strategy to reduce the heating and cooling energy cost for users. all the advantages highlighted in the study are completely in line with the 2030 agenda for sustainable development of european commission. dr. biagio di pietra, senior researcher, enea-utee (technical unit for energy efficiency) international journal of sustainable energy planning and management vol. 24 2019 35 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels function of the considered user typology (domestic user, school or supermarket). these curves has been determined on the basis of literature [19–24] and considering the following assumptions: – domestic user: building composed by 83 apartments, each one with (i) a peak of electrical need equal to 0.65 kwe, (ii) a peak of thermal need of 7.7 kwth for space heating and 0 20 40 60 80 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 pe winter domestic pe ms domestic pe summer domestic pe winter school pe ms school pe summer school pe winter super-market pe ms supermarket pe summer supermarket e le ct ri ca l n ee d [k w ] h/day a) 0 100 200 300 400 500 600 700 800 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 qth winter domestic qth ms domestic qth summer domestic qth winter school qth ms school qth summer school qth winter super-market qth ms supermarket qth summer supermarket t h er m al n ee d [ kw ] h/day b) 0 50 100 150 200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 qc winter domestic qc ms domestic qc summer domestic qc winter school qc ms school qc summer school qc winter super-market qc ms supermarket qc summer supermarket c o o lin g n ee d [ kw ] h/day c) figure 1: users’ needs as function of the user typology and of the considered typical day (winter, middle season – ms and summertime): a) electrical needs, b) thermal needs and c) cooling needs 36 international journal of sustainable energy planning and management vol. 24 2019 low-temperature district heating networks for complete energy needs fulfillment 0.7 kwth for hot water and (iii) a peak of cooling need of 2 kwc. in addition, a peak of 12 kwe has been considered for the lightening of the common areas of the building; – school: peaks equal to 67 kwe (for the electrical need) and equal to 276 kwth and to 20 kwth (for the thermal needs, space heating and hot water respectively). no cooling needs have been considered for the school, due to the summer closure; – supermarket: peaks equal to 93 kwe (electrical need), equal to 490 kwth (thermal need, space heating only) and equal to 185 kwc (cooling need). in detail, figure 1a shows the electrical needs profiles: the domestic user electrical need presents three peaks, while the lower request is registered during the night. furthermore, for domestic users a slight increase in the electrical needs can be seen in middle season and summer with respect to winter season. as it regards the supermarket, instead, the same electrical need profile is registered for the three typical days, with a maximum constant request during the opening hours equal to around 93 kwe. finally, the electrical needs for the school present similar trends during winter and middle season, while a minimum constant request is considered during the summer closure for the maintenance of the installed appliances. relating to the thermal needs, for domestic users and school hot water and space heating needs are considered during winter, while only hot water is required during middle season and summer. on the other hand, for the supermarket only space heating needs are provided via dhn; consequently, no thermal needs are registered during middle season and summer. finally, for the domestic user and the supermarket, the cooling needs are present only during summertime, while no cooling need is considered for the school, due to summer closure. 2.2. reference case as shown in the schematic of figure 2a, to define a reference case, a traditional dhn has been considered for the fulfillment of the previously mentioned three users of different typology. space heating and hot water needs are provided via dh, while each user provides by itself for electrical and cooling needs by electricity purchase. the heat production occurs by means of ng boilers installed at the centralized thermal power station, characterized by a rated efficiency equal to 90 % and by a total rated thermal power equal to 1600 kw. the off-design behavior of the ng boilers has been modeled as presented in [25]. furthermore, the network temperature levels have been assumed equal to 90°c and 60°c, respectively for the supply and the return lines. as it regards the cooling needs, compression chillers installed at each user have been considered, with an energy efficiency ratio (eer) equal to 4. 2.3. low temperature dhn case the proposed low temperature dhn scenario (figure 2b) considers the presence of a geothermal source at the centralized thermal power station, which provides heat to the network allowing to reduce the temperature levels – with respect to the reference case – down to 20°c and 10°c, respectively for the supply and return pipes of the network. as a consequence, due to the need of increasing the temperature level at the final users, for a correct operation of the current heating systems and to satisfy the hot water needs, the installation of hps at each user has been considered. with this assumption, the temperature levels required by the user side circuit can be guaranteed. furthermore, a cop equal to 3 has been assumed: indeed, even if geothermal hps commonly achieve higher cop values [26], this assumption has been made as a mere precaution due to the high difference between the temperature levels of the condenser and of the evaporator of the hp. instead, as it concerns the cooling needs, absorption chillers have been considered, fed by the outlet stream of the hp and assuming an eer equal to 0.67. finally, the installation of pv panels at the final users is accounted: the peak power has been evaluated based on the solar irradiation data for the considered location (bologna, north of italy [27]) and on the available rooftop surface [27], considering (i) an occupancy factor of the 70 % (to allow installation and maintenance), (ii) a conversion efficiency equal to the 10 %, (iii) a tilt angle of 30° and (iv) an exposition to south. the electrical energy produced by the pv panels can be used to move the hp and/or to fulfill the electrical needs of international journal of sustainable energy planning and management vol. 24 2019 37 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels the users. a connection with the national electric grid is obviously maintained. 2.4. software 3-cento and preliminary economic analysis the software 3-cento (electrical, thermal/cooling and fuel – complex energy network tool optimizer) has been developed to optimize the design and operation of complex energy networks, including – eventually in smart configuration – electrical grids, dhns and district cooling networks (dcns). the software (see the flowchart of figure 3), on the basis of several inputs – related to networks topology, users loads, energy systems typology and characteristics, economic tariffs, etc. – allows to optimize both the networks operation and the scheduling of the energy systems by the application of specific objective functions. in detail, the calculation core consists of two calculation models based on the todinipilati [28] and genetic algorithms [29], for dhn/dcn operation and energy systems’ scheduling optimization respectively. in particular, once the calculation has been carried-out, for the dhns the developed software evaluates: natural gas boilers electrical grid ch4 natural gas network dhn supply dhn pumping station centralized thermal power station user: supermarket domestic user dhn return user: school a) geothermal system electrical grid dhn supply dhn pumping station centralized thermal power station user: supermarket domestic user dhn return user: school b) hp acpv a c h p p v electrical gridelectrical grid hp acpv electrical grid figure 2: schematic of the analyzed scenarios: a) reference case and b) low temperature dhn case 38 international journal of sustainable energy planning and management vol. 24 2019 low-temperature district heating networks for complete energy needs fulfillment • thermal energy to be produced at the centralized production plant; • inlet and outlet temperature and pressure, mass flow rate, velocity and pressure drop for each pipe; • electric power for the pumping station; • pressure drops of the primary circuit of each users; • heat losses through the network. furthermore, as a result of the software application, the energy systems optimal scheduling and design is calculated. based on the energy results obtained from the software, a preliminary economic analysis has been carried out for the evaluation of the annual cash flow (cfi) related to the two compared scenarios, accounting for the costs of fuel and electricity purchase, as well as for the operation and maintenance costs of the energy systems: cfi=efuel . cfuel + ee . ce + eth,b . cm,b + ec,cc . cm,cc + eth,hp . cm,hp + ec,ac . cm,ac [€] being: efuel yearly fuel consumption of the plant [kwh/y]; cfuel specific cost of the fuel (ng); ee yearly electricity purchase [kwh/y]; ce specific cost of electricity; eth,b thermal energy yearly produced by the ng boilers [kwh/y]; cm,b maintenance specific cost of ng boilers, assumed equal to 0.005 €/kwh [30]; ec,cc cooling energy yearly produced by the compression chillers [kwh/y]; cm,cc maintenance specific cost of compression chillers, assumed equal to 0.006 €/kwh [30]; eth,hp thermal energy yearly produced by the hps [kwh/y]; cm,hp maintenance specific cost of hps, assumed equal to 0.010 €/kwh [30]; ec,ac cooling energy yearly produced by the absorption chillers [kwh/y]; cm,ac maintenance specific cost of absorption chillers, assumed equal to 0.002 €/kwh [30]. since cfuel and ce strongly depend from the considered country, three different hypothesis in terms of cfuel/ce ratio have been accounted: 0.5 (corresponding to the italian values, 0.087 €/kwh for the ng and 0.180 €/kwh for the electricity), 0.3 and 0.7. 3. results and discussion the yearly energy results obtained for the proposed scenarios are presented in figure 4 and in figure 5. in detail, both for the reference case and for the low temperature dhn case, two off-design operation strategies have been considered and evaluated, respectively maintaining constant (at the design value) the mass flow rate through the network or the temperature difference between the supply and the return of the network. in figure 4 the yearly fuel consumption and electricity purchase of the proposed scenarios are shown. as it can be seen, for the reference case a yearly fuel consumption equal to around 3900 mwh/y and to about 3700 mwh/y is registered, respectively in case of constant mass flow rate and in case of constant temperature difference off-design management strategies. on the climatic data simulation users load simulation ren gen set simulation climatic data users load demand and/or production ren gen set production tariff scenario optimization settings scheduling calculation dhn calculation smart grid definition smart grid topology users info energy system info optimal load allocation optimal dhn and/or dcn operation optimal operation set point energy results economic results dcn calculation in p u t s e c tio n c a lc u la tio n c o r e o u tp u t s e c tio n figure 3: general schematic of the 3-cento software international journal of sustainable energy planning and management vol. 24 2019 39 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels contrary, the proposed low temperature scenario – by the exploitation of a geothermal source – allows to completely avoid the fossil fuel consumption at the district area, with the consequent elimination of the related pollutant emissions. in particular, considering an emission factor equal to 0.198 kgco2/kwhch4 for the ng, a total emission ranging from 735 to 773 tonco2/y (depending on the off-design strategy) can be locally avoided during a year. this result is particularly interesting to promote environmental sustainability and to increase the life quality at the city areas. on the other hand, evidently, an increase in the electricity purchase is registered during the year for the low temperature case (see figure 4), mainly due to the introduction of the hps employed to provide both the thermal needs of the users and the heat required by the absorption chillers. however, this increase is limited thanks to the pv panels installation, which allow a production of around 600 mwh/y of electric energy. in more detail, the pv production covers the 22 % and the 24 % of the annual total request of 0,0 0,50 1,0 1,5 2,0 2,5 3,0 3,5 4,0 ref. case m cost ref. case dt cost low t dhn m cost low t dhn dt cost fuel consumption electricity purchase[g w h /y ] figure 4: annual fuel consumption and electricity purchase for the proposed scenarios (ref. case, low temperature dhn) and for the evaluated off-design management strategies (constant mass flow rate or temperature difference) 0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35 ref. case m cost ref. case dt cost low t dhn m cost low t dhn dt cost dhn thermal losses pumping station electrical consumption[g w h /y ] figure 5: annual thermal losses through the network and electricity consumption of the pumping station for the proposed scenarios (ref. case, low temperature dhn) and for the evaluated off-design management strategies (constant mass flow rate or temperature difference) 40 international journal of sustainable energy planning and management vol. 24 2019 low-temperature district heating networks for complete energy needs fulfillment electricity respectively for the case with constant mass flow rate and with constant temperature difference off-design management strategies. furthermore, the comparative evaluation, between the reference case and the low temperature case, of the total annual fuel consumption – composed by a contribution attributable to the centralized production plant (i.e. the annual fuel consumption shown in figure 4) and by the amount of fuel consumed to generate the electrical energy purchased from the national electrical grid – confirms a reduction ranging from the 26 % to the 34 %, obtainable for the low temperature scenario. to this respect, in order to evaluate the fuel amount for the electricity production, the mean efficiency value for the italian power generation plants has been considered (40.2 %) [31]. as a consequence, an overall reduction in the co2 equivalent emissions ranging from 355 to 414 tonco2/y (depending on the off-design considered strategy). as it regards the dhn operation, figure 5 shows the yearly thermal losses through the network and the annual electrical consumption of the pumping station. as it can be seen, the thermal losses are importantly reduced by the decrease of the network temperature levels: being equal for the two cases the off-design strategy, indeed, a thermal losses reduction of around the 85 % can be achieved with the low temperature dhn scenario. on the other hand, the reduction in the temperature difference between the supply and the return of the network leads to an increase in the mass flow rate through the network, from a value of around 12 kg/s (reference case) to a value equal to about 24 kg/s (low temperature dhn scenario). as a consequence, the electrical consumption of the pumping station results importantly increased (see figure 5) especially when the constant mass flow rate strategy is adopted for the off-design operation. in addition, an increase in the network supply pressure is required for the low temperature dhn scenario with respect to the reference case. in particular, the 3-cento software has enabled to evaluate the optimal supply pressure for the correct network operation, which allows to guarantee a minimum pressure drop equal to 0.5 bar in correspondence of the user located at the end of the critical path (i.e. the path from the centralized production plant to the user with the highest pressure losses). the resulting optimal supply pressures are equal to 8 bar for the reference case and to 18.5 bar for the low temperature dhn scenario. finally, the results of the preliminary economic analysis are presented in figure 6 in terms of annual cash flow, as function of the ratio cfuel/ce. as it can be seen, the low temperature scenario always allows to reduce the annual costs to be sustained for the energy production and network’s operation and maintenance. in detail, the annual costs reduction ranges from the 5 % to the 47 % (depending on the ratio cfuel/ce). to this respect, it should be highlighted that the investment costs for the conversion of a traditional dhn into a low temperature network are quite high. as a consequence, even if the environmental advantages have been demonstrated in this study, incentives for the installation of renewable 0 100 200 300 400 500 600 ref. case m cost ref. case dt cost low t dhn m cost low t dhn dt cost c fuel /c e = 0.5 c fuel /c e = 0.3 c fuel /c e = 0.7 a n n u al c as h f lo w [ k€ /y ] figure 6: annual cash flow (costs sustained for energy production and network’s operation and maintenance) for the proposed scenarios and for the evaluated off-design management strategies as function of the ratio cfuel /ce. international journal of sustainable energy planning and management vol. 24 2019 41 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels generators and carbon taxes related to the pollutant emissions should be considered, to make the proposed solution economically viable. furthermore, the economic convenience is strongly affected by the ratio between the costs of the ng and of the electricity. to this respect, a greater convenience can be achieved in a perspective in which – thanks to the increase in the res penetration for electricity production – the price of ng is expected to increase while the price for electricity purchase is supposed to decrease. 4. concluding remarks to promote primary energy saving and pollutant emissions reduction, in this study a low temperature dhn scenario has been proposed for the fulfillment of the connected users’ energy needs. the low temperature dhn operates with supply and return temperatures equal to 20°c and 10°c respectively and includes res (geothermal and photovoltaic), hps and absorption chillers. this scenario has been compared – in terms of primary energy consumption, network’s thermal losses and pumping consumption, annual cash flows – with a traditional dhn with ng boilers as energy production systems, operating at 90°c/60°c. the results show that the proposed low temperature scenario allows to completely avoid the fossil fuel consumption at the district area, with the consequent elimination of the related pollutant emissions. in addition, even if the yearly electricity purchase is increased due to the hps installation, the total annual fuel consumption – calculated as the sum of the fuel locally consumed and the amount of fuel consumed to generate the electrical energy purchased from the national electrical grid – results decreased by a value ranging from the 26 % to the 34 %. further advantages can be achieved for the network operation, since the low temperature dhn 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aiu30@hw.ac.uk. international journal of sustainable energy planning and management vol. 21 2019 19–34 abstract: for decades, nigerian households have endured unreliable national electricity supply which have stifled economic growth and socio-economic development. as nations shift to green electricity adoption and a commitment to lowering their carbon footprint, opportunities arise for developing countries like nigeria to improve supply using solar pv for power generation. at over 50% private power systems ownership, the majority of urban nigerian households rely on selfgeneration using expensive petrol and diesel-powered generators. with pv generated electricity increasingly becoming more cost-competitive with conventional sources due to technological learning and support policies, this paper investigates the barriers to and motivations for pv adoption in urban nigeria. using interviews, data were gathered on key barriers to and motivations for pv adoption and results analysed. findings indicate that the major barriers are high capital costs and lack of finance. the key motivation for pv adoption was power outages, energy cost-savings including generator use fuel fraud, awareness and access to finance. the results point to the need for regulatory and political intervention. effective pv awareness creation campaigns and promotional strategies would also be necessary in the changing face of electricity supply in nigeria. 1. introduction promoting green energy technologies and energy efficiency are the two core tenets of the transition to a low-carbon future. the goal is to advance renewables and encourage resource-use efficiency particularly in the built environment which constitutes the bulk of energy use and emissions globally [1]. it is generally accepted that following this path would ensure the security of vital energy systems via the use of more sustainable energy sources. this is because conventional fossil-based sources are environmentally harmful. heavy reliance on combustible fuels contributes to climate change which causes global warming. a situation that many nations globally now seek to mitigate due to the adverse consequences linked to a warming globe. as part of this initiative, the un sustainable development goal (sdg) 7 is aimed at increasing the use of clean energy systems with the goal to make it affordable by 2030 [2]. while the targets may not be binding for nigeria [3], it is important to put various policy measures in place to diversify the national energy portfolio and promote renewable energy technologies (rets). nigeria also has its own nationally set targets for clean energy aimed at improving electricity supply, increase access as well as reduce environmental pollution. in the long term, it is projected that solar pv will provide 13 gw by the year 2030 [4]. this figure excludes solar pv streetlighting, solar refrigerators and solar hot water systems. ranging between 12.6 mj/m2/day to 25.2 mj/m2/day (3.5–7.0 kwh/m2/day), nigeria has an ideal solar barriers and motivations for solar photovoltaic (pv ) adoption in urban nigeria anthony ifeanyi ugulu * department of construction management and quantity surveying, faculty of engineering and the built environment (febe), university of johannesburg, auckland park campus, 2006, johannesburg, south africa. keywords: solar pv electricity; adoption; barriers; motivations; urban households; nigeria; url: http://dx.doi.org/10.5278/ijsepm.2019.21.3 http://dx.doi.org/10.5278/ijsepm.2019.21.3 20 international journal of sustainable energy planning and management vol. 21 2019 barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria nigeria, most focus on rural electrification programmes [15] which has not been successful in many studies [11, 12]. when focused on urban electrification, the existing studies emphasize centrally supplied electricity [13, 14]. for decades, this focus on large central power approach has failed hence the current national power predicament. only fagbenle et al. [8] researched the potential of adopting pv in cities using ann and found it to be technically viable. but their focus was on commercial buildings. no known study has approached the electricity provision challenge directly from the viewpoint of the electricity end-users, the households. analysis of these studies revealed opportunities for improvement in the pv promotion agenda. this study contributes to the debate from a demand-oriented perspective. it proposes a solution based on the ‘experienced’ power-generating households. this paper therefore investigates the barriers to and motivations for urban households pv adoption in nigeria, and how uptake can be accelerated through this group. this paper is structured as follows. section 2 discusses the background, status quo of electricity generation, energy consumption and challenges in nigeria. in section 3, the theoretical framework that underpins the study are explored. section 4 focuses on the method of enquiry. in section 5, the results are presented. section 6 discusses the key findings in relation to existing studies. section 7 concludes the paper by suggesting some policy recommendations based on the findings. 2. the status of electricity and energy generation in nigeria in nigeria, electricity is jointly produced using thermal power plants and hydropower with the thermal plants generating a bulk of the supply at 81% [19]. the undersized operational grid infrastructure of 6000 mw implies that there is always an imbalance between demand and supply which households and other energy end-users have to bridge using private power generators. nigeria is also rich in crude oil and natural gas and is one of the largest exporters of this resource. crude petroleum sales represent over 75% of the government’s revenue bringing in close to $100b per year from 2011–2013 [17, 18]. to emphasize, daily crude oil production in nigeria up until 2014 constantly averaged 317,974 cubic metres (2.0 million barrels) [22]. however, in recent years, the oil revenues have been on the decline due to fall in oil prices to below $80 for 0.1589 radiation base. using artificial neural networks (ann), fadare [5] mapped the entire country to arrive at average solar radiation intensity for all urban areas with lagos receiving between 12.6 mj/m2day to 19.5 mj/m2/day (3.54 –5.43 kwh/m2/day). recently, in their assessment of solar potential in cities in nigeria, ozoegwu [6] demonstrated similar. as a city, lagos has the added advantage of being in a coastal area where pv performance is generally better than in excessively hot climates or locations. this is why, despite low overall solar insolation in a location like ireland, improved module performance was recorded [7]. in their study examining lagos and ibadan, fagbenle et al. [8] reported the technical feasibility of using pv in such urban locations. despite this the uptake of pv in nigeria has been slow with the current installed pv capacity estimated to be less than 1 mw [9]. presently in nigeria, the operational grid network is undersized at 6000 mw [10], commensurate to the 185 million population [11] it is intended to serve. the under-capacity of the grid infrastructure has frequently led to power outages with electricity rationing and load shedding commonplace for most households. at the present operating capacity, the grid network is only able to meet 31% of the energy necessary for minimal use [12]. for this reason, for years, the supply and demand gap has been filled by households using private power generators making them ‘experienced’ own-power generators. as a result, approximately half of the elect ricity produced in nigeria is generated off-grid [13]. but the price of petroleum products for these generators have risen sharply. similarly, following the removal of state electricity subsidies electricity tariffs have increased by over 80% [14] making modern renewables like solar pv more competitive. the nigerian government has recognized the scale of the electricity sector problems and the crucial role the private sector and energy end-users would play towards improving the electricity situation. this is because the cost of grid expansion for 100% connection runs into millions of dollars making it unaffordable for the government [13]. given the exorbitant electricity tariffs, high petroleum prices, suitable solar resource of between 12.6 mj/m2/day to 25.2 mj/m2/day (3.5–7.0 kwh/m2/ day) [5] and the constantly declining costs of pv modules, this paper investigates the barriers to and likely motivations for residential solar photovoltaic (pv) adoption in cities in nigeria. although there are studies on the necessity of including rets such as solar in the energy portfolio in international journal of sustainable energy planning and management vol. 21 2019 21 anthony ifeanyi ugulu are subject to lesser market fluctuations. nigeria is also one of the largest gas flaring countries in the world. a practice that is not only wasteful but environmentally degrading. while this has reduced in recent years, it is still amongst the top five natural gas flaring country. figure 2 details. the nigerian government has now set targets for renewables with 13 gw of electricity expected to be generated from solar pv by 2030 [4]. 2.1. patterns of electricity consumption in nigeria electricity demand in nigeria is broadly grouped into residential, industrial, and commercial sectors. demand from the residential sector has in the past decades taken up the largest proportion of total electricity production [24]. figure 3 illustrates. this is in sharp contrast with cubic metres (per barrel) for the first time since 2014. also, the discovery of shale gas in the united states of america which was nigeria’s largest export market [23] has resulted to a reduced source of revenue for the nigerian economy. figure 1 represents the decline in demand for the nigerian crude oil over a period of 10 years. such revenue drop is another reason for wanting to divest from fossil fuels and moving to cleaner energy sources which thousand barrels per day 1,200 1,000 800 600 400 200 0 u. s. imports of nigerian crude oil percent of total u.s. crude oil imports percent 12% 10% 8% 6% 4% 0% 2% 2005 2006 2009 2010 2012 2013 2014 20152007 2008 2011 figure 1: us crude oil net imports from nigeria from 2005–2015 source: eia, 2017 rest of the world 39% iran 12% russia 13% venezuela 11% iraq 10% nigeria 8%united states 7% figure 2: world’s top five natural gas flaring countries as at 2014, source: iea, 2017 17% 26% 57% industrial commercial residential figure 3: electricity demand by sector in nigeria 2000 to 2011 source: author using iea data 22 international journal of sustainable energy planning and management vol. 21 2019 barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria using data from urban locations in southwestern nigeria (including lagos state), the minimum energy poverty line (mepl) for urban nigeria should be at least 3068 kwh/cap [12]. the mepl is the minimum energy that is required to meet the subsistence needs of urban households per/year [12]. this level of electricity demand can be easily generated using a good-sized pv. a 4 kwp pv system was able to generate 4000 kwh/year in the uk meeting the annual energy needs of the average uk household [26]. such a pv device can generate more in locations with better solar intensity as long as it is properly designed, installed and maintained. the next section discusses the grounded theories on technology adoption, innovation diffusion and barriers and motivations linked to rets uptake. 3. technology adoption and innovation diffusion theories most of the conceptual models deployed in pv adoption and diffusion studies from the end-user’s perspective are predominantly based on social psychological perspectives [27]. fewer studies are embedded in economic principles [28]. the economic model is founded on the classical economic theory of utility. it is centred on rational choice. it assumes that given capital constraints consumers make consumption decisions based on least cost and welfare maximisation. it further views the performance of any south africa where industry represented the largest total electricity consumed for the same period. [25]. 2.2. challenges of the electricity sector in nigeria urban households generally use electricity for lighting, use of appliances and sometimes for cooking. due to the power supply shortages, many urban dwellers use liquefied petroleum gas (lng) for cooking. this electricity supply and demand imbalance has meant that the average per capita electricity consumption in nigeria is still small relative to many locations in africa [4], including other oil resource-rich regions. in 2010, the electricity consumption per capita in nigeria was 136 kwh/cap while that of south africa was 4510 kwh/cap. as at end 2012, it rose to 156 kwh/cap for nigeria. though that of south africa fell for period end 2012, it was greater 4000 kwh/cap. figure 4 details. although ghana has oil deposits, it is not an oil-rich country. it was included in the graph for the sake of emphasis. based on to the latest available data, the world average electricity consumption per capita for 2014 was 3217 kwh/cap [26]. a figure that south africa surpasses at 4198 kwh/cap for same year despite a fall compared to 2012 levels. however, for nigeria, per capita electricity consumption dropped in 2014 by approximately 6% and have been fluctuating between 130 kwh/cap to 156 kwh/cap in the past 14 years without any significant improvement [25]. 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 39 24 89 6.3 177 27 54 algeria angola egypt libya nigeria ghana s.africa k w h /c a p country population (million) electricity consumption per capita for oil producing african countries 2010 2011 2012 figure 4: electricity consumption per capita of select oil rich african countries source: author international journal of sustainable energy planning and management vol. 21 2019 23 anthony ifeanyi ugulu found application in many fields. the theory of planned behaviour proposes that attitudes (such as, perceived reputation of utility suppliers), subjective norms (e.g. concern for environment) and perceived control (e.g. technology affinity) drive behaviour. attitudes, norms and perceived control impact intention and subsequently behaviour [34]. ajzen’s theory also suggests that aside norms, knowledge is also crucial in the formation of consumer attitudes including the formation of ‘green’ attitudes [30]. this theory is vital in that it helps to reveal the major factors and the characteristics of households who want to generate their own power sustainably. in terms of meeting home energy needs, households must make pv adoption decisions based on a number of factors including: cost, reliability, values, attitudes, energy use behaviour, income, household size and availability of government subsidies etc. this long list of considerations adds to the complexity of the decision-making which can pose a barrier to adoption. few studies in nigeria have explored the power sector challenges in nigeria and solutions using solar [8, 36] and general renewables [9, 10]. as pointed out earlier, fagbenle et al. [8] were the first to investigate the feasibility of using pv on buildings in cities and found it to be technically viable. however, they revealed that the investment costs remained a barrier and recommended that carefully designed financial support schemes be used to facilitate uptake. note that this research was conducted over 15 years ago. over this time, pv module costs has greatly reduced. aliyu et al. [9] and adhekpukoli, [10] researched electricity sector challenge proffering generic solutions that included the addition of renewables to the energy mix, use of support incentives and the importance of private sector participation. most importantly, as relates to this particular research, ohunakin et al. [36] detailed how high capital costs, low level of awareness, absence of incentives and poorquality control of products has posed a barrier to pv adoption. they also described how favourable government policy can lead to increased adoption. they further opined that solar pv usage is practical in every part of nigeria including grid-tied urban areas with highly unreliable grid power network. while their study gave insightful details as to the drivers and barriers it was more exploratory based on expert opinion of the sector. in other words, it can be described as a general prescription in the search for electric sector solutions in nigeria. purchase behaviour as a reflection of an individual’s underlying needs. this need is driven by the quest to maximise the satisfaction gained from consuming the product or service concerned. thus, for any demand for a good or service, there is a conflict with an alternative good or service, as the scarce financial resource faces stiff competition from both desired goods [28]. a key aspect of pv technology’s profile which impacts uptake is its high upfront costs and long payback time [29]. high initial costs of pv systems discourage uptake. due to the initial cost implications of pv as at the time of purchase, it yields negative outcomes, while some desirable outcomes are postponed. thus, pv is said to represent a high involvement purchase for most individuals [30]. for households in developing countries in particular, low income and purchasing power would mean that the capital-intensive pv becomes unaffordable for many. aside capital cost as a deterrent to pv adoption, the influence of payback time (pbt) has been shown [31]. pbt can be important in technology adoption decisions [32]. in general, consumers tend to prefer shorter pbt for their investments. but pbt is only a part of a bigger consumer barrier or motive. an example of pbt not making much of a difference has been shown in the uk, where lower pbt for wall insulations did not result in increased investments [33]. this means that there are other factors necessary for consumer uptake beyond economic factors. the rational choice theory has been criticised mainly by behaviourists, who argue that consumers do not make decisions solely on economics, but also as a result of ethical and environmental worldviews [27]. studies have shown that altruism and concern for the environment can influence the adoption of green energy technologies [34]. some other common factors that determine adoption decision include prior knowledge or awareness [35], output limitations, availability of technical support [16] and availability of fiscal support incentives [28]. aside, the socio-cultural, technolo gical, environmental and economic factors impacting solar pv adoption decision, the key role of regulation and supportive institutions have been repeatedly referenced[26, 32]. as a social psychological perspective, the theory of planned behaviour or reasoned action [37] is one of the most frequently cited in technology adoption and innovation discourses. it has been hugely successful in explaining and predicting consumer behaviours and has 24 international journal of sustainable energy planning and management vol. 21 2019 barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria ment is relied upon based on study rationale and interest [40]. purposive sampling is a generally acceptable technique in qualitative studies [41]. the respondents were primarily pv households, installers and module component distributors with varying degrees of experience with using the system. three of the adopters were recruited following a questionnaire survey of a different study while the remainder were from referrals1. in most cases, adopters knew someone else using solar pv and may have had their panels installed by the same technician. this method of referral is also referred to as snowball sampling [31]. the format of the interviews was open-ended and semi-structured to allow the respondents the freedom to say the unexpected which is recommended in qualitative studies. in other words, the interview was flexible but with researcher control. the interview questions format took the order of the opening questions, the intermediate and the final questions. the opening questions centred on how they became aware of pv, the pv system size owned and duration of ownership. the intermediate questions focused on barriers faced by the adopters and potential adopters’, the motives for uptake, the adopter’s user experiences and their perception of the pv module compared to petrol and diesel-powered generators and national grid electricity. the final questions examined the difficulties (technical, financial and otherwise) faced prior to installing pv and in the course of utilizing pv and respondents’ suggestions for dealing with such challenges. all the interviews were recorded with a tape recorder and the data transcribed and analysed using a computer assisted qualitative data analysis software. table 1 represents the summary of the analysis process followed. table 2 is a profile of the surveyed adopters while figure 5 is the map of nigeria highlighting the 4 cities from where the adopters were drawn. 5. results and analysis the barriers to pv adoption as identified in this study were found to be socio-cultural, technical, economic and regulatory as figure 6 shows. in order of importance, the top three barriers are high capital costs, installer dishonesty and use of sub-standard products and lack of government incentives and regulation. these barriers are discussed next. this present study takes the electricity sector challenge and solution debate further by examining the electricity and energy end-users, the households. this study therefore investigates the barriers to and likely motivations for domestic pv adoption in urban nigeria. the goal is to understand why despite a fall in pv module costs from about $30/wp three decades ago to less than $1/wp currently, uptake has been slow [4]. gaining such an insight would help create effective support mechanisms to boost uptake and eventual diffusion. most importantly, it is argued that private sector pv adoption would help to ease the national electricity supply deficit in cities as well as extend access to the unconnected rural areas. 4. research methodology a total of 14 solar pv users from urban households were interviewed with most taken from lagos state, a key city with one of the most diverse population in nigeria. other respondents were taken from abuja, delta and edo states. the reason for drawing respondents from these other states was because of the small number of users initially found in lagos willing to participate in the survey. the decision to stop at 14 respondents was based on reaching saturation. at saturation point, conducting further interviews would no longer be value adding. this is a known quality control process. bahaj and james [38] did a comparable study in southampton, uk using 9 households, while sommerfeld et al. [39] used 22 australian pv adopters in their qualitative study. the interview was primarily designed to understand the barriers that has prevented electricity and energy consumers from adopting the technology when the prices of conventional fuels have been on the rise. it was also designed to gain an understanding from the few early pv adopters the reasons for adoption, challenges faced and how uptake can be accelerated. the gathered data are based on the views and experiences of the heads of households who would have overseen the adoption decision. the impact of human factor in green power technology adoption decisions were also examined. following purposive sampling technique, the scheduled interviews were carried out between january to june 2014. under this type of sampling, the researcher’s judg1 a situation where an interviewed adopter refers the researcher to other users international journal of sustainable energy planning and management vol. 21 2019 25 anthony ifeanyi ugulu 5.1. high investment costs and lack of finance as shown in figure 4 and representing 60% of the responses, the high investment cost of a pv system was cited as the foremost impediment to uptake. although most found the modern power technology appealing and beneficial, the high capital outlay prevented consumers from paying for the system. collectively, high investment costs and lack of finance accounted for about 80% of responses. as some of the adopting respondents acknowledged, purchasing power is still a key problem. not many people can afford it due to the high upfront cost. most people tend to withdraw because of the high cost. b.c. the cost of acquiring it is the problem. so, people prefer to continue using the generators they have and be spending maybe like £8–£12 everyday instead of putting in about £3000 or thereabout for good-sized panels. my panels, i actually got it from a distributor friend who agreed that i pay by instalment which made it easier for me. f.i. the high capital cost would mean that not many nigerian households can easily pay for a sizeable pv module. although there seemed to be an interest in this modern renewable power technology, this interest does not readily culminate in uptake as a result of this barrier. when it did, the outcome was that individuals ended up installing under-sized systems incompatible with their table 1: nvivo analysis process, adapted from o’neil [42] nvivo analysis phases steps taken at each phase 1. descriptive phase interview transcript review inputting sources assigning attributes creating values creating classifications 2. topical phase identifying key themes creating initial nodes creating memos preliminary coding 3. analytical phase merging nodes into hierarchies text search/word frequency queries final coding/matrix coding queries creating models and relationships 4. conclusions cross verification validation and theory development t ab le 2 : p ro fi le o f th e in te rv ie w ed p v a d op te rs a d op te r a ge g ro u p e d u ca ti on t en an cy s ta te p v s iz e t im e of o w n er sh ip p er io d o f u se p v u se o cc u p at io n b .c 35 –4 4 d eg re e r en ti ng d el ta 35 0 w at ts 8 m on th s > 6 –1 2 m on th s b us in es s e le ct ri ca l e ng in ee r d .t 35 –4 4 d eg re e r en ti ng l ag os 1. 2 kw p 4 ye ar s > 2 –4 y ea rs b us in es s e le ct ri ca l e ng in ee r d .s 35 –4 4 d eg re e o w ne r oc cu pi ed l ag os 1. 6 kw p 4 ye ar s > 2 –4 y ea rs h om e o th er s er vi ce s d .f 55 –6 4 d eg re e o w ne r oc cu pi ed a bu ja 5. 2 kw p 1 ye ar 1– 2 ye ar s b us in es s o th er s er vi ce s d .b 25 –3 4 s ec on da ry r en ti ng l ag os u nk no w n 1 ye ar 3 m on th s b us in es s o th er s er vi ce s f. i 45 –5 4 d eg re e r en ti ng l ag os 6 kw p 1 ye ar 1– 2 ye ar s b ot h s em ipr of es si on al f. f 35 –4 4 s ec on da ry r en ti ng l ag os 4 kw p 3 ye ar s > 2 -4 y ea rs b us in es s s em ipr of es si on al j. a 35 –4 4 d eg re e o w ne r oc cu pi ed l ag os 2. 5 kw p 2 ye ar s 1– 2 ye ar s h om e e le ct ri ca l e ng in ee r l .s 35 –4 4 d eg re e r en ti ng a bu ja 4 kw p 2 ye ar s 1– 2 ye ar s h om e o th er s er vi ce s r .c 55 –6 4 d eg re e o w ne r oc cu pi ed a bu ja 8 kw p 18 m on th s 1– 2 ye ar s h om e o th er s er vi ce s b .r 45 –5 4 d eg re e o w ne r oc cu pi ed e do u nk no w n 2 ye ar s 6 m on th s h om e o th er s er vi ce s s .a 35 –4 4 s ec on da ry o w ne r oc cu pi ed e do 3. 5 kw p 6 m on th s > 6 –1 2 m on th s b ot h o th er s er vi ce s s .i 25 –3 4 d eg re e o w ne r oc cu pi ed a bu ja 2. 8 kw p 4 ye ar s > 2 –4 y ea rs b ot h e le ct ri ca l e ng in ee r s .b 45 –5 4 d eg re e r en ti ng l ag os 2 kw p 1 ye ar 1– 2 ye ar s b us in es s s em ipr of es si on al 26 international journal of sustainable energy planning and management vol. 21 2019 barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria figure 5: country map of 4 cities from where the pv adopters were drawn source: author international journal of sustainable energy planning and management vol. 21 2019 27 anthony ifeanyi ugulu diffusion in nigeria. as emphasized by the interviewed respondents who use pv in their homes and those that installed it for running their businesses, the presence of dishonest and low-skilled technicians and the prevalence of poor-quality modules, inverters and batteries all contribute to the low rate of uptake. remarks about incompetence ranked 32% of the responses. when combined, issues related to incompetence, and the prevalence pf sub-standard products represented 78% of responses. relevant comments include there was a time i had problem with my panels and i was asked to change the batteries. i did but the new ones that i got were not actually new. the batteries were actually 150 watts; they now changed the labels to 200 watts. you know these guys that install the systems; they play a lot of tricks. i also discovered that some installers don’t have the required knowledge. that is why some people tell you that solar panels don’t work. f.i. a key problem we usually have is that, you know in nigeria, they bring in sub-standard products. that’s why sometimes; you find that a battery that was okay at the start, after six months, the battery will not be able to back up the user again. d.t. the remarks made towards incompetence were found interesting. some improperly installed pv systems as energy demand, leading subsequently to system failures as described by one respondent here: it would have turned out to be a good investment if i had money to pay for a suitably-sized system. b.r. some described how not having sufficient funds and the lack of pv knowledge led them to purchase 8 batteries rather than the 16 batteries recommended by his installer. another adopter said, you know, when i installed my pv, i wasn’t having much money and i was doubtful of the technology so i didn’t want to invest too much money on something i was not sure of. s. a. this high investment cost is further compounded by the need to utilise energy efficient appliances which are generally more expensive than their conventional equivalent. pv efficiency limits which has to do with the wellknown capacity factor issues also means that households who opt for it would have to incur further expense in the form of purchasing low energy appliances in order to enable the module operate optimally. thus, when potential adopters weigh the whole cost estimates, some decide to continue using gasoline engines. 5.2. dishonesty, incompetence and substandard pv products representing 46%, dishonest module distributors and installers have hampered widespread pv adoption and 21% 40% 16% 17% 60% 36% 46% 12% 32% 25% 0% 10% 20% 30% 40% 50% 60% 70% lack of finance no incentives & regulation non-recognition cheap electricity high investment costs low awareness dishonesty & substandard products grid power surge incompetence & failed systems pv limits figure 6: barriers to pv adoption in urban nigeria 28 international journal of sustainable energy planning and management vol. 21 2019 barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria it was a key reason why the industry seemed to be struggling to take off. most of the major problems that the adopters reported are in one way or another connected to competition in an unregulated market. since pv uptake has been largely market-oriented in nigeria, the role of governance towards legislation and consumer protection becomes increasingly important. some of the adopters shared how without the financing they received, it would have been difficult for them to obtain a pv device. while other adopters’ criticised government inaction on people who through their bad practices bring the industry into disrepute. key comments with respect to this view include, if government can help to regulate the market, it will bring about a reduction in the number of poor-quality systems we see in the market today which has affected consumer confidence in pv. d. t. if government can subsidise pv and make it readily accessible and cheaper for consumers, it will encourage uptake. we import all our systems. government should create an environment where there will be an outlet for manufacture of pv systems and components. s. i. government has been too lenient. even most street-light projects the government contracted out, after three months, the system dies off. when such happens, it becomes difficult to convince people again. s. b. although related to the lack of government incentives, particular mention was made with reference to dearth of a recognition and appreciation for pv users. nonrecognition accounted for 16% of the responses on obstacles to uptake and in combination with the absence of incentives represents 56% of consumer concerns. this group of adopters were very aware of their contribution towards emissions reduction and environmental sustainability. if government can encourage people by maybe letting them pay less tax or paying them for not polluting the environment. since i am using pv systems, if there is any way i can benefit from doing this, it would serve to encourage people. we need something to make people see that their uptake of alternative energy sources is recognised and rewarded. f. i. representing 36% of responses, low awareness of pv technology appeared to be a barrier to adoption. the link between level of awareness, knowledge and education on pv uptake has long been demonstrated [28]. this is the well as abandoned systems the researcher saw during the field trip support the claims. examples of this can be seen from figure 7 where a system was installed under a tree which mostly shaded it from the requisite daylight necessary for its proper function. figure 8 is an image of a failed pv streetlight module which was subsequently abandoned. 5.3. absence of government financial incentives and regulation the third most cited barrier to uptake was the lack of government support in the form of incentives and policies to protect the emerging industry. the absence of this sort of support received 40% of the responses. for many, figure 7: shaded streetlight, ikeja lagos figure 8: abandoned streetlight in lekki, lagos international journal of sustainable energy planning and management vol. 21 2019 29 anthony ifeanyi ugulu savings and familiarity with pv generated power. they are explained accordingly. 5.5. reliable supply frequent electricity outages and the need for a more reliable supply source represented 80% of the motivations for pv adoption as figure 9 indicates. all the interviewed found pv to be very reliable and better than grid electricity and petrol and diesel-generated electricity. even more impressive was that adopters whose systems failed after a duration of 3 and 6 months held this same optimistic view. they attributed the failures to not being able to afford the number of required batteries and using insufficient number of modules. overall, the opinions were positive. 5.6. energy cost savings representing about 60%, energy cost savings was the second most important motive for pv uptake. this finding was surprising because of the widely acknowledged high initial cost of pv modules. most of the adopters clearly thought that in the long-run, pv generated electricity was more economical than private generators and grid distributed electricity, with some specifically given a breakdown of the cost-savings. a notable point made in the interview regarding pv was that its installation turned out to be a mechanical solution to the problem of generator-use fuel fraud. an adopter narrated how his pv installation helped curb being defrauded by his employees. they said, reason adoption levels tend to be higher in richer and more developed countries [29]. also, education is also crucial in the acceptance of novel technologies due to its links to level of consumer awareness and general knowledge. results showed a strong correlation between education and adoption decision. highly educated consumers had a more positive allure for pv than the less educated. perhaps, this is to do with the fact that more educated people are more likely to spend the time to search for information and research a technology to aid their decision-making. this finding on the effect of education is in line with that of other researchers [25, 26, 39]. furthermore, the respondents did not consider pv power limits a hindrance to uptake. pv power limits has to do with the intermittency of solar radiation as an energy source and pv module capacity factor issues which places limits to its power output. this is often cited as a barrier in studies [36]. an explanation for this not having an impact on the respondent’s perception of pv is the fact that most installations come with battery power storage helping to balance demand when production is low due to reduced insolation. 5.4. motivations for solar pv adoption in urban nigeria the motives for pv adoption in nigeria were broadly found to be socio-economic and environmental. the most significant motive was households’ need for reliable electricity supply. in other words, frequent power outages were driving the demand. others are energy cost 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% access to finance energy cost-savings marketing purposes payback time convenience perceived overbilling familiarity neighbour influence pv compact design quiet operation reliable supply technical knowledge figure 9: motivations for pv adoption in nigeria 30 international journal of sustainable energy planning and management vol. 21 2019 barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria environment, technological, socio-economic and political factors have been previously shown to impact the adoption of pv and other green energy technologies. sociodemographic factors such as age [28, [29], income [31] education and homeownership [34] although important, are often less significant factors compared to the technological and socio-economic determinants. environmental factors as drivers were not significant in this study. there is evidence that altruism or environmental concerns can sometimes be exaggerated even in advanced nations [29]. technological and socioeconomic factors were greater influences in this study. these finding are shared with many established studies. for example, sovacool et al. [16] demonstrated how in papua new guinea, issues of low-quality products affected pv adoption. tillmans and schweizer-reis [17] gave similar accounts in their ugandan study. likewise, unfamiliarity and lack of awareness were also found to be barriers just as technology affinity was shown to drive uptake [39]. in this particular research, dishonest installers using lowquality products were found to be barriers to adoption. in terms of economic influences, as found in this study, high initial costs and lack of finance have been shown to be one of the most important factors that hinder uptake [16, 36], while the desire to reduce energy bills was revealed to be a driver [29, 39]. in their greek study, sardianou and genoudi [28] showed that such economic influences play a role. the negative effect of long payback time (pbt) was described by saleki [32] who studied solar pv and wind energy in iran. they suggested that financial aids should be used as incentives. pbt was not a strong determinant in this present study hence contrasts with saleki’s [32]. however, it agrees with the finding by schelly [31] who researched households in the united states of america. in nigeria, ohunakin et al. [36] who investigated solar energy application barriers and drivers enumerated barriers that included capital intensiveness, low level of awareness, absence of incentives and poor control of substandard products that gets into the market. they suggested that government support would be necessary to stimulate uptake. also, in nigeria, researchers aliyu et al. [9] concluded that market-based policies and support incentives such as feed-in-tariffs (fits) would be necessary to facilitate uptake and diffusion of decentralised pv. i tell you something. in my shops when i am away, i have been having this issue where my staff members do not buy fuel for generator use but tell me that they did buy fuel. there might have been central electricity supply and they will say oh there was no light2; that they bought fuel when they didn’t buy fuel. so, i have used my pv installation to cut them off. it is actually saving me a lot of money. they can tell you that they bought fuel and they used generator from morning to night when they didn’t use it. -f. i. the above described scenario was made possible because the pv adopter made use of a switchover connection allowing the system to switch automatically to grid electricity when central power was restored and vice versa. therefore, depending on how the connections are made, pv can help safeguard adopters and users from being defrauded by employees and family members. 5.7. awareness, technical knowledge and familiarity of pv as identified in studies, awareness comes before uptake in the adoption decision. not only the awareness of the technology but also some basic technical knowledge about electricity. sovacool et al. [44] pointed out how basic electricity literacy was very low even in the united states. familiarity represented about 30% of views. many adopters said that they deliberately made certain electrical connections in their dwellings to accommodate such modern energy systems like pv. awareness and familiarity also meant that some adopters were able to question the quality and number of modules, batteries and general work before deciding whether to go ahead with the installation. while the role of marketers influenced pv uptake as well as perceived overbilling from grid supplied electricity distributors was a driver of the change, they were less significant. understandably, payback time was the least of the motives. this is expected for consumers who suffer frequent power outages and its associated inconvenience. 6. discussion the results from this study is largely in agreement with established research locally and internationally, but with some new findings. sociodemographic profile, 2 note that in nigeria and most of africa, electricity is generally referred to as “light.” international journal of sustainable energy planning and management vol. 21 2019 31 anthony ifeanyi ugulu nigeria and similar countries. like adhekpukoli [10] pointed out in his paper on the democratisation of power, meaningful change can only come in the nigerian power sector when it is decentralised and handed back to the people. until, the end-users are seen as a key part of the power supply and demand process, the lingering electricity issue will remain unsolved. as the nigerian government seek out ways to combat the electricity supply problems it will be imperative to seriously ponder the opportunities pv electricity presents. barriers to uptake can be slowly removed with adequate political, regulatory and institutional support. in many countries, there are incentives to help stimulate private sector uptake of renewables such as the feed-in tariffs (fits) and net metering depending on level of grid maturity and electricity markets liberalisation. finally, despite the high initial cost, in the long run, pv offers greater cost savings over grid power and auto-generation as previous studies have demonstrated with zero direct emissions. there is an urgent need to regulate the nascent pv industry to ensure that only quality modules are imported and used in nigeria. the presence of monetary and non-fiscal incentives would encourage potential adopters and adopters who by their actions are contributing to carbon reduction. this would also help support businesses as well as grow the economy as new markets are created. as a public good that creates net environmental benefits, pv will be instrumental for transforming the nigerian power sector. acknowledgements this research received financial support from the global excellence and stature (ges) fellowship. opinions expressed and conclusions reached are strictly those of the author. references [1] unep, “renewable energy: renewables on the rise.,” united nations, 2018. 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e-mail: tanja.toetzer@ait.ac.at international journal of sustainable energy planning and management vol. 24 2019 67–74 research and experimentation abstract the paper explores future opportunities as well as challenges arising from urban manufacturing (um) regarding the design of sustainable energy systems for cities. global trends affect the type of production (e.g. industry 4.0) as well as the industrial structure (e.g. convergence of services and production) of um in cities. this causes new requirements but also new options for the urban energy system. the study presented in this paper examines this area of tension and explores not only the potentials of waste heat use, but also additional electricity demand through steadily advancing digitalisation. the study illustrates, that over the next few years it will be key to improve the interfaces between actors and sectors: between companies ("energy communities"), between industry and grid/ energy supply company/neighbouring settlement areas and between the sectors heat-electricitygas-mobility through e.g. power-to-x and possible uses of hydrogen. the paper concludes with a concept for integrating urban manufacturing optimally in the urban energy system for a sustainable energy transition in the future. 1. introduction in the last decade, the trend towards re-industrialisation has become noticeable in developed cities, including many austrian cities such as vienna, linz and steyr. it has been increasingly recognized that the industrial sector is one of the key drivers for economic growth and jobs [1] which is also relevant for cities [2]. however, urban manufacturing has to deal with specific framework conditions in cities due to high density resulting in little space and high rental prices, close neighbourhood to residential areas and difficult traffic conditions. thus, integrating urban manufacturing (um) into the urban fabric as smoothly as possible, is a must for keeping um in cities. this also addresses the energy system where an optimisation of demand and supply with high energy efficiency and renewable energy sources (res) integration must be strived for. this paper presents the results of a study on “energetic effects of urban manufacturing in the city enumis” [3] conducted for the austrian ministry for transport, innovation and technology (bmvit) funded within the research programme “cities of tomorrow”. the enumis study focuses on two key questions: 1) how can framework conditions be created to keep manufacturing companies in cities or to promote the establishment of new industry? 2) which waste heat utilisation potentials from industrial and commercial enterprises are available in selected austrian municipalities and which changes on the energy supply side can be expected from um? based on the study results, the paper explores future opportunities as well as challenges arising from how can urban manufacturing contribute to a more sustainable energy system in cities? tanja tötzer*,1,a, romana stollnbergera, roland krebsb, mara haasb, christoph bieglerc aait austrian institute of technology gmbh, giefinggasse 4, 1210 vienna, austria bsuperwien urbanism zt og, lenaugasse 2/4, 1080 vienna, austria cfraunhofer austria research gmbh, theresianumgasse 27, 1040 vienna, austria keywords: urban manufacturing; waste heat; austrian cities; digitalisation; sustainable energy systems url: http://doi.org/10.5278/ijsepm.3347 http://doi.org/10.5278/ijsepm.3347 68 international journal of sustainable energy planning and management vol. 24 2019 how can urban manufacturing contribute to a more sustainable energy system in cities? the paper is organized along 4 sections. after this introduction the results of quantitative and qualitative analysis conducted in the study will be presented in section 2. on the one hand, expert interviews and stakeholder workshops with representatives from industry, companies, research and city administration had been conducted for identifying the key issues and discussing opportunities and potentials in a future sustainable energy supply through um from a practical point of view. on the other hand, the energetic impacts of um were examined more closely and waste heat potentials from industry and commerce in selected austrian cities were estimated. these results feed into defining the role of digitalisation in um for the future energy transition which will be presented in section 3. special focus is laid on the potentials and challenges for um trough digitalisation and industry 4.0 and its implications on the urban energy system. finally, in section 4, the paper concludes with a concept for integrating um optimally in the urban energy system for a sustainable energy transition in the future. 2. potentials of um for the energy system the city of vienna commits itself to the provision of attractive and affordable locations for urban production and innovation and aims for an adequate land development strategy with the development of the thematic concept „productive city” [2]. however, challenges that um brings are to be found in the field of transport, economy and environment (emissions): um causes traffic in the entire city which can lead to considerable traffic obstructions and congestion in mixed residential um regarding the design of sustainable energy systems for cities. um is understood as producing industry that is city-compatible, mixable, embedded in a digital environment, research-intensive and which generates high added value in the city [2]. the benefits of um are seen in avoiding increasing delivery routes, high land consumption and a better integration and usage of renewable energies [4]. however, cities in transition and global trends are changing the type of production (industry 4.0, digitalisation, electrification) as well as the industry structure (tertiarisation, convergence of services and production). for keeping um in the city or even attracting new companies, the provision of a sustainable and secure energy supply is essential. the big challenge is to anticipate changes in the energy demand (and production) of um and to optimally integrate um into the urban energy system. our study addresses exactly this open issue for selected austrian cities. it is based on two previous studies on um, which had been carried out by fraunhofer austria (fha) [5] and superwien urbanism zt og [6] who were both partners in our project. in the course of these studies a structural analysis of the urban industry had been conducted and the future of um in cities had been analysed. our enumis study brings this knowledge into an energy context and explores the effects for the urban energy system. considering the structural changes, the study researches potentials for waste heat use as well as additional electricity demand expected trough steadily advancing digitalisation. this delivers a comprehensive overview of the effects of these new requirements on the energy system but also of new options for energy supply. acknowledgement of value cities of tomorrow need to become sustainable, liveable and prospective. one of the key topics is “urban production”. from an ecological, economic and social point of view, it is more sustainable to produce within the city. the program "city of tomorrow" is researching and developing new technologies and solutions for future cities and urban developments. its focus lies on the reduction of energy consumption and the use of renewable energies in buildings and city quarters as well as increasing the quality of living within cities. the study provides orientation in the context of urban manufacturing and makes a first contribution to the technical involvement of relevant actors in the manufacturing sector. the results will help us to develop political measures for the development of new sustainable energy systems and will share first recommendations how to better connect research institutions with companies and energy suppliers. theodor zillner, austrian ministry for transport, innovation and technology. energy and environmental technologies international journal of sustainable energy planning and management vol. 24 2019 69 tanja tötzer, romana stollnberger, roland krebs, mara haas and christoph biegler 1 choosing relevant business sectors based on the nace classification (european classification of economic activities) 2 assessment of the energy consumption based on employee-specific energy parameters (kwh/ employee) 3 assessment of the waste heat potentials assuming a sector-specific shares of the energy consumption to be available as waste heat due to the use of characteristic sector-specific average values, the waste heat potentials can only be estimated at a rough level. thus, a detailed examination (measurement, real consumption figures etc.) is necessary in the next step. however, the rough analysis gives a good overview of possible existing potentials and hotspots in the city, which should be considered in detail. figure 1 presents the results of selected sectors of the waste heat potential estimation in 8 austrian cities investigated. the waste heat potentials were evaluated according to their future usability and are therefore divided into the following temperature level classes (1) low temperature (30-100°c), which is directly in low temperature systems (e.g. underfloor heating) or can be raised to higher temperature levels by heat pumps (2) medium temperature (100-500°c), lower ranges can be directly fed into a district heating system, higher ranges can be used for converting into electrical energy (3) high temperature (> 500°c), can be directly used for conversion into electrical energy or must be cooled for feeding into a district heating network. generally, some sectors such as bakeries and laundries are well suited for a location in the city, while companies in the chemical, rubber and plastics, paper or iron and steel sectors are more likely to settle on the outskirts or in the countryside due to high emissions or space requirements. nevertheless, the analysis shows that some companies from these sectors can still be found within the city borders. in most cases they have traditionally been at this location for many years or even decades and waste heat could be used to heat neighbouring residential or industrial areas. to discuss the results of the analyses and to receive input from a practical point of view, opportunities and potentials in the area of a future sustainable energy supply through um were discussed in a stakeholder workshop. the participants gave valuable input to round off the picture derived from desk research and quantitative analysis. areas where um is per definition mainly located. considering the economic pressure on the cities, land is mostly dedicated to residential use rather than industrial use, as higher profits are to be expected. this leads to the fact that it is becoming more and more difficult for companies to settle in urban areas and find affordable land. however, interviews and workshops with representatives from industry, urban planning, neighbourhood management, energy suppliers and manufacturing companies made clear that um not only holds challenges, but also promises opportunities and potentials. a location in the city offers direct proximity to customers and highly qualified expert staff which promotes productivity. in the context of energy, the mixed land use is an opportunity for using renewable energies in a local heat network. in new urban areas, the use of locally available renewable energy sources can be promoted by an obligatory energy concept. furthermore, the definition of the energy supply in the zoning plan or urban planning concepts could ensure the use of locally available energy sources. in general, using energy-political regulatory mechanisms supports the beneficiary use of the synergies from um. however, it is crucial that the political will on the part of the city is given and a “caretaker” in the company or neighbourhood/town district shoulders the responsibility to engage the stakeholders and to facilitate the process. in parallel to the qualitative analysis of the potentials, the energetic impacts of um were examined more closely and waste heat potentials from industry and commerce in selected austrian cities were estimated using a bottom-up approach. the already available studies are usually based on four basic methods: using publicly available carbon dioxide emission data from the european pollutant release and transfer register (e-prtr) [7], estimating the efficiency of the plants, machines and processes [8], sending out questionnaires [9] or doing measurements. since most companies’ data on energy consumption are not publicly available, the methodological approach, that had been developed in the previous project heat_re_use.vienna [10], was applied. it is based on open data from the austrian statistical office (number of employees) to calculate industry-specific energy consumption (detailed description in [11] [12]). from this, the amount of waste heat was estimated proportionately, differentiated by sectors as well as by low, medium and high temperature classes. the approach follows these steps: http://network.figure http://heat_re_use.vienna 70 international journal of sustainable energy planning and management vol. 24 2019 how can urban manufacturing contribute to a more sustainable energy system in cities? proportion of total final energy consumption meaning that the importance of electricity as an energy source will increase [18]. due to the wave of digitization, which is often described as “industry 4.0” in the manufacturing environment, the manufacturing sector is undergoing a significant change. it enables the expansion of renewable energies via controlling and regulation of the system to meet the challenges of decentralisation and flexibilization [13]. new technologies and developments such as cyber-physical systems, higher automation, human robot collaboration, cloud solutions and increased computing power also present opportunities for um. digitization is often referred to as the enabler of the energy revolution and offers opportunities to transform the energy sector into the digital age [19, 20]. this leads to the rollout of intelligent measurement systems (smart meters) and the use of smart grids, which enable load management within the distribution network. although potentials are high, actual future development and true effects of digitalisation on the energy demand are associated with a high level of uncertainty. experts are not yet sure how digitization will affect the 3. the role of digitization in um for the future energy transition according to the austrian climate and energy strategy [13], the objective is to cover 100% of total electricity consumption (national balance) from national renewable energy sources by 2030. with currently 72% share (status 2017) [14] of renewables for electricity generation, austria is well ahead in the ranking of eu [13]. however, the austrian industry sector has a high proportion of energy-intensive basic industry and is still highly dependent on fossil fuels. in 2017, the energy and industry sector accounts for about 45% of the total greenhouse gas emissions in austria [15]. energy saving, energy efficiency, integration of renewables and electrification will be key elements for an industrial energy transition [15] and go hand in hand with digitalisation. the global trend of digital transformation affects um which will transform to service-oriented production [16, 17]. this change must also be accompanied by a change in the energy supply system. the share of electricity in the energy mix of households and services has risen significantly since 1970. in the future, electricity consumption will increase both in absolute terms and as a figure 1: waste heat potentials of 8 selected austrian cities differentiated by three temperature classes in mwh/a, own illustration international journal of sustainable energy planning and management vol. 24 2019 71 tanja tötzer, romana stollnberger, roland krebs, mara haas and christoph biegler energy, waste heat recovery is a considerable mean to reduce their environmental footprint. stockholm provides a good practice example where a data centre operator (digiplex) and heating and cooling supplier (stockholm exergi) signed a heat reuse agreement for heating up to 10,000 modern residential apartments with recovered data centre waste heat [25]. 4. concept for integrating um optimally in the urban energy system & conclusions the previous research fed into the development of a concept for integrating um optimally in the urban energy system illustrated in figure 2. it illustrates that new requirements occur through changes in type of production and in the industrial structure which lead to new demands on energy supply (both electricity and heat). changing energy demand from um can be related to e.g. digitalisation in traditional um sectors or to new sectors like 3d printing, vertical farming or data centres which become an essential precondition for um. new options for the urban energy system arise through changing roles of um to a prosumer and producer of waste heat and res. the trend is clearly in the direction of blurring the boundaries between consumers and producers, between heat, electricity, gas and mobility sectors (sector coupling) and between commercial/industrial and residential sectors. as also heinisch et al. [26] state in their work, the electricity, heating, and transport sectors in urban areas all must contribute to meet the overall energy consumption. in the study “digital transformation to the energy world” [21] carried out by the austrian energy agency in 2017, around 40 experts were asked about how digitization will affect the energy demand. 35% believe in an increase, 47% think the energy demand will not change and 15% believe in a decrease. the international energy agency [20] estimates that energy saving potentials of about 10% can be reached through smart technologies in the buildings sector. in industry further efficiency potentials are particularly seen by improved process controls, 3d-printing, machine learning and enhanced connectivity. however, although the potential savings can be leveraged through digitization, they are overshadowed by rebound effects and the additional demand generated. research already focusses on how to manage the growing energy by information and communication infrastructures [22]. experts agree, however, that only digitization will enable the broad expansion of decentralised renewable energy sources and the necessary flexibilization of energy demand [20, 21] and can initiate a backshoring of manufacturing activities back to the european market [23]. in this context data centre play an essential role – they are the backbone for digitalisation and closely interwoven with industry 4.0. as such they are becoming relevant components in the energy system of um. the world-wide energy demand of data centres is assumed to be about 1.5% of the world´s electric power consumption and is increasing significantly in the future [24]. as all this energy is ultimately transformed into thermal figure 2: concept for integrating um optimally in the urban energy system, own illustration 72 international journal of sustainable energy planning and management vol. 24 2019 how can urban manufacturing contribute to a more sustainable energy system in cities? utilities and consumers with the ability to control their systems. the focus will be on the rollout of smart meters and smart homes in order to develop urban smart districts like e.g. in rome [29]. as a result, data volumes will increase, and more computing power and storage space will have to be made available. beside new requirements also new options for the energy system occur (right side of figure 2), including the possibility of using waste heat from industrial processes. companies can become energy sources for local microgrids and provide power and heat for other businesses or neighbouring settlements. among other things, there is also the possibility to generate electricity from waste heat (at low temperature for example via orc processes) or to feed pv from hall roofs into a local grid. in addition to billing-related issues (billing via blockchain, fees for the use of the public grid), legal issues also arise (electricity seller becomes an energy supplier with associated obligations). in addition to the production of renewable energy, um can also become a consumer of a surplus of renewable energy. either because they can directly use the electricity in production processes at res peak times or save it for later. for example, heating or cooling processes could be carried out electrically at a time of high res supply or discontinuous batch processes could be coordinated therewith (demand-side-management). to focus more strongly on the new role of um companies in the energy system, targeted district management and forward-looking energy planning (for example for low-exergy systems) can make a significant contribution. it offers assistance and a framework for the energy strategy in companies. concluding, research has shown that for most of the solutions, that um would optimize from an energy perspective, the technological requirements are largely available. however, over the next few years, it will be necessary to intensify the testing of technologies in demonstration projects and to improve the interfaces between actors and sectors: between companies (“energy communities”), between industry and grid/energy supply company/neighbouring settlement areas and between the sectors heat electricity gas – mobility through e.g. power-to-x and possible uses of hydrogen. demonstration projects on load management for heat and electricity, waste heat and surplus electricity use (power-to-heat) in industry should be pushed and be tested under real-life conditions to prepare for large-scale use in the future. the concept for integrating um optimally in the urban climate targets. in this context, storage options are becoming increasingly important. this makes it possible to bridge energy generation and demand over time, make better use of fluctuating renewable generation, balance short-term load fluctuations and control production processes in a grid-stabilizing way. um companies can offer different potentials depending on the sector and production process: many companies need most of the energy during the day, at times when demand from households is low; some have the potential to adjust their production (e.g. in batch processes) to when a lot of energy is available and cheap (power-to-product); they have storage potentials (heating and cooling processes (power-to-heat/cool), own storage) and the possibility to produce and make and offer heat and electricity themselves. the increased use and integration of renewable energy sources that also come from um in the energy system create additional new requirements for the energy system. sector coupling is seen as a key concept of the energy transition and in building carbon-free energy systems [13]. previously separate systems, the energy consuming sectors buildings (heating and cooling), transport and industry are interlinked with the power sector. the increasing use of electricity from renewable energy sources in all sectors supports the decarbonisation of the energy system but is also associated with new challenges. according to the masterplan 2050 from the swiss municipal utility swisspower [27], this system change requires a paradigm shift: “in order to efficiently coordinate the large number of new, decentralized energy producers, an intelligent local management of supply and demand across all energy sources is needed.” in the future, the network infrastructure will have to take a balancing and storage function in addition to its transport function and balance fluctuations in energy generation from volatile sources such as wind and sun. all systems must exchange information with each other on an ongoing basis in order to achieve optimal results. the viennese distribution system operator wiener netze gmbh will also focus on similar topics in the future. smart grids and digitalisation, which enables communication between the individual plants and grids, can significantly optimise grid planning and forecasting, provided that the data is available at all times. smart grids should also make it possible to consume electricity exactly when it is generated primarily by renewables [28]. smart technologies are intended to provide both international journal of sustainable energy planning and management vol. 24 2019 73 tanja tötzer, romana stollnberger, roland krebs, mara haas and christoph biegler [8] waste-heat, manual for the estimation of regional waste heat potential, (2019). https://www.waste-heat.eu/waste-heat-potential/ manual-for-the-estimation-of-regional-waste-heat-potential [9] enova, potensialstudie spillvarme [potential study waste heat] (2009). https://www.enova.no/download/?objectpath=upload_ images/44eb7a65846b4824a6eb704198c3f6bc.pdf [10] loibl w, stollnberger r, heat_re_use.vienna, sondierung zur systematischen nutzung von abwärmepotenzialen in wien [exploration for the systematic use of waste heat potentials in vienna], (2016). https://smartcities.klimafonds.gv.at/ wp-content/uploads/sites/3/bgr010-2017-sc-2.pdf [11] 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https://www.energyagency.at/fileadmin/dam/pdf/publikationen/studien/aea_digitale_transformation_der_energiewelt_mai_2017.pdf https://www.energyagency.at/fileadmin/dam/pdf/publikationen/studien/aea_digitale_transformation_der_energiewelt_mai_2017.pdf https://www.energyagency.at/fileadmin/dam/pdf/publikationen/studien/aea_digitale_transformation_der_energiewelt_mai_2017.pdf https://www.sciencedirect.com/science/article/pii/s2214629618301051 https://www.sciencedirect.com/science/article/pii/s2214629618301051 https://www.sciencedirect.com/science/article/pii/s1090951617309008 https://www.sciencedirect.com/science/article/pii/s1090951617309008 _goback international journal of sustainable energy planning and management vol. 20 2019 51 *corresponding author – e-mail: marco.pellegrini3@unibo.it international journal of sustainable energy planning and management vol. 20 2019 51–66 abstract the revamping of existing high temperature district heating systems with low temperature solutions will ensure a better usage of primary energy thanks to the reduction of thermal losses through the networks and to the possibility of using low grade enthalpy heat for the purpose, including renewables and waste heat. however, several criticalities are present that make the evolution from the 3rd to the 4th generation of district heating not immediate. the paper aims to identify general technological and non-technological barriers in the revamping of traditional district heating networks into low temperature ones, with a particular focus on the italian framework. possible solutions are suggested, including relevant advice for decision makers. the paper also analyses how the possible solutions required for the up-grade of the existing district heating network can be classified through the analytic hierarchy process (ahp) to prioritize the ones that prove best for more advanced evaluation. 1. introduction the introduction includes a brief overview of dh systems to give an insight on district heating general framework, with a focus on low temperature district heating concept. in particular, the italian dh framework is analysed through a state of the art survey. 1.1. general framework thanks to the adoption of the paris agreement, new and challenging energy strategies were promoted with the aim of reducing fossil fuel consumption and of limiting the global temperature increase to within 1.5 °c above pre-industrial levels [1]. the implementation of several technologies based on renewables were studied to gradually reduce the penetration of traditional fossil fuels in the energy sector such as, for example, photovoltaic cells [2], solar thermal collectors and concentrators [3,4], wind turbines [5], biomass plants [6] and heat pumps [7]. however, although the potentialities, the implementation of renewables is limited by economic considerations requiring therefore new business models and regulatory frameworks based, for example, on environmental impact [8]. in particular, since the domestic/residential sector [9] accounts for one third of the total world energy consumption , new solutions are needed that are able to address space heating and cooling demand with a lower consumption of primary energy, a higher efficiency and a relevant renewable energy fraction. district heating (dh) can be considered as one of the most interesting solutions able to improve the entire efficiency of heat production and to reduce classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study marco pellegriniaa,*, augusto bianchinia, alessandro guzzinib and cesare saccanib a department of industrial engineering (din) – university of bologna, via fontanelle 40, 47121 forlì, italy. b department of industrial engineering (din) – university of bologna, viale risorgimento, 2 40136 – bologna, italy keywords: low temperature district heating (ltdh); revamping dh systems; barriers; analytic hierarchy process (ahp); url: http://dx.doi.org/10.5278/ijsepm.2019.20.5 52 international journal of sustainable energy planning and management vol. 20 2019 classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study abbreviations a alternative edh existing district heating ahp analytic hierarchy process epbd energy performance of buildings directive cltdh cold low temperature district heating ltdh low temperature district heating c criteria ng natural gas ci consistency index opex operative expenditures cop coefficient of performance q question cr consistency ratio ri random index cw composite weight rw relative weight dh district heating wltdh warm low temperature district heating dhw domestic hot water wte waste-to-energy environmental impact if compared with traditional decentralized heating systems [10–12]. from the first commercial application in 1877 at lockport (new york), several improve ments have been made over the years, totalling more than 80,000 dh networks worldwide [13]. among these improvements, attempts to foster the environmental sustainability were made in several retrofitting projects by increasing the utilisation of high enthalpy renewables such as biomass plants [14]. therefore, although developments have been made with respect to the first application, a reduction of the operative temperature was encouraged over the years to reduce thermal losses and to increase the utilization of lower enthalpy energy sources. furthermore, as reported in [15], the reduction of district heating competitiveness with the decrease of its linear heat density requires high distribution efficiency to ensure operations economic feasibility. in particular, four different dh generations are recognized by the literature according to the characteristics of the heating transfer fluid, such as the operating temperature and the thermodynamic state [16,17]. the 4th dh generation, also called “low temperature district heating” (ltdh), was firstly proposed by [18]: the minimum requirements fulfilled are the ability i) to supply low-temperature thermal energy to new and existing customers, ii) to minimize thermal losses, iii) to integrate low enthalpy heat and iv) to become part of smart energy systems contributing to the transition towards a 100% renewable energy supply system characterized by the integration of different energy sectors [19,20]. the ltdh definition identifies a wide range of temperatures: for example, a preliminary classification is proposed in [21] where “warm ltdh” and “cold ltdh” systems are introduced based on the need or not to locally boost the temperature to customer level. in [22] three different ltdh systems are defined on the basis of distributing temperature: “low temperature” systems (55/25 °c), “ultra-low temperature with electric boosting” systems (45/25 °c), and “ultra-low temperature with heat pump boosting” systems (35/20 °c). in [15] ltdh systems (70/40 °c) are compared with ultdh systems (40/25 °c): the annual heat distribution costs and the specific distribution costs are lower in the case of ultdh. in both cases centralized ground source heat pumps are defined, while decentralized air-to-water heat pumps are considered only for ultdh case. however, even if advantages can be achieved through the implementation of dh systems [23] many technical and non-technical challenges have to be solved to fully apply the 4th dh concept in existing systems [24]: • flow recirculation. in traditional dh systems the supply fluid is recirculated to reduce temperature decrease due to heat dispersion in the network in stagnant conditions. recirculation, however, causes return temperature increase a phenomenon known as return contamination and consequently a system performance reduction. since this is not acceptable in ltdh, an integrated solution consisting of a three-pipe distribution network is proposed in [25]. three independent solutions international journal of sustainable energy planning and management vol. 20 2019 53 marco pellegrini, augusto bianchini, alessandro guzzini and cesare saccani are instead proposed by [26], consisting of the recirculation of the supply flow through service pipes, of bathroom floor heating and of the cooling by heat pumps to produce domestic hot water. • need to implement ict solutions and distributed instrumentation in the system. because of the possibility to consume and to introduce thermal energy into the dh network by prosumers as described in [27], more stringent requirements regarding metering and control will be present in ltdh networks both at customer level and along the network in order to help distributors take operating decisions, for example in the presence of substation faults [28,29]. • size of existing heat exchangers and radiators. by reducing supply temperature, a reduction of heat transfer is expected, resulting in possible uncomfortable conditions for customers. even if usually oversized, a possible solution is the substitution of existing radiators whose performance cannot be satisfactory for the new operating conditions as reported in [30], where a case study is analysed considering heating demands in four danish single-family houses from the 1930s. a similar analysis was performed in [31] where thermal performance of danish single-family houses from the 1980s supplied by ltdh was simulated resulting in an acceptable condition for most of the year. another proposed solution is the increase of dh temperature during the coldest season as proposed by [32]. • legionella issue in domestic hot water production systems. to reduce the risk of legionella contamination in domestic hot water (dhw) storage systems, national regulations require high water temperature in order to inhibit bacterial growth. however, thermal, chemical and physical treatments are available against legionella issue as reviewed by [33], reducing the concentration of bacteria or preventing them from entering into the system operated at low temperature. from a design point of view, two configurations of decentralized substations to produce dhw in ltdh systems based on the minimization of the available volume for bacteria proliferation, the instantaneous heat exchanger unit (iheu) and the district heating storage unit (dhsu), are proposed in the literature [34]. in addition to these solutions, five different substation configurations applicable to single-family cases supplied with ultra-low temperature district heating (ultdh), consisting of an additional heating device, are proposed and compared in terms of total energy consumption in [35]. because of the identified issues, the application of ltdh is easier in new networks as shown by the low number of existing system renovations. in fact, very few cases were found in the literature. for example, in sønderborg (denmark), 975 mwh/y of thermal energy are supplied by an ltdh network operating at a supply temperature between 50 °c and 55 °c in place of an existing network previously operated at 70/75 °c [36]. in lystrup (denmark), a demonstration ltdh network supplying heat to forty terraced low energy houses is operated at a supply temperature of 55 °c in a place of the initially envisaged traditional system [32]. in aarhus (denmark), ltdh systems will be demonstrated in single and multi-family buildings, reducing the supply temperature from around 72–83 °c towards 60 °c during summer and 70 °c during winter [37]. in albertslund (denmark), the renovation of the existing dh is encouraged by the local municipality to apply the concept of ltdh by 2026, reducing the supply temperature from 85 °c to 60 °c [38]. instead, many new ltdh systems have been designed and supplied by different types of renewable sources, such as in slough (uk), in ackermannbogen (germany) [39], and in okotoks (canada) [40]. among low enthalpy sources, many geothermal applications are located in switzerland as reported in [41]. for example, 960 kw of thermal power are supplied to 177 apartments in the city of oberwald through an ltdh network supplied by geothermal heat pumps fed by a water source at 16 °c. another example of new ltdh systems is present in airolo, where 1.9 mw are supplied by heat pumps to the highway’s buildings, exploiting a water source at 15 °c cooled down by 2.3 °c. a heat pump is used in the village of kaltbrunn to supply 156 kw utilising a heat source at 12 °c. a low capacity system consisting of a heat pump is located in the community of minusio (canton ticino), exploiting an available source at 16 °c. a coefficient of performance (cop) of 4.0 is obtained in the village of trimbach (canton 54 international journal of sustainable energy planning and management vol. 20 2019 classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study the paper shows an overview of the italian dh state-of-the-art in order to identify the main characteristics of the sector. possible technological and non-technological barriers to the renovation of existing italian dh systems are then identified and critically analysed. the analytic hierarchy process (ahp) method is applied using the identified barriers as criteria to rank cold and warm ltdh systems with respect to existing dh systems. 1.2. analysis of the italian district heating sector italian dh systems are relatively recent, since the first system was installed in 1971 in modena. a rapid development of the dh sector occurred between 2000 and 2015 in italy, thus reaching a total number of 236 dh networks in 2016, with a total pipelines nstalled covering 4270 km, distributed in 193 cities. on the other hand, the heated volume increase is concentrated in the years 2004–2007, while in the last 10 years a decreasing trend in the yearly percentage increase of heated volume can be observed [49]. table 1 shows that the majority of italian dh systems (77.5%) have been operating for less than 20 years: therefore, it is very difficult to justify a renovation in accordance with the ltdh concept while the dh system is still being depreciated. most dh systems can be classified as 3rd generation (81.4%), while very few can be included in the 2nd (16.1%) and 1st (2.5%) generations. moreover, the italian dh framework is characterized by the following heat generation plants: cogeneration plants, natural gas (ng) boilers and renewable plants, including also waste-to-energy (wte) power plants. in 2016, most of the heat was still produced by cogeneration, followed by ng boilers and renewable sources. nevertheless, a significant decrease of cogeneration penetration occurs with respect to 1995, while an increasing of renewable sources can be highlighted: this fact can be justified by the combined effect of i) energy efficiency policies (including renewables incentives) and ii) the reduction of profitability in electricity production by fossil fuel cogeneration. an increase (+226.9%) of the supplied thermal energy occurred between 1995 (2687 gwh) and 2016 (8784 gwh), justified by the heated volume increase (+360.1%) in the same period. however, a reduction of the specific consumption from 36.1 kwh/(m3y) to 25.7 kwh/(m3y) can be observed. instead, only 121 gwh of cooling energy were delivered in 2016 [49]. solothurn) where 150 apartments are supplied by a heat pump and traditional boilers. in italy, instead, two ltdh pilot projects were developed by cogeme, an italian communal holding company operating in the energy sector, exploiting a geothermal source and the lake of iseo [41]. a similar approach is implemented at portopiccolo (near trieste) where 4.5 mw are centrally extracted by seawater at a temperature between 9 °c and 28 °c and used to produce heat up to 40 °c through decentralized heat pumps [42]. other examples of successful implementation of geothermal source in ltdh are also found in ulstein [39] and stavanger [43] (norway), and in heerlen (netherlands) [44]. the integration of renewable sources proves easier in ltdh, making the concept of the smart energy systems effective [45]: a case study regarding the possibility to maximize the use of locally produced electricity by photovoltaic panels through the use of electric storage and heat pumps connected to a thermal storage in the municipality of bressanone-brixen is analysed in [46]. in nottingham (uk) a ltdh project (the remourban project) was developed aiming to connect 94 properties in the demo site supplying heat at approximately 50 °c to 60 °c and return temperature approximately at 30 °c by exchanging heat with the primary return pipeline [47]. the need to apply the concept of the smart energy systems approach to contribute to a future 100% renewable energy system is highlighted in [48], requiring a new approach to energy generation and consumption. so, ltdh implementation in future years is crucial to contribute to the worldwide energy efficiency goals and to create interconnected energy systems. the paper analyses the existing barriers for the renovation of existing dh systems for transformation into ltdh, with a particular focus on the italian dh sector, considered as representative also for southern europe. there are very few reports in the literature about ltdh development in european southern regions, thus making it very difficult to plan and to invest in such renovation action. furthermore, the technological solutions suggested for northern regions moving towards ltdh systems are often not applicable to southern regions because of the presence of different framework conditions, in particular as regards building characteristics. international journal of sustainable energy planning and management vol. 20 2019 55 marco pellegrini, augusto bianchini, alessandro guzzini and cesare saccani the current solutions identified by italian dh operators seem unable to ensure on their own the economic profitability of the dh sector in accordance with the market’s evolution due to climate change and to the variation of customers’ energy demands. among these, in fact, the optimization of the circulating flowrate through the installation of pumps with inverters or the increase of temperature difference between supply and return pipes to reduce the thermal losses through the return pipes seem to be not enough to support dh investments in the future, and disruptive another relevant fact about italian dh existing networks concerns distribution heat losses: an average value equal to 21.7% of the total produced heat is currently dispersed in italian dh networks. the highest heat losses are concentrated in low density distribution networks as resulting from the processing of data shown in figure 1. hence, the strategies to increase dh system efficiency in italy should include a reduction of fossil fuel dependence, an increase in renewable sources and a reduction of distributing thermal losses. nevertheless, table 1: development and characterization of the italian dh framework since 1995. (based on [49]) parameter 1995 2000 2015 2016 number of cities with a dh system 27 27 182 193 number of dh networks 45 53 216 236 hot water (90 °c) 26 27 174 192 superheated water (120 °c) 17 22 37 38 steam 2 4 6 6 heated volume (mm3) 74.4 117.0 329.8 342.3 heat delivered (gwh th/year) 2,687 3,854 8,551 8,784 cogeneration (%) 76.0 66.0 51.2 50.7 ng boilers (%) 18.0 22.0 23.1 23.2 renewable sources including waste-to-energy power plant (%) 6.0 12.0 25.7 26.1 dh network length (km) 648 1,091 4,098 4,270 number of dh substations 10,148 18,594 77,482 79,991 100 90 80 70 60 50 40 30 20 10 0 0,00 2,00 4,00 6,00 heat demand density, [gwh/km] t h e rm a l l o ss e s, [ % ] 8,00 10,00 12,00 14,00 figure 1: thermal losses according to the heat demand density in italian dh networks. (based on data of [49]) 56 international journal of sustainable energy planning and management vol. 20 2019 classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study renovation actions must be taken mainly by private customers in order to have an impact, meaning that higher economic incentives or the introduction of taxes based on co2 emissions should be put in place by policy makers to stimulate a wider adoption of building efficiency actions. in conclusion, the dh framework in italy seems to be promising for ltdh application, but some limitations are expected due to the buildings’ characteristics of age and of low energy efficiency, meaning that low temperature heating systems are not commonly found at customer level. 2. material and methods the materials and methods section presents the method applied by the authors to identify and classify the barriers to the development of ltdh in italy. the ahp method is fully described to ensure the replicability of the analysis also to other european contexts. 2.1. identification of barriers in the development of ltdh in italy relevant barriers have to be identified to pave the way for the renovation of existing italian dh systems in accordance with the ltdh concept. in fact, even if several solutions are present in the literature, their direct application to italy and more generically to southern european countries may be not effective since different framework conditions can be found. the following questions (qs) have been defined to identify these barriers: 1) the traditional dh system is a well-known system: why should we change existing dh configurations into new ones? solutions such as the introduction of the ltdh concept are expected to be necessary. the ltdh concept seems to be really appropriate to the italian dh framework since it can contribute both to integrate low enthalpy renewable sources and to reduce the distribution heat losses. however, the feasibility of the transition from traditional dh to ltdh systems needs to also consider the characteristics of the buildings connected to the dh networks, since some criticalities at customer level may arise from the changes in dh operating conditions. as reported by [50], 7.3 million residential buildings (about 60% of the total) in italy were constructed before 1976, when the first italian law about energy efficiency in buildings was promulgated. furthermore, a decline in construction activities began in the 1990s, as shown in figure 2. the effect of the combination of an old buildings stock and of a decreasing trend in the construction sector is that only a very small percentage of italian buildings is characterized by good energy performances (<8%) [51]. furthermore, no particular improvements in energy efficiency in the building sector are expected in the near future. in fact, italy is characterized by a major renovation rate (defined as the number of major renovations divided by the total number of buildings) of about 0.75% [52], which is relatively low if compared with other european countries (i.e. germany is about 1.5%, france is 2.0% and norway 2.4%). in addition to previous concerns, in the current italian situation only 0.8 million residential buildings are public (housing less than 2 million people) [53], and so public housing renovation can only play a marginal role in the transition to higher efficiency building stock. therefore, 2500000 2000000 1500000 1000000 500000 >1918 1919-1945 1946-1960 1961-1970 1971-1980 year of realization 1981-1990 1991-2000 2001-2005 >2006 0 n ° o f re si d e n tia l b u ild in g s, [ # ] figure 2: number of residential buildings in italy. (based on [50]) international journal of sustainable energy planning and management vol. 20 2019 57 marco pellegrini, augusto bianchini, alessandro guzzini and cesare saccani eq. (2) has also to be respected: the following question: “of the two elements, which is more important with respect to the criterion and how much?” has to be answered to compare two elements with respect to a common criterion. a nine-point scale is used to convert qualitative judgments into numerical ones as defined in table 2. 3) because several decisional criteria are present, the third step consists in the ranking of criteria and in the evaluation of judgement consistency. for the purpose, the principal eigenvector v of the matrix a has to be calculated through the solution of eq. (3): where λmax is the largest eigenvalue of the matrix a and the corresponding eigenvector v contains only positive entries. the consistency of the matrix is estimated through the calculation of the consistency ratio (cr) defined as in eq. (4): where ci is the consistency index of a randomly generated reciprocal matrix from the nine-point scale and ri is the random index. a higher value of the index cr is representative of a poor consistency of the matrix and thus of the judgement. a threshold value equal to 0.10 is usually considered for the acceptability of the analysis [55]. the calculation of ci can be done through eq. (5): , , , 1 > 0; ; 1i j j i ii i j a a a a = = (2) vmaxav = λ (3) ci cr ri = (4) (5) 1 max nci n λ − = − 2) the italian dh market decreased in the last 10 years: why invest in it? 3) investment uncertainty: how much does the renovation of a dh system to an ltdh system cost? 4) the italian building stock is old and characterized by low energy efficiency: what are the solutions to ensure thermal comfort also in low energy performance buildings? 5) what interventions should be made to ensure the respect of contractual obligations by dh operators? 6) dh supply limits: what are the technical issues? 7) dh supply limits: what are the business/legal issues? 8) what are the new skills required in the design, realization, commissioning and operation phases? 9) what can be the issues due to the integration with district cooling (dc) systems? 10) what are the main potential impacts on customers? in the discussion section, answers are given to the proposed list of questions. 2.2. the analytic hierarchy process (ahp) method a comparison was made between different possible solutions to overcome the identified barriers. a quantitative comparative analysis did not seem to be appropriate at this early stage of the analysis, and a qualitative multi criteria approach was thus considered in the paper through the analytic hierarchy process (ahp) [54]. ahp is a qualitative comparative method [55] structured in the following four steps: 1) in the first step a hierarchical model is designed to aggregate elements according to their common characteristics at separate levels. the highest level represents the aim of the analysis, the middle ones correspond to the criteria and sub criteria, while the lowest one contains possible alternatives. 2) in the second step, a pair-wise comparison between elements of the same levels is required based on a specific element of the upper level. a comparative matrix a, in which each elements ai,j represents the comparison between the row element ai and the column element aj as reported in eq. (1), is constructed: table 2: relative importance measurement scale importance intensity definition 1 equal importance 3 weak importance 5 moderate importance 7 strong importance 9 extreme importance 2,4,6,8 intermediate values sum 11.00 (1),( ) , 1, 2, ... ..,i ja a where i j number of criteria= = 58 international journal of sustainable energy planning and management vol. 20 2019 classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study traditional heating systems with more efficient ones (i.e. renewable energy sources), and the current low profitability of existing dh systems are three great drivers moving towards ltdh systems. however, the quantification of the cost for the retrofit of existing dh networks is more critical and is usually perceived as requiring high investment. at the same time, operation benefits depend on several parameters that are not directly under the control of dh operators, like ng and electricity costs, or the presence of dedicated incentives and tax reductions. because very large investments require a very small range of uncertainty or must offer a potentially high yield on investment capital [56], dh operators consider the retrofitting of the existing dh networks very critical from the economic point of view. another critical issue is due to the presence of a great number of low energy efficiency buildings and, consequently, to the possible limitations in ensuring thermal comfort (q4). in fact, the decrease of transmitted heat due to the reduction of the supply temperature is not always acceptable for final customers that would need to renovate their internal heating systems to ensure thermal comfort conditions in accordance with the new supply conditions [30]. therefore, dh supply temperatures have to be ensured coherently with existing contracts between operator and customers, otherwise new contracts have to be signed. temperature boosters (q5) such as decentralized heat pumps, solar collectors, electric boilers or other solutions should be installed to locally increase the temperature without thermally unbalancing th ltdh network [57,58]. however, a check of available spaces within substations and of the required variations has to be performed to ensure the respect of existing constraints and dh supply limits (q6) [33]. although the installation of active latent heat thermal energy storage systems could save spaces in existing dh substation, sensible heat water storage systems are still preferred due to their lower specific cost per cubic meter [59]. temperature boosters can also be property of the final customers or prosumers: in the last case, thermal energy can be fed-in into the network even if it is produced outside of the dh system’s supply limits. the result is a complex bi-directional and decentralized energy system that requires smart management and where n is the number of criteria. ri factor is then tabulated according to the number of element as reported in table 3. 4) the final step of the method is the calculation of the aggregate priority. thanks to the local priorities alternatives with respect to each criterion, the total priorities of each alternative are calculated. to calculate the relative weight (rw) for each criterion at each level, eq. (6) has to be used: a composite weight (cw) of the high level alternatives taking into account the rw of low level alternatives and representing their ranking can be lastly calculated as in eq. (7): where the subscript k is used to indicate the different level. 3. results and discussion the results of the ahp analysis are shown and discussed in the third section of the paper. comments are given by the authors to suggest effective actions to be carried out for the development of ltdh systems in italy. 3.1. barriers and possible solutions for the development of ltdh in italy in the previous section, ten questions (qs) were defined as a track-list to identify the main barriers to the renovation of existing dh systems to 4th generation systems. a preliminary division into technological and non-technological barriers was made as in table 4. the first issues to be overcome (q1, q2, q3) are related to the techno-economic feasibility and sustainability of dh operators’ investments in dh renovation. the quantification of heat losses reduction, the efficiency gain reached by the substitution of 1 1 2 2 1 preference of criterion i in column sum of the entries in column of criteria preference of criterion i in column sum of the entries in column of criteria preference of criter r ion i i w n n  =   + +⋅⋅⋅ + column n sum of the entries in column of criteria n    (6) , 1 , 1 n i k i k i cw rw rw− = = ×∑ (7) table 4: technological and non-technological barriers to the integration of the ltdh concept technological non-technological question 1, 4, 6, 8, 9, 10 2, 3, 5, 7 table 3: random index according to the number of elements n 1 2 3 4 5 6 7 8 9 10 ri 0 0 0.58 0.9 0.12 1.24 1.32 1.41 1.45 1.49 international journal of sustainable energy planning and management vol. 20 2019 59 marco pellegrini, augusto bianchini, alessandro guzzini and cesare saccani finally, depending on the adoption of a warm or cold ltdh model, the impact on customers (q10) may be different: while a cold ltdh system needs a local booster, and so the customer may not perceive any kind of variation in the dh operation, in a warm ltdh a supply temperature reduction is present in the substation, and so the customer can directly observe different performance levels of the dh system (i.e. temperature reduction in the radiators) [21]. 3.2. alternatives and selection criteria from the proposed questions regarding existing barriers for the introduction of ltdh, ten criteria (c) were chosen for the ahp analysis to compare possible dh configurations, distinguishing between technological and non-technological alternative: 1) knowledge about state of the art technology (technological) – c1. 2) status of dh market (non-technological) – c2. 3) economic profitability and uncertainty payback time (non-technological) – c3. 4) supply delivery conditions (technological) – c4. 5) contractual obligations (non-technological) – c5. 6) dh supply limits (technological) – c6. 7) dh supply limits (non-technological) – c7. 8) skills required (technological) – c8. 9) integration with dc (technological) – c9. 10) impact on customer (technological) – c10. to perform ahp analysis, compared alternatives (a) also have to be defined. for the purpose, three possible configurations were considered: existing dh (edh – a1), warm ltdh (wltdh – a2) and cold ltdh (cltdh – a3). edh was introduced to compare existing systems with ltdh ones. a schematic representation of the hierarchal approach is proposed in figure 3 where the scope of the analysis, criteria and alternatives are shown. innovative business models, with relevant legal issues (q7) related to fiscal energy metering (consumption and production), charge for device maintenance, responsibilities in the case of anomalies, and energy production planning [60,61]. the criticalities can be solved through the application of new contracts, and a different legal framework also seems to be required. furthermore, new intermediary figures would be introduced in the dh market being responsible for the management of decentralized systems. to make ltdh revamping of existing dh networks effective, new skills are required (q8), starting from the design phase, the ability to manage big data and the optimization of control strategies [62]. a new business approach to the dh market is required from the decision makers and from those who will be responsible for the definition of contracts because many more variables will be present in future energy scenarios [61]. another relevant barrier is related to dh integration with dc, which is a specific issue of southern europe (q9). in traditional dh systems, absorption chillers can be used as refrigeration units in combination with standard compression chillers. the absorption chillers can recover the waste heat produced by cogeneration plants, thus maximizing the investment and considerably reducing the cold energy production costs [63]. absorption chillers are supplied by relatively high temperature fluid and cannot directly work with supply fluid temperature of ltdh networks. an effective integration of ltdh and dc can be achieved with a different substation configuration only if the supply temperature is very low, i.e. under 25 °c: in that case it is possible to locally satisfy the cooling demand of each customer through decentralized chillers or reversible heat pumps. through a further decreasing of ltdh supply temperature under 12 °c, free cooling may be achieved [63]. scope of ahp criteria alternatives ranking of dh configurations edh c1 c2 c3 c4 c5 c6 c7 c8 c9 c10 wltdh cltdh figure 3: the hierarchal representation of the comparative analysis with ten criteria and three alternatives 60 international journal of sustainable energy planning and management vol. 20 2019 classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study “considering dh systems, what is the importance of criteria a with respect to criteria b?”. table 6 reports the pair wise matrix resulting from the comparison: each number is the preference of each criterion with respect to the others. for example, in the fourth row, c5 (contractual obligations) is compared to all the other criteria. as shown, c5 is considered much more important than c1 (state of the art technology) in the first column but it is considered to have the same importance with respect to c4 (supply delivery conditions). therefore, the values reported in the intersection between rows and columns are the preference of the first with respect to the second. the estimation was performed by the authors based on the criticalities identified by the literature and by considering the italian dh sector peculiarities. more in detail, economic and financial issues as well as the relationship with the customers are generally considered the most critical ones, since both can have high negative impact on a dh project development [23,64–67]. the highest importance (32.3%) given to the impact on customer (c10), as resulting from table 6, is justified by the specific italian framework, which is characterized by a larger part of low energy efficiency buildings and the consequent high risks of negative impact on the performance at customer level (i.e. thermal comfort) of the dh system due to supply temperature lowering. economic uncertainty (c3) is the second impacting criteria (21.5%), since financing issues always play a decisive role in the dh sector. contractual obligations (c5) and the supply delivery conditions (c4) have, respectively, the third (14.0%) and fourth (11.9%) importance, since both are related to the italian customer characteristics (as per c10). other criteria have an importance almost equal to or lower than 5.0%. as shown in table 6, table 5 proposes a qualitative assessment of the identified criteria due to the impact of ltdh for wltdh and cltdh configurations. as shown, due to the absence of remote temperature boosters in wltdh configurations, a high possible impact is considered for those criteria that take into account the delivery conditions to the customers. in fact, the absence of remote boosters is responsible for offdesign working conditions that can be unacceptable for the end-users. the same barriers, instead, have a different impact on cltdh. as shown in table 5, the main barriers for the implementation are the economic ones (c2 and c3) and those related to the renovation of existing systems to ensure design delivery conditions (c6). as previously reported, in fact, ever-greater guarantees are required by top management before making economic investments. this is particularly true in the case of cltdh for which great efforts are required for their implementation in substitution of the relatively new italian dh. another possible impact is due to the necessity to modify dh substations in order to ensure delivery conditions at the same time as the variation of the dh plant supply conditions. as previously described, the implementation of dedicated devices along the dh network has to be carefully checked both during design and operation. consequently, the identification of the best solution requires further investigation. 3.3. obtained results to overcome the identified uncertainty, ahp is the selected method because qualitative judgement can be used as a starting point for a semi-quantitative analysis. the first step of the analysis was the comparison between criteria responding to the following question: table 5: impact of different criteria with respect to the implementation of wltdh and cltdh criteria kind wltdh cltdh c1 technological low low c2 non-technological medium high c3 non-technological low high c4 technological high low c5 non-technological high none c6 technological none high c7 non-technological none medium c8 technological low medium c9 technological high low c10 technological high none international journal of sustainable energy planning and management vol. 20 2019 61 marco pellegrini, augusto bianchini, alessandro guzzini and cesare saccani from the processing of the obtained results in the pair-wise comparison between criteria and alternatives, the preferred configuration is calculated by eq. (7) as reported in table 17. it is interesting to note that cltdh proves to be most appropriate for the italian dh a good consistency ratio (cr), lower than 0.10, was found, thus ensuring the consistency of the analysis. matrices for the pair-wire comparison of the three alternatives based on each criterion are presented in tables from 7 to 16. the values in the tables are obtained by answering the following question: “with respect to criterion c, what is the impact on alternative a with respect to alternative b?”. the answers have been given on the basis of the preliminary qualitative analysis carried out in table 5. for example: in table 9 economic investment and uncertainty are considered: edh is assumed to be the most critical solution since several external factors such as fuel cost, electricity selling price and incentives/feed-in tariffs can have a negative impact on expected operative expenditures (opex); in table 10 and table 11, supply delivery conditions and contractual obligations have the greatest impact on wltdh due to the fact that, without the presence of decentralized heat sources, wrong supply conditions could verify during operative conditions, while a lower impact is assumed for cltdh due to the presence of remote heating devices; in table 12 and table 13, technological and not technological supply limits are considered: the greatest impact is assumed for cltdh, since decentralized heat sources and dedicated control systems have to be installed in existing substation where spaces are limited; in table 16, cltdh and edh are assumed as the least impacting configurations ensuring the maintenance of existing supply conditions. table 6: pair-wise comparison of the different criteria and their relative weights (rw) c1 c2 c3 c4 c5 c6 c7 c8 c9 c10 rw c1 1.00 0.33 0.11 0.14 0.11 0.33 0.33 0.33 0.33 0.11 0.015 c2 3.00 1.00 0.20 0.20 0.20 3.00 3.00 3.00 3.00 0.11 0.053 c3 9.00 5.00 1.00 3.00 3.00 9.00 9.00 9.00 9.00 0.20 0.215 c4 7.00 5.00 0.33 1.00 1.00 5.00 5.00 5.00 5.00 0.20 0.119 c5 9.00 5.00 0.33 1.00 1.00 7.00 7.00 5.00 5.00 0.33 0.140 c6 3.00 0.33 0.11 0.20 0.14 1.00 1.00 3.00 3.00 0.14 0.038 c7 3.00 0.33 0.11 0.20 0.14 1.00 1.00 5.00 5.00 0.14 0.048 c8 3.00 0.33 0.11 0.20 0.20 0.33 0.20 1.00 1.00 0.11 0.024 c9 3.00 0.33 0.11 0.20 0.20 0.33 0.20 1.00 1.00 0.11 0.024 c10 9.00 9.00 5.00 5.00 3.00 7.00 7.00 9.00 9.00 1.00 0.323 sum 50.00 26.67 7.42 11.14 9.00 34.00 33.73 41.33 41.33 2.46 ri: 1.49 ci: 0.14 cr: 0.095 λmax: 11.28 table 7: pair-wise comparison of the three alternatives with respect to the knowledge about state of the art technology criterion c1 cltdh wltdh edh rw cltdh 1.00 1.00 1.00 0.33 wltdh 1.00 1.00 1.00 0.33 edh 1.00 1.00 1.00 0.33 sum 3.00 3.00 3.00 ri: 0.58 ci: 0.0 cr: 0.0 λmax: 3.00 table 8: pair-wise comparison of the three alternatives with respect to the status of dh market criterion c2 cltdh wltdh edh rw cltdh 1.00 3.00 0.20 0.19 wltdh 0.33 1.00 0.14 0.08 edh 5.00 7.00 1.00 0.72 sum 6.33 11.00 1.34 ri: 0.58 ci: 0.025 cr: 0.043 λmax: 3.05 62 international journal of sustainable energy planning and management vol. 20 2019 classification through analytic hierarchy process of the barriers in the revamping of traditional district heating networks into low temperature district heating: an italian case study table 15: pair-wise comparison of the three alternatives with respect to the integration with dc criterion c9 cltdh wltdh edh rw cltdh 1.00 0.11 0.33 0.07 wltdh 9.00 1.00 5.00 0.75 edh 3.00 0.20 1.00 0.18 sum 13.00 1.31 6.33 ri: 0.58 ci: 0.010 cr: 0.017 λmax: 3.02 table 16: pair-wise comparison of the three alternatives with respect to the impact on customers criterion c10 cltdh wltdh edh rw cltdh 1.00 0.11 1.00 0.09 wltdh 9.00 1.00 9.00 0.82 edh 1.00 0.11 1.00 0.09 sum 11.00 1.22 11.00 ri: 0.58 ci: 0.0 cr: 0.0 λmax: 3.00 table 10: pair-wise comparison of the three alternatives with respect to the supply delivery conditions criterion c4 cltdh wltdh edh rw cltdh 1.00 0.11 1.00 0.09 wltdh 9.00 1.00 9.00 0.82 edh 1.00 0.11 1.00 0.09 sum 11.00 1.22 11.00 ri: 0.58 ci: 0.00 cr: 0.00 λmax: 3.00 table 11: pair-wise comparison of the three alternatives with respect to the contractual obligations criterion c5 cltdh wltdh edh rw cltdh 1.00 0.14 1.00 0,11 wltdh 7.00 1.00 9.00 0,80 edh 1.00 0.11 1.00 0,10 sum 1.00 0.14 1.00 ri: 0.58 ci: 0.00 cr: 0.00 λmax: 3.00 table 13: pair-wise comparison of the three alternatives with respect to the supply limits (not-technological) criterion c7 cltdh wltdh edh rw cltdh 1.00 5.00 9.00 0.72 wltdh 0.20 1.00 5.00 0.22 edh 0.11 0.20 1.00 0.06 sum 1.31 6.20 15.00 ri: 0.58 ci: 0.055 cr: 0.095 λmax: 3.11 table 14: pair-wise comparison of the three alternatives with respect to the skills required criterion c8 cltdh wltdh edh rw cltdh 1.00 9.00 9.00 0.82 wltdh 0.11 1.00 1.00 0.09 edh 0.11 1.00 1.00 0.09 sum 1.22 11.00 11.00 ri: 0.58 ci: 0.0 cr: 0.0 λmax: 3.00 table 12: pair-wise comparison of the three alternatives with respect to the supply limits (technological) criterion c6 cltdh wltdh edh rw cltdh 1.00 3.00 9.00 0.69 wltdh 0.33 1.00 3.00 0.23 edh 0.11 0.33 1.00 0.08 sum 1.44 4.33 13.00 ri: 0.58 ci: 0.0 cr: 0.0 λmax: 3.00 table 9: pair-wise comparison of the three alternatives with respect to the economic investment and uncertainty on payback time criterion c3 cltdh wltdh edh rw cltdh 1.00 5.00 0.33 0.28 wltdh 0.20 1.00 0.14 0.07 edh 3.00 7.00 1.00 0.64 sum 4.20 13.00 1.48 ri: 0.58 ci: 0.025 cr: 0.043 λmax: 3.05 international journal of sustainable energy planning and management vol. 20 2019 63 marco pellegrini, augusto bianchini, alessandro guzzini and cesare saccani scenario. wltdh, instead, is considered the most critical for the italian dh market, especially for the possible impact on customers that limits its imple mentation in existing systems. 4. conclusion solutions to improve energy efficiency are required in order to identify energy and emission targets worldwide and particularly in residential and commercial sectors where a greater implementation of district heating (dh) systems is expected in future years. however, even if known for more than a century, a continuous technological development has always characterized the dh sector with the aim of reducing thermal losses, integrating more renewable sources and integrating them with other energy sectors. the fourth generation of this sector or the so called low temperature district heating (ltdh) represents the novel approach in dh. nevertheless, many barriers are currently present reducing the development potential of ltdh systems. furthermore, little research has been done for southern european regions, and for italy in particular, where a high potential of renewable sources could be present. the paper identifies and classifies ten main technological and non-technological barriers to the adoption of ltdh in italy. the analytic hierarchy process (ahp) method is applied to assess the difficulty to implement cold ltdh and warm ltdh in existing dh networks by considering the identified barriers. the preliminary assessment shows that cold ltdh proves to be the best option for the italian dh sector, while several concerns are still present for the application of warm ltdh, the possible impact on the customers being the most relevant. a questionnaire was drawn up and submitted to several experts in italy and in other european countries, to compare the opinions on barriers and solutions in the development of ltdh and to allow a comparison between the italian framework and those in other european countries. once concluded, the findings of the survey will be used to adjust and modify the ahp approach developed in the paper and to validate or to update the current results. furthermore, a feasibility study will be carried out in one existing and representative italian dh network to measure technical and economic barriers in the retrofitting into an ltdh network. acknowledgments the authors acknowledge the eit climate-kic 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https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/191542/barriers_to_deployment_of_district_heating_networks_2204.pdf 05. 1166-3897-1-le.qxd international journal of sustainable energy planning and management vol. 06 2015 49 i beijing, tianjin, hebei, shanxi, inner mongolia, liaoning, jilin, heilongjiang, shandong, henan, shanxi, gansu, ningxia, xinjiang and qinghai. international journal of sustainable energy planning and management vol. 06 2015 49-68 a transition perspective on alternatives to coal in chinese district heating ���������� ���� ��� ���������� ��� ���� �������� ��� ������� �������� ������� ������������ ��������� � � �� ��� ������������ ��� ��� ������ � ��� ��� � ���������� abstract china uses half the world’s annual coal consumption, since coal is the primary energy source for heating in urban areas, particularly in northern china. this entails significant challenges for urban air quality in china and for the global climate. unlike the electricity and transportation sectors, the heating sector has received little attention from policy and research actors in china, despite very high penetration of urban district heating (dh) systems, which supply more than 80% of northern china’s urban buildings. dh systems can facilitate efficiency improvements and the use of renewable energy sources. this study explores the dynamics and possibility to expand alternative energy sources (natural gas, biomass, direct geothermal heat, ground-source heat pump, municipal waste heat, industrial waste heat) for dh in china. we apply an analytical framework largely based on the multi-level perspective on socio-technical transitions, in which transitions are interpreted as the result of interactions between niche, regime and landscape elements. the study provides an integrated picture of the socio-technical structure and functioning of dh in china. the results show that an energy transition in chinese dh systems has barely started. the system is characterised by stability of the coal-based dh regime, while a number of alternative niches are struggling to emerge. among these, natural gas is the most successful example. however, at local level different niches present opportunities in terms of physical availability, economic viability and capacity to address landscape pressure. the introduction of an appropriate sustainable heat roadmap and policy framework at national level could promote and facilitate this energy transition. keywords: district heating; china; renewable energy; transition. url: dx.doi.org/10.5278/ijsepm.2015.6.5 1. introduction on cold winter mornings, the residents of beijing wake up in a city trapped by smog. china’s increasingly grave air pollution is experienced daily by millions of people across the country. the problem is even more acute during winter in northern china, where heating systems are needed [1]. in the provinces of northern chinai, where on average 80% of all urban buildings are connected to a district heating (dh) network [2], dh could be used to reduce use of fossil fuel for heating. dh involves the distribution of heat from one or several heat production plants to a number of consumers in a city or town through a network of pipes. due to the scale involved in dh, these systems provide a number of advantages over individual heating systems, including the opportunity to use renewable energy sources such as unrefined biomass and municipal solid waste (msw), while also reducing primary energy demand by enabling combined heat and power (chp) production and recovery of industrial waste heat [3]. today, many european countries have constantly increased the share of renewable energy used in dh systems [4]. dx.doi.org/10.5278/ijsepm.2015.6.5 however, in china 97% of the heat distributed through dh networks is based on fossil fuelsii, specifically coal about (82.3%) [5]. this roughly corresponded to 3.4%iii of national consumption of coal in 2011 [6,7]. combustion of large quantities of coal in the proximity of highly populated areas for the production of dh affects environmental and human health standards in chinese cities [1]. the chinese national government has recognised the urgency of these challenges and adopted measures to further expand the dh network and improve efficiency in buildings and heat distribution through e.g. improved building codes and heat meter reform [8]. emergency measures have been introduced at local level, especially in beijing, to contain the problem. however, dh in china remains largely dependent on coal, despite the population (timidly) expressing disapproval of the deteriorating environmental and health conditions in all main cities. the aim of this study was to explore the dynamics and possibility for an energy transition in the chinese dh system, increasing the use of alternative energy sources and reducing the reliance on coal. to achieve this aim, we examined the structure and functioning of the chinese dh system at national level and sought to identify the socio-technical feasibility of expansion of alternatives to coal-based dh systems in china. previous studies of chinese dh have addressed the technical feasibility and potential energy savings of integrating heat pumps [9], seawater [10], direct use of geothermal [11], biomass gasification [12] and industrial waste heat [13,14]. systems studies have analysed the integration of waste heat, electric heat pumps and natural gas to achieve a clean technology transition in the chinese dh system [2,15]. previous studies have also examined the institutional mechanisms of the chinese dh system [16]. however, a comprehensive study of fuel switch dynamics based on the socio-technical aspects of an energy transition in the dh system is lacking. an integrated perspective on the energy planning in the sector is considered important to facilitate transition [17]. 50 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating abbreviations: chp = combined heat and power cnooc = china national offshore oil corporation cnpc = china national petroleum corporation cuhsa = cuha chinese urban heating association dh = district heating ghg = greenhouse gas gshp = ground-source heat pumps hao = heating administration offices hobs = heat-only boilers iwh = industrial waste heat mep = ministry of environment protection of china mof = ministry of finance of china mohurd = ministry of housing, urban and rural development of china mlr = ministry of land and resource of china mlp = multi-level perspective mdrc = municipal development and reform commissions msw = municipal solid waste nbs = national bureau of statistics of china ndrc = national development and reform commission of china nea = national energy agency of china pm = particulate matters smes = small to medium-sized enterprises ii in 2011 the total heat supply was 2.81 ej, in which the fossil fuel sources share 97%, i.e., 1.24 ej from coal-based chp and 1.48 ej from coaland gas-based heat boilers [7]. iii total coal consumption in china was 2.4 billion tons of standard coal (70.5 ej) in 2011. international journal of sustainable energy planning and management vol. 06 2015 51 jingjing zhang and lorenzo di lucia 7000 6000 5000 4000 3000 2000 1000 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 0 200 180 160 140 120 100 80 60 40 20 0 heated area (km 2) total pipeline length (1000 km) figure 1: floor area and total pipeline length in the chinese dh system (1981-2013).source: [20]. here we applied a transition framework to assess the future potential of innovations that can grow into a new system through large-scale diffusion. the framework is based on the multi-level perspective (mlp) [18,19], which interprets transitions as the change from one socio-technical regime to another. the framework’s objective is the identification of factors that support innovation diffusion and critical barriers that may hinder it. however, the framework is qualitative in nature and does not aim to give precise predictions regarding the rate and speed of diffusion, but is able to gauge the future potential of emerging technologies in a qualitative manner. the data for niche innovation system and niche-regime anchoring analysis were collected through academic publications, reports and governmental documents both in english and chinese. additional data were collected through semi-structured interviews in beijing in 2013, including heating reform office in mohurd, chinese district heating association, china geothermal association, danish district heating association (beijing office), swedish district heating association (beijing office), and experts in the alternative energy sectors, including tsinghua university, beijing forestry university and china academy of building research. in most cases, the interview results were used as a complement to the data collection or a source to acquire data and documents. 2. district heating in china today china has one of the most extensive dh networks in the world. the history of district heating in china started in 1950 with the first five-year plan. the size of the dh network remained negligible until 1986, when a change in policy priorities promoted rapid expansion that is still continuing, with a growth rate averaging 9-17% per year in recent decades (figure 1). in 2013, dh supplied 5717 km2 floor area through a network of 178,136 km of pipes in the provinces of northern china [20]. the dh sector is organised as a monopoly through china’s top-down government [16]. at the national level, the ministry of housing and urban-rural development (mohurd) and the national development and reform commission (ndrc) are two of the most influential public actors. the ndrc’s function is to formulate energy policies (also through the national energy agency) that influence the development of the dh sector, such as energy efficiency and renewable energy policies and programmes [16]. the ndrc, in coordination with mohurd, is also responsible for the establishment of general guidelines on the dh pricing policy [21]. the responsibility of mohurd is to implement ndrc policy guidelines and formulate specific sector policies. another important actor at national level is the chinese urban heating sector association (cuhsa). established in 1987 by the beijing municipal heating company, the cuhsa functions as a key actor in sharing experiences and information among its members (municipal heating companies, equipment suppliers and researchers) and an advocate for the heating industry [22]. at local level, municipal governments play key roles. in most cities, the deployment of dh networks is the responsibility of heating administration offices (hao), usually under the department of construction, or the public utilities bureau. in collaboration with the municipal development and reform commissions (mdrc), the local branches of the ndrc, haos are responsible for issuing construction and operation permits. in this regard, the dh sector has remained largely untouched by the marketization process that characterised many sectors in the chinese economy in recent decades. dh is provided as a form of social welfare to protect vulnerable groups. while the heat supply is ensured for the sake of social sustainability, the heat production side is subject to market rules. heat production costs float according to the market price of energy, particularly coal, while the heat price are usually lower than the production cost and heavily subsidized from the municipal budgets. in 2005, the ndrc issued guidelines to link the price of coal with that of dh [21]. as a result of this complicated and overly bureaucratic system, the price of dh is now dependent on the type of provider or energy source used, and varies greatly within and between cities [23]. with the adoption of the urban heating reform in 2003 [24], the process of marketization was initiated throughout china. the primary goal was replacement of the area-based billing system with a consumption-based system. however, more than ten years after implementation, the results of the reform are still modest [16]. the dh sector remains highly fragmented and, despite recent progress in consolidation of small providers into larger commercial companies [16], still has a large number of dh providers and heat suppliers in each city [25]. providers can be of different forms, from state-owned enterprises (usually supplying large urban areas), public utilities (responsible for smaller networks) to private companies [26]. 3. analytical framework for studying future energy transitions in dh systems the analytical framework employed in this study relies largely on theories and approaches developed within the literature on socio-technical transitions, with mlp being an important approach [27, 28]. a first challenge when applying mlp to study dh is delineating the boundaries of the system under analysis. in transition studies sociotechnical systems traditionally comprise: (i) a technological system of material and technical artefacts; (ii) a social system formed by networks of actors and social groups; and (iii) an institutional system, which includes the formal, normative and cognitive rules that guide the activities of these actors. in this study, we delineated the boundaries of the system under analysis by focusing on two components of the dh supply chain: the supply of energy and its transformation into heat (see dashed box in figure 2). consequently, the system under analysis consists of, (i) the technical components (technologies and artefacts) relevant for energy supply and transformation, (ii) the social components (actors and networks) using or influencing the use of these technologies and, finally, (iii) the institutions affecting the activities of these actors. the mlp approach views transitions as the outcome of interactions between three levels: regime, niche and landscape (figure 3). socio-technical regimes represent the dominant way of fulfilling societal functions [29]. we considered coal-based dh to be the socio-technical regime, since coal has been the undisputed energy source in chinese dh. a second major element in the mlp is the socio-technical niche, which forms the sociotechnical environment where novelties emerge [28,30]. we defined niches as alternatives to coal-based dh and, through a review of the literature on dh systems and interviews with actors in the chinese dh sector, we identified a set of six for inclusion in the study. these were dh based on: natural gas, biomass, municipal solid waste (msw), direct geothermal heat, ground-source heat pumps (gshp) and industrial waste heativ. 52 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating biomass natural gas coal geothermal heating/ cooling plant heat pumps municipal solid waste industrial waste heat residential industrial commercial figure 2: simplified representation of the chinese dh system. note: dashed box highlights the boundaries of the system covered in this study. biomass time niches s ca le colabased regime technology actors knowledge new regime institutions infrastructure networks landscape ng gshp geo iwh msw figure 3: multi-level perspective on transitions. adapted from geels [19]. iv other alternatives such as nuclear, solar, wind energy and electricity might be technically feasible, but are not considered in this study due to concerns about infrastructure and sustainability issues. finally, the landscape includes all exogenous factors that affect the development of niches and regimes, but are largely outside the influence of niche and regime actors [19,31]. here we focused on three major landscape factors connected to the social discontent with environmental quality, mitigation of climate change and the increasing demand for indoor heating. a typology of transition pathways based on the type and timing of interactions between niches, regime and landscape has been suggested by geels and schot [32]. the classical case is that of substitution, which occurs when landscape pressures create ‘windows of opportunity’ for niches that are sufficiently developed to exploit the opportunity, which then diffuse and eventually replace incumbent regimes [19] (see figure 3). we developed an analytical framework to assess each alternative (niche) and identify barriers and opportunities for their diffusion in the dh system. the framework is based on the idea that the likelihood of diffusion is affected by the socio-technical structure of the niche and the interactions between the niche and the incumbent regime. we analysed the socio-technical structure of niches by examining: (i) material and technical artefacts; (ii) networks of actors and social groups; (iii) institutions; and (iv) infrastructure. the first three elements are suggested in the mlp approach [19], while the fourth, infrastructure, is our additionv. infrastructure covers the physical and material aspects of the systems. its inclusion is justified by the specific features of dh systems, e.g. spatial location of networks, geographical limitation of energy resources and distribution systems, etc. the analysis of the interactions between niches and regime was carried out in terms of niche-regime translation. the assumption was that niche development is not a matter of simple up-scaling, but of making a broad variety of connections between niche and regime [33]. elzen et al [33, 34] suggest that the anchoring of socio-technical practices in an existing regime facilitates the transition process and identify three forms of anchoring; technological, network and institutional. inspired by these studies, we defined anchoring as the process by which a novelty becomes newly connected, or connected more firmly, to a regime. the further the process progresses, i.e. with more connections, the larger the chances that anchoring will eventually develop into durable links supporting the expansion of the niche. in our framework we considered three types of anchoring: (1) social anchoringvi, which is dependent on (i) the extent niche actors are present in the regime, i.e. hybrid actors; and (ii) the level of collaboration (or conflict) between niche and regime actors. (2) institutional anchoring, which is affected by (i) the existence of market space for the niche in the dh system and thus its competitiveness against the regime; and (ii) the impact of regime institutions on the potential diffusion of the niche ranging from obstructing to allowing and supporting. (3) technical anchoring, which refers to (i) the type of relationship between the knowledge and technology of the niche and those of the regime (this can be competitive, compatible or dependent); and (ii) the capacity of niche technical artefacts, concepts and practices to address tensions (or exploit opportunities) created by landscape factors. 4. coal-based dh system – the regime coal has been the unquestioned source of energy for dh in china since these systems were first deployed in the 1950s. with a share of about 82.3% of the heat supply in dh [5], coal-based dh is the stable way of supplying indoor heating in northern china. technical, social, institutional and infrastructural factors contribute to the stability and path dependency of this regime. 4.1. infrastructure, actors and technologies with 19% of the total global proven reserves, china is rich in coal. in 2013 it consumed nearly half the world total, 72.5 ej (low-heat value) [20]. although traditionally a net coal exporter, since 2009 the country has become a net importer. in that year imports accounted for only 4% of domestic coal consumption, but these volumes represented 15% of the global coal trade [35]. the production of coal (upstream system) is carried out in china by a large number of public and private mines. due to recent consolidation of the industry into a small number of larger mining groups, the sector has become less fragmented. according to china’s coal industry association [36], in 2013 the top four and top ten coal producers having 25% and 40%, respectively, of the market. international journal of sustainable energy planning and management vol. 06 2015 53 jingjing zhang and lorenzo di lucia v inspired by the most recent literature on technology innovation systems, in which infrastructure is considered part of the structure of innovation system [97]. vi we refer to social instead of network anchoring since we chose to limit our scope to actors due to the difficulties of identifying and examining informal networks in such an extensive system such as the chinese dh system. the actors involved in the transformation of coal into heat (downstream system) are large power companies, for which heat is a co-product of electricity production from chp plants, and large dh providers, which generally own chp plants and large hobs. however, each city also has a large number of medium and small providers of coalbased dh. these traditionally employ small hobs for dh production [16]. overall, the share of hobs in dh has been stable in the past decade (figure 4). however, since hobs have lower energy input/output efficiency (60–65%) [37] and consequently higher heat production costs than chp, expansion of the share of coal-based chp is seen by the national government as one of the main strategies to improve the efficiency of heat production. 4.2. institutions the coal sector in general and the coal-based dh system have experienced substantial changes in the past two decades, in response to the concern of actors, in particular the national government, important policies have included, energy efficiency improvements in coalfired thermal power plants, containment of total coal consumption and promotion of clean coal technologies. since 2000 with the adoption of the “revised regulations for chp development” the national government has promoted the deployment of chp [38]. “the small plant closure program” established by the 11th five-year plan (2006–2010) is a key policy requiring municipal governments to decommission small coal hobs and replace them with larger plants. in addition, the national government has sought to limit overall consumption of coal by introducing a general cap of 4.2 billion tons by 2020 [39]. growth in coal consumption has been slowing down, from an average of 6.1% per year in 2007–2011 to 2.6% in 2012–2013 [20]. in 2014 coal use declined for the first time, by 2.9% [40]. finally, the promotion of 'clean' coal technologies has been another key institutional component of the coal regime. there is general support for the transformation of coal into gas, oil and olefins and the application of measures to reduce emission of air pollutants and ghgs from coal supply and combustion phases. in 2012, 92% of coal-fired power plants (including chp) were equipped with sulphur removal technologies at 90% average efficiency, while only 27.6% had nox removal equipment at 48% average efficiency [41]. a key feature of the coal industry is the marketization which started a decade ago. since 2006 the price of thermal coal for utility use has been fully subject to market pricing. according to national guidelines [42], thermal coal contracts for utility use should be directly and independently negotiated between coal producers and power plants, without state intervention. this was the last step in deregulation of coal pricing in china. in sum, the coal-based dh system is characterised by stability and path dependency. the factors contributing to this are the availability of abundant domestic reserves of coal and increasing efficiencies through a trend towards larger actors (both in downstream and upstream parts of the system), the diffusion of chp and large hobs and the application of clean coal technologies. however, the introduction of stricter environmental regulations and the adoption of regional and national caps on coal consumption undoubtedly create challenges to the dominance and stability of the sociotechnical regime. 5. changing landscapes the dh system is influenced by the landscape, which contains factors outside the control of regime and niche actors. these factors can generate dynamics which consolidate or challenge the stability of the regime and the emergence of niches. here we do not attempt to quantify these impacts, but limit our interest to qualitative evaluation of a set of three factors: 54 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating 3.0 2.5 2.0 1.5 1.0 h e a t su p p lie d ( e j) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0.5 0.0 boiler chp figure 4: heat supplied by chp and hob to chinese dh (2001-2011). source: [20]. vii who recommended levels of pm2.5 are below 25 _g/m3 [98]. air pollution due to pm2.5 is associated with diseases such as respiratory infections, heart disease and lung cancer [99]. other alternatives such as nuclear, solar, wind energy and electricity might be technically feasible, but are not considered in this study due to concerns about infrastructure and sustainability issues. (1) social discontent with environmental quality. urban air pollution in chinese cities made headlines around the world in early 2013, when record levels of small particular matter (pm2.5) above 900 μg/m3 were recorded in beijing [43]vii. the increasing levels of air pollution experienced throughout china in recent decades have led to growing discontent among urban and rural residents. the number of reported environmental protests grew from 50,000 in 2005 to 180,000 in 2010 [44]. as social discontent with air quality and environmental conditions skyrockets, it inevitably generates pressure on coal-based dh since coal combustion has been identified as one of major causes of pollution in urban areas [5]. (2) interest by the national government in ghg emission reductions. in 2007 china became the largest global emitter of ghg. the government has recognised its responsibility and in 2010 introduced national reduction targets as an effort to address global climate change [45]. in 2014, it pledged that the country’s emissions will peak around 2030, if not earlier [46]. this will require substantial savings from the energy sector. in a context where reductions in coal consumption and coal-related emissions are seen as a key contributor to the climate targets, the dh regime will be subject to further pressure. (3) growing urbanisation and increasing standard of living. currently about half of the world’s new buildings are being constructed in china and the scale of urbanisation is unprecedented in human history. the share of urban population increased from 11% in 1950 to 54% in 2014, and is expected to reach 70% by 2030 [47]. an increasing urban population and higher heating demand per inhabitant have had a massive impact on residential urban energy consumption, which tripled between 1996 and 2008 largely due to the staggering increase from heating demand [48]. the first two landscape factors are interpreted here as generating pressure on the coal regime. this is apparent at local and national level, with governments promoting alternative sources of dh, forcing coal plants to move outside the city boundaries, introducing national and regional coal consumption caps, and promoting improvements in coal-fired thermal power plants. however, the third factor, further increased heating demand, is expected to have a dual impact on the coal regime, by contributing to regime stability since coal-based dh is the only system able to supply the large quantities of heat required by the scale of these dynamics, but also by creating market space for the deployment of alternative dh systems (niches). 6. alternatives to coal-based dh – niches it is possible to envisage a large number of alternatives to coal for supplying heat to dh systems in china. in this study we considered six alternatives (natural gas, biomass, municipal solid waste, geothermal energy, ground-source heat pumps and industrial waste heat). each alternative was interpreted as a socio-technical niche and evaluated with attention to its structural components and the interactions with the coal regimeviii. 6.1. natural gas natural gas provides around 6% of china’s primary energy supply and this is expected to grow to 10% by 2020 [49]ix. the majority of the gas consumed in china is of domestic origin. domestic conventional gas reserves are 68,000 billion cubic metres (bcm) (2650 ej), with proven reserves of 40,000 bcm (1559 ej) and exploited gas 12,000 bcm (468 ej) [50]. however, since 2006 imports have become increasingly important. in 2013 they accounted for 31.6% of domestic consumption [51]. imports reach the chinese market as liquefied natural gas (lng) via major ports, or through the pipeline infrastructure connecting china with neighbouring countries. several pipelines are planned to increase the import volume (e.g., from russia). however, only a small share of the gas consumed in the country is used for dh. most is consumed by the industrial sector, chiefly for power and heat production [52], while the power sector demand for gas is currently limited to peak load adjustment or to cover power shortages [53]. the share of natural gas in dh was roughly 15% in 2010 [2]. the upstream part of the system is characterised by dominance of a small number of large companies. these international journal of sustainable energy planning and management vol. 06 2015 55 jingjing zhang and lorenzo di lucia viii note that data on the economic and technical potential of niches are given only as exemplary cases to understand the transition dynamics among different niches. the cost of niches are average national energy retail prices with subsidies included and do not reveal the complexity of price variation influenced by different supply chain, product quality and category. similarly, niche potential to deal with landscape pressures is an estimate and does not take into account different technical and efficiency levels adopted by enterprises. ix we did not consider unconventional gas such as shale gas and coal-bed methane, since they still face technology challenges to reach commercialization in china. include three national oil companies: china national petroleum corporation (cnpc), sinopec and china national offshore oil corporation (cnooc). the downstream market is highly fragmented, with a large number of local wholesale suppliers of gas to industrial (e.g. dh production) and residential users. some of the most prominent barriers to expansion of the use of natural gas are supply constraints, access to infrastructure and the intricate price mechanism [54]. gas pricing is currently regulated by ndrc, which aims to avoid inflation and encourage the use of gas. however, chinese customers in some areas pay relatively high gas prices compared with other non-oecd countries [54]. in 2013, ndrc introduced “net back pricing” to move the pricing point downstream from the wellhead to the city gate [55]. under this new mechanism, domestic gas prices will gradually align with prices of lpg and oil imports, while the oligopoly of gas transportation and distribution will remain under government supervision. china’s gas infrastructure lags far behind its demand requirements. even if cnpc succeeds in doubling the current transmission pipelines in the next five years, china would still have less pipelines than germany, with a demand that is 2.5-fold higher [54]. the gas niche maintains intense interactions with the coal regime. evidence of anchoring can be found in the downstream part of the two systems, social: hybrid actors who produce dh from gas and coal boilers; institutional: coal-to-gas boilers policy in main economic zones; and technological: compatibility of the two combustion-based technologies. however, our analysis of the institutional interactions revealed that use of natural gas for dh production is not competitive against coal. in 2013 the average ceiling price of gas at the city gate for industrial users was between 2.09 and 2.95 rmb/m3 (53.6–75.7 rmb/gj)x [56], while the steam coal composite average spot price (bohai-rim steam-coal price index, july 31, 2013) was 570 rmb/t (27.2 rmb/gj)xi [57]. both gas and coal prices fluctuated in the last few years. finally, a positive anchoring is due to the capacity of the knowledge and technology of the gas niche to address landscape pressure. use of gas in chp and hobs generally emits less air pollutants (less than one-third of nox and 1% of so2) and half the ghg emitted by coal boilers [58]. in summary, the gas niche shows significant potential for expansion in the near future. despite its poor economic performance against coal dh, the niche has been strongly pushed at local level by stringent regulations enforcing coal-to-gas boiler replacement. this process has facilitated diffusion of the gas niche through the technological compatibility between coal and gas boilers and the ability to address landscape pressure. however, further diffusion of the niche will be determined by the oligopoly feature throughout the supply chain, the economic variability of gas to endusers and the gas infrastructure capacity. 6.2. biomass with china shifting away from an agriculture-based economy to an industrial economy, the role of traditional biomass as a heating source has become less dominant. according to ndrc, residues from agriculture and forestry can supply an estimated 145.5 ej of heat annually [59]. however, only 0.044 ej (1.5 million tons standard coal) were supplied by pellet fuels (mainly from straw) in rural and urban areas in 2010 (12th biomass five-year plan)[60]. the target for biomass is 50 km2 of urban floor area heated with biomass-based dh by 2015. this is roughly about 0.87% of the total area currently covered by dh (5717 km2 in 2013). biomass is transformed into dh by employing chp and small-scale hobs. the primary feedstock is compacted biomass fuel, mainly straw [61]. key features of this feedstock are its dispersed form and limited availability. the dispersed feature of feedstock makes investment by large energy enterprises less attractive, so the companies supplying biomass are mostly small to medium-sized enterprises (smes) [62]. in 2010 there were about 250 pellet producers [63]. another challenge to expansion of biomass use for dh is the industry’s low standards for market entry, as the regulatory criteria regarding raw material, equipment quality and emission standards are still under development. to ensure the quality of biomass boilers used in the demonstration projects proposed in 2014–2015 [64], the national energy agency and the ministry of environment required pellet boilers to comply with the same or better emissions standards than natural gas [65]. 56 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating x in 2013, the gas pricing had two categories: the price of existing gas volume (2012 gas sales for non-residential sectors, 2.09 rmb/m3) and the price of incremental gas volumes (in excess of 2012 volumes for non-residential sectors, 2.95 rmb/m3). these two categories have been merged into one in 2015. xi 1 ton of raw coal equals to 0.714 ton of standard coal. the biomass niche shows intense interactions with the coal regime. the social components of the two systems interact primarily in the downstream part of the system, where niche actors (dh providers) often own hobs that are fuelled exclusively with biomass or cofire biomass with coal. for this reason they can be seen as hybrid actors, which should be regarded as a special case as far as sustainability is concerned. for instance, co-firing biomass and coal is forbidden in biomass heating boiler demonstration projects [65]. in the upstream part of the system, biomass suppliers (usually smes) are not involved in the extraction and distribution of coal for dh. as regards institutional anchoring, our analysis showed that the biomass feedstock is not costcompetitive against coal. a study [66] suggests that the price ratio between pellets and coal, although steadily decreasing in the past decade, is still very high. the average retail price of pellets was 950 rmb/ton (56 rmb/gj) in 2012xii, compared with 27.2 rmb/gj in 2013. however, intense policy support provides institutional anchoring to the regime, particularly through the coal-to-biomass boiler policy in the three main economic zones and the biomass heating demonstration projects 2014-2015. however, the major form of anchoring appears to be connected to technology and knowledge. combustion boilers used in the two systems are highly compatible, which facilitates use of biomass in dh and, at the same time, helps the coal regime to mitigate landscape pressure. for instance, in one case in china [67], heat generation by pellet boiler (mainly straw) in chp and hobs emits less air pollutants (similar nox, 93% less sox) and ghg gases (80% less co2 ton/year) than coal boilers. the opportunities for diffusion of the biomass niche in dh are linked to the intense interaction with the regime in terms of technology, actors and institutions. however, beyond the anchoring process, the niche is challenged by infrastructural components of the system such as limited feedstock availability and industry compliance with higher standards for market access. 6.3. direct geothermal energy dh systems can be supplied with the heat harvested from geothermal sources. geothermal energy can be categorised as low temperature (less than 90 °c), intermediate-high temperature (between 90–150 °c) and high temperature (above 150 °c). according to the ministry of land and resource of china (mlr), the conventional geothermal resources of sedimentary basin major plains amount to 25,595 ej (853.19 billion tons standard coal), all intermediate and low temperature geothermal energy [68]. most of these resources are located near the east coast and in the west of china [69]. according to the international geothermal association, geothermal dh capacity has continued to increase at about 10% annually in china, amount to 14,798.5 tj/yr in 2009 [69]. in 2009, it supplied 12 km2 of floor area, half of which went to homes of at least 1 million people in tianjin city [69]. however, this is only roughly 0.2% of the 5717 km2 heated with dh in 2013. the first policy official target was established only in 2013, requiring 500 km2 of floor area to be heated with geothermal-based dh, including gsph, by 2015 [70]. the oil industry has played an important role in the deployment of geothermal dh systems. utilising these geothermal resources generally requires resource evaluation, drilling in different reservoirs and application of close-loop systems to carry reject water back to reservoirs [11]. these systems are capitalintensive and require large initial investments for production and injection wells, while the operating costs are relatively low, about half those of coal boilers [69]. the oil industry has the capital and knowhow to deploy these systems. sinopec is now the leading company in the geothermal dh sector in china, with more than 6 km2 of floor area developed [11]. in addition to demonstration projects, sinopec has established itself as a reference research actor, launching the national geothermal energy utilisation research and technology development centre in beijing. our analysis of the interactions between the niche and the regime showed limited activities. niche actors involved in the extraction and distribution of geothermal heat, primarily oil companies, do not have important interactions with actors in the coal regime. this is caused to some extent by the lack of technological anchoring. technologically, the niche and the regime are not compatible, since utilisation of geothermal energy is based on mechanical systems, while coal international journal of sustainable energy planning and management vol. 06 2015 57 jingjing zhang and lorenzo di lucia xii 1 ton of biomass (straw) equals to 0.578 ton of standard coal [100]. boilers are combustion based. an opportunity for the expansion of the niche is given by its capacity to address landscape pressure. for instance, new geothermal plants applying binary technology emit almost zero ghg emissions and air pollutants [71]. finally, it is important to stress that geothermal dh in general is rarely competitive against coal-based dh, mainly because the resource is highly dispersed and entails high risks in the drilling phase. however, operating costs are very low and make the niche competitive where geothermal resources of good quality are readily available. for example, in the city of xiongxian, 17.7rmb are saved in the operating phase for every m2 of geothermal dh used to substitute coal-based dh [72]. in summary, the geothermal niche is significant in dealing with landscape pressure. however, our analysis showed that there is limited interaction between niche and regime. the niche expansion has largely been supported by large industrial actors. policy support for the niche has only been recently introduced, and challenges remain in niche development itself. these include the regional availability of geothermal resources and the high upfront investments. 6.4. ground-source heat pump extraction of shallow geothermal energy is the most common way of using geothermal energy in china. this type of geothermal energy refers to the solar energy harvested at shallow depth in the earth and sewage waste heat recovery. the potential contribution in dh regions is high, around 111.7 ej [68]. the technology used to extract shallow geothermal energy is based on ground-source heat pumps (gshp). depending on the heat source, it can be characterised into (i) groundcoupled heat pumps which extract heat from soil and bedrock, or (ii) groundwater and surface water heat pumps (including sewage, lake, river and seawater). all these types of gshp are deployed in china and their application is usually not as geographically dependent as conventional geothermal energy [73]. however, the availability and quality of groundwater and surface water is a major concern in water-constrained regions. by late 2012, more than 5000 gshp systems were installed countrywide, 80% of which were in north and north-east china, where hot summers and cold winters dominate. the building area with gshp systems installed exceeded 1400 km2 [74] xiii. this is roughly 2.4% of the total area currently heated with dh. the 12th five-year plan established a target for gshp of 350 km2 of floor area by 2015 [68]. to promote pilot projects and market expansion, a package of policy measures was introduced at national level [75]. however, national guidelines for authorisation and resource exploitation are still lacking. at local level institutional settings differ greatly. in some regions/cities the exploitation of low temperature geothermal energy is widely supported through subsidies, tax reductions, standards, market entry requirements, networks and other institutional tools. the city of shenyang, which accounts for 36.3% of all gshps installed in china, offers an important example of successful policy implementation [76]. at the same time, other regions/cities have introduced important limitations to the utilisation of gshps. according to the interview, this can be seen as a consequence of the niche’s historical development. in the early years, lack of regulation resulted in the market booming from gshp smes, and the diffusion of open-loop gshp applications without adopting water reinjection technology or close-loop gshp [77]. in response to this situation, cities where water scarcity was a concern, e.g. nanjing, banned groundwater-based gshp [78]. in recent years the market has matured and the close-loop gshp has become increasingly popular. our evaluation of niche-regime interactions revealed a limited range and intensity of interactions. there are no significant interactions between the niche actors, i.e., gshp smes active at local level, and coal-based dh providers and coal suppliers. as regards institutional interactions, the niche is economically competitive against the regime. high upfront costs, on average 1-3 times greater than coal-based dh systems, are compensated for by operating costs between 30% and 70% lower [79]. moreover, public policies support niche expansion at national level and, in some regions, also at local level. however, there are important technical and institutional barriers regarding water use and pollution in water-scarce regions. finally, the technologies employed in the niche are fundamentally different from those of the regime. the gshp employs a mechanical system, while coal-based dh is combustion-based. a final element is the capacity of the niche’s technologies and knowledge 58 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating xiii these values refer to individual application of gshp as well as dh and cooling applications. to address landscape pressure. gshps normally use one unit of electricity to move three units of heat [80]. in summary, this niche is well developed in some regions. it currently enjoys public policy support at national level and in some regions. moreover, the niche is economically attractive and widely available throughout northern china. however, important barriers to further expansion in dh beyond pilot cities are technology quality control and appropriate regulation of gshp installations. 6.5. municipal solid waste dh systems can be supplied with heat produced from incineration of waste, particularly, msw. in china, the quantity of msw collected every year is growing with urbanisation and changing living standards. most of the msw collected is currently landfilled [81]. however, since the 2000s the share of msw incinerated has rapidly increased and 20% of total msw was incinerated in 2010 to produce 1.7 gwh of electricity [60]. a co-product of electricity production is the generation of large quantities of heat, which are released into the environment [82]. the deployment of waste-to-energy (wte) facilities is a key component of national and local strategies to handle msw, especially where space for landfill is limited [82]. small utility companies have entered the sector, attracted by high returns on investment [83], but their interest in msw incineration is limited to production of electricity. the 12th national five-year plan for msw sets a target for msw incineration of 35% by 2015 [84]. support measures to achieve the target include loan programmes, guaranteed tariffs for renewable electricity, r&d on renewable electricity generation and exemptions from corporate income tax for 5 years [84]. however, msw incineration remains a controversial method of waste disposal due to environmental and human health concerns about emissions of pm, gaseous pollutants, and dangerous substances (e.g. dioxins, toxic heavy metals etc.) [85]. technologies to limit air pollution, such as semi-dry scrubbing and activated carbon injection to remove volatile metals and organic compounds and fabric filter bag housing to remove pm, are widely employed in china [82]. these technologies are similar to those used in the us and eu [86]. however, primary measures, i.e. processes that limit the formation of pollutants, especially nox and organic compounds such as dioxins, are not effectively implemented in wte facilities in china [83]. the result is a risk of unsteady and unstable combustion flame, incomplete combustion of the waste and consequent formation of air pollutants. local residents living around existing or planned projects vigorously oppose wte plants [87]. they mistrust the scarce information provided by utility companies and local authoritiesxiv, and demand that wte plants be located at great distance from urban centres. this distance limits the possibility to use the heat in urban dh networks. the loss is noticeable considering that in the 15 provinces of northern china, nearly 32.4 million tons of msw per year are collected in urban areas [88] and this could provide an estimated 0.028 ej of heat for dh, corresponding to 1% of dh demandxv. our anchoring analysis showed that the coal-based regime and the msw niche have little interaction. social interactions are limited since there is no evidence of hybrid actors or collaboration between niche and regime actors. in each city many smes manage the incineration of msw for electricity production and these companies are normally not involved in the supply of coal or the transformation of coal into dh. a major opportunity for the niche is its competitiveness against the regime. the opportunity cost of msw-based heat is very low, since the heat is currently a waste product of msw electricity production [82]. the major obstacle to niche expansion is related to the incapacity of its technologies and knowledge to address landscape pressure. msw-based dh can cause soot and dioxide air pollution through incomplete combustion when the msw is not appropriately handled. as a consequence, projects too close to urban centres face strong opposition. this barrier also limits the positive effects of the technical anchoring of the niche resulting from the possibility to co-fire msw with coal to produce dh. in summary, the msw niche shows some potential as an alternative energy source for dh. it can supply heat in each city for the production of dh at competitive prices. however, important barriers to niche expansion are the incapacity to address landscape pressure and, in particular, to reduce air pollution and the consequent need to locate wte facilities at a great distance from urban centres. this result is reinforced by the mistrust of international journal of sustainable energy planning and management vol. 06 2015 59 jingjing zhang and lorenzo di lucia xiv even though the recent emission standards for msw incineration are close to the standards enforced in the eu [101]. xv the estimate assumes 35% of the msw collected is incinerated; average calorific value of msw 5 mj/kg [102]; 50% heat conversion efficiency. the local population in the companies and authorities responsible for environmental and health management. 6.6. industrial waste heat in recent years, the industrial sector has consumed on average two-thirds of national energy consumption. energy-intensive industries such as steel, non-ferrous, petroleum, chemical, construction and pulp and paper shared about two-thirds of the industrial energy consumption [14]. at the same time, these industries generate waste heat, which can be used to supply dh systems. it is estimated that at least 50% of industrial energy is discharged into the environment in the form of mostly low-grade heat (below 200 °c) [89]. in northern china this amounts to about 7.6 ej, or 3 times the annual energy demand of district heating in that region [14]. the productive use of waste heat has long been seen as one of the key measures of energy efficiency in china. firstly, it is economical since waste heat is an industrial by-product. resources of low-grade waste heat are largely underexploited compared with the relatively mature market for high-grade waste heat, in particular in the steel and cement sector [89]. currently there are only a handful of demonstration projects utilising low-grade waste heat, e.g. chifeng [14], shijiazhuang [90], qianxi [91] and tangshan [92]. although on average the payback time is between 4–6 years for waste heat power generation, the high initial investment creates barriers for application in industrial smes [93]. in addition, the exploitation of industrial low-grade waste heat suffers from challenges related to infrastructure and the uncertainty of heat supply. for instance, the feasibility of a dh system requires sufficient heat demand to be available nearby. however, industrial zones are normally built in remote areas far from large cities. thus, extensive pipelines need to be built to connect heat suppliers and consumers. a suitable distance is considered to be between 5–10 km for a small-scale town and 20–30 km for a medium to large city [14]. moreover, the lowefficient district heating infrastructure that require high return temperature further inhibit the economic viability of utilizing low-grade heat [91]. the uncertainty and fluctuation of heat supply also creates technical challenges for peak load management and piping network safety. these features indicate that industrial waste heat cannot be utilized alone as heating source [94]. the policy support needed to deploy projects is currently lacking. the financial barriers can be eliminated through industrial escos projects. support could also be made available through energy efficiency funds, under the framework of the 12th five-year plan on industrial energy efficiency, but so far none of the policies specifically targets use of low-grade waste heat. the anchoring analysis showed that the industrial waste heat niche maintains a limited level of interactions with the coal regime. we observed no social anchoring, since niche actors do not interact with regime actors. regarding institutional anchoring, although this niche benefits from competitive costs, it is so far still neglected by policy makers. technological anchoring shows important opportunities for niche deployment. since most industries are fuelled by coal, the niche promotes more efficient use of coal-based heat, so it can deal with landscape pressure on the regime. 60 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating table 1. summary of the structural components of different niches and niche-regime interactions in the district heating system. niche socio-technical structure niche-regime interactions anchoring natural technology: combustion-based social: no anchoring of gas actors with coal gas chp and hob. actors in upstream system; anchoring downstream. actors: three large companies oligopoly. institutional: not economically competitive against coal dh; policy support for institutions: “coal to gas” replacement of coal with natural gas dh. replacement locally; gas price regulation reform. technological: compatible with coal infrastructure: gas supply technologies; able to address landscape shortage; insufficient tensions. transmission pipelines. international journal of sustainable energy planning and management vol. 06 2015 61 jingjing zhang and lorenzo di lucia table 1. summary of the structural components of different niches and niche-regime interactions in the district heating system. (continues) niche socio-technical structure niche-regime interactions anchoring biomass technology: combustion-based social: no anchoring of gas actors with coal (pellets) chp and hob. actors in upstream system; anchoring downstream only when biomass and coal actors: small to medium-sized are co-fired. companies. institutional: not economically competitive institutions: “coal to biomass against coal dh; policy support for boilers” replacement locally. not replacement of coal with biomass dh. enough incentives, lack of boiler standards and no market entry technological: compatible with coal regulations. technologies. can address landscape tensions to some extent, e.g. in a selected infrastructure: limited supply of case the biomass boiler emitted 93% less feedstock. so2 and 29% less soot emissions. geothermal technology: mechanical system social: no anchoring, since niche actors do direct use (geology-dependent). not interact with regime actors. actors: oil industry (sinopec as institutional: generally poorly competitive the main player). against coal-based dh. however, operating costs are highly competitive to coal-based institutions: targets for dh where resources are available; policy expansion of geothermal energy support only available since 2013. use. technological: not compatible with coal infrastructure: resource technologies; able to address landscape availability geographypressures since it emits almost zero dependent. emissions. ground source technology: mechanical system. social: no anchoring of geothermal direct heat pump use actors with coal actors. actors: small to medium-sized companies. institutional: heat pump-based dh is institutions: varies between economically competitive. on average cities, some are equipped with upfront costs are 1-3 times greater than for full policy package, some cities coal-based dh systems, while the operating against. traditionally not costs are between 30% and 70% smaller; considered geothermal energy, policy support available at national level lack of regulations and quality and in some cities; in water-scarce regions, control. there are important technical and institutional barriers. infrastructure: open-loop technology misused in some technological: not compatible with coal regions where groundwater technologies; able to address landscape resources are scarce. pressures, i.e. one unit of electricity required to produce three units of heat. overall, the industrial waste heat niche has large resource potential and important technical and institutional interactions with the regime. the challenges lie in the high upfront cost, the uncertainty and fluctuation of heat supply and, often, the long distance between industrial zones and urban dh networks. 7. discussion and conclusions this study explored the dynamics and possibility for an energy transition in the chinese dh system, and the results provide a rich systematic picture of the dh system. the system has been, and will long continue to be, characterised by the dominance of coal, a regime that remains highly stable. factors internal to the sociotechnical regime which promote its stability are the large availability of domestic resources, the competitive price of coal as an energy source for dh and support from powerful regime actors. while dh is one of the last vestiges of chinese social welfare, coal-based dh is entering a period characterised also by challenges. some of these originate within the coal regime, e.g. further energy efficiency improvements and more stringent policies to curb overall coal consumption and coalrelated emissions. they contribute to challenge the dominance and stability of the coal regime. analysis of the socio-technical systems of niches indicated that there are several viable alternatives to coal-based dh and that these have been deployed to various degrees in china. each niche has specific features in terms of structural components and interactions with the coal regime. however, here we categorised the niches into three groups with reference to the barriers they face, the opportunities they entail and their brief prospective for transition. 62 international journal of sustainable energy planning and management vol. 06 2015 a transition perspective on alternatives to coal in chinese district heating table 1. summary of the structural components of different niches and niche-regime interactions in the district heating system. (continues) niche socio-technical structure niche-regime interactions anchoring municipal solid technology: combustion-based. social: industrial actors do not involve waste (msw) hybrid actors or collaborations with regime actor/network: electricity actors. utilities. institution: government institutional: heat from msw plants is support, local opposition. released into the environment, its recovery is highly economically competitive to coal; infrastructure: inappropriate policy support is lacking and there is public resource sorting system and opposition at local level. technical handling, usually located far from urban areas to technological: compatible with coal avoid air pollution in cities. technologies; able to address landscape pressures, but in practice msw plants emit soot and dioxide air pollutants due to incomplete combustion. industrial technology: heat exchanger, social: no anchoring of industrial actors waste heat heat pump etc. with regime actors. actor/network: main industry institutional: faces upfront costs relevant sector. to the infrastructure settings, but industrial waste heat is affordable as a by-product of institution: low-grade heat not industrial processes; policy support for use supported. of low-grade heat currently lacking. infrastructure: industrial zones technological: symbiosis since it promotes are usually far from urban energy efficiency of regime; it can address areas. landscape pressures. – the natural gas and biomass niches have barriers in terms of limited domestic supply and high production costs. however, they share a high degree of technical compatibility with the technologies and knowledge of the regime. this represents a significant opportunity for these niches. gas alone provided more than 15% of the heat distributed through dh networks in 2012. this is also the result of policy support for these niches in recent years at national and local level. the perspectives of these niches are now largely dependent on favourable top-down institutional environments. – the geothermal energy (direct use and gshp) niches share similar opportunities in terms of operating costs and capacity to address landscape pressure. however, they suffer from infrastructural and institutional barriers. the expansion of the direct use niche has been largely hindered by the geographical distribution of the resource, while local regulatory bans have hindered the deployment of gshps in some regions. in addition to this regional specificity, the niches share a lack of interactions with the incumbent regime. in their isolation from the regime, these niches have begun to expand in regions where regulations, standards and other forms of institutional support are present. the perspectives of these niches are predominantly driven by their increasing economic returns and bottom-up support from industrial actors. – the msw and industrial waste heat niches are similar in that their diffusion beyond pilot cases has barely started, with only a handful of cases of industrial waste heat-based dh. they both face infrastructural barriers, since heat production units are usually located at great distance from urban centres. however, the potential is considerable, in particular industrial waste heat could provide an estimated 7.6ej of heat to dh networks. moreover, the operational cost of both niches is very low and thus they can be seen as competitive against coal-based dh. their interactions with the regime have been very limited in the past and unable to support their expansion. the perspectives for expansion are hindered by lack of supportive institutional environments for low-grade waste heat utilization. landscape factors affect the regime and the sociotechnical niches alike. this analysis identified factors able to strengthen the stability and dominance of the coal regime. these include the increasing demand for dh, mainly due to expansion of the urban population and higher standard of living. meanwhile, the landscape also generates challenges for the coal regime. in particular, social discontent with air quality in urban centres and the need to reduce ghg emissions have resulted in public policies establishing emission controls and the replacement of coal with other energy sources. in this context, the niches that are able to address landscape challenges enjoy more favourable prospects. however, with the exception of natural gas, there are currently few public policies and programmes designed to recognise and promote such niches. the analytical framework applied in this study provided useful insights into the dynamics and opportunities for an energy transition in the chinese dh system. the analysis focused on the exogenous and endogenous factors that are able to influence the likelihood of energy transition, including structural components of the socio-technical regime and niches, and interactions between the niches and the regime in the context of changing landscape pressure. in some case, niches have expanded because of strong institutional and technological anchoring, despite the presence of structural barriers within the socio-technical niche. in other cases, niches have expanded due to locally favourable conditions despite a lack of supportive niche-regime interactions. a more refined analytical framework would cover a wider range of interactions, including niche-niche interactions and regime-regime interactions [95], e.g., coal regime in the electricity sector. another important addition to the analysis of each socio-technical niche would be the inclusion of actor/network assessment [96]. however, this would require collection of large amounts of data about the (mainly) informal connections between actors in each niche. although dh systems offer technical opportunities to integrate different sources of energy and utilise resources that are difficult to employ in individual heating systems, the coal regime is particularly resistant to change. in this context, an integrated energy planning approach should be adopted in particular to address infrastructural and institutional barriers that this study found to be inhibiting niches’ expansion.. at the local level, one can envisage future dh systems employing several international journal of sustainable energy planning and management vol. 06 2015 63 jingjing zhang and lorenzo di lucia alternative energy sources as a complement to coal. for transition to this more diversified system, government must create a supportive institutional environment. this is currently available only for the natural gas niche. however, considering the opportunities provided by many niches in terms of physical potential, capacity to address landscape pressures and economic viability, attention from policy-makers is needed to initiate the emergence of all niches that can contribute to this energy transition. national policymakers could learn from the experience gathered in the past decade with the deployment of renewable electricity. 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management vol. 06 2015 i international journal of sustainable energy planning and management vol. 06 2015 i-ii appendix 1: interview template 1. do you have statistics on: a. the shares of different energy sources to the dh system? b. the shares of chp, big boilers and small/distributed boilers in dh? c. heat production costs d. heating prices? how are prices established? 2. what are the technologies used to supply the heat to dh (e.g. chp, boilers, csp, heat pumps)? any advanced technology currently at r&d level? 3. what are the main national policies for heating (or in electricity) that affect the dh sector? 4. what are the main types of local policies for dh (some examples)? 5. who are the actors most active in the sector? are energy companies interested in dh? does dh have an important role in deciding which energy source to use? is the national government interested in switching energy source away from coal? do real estate developers have a say in the choice of energy source? 6. how does the energy supply for dh in china fit/compare with the national plans for the use of renewables for electricity in china? 7. more…. notes the interview template is designed to assist the analysis of niche innovation system and niche-regime anchoring, in addition to the data collected from various publications. the template is a general framework for all interviews. we aimed to cover the basic data for technology, economics, actor and institution of each niche. in practice, we revised each question slightly to fit into the characteristics of each niche, as well as the conversation flow went with the interviewees. the conversation was conducted in chinese in beijing between july-sep 2013. interviewees include: heating reform office at ministry of housing, urban and rural development, chinese urban district heating association, china geothermal association, danish district heating association (beijing office), swedish district heating association (beijing office), and experts in other alternative energy sectors (tsinghua university, beijing forestry university and china architecture science and so on). << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true /dscreportinglevel 0 /emitdscwarnings false /endpage -1 /imagememory 1048576 /lockdistillerparams false /maxsubsetpct 100 /optimize true /opm 1 /parsedsccomments true 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 23 2019 27 *corresponding author e-mail: dipusarkar5@rediffmail.com international journal of sustainable energy planning and management vol. 23 2019 27–38 abstract with the introduction of renewable energy sources (res), energy storage systems (ess), smart grid technologies, micro-grid technologies, and distributed generation (dg), the power system is changing significantly. planners, researchers, regulators, operators and policy-makers need to ensure that the power system adapts to these changes. with change comes the unknown (issues and challenges) and unless a majority of these unknowns are identified, analysed and addressed properly, the system cannot achieve its maximum potential. the proper management, operation and integration of res in the grid is one of the promising avenues for increasing the capacity of grid and thereby decreasing environmental impacts. this paper presents a review of the challenges and issues associated with res integration in the power system and some of the existing techniques that are in use to address these. 1. introduction in recent years, with electricity becoming more accessible and its applications more versatile, the demand for stable and adequate electricity supply is continuously on the rise [1, 2]. in some cases, these increasing electricity demands have been inadequately dealt with by expanding the capacity of the existing power stations [3]. however, with the transmission infrastructure remaining the same, it becomes increasingly difficult for a centralized grid to meet the increasing electricity demands [1, 3]. in order to meet the increasing load, one of the promising solutions is the integration of small generating units directly on the demand side. these small generating units usually connected to the distribution sector, to meet the necessary power demands mainly during peak hours, constitute the distributed generation (dg) [3, 4, 5]. distributed generation is a general term, and is used to represent a number of individual generating units connected to the distribution site. integrating dg to the electrical grid is an important field with regards to relieving the centralized power system from overload conditions [6, 7]. with the ever-increasing power demand, there arises a need to look for alternate sources of electricity [3, 6]. currently, many system operators are facing the challenges of matching the available electric generation with the rate of consumption, especially during peak demand hours [3]. this gap margin between the supply and demand of power can be adjusted up to a certain extent by setting up peak load plants which will only be operated when required, i.e., during peak hours to supply the load. employing renewable energy sources (res) instead of conventional sources to operate these peak load plants offer additional advantages including reduction in cost of operation and less pollution emissions [8, 9]. therefore, when compared to coal or petroleum an ab initio issues on renewable energy system integration to grid dipu sarkar* and yanrenthung odyuo department of electrical and electronics engineering, national institute of technology nagaland, chumukedima, 797103 dimapur, india keywords: renewable energy sources; distributed generation; energy storage systems; url: http://doi.org/10.5278/ijsepm.2802 http://doi.org/10.5278/ijsepm.2802 28 international journal of sustainable energy planning and management vol. 23 2019 dipu sarkar and yanrenthung odyuo wind energy integration to a grid, dfig and ddsm are a better option. dfig and ddsm are variable speed wind turbines while scig is a fixed speed or constant speed wind turbine. the authors in [16] have done an interesting and in-depth discussion on constant/fixed speed wind turbines and adjustable/variable speed wind turbines, and argues the advantages of dfig in achieving improved efficiency, reduced inverter cost, reduced cost of the inverter filters and electro-magnetic interference filters, implementation of power factor control at lower cost, as well as decoupled control of the generator’s active and reactive power flows. these characteristics of dfig were also expressed in [17–19]. considering the uncertainty and variability aspect of wind resource, incorporating esss with wind power technologies is always a welcome development. it has added benefits such as during unplanned or unexpected availability of wind energy, the generated electricity can be stored in batteries or other ess units to be used as an alternate source of supply [20, 21] when required. 2.2. photovoltaic (pv) systems pv systems convert the sunlight directly into electricity, which may be fed to the grid through inverter or stored in electricity storage [22, 23]. since the direct current generated by pv systems can be stored in batteries [24] therefore, storage batteries and inverters can also be employed when pv systems are integrated into the grid [25]. with advancements and improvements in the pv technology, there is a noticeable growth in the integration of pv systems as dgs [26]. presently, electricity generated by pv systems is allowed to fully inject into the grid [23]. photo-voltaic systems generate electricity depending on the availability of sunlight in the area [27, 28], and since the availability of bright sunlight is weather dependent, it leads to the variability and intermittency of supply by solar-based generating devices [29, 30]. in large pv system installations, this unpredictability prompts the issue of fluctuations in the output power and the corresponding negative impacts it will have on the systems connected to it [30, 31]. a most informative and comprehensive review on solar forecasting methods have been done in [32]. based on the discussion in [32], the types of solar forecasting techniques generally include; numerical weather prediction (nwp) based forecast, stochastic forecast, artificial intelligence forecasting model and hybrid forecasting models. in modern power systems -based on various time scalesa combination of one or more of these techniques are used to give the best forecast. the based power production, integration of res-based power production is more beneficial to the grid, it also makes the grid more environmentally friendly [3, 10, 11]. when different dgs are pooled together into a single integrated unit along with components such as power electronics based converters, energy storage systems (ess) and other necessary equipment to deliver stable supply into existing conventional grid through an interconnecting link, it initiates the concept of microgrid [12]. the present paper attempts to investigate the issues that arises as a result of integrating res-based distributed generation into the grid, and the solutions and conclusions arrived at to solve some of these issues by reviewing scholarly papers and work done on this relevant field of study. 2. wind and solar based renewable energy systems the different forms of renewable energy that are currently in use for production of electric power are wind energy, solar energy, hydropower, tidal energy, bio gas plants, geothermal energy, wave energy, ocean thermal energy, etc. out of these, wind and solar res [10] are considered to be among the most suitable candidates to serve as distributed generation. with current advancement in the field of wind and solar energy conversion techniques, it is now becoming easier to convert more amounts of wind and solar energy into electricity. additionally, the release of harmful chemicals into the atmosphere from burning of fossil fuels for electricity generation is practically non-existent in electricity generation from wind and solar [11, 13], and these technologies are convenient and comparatively easy to use. it is mainly for these reasons that wind and solar-based electric generation systems are preferred over the other forms of energy for res integration to grid, and also why the bulk of this study is based on. 2.1. wind turbines wind energy is a clean and freely available res exploitable through wind turbines [14]. for generating electricity from wind, generally devices like doubly fed induction generator (dfig), direct drive synchronous machine (ddsm), and squirrel cage induction generator (scig) are used. the wind turbine output is dependent on the speed and velocity of the available wind. a performance comparison between scig, dfig and ddsm was done in [15], and it was found that for international journal of sustainable energy planning and management vol. 23 2019 29 an ab initio issues on renewable energy system integration to grid constant or uniform velocity for a specified duration and in a specific direction, minimum obstruction to the path of the wind before hitting the blades of the turbine, and if possible, a place where the availability of wind can be accurately predicted up to a certain extent. due to these and many other reasons including (noise) pollution concerns, a wind farm generally has to be set up far away from populated or residential areas. pv systems on the other hand basically can be set up anywhere where there is ample amount of sunshine available in the form of roof-top solar panels for residential areas and solar farms for solar power generating plants. also, pv systems are portable and as such can be installed anywhere, and be relocated if necessary. the major drawback of deriving electricity from solar is the nature of intermittent supply since the majority of the existing solar panels are fully dependent on direct sunlight and as such, any obstruction between the sun and the solar panel drastically reduces the power output of that panel by about 70 percent or more[35, 36, 37]. 3.2. the variability and uncertainty of renewable energy the variability of renewable energy is another major issue facing res integration to grid. power from res is highly weather dependent. the variability of renewable energy arises as a result of the variable nature of availability of renewable resources. the uncertainty and unpredictability aspect of availability of renewable energy on the other hand is mainly due to inevitable errors inherent in the forecast data used as inputs in res forecasting models [38]. figure 1 shows the variable and intermittent nature of solar and wind supply data in india types of solar power forecast based on various time scales include: (i) nowcasting [33] (also known as very short term forecast) which involves forecasts for the immediate or hours-ahead forecasts; some of the popular techniques employed for nowcasting are statistical techniques and satellite based methods, (ii) short-term solar power forecast deals with forecasting the availa bility of solar resource ranging from a day to a week; nwp based forecasts such as global forecast system, and regional nwp models, are efficient forecasting techniques for short-term forecasts and, (iii) long-term solar power forecasting, which forecasts the monthly or annual availability of resource. in [10], the authors have discussed some of the challenges related to solar pv integration to the grid. additionally, incorporating esss to address some of the issues regarding solar generators providing a stable supply of power to the consumers connected to the grid were discussed in [23]. 3. challenges in integrating renewable resources into grid integrating res into the utility grid comes with many challenges; the major challenges include the issue of location and the variability and uncertainty of renewable resources [34]. 3.1. the location of renewable resources the availability of renewable resources in a particular location plays an important role in the decision to set up an res [4, 27]. generation of electricity from wind turbines have certain requirements that have to be satisfied such as availability of wind moving with 0 50 100 150 200 250 300 350 400 450 e n e r g y ( g w h ) days wind energy solar energy 24 -j un -1 9 26 -j un -1 9 28 -j un -1 9 30 -j un -1 9 2ju l-1 9 6ju l-1 9 8ju l-1 9 10 -j ul -1 9 12 -j ul -1 9 14 -j ul -1 9 16 -j ul -1 9 18 -j ul -1 9 20 -j ul -1 9 22 -j ul -1 9 24 -j ul -1 9 4ju l-1 9 figure 1: wind and solar pv generation in india from 24 june – 24 july 2019[39] 30 international journal of sustainable energy planning and management vol. 23 2019 dipu sarkar and yanrenthung odyuo and solar, which can be predicted upto some extend via weather forecasts. in the case that during high demand, if the renewable plants are unable to meet the demand adequately due to resource constraints such as drop in wind-speed for wind turbines or overcast sky for solar plants, an alternate source has to supply the deficit in the demand. this alternate source should have the same or higher generating capacity as that of the renewable power plants and should have provisions for fast operation and connection to the grid to supply the load with minimum time delay. conventional resource-based power plants such as gasoline-powered generators are more suited to play the role of fast-acting reserves due to their ability for a quick start and less time consumption to reach their optimal performance mode. with more amount of renewable energy integration to the grid, it becomes that much more necessary to provide proper fast-acting reserves for the smooth operation of supply. (ii) by installing high capacity ess at proper locations in the grid during the time period of 24th june to 24th july 2019 [39]. figure 2 shows the fuel-wise generation pattern in india from monthly reports, and figure 3 shows the electricity demand and renewable generation for belgium for a week in the month of may 2014. 3.2.1. measures to address the variability of renewable energy supply when demand and supply move together certain measures to address the uncertainty aspect of renewable generation when supply from res rise and fall with demand patterns are discussed below: (i) proper management and operation of fast-acting conventional reserves on the basis of continuously updated weather forecasts integration of res into an electric grid also initiates the need for implementation of suitable contingency plans such as the need for a stable and reliable spinning reserve, which can deliver the load demand in case of failure or unavailability of renewable energy sources [27] for short durations. res produce power on the basis of availability of renewable resources such as wind all india fuel-wise generation patterns for 29-april-2019 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 200 180 160 140 120 100 80 60 40 20 0 200 180 160 140 120 100 80 60 40 20 0 200 180 160 140 120 100 80 60 40 20 0 all india fuel-wise generation patterns for 30-may-2019 all india fuel-wise generation patterns for 14-june-2019 g en er at io n (m w ) g en er at io n (m w ) g en er at io n (m w ) figure 2: all india fuel-wise generation pattern from monthly operation reports 2019-20[39] 12000 10000 8000 6000 4000 2000 0 p ow er (m w ) load conventional wind solar 09-may-2014 10-may-2014 11-may-2014 12-may-2014 13-may-2014 14-may-2014 15-may-2014 figure 3: electricity demand and renewable energy production in belgium (may 2014)[38] international journal of sustainable energy planning and management vol. 23 2019 31 an ab initio issues on renewable energy system integration to grid 3.2.2. issues with matching with reserves during renewable energy and demand mismatch now, the variability of renewable energy is relatively easily accommodated by means of the above mentioned approaches when the demand and renewable supply are moving together i.e., high availability of renewable resources when demand is high and vice-versa, but when demand and supply move in opposite directions, operation of conventional reserves to accommodate, address or relieve the situation becomes more challen ging both in terms of cost and management of resources. the two major cases of renewable energy mismatch with demand include: (i) availability of high renewable energy during periods of low demand this condition is mostly observed in wind res. in wind farms, sometimes due to abnormal weather conditions, there may be an availability of high amount of renewable resource (wind moving at high speeds) during periods of low demand hours such as at nighttime. this leads to a condition of surplus availability of electric power in the grid but nowhere to use it since the demand is low. integrating huge electrical ess is being discussed as one of the potential measures to address this issue. by installing high capacity ess at proper locations in the grid any surplus or excess energy can be diverted to charge the ess, and this stored energy can be fed back to the system whenever required or when the demand rises [40]. the constraints involved include finding the optimal locations for installing the esss as well as the cost involved in the installation and maintenance of the esss units. (ii) the absence of renewable energy when demand is high or during peak demand on the other extreme end is the condition of absence of renewable energy during peak demand hours. this condition affects both wind and solar-based res. as can be observed from figures 2 and 3, as well as in the literature [5, 45, 46] that the power generated from solar and wind power technologies are in most cases used to supply the peak demand. with power generation from solar and wind technologies being fully dependent on weather patterns, any abnormal weather conditions for a prolonged period of time lasting from several days to weeks will have a significant impact on the grid, and in worst cases no power may be generated by the res during the affected time period. for such eventuality, alternate arrangements have to be planned in advance to ensure that the power demand is delivered. installation in [27, 40] the possibility of implementing large electric power storage devices at certain locations in the grid which will store energy when excess energy is present and supply the stored energy when demand rises, were discussed. the excess electrical energy may be stored in many forms [41, 42] such as rechargeable batteries [25], fly-wheel technology, heat energy, potential energy, mechanical energy and many other forms of energy which can be converted back to electrical energy when required. by installing devices with a capability of large storage on the grid, surplus electrical energy can be stored in huge amounts and this stored energy can be utilized when the demand rises or during an emergency [25, 40, 43]. in [44], applica tions of different esss for operation in timescales ranging from few microseconds (for maintaining power quality, and proper frequency response) to months (for cases involving seasonal storage) were identified and discussed. (iii) by spreading out res installations over a wide area the availability of renewable resources varies over a wide area [4], and these characteristics can be noticed even when we consider a place such as a town or a city. sometimes, it may be noticed that while one part of the town is sunny, there is rainfall in the other part of the town. and, even during clear weather days presence of an occasional passing clouds affects the exposed area portion by portion, and also that the speed of the wind does not remain constant over the whole town instead it varies throughout. taking these small details into consideration, it may be observed that installing small interconnected res spread out over different locations of the town would provide a more stable and steady supply as compared to setting up one huge plant at a designated location which generates maximum power when renewable resources are available and negligible power during unavailability of resources [27]. thus, instead of setting up a huge renewable energy power plant in one location, setting up small interconnected res over a wide area will go a long way in providing a stable and constant transmission of electric power to the consumers [4, 27]. at present, the variability of renewable energy is mostly addressed by installation and proper control of the fast-acting reserves but as the integration of renewable energy into the grid grows more and more, installation of esss and controlled transmission becomes more appealing. 32 international journal of sustainable energy planning and management vol. 23 2019 dipu sarkar and yanrenthung odyuo community to fulfil their own electricity needs. slowly, the generation of electricity is shifting towards resbased electric power generators from the more conventional fossil fuel based generators. these changes in the power system network as a direct or an indirect result of the introduction of res-dg also leads to several impacts within the network itself. in a power system network, the production and demand keep on changing continuously with time. due to the dynamic nature of the power system network, it is difficult to observe or estimate all the impacts on the network as a result of the addition of new dgs into the network. major concerns with dg integration include the issue of power dispatch from res-based smaller generator units, and the issue of proper operator distribution planning to include the unpredictable nature of dg supply. it may also be noticed that though the distribution networks were designed to transport and deliver power from the substations to the consumers and not the other way around, the integration of distributed generation is normally being done on the distribution side of the power system network. this contradictory connection of dgs to supply via the distribution side causes a number of problems especially in situations of uncontrolled and unsupervised connection of dgs in huge numbers. 4.1. the severity of the impacts with res-dg includes: increase in uncertainty due to fluctuating and unpre dictable power sources are one of the main concerns for the transmission system operator [51]. the behaviour of small or novel generators during large disturbance is unknown and as such may make it difficult for the network operator to operate the network in a secure way. very large disturbance within the network itself may have a huge impact on the dgs connected to it, and in severe cases, it may even lead to some individual dg units being destroyed as a result of the backlash from the main network. in some cases due to abnormal conditions in the network, huge disturbance may be introduced into the network through the accumulation of small disturbances by the high amount of dgs connected to it. such an abnormal condition may lead to the collapse of the whole network if proper contingency plans are not implemented in advance. incorrect operation of the protection is another issue that occurs with a bulk integration of distributed generation. if proper regulations are not chalked out in advance, it may lead to unwanted and proper management of spinning reserves are being considered for addressing these issues, but the cost involved in setting up the reserves serves as a barrier. spreading out interconnected res over a very wide area in order to collect resources from more locations [4] is also another option that is being considered but it has some constraints such as power loss involved during transmission between the different areas as well as concerns over the security and cost of maintenance of the interconnected individual renewable energy plants. dealing with the above two cases is still a major challenge facing renewable energy integration to the grid, and research is still being done to find the best possible solution to properly address these issues. the intermittency in supply due to the nature of variability and unpredictability of renewable energy sources are currently being addressed via flexibility in generation [34, 38], supported with reliable and accurate weather forecast data [38] for precise and accurate prediction of availability of supply as well as employing ess units [42] at strategic and optimal locations, and adoption of efficient and energy saving practices and actions in the usage of available electric supply. 4. res enabled distributed generation (res-dg) and its impacts small generating units connected to the distribution side to deliver the demand when required and which acts as an alternate source of supply are normally termed as distributed generation (dg). the concept of introducing distributed generation as an additional power source has been discussed by many intellectuals and scholars alike for many years. over the years, dgs have been tested out in various places and found useful in many cases. the potential benefits involved have led many countries to integrate a number of dg units into the electricity grid [4, 47, 48]. introduction of dg units have also led to the minimization of setting up of new localized power plants such as coal or petroleum powered thermal power plants. it is expected to play a major role in the deregulation of the electricity network especially in the generation sector [6]. the distributed generation with a special focus on res has become more popular due to its eco-friendly and cost-effective approach towards power production [49]. res are also employed in community renewable energy networks [50], an application of res integration for electricity generation owned, operated and traded by either individuals or international journal of sustainable energy planning and management vol. 23 2019 33 an ab initio issues on renewable energy system integration to grid supply [51]. for demand response to work efficiently, consumer participation is the most important factor, and in smart grid-dg integrated networks, its importance is felt even more. active consumer participation in the daily activities of a power system network is a measure that has been investigated for a long time by different intellectuals and scholars as a measure for the smooth and efficient functioning of the grid. demand-side flexibility can address some of the problems due to variable renewable energy integration [34, 55]. with the active participation of the consumers, not only is the cost of operation of the grid greatly reduced but the power from res can also be more efficiently utilized. 5.2. micro-grid renewable energy sources or alternative electrical energy sources connected together in a harmonious arrangement with ess [6, 7, 52], dedicated loads, protection and control devices and power electronic based converters [56, 57], and which can act as a standalone self-sustaining generation side grid and is equipped with provisions to connect and disconnect with the utility grid via a power electronic based connecting link or a transformer makes up a micro-grid [12, 47, 58]. micro-grid can act as a distributed generation unit or an islanded standalone electricity generation plant or system [52, 56]. micro-grid acts as a common pool of electrical energy, where all the connected energy sources are provided with provisions to integrate smoothly with the existing electric grid [12, 57, 59]. power electronics plays a very important role and is a critical component of any microgrid system. the attraction of microgrid lies in its possibility of accommodating a wide range of growing needs in a seamless manner and with flawless control techniques [52, 56, 60], which is achieved through the use of power electronics. in a microgrid, micro sources should be able to seamlessly integrate as well as disconnect with the existing microgrid without the need for any extensive modification of the existing micro sources. generator ‘plug and play’ can be enabled through implementation of proper inverter control techniques [6, 61], thereby providing the much needed generator flexibility. a microgrid requires highly flexible power supply from every possible micro sources connected to it in order to ensure smooth and controlled operation as a single microgrid unit; which can only be achieved with power electronic based micro sources [59]. flexibility is desired for addition as well as operation of the protection devices when not required and in some cases, failure of the protective devices to operate when required [27, 52]. unwanted operation of the protective devices will lead to the links between supply and demand being disconnected prematurely thereby failing to meet the load demand even though generation assets to supply the load exists. on the other hand, failure of operation of the protective devices when required is a more serious issue as this may lead to malfunction of electrical components and devices both on the producers side and the consumers side, and in severe cases the distribution sector as well as the dgs connected to it may burn-out or get damaged beyond repair. 5. measures to address issues of res integration to grid provisions and measures to address some of the issues of res integration by different researchers and authors are discussed below. also, some measures discussed in section 4.4.1 are discussed in more detail in this section. 5.1. smart grid renewable energy systems with demand response smart grid may be defined as the electricity networks fully equipped and integrated with real-time monitoring sensors and advanced communication standards that intelligently integrates the generators with the consumers, is self-healing, resilient, sustainable, efficient adaptive, safe and which efficiently delivers electricity [3, 47, 53]. compared to integrating res into conventional electric grid, smart grid res provides certain advantages and benefits which include, but is not limited to, facilities to implement cost-effective higher penetration of res into the grid with noticeable improvements in the power quality, reliability, and resiliency [3, 6, 47, 53, 54]. also, in smart grid, the consumers are also considered as active participants in the electricity system and any activities of the consumers are reflected in the operation of the grid. consumers are given incentives inorder to motivate and encourage them to work towards a lifestyle that brings about more savings in energy consumption. in smart grid, implementation of demand-response programs based on the consumer consumption patterns leads to a lot of advantages and savings for the electric utility grid. demand response focuses on controlling the demand to match the supply instead of focusing on the 34 international journal of sustainable energy planning and management vol. 23 2019 dipu sarkar and yanrenthung odyuo generation assets also becomes easier and generator commission and decommission also becomes more efficient[ 4]. by accurately predicting the weather pattern in advance, faster operation of reserves to deliver any deficiency in supply, due to a failure of operation of renewable sources, can also be achieved [55]. 5.5. faster dispatch instead of long duration fixed schedule of generators generally, generators are made to operate on a fixed schedule to supply the demand for a certain period. during this period of scheduled operation, the selected generators are fully committed to their fixed schedules and will not be available to do other tasks such as providing help to relieve the electricity network during times of fault situations or scheduled deviations. so, during fixed scheduled operation of generators, if the demand of the grid suddenly increases then the committed generators will not be able to balance the load even though they may have the capacity to do so. now, instead of committing the generators over long periods of fixed schedules, if the generators are operated with faster dispatch intervals, then it becomes increasingly easier to match the load and generation levels and any overproduction of power or deficiency in supply can also be quickly addressed [51]. fast dispatch of generators is more desirable in the operation of renewable generators as well, since with faster dispatch of generator assets, activating the corresponding conventional reserves during times of sudden fluctuations in weather conditions can be significantly improved to meet the load demand [51, 66]. on the other hand, if there is an availability of renewable resource at any time of the day, then some of the conventional fuel based generators can be decommissioned in favour of commissioning the renewable generators to supply the demand. fast dispatch of all generation assets is somewhat limited by current existing technology. 5.6. flexibility in generation some papers such as [66] also discuss the use of flexible generation sources for smooth integration of renewable resources. in simple terms, the flexibility of a generator is nothing but the ability of a generator to start quickly, reach optimum operating conditions in the least amount of time, and stop when desired. the flexibility of a generator unit or a generation unit (fleet of flexible generators) is very much required if we want to integrate res smoothly, efficiently and quickly. the variability of islanding of micro sources. microgrid control using inverters can also provide greater flexibility via implementation of the plug and play functionality [56]. 5.3. essenergy storage systems energy storage systems are devices that have capabilities to store huge amount of electricity, and the stored energy of which can be utilized whenever required [27, 40, 41, 43, 62]. with the increase in the integration of renewable resources into the grid, proper implementation and utilization of more number of eess also become important [7, 42, 62]. also, improvements in the technology associated with ees can address some of the problems such as issues with peak load management, improvement in electrical stability and improvement in the power quality [7, 40, 63]. electrical energy can also be stored in the form of potential energy through mechanisms such as pumping up water to high locations in huge amounts during availability of high surplus power, and this stored potential energy can be converted back to electrical energy through electrical turbines which converts the mechanical energy of moving water into electrical energy which can then be supplied to the grid when the demand for power rises. electric cars as potential ess units were discussed in papers [27, 51, 64]. proper implementation and installation of esss in res integrated power systems can go a long way in ensuring that for sudden momentary dips in system voltage, the system is compensated for those short periods without the need for new generating plants to be started [62, 65]. some of the problems faced by current esss include role and design of ess [43], limited storage capacity, limited shelf life of batteries, etc. 5.4. advanced forecasting the electricity generation of an res-based generation unit is directly dependent on the amount of availability of the sources such as wind and solar, and their availability is dependent on the weather conditions. with advancement in technology, it is now possible to forecast weather conditions around the world hours and days ahead with high accuracy [51] using weather satellites and other means. using this and other already available means to accurately make weather forecasts of a particular region hours and days ahead especially with regards to availability of wind and solar resources also provides some help in solving the nature of variability of these sources [55]. with advanced forecasting, scheduling of the renewable generation assets with other conventional international journal of sustainable energy planning and management vol. 23 2019 35 an ab initio issues on renewable energy system integration to grid with the passage of time, many issues related with res integration have been sorted out and addressed, but even with all these solutions, planners and operators of the power system network still continue to face many challenges as a result of advances in the field of renewable energy generation or due to upgradation of equipment, and so the process of finding new solutions as new challenges arise is an ongoing activity. we also observed through the literature review the need for and the importance of the smart grid in providing assistance towards achieving a seamless integration of renewable and other alternative power sources to the grid. the importance of the micro grid is also on the rise. micro-grids, with its micro-sources, esss and power electronic based controlling units are becoming more widely used to address many of the challenges faced in integrating res to grid. for achieving better interconnection relation between grid and renewable energy integration, issues related with the design and sizing of the system, and suitable and efficient models incorporating the technical and financial aspects of grid integration, etc are some of the issues that also need to be addressed. references [1] basak p, chowdhury s, nee dey sh, chowdhury sp, a literature review on integration of distributed energy resources in the perspective of control, protection and stability of microgrid, renewable and sustainable energy reviews 16 (8) (2012) pages 5545–5556. https://doi.org/10.1016/j.rser.2012. 05.043. 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their renewables potential. the model region consists of three municipalities (two rural regions and a mediumsized city) with the joint goal of 100% renewable electrical power supply in annual average by 2030. based on the region’s development path, this study predicts time-resolved renewable production and electrical demand profiles, including a sensitivity analysis on demand and generation profiles. in both rural regions renewable power production will exceed electrical demand while the city can only cover 27% of its power demand in 2030. the transition to renewable electricity supply of the city thus depends on its rural hinterlands. synergetic crosslinking of urban and rural regions increases the total renewable electricity supply to 60 or 70%, depending on the size of the rural region considered. seen from the perspective of rural regions cross-linkage to a city decreases the possible self-sufficiency compared to considering them as single regions. they can act as energy suppliers for neighbouring cities in the future. 1. introduction for the supply with raw materials and energy cities have always been dependent on their local surrounding areas or on regions which are located far away. day and hall [1] evaluate urban self-sufficiency as a myth, and in order to keep urban systems running, cities depend on “large areas of productive ecosystems and waste sinks”. dosch and porsche [2] argue that, in terms of a future climate neutral energy supply, urban territories might need even more support from their rural surroundings due to large land requirements for the installation of renewable energies. on the other hand, the fight against climate change and the promotion of energy transition play a major role on a regional community level, and more and more strategies of how to mitigate greenhouse gas emissions are being worked out in urban and rural municipalities. in germany and other european countries, the term “energieregion (energy region)” has been established in the course of the energy system decentralization. this term is often used as a synonym for regions with the fixed political aim of a high percentage of renewables in energy supply up to energy autarky. abegg [3] in a study on energy-autarchic regions in the european alps speaks of a vision of regions to become independent from fossil energy imports. numerous studies deal with the socio-economic factors of energy regions and their importance for the “energiewende (energy transition)” (see e.g. [4-7]). urban-rural relations in renewable electric energy supply – the case of a german energy region caroline möllera,b,*, martin faulstichc and sandra rosenbergera a faculty of engineering and computer science, osnabrück university of applied sciences, albrechtstr. 30, 49076 osnabrück, germany b transformation of energy systems, reiner lemoine institut ggmbh, rudower chaussee 12, 12489 berlin, germany c chair of environmentaland energy engineering, clausthal university of technology, leibnizstraße 28, 38678 clausthal-zellerfeld, germany keywords: electric energy supply; urban-rural cooperation; energy regions; self-sufficiency; residual load url: http://dx.doi.org/10.5278/ijsepm.2019.21.7 mailto:caroline.moeller@rl-institut.de 94 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region energy installation cost range from 1,000 to 1,500 eur/ kw, see for example current and past reports of irena [24], the fraunhofer institute for solar energy systems ise [25] and the german institute for economic research [26]). they found small wind turbines, if at all, only profitable in coastal suburban or rural areas. besides, comparison of installable capacity with large wind energy installations is still pending. millwardhopkins et al. [27] found 2,000 to 9,500 possible buildings to install small wind turbines in the british city of leeds. assuming an average power of 4 kw per micro wind turbine, the total installed capacity would match to maximum 38 mw, which corresponds to around 13 large wind turbines of 3 mw each which, however, could not be installed within the urban environment. the solar potential in the urban environment is far higher than the potential of wind energy. photovoltaics can primarily be implemented in cities on rooftops and facades. prina et al. [28] e.g. only use photovoltaics as renewable energy producer with their maximum rooftop potential for their energy system analyses of an urban municipality in italy. miranda et al. [29] analyze the availability of rooftops to install photovoltaics by example of brazilian municipalities. they found a much higher potential of installing photovoltaics in urban areas compared to rural ones. since socio-economic factors like income were considered in the calculations of this study as well, e.g. the relatively higher income in brazilian cities than in rural areas plays a role for the potential of photovoltaics to be installed. the urban density of buildings, however, is likewise emphasized in this study as a major factor regarding available rooftop areas for photovoltaics. also, mohajeri et al. [30] state a great potential of compact cities to install photovoltaics, but also indicate that the urban potential for rooftop and facade photovoltaics decreases with increasing building density. brito et al. [31] investigate the potential of facade photovoltaics in various neighborhoods of the city of lisbon, portugal. in these latitudes and climate conditions façade photovoltaics have the potential to better meet the demand both in summer and winter. kurdgelashvili et al. [32], calculating a big potential of rooftop photovoltaics for a number of us-american states, point out that differences in the potentials between different states are not only caused by different irradiation ratios but also arise due to housing and rooftop characteristics. changes of the solar potential on roofs and facades with increasing building density in cities in germany, for example, initiatives like the “100% erneuerbare-energie-regionen” (100% renewable en ergy regions) [8], the “bioenergy villages” [9,10] and the “masterplan 100% klimaschutz“ (master plan 100% climate protection) [11] support regions which aim at a 100% renewable and regional energy supply. on the european level the “covenant of mayors” e.g. already represents more than 7,500 communities which plan to go beyond the 2020 and 2030 eu objectives in greenhouse gas emission reduction [12,13]. mega cities like the chinese city of wuxi are also elaborating plans for a renewable energy transition [14]. in germany, currently three of 153 100% renewable energy regions are urban-type regions [8]. however, the future energy demand for electricity, heat and mobility in cities cannot be covered sufficiently by urban territories alone. with increasing share of renewable energy sources (res) in energy supply, cities become more and more reliant on their surrounding rural areas. in case of electric energy supply, cities can provide only little space for the installation of power supply units based on res (res-e) due to their high demand in residential, commercial and traffic areas. the available accounting for area restrictions is often defined as geographical potential (see e.g. [15]). moreover, energy supply based on renewables requires significantly greater production areas than based on fossil fuel. if previously a great part of electric energy could have also been provided by fossil power plants within urban territory, this is not the case for renewables. the use of wind energy in urban territory is often only possible as micro or roof mounted wind turbines. not only does the problem of limited space in the urban environment have to be considered, but also wind conditions are not as intensive and often turbulent, thus horizontal axis wind turbines are not commonly used on roofs [16]. many studies deal with those wind-flow patterns and turbulences in the urban environment and estimate the effects of urban morphology like roof shapes, building heights and neighborhood density on wind power yields (see e.g. [17-22]). the costs of micro wind turbines are remarkably higher than big wind turbines with low yields. besides, there are additional costs for approval procedures, noise and vibration protection. installation solutions are also distinctly more specialized and not standardized as with photovoltaics. grieser et al. [23] compare initial installa tion costs of three installations between 5,000 and 14,000 eur/kw (in comparison: large onshore wind international journal of sustainable energy planning and management vol. 21 2019 95 caroline möller, martin faulstich and sandra rosenberger of the chinese urbanization processes and the development of low-carbon cities. the authors analyzed the cost and emissions minimum technology mixes for different scenarios with optimization algorithms and found the urban-rural cooperations to be the best option from economic and environmental viewpoints. the research object of our study was the german master plan region osnabrück-steinfurt, located in the north-west of germany. this region is funded by the project “masterplan 100% klimaschutz” (master plan 100% climate protection) [11] through the federal ministry for the environment, nature conservation, building and nuclear safety (bmub) and consists of the two rural municipalities landkreis osnabrück and kreis steinfurt and the two cities osnabrück and rheine. the total region is characterized by the aim for greenhouse gas mitigation by 95% until 2050 compared to 1990, a fast extension of res in the sectors electricity, heat and transport, and energetic self-sufficiency on an annual balance (for electricity supply in 2030 and for heat supply in 2050). the cities within this region are highly dependent on energy imports and cannot claim themselves energy regions as defined by energy autarky without their adjacent rural neighbors. as a first step, this study focuses on the region’s development path for renewable electrical energy and performs load profile based self-sufficiency analyzes instead of annual balances. the further implementation of storages or other flexibility options are not considered. in the medium-sized city of osnabrück presented in our study the res-e potentials within the city’s territory clearly do not meet the annual electric energy demand. an urban-rural cooperation of the city with its two surrounding municipalities is most likely. given that the city depends on cooperation with its rural surroundings when aiming at a full renewables supply, our study quantifies to what extent the city must rely on the neighboring rural energy potential. further, the potential for providing the city with electric energy from the perspective of the two rural municipalities is investigated. thus, the novelty of our study is the focus on urban-rural cooperation in the context of regional renewable supply with the aim for regional self-sufficiency. we focus on the electricity supply and the aim for self-sufficiency in this sector by 2030. electricity demand also contains the demand in the heat and mobility sector which is directly supplied by power-to-heat and power-to-mobility. the study is structured as follows: first we describe the methodology of transforming the annual values of due to shadowing and the calculation of the optimal orientation of neighborhoods is part of many studies (see e.g. [33,34]). especially for neighborhoods to be newly built in the future, sarralde et al. [35] propose an algorithm that calculates the optimal orientation of rooftops and facades for increase of the solar potential. new neighborhoods should not only be built energyefficient, but also for harvesting solar energy. lee et al. [36] also analyze the relation between housing density and “the amount of solar irradiation that reaches a building” and “suggest ways to optimize the capacity for solar collection during the initial urban planning phase”, and morganti et al. [37] propose that those correlations “should be integrated in the early stage of design process […] to guide strategies for harvesting solar energy and fostering solar energy technologies”. in contrast, rural districts usually own plenty of land in relation to their energy demand. regarding the full potential of fluctuating res, rural areas are more suitable. here ground mounted photovoltaic plants and large, horizontal-axis wind turbines could be applied in the mw-range. moreover, they are able to install more renewable energy plants than needed to cover their demand, which is why they become interesting with regard to the provision of energy for neighboring cities. but not only cities depend on their rural surroundings. also, energy export regions might need an energy drain in times with high electric energy production from res-e and low energy demand. cross-linking rural and urban areas therefore seems appropriate for promoting a decentralized and regional renewables supply which also includes cities. current studies mainly focus on the evaluation of urban potentials for harvesting energy from renewables such as wind and photovoltaics power, biomass and geothermal energy. very few scientific studies on the cooperation of cities and their hinterland exist. in case studies of cities examining the transition to renewables often possible supply through local hinterlands and res-e located further afield is mainly discussed on a theoretical level, like for example by droege [38], or calculations are based on annual energy balances like in the study of grewal and grewal [39] about the north american city of cleveland. also differences in e.g. energy consumption patterns or driving factors for co2 emission reduction between urban and rural areas are evaluated, as described in ren et al. [40] for the chinese case. ren et al. analyze an urban-rural mutual cooperation to cover electricity and heat demand from the perspective 96 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region potential). table 3 gives the assumed electric energy demand pathway in the three municipalities. the expansion pathways as displayed in tables 1 to 3 are based on a potential analysis made by the master plan regions in the context of developing their master plans (see [11] for general information about the master plan program, and the master plans for the city of osnabrück [41], landkreis osnabrück [42] and kreis steinfurt [43]). table 3 implements both, demand decrease by efficiency measures and an assumption of future electricity demand for heat, cold and mobility. the share of electric energy in the final energy demand thus increases. in a first step of this study, the expansion scenarios for wind power and pv, the biogas potential and the assumptions of the annual electric energy demand were transferred into time-resolved electric energy feed-in and demand profiles to calculate self-sufficiency degrees and amounts of deficit and excess energy. when the integral of electrical deficit and excess energy profiles equals zero, mean annual self-sufficiency is reached, which is one of the goals of the considered masterplan region. in reality, deficit and excess loads will either be the master plan targets for generation and demand to time step based profiles and of calculating the residual load. in section 3 we present results for deficit and excess energy and the resulting real self-sufficiency degrees of the three regions individually (3.1) compared to various cross-linking options (3.2). further, in section 3.3 we investigate the influence of various generation and load profiles. in section 4 we close with a discussion of the results and a conclusion. 2. methods the model region osnabrück-steinfurt is located in the north-west of germany and consists of two rural regions (landkreis osnabrück and kreis steinfurt) and one urban region, the city of osnabrück, see figure 1. the city of rheine is not considered as a single region within this study. although it has its own expansion scenario, it is part of the region kreis steinfurt and therefore not specified here. the three municipalities have defined a clear expansion path regarding the development of re technologies for electricity supply (see tables 1 and 2 for pv, wind power, and biogas city of rheine 10 0 10 20 30 40 km city of osnabrück kreis steinfurt landkreis osnabrück figure 1: the master plan region osnabrück-steinfurt, consisting of two rural districts (landkreis osnabrück, kreis steinfurt) and two urban districts (city of osnabrück, city of rheine), and its location in germany. the city of rheine is part of kreis steinfurt and was not considered separately within this study international journal of sustainable energy planning and management vol. 21 2019 97 caroline möller, martin faulstich and sandra rosenberger [45,46]) were applied for the location of the city of osnabrück (longitude: 8.0, latitude: 52.3). primarily, the evaluations in this study are based on the weather year 2005. to cope with the sensitivity of weather data, the analysis concludes with a short assessment of the weather years 1998 to 2014 in section 3.3. the region’s master plans also identify the biogas potential for energy generation. in both rural munici palities a high number of biogas plants is in operation mainly on manure and energy crops, but also on food-waste. the predominant operational model is constant combined heat and power (chp) operation with parallel heat and electricity production. within this study, the biogas plants are simplified regarded as constant electricity producers with an electrical efficiency of 0.38 (while in parallel producing thermal energy with an efficiency of approx. 0.4). biogas supplements the supply from fluctuating res-e as it can be used flexibly which should be the predominant operation mode in exchanged with the grid or need to be leveled out by different flexibility options, e.g. battery storages, sector coupling, or smart energy systems. further, various urban-rural combinations were compared. all investigations are based on the conversion of annual values (consumption, potentials for bioenergy) and installed capacities (wind and photovoltaics) into time-resolved profiles with hourly time steps. to compare the different scenarios, the residual load (also called reduced load) was calculated by subtracting time step based generation profiles of fluctuating renewable electric energy supply from the likewise time step based load profile. the resulting reduced load profile gives information about energetic excesses and deficits. the fluctuating res-e considered in this study are wind power and photovoltaic (pv). electric energy feed-in was derived by applying the feedinlib toolbox of the open energy modelling framework (oemof) [44]. weather data (wind speed, solar irradiation; taken from table 1: planned development of electricity supply from wind power and pv for the considered master plan regions and for the years 2020 to 2050. numbers were taken from the potential analysis of the master plan regions [41,42,43]. city of osnabrück landkreis osnabrück kreis steinfurt 2020 2030 2040 2050 2020 2030 2040 2050 2020 2030 2040 2050 installed wind power capacity [mw] 11 17 23 30 340 500 600 700 650 1000 1210 1470 installed pv capacity [mw] 110 190 250 360 390 720 1050 1380 330 580 780 1130 table 2: planned development of electricity supply from biogas for the considered master plan regions and for the years 2020 to 2050. numbers were taken from the potential analysis of the master plan regions [41,42,43]. to calculate the residual load biogas potential is transformed into electric energy using an electrical efficiency of 0.38. city of osnabrück landkreis osnabrück kreis steinfurt 2020 2030 2040 2050 2020 2030 2040 2050 2020 2030 2040 2050 annual chemical biogas potential [gwh/a] 40 50 70 80 720 730 740 740 740 1460 1140 1110 table 3: planned development of annual electric energy demand for the considered master plan regions and for the years 2020 to 2050. numbers were taken from the potential analysis of the master plan regions [41,42,43]. city of osnabrück landkreis osnabrück kreis steinfurt 2020 2030 2040 2050 2020 2030 2040 2050 2020 2030 2040 2050 annual electric energy demand [gwh/a] 930 910 900 880 1960 2000 2040 2100 2560 2260 2200 2120 share of electric energy in final energy demand 20% 22% 25% 31% 22% 28% 38% 55% 24% 29% 41% 71% 98 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region the kreis steinfurt have more than twice as many residents, namely 358,000 and 443,000 respectively. conversion into demand per resident results in the same dimensions (e.g. in 2030: city of osnabrück: 5.6 mwh/ resident, landkreis osnabrück: 5.6 mwh/resident, kreis steinfurt: 5.1 mwh/resident). by means of the curves of two weeks the electric energy generation from res-e and the electric energy demand of the landkreis osnabrück is shown in figure 2. the focus within this study was on two different load profiles scaled down to the annual demand of the particular region (see table 3) and representing two extremes. load profile 1 represents the german load profile of the european network of transmission system operators for electricity (entso-e) [47] which can be seen as too smooth for a region whose residents account for only slightly more than 1% of the total residents in germany. the second load profile is the standard load profile for households (h0) from the german association of energy and water industries (bdew – bundesverband der energieund wasserwirtschaft) [48] and represents only around 400 households [49]. this load profile is future. the total amount of produced electricity over the year is the same in constant or flexible operation mode. with respect to total electrical load profiles, flexible biogas plant operation will lead to lower deficit and excess load peaks and an overestimation of residual load. by looking at table 1 to 3 the different capabilities of renewable energy supply in urban and rural areas become obvious. while the planned development of wind energy, e.g., is up to nearly 1,500 mw in the rural municipality kreis steinfurt, the city of osnabrück only holds a capability of 30 mw for wind power plants, which is 2% of the capability of kreis steinfurt and 4% of the capability of landkreis osnabrück. however, installing pv within the city is more promising than wind energy due to rooftop potential. nevertheless, the overall space potential for pv is still less than within the rural regions since rural areas also offer space for ground-mounted pv systems. furthermore, it is striking that the city’s electricity demand is much lower than the demand of both rural regions. this is due to the different number of residents. the city of osnabrück has around 162,000 residents whereas the landkreis osnabrück and wind + pv + bio-energy 800 600 p o w e r [m w ] 400 200 100 200 hours 300 0 0 load entso-e load bdew h0 figure 2: electric energy generation from res-e (wind power, pv and bio-energy), electric energy demand as entso-e load profile (solid, data taken from [47]) and bdew h0 load profile (dashed, data taken from [48]), calculated for landkreis osnabrück for two weeks; master plan scenario 2030, weather year 2005. reduced load is calculated by subtracting electric energy generation from load profile international journal of sustainable energy planning and management vol. 21 2019 99 caroline möller, martin faulstich and sandra rosenberger with the sensitivity of input data the influence of different weather data and load profiles has been analyzed (3.3). 3.1. individual residual load of the three regions figure 3 shows the calculated annual load duration curve of the residual load for all three considered municipalities and the year 2030. positive ordinate values reflect a deficit in demand coverage, negative ones an excess in electricity supply. the graph also depicts the number of hours with deficit or excess in energy supply and maximum values of the positive and negative residual load. in 2030, all regions exhibit deficit times (positive ordinate values). in total, the deficit energy in the city of osnabrück amounts to 670 gwh, in landkreis osnabrück to 640 gwh, and in kreis steinfurt to 480 gwh. with the city’s demand of 913 gwh in 2030 and without implementation of energy storage, this results in a predicted deficit of 73% and thus a real self-sufficiency degree of 27%. at the same time, the real self-sufficiency originally given in 15 minute time steps and has been converted into hourly time steps by averaging over four quarters of an hour each. the influences of the different load profiles on the results are, just as the influence of different weather years, discussed in section 3.3. with figure 2 the basic idea behind the residual load calculation is shown. subtracting the res-e generation profile (gray) from the load profile (blue) results in a time step based profile of positive and negative residual load which represents deficits and overproduction (see figure 3 in the results section). 3. results the following chapter presents the results of the residual load analysis for the three individual regions of the model region (3.1) and shows the effects on deficit and excess energy as well as real self-sufficiency degress when cross-linking urban and rural regions in various cross-linking options (3.2). further to cope city of osnabrück 500 0 -500 -1000 -1500 -2000 -2500 0 2000 4000 hours of the year r es id ua l l oa d [m w ] 6000 8000 landkreis osnabrück kreis steinfurt figure 3: annual load duration curve of the residual load (positive ordinate values: deficit, negative ordinate values: excess) in landkreis osnabrück, kreis steinfurt and the city of osnabrück, calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] 100 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region 2020 to 550 gwh in 2050; the excess energy increases to only 170 gwh in 2050. times without deficit in energy demand in the city of osnabrück are little: in the year 2020 there are only 80 hours without deficit in energy supply, which correlates to three days. 3.2 the benefit of cross-linking urban and rural areas in the following, the potential of urban energy supply through rural regions is evaluated based on two different urban-rural-connections. the first connection combines the city of osnabrück only with the rural municipality landkreis osnabrück. the second connection also considers the second rural municipality, kreis steinfurt, therefore representing the overall master plan region. figure 5 shows the monthly summary of demand (positive values) and excess energy (negative values) of the city of osnabrück and the landkreis osnabrück as single regions before cross-linkage. further the demand in the positive axis is subdivided into covered demand and deficit energy. it can be seen that the city of osnabrück covers a part of its demand out of its own resources, especially in summer, however only by around 27%. the excess energy is only at around 26 gwh (see section 3.1). in the winter months, particularly in january, november and december, the energy supply conditions of the city of osnabrück lead to zero overproduction. the landkreis osnabrück, on the other hand, exhibits large amounts of excess energy in almost every month of the year. in january and march, but also in april and may, the excess is higher compared to the rest of the without storage is 68% in landkreis osnabrück and 79% in kreis steinfurt. the share of excess energy (negative ordinate values) compared to the annual demand is 69% in kreis steinfurt (1,550 to 2,260 gwh), 40% in landkreis osnabrück (800 to 2,000 gwh) and less than 3% in the city of osnabrück (26 to 910 gwh)." (values adjusted according to table 3) . the excess energy in kreis steinfurt is thus far more than half of the annual demand, which is not the case in landkreis osnabrück. landkreis osnabrück produces only half of the excess energy of kreis steinfurt due to the installed wind power which is only half of that in kreis steinfurt (see table 1). figure 4 shows the residual load as annual load duration curve for both rural regions, supplemented by the years 2020, 2040 and 2050. the deficit energy of kreis steinfurt still exceeds that of landkreis osnabrück in the year 2020 (1,010 gwh compared to 790 gwh), it decreases much faster though (until 2050 more than 60% to 360 gwh, compared to almost 30% decrease in landkreis osnabrück to 560 gwh). in kreis steinfurt, from 2030 on a deficit in electric energy supply results in less than half of the total hours of one year. in landkreis osnabrück, this is not the case before 2050. the excess energy increases much faster than the deficit energy decreases over the considered period. in both rural regions the excess energy increases by a factor of six to seven (kreis steinfurt: from 480 to 3,030 gwh, landkreis osnabrück: from 270 to 1,790 gwh). the deficit energy of the city of osnabrück (not shown) decreases likewise by almost 30% from 770 gwh in landkreis osnabrück hours of the year r e si d u a l l o a d [ m w ] 500 0 -500 -1000 -1500 -2000 2000 4000 6000 8000 -2500 0 hours of the year r e si d u a l l o a d [ m w ] 500 0 -500 -1000 -1500 -2000 2000 4000 6000 8000 -2500 0 kreis steinfurt 2020 2030 2040 2050 2020 2030 2040 2050 figure 4: annual load duration curve of the residual load (positive ordinate values: deficit, negative ordinate values: excess) in landkreis osnabrück (left) and kreis steinfurt (right), calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] international journal of sustainable energy planning and management vol. 21 2019 101 caroline möller, martin faulstich and sandra rosenberger calculations result in only 25 gwh electric energy production in the landkreis osnabrück at an installed capacity of around 720 mw (see table 1). this also explains why the city of osnabrück exhibits zero overproduction in january as the renewable energy supply is mainly based on pv. figure 6 compares the sum of the individual values of annual excess, covered demand and deficit (variation 1) year. in february, november and december the excess energy is slightly decreased. the increased excess e.g. in january is mainly due to good wind conditions. there is 188 gwh electric energy production from wind power in january at an installed wind power capacity of around 500 mw (see table 1) which would correlate to more than 4,500 full load hours if projected to one year. solar irradiation conditions were poor during the same period. figure 5: monthly demand coverage, deficit and excess energy in the city of osnabrück (left) and the landkreis osnabrück (right), calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] city of osnabrück400 300 200 100 0 -100 jan feb mar apr may jun jul aug sep oct nov dec 400 300 200 100 0 -100 d e m a n d [ g w h ] d e m a n d [ g w h ] landkreis osnabrück (lkos) deficit covered demand excess deficit covered demand excess jan feb mar apr may jun jul aug sep oct nov dec city of osnabrück + lkos individually city of osnabrück + lkos cross-linked excess covered demand deficit -1000 0 1000 2000 3000 4000 5000 -826 1,310 -680 1,160 figure 6: annual demand coverage, deficit and excess energy of the landkreis osnabrück (lkos) and the city of osnabrück taken individually with added up values, compared to both regions cross-linked, calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] 102 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region in the landkreis osnabrück and 3% in the city of osnabrück when examined as individual regions (see section 3.1). for the city of osnabrück, the cross-linkage with its rural neighbor is beneficial since it can more than double its self-sufficiency from 27% to 60% in connection with the landkreis osnabrück. the landkreis osnabrück, however, reduces its individual self-sufficiency of 68% by 8 percentage points. from the perspective of the rural region, there is thus no direct benefit of cross-linkage to the city, but could lead to an economic incentive by selling electricity to the city in future regional energy markets. the individual specific deficit energy converted into values per resident is 4.1 mwh/resident for the city of osnabrück and 1.8 mwh/resident for the landkreis osnabrück. cross-linking both regions, the deficit results to 2.2 mwh/resident (1,160 gwh to 520,000 residents), which is an increase from the perspective of the landkreis osnabrück and would lead to greater efforts in providing flexibility. figure 7 finally shows both cross-linking options (cross-linkage with the landkreis osnabrück and crosslinkage of the total region) compared to the city of with the cumulative values when cross-linking both regions (variation 2). in contrast to variation 2, variation 1 does not use synergies in energy supply and demand, which means that overproduction in one region is not used to cover a deficit in the other region. cross-linkage of the city of osnabrück with landkreis osnabrück results in a slight increase of coverage of cumulative demand and a slight decrease in cumulated energy deficit.while the cumulated annual deficit of the individual regions is around 45% of the annual demand (annual deficit of 670 gwh in the city of osnabrück plus 640 gwh in the landkreis osnabrück, compared to an annual demand of 910 gwh in the city of osnabrück plus 2,000 gwh in the landkreis osnabrück), it decreases to 40% for cross-linked regions (mutual annual deficit of 1,160 gwh compared to annual demand of 2,910 gwh), resulting in a self-sufficiency degree of 60%. the excess energy is accordingly reduced (from 800 gwh in landkreis osnabrück plus 26 gwh in the city of osnabrück to 680 gwh in the cross-linked variation). proportionally, the share of overproduction in annual electric energy demand drops to 23%, compared to 40% city of osnabrück 500 0 -500 -1000 -1500 -2000 -2500 0 2000 4000 r e si d u a l l o a d [ m w ] hours of the year 6000 8000 cross-linking with lkos cross-linking with lkos and krst figure 7: annual load duration curve of residual load (positive ordinate values: deficit, negative ordinate values: excess) in the city of osnabrück alone and either cross-linked with only the landkreis osnabrück (lkos) or with the landkreis osnabrück and the kreis steinfurt (krst), calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] international journal of sustainable energy planning and management vol. 21 2019 103 caroline möller, martin faulstich and sandra rosenberger curves between 141 and 327 mw and the bdew standard load profile h0 curves between 77 and 411 mw for the assumed annual electric energy demand of the landkreis osnabrück in 2030 (see figure 2 in section 2). the entso-e load profile is thus too smooth and the bdew standard load profile h0 too sharp for a region of this size. figure 9 depicts the influence of the two load profiles on the monthly demand distribution for the landkreis osnabrück in 2030. the profiles show significant deviations in seasonal distribution. when assuming the bdew standard load profile h0, demand increases in summer and decreases in winter. the bdew profile thus leads to a contrarian monthly distribution. a possible explanation can be found in the origin of the profiles. the entso-e load profile represents the electric load at maximum voltage level. therefore, the electric demand directly covered by res-e feed-in in lower voltage levels is not included. as mainly pv power plants are connected to low voltage levels, the non-incorporated load of the entso-e profile appears in summer. osnabrück as an individual region. when enlarging the region and implementing kreis steinfurt, the mean specific deficit drops to 1.6 mwh/resident (1,530 gwh to 963,000 residents), which would be beneficial for both, the city of osnabrück and the landkreis osnabrück. for kreis steinfurt, however, it is an increase as its individual specific deficit amounts to only 1.1 mwh/ resident. the deficit of kreis steinfurt as an individual region increases when using synergies by cross-linking it to the rest of the region and analyzing electricity production and demand from the view of the total region. thus self-sufficiency decreases from 79% to 70% (see also section 3.1). 3.3 influence of different input weather data and load profiles simulation data generally rely on the quality of the input data. to validate the results presented in the prior sections, the influence of two significant input parameters was analyzed: weather data and load profile. weather data (wind speed and solar irradiation) are directly linked to the generated electric energy of the fluctuating res-e. together with the shape of the load profile they directly influence the residual load. figure 8 shows the predicted self-sufficiency degrees of the three regions for 2030, calculated with weather data of 17 different years (1998 to 2014). blue symbols represent the results of the weather year 2005 used for the calculations in the prior sections. the resulting selfsufficiency degree varies between 76 and 82% in kreis steinfurt (compared to 79% for 2005 data), between 65 and 72% in landkreis osnabrück (compared to 68% for 2005 data) and between 24 and 28% in the city of osnabrück (compared to 27% for 2005 data). due to low installed res capacity in the city of osnabrück, the effect of the weather data on the self-sufficiency degree is lower than in the rural regions. regarding the crosslinked synergetic calculation of the total region comprising kreis steinfurt, landkreis osnabrück and the city of osnabrück (not shown in the figure), selfsufficiency varies between 67 and 74% (compared to 70% for 2005 data) the relative error due to different weather data on the presented results can thus be estimated to be less than 10%. regarding the influence of different load profiles on the results, the entso-e load profile [47], used for all previous analyses, was compared to bdew standard load profile h0 [48]. both load profiles represent extreme approaches: the entso-e load profile delivers 80 60 40 20 0 landkreis osnabrück kreis steinfurt s e lfsu ff ic ie n cy d e g re e [ % ] city of osnabrück figure 8: self-sufficiency degree of kreis steinfurt, landkreis osnabrück and the city of osnabrück, calculated with the weather data of the years 1998 to 2014 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] 104 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region different load profiles can thus be estimated at less than 4%. this also applies for the cross-linking options. the use of different load profiles leads to only little changes in resulting self-sufficiency degrees, but affects the monthly distribution of deficit and excess energy and the resulting periods like summer or winter. this also applies for different weather years (although not considered in this study) and could have consequences for providing flexibility like power to heat or other flexibility options, as for example described by niemi et al. [50] who connect different energy carrier networks to distributed renewable energy generation (for example convert surplus electricity into thermal energy) to improve energy sustainability in urban areas. 4. discussion and conclusion in this study the potential of two rural municipalities for providing a neighboring city with electric energy was determined and the different potential of renewable hence, the different profiles also lead to different distributions of deficit and excess energy among the months of one year, as depicted in figure 10. the deficit energy is accordingly higher in the summer months with the bdew standard load profile h0 compared to the entso-e load profile, whereas the behavior of the excess energy is the exact opposite (higher in winter and lower in summer when assuming bdew standard load profile compared to entso-e load profile). considering one year in total, the use of the two different load profiles result in the following values on the example of landkreis osnabrück and the scenario year 2030): deficit decreases from 640 gwh (entso-e profile, see section 3.1) to 620 gwh (bdew h0 profile), excess energy from 800 gwh (entso-e profile) to 780 gwh ( bdew h0 profile). thus, the resulting annual deficit and excess energy values are nearly the same. therefore also, there is almost no difference in the resulting self-sufficiency degree. the relative error on the presented results due to assuming 200 100 d e m a n d [ g w h ] 0 jan feb mar apr may jun jul aug sep oct nov dec 177 165 175 155 157 153 160 158 162 172 176 185 -9% -11% -5% +7% +10% +12% +10% +12% +3% -1% -10% -12% figure 9: monthly demand of the landkreis osnabrück, calculated with entso-e load profile (data taken from [47]) and annual electric energy demand target of 2030 (see table 3), and monthly percentage deviations of calculation with bdew standard load profile h0 (data taken from [48]) international journal of sustainable energy planning and management vol. 21 2019 105 caroline möller, martin faulstich and sandra rosenberger resulting from the time step based res-e generation and electric demand, without implementation of storage. the city is not capable of meeting its electric energy demand only by the targeted increase of res-e within its urban area. most hours of the year show a deficit in energy supply. the rural regions, on the other hand, are characterized by far greater expansion targets of res-e compared to the city. depending on the master plan year, this leads to an overproduction in up to half of the hours of one year. using excess energy from the rural regions to provide the deficit in the urban area leads to a benefit for the total system. the city of osnabrück benefits primarily since self-sufficiency, from the city’s point of view, increases significantly cross-linked with the neighboring regions. to some extend also the landkreis osnabrück benefits, which becomes apparent when cross-linking the total region. the self-sufficiency of the total region increases compared to the examination of landkreis osnabrück as a single region. the kreis steinfurt, having the largest expansion targets of res-e, takes on the role of the supplier. demand covering and self-sufficiency in urban and rural regions was evaluated. three regions were studied in detail based on long-term projections and political decisions for the installation of renewables, the city of osnabrück in the north-west of germany and its neighboring rural municipalities, landkreis osnabrück and kreis steinfurt. all sub-regions of the total region under study are master plan regions funded by the federal ministry for the environment, nature conservation, building and nuclear safety (bmub) and aim at a fast increase of renewable energy sources and self-sufficiency on an annual balance. deficit and overproduction in urban and rural areas were determined and the potential of cross-linking the rural regions to the city was analyzed. to calculate real self-sufficiency degrees the residual load was analyzed by transferring the expansion scenarios of the region’s res-e targets, mainly the increase of wind and photovoltaic power, to hourly time step based load and generation profiles. the different potentials of installing res-e due to structural differences in urban and rural areas lead to a great range of predicted real self-sufficiency degrees 100 50 0 jan feb mar apr may jun jul aug sep oct nov dec 100 50 0 jan feb mar apr may jun jul aug sep oct nov dec -8% -19% d e fic it [g w h ] e xc e ss [ g w h ] -12% +5% +12% +13% +11% +22% -3% -6% -15% -20% +13% +15% +5% -9% -13% -17% -15% -14% -13% -3% +30% +29% figure 10: monthly deficit (top) and excess (bottom) energy of the landkreis osnabrück, calculated with entso-e load profile (data taken from [47]) as in figure 5, and monthly percentage deviations of calculation with bdew standard load profile h0 (data taken from [48]). 106 international journal of sustainable energy planning and management vol. 21 2019 urban-rural relations in renewable electric energy supply – the case of a german energy region as shown in figure 12, from the perspective of the city of osnabrück significantly increases, but decreases from the perspective of the landkreis osnabrück when crosslinking both regions. during the master plan process, stakeholders from the city of osnabrück and the surrounding districts, landkreis osnabrück and kreis steinfurt, are discussing the question of how much the city of osnabrück has to profit from its rural neighbors. the relations of the city and its surroundings are analyzed and possible solutions are discussed. the city of osnabrück has great interest in getting support in electricity supply from their figures 11 and 12 summarize the results. the annual values of deficit and excess energy, and the resulting self-sufficiency degree for the priorly discussed variations are shown. figure 11 shows deficit and excess energy for the single regions compared to both variations of cross-linking, exemplarily for the year 2030. deficit energy is nearly the same in all regions, whereas excess differs considerably. cross-linking the regions leads to lower deficit and excess energy compared to the respective summed up values due to the use of synergies in energy production and demand. self-sufficiency and share of excess energy in annual electric energy demand, 670 640 1,160 1,530 680 2,110 680 0 500 1000 1500 2000 2500 3000 0 500 1000 1500 2000 2500 3000 city of osnabrück + lkos cross-linked total region cross-linked single regionssingle regions annual deficit energy [gwh] city of osnabrück landkreis osnabrück (lkos) kreis steinfurt annual excess energy [gwh] city of osnabrück + lkos cross-linked total region cross-linked 26 800 1,550 city of osnabrück landkreis osnabrück (lkos) kreis steinfurt figure 11: deficit (left) and excess (right) energy for sub-regions and various cross-linking options, calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] kreis steinfurt kreis steinfurt 70% 60% 41% 23% 69% 40% 79% 68% 27% 3% landkreis osnabrück landkreis osnabrück city of osnabrück city of osnabrück single regions crosslinked single regions crosslinked figure 12: change of self-sufficiency degree (left) and share of excess energy in annual electric energy demand (right), calculated with weather data (wind speed and solar irradiation) of 2005 [45,46], models for wind power and pv feed-in [44], a simplified biogas electric energy model, master plan targets for 2030 (see table 1 to 3) and entso-e load profile [47] international journal of sustainable energy planning and management vol. 21 2019 107 caroline möller, martin faulstich and sandra rosenberger thus lead to a better holistic energy balance. remaining overproduction and deficit has to be leveled either by the grid or electrical storages. as the region is located in the north of germany, deficit compensation via the grid might be a good and economical option when using offshore wind energy. the total amount of available offshore wind energy is however limited due to germany's small coastline. acknowledgement the fincancial support of the ministry of science and culture of lower saxony is gratefully acknowledged (grant no: vwzn2890). references [1] j.w. day, c. hall. the myth of urban self sufficiency. in: j.w. day, c. hall, editors. america’s most sustainable cities and regions. new york: springer new york; 2016. p. 25-36. https:// link.springer.com/book/10.1007%2f978-1-4939-3243-6 [2] f. dosch, l. porsche. rebuild the city! towards resourceefficient urban structures through the use of energy concepts, adaption to climate change, and land use management. in: b. müller, editor. german annual of spatial research and policy. berlin, heidelberg: springer; 2010. p. 35-48. 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perspective of rural regions, cross-linkage to a city decreases the possible self-sufficiency resulting from the rural renewable energy potential. however, cross-linkage should be the first choice for rural regions before considering further flexibility options like storages which is significant considering the discussion on e.g. energy storage demand. further, urban-rural cooperations facilitate a regional compensation of load and generation, which has the potential to reduce generation peaks of res-e and could therefore reduce supraregional grid expansion. the potential of cross-linking, however, is also technically limited. as the regarded city of osnabrück has no own fossil energy production, it already depends on the existing power grid. thus, the focus of our study is system analysis based on energy flows, but we recommend evaluation of power network calculations within the context of urban-rural energy supply as part of further studies. further studies must also ask the question 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https://www.kreis-steinfurt.de/kv_steinfurt/kreisverwaltung/%c3%84mter/amt%20f%c3%bcr%20klimaschutz%20und%20nachhaltigkeit/energieland2050%20e.v./service/informationsmaterial/masterplanbericht_langfassung%20.pdf https://www.kreis-steinfurt.de/kv_steinfurt/kreisverwaltung/%c3%84mter/amt%20f%c3%bcr%20klimaschutz%20und%20nachhaltigkeit/energieland2050%20e.v./service/informationsmaterial/masterplanbericht_langfassung%20.pdf __ddelink__1961_1246270045 _goback international journal of sustainable energy planning and management vol. 24 2019 125 *corresponding author e-mail: framig@cartif.es international journal of sustainable energy planning and management vol. 24 2019 125–134 research and experimentation abstract considering the challenge of evaluation of the urban environment from the energy point of view, there is plenty of room to improve the resources currently managed by users, enterprises and public institutions. the goal is to create a tool that supports in the decision making in the energy planning process in specific areas by automatically estimating the energy demand and consumption of buildings using public data and representing the results in a geo-referenced way. the tool will provide a better understanding of what the current status of the buildings is, providing these stakeholders with a larger quantity of useful data about the city environment, including not only the geometric information present in cadastre repositories, but also the data collected from the energy performance certificates (epcs). in this case, the data from the cadastre repository are combined with the epcs for each province, with data about the demanded and consumed energy. the objective is to generate a set of buildings typologies for each province with estimated values for the demand and consumption for each building type. these typologies could be used to generate a map with the energetic values for any municipality of this province. these results can be injected into gis (geographic information systems) tools that could show these data in order to evaluate the energy demand/consumption of the municipality easing the energy planning decision-making process, or even into databases for further uses. 1. introduction current worldwide problems such as climate change and growing co2 emissions, and the corresponding temperature increase, define a reality where it is necessary to act upon. fossil fuel consumption needs to be reduced, alternative renewable energy sources should be implemented, as well as energy efficiency strategies promoted and refurbishment of the existing building stock aimed for, since it is one of the most problematic sectors in terms of co2 emissions. all of these strategies need to be implemented at different scales, ranging from the european level (e.g. through the implementation of energy directives), to national and regional scale, and to urban scale, where specific actions can be defined and implemented. however, these energy planning processes at urban scale are complex, time-consuming and often do not count on the necessary tools to support them, which leads to inadequate assessments and to not progressing at the pace required by the challenges faced. on the other hand, there is an increasing amount of publicly available data that has not been exploited or put to use to this purpose. in this line, the cadastre and energy performance certificates (epcs from now on) databases (national and regional respectively) offer a vast amount of data that can result in valuable information to support energy planning processes. supporting tool for multi-scale energy planning through procedures of data enrichment francisco javier miguel-herrero*, víctor iván serna-gonzález and gema hernández-moral fundación cartif, parque tecnológico de boecillo, 205, 47151 boecillo, valladolid, spain keywords: energy planning; energy performance certificates; cadastre; data enrichment; building typologies. url: http://doi.org/10.5278/ijsepm.3345 http://doi.org/10.5278/ijsepm.3345 126 international journal of sustainable energy planning and management vol. 24 2019 supporting tool for multi-scale energy planning through procedures of data enrichment thus, the aim of this paper is to present a modular software tool that could cover the foretold goals, adding value to the information contained inside the cadastre repository by means of combining these data with the data obtained in the epcs, in other words, the energy consumption values and co2 emissions contained in the epcs with the geometry of the buildings included in the cadastre registers, starting at city/municipality level. links to previous works there are several projects that deal with the mapping of energy demand and consumption for energy planning purposes. some of them estimate energy consumption at the block and lot level of a determined city [1]. others focus on the calculation of not only energy consumption, but also energy demand based on calculation methods proposed in energy performance certification processes [2,3], whereas there are other examples which combine this with information coming directly from the energy performance certificates database [4]. however, when dealing with estimations of a large number of building blocks this process is highly time-intensive and resource-consuming; on the contrary, the tool proposed offers estimations that could serve to derive similar conclusions to the abovementioned tools, based on reliable data and with a lower resource cost. 2. methodology it is important to highlight that the tool has two clearly differentiated parts. the first part corresponds to the algorithm building in charge of the creation of the building typologies using the information of the public available epcs in a province. the second part is the application of these typologies in one specific location (municipality) in order to estimate the values for the demand, consumption, primary energy consumption and co2 emissions for each building of this location. for the purposes of the part of the typologies generation, two main data sources were used. on the one hand, energy performance certificates data from the ente regional de la energía de castilla y león (eren) through the general open data service from the junta de castilla y león [5] were acquired, and on the other hand, the other set of data (building data, address, etc.) to be combined came from the spanish cadastre [6]. the module’s objective is to obtain a combination of both data sources and obtain useful statistics about the energy indicators based on the establishment of typologies based on the use of the building and other parameters such as the climate zone and the year of construction; and also location references for these registers in order to manipulate the data into gis applications and services. one of the main reasons to get these data is to try to minimize the effect of the suppositions usually made by other works that rely strongly on simulations or aggregated values [7] (e.g., the aggregations based on the age of the buildings that would not take into account reforms and refurbishment procedures). thanks to these values, the individual results will be concretely located and the real features of the buildings will be consequently assembled into gis tools with data derived from epcs values and not the result of calculated estimations that could not be necessarily accurate. for the second part of the tool, the estimation of the demanded and consumed energy in one location, the sources of the module are the spanish cadastre and data about land use of spain (siose, sistema de ocupación del suelo de españa) [8] a part of the information of the typologies generated. the data from the cadastre are used not only for doing the calculations but also for establishing the location of the building. the information collected from siose is used in order to complement the information of the current use obtained from the cadastre. it is critical to notice that the whole sets of data are publicly available and there are no privacy issues. otherwise, the procedures should include aggregation procedures to anonymize, like used in [9] acknowledgement of value from the eren (ente público regional de la energía de castilla y león) institution, we have been presented with the concepts deployed in this article, and express our conformity about what has been shown and also our interest on following the development of the tool for its possible utilization in the terms indicated, considering that they are aligned with our will to improve the services offered to the citizens from our organization. eren, spain international journal of sustainable energy planning and management vol. 24 2019 127 francisco javier miguel-herrero, víctor iván serna-gonzález and gema hernández-moral as a summary, all these processes, considering the validation levels for epcs indicated in [10] will perform validations of levels 0, 1 and 5. 2.1. typologies generation tool the main workflow of the tool for the generation of the typologies can be seen in the following figure. the six main phases indicated in the figure are described below. phase 1: data setup. during the initial phase, the goal is to acquire an environment of data files that could help to configure the requests to the cadastre, keeping in mind that these requests represent the largest bottleneck and the most sensitive part of the process. to aid in our goal of a proper configuration of the requests, some data are necessary: • provinces (code list). each and every province of spain has a distinctive code that has to be gathered in order to make a proper consultation in the cadastre website. the list itself is requested to the cadastre, and a json file [11] with the data is recovered and put into the root folder of the application, as long as it will belong to all the consultations. the decision to work with json format was taken because a) the format is considered as a valid standard of data and b) the way it is constructed mimics the behaviour of the objects in object-oriented programming that facilitates handling them in languages such as the javascript being used. • municipalities (code list). for a single selected province (excluded basque country and navarre because they have their own cadastre system), a data request is performed to get the code values for each municipality in the province. the format of the data is json, and amongst other values, the cadastre code number is obtained. the list is put inside a dedicated folder for the province. register cadastre get building data file formatting 6 5 3 1 4 2 6 5 statistics enrichment process process outliers get new epcs adjust data formats & fix faulty data unification of certificates figure 1: working flow of the tool developed for the data process 128 international journal of sustainable energy planning and management vol. 24 2019 supporting tool for multi-scale energy planning through procedures of data enrichment • streets (code list). for each municipality, a file with the streets codes is downloaded from the cadastre. everything is inserted into a folder organized like a tree so the files can be easily found. phase 2: energy performance certificates acquisition and processing. the block of data related to energy performance certificates (epcs) can be also requested via web to a service of open data provided by the junta de castilla y león. in spain, epc registers are managed at regional level; thus different approaches and data availability may vary from region to region. in other regions there could be similar services that provide the lists with the energy performance certifications necessary for this work, so the module that manages the connection should be adapted. the system distinguishes between the first instalment and the following ones. first, all the existing certificates are obtained. for the following instalments, only new epcs need to be processed. however, the system will obtain the full set, so it will have to filter these new ones, thanks to the identification code that the certificates bear. the next step is to generate the list of objects that will contain the interesting data from the certificates. most of the variables have a relation one-to-one from the certificates to the destination objects, but some of them need some processing in order to be of use afterwards, concretely, the addresses of the dwellings. the system implemented takes into consideration the habitual layout of the addresses inside the certificates (type of street, name of the street, number, stair/letter/others and postal code in the end) and tries to cope with certain cases and exceptions (suffix in the names of the roads, problems with the codifications, former urban entities absorbed by nearby larger municipalities, etc.). the architecture of this process is purely rule-based, although an alternative considering one customized machine learning tool is proposed as a future development, for example through the usage of tensorflow [12] or similar software. for that case, the previous experience with the current system will be invaluable to get an initial set of training and evaluation data. along with the process of the certification data, the codes referred to the street, the municipality and province are inserted from the code lists obtained during the phase 1. if there are no coincidences, error fields are filled with the corresponding explanation. phase 3: cadastre identifiers. the next field to be completed is the cadastre identifier (or inspire id) from the element whose energy performance certificate is referred. the quantity of items in use during the latest tests was as large as 30,000 epcs entries for the province of valladolid. the system sends one request per object and the cadastre online answers affirmatively or gives off an error message. during this process, the objects containing the information are split into three different groups: (1) elements processed correctly and that now have their corresponding cadastre id, (2) elements containing some kind of error that have been rejected, and (3) a disappeared category containing some cases that never had a proper answer from the cadastre server. the procedure was performed this way in order to minimize the effect of eventual connection failures to the cadastre, considering that online requests are usually one of the weakest parts from a given process, where there is little to no control for the answers, as long as they are strongly asynchronous and prone to have a large range of different failures. moreover, the cadastre site in spain has a protection system against distributed denial of service (ddos) attacks [13] that forced to limit the number of request per hour in order to avoid being banned/blocked. the key to avoid these problems was to allow some asynchronous behaviour with the connections and the processing of the data request by the means of splitting the code into synchronous/asynchronous processes so the results could be properly ordered, filtered and evaluated, generating checkpoints that could be easily followed for educational, clarity and debugging purposes as well as enabling portability of code, replicability and rearrangement in the order of certain procedures. the last part of this phase is a procedure to reprocess elements that did not get a response from the cadastre server, in order to have the definitive list of elements that can be further processed or not, looking to avoid data holes and incorrect results. it works the same as the general procedure. phase 4: the unification of certificates. unification of certificates in order to harmonise the input data was necessary. this is the case of existing dwelling certificates inside a building block, which are not comparable to the results that would have been obtained when considering the whole building. in order to reduce the potential discrepancies found among certificates of different dwellings inside a building, in the international journal of sustainable energy planning and management vol. 24 2019 129 francisco javier miguel-herrero, víctor iván serna-gonzález and gema hernández-moral tool’s approach there is only a single certification element per building representing the mean of all of them for every parameter (demand, consumption, etc.). one advantage of this unification is the reduction in the number of certification elements that will also reduce the number of web requests in the next phase. phase 5: data enrichment and outlier selection. once again, the cadastre is consulted in order to obtain information about the buildings, using the cadastre identifiers that the certificates already have. in the same way that has been commented before, this is another execution bottleneck, very time-consuming and consequently has to be carefully monitored. for this purpose, a modified version of a module created for a previous project [2] has been used. in this point the system has data from two different sources: the energy performance certificates (containing information about the use of the building and energy data: demand, consumption and co2 emissions) and the cadastre data (surface, number of dwellings, year of construction and location for establishing the climate zone). all the data is combined into a single element that contains the important information in terms of consumption, and it is also well referred with the address, coordinates and identifiers. one important procedure during this phase is the handling of outliers [14] [15]. the outliers can be treated during this part of the process, although the corresponding module is well prepared to work during previous stages of the process as well. the method for eliminating outliers includes the following steps: • cluster generation: separation of values into “use of building” clusters or building typologies as they are used in the spanish cadastre. the categories taking into account the uses of buildings are the following: complete blocks of dwellings; individual homes in building blocks; detached houses; educational facility; commercial building; administrative facility; health and hospitals; sports facilities; hotels and residences; office buildings; and other tertiary usages. in the case of the periods the classification used by the energy performance certification tool ce3x [16] is used, which correspond to relevant changes in building construction regulation: before 1981, from 1981 to 2007, from 2008 to 2012, from 2013 to 2018 and after 2018. for climate-related data, the national code for building construction [17] in spain was queried, since it establishes reference climate zones. in our case, for each province only two or three climates zones will be differentiated. • treating small groups of elements: the small groups of elements have been discarded, since it could make no sense to search for outliers when the number of elements is small. for this case, the number of 50 has been chosen, but it can be changed in-code. • mean and the standard deviation calculation for each set of values. the values of x and σ are obtained, and for every single element of the set (xi) the following equation is used: the equation works perfectly for the values considered (energy heating and cooling demand) in the current building cases. the values that satisfy the equation 1 are considered outliers, and the whole element is separated from the general set of values. as it happened to other discarded elements, there is a variable dedicated to indicate the kind of error in order to follow and evaluate these cases. phase 6: data visualization: graphs, tables and gis-based from this point on, the system has available some tools that: • generate values of aggregated demand, consumption and co2 emissions values from every building typology considered. • create files containing the data from the energy objects. the input are these objects in json format, and the output is a .csv file that would fit perfectly into a table in a database or can be manipulated with an excel type application. the figure 2 and table 1 show an example of aggregation obtained with the results extracted from the province of valladolid (spain). 2.2. applying the typologies: estimation tool in a given location not all buildings have an energy certificate, so if we mapped the data directly from epcs we would only get values for a few buildings. the generation of the typologies not only allows to obtain a set of typologies that can help to study the (1) xi-x σ > 2 5. 130 international journal of sustainable energy planning and management vol. 24 2019 supporting tool for multi-scale energy planning through procedures of data enrichment behaviour of the buildings globally in a province, but also to apply this typologies in one specific location in order to estimate the demand and consumption energy and the emission of the co2 of the buildings in this location. the idea is to use the results of the aforementioned process, i.e., the data of demand, consumption and co2 aggregated by typology (use, period of construction and climate zone), and to apply them for each building of this location taking into account the use, the year of construction and the climate zone of the building. so an estimation for each building of this location is available regardless of whether or not there is available epc for that specific building. therefore, the estimation based in the application of the typologies on all the buildings can be applied to a determined municipality in order to determine how that city behaves energetically. for the application of the typologies we need to know different data from the buildings of the location in order to categorize the building in the correspondent typology and also additional information for the calculations. for this purpose data form the spanish cadastre and information about land use from siose is used. so the information extracted from each one is: 1. spanish cadastre: a. location of the building (for locating in a map and for set the climate zone) b. year of construction c. condition of the building (in order to discard ruined and declined buildings) 900 800 700 600 500 400 300 200 100 0 kwh/m2 year co m pl et e bl oc ks o f d we llin gs in di vid ua l h om es in b lo ck b ui ld in gs de ta ch ed h ou se s ed uc at io na l f ac ilit y co m m er ci al b ui ld in g o th er te rti ar y us ag es ad m in ist ra tiv e fa ci lity he al th a nd h os pi ta ls sp or ts fa ci liti es o ffi ce b ui ld in gs ho te ls an d re sid en ce s heating demand cooling demand primary consumption ratio figure 2: aggregated values for heating demand, cooling demand and primary energy consumption in kwh/m2 per year table 1: example of table of aggregated values for co2 emissions per building typology, climate zone and construction period period climate zone individual dwellings residential buildings educational facility administrative buildings health and hospitals office buildings hotels and residences before 1981 y 160.92 40.64 60.60 109.50 134.88 92.25 117,56 1981-2007 y 82.56 22.50 54.57 121.93 137.62 74,63 283,71 2008-2013 y 41.34 10.45 88.00 57.00 186.00 122.00 192.00 2014-2018 d 41.14 20.13 0.00 86.00 0.00 0.00 42.00 2014-2018 e 32.80 0.00 0.00 0.00 0.00 0.00 0.00 international journal of sustainable energy planning and management vol. 24 2019 131 francisco javier miguel-herrero, víctor iván serna-gonzález and gema hernández-moral d. surface of the building e. number of dwellings f. use of the building 2. siose: a. current use of the building (in order to complement the information of the spanish cadastre because in the case of the building for the tertiary sector siose has information disaggregated: hotels, office, administrative buildings, educational, etc.) with this information and with the typologies aforementioned this component of the tool is able to create a map of energy demand, consumption and co2 emission in geojson format that can be seen in any gis tool as qgis [18]. in figure 3 it can be seen the result of the tool for the municipality of medina del campo (valladolid) using in the typologies created for the valladolid province. the values are in tonnes of co2 per year. it is important to highlight that the ruin or declined buildings are considered as zero emissions and besides industrial buildings are not categorised. 3. layout and working tools the environment selected in order to deal with the tasks proposed was designed with a high degree of flexibility so the design itself would not condition the goals of the overall project. the usage of a programming language like javascript enables the use of a simple, well developed and full of libraries language, and node.js was chosen in order to take advantage of a potent set of built-in modules to simplify the inner programming processes, avoiding spending work hours in existing procedures. moreover, the javascript fits perfectly when dealing with online transactions, and envisioned future implementations, the developed modules could be easily inserted into websites for user interfaces and open platforms. the last advantage is the portability into linux/unix systems, as long as the current production environment is windows-based, so the solutions would be considered as compatible with as many platforms as possible. the code was reworked also to avoid the utilization of non-canonical node libraries. when it was possible, the most generic library was put into use. to name some of them, the fs library was utilised for file management, the cron library for synchronous-timed calls, http library for internet connections or xlsx library to generate files compatible with excel. all these libraries are also public and free of charge. most of the testing procedures have been performed with average pcs in order to properly evaluate the performance of the algorithms, especially those that would include data combined with large quantifigure 3: estimation of the co2 emissions in the municipality of medina del campo using the tool http://node.js 132 international journal of sustainable energy planning and management vol. 24 2019 supporting tool for multi-scale energy planning through procedures of data enrichment ties of requests that have to be checked one by one, keeping in mind that some external issues would appear and cannot be controlled (e.g., internet connection failures). 4. assessment of outputs and results the outputs from the whole process (maps and numerical results) have several applications. the most visual result would be the maps. by interacting with them, a user can appreciate what area of a city is most affected in terms of energy demand, energy consumption, primary energy consumption or co2 emissions. this estimation and mapping would not be possible had it not been for the typology analysis performed, as well as the identification of these building typologies using two different data sources. additionally, the numerical results complement this first output by offering more insight on how the building stock has evolved within a certain typology and enables to aim refurbishment strategies to a specific set of buildings which are more in need than others. in table 2 results for some typologies in valladolid are offered, without discriminating per climate zone. in this case, the reduction in time of different values can be observed in most of the cases. discrepancies in these values can be used as red flags to highlight typologies which need a more in-depth analysis. it must be stated that the main values to be analysed should be the heating and cooling demand, since energy conversion factors affect the results of primary energy consumption and co2 emissions. this can potentially lead to misunderstandings when not being able to relate and compare the results to the fuel used by the energy system in a determined building, since this information is not provided as open data. in addition to the abovementioned applications, the results obtained can be also used in quality checks performed by the authorities in charge of the energy performance certificates, where a value that deviates from the mean of a determined typology or period may table 2: estimation of values per construction period and building typology residential buildings before 1981 1981–2007 2008–2013 2013–2018 health and hospitals before 1981 1981–2007 2008-2013 2013–2018 heating demand 98.47 53.81 28.82 60.69 heating demand 224.29 174.49 80.94 cooling demand 4.77 3.77 3.01 8.82 cooling demand 31.23 63.68 123.31 primary consumpation 189.85 105.55 53.63 102.56 primary consumpation 596.31 594.35 791.00 co2 emissions 41.13 22.77 11.21 21.39 co2 emissions 134.88 137.62 186.00 individual dwellings before 1981 1981–2007 2008–2013 2013–2018 office buildings before 1981 1981–2007 2008–2013 2013–2018 heating demand 371.64 343.91 108.44 133.45 heating demand 106.23 124.61 195.39 cooling demand 11.90 16.76 8.82 15.10 cooling demand 53.63 37.81 90.95 primary consumpation 691.61 368.34 188.37 199.90 primary consumpation 399.17 314.13 586.50 co2 emissions 160.92 82.56 41.34 41.14 co2 emissions 92.25 74.63 122.00 educational facility before 1981 1981–2007 2008–2013 2013–2018 hotels and residences before 1981 1981–2007 2008–2013 2013–2018 heating demand 127.25 89.42 112.19 heating demand 255.53 91.46 138.72 62.28 cooling demand 13.31 14.19 44.71 cooling demand 29.39 213.68 66.76 219.2 primary consumpation 286.14 234.64 384.00 primary consumpation 516.89 1219.71 838.00 246 co2 emissions 60.60 54.57 88.00 co2 emissions 117.56 283.71 192.00 42 international journal of sustainable energy planning and management vol. 24 2019 133 francisco javier miguel-herrero, víctor iván serna-gonzález and gema hernández-moral imply that the energy performance certificate might need to be revised. future evolutions of the tool would be utilized in solutions with larger scope (region-country-world) in order to aggregate energy-related data from various sources (local and global) and the integration with current gis software (through the usage of geojson or citygml files, for example). 5. conclusions the paper has presented the development and demonstration of a software tool that generates aggregated data from energy certificates and cadastre values, and has some outputs that will be very useful to integrate in gis energy analysis processes at urban level, as well as for data analysis based on the typology generation. acknowledgements the tec4enerplan project is currently financed by the ice, instituto de competitividad empresarial from junta de castilla y león with reference cctt1/17/ va/0001, co-funded with european union erdf funds (european regional development fund). this article was invited and accepted for publication in the eera joint programme on smart cities’ special issue on tools, technologies and systems 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[3] energy services platform enersi (plataforma de servicios energéticos basados en la integración y análisis de datos de múltiples fuentes): http://enersi.es/ [retrieved: nov, 2018] [4] energie label atlas (netherlands): http://energielabelatlas.nl/# [retrieved: april, 2018] [5] datos abiertos de castilla y león. https://datosabiertos.jcyl.es/ web/es/datos-abiertos-castilla-leon.html [6] sede electrónica del catastro. https://www.sedecatastro.gob.es/ [7] x. oregi et al., automatised and georeferenced energy assessment of an antwerp district based on cadastral data. energy and buildings, volume 173, 2018, pages 176-194, issn 0378-7788, https://www.sciencedirect.com/science/article/pii/ s0378778817340318 [8] sistema de información de ocupación del suelo de españa. https://www.siose.es/ecma. standard ecma-404. the json data interchange syntax. second edition. december (2017). [9] dochev i, seller h, peters i. spatial aggregation and visualisation of urban heat demand using graph theory. int j sustain energy plan manag 2019;24. http://doi.org/10.5278/ ijsepm.3346. [10] pasichnyi, oleksii & wallin, jörgen & levihn, fabian & shahrokni, hossein & kordas, olga, 2019. 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(2013). best-practice recommendations for defining, identifying, and handling outliers. organizational research methods. 16. 270-–301. 10.1177/1094428112470848. https://journals. s a g e p u b. c o m / d o i / a b s / 1 0 . 1 1 7 7 / 1 0 9 4 4 2 8 1 1 2 4 7 0 8 4 8 ? journalcode=orma [15] osborne j.w. and overbay a. the power of outliers (and why researchers should always check for them). north carolina state university. practical assessment, research and evaluation. volume 9, number 6, march, 2004. https:// pareonline.net/getvn.asp?v=9&n=6 [16] sanctioned document for energy certification of existing buildings.developed by cener & efinovatic. https:// www.efinova.es/ce3x [17] spanish national building code, on energy savings (cte) db he: ahorro de la energía: https://www.codigotecnico.org/ images/stories/pdf/ahorroenergia/dbhe.pdf [retrieved: nov 2018] [18] free and open source geographic information system. https:// qgis.org/en/site/ [19] østergaard pa, maestosi pc. tools, technologies and systems integration for the smart and sustainable cities to come. int j sustain energy plan manag 2019;24. http://doi.org/10.5278/ ijsepm.3450 http://qsel.columbia.edu/nycenergy/ http://qsel.columbia.edu/nycenergy/ http://et.al http://enersi.es/ http://energielabelatlas.nl/# https://datosabiertos.jcyl.es/web/es/datos-abiertos-castilla-leon.html https://datosabiertos.jcyl.es/web/es/datos-abiertos-castilla-leon.html https://www.sedecatastro.gob.es https://www.sciencedirect.com/science/article/pii/s0378778817340318 https://www.sciencedirect.com/science/article/pii/s0378778817340318 https://www.siose.es/ecma http://doi.org10.5278/ijsepm.3346. https://ideas.repec.org/a/eee/enepol/v127y2019icp486-499.html https://ideas.repec.org/a/eee/enepol/v127y2019icp486-499.html https://www.ecma-international.org/publications/standards/ecma-404.htm https://www.ecma-international.org/publications/standards/ecma-404.htm https://www.tensorflow.org https://www.tensorflow.org https://link.springer.com/chapter/10.1007/978-3-642-11207-2_17 https://journals.sagepub.com/doi/abs/10.1177/1094428112470848?journalcode=orma https://journals.sagepub.com/doi/abs/10.1177/1094428112470848?journalcode=orma https://journals.sagepub.com/doi/abs/10.1177/1094428112470848?journalcode=orma https://pareonline.net/getvn.asp?v=9&n=6 https://pareonline.net/getvn.asp?v=9&n=6 http://buildings.developed https://www.efinova.es/ce3x https://www.efinova.es/ce3x https://www.codigotecnico.org/images/stories/pdf/ahorroenergia/dbhe.pdf https://www.codigotecnico.org/images/stories/pdf/ahorroenergia/dbhe.pdf https://qgis.org/en/site https://qgis.org/en/site http://doi.org/10.5278/ijsepm.3450 http://doi.org/10.5278/ijsepm.3450 _goback _ref12448259 _ref12638443 _ref519443546 05-1910-6588-1-le.qxd abstract the residential energy consumption is influenced by a lot of factors. understanding and calculating these factors is essential to making conscious energy policy decisions and feedbacks. since 2013 the energy prices for households have been controlled by the government in hungary and as a result of the utility cost reduction program a sharp decline can be observed in residential electricity, district heating and natural gas prices. this paper applies the lmdi (~logarithmic mean division index) method to decompose the absolute change of the residential energy consumption during the period of 2010–2015. i calculate the price, the intensive structure (it means the change of energy expenditure share on energy sources), the extensive structure (it is in connection with the change of energy expenditure share in total expenditure), expenditure (it is the change of per capita total expenditure) and population effect. all of that shows the impact of the specific factor on the residential energy consumption by income deciles. my results have verified the preliminary expectations: the decreasing energy prices for households have a positive impact on energy use and it has been strengthened by the expenditure effect as well. however, the intensive structure, the extensive structure and the population effect have largely offset it. 1. introduction hungary is a highly developed country in east-central europe and member of the european union. the real gdp growth rate averaged 1.7% during the period of 2010–2015 and the gdp per capita was 26.457 usd (ppp, current international $) in 2015 [1]. it is a small country with a population under 10 million. the economic structure is dominated by the service sector (its contribution to the gdp was 64%), while the industry sector accounted for about 31.9% of the gdp in 2015 [1]. after the regime change the hungarian residential energy consumption has showed a declining tendency in the final energy consumption. however, the proportion of that exceeds the eu-28 average (it was international journal of sustainable energy planning and management vol. 13 2017 61 25.3% in 2015) according to the eurostat (2017) (see more details in appendix 2). both the hungarian nes 2030 and neeap 2020 documents set the highest energy saving target values in the household sector (until 2020 and 2030), but the available analysis and forecasts anticipate a slightly increasing tendency in residential energy consumption [2, 3]. the sharp decline in residential electricity, district heating and natural gas prices in 2013 and 2014 resulted in a new situation: the ratio of residential expenditure on energy services to total expenditure significantly decreased, the inflation rate has declined and the economic and income situation of the poorest families significantly improved. but the price drops negatively affected consumer energy awareness and energy efficiency investments [11]. 1 corresponding author e-mail: regtekla@uni-miskolc.hu international journal of sustainable energy planning and management vol. 13 2017 61–78 the effects of utility cost reduction on residential energy consumption in hungary – a decomposition analysis �������� � �� ���� �� �������� � ��� �������� �� ������ � ���������� ����� ������ ������������� ������ � �� ��!���� � keywords: utility cost reduction; decomposition; energy consumption; residential sector; url: dx.doi.org/10.5278/ijsepm.2017.13.5 62 international journal of sustainable energy planning and management vol. 13 2017 the effects of utility cost reduction on residential energy consumption in hungary a decomposition analysis investigating and quantifying the factors affecting the residential energy consumption is indispensable to making an efficient energy policy, to fulfil the targets and to select the right instruments. this analysis contributes to quantify the effects of price reduction. it has to be seen that these impacts make achieving the energy efficiency goals harder. furthermore it is a very unique situation that a highly developed country applies the instrument of price control, while in the last few years many developing countries (such as china, iran and kyrgyz republic) made a serious effort to reform the pricing mechanism for the energy prices in the household sector. examination of the situation serves interesting context and it contributes to the existing literature as well. the rest of this paper is organized as follows: section 1.1 shows the prior situation to the utility cost reductions program, makes a comparison between the state of the hungarian households and the other countries in the european union, and it covers the prices and structure of household expenditure. section 2 and 3 introduces the logarithmic mean divisia index (lmdi) method and the international experiences related to the topic. section 4 and 5 apply the method to the hungarian residential energy consumption and quantify the price, the intensive structure, the extensive structure, the expenditure and the population effect. finally, the last section concludes this study with policy implications. 1.1. before and after the utility cost reduction the energy intensity of an economy is essentially affected by two factors: changes in the energy intensity of economic sectors (intensity effect) and the shift in the mix of products or activities (structural effect). before the regime change (1989–1990) the different characteristic of the economic structure in western europe and in hungary appears in the energy use as well. in spite of the forced industrialization in the socialist countries the energy use per capita was higher in the european union. after the regime change the energy efficiency increased dynamically in the transition economies. former results of the decomposition analysis show that between 1990 and 2015 in east-central europe the intensity changes had a more significant affect on the energy use and the impact of structural change is smaller in comparison. these tendencies are the opposite of western europe where the structural and inteisty effect are both determinative. it can be stated that the developed, western countries were not forced to restructure their economies and there the changes were results of natural processes. (figure 1) nowadays the hungarian gdp per capita is far behind the eu-average, it was 14,519 usd in 2015. but the value of the energy intensity is nearly equal with the eu-average (the difference is only 10 percentage) and the energy use per capita is lower as well (circa three quarters of the eu-average) (table 1). hereinafter the more specific data (from the study’s point of view) will be presented. after the regime change the prices of food and other commodities, including fuel have moved together generally, but the growth of the service and especially the residential energy prices was higher than the inflation rate. this gap has started to narrow after the utility cost reduction program in 2013–2014. (figure 2) according to the national consumer centre hungary (2017) since the act on the enforcement of utility cost reduction (act no. liv of 2013) became effective, the prices of the main energy carriers (such as natural gas, electrical energy and district heating) in the household sector have been reduced in three consecutive steps in hungary [5]. this price reduction was unified so it was not differentiated according to the income levels of households. in the first phase (between 1st january 2013 and 31st october 2013) the price decline was 10% (compared to the prices on 1st december 2012), in the second phase it was 11.1% (compared to the prices on 31st october 2013) in case of all housing-related energy services. in the third phase the natural gas price decreased by 6.5% (from 1st april 2014), the electricity price by 5.7% (from 1st september 2014) and the price of district heating by 3.3% (from 1st october 2014). so the prices have fallen by totally 25.19% in case of natural gas, 24.55% in case of electrical energy and 22.63% in case of district heating for the household sector without differentation. according to energiaklub (2015) the households spent more on energy services by only 5–6% in 2015 than in 1996 in real terms [6]. abbreviations nes 2030 national energy strategy 2030 neeap 2020 national energy efficiency action plan until 2020 ecarap energy and climate awareness raising action plan ksh central bureau of statistics figure 3 shows the overall structure of consumption expenditure in the european union. here i notice that the share of expenditure on housing, water, electricity, gas and the other fuels subcategory is much higher (in case of hungary it was 39.3% in 2010) than in the previous studies (such as [8]). in the latter these data are 22.2% in 2010 and 19.1% in 2015 (see appendix 3). the significant deviation is attributable to the following reasons. the mentioned publications are based on final consumption expenditure of households by consumption purpose (coicop 3 digit, eur, current prices)2 published by eurostat and the annual per capita expenditure by coicop, income deciles, regions and type of settlements data (published by ksh). the expenditure data are expressed in current prices, eur and huf. the difference is due to the methodology. accordingly, the ksh (2017) data table is based on micro data, the data table of eurostat on macro data [4, 7]. the most important methodological difference in quantitative terms, but not the only one, is the owneroccupier imputed rent [7]. typically, these are national accounts data so the micro data don’t contain that. the other difference is due to that the micro data refer to the individual private households, but the macro data international journal of sustainable energy planning and management vol. 13 2017 63 tekla sebestyén szép table 1: changes of the gdp per capita, energy intensity and energy use per capita in the eu and in hungary (1990-2015). based on data from [1] indicator 1990 2000 2010 2015 eu-28 gdp per capita (constant 2010 us$) 24 745 30 254 33 658 35 100 energy intensity (energy use (koe) per $1,000 gdp (constant 2011 ppp)) 134 115 100 87 energy use (kg of oil equivalent per capita) 3 441 3 472 3 420 3 207 hu gdp per capita (constant 2010 us$) 8ˇ814* 10 440 13 026 14 519 energy intensity (energy use (koe) per $1,000 gdp (constant 2011 ppp)) 175* 137 115 98 energy use (kg of oil equivalent per capita) 2 774 2 448 2 569 2 433 40 1 9 6 5 1 9 6 7 1 9 6 9 1 9 7 1 1 9 7 3 1 9 7 5 1 9 7 7 1 9 7 9 1 9 8 1 1 9 8 3 1 9 8 5 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 0 0 1 2 0 0 3 2 0 0 5 2 0 0 7 2 0 0 9 2 0 11 2 0 1 3 2 0 1 5 hu gdp per capita (constant 2010 us$) eu gdp per capita (constant 2010 us$) eu energy use (kg of oil equivalent per capita) hu energy use (kg of oil equivalent per capita) eu energy use (kg of oil equivalent) per $1,000 gdp (constant 2011 ppp) hu energy use (kg of oil equivalent) per $1,000 gdp (constant 2011 ppp) 60 80 100 120 140 160 180 figure 1: changes of the gdp per capita, energy intensity and energy use per capita in the eu and in hungary (1990-2016; 1990=100%). based on data from [1] 2 eurostat code is [nama_10_co3_p3] 64 international journal of sustainable energy planning and management vol. 13 2017 the effects of utility cost reduction on residential energy consumption in hungary a decomposition analysis 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% h u n g a ry b u lg a ri a r o m a n ia l u xe m b o u rg s lo va ki a s w e e d e n p o la n d c ro a tia it a ly d e n m a rk g e rm a n y s p a in s lo ve n ia e st o n ia p o rt u g a l e u -2 8 n e th e rl a n d s l ith u a n ia ir e la n d g re e ce f ra n ce b e lg iu m f in la n d c yp ru s a u st ri a l a tv ia c ze ch r e p u b lic u n ite d k in g d o m m a lta housing, water, electricity, gas and other fuels miscellaneous goods and services restaurants and hotels education recreation and culture communications transport health furnishings, household equipment and routine household maintenance clothing and footwear alcoholic beverages, tobacco and narcotics food and non-alcoholic beverages figure 3: overall structure of consumption expenditure in the european union by detailed coicop level (2010, %)3. based on data from [7] 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 11 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 consumer price index food residential energy other commodities, fuels services figure 2: changes of the consumer price index (1990–2016; 1960 = 100%). based on data from [4] 3 eurostat code is [hbs_str_t211] contain the institutional households and persons living in collective households or in institutions. furthermore, in case of the data in figure 3 the structure of consumption expenditure is determined per 1000 unit (and it shows the data in eur and pps) so actually it hides the differences among the household expenditure figures of the european union member countries (obviously a household in western europe has higher per capita income so the disposable income is higher as well). it can be stated (figure 3) that the share of expenditure on housing, water, electricity, gas and other fuels represents a significant part in all member states (maybe malta is the only exception) but their share is scattered on a wide scale. before the utility cost reduction in 2010 the highest proportion of this kind of expenditure was in hungary (39.3%) surpassing the neighboring countries as well. the expenditure on housing and housing-related energy services exceeds significantly the expenditure on food and non-alcoholic beverages or transport as well. as the rekk (2013) concludes the high rate of housing and energy expenditure can be explained with two factors: on the one hand it is related to the high energy prices, on the other to the relatively low levels of disposable income. in the following segment i deal with the question of prices [8]. examining the data in current prices (similar to [8]) hungary really belongs to the middle range (both in the european union and in the oecd). but looking at the data from the aspect of purchasing power standard the situation is totally different (figure 4). comparing the prices including all taxes and levies, it is clear that in 2010 the energy price including gas and electricity was the highest in case of hungary and the negative consequences were experienced (by 2015 hungary improved a lot on its position and in both cases hungary got into the middle third – hungary was the 18th in case of gas prices and electricity prices as well). as a result of the high energy prices in 2010 the households spent over 25% of their total expenditure on housing and energy as reported in the ksh (2017) database (it was more than their total expenditure on food and non-alcoholic beverages). böcskei (2015) emphasizes that as a result of the high energy prices and international journal of sustainable energy planning and management vol. 13 2017 65 0 20 40 60 80 100 120 140 160 180 200 h u d e s k m t p l c z c y r o d k l t it p t e s b g a t b e e u -2 8 s i ie h r l v n l s e e e l u u k e l f r f i gas prices for domestic consumers (all taxes and levies included, 2010) gas prices for domestic consumers (all taxes and levies included, 2015) electricity prices for domestic consumers (all taxes and levies included, 2010) electricity prices for domestic consumers (all taxes and levies included, 2015) figure 4: the electricity prices for domestic consumers (band dc: 2 500 kwh < consumption < 5 000 kwh ~ medium sized households) and the gas prices for domestic consumers (band d2: 20 gj < consumption < 200 gj ~ medium sized households) in the european union (basic data in pps, eur, 2010, 2015; eu-28 = 100%). based on data from [7] tekla sebestyén szép the low levels of disposable income, the number of households with accumulated debt towards energy utility companies has significantly increased in 2011–2012 [9]. while under these circumstances the state intervention and the measures to reduce the energy prices and the expenditure on housing-related energy services for domestic consumers are considered justified, the efficiency of the applied measures (the price control) is doubtful. on the one hand it results in high fiscal pressure and imposes a significant burden on the energy sector while hampering the new energy investments. moreover, it makes it more difficult to perform the strategic goals determined by the national energy strategies (such as [2]) because the energy subsidies erode the competitiveness of the renewables, and don’t encourage energy saving and the energy efficiency. on the other hand, the changes of the international market prices are hardly reflected in the national energy prices. beöthy (2017) emphasizes that the effects of oil price reductions (which started in the second half of 2014) is traceable in the short-term contracts, which are directly indexed to the price of oil from april 2015 [10]. but the decline of the market prices doesn’t appear in the regulated end prices of natural gas universal service (similar tendencies can be observed in the electricity markets). probably the profit of the cheap import remains with the hungarian gas trade ltd, but i notice here that in 2013-2014 when the oil prices soared, the significant part of the losses was born by it as well (in case of electricity the costs of the state intervention were paid in greater part by the large consumers and in smaller part by the universal providers and by the distribution companies). these findings are confirmed by the oecd (2014) [11]. hereinafter my main objective is to examine the effects of suddenly falling residential energy prices on residential energy consumption. i am looking for the answer to the question how much the price effect itself increased the residential energy consumption between 2010 and 2015 in hungary and what other factors offset it. 2. theoretical background of residential energy consumption residential energy consumption is affected by many factors, such as energy price, household income, willingness to save, energy structure, urbanization, energy efficiency, consumer habits. since the pioneering work of haas (1997) [12] there have been a number of studies (such as [13, 14, 15]) on the decomposition of residential energy consumption. in the last few years many countries (such as china, iran and kyrgyz republic) made a significant effort to reform the pricing mechanism for the residential energy prices and to liberalize the energy markets. consequently, a separate group of studies emerged focusing on the assessment of the impact of the respective state measures (such as [16, 17, 18, 19, 20]). a wide range of methodologies can be found in the topic of residential energy consumption, such as analysis based on inputoutput models, econometric and index decomposition methods. this latter approach was elaborated after the 1973 oil crisis to quantify the factors affecting the energy and environmental indicators [15]. generally the following factors are calculated: population, income, prices, energy intensity and energy mix (it is actually the structural change). in most cases the energy consumption is corrected with climate but sometimes the weather is an independent factor in the index decomposition analysis (such as [21]). two broad categories of the decomposition techniques can be distinguished, the structural (sda) and the index decomposition methods (ida). both of these techniques have many types. typically, the sda approach is used when data are at a lower disaggregated level (such as the data based on input-output tables) while the ida mainly uses data at higher level of aggregation [22, 23]. index decomposition analysis is a widely used tool in the topic of residential energy consumption (such as [14, 15, 16, 17] and emission (such as [24]). with that, both the absolute (additive approach) and the relative (multiplicative approach) change can be decomposed and the effects can be quantified. hereinafter these approaches are shown. let v be an energy-related aggregate. i assume, that it is affected by n variable, so x1, x2, … xn. the aggregate can be divided into i subsector (in my case these subsectors are the income deciles), where the changes take place. the connection among the subsectors can be described by the next ones: (1) by the multiplicative method i decompose the relative changes [25, p. 867]: v v x x xi n i = =∑ 1 2, , ,i i ik 66 international journal of sustainable energy planning and management vol. 13 2017 the effects of utility cost reduction on residential energy consumption in hungary a decomposition analysis (2) where: (3) (4) by the additive method i decompose the absolute changes: (5) where: (6) (7) the methodology of the index decomposition analysis has been significantly improved in the last few years and many kinds of methods are available simultaneously (such as the laspeyres-, paasche-, marshall edgeworth-, walsh-, fisher ideal, drobish, lmdi and the amdimethodology). the detailed mathematic deduction can be found in [26] and [27]. hereinafter the lmdi method (~logarithmic mean divisia index) is employed in this paper [26]: (8) (9) it has several great advantages such as the ability to handle zero values, path independency, consistency in aggregation and the perfectness in decomposition (the calculation doesn’t result in residual term) [15, 23, 25]. more details about the lmdi method can be found in [25]. l a b a b a b b a a b , ( ) ( ) , , ( ) = − − ≠ = = ln ln or or f a f δ = ( ) ⎛ ⎝⎜ ⎞ ⎠⎟ ∑vx l v v x i i t i t i 1 0 1 0 , * ln 1 x i v x x xt i t i i t n i t= ∑ 1 2, , ,k v x x xi i i n i 0 1 0 2 0 0= ∑ , , ,k δ = − = δ + δ + + δv v v v v vtot t x x xn 0 1 2 l v x x xt i t i i t n i t= ∑ 1 2, , ,k v x x x i i n i 0 1 0 2 0 0= ∑ , , ,k d v v d d dtot t x x xm= =0 1 2 k 3. methodology the sample period is from 2010 to 2015. annual data as listed below are applied in the calculations collected from the eurostat and the hungarian central bureau of statistics (ksh): – final energy consumption of the households by energy sources, such as solid fuels, total petroleum products, gas, nuclear heat, derived heat, renewable energies, electrical energy and waste (non-renewable), (unit: toe; source: [7]); – heating degree-days by nuts 2 regions which includes actual heating degree-days and mean heating degree-days over period 1980-2004 (unit: day; source: [7, 28]); – annual per capita expenditure by coicop and income deciles (unit: huf; source: [4]); – population (unit: capita; source: [4]). here i note that the subcategories of the annual per capita expenditure by coicop levels data was consistent with the final energy consumption of the households by energy sources (the nuclear heat and waste consumption of the houesholds was zero every year in hungary). the short time period can be explained by the fact that the ksh has been publishing the annual per capita expenditure by coicop and income deciles data only from 2010, so the lack of data hampers long-term analysis. furthermore, the main objective of this study is to examine the effects of utility cost reduction on residential energy consumption and in my view the applied lmdi method allows it in spite of the short time period. the final energy consumption of the household sector is climate corrected so the heating degree days are used to normalize the energy consumption. making these calculations the following formula was applied (case of enerdata odyssee and eurostat). (10) where: e is the energy consumption (climate corrected), ewc is the energy consumption, k is the heating share for normal year, dd is the heating degree days, ddn is the heating degree days (25 years average – 1980–2004). the k reference value is 0.6 which was determined by using the ksh’s data collection results in 2008 [29]. e e k dd dd wc n = − − ⎛ ⎝⎜ ⎞ ⎠⎟ * * 1 1 1 international journal of sustainable energy planning and management vol. 13 2017 67 tekla sebestyén szép similar to zhao et al.’s (2012) study the identity of the lmdi index decomposition analysis in this paper is below [17]: (11) where: e is the final energy consumption of the household sector (climate corrected; unit: toe); y is the residential energy expenditure (annual per capita expenditure on electricity, gas and other fuels; unit: huf); l is the annual total expenditure (unit: huf); p is the population (unit: capita); i is the income deciles; j is the type of energy consumed by residents, such as solid fuels, total petroleum products, gas (piped and bottled), electrical energy and district heating. zhao et al. (2012) examine the urban residential energy consumption and apply data with regard to energy-using activities and energy-using products as subcategories [17]. i follow this study by building my model because its applied factors are appropriate for my research issue as well. however, in my case the income deciles and the type of energy sources are the levels of aggregation. on the one hand it can be justified by the available data and on the other hand – according to my preliminary assumptions – during the period of 2010–2015 the changes of the residential energy consumption were influenced mainly by the prices and the disposable income not the changes of the consumer habits (to track this latter would only be possible by using long time series). for a clearer presentation i introduce five new intermediate terms to present the five previous terms in formula 9, respectively, so: (12) applying the additive form of lmdi the changes of residential energy consumption between any two years (t and t−1): (13) where: δepr is the price effect, δes1 is the intensive structure effect, δes2 is the extensive structure effect, δeep is the expenditure effect, δepo is population effect. all of that shows the impact of the specific factor δ = − = δ + δ +δ + δ + δ −e e e e e e e e tot t t pr s s ep po 1 1 2 e pr s s ep po ji = ∑∑ * * * *1 2 e e y y l y y l p p ij ij i i ij i i ij i i = ∑∑ on the residential energy consumption by income deciles. the price effect represents the impact of energy price change, the intensive structure effect is the change of energy expenditure share on energy sources by income deciles, the extensive structure effect is the change of energy expenditure share in total expenditure by income deciles, the expenditure effect is the change of per capita total expenditure by income deciles and finally the population effect is the change of population size by income deciles. these specific factors can be expressed as follows: (14) (15) (16) (17) (18) where wij,t is the logarithmic weighting scheme in year t, specified as: (19) assuming that: eij,t ≠ eij,t−1 (20) if: eij,t = eij,t−1 (21) so: wij,t = eij,t (22) w l e e e e ln eij t ij t ij t ij t ij t ij , , , , , ,= ( ) = −( ) − − 1 1 ,, , t ij te − ⎛ ⎝⎜ ⎞ ⎠⎟1 δ = ⎛ ⎝ ⎜ ⎞ ⎠ ⎟∑∑ − e w po po po ij t j i t i ti , , , ln 1 δ = ⎛ ⎝ ⎜ ⎞ ⎠ ⎟∑∑ − e w ep ep ep ij t j i t i ti , , , ln 1 δ = ⎛ ⎝ ⎜ ⎞ ⎠ ⎟∑∑ − e w s s s ij t j i t i ti 2 1 2 2 , , , ln δ = ⎛ ⎝ ⎜ ⎞ ⎠ ⎟∑∑ − e w s s s ij t j ij t ij ti 1 1 1 1 , , , ln δ = ⎛ ⎝ ⎜ ⎞ ⎠ ⎟∑∑ − e w pr pr pr ij t j ij t ij ti , , , ln 1 68 international journal of sustainable energy planning and management vol. 13 2017 the effects of utility cost reduction on residential energy consumption in hungary a decomposition analysis 4. applying the lmdi method results the changes and results are provided in figure 5. it shows the changes of the residential energy consumption and the impact of price effect (δepr), the intensive structure effect (δes1), the extensive structure effect (δes2), the expenditure effect (δeep) and the population effect (δepo) on the shift. any of these effects eventually shows how much the specific component would have contributed to the changes of the dependant variable (assuming that the other factors are fixed). in my case the outcome variable is the residential energy consumption. next the explanations of the effects are discussed in a broader context. the final energy consumption of the hungarian household sector declined every year during the period of 2010–2013, but in 2014 and in 2015 growth is experienced. in spite of that these tendencies don’t change the general trends: in the examined entire time period residential energy consumption decreased in hungary. figure 6 confirms that this general trend applies in the european integration as well. the final energy consumption of the household sector – excluding malta and bulgaria – decreased everywhere in the european union during the period of 2010–2015 which is consistent with the goals and strategies for energy efficiency in the integration. but the changes in the total final energy consumption are not so clear: in some member states the energy consumption increased because in 2010 the impact of the 2008–2009 financial crises still had been felt, the performance of the industry was under the expectations and the households restricted their consumption. naturally it is the case with total final energy consumption. by 2015 most of the members were on a growth path and it positively affected the energy use. the price effect had a negative impact on the residential energy consumption (it was negative) between 2010 and 2012 but as a result of price drops and the decreasing energy expenditure after 2013 the situation is significantly changed. if there was no structural and population effect, the price effect itself would have increased the dependant variable by 407 toe (~17.02 pj) between 2012–2013, by 347 toe (~14.54 pj) to 2014 and by 124 toe (~5.21 pj) to 2015 (more details in appendix 1). the neeap 2020 declares the energy saving target of the hungarian government is 40 pj in the residential energy consumption for the period of 2010–2020 [3]. but the energy use growth caused by the international journal of sustainable energy planning and management vol. 13 2017 69 tekla sebestyén szép –1500 –1000 –500 0 500 1000 2010–2011 2011–2012 2012–2013 2013–2014 2014–2015 2010–2015 �etot �epr �es1 �es2 �eep �epo figure 5: decomposition results of residential energy consumption in hungary (2010−2015, 1000 toe) price drop is significant, which makes it harder to achieve the strategic goals. the rebound effect can be logically concluded from the price effect. according to sorrell (2009) “the rebound effect is an umbrella term for a variety of mechanisms that reduce the potential energy savings from improved energy efficiency” [30]. the main objectives of the households with the energy efficiency improvements (such as insulation, renovation, boiler replacement etc.) are to spend less on housing related energy services and to decrease their utility costs. the utility cost reduction in 2013 and 2014 has created a similar situation, actually the size of the price effect is equal with the rebound effect. it shows the rate of energy consumption increase as a result of 20% reduction in cost allowed by an energy efficiency improvement as compared to the percentage of the loss in the potential energy savings. in 2013 it was 7.3% (this is the size of the price effect relative to the energy use in 2013), in 2014 it was 6.6%, in 2015 it was 2.4% which is under my former results (see [31]) but it is broadly consistent with experiences reported in professional literature. hereinafter the main energetic features are shown to clarify the interpretation of the structural effect. in the empirical studies using ida the energy structure is assigned priority, which significantly affects the final energy consumption. obviously the structure of residential energy consumption and the structure of energy expenditure can be greatly different [15]. in spite of that the absolute size and relative share of solid fuels (it means mainly the firewood) decreased, while the related expenses significantly increased in all of income deciles (both in absolute and relative terms). this is primarily explained by the fact that the price of firewood was not affected by the utility cost reduction (moreover it became more expensive, but the price of electricity, gas and district heating declined) so the shift of proportions is even more prominent. it can be stated that by 2015 not only by households in the bottom deciles (so by the poorest families) but by the middle class as well the share of solid fuels has exceeded 20% in the energy expenditure. (figure 7) natural gas remains dominant part of the energy consumption but its significance slightly declined in the 70 international journal of sustainable energy planning and management vol. 13 2017 the effects of utility cost reduction on residential energy consumption in hungary a decomposition analysis at be bg mt hr cy czdk ee eu–28 fi fr de el hu ie nl lv lt lu plpt ro sk si es se uk –25 –20 –15 –10 –5 0 5 10 15 20 –30 –25 –20 –15 –10 –5 0 5 10 15 20 c h a n g e s o f re s id e n ti a l e n e rg y c o n s u m p ti o n (2 0 1 0 – 2 0 1 5 , % ) changes of final energy consumption (2010–2015, %) figure 6: changes of final energy consumption and residential energy consumption during the period of 2010–2015 in the european union (with climatic corrections, %). based on data from [5] examined time period because of the spreading of renewable energy sources and increasing share of electricity. this latter can be explained mainly with the expansion of the air-conditioners and electrical appliances (figure 8). in 2000 the households spent 17.68% of their total expenditure on housing and energy, but in 2010 this proportion is over 25% as reported in the ksh (2017) database (it is a little bit higher than the eurostat data – see appendix 3). by comparison the households spent 27.84% of their total expenditure on food and non-alcoholic beverages in 2000 and 22.8% in 2010. the shift between the two items can be explained by decreasing food-related expenses of households. accordingly stagnating or declining incomes force consumers to change their buying habits in favour of cheaper products. the expenditure on housing and energy is inelastic in the short term (in the long term it is only relatively elastic as well) so the households face a major burden in adapting to such circumstances [29]. however, there are many options for energy savings, such as replacing obsolete heating, cooling, ventilation and lighting appliances, renovating residential houses (although i note here that it is the most expensive possibility) and improving the energy efficiency. another option is to prescribe mandatory energy standard for all new buildings and to promote energy international journal of sustainable energy planning and management vol. 13 2017 71 tekla sebestyén szép 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% to ta l 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 1 0 . to ta l 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 . 1 0 . 2010 2015 electrical energy gas (bottled and piped) total petroleum products solid fuels derived heat note: 1st decile represents the poorest households, 10th decile represents the richest households figure 7: structure of residential energy expenditure by deciles (2010, 2015, %). based on data from [4] 0 500 1 000 1 500 2 000 2 500 3 000 3 500 2010 2011 2012 2013 2014 2015 solid fuels total petroleum products gas derived heat renewable energies electrical energy figure 8: residential energy consumption by energy sources (2010–2015, toe). based on data from [7] efficiency. the national energy strategies (such as [2, 3]) emphasize as well that there is huge energy saving potential in renovating residential houses. after 2013 the ratios seemed to have turned, in 2015 the expenditure on food and non-alcoholic beverages is the biggest item (24.49%) and the share of housing and energy expenditure goes below 21.5% (figure 9). according to the ksh’s micro-census in 2010 the heating represents two-thirds of the residential energy costs (it contains the electrical energy, the piped and bottled gas, the solid and liquid fuels, the district heating) and the remaining one-third is the water heating, cooking, lighting and the operation of electrical appliances for every income group. the energy expenditure per capita increases proportionally with the income level and there are huge differences in the share of energy expenditure to the net income: in 2015 it was 20.57% in the lowest income decile (which raises the issue of energy poverty), in the highest income decile only 6.6% (the average is 10.92%). these values significantly improved compared with the data in 2010, where these were respectively 23.15% and 8.4% (the average was 13.6%) [29]. explanation of this context contributes to understanding the structural effect, which can be divided into two main parts, to the intensive (δes1) and the extensive part (δes2). the intensive part is affected by two factors, on the one hand the price change between various energy sources and the structural shift in the energy mix [17]. the extensive part shows the energy intensity development, that is, the energy expenditure per unit of annual total expenditure. it can be explained by three factors: the first is the change of consumer habits (through modification of the energy-using activities and there is a structural shift between these activities), the second is the energy efficiency changes (such as the households replace the outdated boilers and use energy saving bulbs, etc.), the third is the price change resulting in energy expenditure changes in order of magnitude. for example, a positive extensive structural effect shows the following. despite the households’ buying energy efficient appliances and devices, their energy consumption grows because of the shift toward the more energy intensive activities (such as the family moves into a larger house 72 international journal of sustainable energy planning and management vol. 13 2017 the effects of utility cost reduction on residential energy consumption in hungary a decomposition analysis 8 10 12 14 16 18 20 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 0 2 0 1 2 2 0 1 4 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. total note: 1st decile represents the poorest households, 10th decile represents the richest households figure 9: share of expenditure on electricity, gas and other fuels to the annual per capita expenditure, by deciles (2010–2015, %). based on data from [4] where they need to heat more or every room is equipped with an air-conditioner system). in hungary typically the negative structural effect can be discerned. this can be explained by the improving energy efficiency to a lesser extent and by the energy expenditure decline resulting in price reduction to a greater extent. next i discuss it in more detail. in 2010–2011 both the intensive and the extensive effect had been positive, after that it changed to negative. in case of the intensive structural effect it suggests that between 2010 and 2011 there was an increasing demand for cheaper energy sources and many families switched to a less modern, but more favorably priced wood as fuel. during the period of 2012–2015 the effect is negative because at that time there was a shift toward the more expensive energy sources (such as electricity) which is related to the spreading of electrical appliances and air-conditioners. the extensive structural effect is positive between 2010 and 2011, which can be explained with the increasing share of energy expenditure to the total annual expenditure. by 2012 the effect became negative (but at that time there was no price reduction) and opposite progress can be observed among the income deciles: while in the 1st and in the 7th−8th−9th−10th the energy expenditure increased, in the 2nd−3rd−4th−5th−6th deciles it decreased, which signals that these latter households restrain their consumption and use cheaper energy sources (typically the expenditure on solid fuels, especially wood grew). probably the high energy prices hit these households the most. between 2013 and 2015 the energy expenditure declined because of the price drop (it is the case for all the income deciles), so the effect is negative. the expenditure effect had positive impact on residential energy consumption in every year which can be explained by the rising income and standard of living. the population of hungary constantly declines in number and it can be detected in the population effect as well. in all of the examined years it had a negative impact on the residential energy consumption, and the values are similar (the values are scattered around 0.5 pj). beyond the lmdi index decomposition analysis i examined whether the price decline or the rearrangement between expenditure items reduced the social inequalities. the lorenz curve is especially suitable for the graphical representation of the social inequalities, which has become a popular tool to illustrate not only the income, but the expenditure-related inequalities as well (such as [33, 34]). the gini coefficient is derived from the lorenz curve. the latter “shows the share of spending (or income) by households ranked by spending (or income). the further the curve is below the 45 degree line, the less equal the distribution. correspondingly, the gini coefficient is calculated as the area between the lorenz curve and the 45 degree line divided by the total area under the 45 degree line.” [33] the higher the coefficient, the more unequal the distribution is. figure 10 represents growing inequalities in case of all three indicators (energy expenditure, total expenditure, net household income) during the period of 2010−2015 and the values of the gini coefficient confirm it as well. however, in the case of energy expenditure and total expenditure the disparities are lower compared with the net household income and this suggests that households have the ability to borrow and save to offset the provisory changes. 5. conclusion the comprehensive study of the situation preceding the passage of the act on the enforcement of utility cost reduction (act no. liv of 2013) confirms that in hungary the share of expenditure on housing, water, electricity, gas and other fuels (measured in pps) was one of the highest in the european union which imposes a greater burden on vulnerable households, especially the poorest lower-income families. the act no. liv of 2013 has positively affected both the absolute value of the housheold expenditures and the structure of these spendings in all income levels. at the same time the effects of oil price reductions (which started in the second half of 2014) doesn’t appear in the regulated end energy prices so the households can not benefit from the lower world energy prices. consequently, the measures to reduce the energy prices and the share of energy expenditure are justifiable, but many negative tendencies have to be considered. it is a problem, that the the passage of the act was really fast. the real and strong participation of the interested stakeholders was limited. futhermore, the price control of energy sources in the residential sector and the completed price reduction are contrary to the national energy strategy goals, whose pillars are competitiveness, sustainability, and security of supply. according to the neeap 2020 “the most efficient and effective way, also international journal of sustainable energy planning and management vol. 13 2017 73 tekla sebestyén szép viable in the short term, of increasing the security of supply is to lower consumption and to treat energy conservation and energy efficiency as priorities.” [3, p. 9]. because the price of gas, electrical energy and district heating has fallen by almost a quarter in 2013−2014 in the household sector, in my calculations it induced 17.02 pj between 2012 and 2013, 14.54 pj in 2013−2014 and 5.21 pj in 2014−2015 in additional energy use. while this price effect was counterbalanced by the structural and population effect, in any case it makes the fulfillment of the objectives (related to energy efficiency) more difficult. in my view emphasis should be placed on raising the residential awareness and it must be clear that the households should spend their cost savings on energy efficiency investments (such as retrofit, thermal insulation and replacing outdated boilers) because in the long term this is the only way to reduce their energy expenditure. as the ecarap states “for the hungarian population the cost-oriented motivation is the most approppriate” [35, p. 45], so the awareness raising campaigns should focus on that. 6. references [1] worldbank. databank. 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of residential energy consumption in hungary (2010−2015, pj) δetot δepr δes1 δes2 δeep δepo 2010–2011 −5,23 −21,23 1,24 4,61 10,79 −0,65 2011–2012 −13,22 −10,13 −6,44 −3,06 7,05 −0,63 2012–2013 −7,46 17,02 −8,78 −24,61 9,50 −0,59 2013–2014 0,12 14,54 −4,33 −17,69 8,28 −0,67 2014–2015 3,73 5,21 −2,19 −15,11 16,39 −0,57 2010–2015 −22,07 7,22 −20,31 −59,60 53,81 −3,19 international journal of sustainable energy planning and management vol. 13 2017 77 tekla sebestyén szép hr ro ee hu lv lt pl uk dk cz de it fr ie eu28 el si bg be se nl at fi sk cy es pt mt lu 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 0 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 0 2 0 1 0 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 2 0 1 5 residential transport industry fishing agriculture/forestry services other sectors appendix 2: changes of final energy consumption by sector in the european union (2010, 2015, %). based on data from [7] 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 2 0 1 0 2 0 1 5 dk cz se uk fi fr de sk eu28 be pl it lu nl hu ie at lv es ro bg el ee si cy pt lt mt housing, water, electricity, gas and other fuels food and non-alcoholic beverages alcoholic beverages, tobacco and narcotics clothing and footwear furnishings, household equipment and routine household maintenance health transport communications recreation and culture education restaurants and hotels miscellaneous goods and services appendix 3: final consumption expenditure of households by consumption purpose in the european union (2010, 2015, %; eur, current prices). based on data from [7] << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 23 2019 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 23 2019 01–02 abstract this editorial introduces the 23rd volume of the international journal of sustainable energy planning and management. this volume presents research on the robustness of energy modelling, firstly through an assessment of the accuracy of heat demand estimations compared to measured data, followed by an examination of assessment of the robustness of energy modelling relative to the results’ dependency on input time series. subsequently, challenges to the integration of renewable energy are reviewed, followed by a case from iran investigating a 100% renewable energy system for desalination. finally, the issues of technology prioritization for energy efficiency purposes and the development of energy indicators are tackled. 1. robustness of energy modelling two articles of this issue tackle the challenge of ensuring accurate inputs for energy system modelling such as energy demands and weather resources. grundahl & nielsen [1] build on previous work on heat atlases, where gis and building information is used to assess heat demands with the prospects of e.g. assessing potentials of model shifts in heating technology. in this work, the authors correlate such more general data with actual metered data to assess the accuracy of the assessment methods. based on statistical analysis, the results indicate that the atlas is mainly accurate for single-family buildings while larger discrepancies exist for other building types. see also [2–5] for further analyses on the use of heat atlasses. to examine the robustness of simulations of 100% renewable energy scenarios, meschede et al. [6] use the spanish island la gomera as a case to analyse the impacts on energy systems scenario performance with different time series reflecting variance in e.g. resource availability. the island energy system is modelled with the energyplan simulation tool, analysing the impact of probabilistic weather data on the design of renewable energy systems. in their work, the authors argue that it is not sufficient to base simulations on empirical data for one year, but rather, it is required for more time series to be applied. in their own work, this is done in the form of synthetic time series. 2. renewable energy systems in a review of the challenges related to the integration of renewable energy sources into the power system, sarkar & odyuo [7] address the most pressing issues, as well as techniques presently applied to negate these. the study considers key issues to be related to the typically geographically distributed nature of renewable energy technologies, which coupled with the variability and uncertainty of renewable energy production challenges the matching of energy supply and demand. caldera et al. [8] investigate the feasibility of 100% renewable desalination systems for water supply in iran as a solution to the severe current and future water editorial international journal of sustainable energy planning and management volume 23 rasmus magni johannsen and poul alberg østergaard* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords ; heat atlas; energy system modelling; hybrid renewable energy systems; energy efficiency; energy indicators; url: http://doi.org/10.5278/ijsepm.3466 http://doi.org/10.5278/ijsepm.3466 2 international journal of sustainable energy planning and management vol. 23 2019 editorial international journal of sustainable energy planning and management volume 23 [2] möller b, nielsen s. high resolution heat atlases for demand and supply mapping. int j sustain energy plan manag 2014;1:41–58. http://doi.org/10.5278/ijsepm.2014.1.4. [3] nielsen s. a geographic method for high resolution spatial heat planning. energy 2014;67:351–62. http://doi.org/10.1016/ j.energy.2013.12.011. [4] grundahl l, nielsen s, lund h, möller b. comparison of district heating expansion potential based on consumereconomy or socio-economy. energy 2016;115:1771–8. http://doi.org/10.1016/j.energy.2016.05.094. [5] nielsen s, grundahl l. district heating expansion potential with low-temperature and end-use heat savings. energies 2018;11. http://doi.org/10.3390/en11020277. [6] meschede h, hesselbach j, child m, breyer c. on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study on la gomera island. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ijsepm.3142. [7] sarkar d, odyuo y. an ab initio issues on renewable energy system integration to grid. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ijsepm.2802. [8] caldera u, bogdanov d, fasihi m, aghahosseini a. securing future water supply for iran through 100% renewable energy powered desalination. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ijsepm.3305. [9] singh vk, henriques co, martins ag. a multiobjective optimization approach to support end-use energy efficiency policy design – the case-study of india. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ijsepm.2408. [10] jemmad k, hmidat a, saad a. developing an aggregate metric to measure and benchmarking energy performance. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ ijsepm.3383. stress caused by a combination of water resource mismanagement and climate change. energy system modelling is applied to determine optimal system configurations and the economic impact of transitioning to 100% renewable energy-based seawater desalination solutions relative to conventional fossil fuel-powered solutions. 3. benchmarking and technology prioritization singh et al. [9] address how to implement energyefficient technologies with a starting point in economic input-output lifecycle assessment with multi-objective interval portfolio theory. based on their analyses, the authors find that incentives targeting switches to fluorescent tubes are feasible while the same is not the case for incentives targeting efficient refrigerators and television sets. in their analyses, the authors also assess the impact of conservative compared to aggressive investment strategies. establishing appropriate indicators can be beneficial to the monitoring and measurement of energy performance. it is however as argued by jemmad et al. [10] difficult to establish universal indicators due to differences in units of physical indicators. jemmad et al. propose an aggregated dimensionless indicator for energy benchmarking; a tool that in the future can be incorporated as a part of energy management and efficiency standards. the authors apply the energy indicator to two central departments of two moroccan hospitals, enabl ing identification of processes increasing energy consumption the most, and thus aiding the prioritization of energy savings actions. references [1] grundahl l, nielsen s. heat atlas accuracy compared to metered data. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ijsepm.3174. http://doi.org/10.5278/ijsepm.2014 http://doi.org/10.1016 http://j.energy http://doi.org/10.1016/j.energy.2016.05.094 http://doi.org/10.3390/en11020277 http://doi.org/10.5278/ijsepm.3142 http://doi.org/10.5278/ijsepm.2802 http://doi.org/10.5278/ijsepm.3305 http://doi.org/10.5278/ijsepm.2408 http://doi.org/10.5278/ijsepm.3383 http://doi.org/10.5278/ijsepm.3383 http://doi.org/10.5278/ijsepm.3174 _goback international journal of sustainable energy planning and management vol. 21 2019 77 1corresponding author e-mail: annika.groth@uni-flensburg.de international journal of sustainable energy planning and management vol. 21 2019 76–92 abstract recently, penetration rates of solar pv-systems increased drastically in rural sub-saharan africa, and there will be less areas without electricity access altogether. simultaneously, mini-grid systems are expected to be key in rural electrification because they allow for higher loads. eventually, interconnection of national grids with mini-grid systems will gain importance. this case study compares impacts of electrification on households connected to an interconnected 4 mw mini-grid system with effects on households connected to off-grid energy systems in rural tanzania. relying on propensity score matching, the analysis detects minor differences regarding usage of electrical equipment and expenditures for energy sources between the comparison groups. as has been expected, it concludes that grid-electrified households have significantly higher mean lumen and lighting hours. however, the case study shows that off-grid technologies, including solar pv-systems, are important sources to bridge and narrow the electricity gap and can already meet a critical level of rural electricity demand of households. pre-grid-electrified statuses and their socio-economic impacts need to be reflected in research as they build the foundation for further electrification measures. 1. introduction in the last decade, many achievements have been made in increasing the number of individuals who have access to electricity. notwithstanding, more than 1 billion of people worldwide still lack access to electricity connections. this is particularly true for rural areas of sub-saharan africa (ssa), where demographic growth is outpacing access gains. at present, 587 million sub-saharan africans do not have access to electricity [1] and this figure is expected to increase by 45 million until 2030 [2]. in tanzania, which is the focus of the paper, some progress has been made recently, and the access to electricity rate jumped from less than 20% of the population in 2014 to 32.8% in 2016 [3]. at the same time, tanzania is still one of the poorest countries in the world in terms of gdp per capita (constant 2010 us$) with approximately 867 usd in 2016 [3]. the nexus between electricity consumption and/or access to electricity and economic development has been studied extensively. payne surveyed international evidence on the relationship between energy consumption and growth [4], whereas ozturk studied the research done in the field of the energy-growth nexus [5]. omri [6] analyzed the literature on this relationship by country-specific cases. notwithstanding, to date there is no clear consensus regarding the causality of the relationship between them. studies on micro level also yield mixed results concerning the evidence of socio-economic impacts of (rural) electrification. however, there is no doubt that rural electrification is a critical factor for socio economic development as identified by peters et al. [7] and grimm et al. [8] for ssa countries, and the ieg [9] and kanagawa et al. [10] for developing countries in socio-economic impacts of rural electrification in tanzania annika groth* department of energy and environmental management (eem-sesam), interdisciplinary institute for environmental, social, and human studies, europa-universität flensburg, munketoft 3b, 24937 flensburg, germany keywords: socio-economic impacts; rural electrification; interconnected mini-grid system; propensity score matching url: http://dx.doi.org/10.5278/ijsepm.2019.21.6 78 international journal of sustainable energy planning and management vol. 21 2019 socio-economic impacts of rural electrification in tanzania [16] for the case of nigeria). yet, to the disadvantage of sustainable electrification and development, grid electrification is still most preferred mode of electrification in many ssa countries [17]. the interconnection of mini-grid systems to the national grid may provide a necessary step towards fullscale electrification, until economic and topographical challenges are met while the revenue base increases. on the other hand, interconnection of systems might help to avoid sunk investment costs in mini-grid systems, e.g. when the national grid arrives. nevertheless, off-grid technologies interconnected with a main grid are rarely studied yet. additionally, a recently published report on mini-grid system deployment in tanzania calls for more formal research on analyzing the impacts of mini-grids in tanzania, as most information on the effects is still “anecdotal” [18] (p.11). as a basis for further proceeding with rural electrification, the quantitative benefits of such need to be understood better. this paper strives to fill these gaps identified by detecting socio-economic effects of access to an interconnected mini-grid system. based on a case study in rural tanzania, it compares off-grid with grid-connected statuses of households. to establish household comparison groups, this study relies on a non-experimental research method, propensity score matching (psm). psm allows to address the challenge of identifying an appropriate counterfactual group. the major share of electricity in rural households in ssa is still used for lighting or illumination purposes as observed by bernard [11], ieg [9], lenz et al. [19] and bensch et al. [20]. illumination belongs to the most direct impacts of electrification and assumes an intermediary role in promoting effects on final impact indicators. therefore, this case study puts a special focus on the intermediary outcome of electricity: lighting and lumen hours (lmhr). to reflect on education, the analysis studies the treatment effects of electricity on children’s home based study time after nightfall. additionally, the paper investigates the effects of electricity on households’ weekly energy expenditures and consumption of energy sources and daily usage time of the most frequently owned electric appliances in terms of tv, radio and mobile phone. these indicators are assumed to affect household´s health, income and also education. 1.1. background and project tanzania´s installed power generation capacity is only about 1,500 mw [21]. this low figure is reflected in general. in research on evidence of impacts of (rural) electrification, researchers frequently refer to the theory of change to analyze causal effects of electricity consumption on selected indicators for a defined population (e.g. [11, p. 14] and graphically well illustrated by peters et al. [7, p. 329]). the framework of the theory of change displays the channels from inputs to activities to outputs, (intermediate) outcomes, and longer-term goals through which an input factor or intervention becomes theoretically effective [12, p. 20 f.]. commonly, researchers study the following final impact indicators of household´s electricity use: income, education and health. thereby, they intend to capture the socio-economic situation of households which might have changed through their access to electricity. in the ssa context, evidence on socio-economic effects of (rural) electrification is inconclusive and patchy in terms of space and time. the majority of studies compares households from either grid-electrified with not (yet) grid-electrified villages, or households from off-grid electrified villages with those from not (yet) electrified areas. however, even in least electrified areas such as in ssa, there will be less and less areas that are still completely without electricity access, as the penetration through off-grid solar based energy systems has accelerated in recent years [13]. as a means to quantify the quality of energy access, the multi-tier-framework from the energy sector management assistance program (esmap) from the world bank no longer defines electrification as binary (e.g. whether a household has access to electricity or not) but multi-dimensional [14]. by considering the user´s perspective, the spectrum of service levels and neutrality of technology delivering the service, they strive to capture better the multiple modes of energy access [ibid]. the international energy agency (iea) estimates that a major share of the universal access to electricity by 2030 is expected to be achieved by off-grid technologies such as (isolated) mini-grid systems [15]. some of these technologies might play a key role to pre-grid-electrify communities, households and enterprises before the national grid arrives and could be interconnected to it at a later point of time. compared to conventional grid technologies, off-grid systems that are based on renewable energy sources might allow for access to electricity in a more environmentally friendly manner. in light of inadequate grid supply, off-grid systems, such as pv systems, could even meet suburban housing electricity demand in a techno-economically manner (as shown by international journal of sustainable energy planning and management vol. 21 2019 79 annika groth 10,000 mw by 2025 [25]. the 4 mw mwenga run-ofriver hydro power project which is the focus of the present study, is one of the first projects under the sppa scheme, and is a mini-grid system interconnected to the nation’s main grid. the majority of its power generated is sold to the central grid (to the state utility tanesco), but it also sells power to the local tea industry and the rural community [26]. in 2018, approximately 80% of electricity consumed by the rural community is still on subsistence plateau with less than 50 kwh per month [27]. the project´s location is in mufindi, one of the three districts of the iringa region in the southern highlands of tanzania. the intensively forested and farmed region is the second richest region of tanzania in terms of gdp per capita (approximately $ 880 usd in 2012 [28]). the mufindi region lies on an altitude between 1700 m and 2000 m above sea level and is characterized by its hilly topography, long rainfall and short dry seasons. in figure 1, the current mwenga power network system is displayed. grid-connected areas, mostly located in the south, received access to grid-electricity in 2012. by the end of 2015, when research data was collected, the villages in the north were still not connected to the mini-grid system. the mini-grid extension to the northern villages became operational in 2017. official indicators on electricity access. annual electric power consumption per capita amounts to approximately 99 kwh and access to electricity is limited to only 32.8% of the population. in urban areas, approximately 65.3% of the population has access to electricity, whereas in rural partswhere three quarters of the tanzanian population lives-only 16.9% of the population is connected to electricity [3]. the growing importance of off-grid technologies for rural areas is reflected there. for example, approximately 65% of rural electrified households rely on solar power [22]. in line with these developments, the investment prospectus for rural electrification estimates that about half of the tanzanian rural population could be costeffectively best served by off-grid and/or mini-grid solutions [23]. this corresponds with recommendations from the international renewable energy agency (irena) [24], which estimates that more than 60% of rural areas globally should be best served by renewable powered off-grid electrification to achieve universal access by 2030. with the electricity act of 2008, the government introduced comprehensive energy sector reforms including a framework for small power producers (sppa). the authorities plan to expand generation capacity up to figure 1: map showing sampled grid-electrified and nongrid electrified villages in 2015 source: author based on [29] 80 international journal of sustainable energy planning and management vol. 21 2019 socio-economic impacts of rural electrification in tanzania due to data constraints, mobile, non-solar powered torches and candles are excluded from the analysis on lighting. firewood is rarely used for lighting and is therefore also excluded. information on lighting tools has been cross-checked by knowledgeable project partners [33]. it should be noted that firewood, kerosene and paraffin, charcoal, lpg/lng, diesel and dry-cell batteries are important energy sources of rural households in ssa. these energy sources could be replaced by access to (grid-) electricity, which is why household´s monthly expenditures and usage of these energy sources will be studied more in detail below. 2.2. propensity score matching (psm) this study examines socio-economic impacts of gridelectrification. these include lighting and lumen hours, children´s study time after nightfall, energy expenditures and usage time of the most frequent appliances used by households in rural sub-saharan african areas in terms of tv, mobile phone and radio. for the purpose of effect analysis, two comparison groups, one of those households being exposed to the invention (here: grid-electrified households) and one of those households not being exposed to it (off-grid households), need to be established. however, the isolation of the genuine effects of grid-electrification might be biased by unobserved influencing parameters researchers cannot control for. theoretically, the most suitable research design to address bias is randomly chosen research units. however, practical research cannot always achieve this. to tackle biases and influencing factors, this study relies on psm based on [37]. it is a quasi-experimental method frequently applied in research when the intervention to be studied is not assigned randomly to units as it often happens in rural electrification [38]. 2. methodology this section provides the survey design and imple mentation as well as the description of propensity score matching (psm). 2.1. survey design and implementation household surveys with more than 70 detailed questions on socio-economic background and energy use were conducted by the end of 2015. the selection of the four grid connected and two not yet grid-connected villages (see figure 1, above) was not done randomly. it was intended to select villages that are comparable in terms of their background conditions: accessibility, existence of complementary infrastructures and context characteristics (such as topography, distance to bigger cities and towns, educational services, health services, (regular) markets in the village, (formal) financial services, mobile phone network, main income sources and presence of other development projects). qualitative information on that level has been obtained by consulting local informants like village leaders or project representatives. additionally, secondary sources such as official reports, other studies and census data supported the selection of the sample villages [30, 31]. household selection was based on random selection due to the difficulty of detached household locations. in total, 120 households were interviewed in mini-gridconnected and not yet grid-electrified areas. this represents approximately 10% of total households in those villages. approximately 44% of the households were located in grid-electrified areas, whereas 56% of them were based in off-grid areas. data collection was based on standardized questionnaires (author based on [30] and [32]] and the interviewers were trained before taking the surveys. a pre-test of the questionnaires aimed to detect misunderstandings, uncertainties, or other difficulties interviewers and interviewees may encounter. daily mean lighting and lumen hours are based on the information provided by the household, on how many lighting hours per day the respective lighting devices are used. the calculation on daily lumen hours is based on assumptions of luminous flux. table 1 below indicates lower and higher levels of luminous flux of the most common lighting devices used by households in gridand nongrid-electrified areas: cfl energy saver (30 w), energy saver (shs), kerosene/paraffin wick lamp, incandescent bulbs (40 w), fluorescent tube (30 w) and solar lamp. table 1: assumptions on luminous flux of lighting tools lower luminous flux [lm] higher luminous flux [lm] cfl energy saver (30 w) [34] 1500 2100 energy saver (shs) [33] 210 420 kerosene wick lamp [35] 8 82 incandescent bulb (40 w) [36] 400 680 fluorescent tube (30 w) [36] 750 3540 solar lamp (stored in rechargeable batteries) [35] 25 200 international journal of sustainable energy planning and management vol. 21 2019 81 annika groth similar living conditions in terms of a large part of their characteristics and irrespective of their grid-connection status. in table 2 below, the characteristics of households are presented with respect to their grid-connection status. in addition, table 2 displays the corresponding test statistic (t-statistic or chi-square (χ2)). it can be noted that the means and shares of households do not differ statistically significantly in terms of household size, number of household members contributing to the household income household´s head education, age and gender. additionally, households from off-grid areas have comparable access to formal financial services, ownerships of buildings and farm land. yet, there are statistically significant differences in terms of use of formal financial services, primary source of drinking water, toilet type facility and number of rooms, as well as floor type in a household´s main building. the differing primary sources of drinking water reflect the fact that public water pumps were available in not yet grid-connected villages. as presented in table 2, it can be noted that almost half of the households (47%) in the not yet gridconnected villages use solar home systems and there is an evident difference in usage of solar home system between households from the grid-electrified (8%) and not yet grid-electrified villages. thus, almost half of the not yet grid-connected households are already electrified in terms of access to solar based technologies. in 2009, only 4% of the not yet connected households reported to own solar home systems [31]. this finding underlines the significantly increased importance of solar powered technologies and the pre-grid electrification status of off-grid households in this region. conversely, some households in the grid-connected areas reported to have had access to solar power before the grid arrived, and still use it. individual generators are rarely used in both areas and some few households also use batteries to power their homes. however, results suggest that some households combine multiple electricity resources, instead of only relying on one electricity resource. on the other hand, firewood is the main energy source for cooking for households (93% in grid-electrified household compared to 99% in not yet grid-electrified households). as table 3 below shows, households differ significantly in their weekly mean expenditure on electricity, kerosene and paraffin, dry-cell batteries and candles. to ensure a high matching quality, genetic matching is applied to establish comparison groups. the calculated mean difference between the outcomes of these two matched groups is then interpreted as the (population) average intervention or treatment effect [37]. however, as the study deals with non-random targeting of electrification, it is restricted to a subsample of the population. therefore, the analysis considers “alternate treatment effects”, the treatment-on-thetreatedeffects (tot) or average treatment effects on the treated (att): e(yi1) i zi = 1 – e(yi0 ) i zi = 1; treatment effect for treated unit i = outcomei (observed) outcomei (unobserved) or treatment effect for nontreated unit i = outcomei (unobserved) outcomei (observed), where only the expected observed and potential outcomes y of the units being treated zi = 1 are considered [37]. the types of treatment effects could differ significantly due to the aforementioned presence of hidden and nonobserved biases. this is also why the subsequent sensitivity analysis is of crucial importance to undermine the detected effects [39] based on [40] and [41]. the sensitivity analysis is based on the wilcoxon-signed ranks test as suggested by [42]. the whole analysis is conducted in r [43] and follows the structure as suggested by leite et al. [39]. 3. empirical results this section provides descriptive statistics and the steps involved in psm. descriptive statistics allow the reader to get an understanding of important socio-economic characteristics and conditions of households in the study area. this part further contrasts household´s ownership and usage of electric appliances as well as expenditures on and usage of energy sources. moreover, it also contains information regarding illumination before matching analysis is undertaken. psm includes the identification of covariates for model specification encompassing checks on model quality, the estimation of the effects of electrification and a subsequent sensitivity analysis. 3.1. descriptive statistics data analysis from the survey before the matching procedure indicates that households from both areas have (1) 82 international journal of sustainable energy planning and management vol. 21 2019 socio-economic impacts of rural electrification in tanzania conversely, households in grid-electrified villages have higher weekly average costs for candles. differences were also identified in firewood and charcoal expenditures. however, these differences are statistically in the not yet grid-electrified villages, households do not incur any electricity costs. it is evident that their average expenditures for kerosene, paraffin and batteries are significantly higher. table 2: descriptive statistics on surveyed households from gridconnected and not yet grid connected areas grid-electrified households (sample size = 40) not yet grid-electrified households (sample size = 66) test statistic average household size 4.5 4.5 t = 0.13 share of male household heads [%] 80 82 x2 = 6.71 average household head´s education [in yr] 7 7 t = 0.26 average age of household head [in yr] 43 41 t = 0.77 average no. of household members contributing to household income 2 2 t = 1.1 household has access to formal financial services [%] 77.5 87.9 x2 = 1.29 household uses formal financial services [%] 72.5 87.9 x2 = 3.03* share of households owning farm land [%] 97.5 100 x2 = 0.06 no. of buildings a household owns 2 2 t = 0.12 no. of rooms in household´s main building 7 6 t = 1.96* wall material of main building (baked bricks) [%] 77.5 74.2 x2 = 0.02 floor material of main building (cement) [%] 55 74.2 x2 = 3.35* roof top material of main building (iron) [%] 100 98.5 x2 = 0.0 household´s toilet facility (without drainage) [%] 85 100 x2 = 7.87*** household´s source of drinking water (unprotected spring) [%] 92.5 50 x2 = 18.21*** firewood is the main energy source for cooking [%] 93 99 x2 = 2.4567 usage of solar home system [%] 8 47 x2 = 17.80*** usage of car battery for electric purposes [%] 8 2 x2 = 0.296 usage of individual generator [%] 0 0 na ***, **, * indicate 1%, 5% and 10% level of significance table 3: weekly energy related expenditures (in tanzanian shilling) per household in grid and not yet grid-connected villages grid-electrified households not yet grid-electrified households test statistic electricity 1040 0 t = 10.71*** kerosene, paraffin 70 625 t = –3.17*** diesel 0 0 na lpg/lng 0 0 na charcoal 275 38 t = 1.10 candles 308 85 t = 1.79* dry-cell batteries 139 1274 t = –4.72*** firewood 437 38 t = 1.57 ***, **, * indicate 1%, 5% and 10% level of significance international journal of sustainable energy planning and management vol. 21 2019 83 annika groth below, the households differ significantly in terms of weekly average usage of kerosene and paraffin and dry-cell batteries. no significant differences can be identified in terms of weekly average usage of candles. table 5 below displays ownership and daily usage of electric appliances in the analyzed households. households from both areas are similar regarding radio and mobile phone usage and ownership. these are the most possessed and used technologies. it should be noted that mobile phone usage may reflect charging with electricity, whereby the operation of radios could also be based on dry-cell batteries. in not significant. it should be noted that most households collect firewood which is free of charge. among the negligible expenditure items of households are lpg/ lng and diesel. however, it should be noted that prices of the different energy sources might differ, which might affect the level of expenditure. for this reason, the study took into account the quantities of different energy sources that a household consumes on a weekly basis. the analysis is limited to those energy expenditures (apart from elasticity and firewood) that were significantly different before (see in table 3 before). as shown in table 4 table 4: weekly consumed amount of energy sources per household in grid and not yet grid-connected villages grid-electrified households not yet grid-electrified households test statistic kerosene, paraffin [in ltr] 0.04 0.2 t = –2.57** candles 0.7 0.2 t = 1.59 dry-cell batteries 0.2 1.9 t = –5.16*** ***, **, * indicate 1%, 5% and 10% level of significance table 5: ownership (share in%) and daily mean usage of electric appliances (in minutes) of grid and not yet grid-connected households grid-electrified households not yet grid-electrified households test statistic radio 90 86 x2 = 0.3 radio usage 210 242 t = -0.934 mobile phone 95 80 x2= 4.42* mobile phone usage 128.6 35.4 t = 1.244 tv 50 15 x2 = 13.23*** tv usage 85 26.1 t = 3.025*** computer 13 1.5 x2 = 5.628** computer usage 22.5 1 t = 1.871** water heater 5 0 x2 = 3.364 mill 5 0 x2 = 3.364 iron 18 9 x2 = 1.636 refrigerator 3 0 x2 = 1.665 internet facility 5 0 x2 = 3.364 power tiller 0 1.5 x2 = 0.612 washing machine 0 0 na sewing machine 0 0 na water pump 0 0 na fan 0 0 na ***, **, * indicate 1%, 5% and 10% level of significance 84 international journal of sustainable energy planning and management vol. 21 2019 socio-economic impacts of rural electrification in tanzania the mean values in daily lighting and lumen hours (lower and higher levels assumed) differ between the households from the mini-grid-electrified and off grid-electrified villages (see table 6 above). it is evident that households the grid-electrified area have significantly higher daily mean lighting (32.95 hours per day compared to 23.94 hours per day) and lumen hours (44924 lmhr or 65288 lmhr compared to 4096 or 8785 lmhr, respectively). in terms of daily lighting hours, the discrepancies are not too high. however, in terms of lumen hours, the differences are substantial. although households from not yet grid-connected villages also have access to (electric) light sources their lighting quality is significantly lower. based on the significant results regarding illumination, in the following, the study examines whether the extended and improved illumination has an effect on the daily home-based study time of children after nightfall, which could impact their education. as can be noted in see table 7 above, on average, children of not yet gridvillages study more after nightfall than children from grid-electrified villages (57.9 minutes compared to 46.5 minutes, respectively). however, the differences are minor and statistically not significant. 3.2. identification of covariates for psm the selection of covariates for the final model to estimate the propensity scores draws on former research and previous statistical checks [19,20,44]. as shown in table 8 below, covariates include gender and educaterms of tv and computer ownership, it can be noted that households differ significantly. in addition, there is a statistically significantly higher usage of tvs or computers in grid-electrified households. however, computers are generally less widespread than tvs. moreover, only a minor share of gridconnected households owns an internet facility. this is also why the study does not consider the usage of computers in the psm below. in addition, very few households own an iron, a mill, a power tiller, a water heater, or a refrigerator, which is why their usagedespite their productive potentialis not studied more in detail in the following. no household possesses a washing or a sewing machine, a water pump or a fan. overall, it should be noted that most of the differences observed are not statistically significant. this underlines the similarities of households regarding electric appliance ownership. as previously described, the study distinguishes between lower and higher levels of lumen of the most frequent lighting tools applied. it is not possible to reflect the real lumen power of all the lighting tools available in a household because different levels of lumen might be combined within a household. however, the lower lumen ranges, as specified in section 2.1 in table 1 above, describe the lowest lumen power possible, whereas the highest lumen levels represent the highest possible lumen regarding the different lighting tools used in a household. lighting hours refer to the sum of usage time per day across all lamps in a household. table 6: average consumption of lighting and lumen hours (lmhr) in grid and not yet grid-connected households grid-electrified households not yet grid-electrified households test statistic average total lmhr consumed, lower level assumed 44924 4096 t = 8.72*** average total lmhr consumed, higher level assumed 65288 8785 t = 8.2*** average lighting hours per day 32.95 23.94 t = 2.01** ***, **, * indicate 1%, 5% and 10% level of significance table 7: daily average study time of children at home after nightfall in grid and not yet grid-connected households grid-electrified households not yet grid-electrified households test statistic home-based study time of children (after nightfall) [in min] 46.5 57.9 t = –1.01 ***, **, * indicate 1%, 5% and 10% level of significance international journal of sustainable energy planning and management vol. 21 2019 85 annika groth tional level of the household head. further, the study considers the number of household members and members contributing to income as well as the main source of household drinking water. related to a household´s main building characteristics, the analysis respects floor type. the visual diagnostic on propensity score estimation quality (in figure 2 below) confirms that there is enough support to estimate mean treatment effects of gridelectrification by the specified model. furthermore, as presented in table 9 below, there is sufficient performance in covariate balance. genetic matching procedure yields high degrees of covariate balance across all outcome variables. the lowest maximum absolute standardized mean differences (masmd) is in all cases is less than 0.1. thus, the propensity score estimation method performs adequately, table 8: model for propensity score estimation covariate selection coefficient gender of household head 0.39631 educational background of household head [in yr] 0.11582 household size –0.12781 no. of household members contributing to income 0.52198 main source of drinking water 2.61968*** main building´s floor type –0.99278 ** ***, **, * indicate 1%, 5% and 10% level of significance f re q u e n cy 0 5 1 0 1 5 –5 –4 –3 –2 shaded = not grid-electrified | grid-electrified –1 0 1 2 figure 2: distribution of linear propensity scores source: author table 9: covariate balance of genetic matching masmd covariates with masmd above 0.25 daily lighting hours 0.08 0 (0%) daily lower lmhr 0.06 0 (0%) daily higher lmhr 0.08 0 (0%) daily children´s home-based study time (after nightfall) 0.08 0 (0%) daily tv usage 0.07 0 (0%) daily radio usage 0.08 0 (0%) daily mobile phone usage 0.06 0 (0%) weekly expenditures for paraffin /kerosene 0.08 0 (0%) weekly consumed amount of dry-cell batteries 0.08 0 (0%) weekly expenditures for dry-cell batteries 0.08 0 (0%) weekly consumed amount of dry-cell batteries 0.08 0 (0%) weekly expenditures for candles 0.06 0 (0%) weekly consumed amount of candles 0.08 0 (0%) weekly expenditures for charcoal 0.08 0 (0%) weekly expenditures for firewood 0.08 0 (0%) ***, **, * indicate 1%, 5% and 10% level of significance 86 international journal of sustainable energy planning and management vol. 21 2019 socio-economic impacts of rural electrification in tanzania conventional significant level. this implies that gridelectrified households watch almost one hour more tv per day than not yet grid-electrified households. the estimated treatment effects of grid-electricity on daily radio and mobile phone usage (att = 13.2 and att = 91.8, respectively) are not significant. regarding the weekly expenditures for and amount of energy sources consumed, the output suggests that access to grid-electricity has a significant impact on the spending on and usage of dry-cell batteries. gridelectrified households consume and spend significantly less money on dry-cell batteries in a week (att = –1.06 and att = –608.9, respectively) than not yet grid electrified households. no impact of grid-electricity on expenses for charcoal or firewood can be detected. moreover, treatments analysis suggests that grid-electrification has no impact on households’ weekly consumption and expenditures which is why the model can be applied to estimate treatment effects. 3.3. estimation of treatment effects and sensitivity analysis as displayed in table 10 below, it is evident that access to grid-electricity has a significant impact on average total lighting and lumen hours of households. gridconnected households have significantly higher lighting hours (att = 18.38) and lmhr per day on average than households from off-grid areas (att = 42044 and att = 59583, respectively). however, extended lighting hours through gridelectricity do not have an impact on daily home-based study time of children after nightfall. the att of -11.9 is not significant. on the contrary, in terms of watching tv, the households differ significantly. after matching, the estimated average treatment effect is 59.1 at table 10. average treatment effects (att) att t-statistic ai s.e. † critical gamma γ lower bound †† (hidden bias) critical gamma γ upper bound †† (hidden bias) daily lighting hours 18.38 3.22*** 5.72 > 3 > 2.0 daily lower lmhr 42044 6.95*** 6045.4 > 3 > 3 daily higher lmhr 59583 6.55*** 9090.3 > 3 > 3 daily children´s home-based study time (after nightfall) [in min] –11.9 –0.79 15.14 1 < 1.4 daily tv usage [in min] 59.1 1.91** 30.91 > 3 > 1.8 daily radio usage [in min] 13.2 0.28 47.62 < 1.2 < 1.1 daily mobile phone usage [in min] 91.8 0.92 99.84 > 1.3 > 3 weekly expenditures for paraffin/kerosene [in tshs] –171.6 –1.378 124.4 1 < 1.1 weekly consumed amount of paraffin/kerosene [in ltr] –0.11 –1.49 0.07 1 < 1.8 weekly expenditures for dry-cell batteries [in tshs] –608.9 –1.82* 334.21 > 3 > 3 weekly consumed amount of dry-cell batteries [in tshs] –1.06 –1.9* 0.56 > 3 > 3 weekly expenditures for candles [in tshs] 54.19 0.21 260.26 1 < 2 weekly consumed amount of candles [in tshs] 0.10 0.16 0.64 1 < 2 weekly expenditures for charcoal [in tshs] 240 0.83 288.57 > 3 > 3 weekly expenditures for firewood [in tshs] 309.3 0.95 324.19 > 1 > 3 ***, **, * indicate 1%, 5% and 10% levels of significance † standard error based on ai estimator †† wilcoxon signed rank p-values based on [42] international journal of sustainable energy planning and management vol. 21 2019 87 annika groth higher access to information and knowledge, which could influence their education or income. however, the effects of tv usage on education or income depend on the content of the tv program but also on the extent to which tv watching comes at the expense of (other) educational or income generating activities. it has also been detected that extended and improved lighting does not lead to a significantly higher study time at home of children in households with grid-electricity. home based evening study time of children amounts to less than one hour per day in both areas. on the other hand, it should be noted, that children could also study at schools at night, which is not considered in the present analysis. the finding on children´s home based study time contrasts with findings from bensch et al. for the rural senegal [46] and for the rwandan context [20]. they were able to identify significantly higher study times or times spent on educational activities in electrified households. the relatively low uptake and usage of electric appliances after grid-electrification may reflect household’s persistently low power consumption. this is in line with findings from [19] and shows that it indeed may take some time until comprehensive socio-economic effects of rural electrification can be detected. it also may confirm that the enhancement of socio-economic conditions has to be addressed by a comprehensive approach, e.g. by including complementary infrastructures. for example, no water supply systems were in place in 2015. therefore, investments of households in sanitary installations or washing machines were not likely. in addition, it has been detected that households still mainly rely on cooking with firewood. cooking with traditional biomass cookstoves is still and expected to remain a widespread phenomenon in sub-saharan africa [47]. consequently, significant improvements to health conditions of household members by reducing indoor air pollution may remain limited. it also may imply that the contribution of electrification to environmental protection in terms of reducing land degradation, deforestation, and air pollution is restricted. on the other hand, the development and introduction of new technologies, such as pv-ecook systems, might become competitive and revolutionize cooking within the next years in sub-saharan africa [48] and thereby contribute to health and environmental protection. commonly, the lack of electric appliances is associated with availability, affordability, reliability, sustainability and social acceptability of these technologies. for paraffin/kerosene and candles. sensitivity analysis indicates that most of the results are robust and not sensitive to hidden bias by the influence of unobserved confounders at comparatively high gamma (γ) values at conventional significant levels. however, findings related to daily radio and mobile phone usage as well as on households’ weekly consumption and expenditures for paraffin and kerosene and candles need to be interpreted with caution because inference might change at low values of γ due to their vulnerability to the presence of hidden bias. 4. conclusion and discussion this case study analyses the impacts of gridelectrification compared to pre-grid-electrification on households in mufindi, in rural southern tanzania. in 2015, the year of data collection, the grid-connected households had access to grid electricity for three years. by relying on the propensity score matching (psm) procedure, the undertaken analysis indicates that socioeconomic impacts of grid-electrification on households are limited. overall, three years after grid-electrification, acquisition and usage of electric appliances in households remained relatively low. in most of the cases, gridconnected and off-grid but potentially pre-gridelectrified households do not differ much in terms of ownership of electric appliances. the most significant effects of grid-electrification can be identified in relation to lighting and quality of lighting. average lighting and lumen hours per day are significantly higher in the interconnected mini-gridconnected areas than in offgrid but pre-grid electrified areas. this means that access to grid-electricity compared to access to off-grid electricity is at the front in terms of enhancing the quality of life of households. the positive impact of grid-electricity on lighting usage, and thereby on households´ quality of life, has also been confirmed by other researchers dealing with the sub-saharan african context: bensch et al. [20] for the case of rwanda, bensch et al. [44] and chaplin et al. [45] for the case of tanzania. results show that radios and mobile phones belong to the most possessed appliances. matching results suggest that households in gridand not yet grid-electrified villages do not differ much in terms of their daily usage. only in terms of tv, matching analysis establishes a significantly higher usage in grid-electrified households. this means that these households have potentially 88 international journal of sustainable energy planning and management vol. 21 2019 socio-economic impacts of rural electrification in tanzania more evident than ever: penetration rates of solar based technologies, such as solar lanterns and solar home systems, in sub-saharan african rural areas accelerated in recent years [13]. this has also been observed in mufindi. solar based energy systems can be appropriate means for sustainable rural electrification and development. at least, they can help to pre-grid-electrify households at low costs and meet social and environmental concerns. in this way households can prepare for the arrival of the grid and do not start from the scratch in terms of access to electricity. however, gaining access to grid-electricity does not automatically imply that households abandon off-grid technologies. on the contrary, results indicate that households rely on multiple electricity sources. this can be beneficial, e.g. to counterbalance the effects of power outages, which was confirmed in another study on this project [49]. the reliance of households on multiple electricity sources after grid-electrification is in line with observations by enslev et al. [50] (p.135 f.) for the rural kenyan context: grid electricity “reorganises and changes the composition of the various energy sources already in use”. this reflects the fact that gridelectricity does not encounter a “vacuum” but rather an infrastructure in which certain needsalbeit limitedcan already be met. evidence from the present study suggests that planners should consider the pre-grid-electrification status of offgrid communities and households to tailor electricity requirements accordingly. it has been observed that rural households` energy consumption follows a complex and dynamic pattern that depends on many factors and does not seem to develop linearly to policy interventions such as grid expansion. on the contrary, nowadays, many households might get access to technologies and electricity without the intervention of any deliberate policy [7]. therefore, it is of utmost importance that planners take into account available, affordable and rapidly changing technologies driving the energy transition. these include (decentralized) energy systems but also appliances, such as the aforementioned pv ecook systems or led technologies. the interconnection of off-grid and grid energy systems can be of crucial importance because it allows to address households’ electricity requirements in a more flexible manner. moreover, planners should keep in mind the possible supportive function of off-grid notwithstanding, it has to be noted that there were some few households possessing electric devices (e.g. computer or mills) that might spur productive activities in the long run. however, while interviewing the households, lack of knowledge with regard to the use of electricity and electric appliances was also noted. to address these constraints, awareness campaigns informing the mufindi population about electricity usage (e.g. concerning the usage of electric kettles and mills) started in 2016 [33], approximately a year after data collection for this study. impacts of these initiatives on the acquisition and usage of new electric appliances should be addressed in a future study. with regard to expenditures on energy sources, matching analysis suggests that only the discrepancy in terms of spending on dry-cell batteries can be attributed grid-electrification. it could indicate that significantly more off-grid households are running radios and lighting tools on dry-cell batteries. the diffusion of dry-cell batteries in rural sub-saharan african off-grid areas was also noted by peters et al. [7] and bensch et al. [35]. the lower usage of dry-cell batteries in grid-electrified households may suggest that these households are less likely to be exposed to health risks and that their environment is less burdened by inappropriate disposal of batteries. to address these risks in high usage areas, bensch et al. [35] propose to implement monitoring and waste management systems and call for immediate action to address the inappropriate disposal of dry-cell batteries. this may be also recommendable for the mufindi region, in particular for off-grid areas. the non-significant difference in terms of weekly consumption of and expenses for paraffin and kerosene after matching may suggest that these sources are less frequently used for lighting purposes, also in off-grid areas, which might be attributable to the spread of solar based technologies but also to the usage of lighting tools that run with dry-cell batteries. for example, grimm et al. [8] and bensch et al. [44] found out that led technologies are increasingly used by households in rural tanzania. in many cases these technologies replaced fuel-run lamps and are nowadays affordable even for poor households [44]. thus, improved efficiency and quality in lighting expressed in lumen hours may not be necessarily related to higher expenditures. to sum up, results indicate that an important share of rural power consumption may already be met by smallscale and off-grid energy technologies. nowadays, it is international journal of sustainable energy planning and management vol. 21 2019 89 annika groth [7] peters j, sievert m, impacts of rural electrification revisited – the african context, journal of development effectiveness 8(3) (2016) pages 327–345. https://doi.org/10.1080/19439342.2016. 1178320 [8] grimm m, munyehirwe a, peters j, sievert m, a first step up the energy ladder? low cost solar kits and household’s welfare in rural rwanda, the world bank economic review 31(3) (2016) pages 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https://www.mathematica-mpr.com/our-publications-and-findings/publications/grid-electricity-expansion-in-tanzania-by-mcc-findings-from-a-rigorous-impact-evaluation https://www.mathematica-mpr.com/our-publications-and-findings/publications/grid-electricity-expansion-in-tanzania-by-mcc-findings-from-a-rigorous-impact-evaluation https://www.mathematica-mpr.com/our-publications-and-findings/publications/grid-electricity-expansion-in-tanzania-by-mcc-findings-from-a-rigorous-impact-evaluation http://dx.doi.org/10.2139/ssrn.2159712 _goback international journal of sustainable energy planning and management vol. 24 2019 1 international journal of sustainable energy planning and management vol. 24 2019 01–06 opening *corresponding author e-mail address: poul@plan.aau.dk abstract this paper introduces contemporary research on smart cities from the special issue of the international journal of sustainable energy planning and management organised in conjunction with the eera joint programme on smart cities. the topic tools, technologies and systems integration for the smart and sustainable cities to come – highlights the variety of research within this field. from a starting point in a discussion on smart cities and smart energy systems, the paper goes on to describe new research findings within the wider area of smart cities and smart energy systems starting with cases of transition, moving on to data requirements and data generation for designing transitions and ending with theories and methodologies for designing transitions. the european energy research alliance (better known by its acronym eera) joint programme on smart cities, which officially started in september 2010 as a network of researchers, experts and stakeholders, has been able to explore the multidimensional aspects which characterized first the paradigm of smart cities, now smart and sustainable cities. also, there are starting some reflections on positive energy district emerging as a future element of the smart cities paradigm. the idea to create a special issue series on behalf of eera joint programme on smart cities (jpsc) came in 2017 with the approval of new eera jpsc work programme which organized the jpsc activities in seven work packages: the aim of work package 4 academy coordinated by paola clerici maestosi – was and still is to boost academic interest and participation, and to strengthen cooperation among research and technologies organizations and university partners as well as external stakeholders. tools, technologies and systems integration for the smart and sustainable cities to come poul alberg østergaarda* and paola clerici maestosib aaalborg university, rendsburgade 14, 9000 aalborg, denmark b enea italian national agency for new technologies, energy and sustainable economic development, energy technologies department, via martiri di monte sole 4, 40129 bologna, italy keywords: smart cities; smart energy systems; environmental impact; url: http://doi.org/10.5278/ijsepm.3405 1. introduction cities are faced with tremendous challenges arising from rapid population growth, decline outside economic hubs, environmental degradation, and social inequality but also increasing expectations of city services from citizens and businesses alike. in recent years, cities have started to recognize that internet communication technology (ict) could be essential for a vibrant social, economic and cultural life and that could play a central role in moving the energy systems towards a more sustainable path while limiting the dramatic increase in urban energy consumption and associated co2 emissions. thus, the paradigm of smart cities has marked research, development and innovation projects in the last five year. now, however, it is time for the new paradigm of smart sustainable cities that enable the decoupling of high quality life and economic growth from resource consumption and environmental impact. thanks to, but not only to, ict. mailto:poul@plan.aau.dk http://doi.org/10.5278/ijsepm.3405 2 international journal of sustainable energy planning and management vol. 24 2019 tools, technologies and systems integration for the smart and sustainable cities to come photo voltaics whose production shares are otherwise typically bounded by the temporal distribution of the electricity demand, the degree to which other production units in the system can regulate up and down and e.g. ancillary service supply. in smart energy system, such fluctuating energy sources are integrated using the entire energy system and drawing on low-cost energy storage particularly in the heating system [7]. while smart energy systems thus have a key-role to play in future energy systems, they also need to be coordinated with and coexist with smart cities, and indeed, the ict solutions for smart cities will have as one its main requirements the ability to successfully coordinate the production, conversion, storage and consumption of all carriers of energy. this is a requirement for the successful transition to renewable energy sources, which are largely of a non-dispatchable nature. in this special issue, a series of articles are presented, which advances the scientific knowledge within the nexus of smart cities, smart sustainable cites and smart energy systems with case of city or energy transition, data acquisition for planning purposes and tools and theories for transition studies. the special starts with an article outlining european research projects and funding within smart cities [8] and ends with a virtual round table discussing the issues pertaining to smart cities [9]. 2. energy system transition outlining how cities have to take the lead due to inadequate national or international global warming mitigation policies, ben amer et al. investigate how an area may transitions its energy system in their work modelling the future low-carbon energy systems a case study of greater copenhagen, denmark [10]. using the energy systems scenario development model balmorel, they show how expanding the present district heating system in copenhagen to a new development area is preferable. this article adds to the present body of work using the balmorel model in the ijsepm [11,12] ancona et al. take a starting point in how district heating combined with renewable energy usage can lead to energy savings in low temperature district heating networks for complete energy needs fulfillment [13]. further advances may be made through the lowering of the district heating supply temperature, which benefits both grid losses, the exploitation of heat sources and accordingly, the idea developed to create the special issue series, and subsequently a scientific board was established as well as a well-defined scientific-editorial work plan which main characteristic was to establish collaborations with existing scientific journals through the development of a special issue. furthermore, the plan is to collaborate with scientific journals edited in different eu countries to ensure a geographic expansion of the work, and to boost discussion on: • an european approach to smart cities, which is why firstly a special issue entitled european pathways for the smart cities to come was published with the journal techne in 2018 [1,2]; • tools, technologies and system integration in smart cities which is why this second special issue entitled tools, technologies and systems integration for the smart and sustainable cities to come is published here in 2019 • smart cities as building block for tomorrow’s low-carbon energy system for special issue 3 in 2020 with the potential title cities of tomorrow: smart sustainable cities and positive energy district. so every year a new special issue is developed with a new host journal; 2018 was the time of techne, an italian scientific journal of technology on architecture and environment, while 2019 is the time of the danish international journal of sustainable energy planning and management which combines engineering with social science within energy system analyses, feasibility studies and public regulation. coming back to the this special issue 2|2019 the decision to join ijsepm relay on the opportunity to join two scientific communities oriented to complementary research fields with the mission to promote scientific dialogue in the field of technologies. from the ijsepm’s perspective, energy systems in particular have a large impact on development and basically the human habitat, and a change needs to be planned and implemented [3], however there are more ways to address the challenge. on the one hand, the emission of greenhouse gasses may be limited by simply changing to carbon-neutral fuels, however this is often not optimal or within the constraints given by resource availability [4]. integrated – or smart energy systems [5,6] – on the other hand, enables a further integration of renewable energy sources where the potential exploitation is limitless. this applies to e.g. wind power and international journal of sustainable energy planning and management vol. 24 2019 3 poul alberg østergaard and paola clerici maestosi transition [28], the authors look into positive energy districts, and strategies for transitioning to smart energy districts. 3. data for energy planning in experimental demonstration of a smart homes network in rome [29], romano describes a project in the centocelle district in rome where a so-called energy box collects data on energy consumption and indoor climate with a view to establishing the data foundation for a urban smart district. data is gathered and may be used for monitoring the system, may be shared among citizens, and is intended to provide a sense of participation in the energy system. ultimately, the energy box may also enable the citizens to participate in energy markets. dochev et al. take a starting point in the need for heat demand data in their article spatial aggregation and visualisation of urban heat demand using graph theory [30]. while many municipalities in germany are actively developing such heat maps, there are also potential privacy issues. in their work, the authors seeks to transcend this complication by aggregating data using an algorithm based on graph theory. this articles adds to the considerable body of literature on spatial data on heat demands [31], electricity demands [32], and energy sources [33–36] from the ijsepm. 4. tools and theories for transition miguel-herrero et al. focus on the circumstance that data is a prerequisite for doing good local energy planning. in supporting tool for multi-scale energetic plan through procedures of data enrichment [37], the authors focus on generating typologies of houses which can be used in the wider assessment of energy demands needs using geographical information tools. in this way, the authors expand on the knowledge already presented in the ijsepm by authors like grundahl and nielsen [38] and knies [39]. in decision support system for smart urban management: resilience against natural phenomena and aerial environmental assessment [40], taraglio et al. present a new decision support system focusing on risk analysis including assessment of the consequences of events on citizens and more taking the case of zero energy bergen as a starting point, gohari & larssæther investigate the governance structure surrounding the energy transition in the efficiencies in the supply system. this work follows nicely in a tradition of low-temperature district heating studies published in the ijsepm [14–16]. using the energy plant design model energypro, widzinski investigate the transition of a polish coalbased power station to a natural-based cogeneration of hreat and power station in the article simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission of harmful substances into the atmosphere [17]. this article follows up on previous work using the energypro model for simulating chp systems published in this journal [18,19]. in a city optimisation model for investigating energy system flexibility [17], heinisch et al. address the electrification of energy systems and how sector-integration using electricity as an system-internal energy carrrier will play a more prominent role in future energy systems. the authors find amongst others that storage will increase the utility of power-to-heat technology. this is line with previous results on sector integration using the smart energy systems approach. [20–23] tötzer et al. investigate how urban manufacturing can be integrated into city energy systems in how can urban manufacturing contribute to a more sustainable energy system in cities? [24]. manufacturing is changing, and while there on the one hand may be waste heat streams from industry to be tapped in, industry is also moving towards higher electricity demands. thus in the future, urban manufacturing needs to be better integrated with other sectors and actors in the city. jaroszewska et al. address a sustainable energy management: are tourism smes in the south baltic region ready? 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http://doi.org/10.5278/ijsepm.2016.10.4. http://doi.org/10.5278/ijsepm.2014.4.2. http://doi.org/10.5278/ijsepm.2017.12.1. http://doi.org/10.5278/ijsepm.2017.12.1. http://doi.org/10.5278/ijsepm.2016.10.1. http://doi.org/10.5278/ijsepm.3347 http://doi.org/10.5278/ijsepm.3347 http://doi.org/10.5278/ijsepm.3342 http://doi.org/10.5278/ijsepm.3342 http://doi.org/10.5278/ijsepm.2544 http://doi.org/10.5278/ijsepm.2544 http://doi.org/10.5278/ijsepm.3336 http://doi.org/10.5278/ijsepm.3336 http://doi.org/10.5278/ijsepm.3350 http://doi.org/10.5278/ijsepm.3350 http://doi.org/10.5278/ijsepm.3335 http://doi.org/10.5278/ijsepm.3346 http://doi.org/10.5278/ijsepm.3346 _goback international journal of sustainable energy planning and management vol. 21 2019 111 1corresponding author e-mail: k.kuriyan@imperial.ac.uk. international journal of sustainable energy planning and management vol. 21 2019 111–131 abstract this paper describes a combined spatial and technological model for planning district energy systems. the model is formulated as a mixed integer linear program (milp) and selects the optimal mix of technology types, sizes and fuels for local energy generation, combined with energy imports and exports. the model can also be used to select the locations for the energy sources, the distribution route, and optionally, to select the heat loads that will be connected to a district energy system. the optimisation model combines a map-based spatial framework, describing the potential distribution network structure, with a flexible resource technology network (rtn) representation which incorporates multiple heat sources. results for scenarios based on a test dataset are presented and show the impact of heat prices on the designed network length. the results illustrate the use of combined heat and power (chp) units to satisfy internal and external power demands, and also demonstrate their use in combination with heat pumps to satisfy emissions targets. a system value metric is introduced to quantify the incremental impact of investments in the heat network in areas of varying heat density. a procedure for screening potential supply locations to reduce computational requirements is proposed. 1. introduction heat-map based representations of energy systems show the locations of heat sources and sinks in a geographical domain, and can range in scope from district level to national level maps [1, 42]. in this paper detailed address level heat-maps for cities are used as the starting point for the development of an optimisation model for the planning of district energy systems. the heat-maps define the spatial framework for the model, identifying potential locations for the energy conversion processes together with the links for the heat distribution network. this is combined with a technological model, based on the resource technology network (rtn) representation, which has been used in a range of applications for infrastructure planning [22-26]. the rtn for heat networks can incorporate supply technologies including heat pumps, boilers and combined heat and power (chp) units. the model can be used to select the type, size and location of each energy source and the connections for the distribution network to optimise an objective function that is the weighted sum of metrics for investment costs, operating costs/revenues and emissions. the value of this work lies in the integration with map-based tools, and the combination of features implemented. it is intended to bridge the gap between higher level map-based planning models and more detailed mechanistic models of the distribution network. a system value metric to quantify the incremental impact of investments in the heat network is also introduced. the model combines features typically found in three categories of energy system models: spatial planning models for identifying areas where construction or a combined spatial and technological model for the planning of district energy systems kamal kuriyan* and nilay shah centre for process systems engineering, imperial college london, exhibition road, london sw7 2az, uk keywords: heat-map; district heating; optimisation; milp; url: http://dx.doi.org/10.5278/ijsepm.2019.21.8 http://dx.doi.org/10.5278/ijsepm.2019.21.4 112 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems are used to select the route, pipe type and size for the heat network. the third category of models optimises the mix of technologies to meet a varying pattern of demands for heating, cooling and power [5]. a review of these three types of models is presented in the next section. the combined model can be used for screening options in the early stages of planning a district energy system. the work described in this paper is intended to establish the feasibility and utility of the combined model for use within a map-based tool for the planning of district energy systems (figure 2). to make it possible to embed within a map-based tool, the model incorporates a spatial framework to represent the layout of streets along which a heat network may be built, building locations, supply locations, and user choices as to whether buildings and network links are required or optional. due to the complexity of the mapping application, the testing of the model has been done prior to the full development of the application. to facilitate testing, the model described in this paper has been implemented using standard optimisation languages and existing tools. an alternative implementation, written in python, has also been developed and integrated within an early prototype of the map-driven application. further expansion of heat networks may be feasible, models for the detailed optimisation of the routes and capacities of heat distribution networks, and models for the selection of the optimal mix of supply technologies (figure 1). the first category of models often uses statistical data to estimate distribution costs for the area being studied [2, 11], but optimisation based methods employing a detailed spatial description of the distribution network have also been developed [3]. the second category employs non-linear or linearised models of the distribution network with varying levels of detail in computations of heat and mass flows, pressure drops and pump energy requirements [4, 14-16]. formal optimisation methods [10], metaheuristics [8] or guidelines based on target pressure losses and flow velocities [15] abbreviations: chp combined heat and power hp heat pump lidar light detection and ranging milp mixed integer linear program minlp mixed integer non-linear program rtn resource technology network spatial planning models network design selection of supply technology combined spatial and technological model netterberg and isaksson [2] persson and werner [11] nielsen [12] pirouti et al. [4] li, svendsen [8] lambert et al. [13] haikarainen et al. [14] yildirim et al. [15] pirouti [16] bordin et al. [3] weber and shah. [9] delangle et al. [19] samsatli and samsatli [23] rong et al. [7] heuberger et al. [17] figure 1: classification of spatial and technological models for energy planning international journal of sustainable energy planning and management vol. 21 2019 113 kamal kuriyan and nilay shah the thermos application processes map data from sources such as openstreetmap into an abstract graph representation which serves as input for the optimisation model (figure 3). footprint polygons extracted from the map are augmented with height data obtained from lidar (light detection and ranging, [38]). this development of the integrated model and application is being undertaken by collaborators within the thermos (thermal energy resource modelling and optimisation system) project [41], driven by feedback on the functionality and performance of the application from participating city partners. server side application optimiser interface spatial data demand data optimisation model web browser map driven interface figure 2: map-driven modelling and optimisation of district energy systems building geometry, network segments abstract graph representation mapping, classification, surface height, routing demand demands supply junction estimation figure 3: map-driven construction of spatial framework for optimisation model 114 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems can be obtained from a gis system. an iterative procedure can then be used to identify expansion opportunities [12]. models that can select the loads to be connected to a heat network using detailed spatial descriptions and optimisation models have also been developed. an milp model for selecting loads to be connected to a heat network based on an economic criterion is described by bordin et al. [3]. this model will be discussed in greater detail in the next section. optimal staging of investments for expanding a heat network using stochastic programming is examined by lambert et al. [13]. as part of the solution, these optimisation models also identify the routes and required network capacities for connecting the selected loads to the supply locations, and thus there is some overlap with the next category of models. the models described above are used to identify potential expansion areas or select individual loads that may optionally be connected to a network. a second category of models optimises the distribution routes required to connect a fixed set of loads. less detailed models with mass and energy balances can be formulated and solved as milp models [14]. more detailed models may use non-linear expressions for pressure drops, pump energy requirements and heat losses. this leads to non-linear models with discrete decisions which can be solved using metaheuristics [8]. an alternative is to use piecewise linear approximations to characterise pump energy requirements [3]. these models emphasise the optimisation of the distribution network, but the technology selection and distribution network can also be optimised simultaneously [9]. more detailed models of the heat network may include detailed thermal and hydraulic calculations [15, 16]. variations in heat demands characterised by load duration curves and corresponding adjustments to the supply flow rate and temperature may also be considered [16]. the optimisation of multiple generation technologies may be carried out in the context of selecting polygeneration technologies within microgrids [7], integration of large-scale heat pumps in district heating [37], and for the analysis of power generation with whole system models [17, 18]. the selection of technologies for the operation of a district heating centre is described by delangle et al. [19]. the latter work also considers the details of sizing the heat network pipes based on projections of the required capacity, but this is decoupled from the subsequent optimisation of the information is processed to obtain the building height, surface area, floor area, and volume. the paths for potential network links are derived from the roads in the map. demands may be estimated by several different methods [20, 42]. one approach is to use benchmarks for annual heat demand per unit floor area for different types of buildings. an alternative approach is to estimate demands based on the heat loss through the external surface of the building, combined with typical values for internal and external temperatures. the spatial framework obtained from this information and demand values are used as inputs for the optimisation model described in section 3. this paper describes the mathematical formulation of the combined optimisation model. an analysis of the incremental value of investing in a heat distribution network which can be obtained through repeated solution of this model is then developed. a test case is used to illustrate both the spatial and technological optimisation features of the combined model. to reduce computational requirements, a screening procedure is used to identify a limited set of potential supply locations prior to the optimisation of the supply technologies and distribution network structure. 2. models of district energy systems a broad review of energy system modelling tools may be found in [6]. many papers focus on the integration of different technology types to supply the energy demands of a building or microgrid [7], whereas others emphasise the design of the distribution network [8]. a model that simultaneously optimises both the technology type and the distribution network routes is presented by weber and shah [9]. models can also be categorised by the methodology used to formulate and solve the model. models for the planning of district energy systems include minlp (mixed integer non-linear progra mming) models [10], milp (mixed integer linear programming) models [3], stochastic programming models [13], multi-objective models for the optimisation of economic and environmental benefits [36], and models solved with metaheuristics [8]. distribution costs for district heat networks may be estimated from aggregate characteristics of a district such as the population density, specific building space, specific heat demand and effective width [11]. more detailed estimates of transmission and distribution costs international journal of sustainable energy planning and management vol. 21 2019 115 kamal kuriyan and nilay shah energy supply system. optimisation methods are extensively used in this context, often with multiobjective formulations to address both cost and environmental concerns [36]. rtn based models, which are discussed in greater detail in the next section, have been used for technology selection in a wide variety of infrastructure planning applications [22-26]. a key feature of rtn models is that the technology mix can be easily restructured to include new technologies or combinations of technologies. the work described in this paper combines an rtn based approach for technology selection, with the detailed spatial optimisation approach developed by bordin et al. [3]. the model includes both environmental and economic metrics. the economic metric combines investment and operational costs for the supply technologies and the heat network. the model is coupled with a system analysis of the value of the distribution network which is similar to methods used in the analysis of storage and renewables in power systems [17, 18]. 3. planning model for district energy systems optimisation models for the planning of district energy systems may combine three frameworks that respectively represent the spatial, temporal and technological facets of the district energy system. the work described in this paper focuses primarily on the spatial and technological frameworks. a limited number of representative time periods, suitable for the early planning stages of a district energy system are used in the temporal framework. the spatial and technological modelling frameworks are outlined below, followed by a detailed description of a combined model. 3.1. spatial framework for district heating network design the spatial framework, which describes the location of energy demands, supply technologies and links for energy transport, is an abstract network representation which can be used for optimising the district energy system. the network includes nodes for required or potential users, supply points and junctions, and arcs for required or potential pipelines (figure 4). historical data for annual heat demand at each node may be available from local authorities or utilities, or may be estimated from building and consumer archetypes [20]. as described in the introduction the spatial framework may be constructed within an interactive map-driven application. the spatial framework and demand values can be used as inputs to an optimisation model which selects potential users to be connected to an existing network. an milp formulation based on a cost objective which maximises revenues and minimises infrastructure and operational costs is described in [3]. this paper describes a model which can additionally select the supply technology type. 3.2. technology selection framework for district heating the resource technology network (rtn) representation is similar to the state task network introduced by kondili et al. [21] for planning the operation of batch chemical processes. this is a convenient representation for describing alternative pathways for producing intermediates and final products from different source materials. in the context of urban energy system models, resources may represent imported materials such as biomass, or natural gas, intermediates such as the supply required junction potential junction required user potential user required pipe potential pipe figure 4: spatial framework for optimisation model [3] 116 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems generated from renewable energy for transportation [23]. this level of detail can result in large scale optimisation problems which are solved using a specialised algorithm. the overall optimisation problem is decomposed into technology selection and storage/ transportation sub-problems that are solved iteratively. a low temporal resolution is used to identify an initial solution for the overall problem. in the present paper, a representative set of periods is used in the temporal framework. this is intended to reduce the computation times required within interactive applications used for the initial planning of district energy systems. the rtn for this paper incorporates multiple “nondomestic” technologies for the production of district heat including chp units, heat pumps and boilers (figure 5). multiple technology sizes are considered for the chp units and non-domestic boilers. natural gas and biomass can be used as fuels for boilers and chp units. a dummy resource is defined to account for heat losses from all technologies. a generic technology for recovering heat from sources such as industrial plants can also be added to the model with user-specified capital and operating costs. heat demands in buildings can be satisfied by heat exchangers connected to the district heating network. renewable technologies such transport medium in district heating systems, or delivered energy for space heating. technologies denote processes that consume and produce resources (e.g. a nondomestic gas boiler consumes natural gas and produces district heating). rtn-based infrastructure planning models have been applied to a wide range of applications including an analysis of the impact of urban energy governance policies [22], design of hydrogen networks [23], trade-offs in the design of urban energy systems [24], planning within the water-sanitation-hygiene sector [25], and planning of the energy-food-water nexus [26]. past applications of the rtn model have typically employed an aggregated spatial framework where each zone in the model may represent a district within a city [22], or area within a region [23], and connections represent transport links between zones. as described in the previous section, the spatial model used here is more detailed, with the zones replaced by nodes representing individual buildings, supply points or junctions in the distribution network. rtn model implementations may also differ in the level of temporal detail. a multi-level temporal framework which can capture seasonal and diurnal variability has been applied to model the use of hydrogen imports gaschp biomasschp gas chips elec dist_heat heatex heat imports imports demands demands, exports nondomhp heatrecovery biomassboiler recheat imports nondomboiler heat losses figure 5: resource technology network for district heating international journal of sustainable energy planning and management vol. 21 2019 117 kamal kuriyan and nilay shah the model incorporates a resource balance for each node in the spatial framework and each set of time intervals (t,tm), where t are minor periods representing seasonal or diurnal demand variations, and tm are major periods for investment decisions (figure 6). major periods can be used to model staged investments, or to compare the energy system performance in a base period against a future period after investments to modify the system [27]. the balance equations for the model span all technologies and resources in the rtn (figure 7). in the equation below rs represents the resource surplus at a node, p is the operating rate of technology j, μj,r is a coefficient that defines the production (or consumption) rate of resource r by technology j, im and exp are imports and exports, q represents the flows and between nodes i and i1, and d represents the demands. note that, although flow connections in both directions are permitted, due to the costs associated with flows, the optimisation will ensure that only one of qr,i1,i,t,tm or qr,i,i1,t,tm is non-zero. the flows q can be modified by as solar thermal have not been considered as these would require additional data on available installation area and solar irradiation. a higher temporal resolution would also be required in the optimisation model to capture the variability in these technologies, resulting in increased computation times for solving the model. possible approaches towards managing the computational requirements for higher resolution models are discussed in the last section of this paper. 3.3. combined spatial and technological model for district energy systems the combined optimisation model uses an milp formulation, similar to those used for other rtn-based infrastructure planning models [25]. the key constraints and objective function are described below. the model has been implemented within an existing interactive tool [24]. the tool, which is written in java, generates scenarios for an milp optimisation model in the gams modelling language which are then solved with the cplex solver. table 1 short names and descriptions for resources and technologies (listed capacities are for technology sizes used in case study) short name description biomassboiler boiler with biomass fuel biomasschp chp with biomass fuel nondomboiler gas boiler for district heating supply (available in 0.5 mw and 1.0 mw sizes) chips fuel for biomass technologies dist_heat district heating resource produced by various technologies elec electricity resource imported, exported or produced by chp gas natural gas fuel for boilers and chp gaschp chp with natural gas fuel (available in the following sizes: 0.135 mwe/0.22 mwth small gaschp, 0.5 mwe/0.675 mwth medium gaschp, 1.0 mwe/1.03 mwth large gaschp) heatex heat exchanger connected to district heating network heatrecovery user defined technology for heat recovery nondomhp non-domestic heat pump for district heating supply (0.5 mw) recheat user defined heat source for heat recovery technology heat losses dummy resource to account for heat losses tm=1 tm=2 investment decisions (tm) operational decisions (t) weekday weekend weekday weekend figure 6: example of temporal discretisation with two investment periods and minor periods for weekdays and weekends 118 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems represented by the binary decision variable y (for required links the decision variable is set to one). the following constraint ensures the existence of the link in periods following the one in which it is built. several types of infrastructure links may be defined with rtn models [23]: bidirectional links which can be used in either direction between a pair of nodes (i,i1); independent bidirectional links where a forward link allows transport from i to i1, and a reverse link allows transport from i1 to i; and unidirectional links where only one of the two links may be built. bidirectional links are used for the case studies described in this paper. these are convenient for use in the interactive planning application since they allow a user to indicate that a link should be built between two nodes without having to select a direction a priori. the following constraint indicates that a link in one direction implies a link in the opposite direction as well. a directional cost factor is then applied to the network costs so that the two links collectively are treated as a single bidirectional link. energy production in a node is constrained by the available capacity of the available units. d,i,i ,tm d,i,i ,tmy y1 1 1−≥ (3) 1 1d,i,i ,tm d,i ,i,tmy =y (4) j,i,t,tm j j,i,tmp ca p n*≤ (5) parameters reflecting heat losses or leaks [25]. the binary decision variable sat in the balance equation selects nodes where the demands are satisfied (for required demand nodes the value of the decision variable is set to one). this is similar to the approach of bordin et al. [3] where district heat connections are selected on the basis of an economic objective. in general, the optimisation will tend to minimise resource surpluses due to the costs incurred in resource production. non-zero surpluses may be permitted if storage is available or if a resource may be dissipated into the environment. for the case study in this paper, the resource surplus for all resources other than the dummy resource for heat losses was fixed to zero a priori. the number of units n of technology j in cell i is determined by investment in inv new units in period tm. investments in supply technologies are fixed at zero in all locations except the permitted supply locations. resources d represent the subset of resources r for which new networks must be built. the existence of a network link to transport resource d in period tm is r,i,t,tm j j,r j,i,t,tm r,i,t,tm r,i,t,tm i r,i ,i,t,tm i r,i,i ,t,tm r,i,t,tm i rs = p + im ex p + q q d sa t1 1 1 1 µ − − − ∑ ∑ ∑ (1) j,i,tm j,i,tmj,i,tmn =n + inv1 (2) balance node dist_heatdist_heat dist_heat from node to node exportimport production consumption in-flow surplus demand out-flow figure 7: resource balance for rtn model [27] international journal of sustainable energy planning and management vol. 21 2019 119 kamal kuriyan and nilay shah the annualised costs are calculated by applying annuity factors an based on the interest rate r and lifetime n, to the equipment or network investment cost [9]. import metrics ic are calculated from the unit cost (or emissions) vi for each imported resource r, weighted by the duration φt of period t. the value φt represents the number of hours for minor period t within a major period. export metrics ec are calculated similarly. the parameters tariff included in the metric tr may vary according to the technology type producing or consuming a resource. this permits the modelling of incentives that are targeted towards specific technology types, such as tax rebates on fuels and feed-in tariffs. the tariff metric used in the case study is based on the price of district heat delivered to each demand node. 3.4. system value of investment in heat distribution network the system value of the heat distribution network can be calculated by placing an upper bound on the investment costs. the system value is measured by the change in the objective function produced by an increase in investment, which in turn results in an extension of the heat network. this is similar to a method used to evaluate the system impact of incremental investments in power generation and storage technologies [17], but here it is applied to investments in the distribution network. the optimisation model is solved repeatedly with an increasing value for an upper bound on the capital expenditure. the system value svk, at each iteration k, is calculated from the change in objective function per unit change in capital expenditure, as defined by equations 7 and 8. the reference value of the objective function for the first iteration is equal to the investment and maintenance cost of the supply technologies, which is fixed for the remaining iterations. the change in the value of the objective function, δk(objfn), at iteration k reflects the ( ) ( )( )n nr +r / +ra n = 1 1 1− (12) * *m,tm t i r r,m r,i,t,tm tic = v i im ϕ∑ ∑ ∑ (13) ( )m,tm t i j r j,r j,r,t,m j,i,t,tm ttr = tarif f pµ ϕ∗ ∗∑ ∑ ∑ ∑ (14) flow between nodes is constrained by the capacity of the network links. the objective is to minimise the function objfn formed as the weighted sum of a value measure vm defined for metrics m representing operating costs, capital costs and emissions. the weights objwtm for each metric are specified according to the desired objective. for the case study in this paper, an objective function which only considers the direct economic impacts is used, i.e. objwtcapex =1, objwtopex =1, objwtghg =0. a non-zero value of objwtghg may be used to incorporate a carbon cost in the objective. the overall metric value vm is formed from the transportation cost tc, the production cost pc, import cost ic, export cost ec, tariffs tr, annualised equipment cost eq, annualised network cost nw, and the annual maintenance cost mc. the model selects the mix of technology type and size, plant locations and distribution network links that minimises the objective function. costs are represented as positive values and revenues as negative values. transport costs tc are proportional to the flows q, while production costs pc are proportional to the production rates p. the network cost nw is calculated for all resources d requiring new networks, from the length disti,i1 of each link and the annualized cost per unit distance vy. alternatively, cost values vyl for individual links may be specified. the parameter β below is set to 0.5 for the bidirectional links used in the case study, so that only the cost of a single link is charged, even though links in both directions are created by equation (4). this is similar to the approach used in [23]. the equipment cost eq is calculated from the annualised cost vij for each technology type j. 1 1*d,i,i ,t,tm max,d d,i,i ,tmq q y≤ (6) tm m m m,tmobjfn = objw t v m∑ ∑ (7) m,tm m,tm m,tm m,tm m,tm m,tm m,tm m,tm m,tm v m = tc + pc + ic ec tr + eq +nw + mc − − (8) m,tm i i d d,m i,i d,i,i ,tmnw = v y dist y1 1 1β∗ ∗ ∗∑ ∑ ∑ (9) m,tm i i d d,i,i ,m d,i,i ,tmnw = v y l y1 1 1β∗ ∗∑ ∑ ∑ (10) *m,tm i j j,m j,i,tmeq = v ij n∑ ∑ (11) 120 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems very slow convergence towards an optimal solution, with estimates of the relative gap (defined as the percent difference between the best solution and the estimated optimum) ranging from 20-90% after 12000 seconds of computation for the test cases considered in section 4.1. the large gaps are in some part due to weak estimates of the optimal solution, but this still creates a difficulty in specifying a suitable convergence criterion to achieve reasonable run times. these initial runs with a full set of possible supply locations were therefore treated as screening runs, and the supply locations identified within the best solution were used as potential supply locations for the scenarios in the next section. with these limited supply locations the solution times for the scenarios in section 4.1 were considerably reduced, with solution times less than 900 seconds in almost all cases, and often less than 60 seconds, with relative gaps in the range 1-5%. the main steps in the construction and solution of the combined spatial and technological model are shown in figure 9. sections 4.1 to 4.3 describe scenarios that illustrate the main features of the model. value of incremental investments δk(vmcapex,tm) in the distribution network. the analysis here is restricted to the case where all investments are to be made within the first major time period (tm=1). since the system value is calculated from changes to the overall objective function value, it reflects the net impact of heat tariffs from newly connected loads, additional fuel costs and the annualised costs of extensions to the distribution network. an application of the system value calculation is provided in the next section. 4. case study the case study is based on a screening data set with 500 nodes. the data set is derived from the uk national heat map [42] for a location within one of the inner boroughs in london. the purpose of this heat map was to identify areas where heat networks were likely to be beneficial and to prioritise locations for more detailed investigation. demand estimates are based on usage data collected at local authority level and address level characteristics obtained from public data sources. pointto-point connections between nodes were used to identify potential network paths. the integrated application described in the introduction will use an improved methodology to estimate demands and identify potential routes from roads defined in the map data. the frequency distribution of demands across the nodes in the data set is shown in figure 8. the majority of nodes represent building with demands less than or equal to 1.6 kw while there are a limited number of buildings with demands greater than 5 kw. all the nodes have heat demands, i.e. there are no nodes that function only as junctions. representative values for the uk were used for network costs, fuel costs, and emissions factors (see appendix 2 for sources). these are estimated values intended for use with this test case to demonstrate the key model features. it has been noted that network capital costs in the uk are high compared to other northern european countries [13, 28]. annualised investment costs are calculated assuming a 3.5% discount rate and 30 year lifetime for the distribution network, and 15 year lifetime for supply technologies. no potential supply locations were identified in the test data set. preliminary testing showed that considering all 500 nodes as potential supply locations resulted in ( ) ( )k k k capex,tmsv = objfn / v m∆ ∆ (15) 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 0 2 4 6 n o . o f n o d e s demand (kw) frequency cumulative % 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 0 50 100 150 200 1 1 .2 1 .4 1 .6 2 5 5 0 m o re n o . o f n o d e s demand (kw) frequency cumulative % figure 8: frequency distribution of demand values: all nodes (top); nodes with demands > 5 kw (bottom) international journal of sustainable energy planning and management vol. 21 2019 121 kamal kuriyan and nilay shah by a single 1 mw natural gas boiler are shown in figure 10. the numbers in the lower right corner of each scenario in the figure indicate the district heat tariff, the length of the designed network, and the linear heat density of the selected loads. three scenarios with district heat tariff levels at multiples of 2.0, 2.5 and 3.0 times the natural gas price are considered. the number of connected nodes and length of the designed network increase with higher district heating network tariffs as it becomes economically viable to supply areas with lower heat densities. table 2 shows the costs and revenues (shown as negative values since the model is formulated as a cost 4.1. impact of district heat tariff levels and supply locations on network design the overall annual heat demand for the area is 24,894 gj. a heat network connecting all nodes would potentially be 4153 m in length; with a linear heat density of 6 gj/m. linear heat density is often used to screen potential district heating areas. as an example, up-res [29] suggests that linear heat density should be greater than 7.2 gj/m for a heat network to be economically viable. this indicates that it may not be viable to connect all 500 nodes to a heat network, and the model is used to select connections based on minimising the objective function. results for three scenarios with heat supplied spatial and technological optimisation identify optimal connections and routes identify optimal supply technology or combination of technologies supply location screening solve model with all nodes considered as supply locations retain supply location(s) identified in best solution at end of screening step spatial framework construction extract building locations and shapes from maps obtain demand estimates from building geometry and archetypes identify potential network routes figure 9: construction and solution of optimisation model with screening of supply locations table 2 cost breakdown for connection selection scenarios (k€) (imp.=import, maint.=maintenance, ntwk.=network, equip.=equipment, obj. = objective function). tariff level boiler type imp. maint. tariffs ntwk. equip. obj. length gj/m 2.0x 1 mw 34 6 -67 8 17 -3 277 m 16.02 2.5x 1 mw 112 21 -281 52 58 -37 1814 m 8.03 3.0x 1 mw 165 35 -496 92 90 -113 3191 m 6.84 2.0x 1x0.5 mw 33 3 -66 8 11 -10 277 m 16.02 2.5x 2x0.5 mw 102 18 -254 40 49 -46 1367 m 9.82 3.0x 2x0.5 mw 151 31 -455 77 79 -116 2680 m 7.49 122 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems costs include both the non-domestic boiler costs and the costs of heat exchangers and other required equipment within the buildings connected to the network. the minimisation problem) for the scenarios in figure 10, followed by those in figure 11. the distribution network and equipment costs are annualised costs. equipment district heat tariff 2.0x 277 m 16.02 gj/m 2.5x 1814 m 8.03 gj/m 3.0x 3191 m 6.84 gj/m 1 mw boiler 1 mw boiler designed network length linear heat density of connected loads 1 mw boiler figure 10: impact of district heat tariff on connections with single supply location (numbers in lower right of each scenario indicate tariff level, network length and heat density) district heat tariff 2.0x 277 m 16.02 gj/m 1x0.5 mw boiler designed network length linear heat density of connected loads 2x0.5 mw boilers 2.5x 1367 m 9.82 gj/m 3.0x 2680 m 7.49 gj/m 2x0.5 mw boilers figure 11: impact of district heat tariff on connections with two supply locations (numbers in lower right of each scenario indicate tariff level, network length and heat density) international journal of sustainable energy planning and management vol. 21 2019 123 kamal kuriyan and nilay shah shape. the high initial system values in both figures show that the screening procedure described at the beginning of section 4 identifies supply locations in areas with higher value connections. 4.2. technology selection with combined heat and power generation this section illustrates the use of the technology selection features of the model to optimise scenarios with combined heat and power generation and consumption. a base “heat only” scenario is defined in which the heat demand at all 500 nodes must be supplied by a heat network, with the total heat demand being approximately 0.8 mw. this is compared with two scenarios which include power generation. the second “heat and electricity” scenario has electricity demands at each node in addition to the heat demands specified in the “heat only” scenario. the electricity demands are specified as 65% of the heat demands, for a total of approximately 0.5 mw, and can be satisfied either by electricity imports from the grid or local power generation. the third “electricity exports” scenario has the same heat demands as the “heat only” scenario, no internal electricity demands, but electricity can be exported to the grid. all three scenarios are optimised with a 1 mw natural gas boiler, 0.135 mwe/0.22 mwth small chp, 0.5 mwe/ 0.675 mwth medium chp, and a 1.0 mwe/1.03 mwth large chp available as potential supply choices. single representative values of the electricity import and export prices were used here (see appendix 2 for sources). this is due to the low temporal resolution of the combined objective function is the sum of the operating and investment components listed in the previous five columns. the second set of scenarios in figure 11 shows the results with 0.5 mw boilers deployed in up to two locations. the second location makes it possible to supply a second cluster of loads without connecting through an intermediate area with a lower heat density, improving the economic performance of the heat network. further insight can be obtained from an analysis of the system value from incremental investments in the distribution network. the system value svk at each iteration k, calculated using the procedure described in section 3.4, is plotted against the corresponding capital expenditure vmkcapex . figure 12 shows the system values for the scenarios with a single supply location, while figure 13 shows the system values with two supply locations. the plots for the higher tariffs in figure 12 have a local maximum in the middle of the plot. at investment levels below this point, there is insufficient capital to construct a heat network from the supply location in the central area to the top right corner in the heat map. the intervening area contains low value connections where the heat revenues are insufficient to recover the added investment costs. these are included in the solution only at higher investment levels where the revenues from higher value connections from the top right corner can be used to offset the additional costs of building a network through this area. with two supply locations there is no need to bridge these low value locations and the system value plots show a more regular 0 0.5 1 1.5 2 2.5 0 50 100 150 200 s y s te m v a lu e capital cost (k€) 1mw 2x 1mw 2.5x 1mw 3x figure 12: system value of distribution network with single supply location 0 0.5 1 1.5 2 2.5 3 0 50 100 150 200 s y s te m v a lu e 1x0.5 mw 2x 2x0.5 mw 2.5x 2x0.5 mw 3x capital cost (k€) figure 13: system value of distribution network with two supply locations 124 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems together with a small amount of imports, while heat is supplied to the heat network by the chp and a nondomestic boiler. the medium chp is selected as the supply technology as its capacity (0.5 mwe) provides the closest match to the level of internal electricity demands, substituting for more expensive electricity imports while also supplying much of the heat demand. in the third “electricity exports” scenario a large chp unit is selected to supply all of the heat demands, while the generated electricity is exported. in this case the operating level of the large chp is curtailed below the 1 mwth maximum because the internal heat demands only amount to 0.8 mw. the revenues from electricity exports reduce the overall operating costs for the heat network. these scenarios illustrate the capability of the model to select the technology type depending on the specific requirements and economic criteria. the results in figure 14 are for scenarios where all the heat loads must be satisfied. an analysis with optional connections is shown in figure 15. the supply technology is a medium chp unit and the heat tariff is 2.5 times the gas price. the length and heat density of the designed network are similar to those for a single 1 mw boiler with a 3x heat tariff (figure 10, right). chp operation is infeasible with a 2x heat tariff since the connected heat loads are below the minimum part load operating level for the chp. no additional connections are found with a 3x heat tariff as the chp is already operating at its maximum capacity. model used in this paper. a more detailed approach to estimating electricity market prices, reflecting seasonal and diurnal variations, may be used in models with a higher temporal resolution [30]. figure 14 shows the technology types selected to supply the heat demands and electricity demands in the three scenarios. in the base “heat only” scenario a 1 mw natural gas boiler operating at 80% of its capacity is used to supply all the heat demands. in the second “heat and electricity” scenario, a medium chp unit is selected to supply the bulk of the electricity demands (0.5 mw) 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 heat only heat and electricity electricity exports d is tr ic t h e a t su p p lie d ( m w ) district heat supply large gaschp medium gaschp small gaschp nondomboiler nondomhp imports 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 heat only heat and electricity electricity exports e le ct ri ci ty s u p p lie d ( m w ) electricity supply large gaschp medium gaschp small gaschp nondomboiler nondomhp imports figure 14: technology selection for combined heat and power scenarios: heat supply (top), electricity supply (bottom) 2.5x 3027 m 7.01 gj/m 1x0.675 mwth figure 15: selection of connections with medium chp and electricity exports international journal of sustainable energy planning and management vol. 21 2019 125 kamal kuriyan and nilay shah heat pumps in district heating considering variations in cop with temperature is given in [37]. 4.4. summary of results to summarise, the scenarios in section 4.1 illustrates the interaction between the heat price and the economic viability of the heat network. higher heat prices make it economical to expand the network to additional locations. with a single supply location the network has to be built through an area with unprofitable connections, whereas this area may be bypassed with two supply locations. figure 16 shows the system values for the distribution network with a single medium chp. the range of the plot is bounded by the operational limits of the chp and consequently does not show the same pattern as the system value plot for a single boiler (figure 12). due to the lower bound on part load chp operation, the distribution network must be large enough to cover both the central and top right areas in the heat map. at investment levels below the values shown in figure 16, the operation of the chp would be infeasible due to insufficient demand. 4.3. technology selection with emissions reduction target the base scenario with 500 nodes supplied by a 1 mw boiler considered in the previous section produces greenhouse gas emissions of 1.428 kt per year. figure 17 shows the results compared to scenarios with targets of 30% and 40% reduction in emissions. these scenarios include a 0.5 mw heat pump in the technology selection. the heat pump is selected in both emissions reduction scenarios, with a small chp in the 30% reduction scenario, and a medium chp in the 40% reduction scenario. the district heating is supplied by a combination of chp, heat pump and boiler. the capital costs, operating costs and ghg emissions are shown in the table below. the heat pump cop was taken to be 2.897 and the emissions factor for natural gas was taken as 0.18416 kg/kwh (see appendix 2 for sources). the heat pump cop value is for an ammonia based ground source heat pump with source temperature of 12 °c and sink temperature of 90 °c as reported in [35], based on the methods and tools described in [20]. a more detailed approach to modelling and optimisation of large-scale 0 0.5 1 1.5 2 0 100 200 300 s y s te m v a lu e capital cost (k€) medium chp 2.5x figure 16: system value of distribution network with medium chp 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 no constraint 30% reduction 40% reduction d is tr ic t h e a t su p p lie d ( m w ) district heat supply large gaschp medium gaschp small gaschp nondomboiler nondomhp imports 0 0.05 0.1 0.15 0.2 no constraint 30% reduction 40% reduction e le ct ri ci ty s u p p lie d ( m w ) electricity supply large gaschp medium gaschp small gaschp nondomboiler nondomhp imports figure 17: technology selection with emissions reduction targets: heat supply (top), electricity supply (bottom) 126 international journal of sustainable energy planning and management vol. 21 2019 a combined spatial and technological model for the planning of district energy systems a series of test cases based on a screening dataset with 500 nodes have been presented to illustrate the main features of the model. preliminary testing showed that considering all 500 nodes as potential supply locations resulted in very slow convergence towards an optimal solution and so a screening procedure was used to identify a limited set of supply locations for the test cases. the results for the test cases show that a mix of technology types, such as heat pumps and combined heat and power units, may be required to achieve emissions reduction targets, and that it is important to consider the interactions between heat and power supply on both environmental and economic indicators. the system value measure, which has been proposed as a method for analysing the impact of storage and renewable technologies in power systems [17, 18], has been adapted to quantify the impact of incremental investments in the heat network. this measure provides a means for visualising the overall effect of heat prices, supply technology type and location, and increasing investment levels on the economics of the heat distribution network. an alternative implementation of the model described in this paper, written in python using the pyomo modelling language [40], has been integrated within a browser based application which is being tested by city partners within the thermos project [41]. the prototype application includes spatial datasets compiled in collaboration with the city partners which can be used to construct the spatial framework required by the model. further development of the prototype application and model is being undertaken in response to feedback from the city partners on the features and performance of the integrated application. this paper outlines a broad conceptual framework for modelling district energy systems. directions for future development include improving estimates of infrastructure and operational costs, and developing solution methods for larger problems. currently, the cost and capacity of potential network links must be estimated beforehand and provided as inputs to the model. one alternative is to select from a range of discrete pipe sizes [19], but this could be computationally demanding if it is directly integrated within the overall system optimisation. another alternative, which would be less computationally intensive, is to use cost estimates that include both a fixed component and a linearised variable component [37]. similar functions, or piecewise linear functions, could also be used in place of discrete values section 4.2 examines different scenarios involving combined heat and power generation. these show it is possible to obtain an economic benefit either by substituting local power generation for electricity imports, or by exporting to the grid. the scenarios in section 4.3 show that significant emissions reductions can be achieved by using combined heat and power generation and heat pumps. overall, the results illustrate how the model can be used for both spatial planning and technology selection. 5. discussion and conclusions a combined spatial and technological model of district energy systems formulated as a mixed integer linear program (milp) has been described in this paper. the model implements a unique combination of map-driven modelling, detailed optimisation of the distribution network, and selection of supply technologies (figure 1). in contrast with empirical methods that are based on aggregate measures such as linear heat density [2,11], the decisions are based on a detailed optimisation of the capital, operating and environmental costs of supply technologies and individual connections within the heat network. the spatial framework for the model, which is similar to the graphical representation proposed by bordin et al. [3], makes it possible to integrate the model within a map-driven application, and to identify subsets of buildings within a neighbourhood where it is economically viable to construct a network, and conversely to exclude locations where the heat revenues would be insufficient to recover the investment in the heat network. this paper further analyses the impact of supply locations and heat prices on the selected structure of the distribution network. the rtn representation, which has been applied in diverse infrastructure planning applications [22-26], makes it possible to evaluate multiple supply technology types including heat pumps, chp and boilers, and to construct scenarios with combined heat and power generation. the model can be used with environmental objectives and constraints. table 3: costs (k€) and emissions (kt/year). scenario capital cost operating cost total emissions no constraint 229 232 462 1.428 30% reduction 313 202 515 0.975 40% reduction 345 218 564 0.850 international journal of sustainable energy planning and management vol. 21 2019 127 kamal kuriyan and nilay shah acknowledgments this work has received funding from the european union’s horizon 2020 research and innovation programme under grant agreement no. 723636 (thermos). the test cases used in this paper were provided by the centre for sustainable energy, bristol (cse). cse is also developing the integrated map based planning application. we would also like to thank the thermos project partners for their contributions in identifying the model requirements and developing the model specification. references [1] persson u, moller b, werner s, heat roadmap europe: identifying strategic heat synergy regions, energy policy 74 (2014) pages 663-681. https://doi.org/10.1016/j.enpol. 2014.07.015 [2] netterberg h, isaksson i, district heating in slough. bsc thesis, halmstad university, halmstad, 2009. 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period tm qmax,r maximum transportation rate for resource r (mw) tariffj,r,t,m tariff for resource r produced by technology j in period t (kgbp/mwh) ver,m export metric for resource r (kgbp/mwh, t co2e/mwh) vir,m import metric for resource r (kgbp/mwh, t co2e/mwh) vijj,m investment metric for technology type j (kgbp) vyd,m investment metric for network to transport resource d (kgbp/m) vyld,i,i1,m investment metric for link to transport resource d from i to i1 (kgbp) variables: expr,i,t,tm export of resource r from node i in period (t,tm) imr,i,t,tm import of resource r into node i in period (t,tm) invj,i,tm number of units of technology type j added in node i in major period tm nj,i,tm number of units of technology type j available in node i in major period tm pj,i,t,tm production rate of technology type j in node i in period (t,tm) qr,i,i1,t,tm flow of resource r from node i to node i1 in period (t,tm) rsr,i,t,tm surplus of resource r in node i in period (t,tm) sati demands in node i are satisfied yd,i,i1,tm network link to transport resource d from node i to node i1 exists in major period tm objective function expressions: tcm,tm transportation cost pcm,tm production cost icm,tm import cost ecm,tm export cost trm,tm tariffs eqm,tm equipment cost nwm,tm network cost mcm,tm maintenance cost vmm,tm overall cost international journal of sustainable energy planning and management vol. 21 2019 131 kamal kuriyan and nilay shah appendix 2: sources for economic and environmental parameters table 5 sources of parameter values parameter source network cost per unit length capital cost typical benchmarks normalised to non mwh metrics [31] import price of gas prices of fuels purchased by non-domestic consumers in the united kingdom (including the climate change levy), medium consumer, 2017 [32] import price of electricity industrial electricity prices in the eu for medium consumers (including environmental taxes and levies) [32] export price of electricity wholesale electricity prices [33] emissions factor for electricity methodology paper for emission factors, base electricity generation emission factors [34] emissions factor for natural gas conversion factors 2017 condensed set, gaseous fuels [34] investment cost for non-domestic boilers hypothesis used to model non domestic boilers [35] investment cost and operational parameters for chps hypothesis used to model chps [35] investment cost and operational parameters for heat pumps hypothesis used to model heat pumps [35] _goback thermos international journal of sustainable energy planning and management vol. 25 2020 95 1corresponding author – e-mail: klara.reder@iee.fraunhofer.de international journal of sustainable energy planning and management vol. 25 2020 95–108 abstract energy scenarios assist decision making regarding the transformation of the energy supply system. a multitude of scenarios exists in various formats. thus, for scientists and policy stakeholders alike, it remains difficult to distinguish and compare scenario data. hence, the aim of the project szenariendb is to establish an energy scenario database containing data in comparable and machine-readable format. szenariendb will do so by extending the openenergyplatform (oep). to ensure that the extension fulfils the requirements of the modelling community, we conducted an online survey. we asked the participants about what they expected of an energy scenario database. along with input from expert meetings and github issues on that topic, we derived user requirement from the answers. in total, we identified 69 requirements. out of these, around 44% were considered as very urgent. hence, we conclude that there is a great need for the development of a consistent energy scenario database. to tackle the requirements we grouped these into twelve categories: input and output, data review process, bug-fixes, documentation, factsheets, features, functions to modify data, layout, metadata, ontology, references, and other. each category is resolved according to its intrinsic properties. 1. introduction the transformation of the energy supply system is complex and the identification of impacts is influenced by the results of scientific reports based on energy scenarios. in general, a scenario is used to express that a future condition or development of a certain aspect is seen as “possible” [1]. energy scenarios describe possible future developments in the energy supply system and e.g. may include effects on greenhouse gas emissions. they can aid the identification of optimal or appropriate paths of development and serve as a factual basis for political decision-making [2]. there are several kinds of scenarios, from which two types are popular in the field of energy scenarios. these types are called “forecasting” and “backcasting”. the type of “forecasting” generates exploratory scenarios that take a look from today into the future. in these types of scenarios, no certain goal or plan is predetermined, where a development shall go. whereas in “backcasting” a target scenario is created with given future conditions, looking for a development that reaches these conditions [1]. nonetheless, the term scenario is not defined and thus may have different implications depending on the person using it. hence, this leads to less transparency and comparability when working with multiple scenarios. several studies and energy scenarios are published each year, usually by research institutes on behalf of public authorities, companies or civil society identification of user requirements for an energy scenario database klara redera1, mirjam stappela, christian hofmannb, hannah försterc, lukas emelec, ludwig hülkb and martin glauerd a fraunhofer institute for energy economics and energy system technology (iee), königstor 59, 34119 kassel, germany b reiner lemoine institut, rudower chaussee 12, 12489 berlin, germany c öko-institut e. v., schicklerstraße 5-7, 10179 berlin, germany d otto-von-guericke-universität magdeburg, universitätsplatz 2, 39106 magdeburg, germany keywords: user requirements; energy scenarios; open source; open data; openenergyplatform url: http://doi.org/10.5278/ijsepm.3327 mailto:klara.reder@iee.fraunhofer.de http://doi.org/10.5278/ijsepm.3327 96 international journal of sustainable energy planning and management vol. 25 2020 identification of user requirements for an energy scenario database organisations [3] [4]. for stakeholders and even the energy modelling community it has become increasingly difficult to compare different scenarios, as methods and objectives usually differ and assumptions may be expressed in different ways [1]. even the reconstruction of a single scenario can be complex or impossible, since assumptions are often not published in full detail [5], thus lacking transparency. furthermore, the collection and processing of input data for scenarios has become more time consuming and costly. this lack of transparency fosters distrust, but trust in this research does matter because it contributes to policies and strategic decision making on energy, as [6] explicates. some approaches were made to meet the need for transparency and comparability in the energy system modelling and scenario community. a transparency checklist was developed by [7], to improve the quality and traceability of scenario studies, for example. other studies focus on the topic of transparency by open access of data and models [8] [9] [10] and data enrichment of those [11]. in our project szenariendb, we focus on transparency and comparability of (complex) energy scenarios. the project szenariendb aims to create a database for energy scenarios as an extension of the openenergyplatform (oep) [12] [13], an open source platform for energy data. here, scenario data of several studies will be uploaded to the database, freely and easily accessible under an open license. they can serve as a reference and help to establish more transparency and comparability. in addition, it is part of the project to ensure the maintenance of the database even after the project has ended. we assume that easily accessible data from the database via a user-friendly interface will increase accessibility as well as scientific exchange. this will contribute to reducing the necessary effort for model comparisons and sensitivity analyses. furthermore, the data platform has potential to facilitate scientific and political decision making due to a generally improved level of transparency and comparability. finally, in the ideal case, the platform will contain the most recent developments in scenario generation and modelling. the development of the oep was started in the research project open_ego, by the implementation of an open and community driven energy database. the database is based on a postgresql database that is made available via a web-interface on the oep [12] [14]. the main focus is to exchange and provide open data via an online data portal which could be used by the project partners and across research projects [15]. furthermore, the oep includes the possibility to version-controlled data sets and assign rich meta data to data sets. an application programming interface (api) allows secure and documented interactions and data exchange. many python-based tools use sqlalchemy to communicate with existing databases that also allows the usage of different database interfaces by so-called dialects. in order to ease the use of the oep the oedialect [12] has been developed to enable the use of sqlalchemy structures to access the data available on the oep. in european energy systems research several open source modelling approaches emerged. these include projects like scigrid [16], oemof [17] , genesys [18], open_ego [12], opsd [19], pypsa-eur [20] and others. in the past, there have been several approaches to distribute open access energy data. in 1991 the project ikarus [21] set up a free database. despite a considerable demand the approach failed. this was due to technical and conceptual restrictions such as the distribution of data via hardware and a proprietary database management system. another open database from the early days is openei [22]. openei is based on the ckan system of the open knowledge foundation. the ckan system is also used by the wold bank database that focuses on developing countries. ckan is in widespread use, but during the initial assessment of possible frameworks it did not use modern web frameworks such as flask or django for the web architecture and was still based on python2 and pylons. the migration of ckan to a more modern python3and flask-based foundation is currently in progress. to address such shortcomings, the oep was developed as a django based open-source application [23]. this gives the oep a flexible foundation which can be extended easily and independently from data specific aspects. further recent projects include the european union project openentrance which aims to develop, apply and disseminate an open, transparent and integrated modelling platform for target scenarios in 2020, 2030 and 2050. the database itself will be hosted by the international institute for applied systems analysis (iiasa) [24]. the past approaches to distribute open access energy data show that it is important to include the user requirements, in order to ensure the success of such a database. establishing user requirements is a common method to capture the most important international journal of sustainable energy planning and management vol. 25 2020 97 klara reder, mirjam stappel, christian hofmann, hannah förster, lukas emele, ludwig hülk and martin glauer 2. methods to generate user requirements user requirements can be established via different methods, such as interviews, comparison to other systems, user observation at the point of application, and more [25]. our approach for developing user requirements for the energy scenario database is based on an online survey, on expert meetings as well as on github issues. the details of this approach are described in the following. in the course of this study we conducted an online survey among potential users of our database from the energy scenario and modelling community. we chose this method because of its high accessibility to the target group, as well as the relatively modest preconditions regarding time and cost [28] [29]. our main research question was: ’what are the user requirements for an open-source database containing energy scenarios?’. the online survey consisted of two parts. the first part considered the day-to-day work of the target group. the second part focused on features and criteria a scenario database should ideally fulfil from their point of view. a complete list of all questions is available in appendix table a1. we invited the target group to take part in the online survey via several channels that focus on energy modelling and scenario topics: • e-mail list of strommarkttreffen (www. strommarkttreffen.org) • e-mail list of openmod initiative (www. openmod-initiative.org) • posting on the platform of forschungsnetzwerk energie – systemanalyse (research network energy system analysis) (www.forschungsnetzwerkeenergie.de/systemanalyse) • internal e-mail list of collegues and target persons at fraunhofer iee • internal e-mail list of collegues and target persons at öko institute • internal e-mail list of collegues and target persons at reiner lemoine institute (rli) • internal e-mail list of collegues and target persons at projektträger jülich (ptj) • internal e-mail list of collegues and target persons at federal ministry of economic affairs and energy (bmwi) • e-mail list of the vdi richtlinien-gruppe zu energieszenarien (vdi guidelines group on energy scenarios) we derived user requirements from the online survey’s multiple-choice answers and free text comments features, functionality and requirements for a software development project [25]. stakeholders and users have individual requirements for a particular software. user requirements provide the basis for specification sheets that allow meeting these needs. considering user requirements during the software development stage requires relatively little effort but the effect on the final result is often significant [26]. the institute of electrical and electronics engineers [27] defines a requirement as: 1) a condition or capability needed by a user to solve a problem or achieve an objective. 2) a condition or capability that must be met or possessed by a system or system component to satisfy a contract, standard, specification, or other formally imposed documents. 3) a documented representation of a condition or capability as in (1) or (2). therefore, it is necessary to capture the user requirements of the targeted stakeholders in order to develop an energy scenario database that will be accepted and used by the target group. the objectives of the energy scenario database are: • provision of access through an api regardless of the system or programming language • versioning of the data, including old results, correction of errors, addition of scenarios and other • open licences (cc0) for all uploaded scenario data • serving as a role model for similar projects of other disciplines and regions • triggering a broad discussion on standards for the exchange on data, code and description of models and scenarios the novelties of our database compared to existing databases in the energy sector are: • helping to reduce the expenses in energy modelling due to easy access of existing energy scenarios • serving as a central repository of consistent and, as far as possible, complete energy scenario data • fostering the comparability of scenarios and thereby improving the support of policy decisions • creating an ontology with open access in the field of energy modelling in the following are the methods and results described how we generated user requirements for an energy scenario database. http://www.strommarkttreffen.org http://www.strommarkttreffen.org http://www.openmod-initiative.org http://www.openmod-initiative.org http://www.forschungsnetzwerke-energie.de/systemanalyse http://www.forschungsnetzwerke-energie.de/systemanalyse 98 international journal of sustainable energy planning and management vol. 25 2020 identification of user requirements for an energy scenario database stories and other issues were raised by people who don’t participate in the project. moreover, several of these issues described similar problems, as well as problems addressed in the survey. overlapping issues and requirements were therefore merged together. furthermore, some issues were very specific while others were very broad. issues were filtered and aggregated into subsets, preserving the initial intentions, but embedding them into a bigger picture; e.g. requested bug fixes were grouped together, as well as calls for documentation, while some time consuming feature requests, such as a global search function, were discarded. this resulted in 27 cumulative requirements condensed from github. in order to merge these different sources of user requirements, we removed duplicate requirements. we classified each requirement according to the following criteria: • estimated time for completion • urgency • overall estimate • category time and urgency were assessed roughly, using the t-shirt size estimation method [33]. we defined the sizes as follows: s = small/one day/not urgent, m = medium/ one week/somewhat urgent and l = large/one month/ very urgent. the overall estimate rates the importance of a requirement. we jointly rated requirements, following the german school grade system from 1 to 6, with 1 being very important and 6 being insufficient. finally, requirements were classified into one of twelve categories: input and output, data review process, the participants were able to provide, too. these user requirements were phrased so that they followed the structure of user stories, i.e. “as <a type of user >, i want <goal>, [so that some reason]” (<.>required, [.] optional) [30]. for example: as a user i would like to use a wizard to upload .csv files in order to use the szenariendb without any technical precognition. all user requirements had to satisfy the criteria in table 1 [31] [26]. another common method used to define user requirements is called the invest method [32]. the acronym stands for independent, negotiable, valuable to the customers, estimable, small and testable user stories. all of the invest criteria but “negotiable” are included in the criteria listed in table 1. negotiability is attempted however, by publishing all gathered requirements in the oep’s online repository and by writing this paper to hopefully reach more people who can generate feedback and thereby improve the database. further user requirements were derived in meetings and web conferences with experts from within the project who discussed one topic at a time. these topics were ‘what metadata should be included?’, ‘how to reference original data?’, ‘how to review uploaded data?’ and ‘requirements for tutorials of the oedialect’. finally, the issues on the oep github repositories were used as another base for user requirements. since the repositories are constantly changing, we set the cutoff date for consideration to be the 29th of october 2018. we collected 147 issues from github in total. these issues did not satisfy our user requirement criteria mentioned above. in some cases these issues were opened before we could decide on the method of user table 1: criteria applied for user requirements [29] [24] criteria description estimation of priority the estimate arranges user requirements by priority. completeness completeness requires that all aspects of the requirement are formulated without implicit assumptions. documentation each user requirement shall have a documentation on where the requirement originates from and the evolution to the final formulation. correctness user requirements should be correct and accepted by the stakeholders to be necessary. clarity the user requirements are written in non-technical understandable text so that everyone involved, from stakeholder to developer, understand what is meant. consistency user requirements are consistent among each other. that means that no competing interests between user requirements exist. verifiability all user requirements can be tested to ensure that each user requirement is functioning. uniqueness user requirements have to be unique in the sense that they must describe only one issue at a time. action user requirements should describe an action, hence some type of functionality which can be used by the person who requires it. international journal of sustainable energy planning and management vol. 25 2020 99 klara reder, mirjam stappel, christian hofmann, hannah förster, lukas emele, ludwig hülk and martin glauer api. out of the participants, 26% were willing to implement a port without any preconditions. the majority of participants (52%) require highly resolved scenario data, e.g. hourly time series for one year, spatial resolution in scale of kilometres. only 19% use data with a low level of detail, such as aggregated values for countries or years. furthermore, quality of data (52%) is most important to the participants followed by quantity of data (25%) and user friendliness of the platform (23%). the participants were asked to assign different levels of importance to six features. figure 1 shows the results in decreasing order: ’filter data’, ’description of metadata’, ’text search’, a ’glossary/ontology’, ’preview of data’ and ’ad-hoc visualization’. the possibility to ’filter data’ was selected most often (70%) as being indispensable. the features ’description of the metadata’, ’text search’, ’glossary/ontology’ and ’preview of the data’ are seen as indispensable or quite important by the majority of participants. the feature ’ad-hoc visualization’ was considered by most participants merely as nice-to-have (60%). only very few participants selected that a feature was a waste (≤7%) or i don’t know (<4%). the preferred formats for uploads and downloads on such a database were interrogated. the participants had the possibility to choose multiple formats. they predominantly favored .csv, .xlsx, api and table. we further prompted the participants to prioritise different criteria into ranked classes from 1 to 6 (figure 2). a ‘list of references for all datasets’ was most often (56%) selected bug-fixes, documentation, factsheets, features, functions to modify data, layout, metadata, ontology, references and other (further explanation in section 3.3). categorisation was implemented in order make sure that all different kinds of requirements are addressed. a categorisation also facilitates the distribution of tasks with different capabilities in the working team. the final requirements with the corresponding estimated time, urgency, overall estimate and category served as input for the specification sheet. 3. results and discussion the results and discussion are presented together in this chapter, starting with the online survey in section 3.1. it is followed by the evaluation of the specification sheet in section 3.2 and concludes with a description on how the requirements of the specification sheets built the energy scenario extension of the oep in section 3.3. 3.1. analysis of the online survey the online survey was started by 177 participants and fully completed by 101 participants. the following numbers all refer to those participants who completed the questionnaire. we received the first response on 12th of june 2018 and closed the survey on 27th of august 2018. about 90% of the responses were given between 13th of june and 10th of july. most participants work in research institutes (71%) and are involved in scenario generation as well as in making use of scenarios created by others (69%). only 6 participants do not work with energy scenarios at all. about 56% frequently use external databases, such as eurostat, openstreetmap and others. only 11% do not use databases at all. the survey revealed a large interest in the topic, especially by the scientific energy modelling community. participants stated that they are willing to use energy scenarios from an energy scenario database like the oep (96%) and also to publish their own scenarios there (92%). however, a precondition for publishing scenarios for many participants (41%) is financing. obstacles in contributing to such a database lie in the difficulty to provide open-source licensing of data or in the commercial nature of scenarios. the participants were asked about their willingness to implement an interface between oep and their models. the majority (53%) was willing to do so under certain conditions. in the free text these conditions included for example: simple and intuitive api and little effort for the implementation of the 100 80 60 40 20 0 indispensable quite important nice to have waste i don’t know % fil te r d at a de sc rip tio n of m et ad at a te xt s ea rc h gl os sa ry /o nt ol og y pr ev ie w o f d at a ad -h oc v is ua liz at io n figure 1: assignment of different features to the categories indispensable, quite important, nice to have, waste and i don't know 100 international journal of sustainable energy planning and management vol. 25 2020 identification of user requirements for an energy scenario database the online survey. from the participants 36% selected all six possible answers, and 24% and 23% selected five and four answers out of six, respectively. this shows that not a single answer explains the term ’scenario’ and it is hard to find a consistent definition within the community. hence, we derived that the energy scenario database has to offer the possibility to include data for all of the six answers above and arbitrary permutations of a subset. this definition is especially helpful for the ontology which ensures that everyone is using the same terminology and hence fosters transparency and comparability. 3.2. specification sheet evaluation in total, 69 user requirements were derived from the online survey, expert discussions and oep github issues. these requirements create the specification sheet. we examined and compared the requirements according to the methods in section [methods]. we found that the requirements do not compete with one another. the only requirement which has an overlap is create a discussion space for tables and schemas. it does not compete with another requirement but with the openmod wiki [34] and openmod forum [35] . despite this slight overlap in topic, a discussion forum for tables and schemas is very specific and is not covered by the openmod wiki and openmod forum, which is why we kept this requirement. however, such a forum may have topics and discussion similar or duplicates to those of the openmod wiki and openmod forum. moreover, in our analysis we did not accept fifteen requirements because • the functionality of the issue is already implemented. e.g. as a user i want the name of the homepage to be displayed high up on google (1-5), so that i don’t confuse the homepage and don’t have problems finding it. • the functionality of the issue was ranked unimportant or requested by only one person of the online survey, and posed huge implementation/ conceptual work which was disproportionate to the importance of the functionality. e.g. as a user i would like to work with multidimensional tables (like eurostat) to assign complex values. the evaluation of the specification sheet showed that 44% of the user requirements were considered very urgent and 26% as not urgent. this implies that there is a great need for a scenario database and its specific requirements. the estimation of urgency is furthermore to have the highest priority (class 1). furthermore, 24% found ‘quality check of new scenario data by database crew’ to have the highest priority, about 40% see it the second highest class 2. the criteria ‘easy and intuitive upload of your own scenarios’ and ‘speed’ have a similar distribution. for these two criteria the participants selected most often a class 3 to 4 (between 19-34%) and less often a class with high or low priority. the criteria of least importance are the ‘possibility of processing data directly in the database’ and ‘unit conversion in the database’ (27% and 33% in class 6 respectively). the expert meetings revealed that the term ‘scenario’ may be understood quite differently, hence a question was included in the online survey to find out what the participants understood by ‘scenario’. a list of possible scenario elements was suggested, where the participants could choose multiple answers. the possible answers were: ‘general framing parameters and assumptions (e.g. geographical and temporal scope, ...)’, ‘scenario type (e.g. extreme scenario, objective scenario, ...)’, ‘model input data’, ‘justification/explanation on assumption’, ‘modelling parameters’, ‘model output data’ and ‘other [free text field]’. all of the above answers apart from ‘other’ were selected with similar shares (around one sixth each) but the distribution between the different answers varied depending on the participant answering 100 80 60 40 20 0 order by priority in classes 1 2 3 4 5 6 list of references for all datasets quality check of new scenario data by database crew easy and intuitive upload of your own scenarios speed possibility of processing data directly in the database unit conversion in the database % figure 2: different criteria for a scenario database arranged by priority in classes 1 to 6 international journal of sustainable energy planning and management vol. 25 2020 101 klara reder, mirjam stappel, christian hofmann, hannah förster, lukas emele, ludwig hülk and martin glauer 3.3. integration and extension of the oep the requirements for an open database are very diverse. to take this into account we have twelve categoies: • input and output • data review process • bug-fixes • documentation • factsheets • features • functions to modify data • layout • metadata • ontology • references • other these twelve categories enable a structured integration of the user requirements we identified. figure 4 shows a schematic overview on the work flow of users interacting with the oep. the work flow is as follows: an energy scenario developer or modeller generates e.g. scenario data, which is uploaded into the oep (tile: data) and correct metadata is supplied (tile: metadata). the developer or modeller also completes the factsheets (tile: factsheets) which are distinguished into model factsheets and scenario factsheets. the model factsheets contain information on how the model works and the scenario factsheets contain information on how the scenario is characterised. the factsheets and the metadata are coupled to the ontology (tile: ontology) which ensures that the same terminology is used throughout the oep. the uploaded scenario may now be downloaded (category: input/output) by other energy modellers. this enables them to use the data for their own modelling exercises. furthermore, users may participate in the reviewing process for data, which is designed to allow for peer review. ’inputs and output’ are managed via an api which is programmed in python. this allows that users only need to invest in establishing a routine on how to interact with the oep once and can then easily use this routine repeatedly. since not all users indicated that they would like to use an api, we identified the need for an upand download wizard as one of the major requirements in our specification sheet. the use of the wizard shall be intuitive while using the api might be more challenging for first time users. hence, to fulfil the category documentation written tutorials which are presented in jupyter notebooks will be provided along with video tutorials on helpful in the upcoming project management. very urgent issues can be worked off first. for the implementation of all user requirements, we roughly estimate 24 months, originating from 16 user requirements with the duration of one month, 27 of one week and 25 of one day. hence, together with the urgency this gives very fast improvement possibilities: to first work off the issues with short time estimation and high urgency. most user requirements (20%) fall into the category input and output, i.e. upload and download of data, and in the category feature (20%) (figure 3). third most frequent category is metadata (16%), followed by oep layout (12%), functions to modify the dataset (9%), documentation wanted (9%) and others which are below 5%. interestingly, the user requirements, while explicitly meant to reflect on energy scenario needs, did not end up being very specific for the energy scenario domain. most requirements would be the same for e.g. a water quality database. generally, the compiled requirements should hold true for any database that stores modelling input and output data and may contain georeferenced and temporal data. therefore, an established energy scenario database may be of interest for other disciplines as well. our chosen approach is thus transferable to other disciplines of research, too. all user requierements can be accessed at github at https://github.com/openenergyplatform with the tag ‘specification sheet’. fe at ur e m et ad at a o e p l ay ou t fu nc tio n to m od ify d at as et p er ce nt ag e 20.0 17.5 15.0 12.5 10.0 7.5 5.0 2.5 0.0 io d oc um en ta tio n w an te d r ef er en ce s d at a r ev ie w p ro ce ss b ug fix es o th er o nt ol og y fa ct sh ee ts figure 3: percentage of user requirements grouped into twelve categories https://github.com/openenergyplatform 102 international journal of sustainable energy planning and management vol. 25 2020 identification of user requirements for an energy scenario database possibility to create a standardised language for a domain of interest: it is a system of concepts including the descriptions of how these concepts relate to one another. the ontology created for the oep harmonises and defines terms and concepts used throughout the oep, for example in factsheets and the metadata. in the course of the szenariendb project, the current ontology on the oep is extended by terminology specific to energy scenarios. this includes information needed for target scenarios, temporal and regional concepts, sector concepts, modelling assumptions and constraints. the user can also upload input data and in that case set ’references’ to individual data tables and cells. these references can be used to include the uploaded data in linked open data schemes (lod) and make them more accessible to potential users and allow the integration of other sources, e.g. by concepts defined in the ontology. the requested ‘features’ (category: features) for the energy scenario extension of the oep are of different kinds, but many refer to preview functionality such as the requirement: as a user, i would like to use the preview function to display data, for example as a table, in order to be able to evaluate the content of the scenarios. the ‘data review’ process is planned to include a badge system like bronze, silver and gold. other users of the oep, besides the person contributing a dataset, may rank the dataset and comment on missing or questionable entries. this will ensure that on the one hand the datasets are complete (including metadata, references, licences etc.) and on the other hand that the uploaded the details of the api and also the upload/download wizard. documentation in form of tutorials will also be provided for all other important features of the oep. how the data is displayed in the oep provides the user with several ‘functions to modify the data’ such as filtering data. these functions are all in separate github issues due to their independence of each other. these function will ensure an easy usability of the data. these changes are often supported by layout changes (category: layout) to enhance usability. the current ‘metadata’ format implemented in the oep will be extended by a standardised, energy scenario specific metadata string. this string includes a human readable description, as well as machine readable name, spatial and temporal context, references to sources and licenses, a list of contributors, a detailed description of the data structure, information on conducted data reviews and additional metadata keys that help to evaluate, compare and contextualise any uploaded dataset. the oep ’factsheets’ are a standardised collection and presentation of information about modelling frameworks, models and scenarios used in climate and energy system modelling. the use of interactive fields and pre-defined responses is designed to make it easy to add new factsheets and to filter for existing entries. the goal is to create a full set of linked factsheets (and datasets) to improve transparency. the current focus is on extending the scenario factsheets to the heterogeneous landscape of different energy scenarios and to link the information in the ontology. an ‘ontology’ provides the ontology data metadata factsheets api api figure 4: work flow of users uploading and downloading data to the oep international journal of sustainable energy planning and management vol. 25 2020 103 klara reder, mirjam stappel, christian hofmann, hannah förster, lukas emele, ludwig hülk and martin glauer categories give an overview on the main development areas. the geographic scope of the oep is currently germany. thus the target group for the survey had to originate from there. since the german energy system modelling community is relatively small, in turn was the sample size. once the oeps focus becomes more international, future surveys can be conducted; based on larger samples sizes. we assume that scientists in this research field will have similar user requirements on such databases, no matter where in the world they conduct their research. further limitations are given by the duration of the project. user requirements had to be selected so that they can all be worked of within the duration of the project. hence, further research includes • complex visualisation of data within maps (e.g. how to display polygons), • automatic identification of missing data in time series, • data review which is not only human based but also supported by artificial intelligence, • including multidimensional tables, • promoting the oep including the new energy scenario extension worldwide, • further promoting of the oep in general to ensure its use and usefulness. acknowledgements this research has been funded by the federal ministry of economic affairs and energy of germany as part of the project szenariendb (03et4057a-d). references [1] christian dieckhoff, hans-jürgen appelrath, manfred fischedick, armin grunwald, felix höffler, christoph mayer, and wolfgang weimer-jehle. zur interpretation von energieszenarien. schriftenreihe energiesysteme der zukunft, 2014. https://www.akademienunion.de/fileadmin/redaktion/ u s e r _ u p l o a d / p u b l i k a t i o n e n / s t e l l u n g n a h m e n / 1 4 1 2 0 3 _ energieszenarien_web_final.pdf [2] editha kötter, ludwig schneider, frank sehnke, kay ohnmeiss, and ramona schröer. the future electric power system: impact of power-to-gas by interacting with other renewable energy components. journal of energy storage, 5:113-119, 2016. http://doi.org/10.1016/j.est.2015.11.012 scenario data is correct and fulfils a scientific standard. the reviewers will be encouraged to participate by a ranking system of their profile similar to stack overflow. the more reviews they have done the more e.g. stars they get. the review functionality shall also include a commenting function, where comments can be up-voted or down-voted. the final two categories are ’bug-fixes’ and ’other’. bugs unfortunately always occur in a software development project, and have to be fixed. these can be of very different kind. either misspelled text on the web-page, links which are not working or features which are broken etc. the last category is ’other’ which contains all requirements which could not be included in the other eleven categories. this includes for example the requirement as a user, i want to access old versions of data if i accidentally entered something wrong. these requirements will be tended to one by one. 4. conclusion our main research question was: ’what are the user requirements for an open source database containing energy scenarios?’. we addressed this by an online survey as well as by expert meetings and github issues. our main findings were: • the modelling community has a high interest in an energy scenario database. • they are willing to upload their energy scenarios and use energy scenarios of others. • more than 50% of the participants would use an api for upload and download, with .csv being the preferred download format. • the two most important features were ’filtering of data’ and ’description of metadata’. • the two most important ranked criteria were ’references for all datasets’ and ’quality check of uploaded data’. • of the requirements, around 40% were rated as very urgent showing the great need for an energy scenario database. in the further development of the openenergyplatform these findings are addressed in realising the user requirements. to aggregate the 69 user requirements they have been clustered into twelve categories: input and output, data review process, bug-fixes, documentation, factsheets, features, functions to modify data, layout, metadata, ontology, references and other. hence, these https://www.akademienunion.de/fileadmin/redaktion/user_upload/publikationen/stellungnahmen/141203_energieszenarien_web_final.pdf 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[28] michael d. kaplowitz, timothy d. hadlock, and ralph levine. a comparison of web and mail survey response rates, public http://doi.org/10.1093/poq/nfh006 http://doi.org/10.1093/poq/nfh006 http://doi.org/10.1136/jamia.2000.0070426 http://xp123.com/article-s/invest http://site.ebrary.com/lib/alltitles/docdetail.action?docid=10762188 http://site.ebrary.com/lib/alltitles/docdetail.action?docid=10762188 https://wiki.openmod-initiative.org/wiki/main_page https://wiki.openmod-initiative.org/wiki/main_page https://forum.openmod-initiative.org http://juser.fzjuelich.de/record/136093/files/umwelt_39.pdf http://juser.fzjuelich.de/record/136093/files/umwelt_39.pdf https://openei.org/wiki/main_page https://openei.org/wiki/main_page https://www.djangoproject.com https://www.djangoproject.com https://www.sintef.no/en/projects/open http://dpunkt.verlag 106 international journal of sustainable energy planning and management vol. 25 2020 identification of user requirements for an energy scenario database appendix: list of questions of the online survey table a1: questions of the online survey on the topic: users expect/wish of a scenario database nr. question answers 1 are you working as ...? • programmer • natural scientist • engineer • economist • social scientist • other 2 information about your institute/organization/enterprise (optional). • research center • government authorities • ngo • system operator/utility company • other • position 3 are you working with scenarios? • yes, i am involved in the generation of scenarios and working with scenarios generated by others. • yes, i am working with scenarios generated by others. • not yet. 4 would it be an option for you to provide your own scenarios for "szenariendb"? • yes, i would provide my own scenarios and publish all assumptions, as far as possible. • yes, in case this is part of my project and will be financed. • no, this is not an option because of the license. • no, this is not an option for me because of other reasons, which are ... 5 would it be an option for you to include a database like "szenariendb" in your workflow by using scenarios from it? • yes, sounds good. • no, using scenarios from "szenariendb" is not an option for me, because ... 6 would it be an option for you to have a port implemented/ implement a port by yourself between your models and "szenariendb", which enables an easy access for further usage? • definitely. • yes, in case of... • no. • explanation: 7 there are several definitions and understandings of what a "scenario" is, in the context of energy system modelling. which parameters are part of a scenario in your daily work? • general framing parameters and assumptions (e.g. geographical and temporal scope, ...) • scenario type (e.g. extreme scenario, objective scenario, ...) • model in-put data • justification/explanation on assumptions • modelling parameters • model output data • other: 8 are you using (external) databases in your daily work, such as openstreetmap, eurostat, etc., to download data, e.g. as input to your models? • yes, in many cases. • rarely. • never. • when using a database, it is usually one of these: 9 how important are the following database features for you when looking for data/using a database • possibility to filter data while searching • text search • preview of data, e.g. as table • ad-hoc visualization of data, e.g. as diagram • description of metadata as text • glossary/ontology 10 in addition, the following features are important to me when looking for data in the internet/using external databases: international journal of sustainable energy planning and management vol. 25 2020 107 klara reder, mirjam stappel, christian hofmann, hannah förster, lukas emele, ludwig hülk and martin glauer 11 which type of data provision is the most comfortable for your purposes? (download interface, formats) • api • table • study • .xslx • .csv • .json • .xml • .pdf • .nc or .cdf • datapackage • other: 12 please rate the following criteria for using a database like "szenariendb" according to your personal opinion and order by priority: no. 1 = "most important" to no. 6 = "least important". • list of references for all datasets • quality check of new scenario data by database crew • speed • easy and intuitive upload of your own scenarios • possibility of processing data directly in the database • unit conversion in the database 13 please value the criteria "quality of data", "quantity of data" and "user friendliness" for "szenariendb" by distributing 100 points among the three categories. the more important a category is to you, the more points you assign. • quality of data • quantity of data • user friendliness 14 which level of detail do you need for your data? • high (e.g. hourly time series for one year, spatial resolution in scale of kilometers) • medium (e.g. typical days, ...) • low (e.g. aggregated values for countries, years,..) • further explanations: 15 do you know the open energy platform? http://openenergyplatform.org/ • yes, i am quite familiar with it. • yes, but i don't have many experiences with it. • no. 16 which properties/features do you appreciate when using oep? 17 which properties are uncomfortable for you when using oep? 18 news on the project "szenariendb" are available here https://www. iee.fraunhofer.de/de/projekte/suche/ laufende/szenariendb.html?cq_ck=1529400732290 or here http://reiner-lemoine-institut.de/szenariendb/ are you interested in getting information via email about further actions in the project "szenariendb"? • no, thank you. • yes, please. email: http://openenergy-platform.org http://openenergy-platform.org https://www.iee.fraunhofer.de/de/projekte/suche https://www.iee.fraunhofer.de/de/projekte/suche http://szenariendb.html http://reiner-lemoine-institut.de/szenariendb _goback international journal of sustainable energy planning and management vol. 25 2020 3 *corresponding author e-mail: gmj790@163.com international journal of sustainable energy planning and management vol. 25 2020 03–12 abstract low-temperature district heating (ltdh) systems can improve energy efficiency and better combine with factory waste heat and renewable energies. in this paper, we develop a data-based temperature control method to reduce the supply and return temperature of the heat exchange station. the relationship between distribution temperature and outdoor temperature is used to achieve lower supply temperature. the reduction of supply temperature is used to evaluate the benefit of the control strategy. moreover, a return temperature prediction model is established to verify the feasibility of different control strategies proposed in our article. the comparison results of different control strategies indicate that the hourly average supply temperature can be reduced by more than 4°c whereas the return temperature keeps above 29°c at all times. to sum up, the supply temperature control strategy proposed in this paper provides a guide for the transformation of existing heat exchanger stations to low-temperature district heating systems in north china. 1. introduction the global building sector accounts for more than 30% of the final energy consumption of world and about 30% of global carbon dioxide (co2) emissions [1,2]. according to the research of the international energy agency (iea), china is the second-largest building energy user in the world after the united states, representing about 14% of the total final energy consumption in buildings globally in 2014 [3]. building energy use accounted for 20% of the total primary energy consumption in china in 2016. building energy conservation work has become one of the biggest challenges for china’s energy conservation and emissionsreduction work [4]. district heating (dh) is a cost-effective heating method, especially to areas with high heat density [5]. the existing systems, commonly referred to as the third generation dh systems, have a supply/return temperature of 80/50°c. to further reduce the dh system energy losses, a low-temperature dh (ltdh) network with supply/return temperature at 55/25°c was developed to supply heat for 30 residential houses [6]. henrik lund et al defined the concept of 4th generation district heating (4gdh) in 2014 [7]. the 4gdh, also known as ltdh, have a supply temperature as low as 50°c even lower. the ultra-low-temperature district heating (ultdh) was defined with supply temperature at 35-45°c in [5]. to improve the efficiency of the ultdh system, the return temperature should be as low as possible [5]. in [8], eighteen danish single-family houses were supplied by ultdh with temperature as low as 45°c, and the existing houses can be heated safely. three alternative concepts for dh temperature level were compared on grid loss, production efficiencies and building requirements in a temperature control strategy to achieve low-temperature district heating in north china yin baia, mingju gonga,*, jin wanga, bo lib and lei zhangc a school of electrical and electronic engineering, tianjin university of technology, binshui west road 391, 300384 tianjin, china b qingdao muyang environmental protection energy co., ltd, qingdao, china c qingdao jiake hengye energy technology co., ltd, qingdao, china keywords: low-temperature district heating (ltdh); energy efficiency; supply temperature control; safe heating; url: http://doi.org/10.5278/ijsepm.3392 mailto:gmj790@163.com http://doi.org/10.5278/ijsepm.3392 4 international journal of sustainable energy planning and management vol. 25 2020 a temperature control strategy to achieve low-temperature district heating in north china [9]. the analysis results on software energyplan showed that the ltdh (55/25°c) outperformed ultdh with electric boosting (45/25°c) and ultdh with heat pump boosting (35/20°c). moreover, ltdh can contribute to more efficient use of energies and better integration of renewable energies [10]. the long-term development of dh systems depends heavily on the improvement of existing control strategies. the effects of the transition to low distribution temperature in existing dh systems were studied, and corresponding technical solutions and evaluation methods were proposed in [11]. in 2018, based on the current heat demand and temperature scenario, the study of heat demand savings and reduction of pipe network temperature in northern denmark was studied. the conclusion is that there is great potential for heating in low temperature [25]. in 2018, the challenges and development potentials of transitioning from existing high temperature dh systems to ltdh in norway were analyzed. the results showed that the lower supply temperature can reduce heat loss [24]. in 2018, the operation of the ltdh system of five single-family houses in denmark was investigated. the results showed that all houses operated well under low-temperature supply [23]. in 2019, the cost and benefits of providing ltdh for existing space heating systems were evaluated. studies showed that it is economically feasible to reduce return temperatures with improved heating system control strategy [21]. in order to transform from existing heating systems to the ltdh, it is necessary to reasonably control the network distribution temperature, that is, to reduce the supply and return temperature on the premise of ensuring safe heating. in this paper, existing temperature control strategies are divided into two categories: (1) optimization strategies based on pipe network structure and heating device [12,13,20,26,27,28] and (2) control methods based on operational data of heat exchange stations [14–19,22]. the former mainly tries to modify the pipe network structure and/or change heating device to optimize the operation on the building level. three layout (centralized, semi-decentralized and decentralized) of district heating network with combining heat storage was compared and optimized with genetic algorithm in [26]. an innovative ltdh network was developed and the possibility of applying the return water of current district heating system to a ltdh system was explored in [27]. technical and economic assessment of the ltdh system with thermal energy storage was presented in [28]. in [12], the concept of cascade utilization of residual energy in dh network was proposed, and the return water of high-temperature dh was used as the heat source of ltdh. the author of [13] developed the concept to reduce return temperature by implementing thermal energy cascades between different building types. a technical solution was proposed to achieve lower return temperature in new residential buildings [20]. data-based control methods mainly explore optimal control strategy through supply temperature and/or flow mass rate. an adaptive control method was developed in [14] to provide the lowest possible return temperature, reducing the average flow by 3.5%. a novel method for temperature difference fault detection using temperature difference signature was presented in [15]. a strategy to improve the distributed heat exchange station system was proposed in [16] to apply ltdh to the traditional domestic hot water circulation system, which reduced the heat loss by 39%. in [17], magnus dahl et al. used optimized temperature control method and time-based weather uncertainly to reduce supply temperature and heat losses. in [18], the outdoor temperature forecast and historical operating data were used as inputs of the neural network to predict the future heat demand and return temperature. moreover, a delay distribution function based on the distances between heat consumers and the suppliers was established to minimize the pumping cost and heat loss, and one-year data from a dh system in finland was used for demonstrating the optimization. in [19], the author proposed a novel control method based on the relationship between the on-off time of valves and return temperature. and the experiment results showed good prospects for development. in 2018, the problem of hydraulic imbalance in the heating pipe network that transformed the existing boiler houses into ltdh was studied. a novel hydraulic model using real-time weather and boiler operation data was proposed. based on the model, the hydraulic imbalance of the four different control scenarios is analyzed [22]. however, the return temperature should not be as low as possible. too low return temperature discomforts the consumers, and few kinds of literatures impose restrictions on the return temperature. moreover, recent research about ltdh is still mainly aimed at the dh systems in nordic countries (such as denmark and sweden). there is relatively little research focus on dh international journal of sustainable energy planning and management vol. 25 2020 5 yin bai, mingju gong, jin wang, bo li and lei zhang systems in china, although china has a large proportion of building energy consumption. actually, the supply temperature of secondary pipe is still primarily adjusted manually by the operator in northern china dh systems. and the secondary supply temperature has to be determined conservatively to ensure a sufficiently high temperature in dh networks at all times, which usually leads to too high secondary supply temperature and unnecessary energy loss. in this article, we aim to explore the temperature control strategies of the secondary network for converting from existing dh systems to the ltdh in north china. the optimal operation of the distribution network is achieved by minimizing secondary supply temperature under certain restrictions. first, the temperature control method is described in detail in section 2, and then the benefits and the safety of different control strategies are evaluated and compared in section 3. finally section 4 concludes the entire work and lists our contributions. 2. temperature control method in this section, we will introduce our temperature control method in details. our method aims to achieve minimum supply temperature for existing dh systems while ensuring heating safety. based on the actual dh operating data and weather forecast data, the return temperature prediction model is established in section 2.1. the supply temperature control strategies are developed in section 2.2 and evaluated in section 2.3. the overall temperature control strategy proposed in this paper is described in figure 1. 2.1. return temperature prediction model this section mainly introduces the establishment process of the return temperature prediction model. we first introduce the data used in the experiment, then present a feature selection method based on the pearson coefficient, and finally describe the established linear regression model. hour-ahead supply temperature outdoor temperature wind speed air quality index return temperature return temperature prediction optimized temperature difference minimum return temperature supply temperature optimization hour-ahead optimized supply temperature outdoor temperature wind speed predict linear regression predicted return temperature air quality index data collection weather forecast data optimized supply temperature feature selection training linear regression input output historical operating data figure 1: the overall temperature control method proposed in our work, including data collection, return temperature prediction, supply temperature optimization and evaluation 6 international journal of sustainable energy planning and management vol. 25 2020 a temperature control strategy to achieve low-temperature district heating in north china 2.1.1. dataset the data used in our work include historical actual operating data of a dh system (dhs) and local weather forecast data. the dhs operating data, which includes secondary supply and return temperatures from february 16, 2018, to march 12, 2018, are collected from a heat exchange station in tianjin, china. the exchange station only supplies space heating for nearly 40 residential buildings in the winter. the operating condition of dhs is always strongly associated with local weather conditions, which is commonly considered as extra information for predicting heat load as well as return temperature. the weather forecast data, which consists of outdoor temperatures, relative humidity, wind speed and air quality index (aqi), is used as inputs of the return temperature predicting model. 2.1.2. feature selection the pearson coefficient, which is a measure of the linear correlation between two variables x and y, is calculated as follows: where n is the number of samples. the r(x,y) ranges from –1 to +1, and the +1/–1 represents total positive/ negative linear correlation and 0 denotes no linear correlation. in our work, the pearson correlation coefficients between potential inputs variables (supply temperature, outdoor temperatures, relative humidity, wind speed, aqi) and target variable (return temperature) are calculated with eq. (1). and the variable relative humidity is dropped for its weak correlation coefficient with return temperature. 2.1.3. linear regression model overall, the secondary supply temperature, outdoor temperature, the wind speed, and the aqi are normalized and then used to establish a simple linear regression model to predict hour ahead return temperature of secondary network. the normalization process is as follows: where μ and σ are the mean and standard deviation of variable x. the linear regression model is as follows: where a,b,c,d,e are learnable parameters trained with the least square method. 2.2. supply temperature control method based on [17], we propose a novel method to reduce the supply temperature. firstly, we define the minimum return temperature, which is regarded as one of the restrictions to ensure heating safety. then, the temperature difference fault detection method introduced in [15] is extended to explore the relationship between temperature difference and outdoor temperature. finally, the optimized supply temperature is easily obtained by summing the minimum return temperature and optimized temperature difference. 2.2.1. the minimum return temperature the return temperature plays an extremely significant role in the actual operation of dh systems. the heat supplied by the heat exchanger is usually not enough to meet the heat demand of the consumers when the return temperature is too low, and the operator needs to raise the supply temperature and/or increase the flow rate in time. and too high return temperature is not conducive to efficient energy supply, usually causing unnecessary energy loss. therefore, the return temperature should be as low as possible but still ensure heating safety. the return temperature is mainly affected by supply temperature, facilities quality of consumers and weather conditions. the scatter plot of hourly average return temperature and outdoor temperature is shown in figure 2. it can be seen that the return temperature mostly located in the range of 29–35°c, which can be further reduced. the minimum return temperature , which is also called “safe return temperature” in our article, is defined as 29°c. the safe return temperature is shown in blue in figure 2 so that only 0.5% of the data is below this line. we developed a method to calculate the minimum return temperature based on the actual operational data of a heating exchange station. it should be pointed out that the minimum return temperature depends on many factors including region, climate, building type, heating method and so on. the minimum return temperature calculated here indeed does not apply to all situations. however, the method proposed here makes reference to other regions. 2.2.2. the temperature difference optimization the heat load p per unit time is calculated as follows: (1)( ) ( ) ( )2 22 2 , i i i i i i i i n x y x y r x y n x x n y y ∑ − ∑ ∑ = ∑ − ∑ ∑ − ∑ (2) x x′ − = µ σ � � � , , 1 out windret t sup tt a t b* t c s d aqi e** *−= + + + + (3) ( )w w w w sup retp = c m t = c tq t∆ −ρ (4) international journal of sustainable energy planning and management vol. 25 2020 7 yin bai, mingju gong, jin wang, bo li and lei zhang where cw and ρw are the specific heat capacity and density of water, q is the flow rate and keep fixed in our study, tsup and tret represent the supply and return temperature respectively. the temperature difference δt is defined as the difference between the supply temperature and the return temperature. when the water flow is constant, then the heat load p is proportional to the temperature difference δt during this period, that is: in many works in the literature, the delivered thermal load of the dh systems is often higher than required, causing significant energy waste. reducing the temperature difference δt can improve this situation according to eq. (6). the temperature difference signature is a diagram that plots the average hourly temperature difference as a function of the outdoor temperature. in figure 3, the temperature difference signature of a dh system in xiqing district, tianjin is plotted with an average line and two offset lines. the average line is calculated by the least squares method, and two threshold lines are defined by using 1.5 standard deviations from the average line. there is an offset line above and an offset line below the average line, and the data between the two lines is considered to be normal temperature difference data. by adding the upper and lower bounds to the temperature difference data, only 3.6% and 2.0% of the data are above the upper boundary and below the lower boundary. in other words, 94.4% of the data is located in the defined interval. the temperature difference fault of the dh systems can be detected based on the defined interval presented here, which is essential for the continuous safe operation of the dh systems. the optimization of the supply temperature needs to be carried out under the normal operation of the heat exchanger station. the relationship between temperature difference and outdoor temperature is: where k and bias are the slope and offset of the average line in figure 3. and std (δt) represents the standard deviation of the temperature difference. de f sup rett t t∆ − (5) p t∝ ∆ (6) ( ) ( ) [ ] , 8 , 1.5,1.5 8 , 8 out out min out k t bias std t t c* *t k bias std t t c*  + + ∆ < ° ∆ = ∈ − + + ∆ ≥ ° γ γ γ (7) minimum return temperature return temperature outdoor temperature (°c) r et ur n te m pe ra tu re (° c ) 36 35 34 33 32 30 29 28 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 31 figure 2: return temperature versus low-pass filtered outdoor temperature for the district heating station in tianjin 8 international journal of sustainable energy planning and management vol. 25 2020 a temperature control strategy to achieve low-temperature district heating in north china 2.2.3. supply temperature optimization according to eq. (5), the minimum supply temperature min supt can be calculated as the sum of optimized temperature difference and minimum return temperature min rett . 2.3. evaluation method as with [17], we use the sum of the supply temperature reductions for all hours over the entire simulation period to estimate the benefits of our proposed optimization method. the linear regression model established in section 2.1 is used to evaluate the safety of our proposed supply temperature control method. specifically, the actual supply temperature one hour ago tsup,t–1 in the model (3) will be replaced with the optimized supply temperature , 1 min sup tt − calculated with eq. (8), and the model output will be compared to the minimum return temperature minrett introduced in section 2.2.1. 3. results the significant changes of the supply temperature are usually the main cause of the “unnormal” operation of the heating system and the temperature difference “fault”. by optimizing the supply temperature, it is possible to effectively overcome the problem. figure 4 compares the optimized and actual supply temperature of the dh systems. the black line is the actual supply temperature from february 16, 2018, to march 12, 2018. the green line is the optimized supply temperature with the average line in figure 3, and the red and magenta line is the optimized supply temperature with ±1.5 standard deviations in figure 3. it can be seen that the actual supply temperature varies considerably. for example, the change range of february 26 is about 8°c, and the range of march 7 is nearly 7°c. the optimized supply temperature changes no more than 4°c daily, which greatly improves the operation of the heating system. the actual and optimized return temperatures are compared in figure 5. the black line is the actual return temperature from february 16, 2018 to march 12, 2018. the green line is the predicted return temperature with average-based optimized supply temperature (green line in figure 4), and the red and magenta lines are the predicted return temperature with ±1.5 standard min min sup min rett t t= ∆ + (8) ( )587 , ,1 minsup t sup tt t t= −∑ (9) te m pe ra tu re d iff er en ce (δ ˚c ) outdoor temperature(˚c) +1.5std average –1.5std δt 20 18 16 14 12 10 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 figure 3: temperature difference signature in the district heating station international journal of sustainable energy planning and management vol. 25 2020 9 yin bai, mingju gong, jin wang, bo li and lei zhang deviations-based optimized supply temperature (red and magenta line in figure 4). the blue line represents the defined minimum return temperature, which is defined as 29°c in section 2.2.1 and also plotted in figure 2 with blue. the optimized return temperature is predicted with the optimized supply temperature obtained above. it can be seen that the actual return temperature varies greatly, especially during the period of february 25-march 3. moreover, the change in the optimized return temperature is relatively slight, and the daily variation does not exceed 1.5°c at any time. however, the return temperature optimized with strategy −1.5 standard deviations deviates on both sides of the minimum return temperature, which will not ensure heating safety at all times. the hourly supply temperature reduction in simulation period and the percentage of predicted return temperature above the minimum return temperature (29°c) with different optimization strategies are plotted in figure 6. the overall supply temperature reduction on the simulation period, which is calculated by eq. (9), is used to estimate the benefits of temperature control strategies whereas the distribution of return temperature is regarded as a metric to ensure heating safety. the different optimization strategies are determined by the parameter γ in eq. (6). the γ = ± 1.5 and γ = 0 give the optimization strategy of ±1.5 standard deviations and the average line in figure 3. with γ increase from –1.5 to +1.5, the supply temperature reduction decrease nearly linearly, from 3136°c (γ = – 1.5) to –80°c (γ = +1.5). the hourly supply temperature reduction is from 5.34°c (γ = – 1.5) to –0.14°c (γ = +1.5). the smaller the value of γ, the larger the supply temperature reduction. however, the premise of lowering the supply 53 52 51 50 49 48 47 46 45 44 43 42 41 40 39 02-16 02-17 02-18 02-19 02-20 02-21 02-22 02-23 02-24 02-25 02-26 02-27 02-28 03-01 03-02 03-03 03-04 03-05 03-06 03-07 03-08 03-09 03-10 03-11 03-12 s up pl y te m pe ra tu re (˚ c ) actual supply temperature average –1.5std +1.5std figure 4: optimized supply temperature with different optimization strategies versus actual supply temperature r et ur n te m pe ra tu re (˚ c ) 34 33 32 31 30 29 02-16 02-17 02-18 02-19 02-20 02-21 02-22 02-23 02-24 02-25 02-26 02-27 02-28 03-01 03-02 03-03 03-04 03-05 03-06 03-07 03-08 03-09 03-10 03-11 03-12 actual hourly average return temperature +1.5std average –1.5std defined minimum return temperature figure 5: the return temperature predicted by linear regression model (3) with different optimized supply temperature in figure 4 10 international journal of sustainable energy planning and management vol. 25 2020 a temperature control strategy to achieve low-temperature district heating in north china temperature is heating safety, which means that the return temperature must be above the minimum return temperature at all times. it can be seen that the percentage gradually increases with γ increases. and all data is larger than the minimum return temperature when γ reaches –0.8. consequently, γ = –0.8 is the optimal control strategy, the corresponding total supply temperature reduction is 2386°c, and the average hourly reduction is 4.06°c. 4. conclusion this paper proposed a supply temperature control method for district heating systems in northern china. specifically, we developed a novel optimization strategy to reduce the supply temperature based on the actual operating data and weather forecast data, and evaluated the feasibility of the strategy by establishing a simple linear regression return temperature prediction model. the experiment results show that the average hourly supply temperature is reduced by more than 4°c with return temperature kept above 29°c at all times. there are mainly the following three contributions of our work: (1) the temperature control strategy proposed in this article can effectively reduce the supply temperature and improve heating efficiency while keeping heating safety, which is consistent with the 4gdh system. (2) the optimized operating interval of the temperature difference of the heat exchanger station is defined, which can be used for eliminating temperature difference fault. (3) surprisingly, the proposed optimization strategy can reduce the daily temperature change, which is conducive to the stable operation of the heating system. specifically, the daily variation of the supply temperature is reduced from the highest over 8°c to 4°c, and the return temperature is reduced from 2°c to not exceed 1.5°c. in general, we provide a possibility to transform the existing dh systems in northern china to the ltdh. however, the temperature control method is not suitable hourly supply temperature reduction percentage of optimized return temperature over 29 ˚c 100 6 5 4 3 2 1 0 –1 90 80 70 60 50 40 30 -1.5 -1.2 -0.9 -0.6 -0.3 0.3 0.6 0.9 1.2 1.5 y 0 p er ce nt ag e (% ) h ou rly s up pl y te m pe ra tu re re du ct io n (˚c ) (1.5,-0.14) (-0.8,4.06) (-1.5,5.34) figure 6: the hourly supply temperature reduction on simulation period and the percentage of predicted return temperature above the defined minimum return temperature (29°c) with different optimization strategies international journal of sustainable energy planning and management vol. 25 2020 11 yin bai, mingju gong, jin wang, bo li and lei zhang for all heating systems due to limitations in geographic location, system capacity, climate changes, etc. to apply the temperature control strategies presented here to the respective heating systems, corresponding changes and necessary adjustments are required of the systems. reference [1] international energy agency (iea). world energy balances 2018. paris: oecd publishing; 2018. https://doi.org/10.1787/ world_energy_bal-2018-en. 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[28] flores jfc, espagent ar, chiu jn, martin v, lacarrière b. techno-economic assessment of active latent heat thermal energy storage systems with low-temperature district heating. int j sustain energy plan manag 2017;13:5–18. https://doi.org/10.5278/ijsepm.2017.13.2. http://doi.org/10.1016/j.energy.2018.03.094 http://doi.org/10.1016/j.energy.2018.03.094 http://doi.org/10.3390/en11020277 https://doi.org/10.5278/ijsepm.2016.10.3 https://doi.org/10.5278/ijsepm.2017.12.3 https://doi.org/10.5278/ijsepm.2017.12.3 https://doi.org/10.5278/ijsepm.2017.13.2 _hlk23020763 _hlk22977215 _hlk23020713 _hlk22977575 _hlk22977662 _hlk22977738 _hlk22977237 _hlk23159176 _hlk23159603 _hlk22982116 _hlk23159814 _goback fig3 fig5 fig6 _hlk23019194 _hlk23078310 _hlk23019227 _hlk11416222 _hlk23019284 ref1 ref2 ref3 _hlk22983796 _hlk22983504 ref7 ref8 ref9 ref10 ref11 ref12 ref13 ref14 ref15 ref16 ref17 ref18 ref19 ref20 ref21 ref22 ref23 ref24 ref25 ref26 ref27 ref28 international journal of sustainable energy planning and management vol. 24 2019 43 *corresponding author e-mail: maciej.widzinski@imp.gda.pl international journal of sustainable energy planning and management vol. 24 2019 43–56 research and experimentation abstract in recent years, poland has been going through many changes, also within energy generation and the legal and regulatory system. according to the eu 2020 climate and energy package, in the nearest future the polish energy industry, will have to significantly modernize most of its power plants. the dynamically changing situation results in higher demand for various analysis (concerning both energy and economic aspect) helping with setting the frames for the future functioning of power engineering companies. one of the polish power companies, pec legionowo, is reshaping its infrastructure to meet the new requirements and from this particular company, authors are using the acquired data for the test case. the first conceptual project related to the development of the pec legionowo energy system is currently being realized in terms of increasing its energy efficiency and reducing harmful exhaust emissions. because pec legionowo is obligated to significantly reduce emissions by 2022, they are seriously considering reducing coal-based production. the resulting energy gap is planned to be covered by among others installing high-efficiency combined heat and power (chp) systems. this article analyzes and verifies the model of an existing chp plant and checks the modernization possibilities of the existing installation in terms of reducing emission. the new installation of gas boilers designed to replace coal-fired boilers is being validated, to meet the new emission requirements while still meeting the demand for heat and electricity. for modelling a test case, the combined techno-economic optimization and analysis software energypro is used. the software optimizes the operation of the modeled system according to all input conditions, such as generation and economic data obtained from a functioning chp plant in the polish industry. the results show the quantitative and economic difference related to the introduced changes in the heat and power plant system. the analysis also focuses on the size of the investment outlay and the return time of the project. 1. introduction energy systems around the world are constantly undergoing changes. you can even say it is revolution. this effect is intimately linked to the changing conditions associated, first of all, with energy demands, accessibility of the energy resources and the introduction of eu environmental directives. when the world was overwhelmed by the simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission of harmful substances into the atmosphere maciej widzińskia,1, patryk chajaa, anders n. andersenbc, marta jaroszewskaa, sebastian bykuća and jakub sawickia a department of distributed energy, institute of fluid-flow machinery polish academy of sciences, ul. fiszera 14, gdansk, poland b department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark, c emd international a/s, niels jernes vej 10, 9220 aalborg ø, denmark keywords: district heating; energy system analyses; energypro; climate and energy package; url: http://doi.org/10.5278/ijsepm.3354 mailto:maciej.widzinski@imp.gda.pl http://doi.org/10.5278/ijsepm.3354 44 international journal of sustainable energy planning and management vol. 24 2019 simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission industrial revolution, coal became the main energy medium, which remains in many countries of the world to this day. in poland, coal is the primary fuel and constitutes over 80% of the energy mix. the current state of the energy fuel market is changing rapidly. constant turbulence of fossil fuel prices can indicate that mankind has started to look for other alternative sources of energy. in europe, denmark is the leader of a new approach to energy systems, which in most cases is based on wind energy generation. despite numerous objections, especially from the coal lobby, the polish economy is undergoing transformation [1]. although there are no proper meteorological conditions to effectively increase the share of res, poland strives to achieve the level of the most ecologically developed economies in europe. numerous economic reforms have bypassed the energy sector, and that left to its own has experienced stagnation. the lack of investment in previous years has led to a sudden need for reform in order to adapt large power plants to the requirements of eu directives [2]. undoubtedly an important role in the process of energy transformation will be played by scientific entities that have been conducting research on this subject for many years. numerous scientific papers have been written describing working conditions, simulation, optimization and maintenance of district heating systems. one of the papers describing a wide range of heating (and cooling) systems is a review article by werner [3] describing the state of heating and cooling systems, with particular emphasis on european countries. lund et al. [4] take a deeper perspective and examine the state and level of fourth generation district heating, as well as describe the role of new technologies for district heating in future intelligent energy systems. kontu et al. [5] examine the role and potential of using large scale heat pumps in existing district heating systems as well as try to understand the point of view of district heating companies on the potential of installing heat pumps in the system. different strategies for decarbonisation scenario for combined heat and power plants are presented by popovski et al. [6] the work focus heat and power plants working on coal, and that is of really big importance for poland to introduce decarbonisation scenarios. kazagic et al. [7] with the use of energypro perform the optimization of operation of district heating companies based on heat and power production units and renewable sources. optimization of a combination of heat and power plants with thermal stores is described by fragaki et al. [8]. østergaard et al. [9] point out that also the social and economic aspects of the operation of district heating systems are important. economic aspect of the acknowledgement of value the polish energy sector is currently facing many challenges. like many other energy companies, we are obliged to meet the relevant standards and parameters in energy production. changes occurring in law, resulting mainly from changes at the european union level, cause that many energy companies must undergo changes in infrastructure that will allow to meet the required standards for increasing energy efficiency and reducing emissions of harmful substances, and. however, one cannot forget about the economic aspect of these changes. the effects of the work described in this article are very valuable to us and will allow us to develop appropriate strategies for heating companies in the face of changes in legal regulations. dariusz wojtas, chairman of the board of municipal thermal energy company in ostrowiec świętokrzyski, poland. abbreviations and nomenclature bat best available techniques eu european union bat-aels emission levels associated with the best available techniques gb gas boiler cb coal boiler hcl hydrochloric acid chp combined heat and power hf hydrogen fluoride dhc district heating company res renewable energy sources international journal of sustainable energy planning and management vol. 24 2019 45 maciej widziński, patryk chaja, anders n. andersen, marta jaroszewska , sebastian bykuć and jakub sawicki operation of district heating plants is discussed by fragaki et al. [10] on the case of heat and power plants in the uk. decarbonisation or designing future low-carbon [11] energy systems are not the only trends in improving the environmental situation. ancona et al. [12] presents an approach of reduction in the consumption of fossil fuels and pollutant emissions by converting current heat distribution systems into low-temperature district heating systems. returning to modern energy systems, only scientific and technical analyses will allow for a harmonious transformation of the currently operating energy systems based on fossil fuels and will not reveal unnecessary costs incurred by investors and operators of this system. special software is needed to work with simulation models. the authors’ choice of energypro as a case study tool in this paper was determined by its worldwide character [13] and the fact that it is designed as a flexible tool for combined technical and economic optimization of different types of energy projects. it is also a widely used tool in research and it is easy to find work written based on energypro results covering the topic of simulation and optimization of district heating companies. this article is devoted to the issue of energy transformation in the light of the implementation of eu directives, which poland has been struggling with for several years. one of the first steps that the energy sector has to take in order to comply with the new regulations is presented. the authors attempted to indicate potential directions of modernization of currently operating energy systems on the example of a heating company operating in poland (combined heat and power plant). 2. description of the power sector in poland in poland, approximately 50% of heat demand is covered by district heating. the largest recipients of system heat are housing associations and housing communities as well as public utility buildings. the remaining heat demand is provided from individual sources or small local sources. for historical reasons, district heating systems were built in most polish cities. as it is presented in figure 1, poland is one of the european leaders in the field of district heat. the majority of heating companies in poland are controlled by local government units. however, public ownership concerns mainly district heating systems in smaller cities. district heating has become an important element of the energy sector due to the possibility of developing energy production from cogeneration, which national potential is estimated at 7-10 gw on the electricity side, depending on the technology. the district heating sector is shredded, and the development of cogeneration is possible in large units as well as smaller ones. the production of district heating in poland is based primarily on black coal, which comes from the fact that historically was the most accessible and cheapest fuel [14]. 99% 64% 61% 60% 53% 50% 49% 42% 41% 38% 23% 20% 17% 14% 8% 4% 1% 0% 20% 40% 60% 80% 100% figure 1: share of heat covered by district heating in european countries [14] 46 international journal of sustainable energy planning and management vol. 24 2019 simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission despite a slight decrease in the share of coal fuels in heat production by 6.7 percentage points compared to 2002, in 2016 coal fuels still accounted for 75% of fuels consumed in heat sources. the share of renewable energy sources in 2016 in heat production increased by 4.7% compared to 2002 and amounted to 7.6% [14]. the diversification of fuels used for heat production was slightly higher in companies producing heat in the cogeneration process. in this group of enterprises, already 19% of consumed fuels are fuels other than coal, including 5.6% heating oil, 7.2% natural gas [14]. the development of heating systems allows eliminating the problem of low emission in many cities, which brings measurable savings in the field of medical expenses related only to the treatment of civilization diseases of the respiratory system. in 2016, over 71% of expenditures of heating enterprises were spent on investments in heat sources, the remaining part on distribution networks. the licensed heating companies funded those investments with own means.. in 2016, the share of internal funds in the financing of incurred expenditures amounted to over 70% of total spending. the development of the district heating industry is still inhibited by the lack of legal regulations for linear heat system infrastructure. in 2015, the project of the so-called “corridor act” fell, which was to be replaced by the act on strategic public investment projects, which, however, is not a solution for the legal status of district heating networks. this is not only a problem of new network investments but also for existing systems. currently, in poland, almost 80% of the network does not have a regulated legal status. lack of regulation generates investment problems and maybe the reason for increasing heat prices for recipients (the cost of lawsuits). in the current eu financial perspective for the years 2014–2020, the heating sector has limited possibilities of using public aid under regional aid. in this perspective only horizontal aid is possible, and for network investments, network upgrades, public aid is implemented only for systems that meet the condition of an effective heating system. according to the definition in the energy efficiency directive, an efficient heating and cooling system is one in which at least half of the energy comes from res or waste heat, at least 75% of heat comes from cogeneration or 50% of heat coming from heat or cold production from the mix of the above-mentioned sources. in poland, about 10% of the largest heating companies meet these requirements, which means that the rest, that needs investment just as much, have no chance of obtaining any funds, even for the modernization of old networks not to mention the development of new ones. in figure 2, heating companies with inefficient heating legend: energy non-efficient dhc energy efficient dhc figure 2: energy-efficient dhcs in poland [14] international journal of sustainable energy planning and management vol. 24 2019 47 maciej widziński, patryk chaja, anders n. andersen, marta jaroszewska , sebastian bykuć and jakub sawicki figure 3: structure of the dhc model consisting of three chp engines, gas-fired boiler figure 4: overall heat production [gj] during one year. 48 international journal of sustainable energy planning and management vol. 24 2019 simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission systems are marked in red, whereas the ones with efficient heating systems are marked in green. 3. challenges for the energy sector and enterprises the implementation of environmental regulations regarding the energy sector in the european union member states indirectly affects the domestic heat engineering sector, as 75% of fuels used in polish heating enterprises is black coal. in 2007, the european union climate and energy package ( so-called “3×20” package) was presented at the eu forum: • a 20% reduction of greenhouse gas emissions, • increase in the share of renewable energy sources (res) in energy production by 20%, • increasing energy efficiency by 20%. filling of commitments resulting from the climate and energy package was undertaken by the whole community of member countries and individual obligations were assigned to individual countries. by the directive of the european parliament and the council 2009/28/ec, poland was obliged to achieve a minimum of 15% share of energy from renewable sources in final gross energy consumption, whereas according to the national action plan for renewable energy from 2010, poland assumes that this share will increase to 15.85% by the end of 2020. the perspective of further extension of these regulations is undoubtedly a significant threat to the domestic black and lignite mining sector, and thus to the heating sector. the new objectives of the european union’s climate and energy policy for 2021-2030 are: • reduction of greenhouse gas emissions in 2030, compared to 1990, by at least 40%, • improvement of energy efficiency by 27% • achieving at least a 27% share of renewable sources in total energy consumption. in order to provide appropriate mechanisms to help achieve the objectives of the climate and energy package by 2020, a number of regulations have been introduced to implement the premises of the “3x20” package. the action aimed at meeting the greenhouse gas emission reduction target was the introduction of new regulations for the co2 emission allowance trading scheme (eu ets). the current phase iii of the system has introduced the need to reduce greenhouse gas emissions by 21% (by 2020) in relation to 2005. a very important element in the context of the “new” eu rules are the so-called bats which set for the standards for best available techniques for large combustion plants in accordance with european parliament and council directive 2010/75/eu, which have been published on 31 july 2017, the bat conclusions refer to the combustion of fuels in installations with a total nominal thermal power of 50 mw or more, only if such activity takes place in combustion plants with a total nominal thermal power of 50 mw or more. according to the above directive , the definition of a combustion plants reads: “any technical device in which fuels are oxidised in order to use the heat generated in this way. for the purpose of bat conclusions, a combination of two or more separate combustion plants in the case where the exhaust gases are discharged through a common stack (…) is considered as one combustion plant. for the purpose of calculating the total rated thermal input of fuel of such a combination, the power of all individual combustion objects considered shall be added whose nominal thermal power in the fuel is at least 15 mw. “ classification of combustion plants/units depending on their total nominal thermal power delivered in the fuel: • “where a part of a combustion plant discharging fumes with one or more separate pipes in a common chimney is used for less than 1500 hours/year, that part of the facility may be considered separately for the purposes of bat conclusions. bat-aels (emission levels associated with the best available techniques) apply to all parts of the structure in relation to the total rated thermal input applied to the fuel of this facility. in such cases, emissions from each of these wires are monitored separately. “ the above-mentioned regulations are currently introducing a very big confusion on the heat and power plant heating market in poland. namely, they make the enterprises significantly reduce emission from solid fuels or switch to another type of fuel (eg. gas) by the end of 2022, in order to meet the goals indicated by the eu. this article examines several variants of the statistical transition of a chp plant in poland to another type of energy system that meets the bat conclusions. international journal of sustainable energy planning and management vol. 24 2019 49 maciej widziński, patryk chaja, anders n. andersen, marta jaroszewska , sebastian bykuć and jakub sawicki 4. methods and data 4.1. simulation environment for the modeling of a dhc test case the combined techno-economic optimization and analysis software energypro was used. the software, developed by emd international a/s, optimizes the operation of the modeled system in accordance to all input conditions such as generation and economic data, obtained from pec legionowo, a functioning heat and power plant in polish industry. the optimization has been implemented by analyzing yearly data profiles on an hourly resolution. 4.2. dhc reference model the simulation model was based upon an existing dhc power plant and consists of heat generation technology and electrical energy generation technology widely used across poland. figure 1 visualizes the entire system setup as it was implemented. the same structure was used for the simulation with values which are explained in the following subsections in detail. in the figure, black arrows represent electricity flows, whereas red arrows represent heat flow. following generation units were implemented as a basic dhc system: • four stoker fired boilers type wr-25 with a total nominal capacity of 124 mwt. two 32 mwt boilers based on rafako units and two 30 mwt based on sefako units, the average efficiency of 87% each, • three chp engines based on caterpillar type g3516h with 1.9 mw thermal capacity and 2.0 mw electric power and average efficiency of average 85% each [15], • high temperature gas-oil boiler with thermal power of 8.0 mwt and efficiency 92.35%/ 92.66%. working as a peak-reserve source for cogeneration engines. based on hoval thw-i ht e unit [16]. stoker fired boilers are supplied with fuel in the form of fine coal and 22.4923 gj/t heat value. chp engines and high-temperature gas-oil boiler are supplied with natural gas with a heat value of 32.26 mj/m3. 4.3. load profiles heat load profile, with an hourly resolution, was provided by an existing dhc power plant on which the model was based upon. the facility is responsible for meeting a heat demand of 198782.1 mwh/year including 4259.7 mwh own use. it should be noted that dhc is an energy engineering enterprise operating in the field of electricity trading and distribution. for poland, it is common to use “standardowe profile zużycia energii” […] (standard load profiles), which are provided by main distribution system operators for electricity load forecasting for municipal utilities or energy suppliers. nevertheless, on behalf of this simulation external software and algorithm were used to generate electricity load profile. the demand profile for electricity was prepared using the artificial load profile generator [17]. based on the algorithm this tool calculates, the electric energy demand profile for a given number and types of households. in this algorithm, many variables are taken into account, including the number of people living in a given household, hours spent at home, working hours, number of appliances consuming electricity, etc. the number of households has an impact on the sum of energy demand, while the type of household affects the distribution. the received data is refreshed every minute, while for the purposes of this article, data was aggregated to refresh every hour. the authors, for the purpose of the analysis, assumed that the total demand is 22295 mwh, and 50% is generated by households run by families, 30% two working people, and 20% older people. the above methods of obtaining heat load profiles are only design methods using many variables. the best input data for implementation would be the one as comparable to real life data as possible, generated e.g. by using graph theory [18]. 4.4. the economy of dhc reference model meeting eu standards is a necessary condition for the optimization issue, while the comparative aspect of the variance of the model is the economics of a given system, the size of investments and the company’s revenue during the first year of the new system’s operation. it is very important to point out that all economic data was obtained through cooperation with the heating energy enterprise. the values used in the model are as close as possible to the actual costs and profits per unit. in the simulation model sale of electricity has been divided into two streams (table 1). the first of them “sale of el.en.” is the fulfillment of the energy demand that is provided to end-users. the second profit “surplus electricity” refers to the profits resulting from the sale of http://el.en 50 international journal of sustainable energy planning and management vol. 24 2019 simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission excess produced electricity. for the sake of simplicity, both profits are calculated based on the day-ahead market, however, they were separated to observe the ratio of profits. day-ahead market (dam) is operating since june 30, 2000. it is a spot market for electricity in poland. from the beginning of trading, prices on the day-ahead market (dam) are a reference for energy prices in bilateral contracts in poland. dam is intended for those companies that want to close their purchase/sale energy portfolios in an active and safe manner on a daily basis. within the electricity dam, hourly and block contracts (base, peak and off-peak) are available. the changes on the dam are currently presented by 6 price indices referring to the day and time of the delivery day. the latest electricity market index tge24 is the base instrument for contracts on the financial instruments market (futures). it is determined by exchange transactions concluded on hourly products in the single-price auction system at the first auction on the dam for electricity. trading on the dam is done for one and two days before the delivery period. until the end of 2018 in poland, there was support for cogeneration plant operators. the energy regulatory office in succession in 2016, 2017 and 2018 set out substitution charges referred in art. 9a paragraph 10 of the energy law act, and in subsequent years amounted to 125 pln/mwh in 2016, 120 pln/mwh in 2017 and 115 pln/mwh in 2018. at the beginning of 2019 funding for chp technology ceased to apply. the current plans of the ministry of energy provide support for cogeneration at the level of 40 pln/mwh. this is an important factor that the authors used when designing one of the variants of the alternative system. 5. heating enterprises adaptation district heating companies fulfill an important role in the social and economic map of poland, ensuring reliable and ecological delivery of heat and more often also electricity. because of the needs of growing recipients and the local heating and energy market becoming more competitive, the main goal is a successive development of the companies and a further increase of their value. simultaneously, district heating companies have to achieve commitments resulting from the climate and energy package and best available techniques for large combustion plants. in the following, the analyzed system variants are presented. 5.1. variant 1: harmful substances reduction system the first option assumes that all standards of bat conclusions will be met by all four, based on fine coal heat sources. a considered variant would consist of construction works including dismantling current harmful substances reduction system (excluding the chimney) and building-up new devices in its place. the following variant would consist of disassembly of four current dust extraction systems, which do not meet the requirements, construction of four individual exhaust gas dedusting table 1: operation income revenues/expenditures pre-unit value unit value unit revenues emissions sale of heat 110 pln/mwh emissions from coal sale of el. en. dam co_coal 0.11 pln/kg surplus electricity dam so2_coal 0.53 pln/kg chp propotion 40 pln/mwh nox_coal 0.53 pln/kg dust_coal 0.35 pln/kg opeating expenditures soot_coal 1.47 pln/kg purchase of gas 1.20 pln/m3 bap_coal 381.36 pln/kg gb maintenance cost 12000 pln/unit/year emissions from gas purchase of coal 330 pln/t co_gas 0.11 pln/kg chps maintenance 137721 pln/unit/year so2_gas 0.53 pln/kg cbs maintenance 222063 pln/unit/year nox_gas 0.53 pln/kg grid tariff 200 pln/mwh dust_gas 0.35 pln/kg international journal of sustainable energy planning and management vol. 24 2019 51 maciej widziński, patryk chaja, anders n. andersen, marta jaroszewska , sebastian bykuć and jakub sawicki systems (including complete pre-separators (mos type), complete pulsing bag filters) and construction of four individual reduction systems: nox, so2, hcl, hf. in addition, each coal boiler would be equipped with reagent injection installation. the cogeneration system would be operated as before along with the gas boiler. heat sources would work under the following regime shown in figure 5: cogeneration engines operated throughout one year with an average use of 8500 h each. in the post-heating season as a peak source, a gas boiler would be used in a maximum level of 3000 h. however, during the heating season, along with the cogeneration system, the currently wr25 sources would be used. it should be borne in mind that simulated models are aimed at proposing possible solutions to meet eu directives while taking into account the need to reorganize the main elements of the current dhc system. bat standards for existing wr25 boilers after implementation of standards are presented in table 2. emission standards for existing cogeneration sources and an existing gas boiler with a dual-burner are presented in table 3. the dust extraction system uses electricity and compressed air at a rate of 170 kwh per hour of work per boiler. assuming that in this variant total annual consumption would be 9500 h x 0.17 mw = 1615 mwh x 200 pln/mwh = 323 000 pln per operating year of the installation. obviously assuming full boiler operation power and the full amount of exhaust. on average, it gives 34 pln per hour of work. the flue gas desulfurization installation uses reagent and electricity. reagent costs 0.95 pln/l (including transport), and consumption (for sox <200 mg / m2u) is about 17 dm3t of coal, which gives 16.15 pln/t. electricity consumption by pumps and auxiliary installations at the level of 15 kwh per hour of work, i.e. 0.015 mw x 9500 h x 200 pln/ mwh = 28 500 pln. coal-fired boilers in 2017 consumed 28 288 tons of coal, this means an annual cost of: 28 288 tons x 17 l/t x 0.95 pln/l = 456 851 pln/year plus 28 500 pln of consumed electricity. on average, it gives 51.09 pln per hour of work. in cooperation with dhc, it was established that the installation of a full harmful substances reduction system would cost about 7 million pln. 5.2. variant 2: additional gas fired boiler the option assumes achieving emission standards specified in the bat conclusions by grouping and optimizing the working times of sources and the installation of a new generation unit. the new unit would be a 15 mwt boiler fired with natural gas. the hoval boiler was used as the reference unit for the device model. the discussed variant does not assume discontinuation of any source of wr25 from operation. in a previous variant, coal-fired boilers were supposed to work with a regular timetable as shown in figure 5. this variant assumes that coalfired boilers will be peak sources, i.e. they will not be able to be operated for more than 1500 h per year. due table 2: bat standards for existing wr25 boilers no. standard type the annual average level in bat for an existing source at power >100 mw & <300 mw the daily average level in bat for an existing source with a power of >100 mw & <300 mw 1 increase overall environmental efficiency none none 2 nox, n2o and co emission reduction nox 100-180 (mg/nm 3) nox 155-210 (mg/nm 3) 3 sox, hcl and hf emission reduction so2 95-200 (mg/nm 3) hcl 1-5 (mg/nm3) hf 1-3 (mg/nm3) so2 135-250 (mg/nm 3) 4 reduction of emission of dust and metals contained in dust to the air dust 2-14 (mg/nm3) dust 4-25 (mg/nm3) 5 reduction of mercury emission (hg) to air hg 1-9 μg/nm3) none table 3: emission standards for existing cogeneration sources and an existing gas boiler with a dual-burner no. natural gas fired cogeneration natural gas fired boiler 1 nox 190 (mg/nm 3) with 15% of oxygen (since 2030) nox 150 (mg/nm 3) with 15% of oxygen 2 none so2 35 (mg/nm 3) with 3% of oxygen 3 none dust 5 (mg/nm3) with 3% of oxygen 52 international journal of sustainable energy planning and management vol. 24 2019 simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission to the use below 1500 h on an annual basis, do not have to meet the bat requirements. however, these sources must comply with the ordinance of the minister of the environment of 6 april [19]. the following table 4 contains standards for existing wr25, cogeneration and gas boiler peak sources. the above work regime will involve the need to build four additional dust extraction systems for these sources to achieve dust levels of 25 mg/nm3. in cooperation with dhc, it was established that expenditure capital related to the installation of a new generative unit would amount to 8 million pln. similarly to the first variant, the dust extraction system uses electricity and compressed air. this results in 170 kw per hour of work for one unit per boiler and on average, 34 pln per hour for the coal boiler. 5.3. variant 3: additional gas-fired boiler and chp engine the last variant of the system is near identical to variant no. 2. it is based on the reference model, the coal boilers have been operated in a regime of <1500 h per year each, whilst the 15 mw gas boiler (mentioned in the previous paragraph) works in the system. the additional production unit is a chp engine with a capacity of 1.9 mwt / 2 mwe, identical to the units already operating in the system. a new chp unit was added to analysis if guaranteed bonuses supporting cogeneration planned by polish government would improve the economic situation of dhc. in cooperation with dhc, it was established that the installation of a full harmful substances reduction system would cost about 3.5 million pln and a new chp unit investment would be 6.8 million pln. 6. results and discussion in the following, the results of the system simulations are presented regarding financial outcomes. the results for three different variants are shown in table 5. it should be noted that both variants 1 and 2 have identical revenues of 32 364 476 pln, while variant’s 3 revenue is 3 088 371 pln higher, which is caused by profits from the export of surplus electricity and additional profits from chp funding. variants of coal-fired boilers working in a regime of the reduced number of hours, the need for production from natural gas-based units increases, which entails higher consumption of this fuel. together with the decreasing number of working hours, coal boilers costs related to the emission of harmful substances into the atmosphere generated from coal boilers fall by more than 58% in option 1 and over 60% in option 2. at the same time, increased pressure on the operation of gas and chp boilers results in an increase in emission costs by over 75%. 0n the other hand general outcome of emissions variances results in almost 45% decrease in emissions expenditures. the costs of purchasing a larger amount of natural gas are so high that they generate negative revenue per year. the co-financing of cogeneration, which at the level of 40 pln is not able to improve the economic situation of the enterprise, despite obtaining 619 520 pln subsidy. assuming the same amount of electricity generation from a new engine, the value of chp funding would have to exceed 60 pln/mwh to improve outcome. table 5 does not include investment expenditures of the proposed solutions, but only costs related to the operation of the district heating company. in order to realize such large investments, dhc would have to take appropriate steps to obtain loans and additional co financing. however, already at this level is visible that if the company does not bring profits, it would not be able to repay any loan installments. the key aspect is the price of natural gas, which at the level of 1.2 pln/m3 generates no profits. however, a decrease by 0.1 pln/ m3 would cause a drop in the cost of natural gas purchase by 2 397 361 pln in variant 2 and it would lead into a positive annual profit of the company. this would be possible, for example, by negotiating the price with the supplier, caused by a significant increase in the demand for fuel table 4: bat standards for existing wr25, cogeneration and gas boiler peak sources no. solid fuels for units >100 mw & <300 mw, existing, peak sources natural gas fired cogeneration natural gas fired boiler 1 nox 450 (mg/nm 3) with 15% of oxygen (since 2030) nox 190 (mg/nm 3) with 15% of oxygen nox 150 (mg/nm 3) with 15% of oxygen 2 so2 800 (mg/nm 3) with 6% of oxygen none so2 35 (mg/nm 3) with 3% of oxygen 3 dust 25 (mg/nm3) with 6% of oxygen none dust 5 (mg/nm3) with 3% of oxygen international journal of sustainable energy planning and management vol. 24 2019 53 maciej widziński, patryk chaja, anders n. andersen, marta jaroszewska , sebastian bykuć and jakub sawicki 7. conclusions regulations regarding the introduction of bats after 2022 significantly complicate the technical and economic situation of heat plants / chp plants located in poland. as can be seen from the results presented in the previous parts of this article, the two most-considered scenarios of adaptation to bat implemented in dhcs are not optimal in terms of both economic and energy efficiency, not to mention the resignation from using fossil fuels. this state of affairs is caused by the lack of specific decisions at the european and national level regarding financial support allowing for energy table 5: simulation results summary variant 1 variant 2 variant 3 revenues unit price pln/unit amount value [m pln] amount value [m pln] amount value [m pln] sale of heat mwh 110 198782.10 21.87 198782.10 21.87 198782.10 21.87 sale of el.en. mwh dam 22295.33 3.76 22295.33 3.76 22295.33 3.76 surplus electricity mwh dam 30204.10 4.64 30204.10 4.64 45692.10 7.11 chp promotion chp1 mwh 40 17515.60 0.70 17515.60 0.70 17515.60 0.70 chp2 mwh 40 17508.70 0.70 17508.70 0.70 17508.70 0.70 chp3 mwh 40 17457.10 0.70 17457.10 0.70 17457.10 0.70 chp4 mwh 40 15488.00 0.62 chp promotion total 2.10 2.10 2.72 total revenues 34.46 34.46 37.55 expenditures purchase of gas 1000 m3 1.20 13554.87 16.27 23973.6 28.772 27172.26 32.61 gb maintenance cost 0.012 0.020 0.012 purchase of coal t 330 28142.70 9.29 12456.20 4.11 10825.80 3.57 chps maintenance cost 0.41 0.41 0.41 cb maintenance cost 0.89 0.89 0.89 grid tariff mwh 200 5.80 ~ 0 5.80 ~ 0 5.80 ~ 0 dust extraction system h 34 9349.00 0.32 5487,00 0.19 5.76 ~ 0 flue gas desulfurization installation h 51.09 9349.00 0.48 emisson co_coal t 110 10.62 0.001 4.70 517 4.08 ~ 0 emisson so2_coal t 530 147.80 0.078 65.42 0.035 56.86 0.03 emisson nox_coal t 530 55.05 0.029 24.37 0.013 21.18 0.011 emisson dust_coal t 350 33.55 0.0117 14.85 0.0052 12.90 0.0045 emisson soot_coal t 147 0.63 ~ 0 0.28 ~ 0 0.24 ~ 0 emissons from coal total 0.124 0.056 0.048 emisson co_gas t 110 3.25 ~ 0 5.75 ~ 0 6.52 ~ 0 emisson nox_gas t 530 23.72 0.012 41.95 0.022 47.55 0.025 emissons from gas total 0.013 0.02 0.03 emissions total 0.14 0.07 0.07 total operating expenditures 27.8 34.47 37.57 operation income 6.66 –0.0028 –0.016 http://el.en 54 international journal of sustainable energy planning and management vol. 24 2019 simulation of an alternative energy system for district heating company in the light of changes in regulations of the emission transformation in countries where coal is the main energy carrier. in this article, the authors analyzed the most frequently considered energy transformation scenarios of a dhc type company. in the beginning, it should be noted that all calculations made in this article are qualitative and not quantitative. in the analyzed cases, the most popular option is the one installing appropriate filtration to existing coal installations, which meet the bat guidelines,. this is currently the safest option when it comes to operating costs of the installation, which currently provides the largest profits but also brings the perspective of no vision for a change in the heating plants energy systems currently operating in poland. it is highly probable that in a few years, the now installed filtering installations will not meet the next climate requirements. summarizing variant no. 1: it is currently the most-considered option in poland. another analyzed approach to solving the bat problem, is the limitation of the operating times of coal boilers to up to 1500h/per annum, and producing the shortage of heat using natural gas. this is an option that is now gaining more and more sympathizers. unfortunately, this is an option that, based on the assumptions made by the authors, does not allow to generate profit, however, it allows to feel safe in the context of future possible changes regarding the regulation tightening on climate change. the authors note that the reduction of the price of gas (with the assumptions for the energypro model) by 0.1 pln (0.1 pln=0.024 eur) results in savings of 3.5 million pln. to sum up, for poland and the countries of eastern europe, there is still a lot of work to be done on the subject of energy transformation. this article was designed to show the initial paths chosen by companies that can directly relate to this topic. the authors hope, that it will allow readers to see a larger 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international journal of sustainable energy planning and management vol. 24 2019 55 maciej widziński, patryk chaja, anders n. andersen, marta jaroszewska , sebastian bykuć and jakub sawicki [12] ancona ma, bianchi m, branchini l, de pascale a, melino f, peretto a. low temperature district heating networks for complete energy needs fulfillment. int j sustain energy plan manag 2019;24. doi:10.5278/ijsepm.3340 [13] energypro references: licence holders n.d. https://www.emd. dk/references/energypro/ [14] buńczyk a, bogusławski p. energetyka cielpna w liczbach 2017. warsaw: urząd regulacji energetyki; 2018. https://www. ure.gov.pl/pl/cieplo/energetyka-cieplna-w-l/7662,2017.html [15] cat® g3516h gas generator sets datasheet., n.d. https://s7d2. scene7.com/is/content/caterpillar/cm20170821-74557-46197 [16] hoval thw-i hte industrial boiler. plant eng handb 2013:387–413. doi:10.1016/b978-075067328-0/50025-2. https://www.hoval.co.uk/products/thw-i-hte/ [17] hoogsteen g. a cyber-physical systems 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https://s7d2.scene7.com/is/content/caterpillar/cm20170821-74557-46197 https://www.hoval.co.uk/products/thw-i-hte/ https://doi.org/10.3990/1.9789036544320 https://doi.org/10.3990/1.9789036544320 http://10.5278/ijsepm http://prawo.sejm.gov.pl/isap.nsf/download.xsp/wdu20180000680/o/d20180680.pdf http://prawo.sejm.gov.pl/isap.nsf/download.xsp/wdu20180000680/o/d20180680.pdf http://prawo.sejm.gov.pl/isap.nsf/download.xsp/wdu20180000680/o/d20180680.pdf http://doi.org/10.5278/ijsepm.3450 http://doi.org/10.5278/ijsepm.3450 international journal of sustainable energy planning and management vol. 28 2020 37 *corresponding author e-mail: lesnanto@ugm.ac.id international journal of sustainable energy planning and management vol. 28 2020 37–52 abstract to ensure sustainable development for sulawesi island, which has significant hydropower potential, generation expansion planning (gep) should meet the forecast electricity demand. gep has determined the type and capacity of generating units necessary to minimize the total cost and provide the required reserve margin and energy balance. this study used gep with wasp-iv software to minimize costs by considering the high hydropower potential of various sulawesi electricity regions. regional-balanced and resources-based approaches were employed to determine the generation candidates. the resources-based approach considered all the hydropower resources in sulawesi island and prioritized installation of hydropower generating units close to resource locations, while the regional-balanced one considered the installation of flexible generating units close to load centers. the results showed that the resources-based approach could achieve up to 30% renewable energy in the energy mix, with total costs for the regional-balanced one being $ 9.83 billion for low demand and $ 13.57 billion for high demand; however, the resources-based scenario costs would be $ 9.54 billion for low demand and $ 13.38 billion for high demand. 1. introduction gep to ensure energy sustainability has become one of the main issues in the power system planning field, especially with regard to limiting carbon emissions as the response of the environmental issue [1]. there are several factors that affect gep, the issue of energy security, fossil fuel depletion, social-economic and environmental issue [2]. for these purposes, the use of renewable energy sources (ress) in generating units has become popular. some countries required their utility companies to employ a specific proportion of res generation in their generation systems. the availability of electricity primary source is very important for ensuring sustainability, especially since many ress have intermittent characteristics [3]. poor electricity supply can have a detrimental effect on the economic activities of a region [4]. in a developing country like indonesia, the yearly increase of electrical energy consumption reflects the economic growth of communities. the incremental growth in energy consumption not only comes from the residential sector, due to population growth, but also from the industrial sector. the annual average economic growth in indonesia of 6.3% caused the annual electricity sales increment (2012–2016) to increase to 6.7%, as asserted by [5]. gep is an important procedure for ensuring sustainable energy. gep determines the type, size, and quantity of generating units to be deployed during a specified time horizon with minimal total costs as the objective [4]. considering the renewable energy proportion targets, the problem can be solved with multi-objective approaches generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system tumirana, sarjiyaa, lesnanto multa putrantoa*, adi priyantob, ira savitrib a department of electrical and information engineering, universitas gadjah mada, grafika street no. 2, yogyakarta, indonesia b system planning division, pt pln (persero) trunojoyo street, blok m-i no.135, south jakarta, dki jakarta, indonesia keywords: generation expansion planning; renewable energy; hydropower; resources-based; regional-balanced; url: https://doi.org/10.5278/ijsepm.3247 mailto:lesnanto@ugm.ac.id https://doi.org/10.5278/ijsepm.3247 38 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system based on the technique presented in [6]. another work [7] considered gep with a high proportion of hydropower generating units, including water pumping technology. to achieve a high proportion of res generation, systems must be more flexible than conventional generation and transmission systems [8]. with effective gep, electricity at an affordable price can be obtained, providing economic benefits for various regions, enabling economic activities and communities’ quality of life to increase significantly [7, 8, 9]. the decline of fossil fuel supplies was the most important factor constraining gep. in developing countries, fossil fuels such as coal are a source of air pollution. to achieve carbon emission targets, res generating units should be considered using a gep procedure [5, 9, 10]. res targets are supported by the presidential regulation of the republic of indonesia no. 61 of 2011, which is the national action plan for reducing greenhouse gas emissions, and law no. 16 of 2016, concerning the approval of paris agreement, by which the government of the republic of indonesia commits to reducing greenhouse gas emissions by 29% by 2030 [10, 11]. considering these regulations, the government of indonesia and pt perusahaan listrik negara (pt pln) have specified a minimum renewable energy mix of 23% by the end of 2025 and 31% by the end of 2050 [3, 12, 13]. the sulawesi electricity system (ses) is one of the largest electricity systems in indonesia, with an average projected growth of electrical energy sales in 2018–2027 of 8.7%, after java and sumatra systems. the economic development of this island will increase rapidly in the near future, so the electricity support systems that are the backbone of development should be put in place. currently, the ses is divided into two sections: the north sulawesi region, consisting of north sulawesi province and gorontalo province, and the southern sulawesi region, consisting of south sulawesi province, central sulawesi province, southeast sulawesi province, and west sulawesi province. the peak load of the north sulawesi region system in 2017 was 401 mw, while that of the southern sulawesi region system was 1,556 mw [3, 13, 14]. currently these two systems are not connected. primary potential ress on sulawesi island include wind energy in the south, hydro energy in the central region, and natural gas on the east coast [5]. based on nippon koei reports in 2011 [15], hydropower potential was 26,321 mw, of which 4,338 mw were already in operation, 5,956 mw were planned, and 16,027 mw were unplanned; however, due to geographical conditions, only about 8,000 mw of hydropower could be generated. the potential ress in sulawesi were determined by the sulawesi electricity masterplan study [16], which included hydropower at 5,174.3 mw, geothermal energy at 1,148 mwe, wind power at 4,104.54 mw, biomass energy at 2,086 mwe, and solar energy at 21,081,000 mw with radiation of 4.80 kwh/m2/day [3, 13]. various gep studies have considered ress. a statistical residual load duration curve (s-rldc) was used to model the load for gep in china [18], which was a technique to simplify the duration curve load method. in that study, the generation of renewable energy was included in the plan as a negative load. in another study in kenya [19], gep was conducted by carrying out renewable energy integration and leastcost gep to achieve security and continuity in the supply of electrical power systems, using wasp-iv as a tool to solve gep problems. in addition, a study of distributed centralized thermal energy generation in the long-term planning of the iranian electricity system used wasp-iv [20]. the researcher in a further study [21] conducted gep for the electricity system in pakistan using wasp-iv. the selection of generating units included in the gep could be achieved by using screening curves to determine the type of generator needed to supply the base and peak loads. yet another study [9] analyzed and estimated the proportion of renewable energy that could be developed in the energy mix of indonesia and thailand. leap was used in the development of renewable energy, such as hydro, wind, and solar power, with the objective of increasing the use of renewable energy in those two countries, which were previously dominated by nonrenewable energy power plants. several studies have applied gep to indonesia’s energy mix. the researcher in [22] used osemosys for gep to meet the demand and satisfy the load increase in the java–bali electrical power system. another study also conducted sulawesi gep using osemosys [23]. in both studies, a res generating unit was considered to be a fixed plant and used as the data input. to deal with the issue of sustainability in the electric power system, research on the energy mix in indonesia has been conducted by a number of researchers [22, 23]. to capture the trend of the energy mix status, one study [24] introduced a dynamics modeling approach to develop a new model of the international journal of sustainable energy planning and management vol. 28 2020 39 tumiran, sarjiya, lesnanto multa putranto, adi priyanto, ira savitri energy mix. previous trends were used as the data input to simulate future energy mix needs. an overview of the potential resources and utilization of energy in indonesia has also been carried out [25]. currently, the energy mix in indonesia still depends on fossil energy, with a contribution of ress of around only 3%. to increase the proportion of ress, local resources and potential ress, one of which is hydropower, must be considered. there are several studies to support gep and energy planning by considering ress, especially related to hydropower. to support the development of a hydropower plant, risk analysis and investment bidding are needed [26,27]. this is to determine the level of competitiveness of the hydropower plant. the researcher in [26], conducted an investment risk analysis of a small hydropower (shp) plant in a portugal electrical system. the researcher considers and identifies several aspects of risk and determining the tariff for shp in portugal. for the determination of costs or bidding for hydropower in norwegian, it is necessary to consider factors of water value, feed-in fees, technical and hydrological characteristics, and bilateral agreements outside the spot market [27]. to conduct the gep for the ses, pre-analysis of the electrical demand projection (load forecasting) and primary energy resources was carried out. these processes, including transmission expansion planning (tep) and transmission backbone determination, became the basis of a masterplan, which is needed to provide development guidelines for specific areas. the previous masterplan study was carried out in 2008, resulting in the installation of more hydropower generating units on sulawesi island [28]. the new masterplan was formulated in several stages: load forecasting, generation expansion planning, and transmission expansion planning, including the determination of the system backbone. the load forecasting stage considered two scenarios: base and high-demand scenarios. the base demand scenario used a “business as usual” approach for normal growth, resulting in a low projection for electricity demand, but the high-demand scenario, which considered all aspects of the possible development planning (such as mining load and higher economic growth) resulted in a high projection for electricity demand. the gep for sulawesi had to consider several factors, such as the system’s reserve margin, the loss of load probability (lolp) reliability index, and the possible interconnection of the northern and southern systems. the value of the reserve margin was deterministically set at 35–40%, or equivalent to the lolp criteria of <0.274%. lolp <0.274% meant that the probability of a system outage was less than one day per year. these two criteria needed to be fulfilled for gep in indonesia. the final stage in the development of the electricity system masterplan was the tep for the ses, which had to consider economic and technical criteria, such as load flow, short circuits, and stability. in the tep, it was necessary to set transmission voltage levels between 275 kv and 500 kv as the backbone. this study focused on gep for the ses by considering potential resources, including res options. the contribution of this paper is a gep procedure for a developing country using low-cost fossil power plants to achieve a high res proportion in the target energy mix. regional-balanced and resources-based approaches were applied to the optimization problem, which modified the constraints in the gep optimization equation. the regional-balanced approach focused on installing generator units close to the load centers, while the resources-based approach focused on installing generator units close to the resource locations. the simulations were developed as an optimization problem, which was simulated in a wasp-iv environment. 2. materials and methodology this section discusses the materials and methodology used to conduct this research. section 2 is divided into two sub-sections: the first discusses the data used in the study (namely the ses data) and the second discusses the methodology, including the assumptions about the data and the objective functions and constraints. 2.1. the sulawesi electricity system currently, the ses is divided into two different sub systems for the northern and southern regions. the northern sulawesi system consists of the north sulawesi and gorontalo provinces, while the southern sulawesi system consists of the south sulawesi, west sulawesi, central sulawesi, and southeast sulawesi provinces. based on the rencana usaha penyediaan tenaga listrik (ruptl) 2018–2027 document, in 2018 the peak load in the northern sulawesi system is expected to be 421 mw, with a total capacity of existing plants of 573 mw, while the southern sulawesi system’s peak load is estimated at 1,413 mw, with a total capacity of existing plants of 1,977 mw. the average load growth 40 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system over 10 years for the northern sulawesi system is 9%, while that for the southern sulawesi system is 9.9% [5]. load growth in the ses is influenced by several factors, such as population growth, economic growth, growth in the number of industrial areas, and smelting industry development. the small industries and smelter factories are two particular factors that will affect the load growth in sulawesi. in the ses, the growth of those sectors has already been planned by the regional government. the locations of the capital city, industrial areas, and smelter factories can be seen in figure 1 [16]. the load growth for sulawesi was divided into two scenarios: a base-demand scenario with normal load growth and a high-demand scenario with very optimistic load growth. the industrial areas and smelter factories should be gradually installed in sulawesi between 2017 and 2026, in the north sulawesi, gorontalo, central sulawesi, west sulawesi, and south sulawesi provinces, and industrial sector development has been planned close to the capital city in each province. smelters in sulawesi will serve the nickel mining process, with smelter factories being spread across seven potential areas: one area in south sulawesi province and six areas in southeast sulawesi province. the requirement of a smelter in south sulawesi is 270 mw for the basedemand scenario and 620 mw for the high-demand scenario. the requirement of a smelter in the southeast sulawesi province is 710 mw for the base-demand scenario and 2,244 mw for the high-demand scenario. the construction of smelter factories in the southeast sulawesi province is spread across six areas: four in the northern and western regions of the provincial capital, and two potential areas on kabaena island and muna island [16]. the ses has a number of potential ress, such as hydropower. based on the one map policy [29], south sulawesi has the largest hydropower resources on sulawesi island at 3,826.5 mw, spread across eight locations. the largest hydropower potential is in karama, at 1,161.1 mw, while the smallest is in central sulawesi, in kerataun, at 54.5 mw. west sulawesi has hydropower potential of 1,867.4 mw, spread across nine locations. karama river has the largest hydropower potential in west sulawesi, at 1,148 mw. in addition, a nippon koei study stated that hydropower potential in sulawesi is abundant. north sulawesi province has 63.19 mw, central sulawesi has 1,596.7 mw, sulawesi south has 3,269.5 mw, and southeast sulawesi has 276.4 mw [16]. 2.2. methodology this research was conducted in several stages and the flowchart is presented in figure 2. data, which was crucial for the gep simulation, was collected by surveying and reviewing the literature and statistics relating to public policy. the data used in this study, consisting of the load duration curve, peak load, energy demand, existing generating unit technical data, and fuel costs for the ses, was obtained from pt pln and the ruptl document. for the load forecasting, economic growth was assumed, based on the indonesian rapbn 2018 data, to have a value of 5.4% in 2018 and 5.9–6.9% by 2021 [16]. the value for the ses’s energy losses was based on the 2010–2016 electricity system losses data from the 2018–2027 ruptl document. fuel costs were assumed based on data from the indonesian crude oil price (icp) and esdm regulation no. 11 of 2017, which can be seen in table 1. in this study, the objective function for minimizing the total cost was formulated as described in equation (1): (1)( )j, t tmin b =  t=1 j,t j,t j,t j,t j,ti s +f +o&m +o−∑ legend: capital city of provience plan for industrial area plan for smelter industry figure 1: map of the distribution of industrial areas and smelter factories in sulawesi [16] international journal of sustainable energy planning and management vol. 28 2020 41 tumiran, sarjiya, lesnanto multa putranto, adi priyanto, ira savitri the optimal solution was formulated by minimizing the total cost of all the expansion plans, for each year, across the horizon plan presented by equation (1). the minimum total cost of generation (bj,t), attached to expansion plan j, is the sum of the discounted investment cost (lj,t), discounted fuel cost (fj,t), discounted operation & maintenance cost (o&mj,t), discounted cost of energy not supplied (oj,t) , minus the discounted residual values after depreciation during the operation period in the study (salvage value, (sj,t)) [30]. the calculations for the cost components of bj,t are presented in equations (2)–(6). where i is the discount rate, t is the number of years between the reference date for discounting and the first year of the study, and t is the number of years in the study period. the investment cost, represented in equation (2), is the sum of all the capital investment costs of units k (c k cap) added in year t by expansion plan j, multiplied by the capacity of units k in mw (p k max). equation (3) shows the calculation for the salvage value. the salvage value is the sum of all the capital investment costs of units k (c k cap) added in year t by expansion plan j, multiplied by the capacity of units k in mw (p k max) and the salvage value factor at the horizon for unit k (δk,t). the fuel cost calculation, represented in equation (4), is the sum of all fuel costs for thermal units k ( k,thermalfuelc ), multiplied by the generation capacity of unit k ( t,hk,thermalg ), considering the probability of hydro-condition (αh) for the number of hydro-conditions (nhyds) in expansion plan j. another cost component was the operation & maintenance cost (o&m), which was divided into a fixed o&m cost and a variable o&m cost. the o&m cost in equation (5), is the sum of all the fixed o&m costs of unit k (c k fom) multiplied by the unit size (p k max), and the variable o&m cost of unit k (c k vom) multiplied by the ( ) ( ) ( ) t k k j,t cap max t k k j,t j,t cap max nhyd k,thermal t,ht -0.5 h fuel k,thermalj,t h=1 k k k tt -0.5 fom max vom kj,t i = (1 + i) × [c  × p ]k s = (1 + i) × [ × c × p ]k ×   c × gf = (1 + i) × k c × p + c × go & m = (1 + i) × k − − − − δ  α      ∑ ∑ ∑∑ ∑ (3) (2) (4) (5) nhydt -0.5 h 1j,t 2 t,h t,h t,h h t t o = (1 + i) × ens ensb c a + × + × × ens × 2 ea 3 ea − =       α          ∑ (6) table 1: primary energy cost and heat content assumptions fuel type price heat content fuel cost value unit value unit (usd/gj) (usd/mwh) coal 0.0650 usd/kg 20.92 mj/kg 3.107 11.1852 natural gas 0.2613 usd/m3 39.34 mj/m3 6.644 23.9184 lng 0.3733 usd/m3 39.34 mj/m3 9.489 34.1604 start data input determine the objective function and constraint parameters determine the power plant candidate determine the scenario to be simulated : • regional balance base and high demand • resource based base and high demand optimal generation expansion planning simulation each scenario optimum possible combination of expansion candidate each year analysis for total cost and power plant mix portion comparison for each scenarios end constraint violated ?yes no calculate lolp of power plant while considering hydro power lolp <0.274% no yes figure 2: research flowchart 42 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system expected generation of unit k in year t (g t k), for each hydro-condition, weighted by the probabilities of the hydro-conditions. the equation for the energy not served cost, represented in equation (6), refers to the amount of energy that is not supplied per year due to deficiencies in generating capacity and deficiencies in the energy supply of plants for each hydro-condition, where a, b, and c are constants ($/kwh), given as the input data. enst,h is the amount of energy not served (kwh) for hydro-condition h in year t, and eat is the energy demand (kwh) on the system in year t. in the gep procedures, some technical constraints had to be fulfilled, as presented in equations (7)–(12) [3, 6, 22, 23]. the total number of generating units in operation in year t for the expansion plan can is given by equation (7). the total number of all generating units (nt) is sum of all the generating units in operation in the year before year t (nt–1), the number of committed additions of units (na), and the number of candidate generating units added to the system in year t (ncand), subtracted from the number of committed retirements of units in year t (nr). the other constraint was the reserve margin constraint represented in equation (8). the installed capacity in the critical period, or in the peak demand period, must lie between the given maximum and minimum reserve margin, at and bt respectively, above the peak demand dtp in the critical period of the year. the installed capacity is the sum of all units k in year t (n t k) multiplied by the maximum capacity of the units k (p k max). total generation from all generating units in year t (gt), as shown in equation (9), must be greater than or equal to the sum of the energy demand (eat) and the energy not served (enst) in year t. in this paper, the reliability of the generation system was considered, and represented by the lolp (loss of load probability) reliability index, which can be seen in equation (10). lolp is the probability of the available capacity not meeting the load in a certain period of time (generally one year). the calculated lolp value must be lower than or equal to the predetermined value (c). the lolp value was obtained from the copt (capacity outage probability table) calculation. copt is used to calculate the probability of loss of power generation from generating units (pj). copt calculations using binomial distribution could be done using equation (11). copt is affected by the number of generating units (n), power plant outage conditions (oc), power plant availability (a), and plant unavailability (u). the copt calculation can produce lole values, which is the amount of time when the available capacity cannot meet the load demand in a certain period of time. the lole calculation can be seen in equation (12), where pi is the cumulative probability from the available generation combination and dayi is the duration of the loss load (per day) [32]. the scenarios’ setup was designed to address the different priorities of policymakers, so the generating unit candidate options and the load forecast for the upcoming years was determined before the optimization procedure. the gep procedure was applied separately to the two existing systems in sulawesi, meaning that the interconnection of the two systems was not considered in the procedure. in determining the scenarios, two issues were considered: the conditions of load forecasting and the limitations of the locations of the generating unit candidates. the load forecast scenarios were used for the base-demand scenario, referring to normal business growth (“business as usual”), and the high-demand scenario used the growth of large industrial sectors, such as industrial areas and smelter factories, and the use of electric vehicles. generating unit candidate options were divided into regional-balanced and resources-based scenarios. the regional-balanced scenario considered the construction of new generating units located close to the load centers, while the resources-based scenario considered the construction of generating units located close to resources. the overall scenario of the gep can be seen in the table 2. in southern sulawesi, there are many sources of hydropower, but the locations are far from the load centers. ( ) ( ) ( ) t t 1 a r cand t k t tp k max t tp t t t n = n + n n + n 1 + a d n × p 1 + b dk g   ea + ens lolp  c − ≥ ≥ ≥ ≤ − ∑ (8) (7) (9) (10) n oc oc j n i ii 1 n! prob = × a × u oc!n oc!  .prob   daylole = = − − ∑ (12) (11) international journal of sustainable energy planning and management vol. 28 2020 43 tumiran, sarjiya, lesnanto multa putranto, adi priyanto, ira savitri in the resources-based scenario, the hydropower should be installed based on the government policy. the regional-balanced scenario considered resources located near the load centers, but northern sulawesi only had a demand scenario, since it has no abundant hydropower potential. after determining the scenarios, the next step was to determine the candidates for the plants to be built. the candidates were divided into two types: thermal and renewable energy. the thermal candidates for the northern sulawesi system and the southern sulawesi system can be seen in tables 3 and 4. in this study, the installation of res plants, such as those running on hydro, geothermal, and wind power, were determined as fixed units. a fixed unit was a candidate of a certain size that entered a system on a certain year. hydropower candidates are shown in tables 5 and 6 for the regional-balanced scenario and those for the resources-based scenario can be seen in table 7. in addition, there were also wind power candidates of 60 mw, which should enter the system in 2027 for both scenarios. in the gep optimization procedure, hydropower characteristics followed the indonesian sunny and rainy season weather patterns. the hydropower daily output was assumed to be an average value. the hydro conditions were divided into four periods per year, with each hydropower unit having a characteristic for energy generation and an average capacity for each period. two types of hydropower plants were used: run-of-the-river (ror) and dam (dam). the two types of hydropower plant had different characteristics, especially for the capacity factor of each type. the ror hydropower plants had a higher capacity factor than the dam plants. dam hydropower plants could be flexibly controlled so that they could be operated as peaker units. if the gep produced a feasible solution, the simulation result could be summarized. 3. results and discussion in this section, the gep optimization for all the scenarios for the planning horizon from 2023 to 2050 is discussed. simulation was carried out using the wasp-iv tool, which has proved useful for solving gep problems. table 2: gep scenarios considering the load forecast and the generating unit candidates’ aspects system scenarios northern sulawesi region base demand high demand northern sulawesi region regional-balanced base demand regional-balanced high demand resources-based base demand resources-based high demand table 3: thermal generating unit candidates for the northern sulawesi system no name code unit size (mw) spinning reserves (%) for (%) scheduled maintenance days per year (days) 1 coal 100 mw c100 100 11 12 35 2 coal 200 mw c200 200 11 12 35 3 coal 300 mw c300 300 10 12 35 4 geothermal 20 mw p020 20 0 5 28 5 ccgt 150 mw cc15 150 20 10 30 6 nggt 200 mw gt20 200 18 10 35 table 4: thermal generating unit candidates for the southern sulawesi system no name code unit size (mw) spinning reserves (%) for (%) scheduled maintenance days per year (days) 1 coal 200 mw c200 200 11 12 35 2 coal 300 mw c300 300 10 12 35 3 coal 600 mw c600 600 11 12 35 4 ccgt 150 mw cc15 150 20 10 30 5 nggt 200 mw g200 200 18 10 35 44 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system the ses demand forecast is presented in figure 3. it can be seen that the northern sulawesi system in 2050 will have a base-demand peak load of 3,224 mw and a high-demand peak load of 4,257 mw, whereas the southern sulawesi system in 2050 will have a base demand peak load of 11,373 mw and a high-demand peak load of 15,630 mw. 3.1. northern sulawesi region gep the gep for the northern sulawesi system was based on regional-balanced scenarios, for both the base demand and high-demand conditions. based on figures 4 and 5, it can be seen that the installed generating units were dominated by thermal plants. figure 5 shows the total capacity for the base demand to the end of 2050, which requires 4,203.4 mw total capacity, with a thermal plant capacity of 4,090 mw and a hydro power plant capacity of 113.4 mw. figure 6 shows the high demand scenario, in which the total capacity of the plant to the end of 2050 is 55,614 mw; the composition of the generating units is dominated by thermal plants (5,490 mw) and hydropower plants (113.4 mw). the northern sulawesi system requires a high number of thermal generating units, due to its limited hydropower resources so, to meet the load requirements, there needs to be a supply of thermal generating units. the reserve margin for the northern sulawesi system is around 30–40%, with a reserve margin at the end of 2050 of 30.4% to satisfy the reserve margin requirement. 3.2. southern sulawesi region gep the gep optimization results for the regional-balanced scenarios can be seen in figures 6 and 7. figure 6 shows that, under base-demand conditions, the total power plant capacity to the end of 2050 is 14,794.7 mw. the thermal generating unit component is 12,750 mw (86.2%) and that of the res generating units, 2,044.7 mw (13.8%). figure 7 shows the high-demand condition, with a total capacity of 20,344.7 mw, a thermal component of 18,300 mw (90%), and a renewable energy component of 2,044.7 mw (10%). figure 8 and figure 9 show the results of the resources-based gep optimization. in the resources-based scenario, the res generating unit component becomes 5,610.7 mw for both the base demand and high-demand scenarios. the thermal generating unit component is 9,300 mw and 14,800 mw for the base and high-demand scenarios, respectively. table 5: hydropower unit candidates for northern sulawesi system no name unit size (mw) unit plant type year 1 poigar 2 30 1 ror 2028 2 sawangan 12 1 ror 2028 table 6: hydropower unit candidates for southern sulawesi system no name unit size (mw) unit plant type year 1 watonohu 15 1 ror 2024 2 konawe 21 1 dam 2023 3 buttu batu 200 1 dam 2025 4 scattered 400 1 dam 2025 table 7: hydropower candidates for the resources based scenario no name type capacity (mw) year 1 watonohu ror 15 2033 2 konawe dam 21 2035 3 buttu batu dam 200 2036 4 tersebar dam 400 2037 5 karama-1 dam 640 2033 6 masuni dam 320 2035 7 mong dam 200 2036 8 batu dam 215 2037 9 lariang-6 dam 160 2038 10 sr 1 (bada)1 dam 420 2039 11 sr 2 (tuare) dam 720 2041 12 kulawi ror 150 2044 13 la’a ror 160 2045 14 lariang ror 127 2046 15 makale ror 45 2047 16 palu-3 dam 75 2047 17 wtunohu-1 ror 33 2048 18 malea ror 70 2048 19 tamboli ror 20 2049 20 koro yaentu ror 16 2049 21 lalindu ror 50 2049 22 bakaru 3 ror 145 2050 international journal of sustainable energy planning and management vol. 28 2020 45 tumiran, sarjiya, lesnanto multa putranto, adi priyanto, ira savitri 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050 pe ak l oa d (m w ) year northern sulawesi region base demand northern sulawesi region high demand southern sulawesi region base demand southern sulawesi region high demand figure 3: baseand high-demand peak load for northern and southern sulawesi 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 c ap ac ity (m w ) year existing coal 100 mw coal existing geo 20 mw geo nggt 200 mw nggt 150 mw ccgt existing hydo new hydro load figure 4: northern sulawesi system installed capacity for the base-demand scenario 0 1000 2000 3000 4000 5000 6000 c ap ac ity (m w ) year existing coal 100 mw coal 200 mw coal existing geo 20 mw geo nggt 200 mw nggt 150 mw ccgt existing hydo new hydro load figure 5: northern sulawesi system installed capacity for the high-demand scenario 46 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system based on the results of the gep optimization, the reserve margin for each scenario is 30–40%. at the end of 2050, the regional-balanced base demand reserve margin is 30%, the regional-balanced high demand reserve margin is 30.2%, the resources-based base demand is 31.1%, and the resources-based high demand is 30.58%. 3.3. comparison between scenarios to compare the installed capacity of the scenarios, the whole ses needed to be evaluated. the installed capacity for northern and southern sulawesi was aggregated, and the northern sulawesi gep results were combined with the regional-balanced and resources-based scenarios for the southern sulawesi results. based on the simulation results, several comparisons could be made regarding the effect of the proportion of ress. applying a resources-based scenario would increase the proportion of hydropower installed capacity as presented in figure 10. by the end of 2050, the resources-based base-demand scenario could have 30% res generating units, thereby meeting the energy mix target set by the government. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 c ap ac ity ( m w ) year existing coal 200 mw coal 300 mw coal 600 mw coal nggt 200 mw nggt ccgt 150 mw ccgt existing hydo new hydro wind new wind load figure 6: southern sulawesi system installed capacity for the regional-balanced and base-demand scenario 0 5,000 10,000 15,000 20,000 25,000 c ap ac ity ( m w ) year existing coal 200 mw coal 300 mw coal 600 mw coal nggt 200 mw nggt ccgt 150 mw ccgt existing hydo new hydro wind new wind load figure 7: southern sulawesi system installed capacity for the regional-balanced and high-demand scenario international journal of sustainable energy planning and management vol. 28 2020 47 tumiran, sarjiya, lesnanto multa putranto, adi priyanto, ira savitri the greater capacity of res generating units could reduce the proportion of fossil power plants as presented in figures 10 and 11. for the base demand, the coal proportion was 60% and the renewable power proportion was 8%. furthermore, the proportion of coal power plant could be reduced by up to 44%. a reduction in the consumption of coal is also one of the government’s targets, as set out in the 2018–2027 ruptl document. with the decrease of fossil-based generating units, especially those consuming coal, the results of gep optimization could have an impact by reducing the emission levels produced by coal power plants and switching to hydropower units. in addition, it could reduce energy dependence on fossil fuels, thereby increasing energy security and sustainability for the future. to increase the energy security and sustainability of power systems, the power plant reliability index is something that needs to be considered. the reliability of power plants must meet the standards for reliability established by the indonesian government and pt pln, 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 c ap ac ity ( m w ) year existing coal 200 mw coal 300 mw coal 600 mw coal nggt 200 mw nggt ccgt existing hydo new hydro wind new wind load figure 8: the southern sulawesi system installed capacity for the resources-based and base-demand scenario 0 5,000 10,000 15,000 20,000 25,000 c ap ac ity ( m w ) year existing coal 200 mw coal 300 mw coal 600 mw coal nggt 200 mw nggt ccgt 150 mw ccgt existing hydo new hydro wind new wind load figure 9: the southern sulawesi system installed capacity for the resources-based and high-demand scenario 48 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system which is less than 0.274% for lolp. table 8 shows the lolp index for each scenario, which is less than 0.274% for each year. another impact of increasing the number of renewable energy power plants entering the system is the decrease in total generation costs. this can be seen in table 9. based on these results, the inclusion of renewable energy through a resources-based scenario could provide a lower total cost for renewable energy generation (usd 9.54 billion for base demand and usd 13.38 billion for high demand) than a regional-balanced scenario, with a relatively high cost (usd 9.83 billion for base demand and usd 13.57 billion for high demand). however, it was assumed that there would be no landacquisition costs for each power plant, and installing a hydropower plant requires a greater area of land than any other type of power plant. (a) (b) 60% 22% 6% 12% coal nggt ccgt renewable energy 44% 20% 5% 30% coal nggt ccgt renewable energy figure 10: installed capacity for the base-demand scenarios (a) regional-balanced (b) resources-based (a) (b) 83% 35% 7% 12% coal nggt ccgt renewable energy 69% 28% 9% 30% coal nggt ccgt renewable energy figure 11: installed capacity for the high-demand scenario (a) regional-balanced (b) resources-based international journal of sustainable energy planning and management vol. 28 2020 49 tumiran, sarjiya, lesnanto multa putranto, adi priyanto, ira savitri 4. conclusion to meet the 30% energy mix proportion target, the resources-based scenario should be chosen for the gep procedure for both demand scenarios. the technical construction costs for the resources-based scenario would be lower than for the regional-balanced scenario. table 8: lolp index for each scenario year base demand (%) high demand (%) northern sulawesi region southern sulawesi region northern sulawesi region southern sulawesi region regional-balanced resources-based regional-balanced resources-based 2023 0.004 <0.001 <0.001 0.098 <0.001 <0.001 2024 0.021 <0.001 <0.001 0.068 <0.001 <0.001 2025 0.091 <0.001 <0.001 0.222 <0.001 <0.001 2026 0.056 <0.001 <0.001 0.13 <0.001 <0.001 2027 0.197 <0.001 <0.001 0.127 <0.001 <0.001 2028 0.192 <0.001 <0.001 0.172 <0.001 <0.001 2029 0.063 <0.001 <0.001 0.112 <0.001 <0.001 2030 0.172 <0.001 <0.001 0.11 <0.001 <0.001 2031 0.138 <0.001 <0.001 0.116 <0.001 <0.001 2032 0.150 <0.001 <0.001 0.071 <0.001 <0.001 2033 0.041 <0.001 <0.001 0.083 <0.001 <0.001 2034 0.142 <0.001 <0.001 0.044 <0.001 <0.001 2035 0.133 <0.001 <0.001 0.058 <0.001 <0.001 2036 0.079 <0.001 <0.001 0.047 <0.001 <0.001 2037 0.079 <0.001 <0.001 0.064 <0.001 <0.001 2038 0.083 <0.001 <0.001 0.06 <0.001 <0.001 2039 0.119 <0.001 <0.001 0.047 <0.001 <0.001 2040 0.090 <0.001 <0.001 0.051 <0.001 <0.001 2041 0.106 0.001 <0.001 0.036 0.001 <0.001 2042 0.076 0.002 <0.001 0.042 0.002 <0.001 2043 0.066 0.002 <0.001 0.035 0.002 <0.001 2044 0.073 0.001 <0.001 0.026 0.001 <0.001 2045 0.046 0.002 <0.001 0.028 0.001 <0.001 2046 0.049 0.003 <0.001 0.015 0.001 <0.001 2047 0.036 0.003 <0.001 0.019 0.001 <0.001 2048 0.037 0.003 <0.001 0.013 0.001 <0.001 2049 0.031 0.002 <0.001 0.007 0.001 <0.001 2050 0.020 0.003 <0.001 0.008 0.001 <0.001 table 9: total cost comparison for each scenario scenario total cost (billion usd) regional-balanced base demand 9.83 resources-based base demand 9.54 regional-balanced high demand 13.57 resources-based high demand 13.38 50 international journal of sustainable energy planning and management vol. 28 2020 generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system however, the land-acquisition costs have not been considered in this study. normally, hydropower plants require more land investment than other types of power plant, so that the social costs for the resources-based scenario could be higher. furthermore, transmission lines would have be installed to transmit the electrical power from the source to the load center. in this situation, the resources-based scenario would require more transmission-line facilities than the regional-balanced one, which might increase the construction costs. references [1] eia, international energy outlook 2016: u.s. energy information administration (eia), vol. 1, no. may. washington dc, 2016. https://www.eia.gov/outlooks/ieo/. 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[32] r. billinton and r. n. allan, reliability evaluation of power systems, second edition. new york: plenum press, 1996. https://www.springer.com/gp/book/9780306452598. http://www.ajer.org/papers/v2 http://www.ajer.org/papers/v2 http://ze211276286.pdf http://doi.org/10.9790/1676-0323949 http://doi.org/10.9790/1676-0323949 http://etd.repository.ugm.ac.id/home/detail_pencarian/112079 http://etd.repository.ugm.ac.id/home/detail_pencarian/112079 http://etd.repository.ugm.ac.id/penelitian/detail/114339 http://etd.repository.ugm.ac.id/penelitian/detail/114339 http://doi.org/10.5278/ijsepm.2018.18.3 http://doi.org/10.1016/j.rser.2011.12.007 http://doi.org/10.1016/j.rser.2011.12.007 http://doi.org/10.5278/ijsepm.201402.5 http://doi.org/10.5278/ijsepm.201402.5 http://doi.org/10.5278/ijsepm.2015.7.4 http://doi.org/10.5278/ijsepm.2015.7.4 http://open_jicareport.jica.go.jp/pdf/11882396.pdf http://open_jicareport.jica.go.jp/pdf/11882396.pdf https://geoportal.esdm.go.id https://www.iaea.org/publications/6327/wien-automatic-system-planning-wasp-package-a-computer-code-for-power-generating-system-expansion-planning-version-wasp-iv http://doi.org/10.1109/ieps.2014.6874165 http://doi.org/10.1109/ieps.2014.6874165 https://www.springer.com/gp/book/9780306452598 _hlk36442557 _hlk36442438 _hlk36442754 _hlk36325264 _hlk36330043 _hlk19711199 _hlk36328457 _hlk36329401 _hlk36329556 _hlk36328187 _hlk36332492 _hlk36327829 _hlk36332587 _ref8877270 _hlk36333169 _hlk36437632 _hlk20386575 _hlk36331759 international journal of sustainable energy planning and management vol. 23 2019 3 *corresponding author. e-mail address: steffenn@plan.aau.dk (s. nielsen) international journal of sustainable energy planning and management vol. 23 2019 03–13 abstract this study investigates the accuracy of the modelled heat demand (kwh/m2/year) in a heat atlas compared to metered data. the danish heat atlas is compared to metered heat demand values from more than 1 million buildings. statistical analysis is applied to the two datasets, to investigate how well the heat atlas predicts the actual heat consumption and how accurate it is for different sized groups of buildings and groups consisting of different building types. the study results in a higher certainty and better knowledge of the accuracy of the results. in this way, the utilization of the tool in actual planning for the danish heating sector is improved. furthermore, by identifying in which areas or building types the heat atlas is lacking accuracy it is possible to consider this in the results of calculations using the tool. the results indicate that the estimates of the heat atlas mainly can be considered valid for single-family buildings, but for other categories, there are larger uncertainties and thus the heat atlas should be used with more caution for those building categories. 1. introduction recent studies show, that in many cases a higher coverage by district heating in the heating sector can be an important part of a smart energy system with a high renewable energy penetration [1–3]. a higher penetration of district heating enables a more diverse heating sector with better integration of renewables, e.g. with biomass [4] or combined heat and power plants [5], but especially in the so-called fourth generation district heating, where supply temperatures are lowered [6–8]. furthermore, district heating can be used as a cross-sector storage of waste heat and surplus electricity from the electricity sector [2,9]. studies also show, that a high district heating penetration is economic feasible compared to focusing on individual heating solutions, especially in dense urban areas [10,11]. to determine the feasibility of district heating in different areas, information regarding the spatial distribution of the heat demand is essential, since the economic feasibility of district heating is related to the heat demand density in the specific areas [12]. furthermore, as shown in [13] the heat density of district heating is related to energy renovation of buildings. many different analyses indicate that heat savings are also a crucial part of the smart energy system[14], and thus this should also be considered when planning for the future heat supply. district heating is only suitable in areas with a high heat density or in places with access to a low-cost heat source such as surplus heat from industrial processes and electricity production. this means that the economic feasibility of district heating depends on spatially explicit conditions. often heat maps or heat atlases are used to investigate the location of the heat demands in a spatially explicit way. recent studies have generated heat atlases for several places, amongst others japan [15], usa [16], denmark [17,18], and the european union [19–21]. the methods to develop these heat atlases differ but can all can be divided into two general categories; bottom-up and heat atlas accuracy compared to metered data lars grundahl a, and steffen nielsen b* a department of planning, aalborg university, a. c. meyers vænge 15, dk-2450 københavn sv, denmark b department of planning, aalborg university, rendsburggade 14, dk-9000 aalborg, denmark keywords: district heating; heat mapping; gis; spatial analysis; heat atlas; url: http://doi.org/10.5278/ijsepm.3174 http://doi.org/10.5278/ijsepm.3174 4 international journal of sustainable energy planning and management vol. 23 2019 heat atlas accuracy compared to metered data heat demand, which as mentioned before, can then be summarized as needed for further analysis. the challenge with the bottom-up method come from the data collection, as it is rare to find metered consumer data on heat demands for all consumers within a large area. this results in two cases; one where data is available for all buildings but only for a smaller area of interest, and the other where data is available for a larger area but not for all buildings. in the first case, assumptions have to be made as to how well the data represents all heat demands also outside the small area of interest. in the second case, assumptions are needed regarding the representation of buildings and locations without data available. a recent example of a bottom-up approach is seen in this case study for belgium [24]. on one hand, the distribution grid companies within the heating sector, such as natural gas or district heating distributors have good knowledge of the demands within their own supply areas, as they know how much heat their costumers purchase. on the other hand, it is more complicated for the areas outside the existing supply areas as these have their own individual heat supply. when choosing the best heat supply option for all buildings, it is important that the economic calculations are based on accurate estimates of the heat demands. often the knowledge of the heat consumption in buildings is kept within the distribution companies. in denmark, the collection of electricity and heat consumption data was initiated across distribution companies with a law implemented in 2010 [25]. this means that data on actual yearly heat consumption has been collected for all the following years for more than one million buildings each year. this data has been used as the foundation for the latest version of the danish heat atlas. the study aims to investigate the accuracy of the danish heat atlas by comparing the results with realworld data. in this way, it is possible to identify areas where improvement in the prediction capability of the heat atlas is needed. it is also a verification process of the heat atlas, defining to what extent it can accurately be used to estimate the heat demands in groups of buildings. 2.1. the danish heat atlas the development of the danish heat atlas has been an ongoing process over a period of years, and the methodology has been developed to include new data types as they have become available. the overall methodology has been the same in all the years and is described in the following together with recent developments. top-down. the division depends on the data used in the development of the heat atlases. when aggregated national or regional heat demand data is distributed across the geographical entity by the use of population data or similar, the heat atlas can be considered to use a top-down approach. on the contrary, bottom-up heat atlases work with detailed data on heat demand on a local level, e.g., single buildings. one of the strengths of the bottom-up approach is that this detailed data can be summarized for any geographic entity as desired, an approach that is much easier than disaggregating national data. the background for this paper is the need for knowledge on how well the indicators perform when compared to the actual consumption in the buildings. 2. heat atlases both types of heat atlases have advantages and disadvantages. the top-down approach often entitles an easier access to data about the heat demand, as this type of data is often available in national or regional statistics as part of the monitoring of energy consumption. sometimes the data is available in a similar format for larger groups of countries e.g. the european countries through eurostat [22]. the challenge in the development of these type of heat atlases lies in the spatial distribution of the heat demand. it is often assumed, that a large part of the heat demand is related to the human settlements, that is: heat demand exists where people are located. furthermore, a large portion of the heat demand is linked to the industry and service sectors. the largest disadvantage for top-down heat atlases arises from the assumptions necessary to distribute the heat demand to multiple locations. although, the heat demand is strongly linked to the location of human settlements as well as the industry and service sectors, the exact amount of heat related to each category is hard to estimate on a regional or national level. this suggests that the distribution will be based on average perceptions of the convergence between each of the categories and the heat demand. as seen in [23], this means that the heat demand on average can be well represented and distributed. however, it is hard to represent local variations and thereby accurately estimate the heat demand on a smaller scale. the bottom-up approach relies heavily on local data collection. it is essential for the method, that local data about heat demand is collected, and it often relies on heat demand data for individual buildings. this gives a very detailed insight into the geographic distribution of the international journal of sustainable energy planning and management vol. 23 2019 5 lars grundahl and steffen nielsen consumption of different building types and ages developed by the danish building research institute [27, 28]. the building types follow the division in the bbr, and the age classification was correlated with updates of the danish building regulations. the indicators were a per square meter heat demand per year which was multiplied with the inhabited floor area of the buildings. in the newer editions of the heat atlas, the indicators from danish buildings research institute are replaced with indicators calculated based on metered data from danish buildings (fie data). the metered data is collected the heat atlas is developed based on the building and dwelling register (bbr) of denmark [26]. the bbr contains information on all buildings in denmark including the year of construction and size of the buildings. further, all buildings are divided into categories depending on their main purpose. the categories are seen in table 1. buildings in categories 910, 920 and 930 are left out of the further analysis since they are assumed to be unheated. in the early editions of the heat atlas, the heat demand was based on indicators for heat demand for the normal table 1: building usage categories, adjusted from [27] code usage 110 farmhouse at agricultural holding 120 detached single-family house 130 terrace-, linked or double house (horizontal separation between units) 140 a building of flats (a house for multiple families including two family housing (vertical separation between units) 150 hostel 160 residential home (for elderly, for children or for young persons) 190 other building for residence all year round 210 commercial production regarding agriculture, forestry, market garden, nursery, raw material extraction, a.o. 220 commercial production regarding industry, trades a.o. (factory, workshop, a.o.) 230 power station, gasworks, waterworks, district heating station, incineration plant, a.o. 290 other building for production and storage in connection to farming, industry, a.o. 310 transportation and parking facility (cargo hall, airport building, train station, a.o. 320 wholesale trade and storage 330 retailers, a.o. 390 other building for trade and transport, a.o. 410 cinema, theater, commercial exhibition, a.o. 420 library, museum, church, a.o. 430 education and research (school, gymnasium, research laboratory) 440 hospital, maternity home, a.o. 490 other institutions, including barracks, prison, a.o. 510 holliday cottage 520 unit for holiday purposes not a holiday cottage (holiday camp, youth hostel, a.o.) 530 unit linked to sport (club house, sports center, swimming bath, a.o.) 540 allotment hut 590 other building for leisure time purposes 910 garage with room for one or two cars 920 carport 930 outhouse 6 international journal of sustainable energy planning and management vol. 23 2019 heat atlas accuracy compared to metered data metered data for the full population of buildings. it also affects the comparison, since it is only possible to compare the estimated data with metered data for the buildings where it is available. for the residential sector is seems a fair assumption that the buildings left out of the analysis will have a heat demands similar to the ones included. however, in many of the other categories, the amount of excluded buildings supersedes the amount of included buildings. without metered data, it is not possible to include them in the analysis. when metered data exists, it might seem wasteful to generate a heat atlas containing estimated data based on statistical analyses. there are, however, several reasons for this approach. firstly, the metered data is considered sensitive data and is to be kept confidential. this means that a heat atlas based directly on the metered data also is to be kept confidential. with a heat atlas based on statistical data, it is possible to use it more freely and publish the data. the current edition is available online in a version with the data aggregated on administrative zones in denmark [29]. secondly, the metered data only covers a share of the buildings, as seen in figure 1. the output of the statistical analysis is, therefore, a necessity from heat providers such as district heating or natural gas providers. the data is collected in a central database for all of denmark and is climate corrected before access is given to the researchers. since the database only contains heat consumption information for buildings with metered heating systems, not all buildings are included in the database. currently, it contains information for a bit more than one million unique buildings, which is around half of the heated building in denmark, many of which have several years of metered data. in the current edition of the heat atlas, a total of 4.6 million yearly measurements are included in the statistical work. it has been decided to use data from the same buildings from various years, as this gives a more robust statistical analysis by including a higher number of observations. the coverage of the metered data is not evenly spread in all building categories. in figure 1, it is seen how many measurements for unique buildings exists out of the total number of this type of building in denmark. as the figure indicate, there is a large amount of data for the residential sector but substantially less for all other sectors. this, of course, affects the accuracy of the estimates of the heat demand since it is not based on figure 1: number of buildings with metered data (fie) compared to actual number of buildings in denmark (bbr) 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 n um be r o f b ui ld in gs 110 120 bbr fie building code 130 140 150 160 190 210 220 230 290 310 320 330 390 410 420 430 440 490 510 520 530 540 590 international journal of sustainable energy planning and management vol. 23 2019 7 lars grundahl and steffen nielsen floor area of the buildings assumes a linear correlation between the energy consumption and the size of the building. this is principally not the case, since the ratio between the surface of outer walls and floor area will have an influence. in principle the surface of the outer walls is proportional to the square root of the floor area. the area of outer walls is not known in the bbr register. one of the main influences on the heat demand in a building is the user behavior. the number and demography of the inhabitants of the buildings are not known as this is confidential information. this factor is therefore not included in the heat atlas, and the resulting consumptions for the buildings, therefore, reflect an average of the user behavior in the building types and ages. as stated above, it is not possible to predict the heat demand perfectly on a single building level; however, it is possible to predict it well for groups of buildings and with increasing accuracy with higher number of buildings. this study will investigate the accuracy depending on the number of buildings and thereby increase the usability of the heat atlas. 3. method the method section describes, firstly, the method used to merge the heat atlas with the observations of metered heat consumption. secondly, it describes the method used in the statistical comparison of the two datasets. the merge of the heat atlas with the observations of metered heat consumption is performed in rstudio version 1.0.143 enabling an easy script-based approach. the following random sample statistics are also performed using rstudio, while the statistics in a geographic context is done using arcgis version 10.3. rstudio is an integrated development environment for r [30], a language for statistical computing and graphics [31]. the heat atlas is compared to metered data for individual buildings. the metered data was collected for the years 2010–2015. table 2 shows the number of observations for each of the years. since some buildings only have metered heat consumption for one year and for all buildings without metered data. thirdly, following the analysis in this paper, it is possible to use the estimated heat demands with knowledge about the accuracy depending on the number of buildings in the analysis. this is important, since the annual heat demand in a building is not a static value. it changes between years, both with the seasons and the behavior of the inhabitants. statistical data has the advantage that it is based on the behavior in many buildings and for various years and therefore on average will predict the heat demand better. it is just as sensitive to, e.g., new inhabitants in the buildings but with the statistical analysis done in this paper that sensitivity is well known. the aim of the danish heat atlas is not to be accurate on a single building level, as too many unknowns exist to achieve this goal, amongst others: user behavior, specific energy performance of the building and economic constrains to energy renovation or consumption. rather, the heat atlas aims at accurate estimations of the average heat demand in the different building categories. a high accuracy in this context is, therefore, an estimated heat demand close to the metered heat consumption for groups of buildings as opposed to individual buildings. the two indicators used in the heat atlas are age and type of the buildings and indirectly the size since the heat demand is calculated as a per square meter demand. these indicators are chosen since they contain important information about the individual buildings. the type indicates the typical usage of the buildings and is divided into several categories for residential, service and industry buildings. however, the division is sometimes very rough as in category 410, which amongst others contains theaters, museum, and churches. the building age indicates under which building tradition and regulation the buildings were constructed. however, it does not reflect the renovation standard of the buildings and improvements of the energy performance after the construction, which can vary substantially between buildings of the same age category. the estimated heat demand represents the average for all buildings in the same building category and of similar age. the use of the table 2: number of observations of metered heat demand per year, and number of observations joined with the heat atlas. 2010 2011 2012 2013 2014 2015 number of observations 1,069,597 1,120,254 1,107,974 1,129,937 1,087,632 1,079,367 number of observations joined 1,054,879 1,102,895 1,088,457 1,111,111 1,074,698 1,068,927 8 international journal of sustainable energy planning and management vol. 23 2019 heat atlas accuracy compared to metered data without being confined to the limited samples available in the urban zones. for the individual building types, a subset of the data is generated containing all buildings with one building usage code. random samples from this subset can then be extracted containing a certain number of buildings with the sampling repeated a certain number of times, the sample function in rstudio was used for this purpose. the sample function extracts a random sample of a pre-set size from the subset. the estimated heat demand can then be compared to the actual heat demand of the buildings. in order to identify variations in the results between different samples multiple samples were extracted and summarized in boxplots. it was found that 5000 repetitions of the samples were sufficient to ensure stable outcomes, where the values no longer changed between runs of the model. this makes it possible to analyze the performance for e.g. detached single-family houses where a random sample of for example 10 or 100 is extracted from the subset 5000 times to see the variations in the. in this way, it is possible to analyze which building types have a high uncertainty and therefore should be handled cautiously when using heat demand estimates for smaller areas. 4. analysis and results all results in this section will be presented with the metered values as the reference value. the total number of buildings with one or more observed heat consumption values is 1,231,791. the total heat demand estimated by the heat atlas corresponds to 96.4% of the metered heat consumption when including all buildings. when only looking at the residential sector, which corresponds to building code 110–190, 1,161,926 buildings are included with the heat atlas estimating 95.7% of the metered heat demand. the geographical distribution of the accuracy is seen in figure 1. following the general accuracy of the heat atlas estimating approximately 95.7% of the metered heat consumption, the geographical accuracy also tends to underestimate the heat demand. in the regions, the heat atlas estimates the heat demand within a five percent margin in all except one. in the municipalities, the majority are also estimated to a heat demand within a five percent margin of the metered value. many of the rest are within a 10% margin of the metered value. one area with a particular high uncertainty is the areas of northeast zealand, shown to the right in figure 2. in the regional map, this area comes out at 89% of the metered heat consumption and similarly in the municipality map others have for several years, an average of all observations for each individual building is calculated. this could also have been estimated by using other methods, such as a weighted average using the degree day method. using the average further reduces the statistical uncertainty arising from climatically induced differences in the data for the different years and matches the goal of the heat atlas to predict the average heat demand in buildings. after joining the fie data to the heat atlas, each building is represented by a row in a table containing information about the type, age, size, and location together with estimated heat demand from the heat atlas and observed heat demand for individual years and an average of all observations. all buildings without metered data are removed from the dataset since the performance cannot be evaluated for these buildings. this leaves 1,231,791 buildings in the dataset for the statistical comparison. the statistical comparison takes two pathways. the first pathway examines the accuracy of the heat atlas in a geographical context. the merged data is exported to arcgis where it can be summarized within danish administrative zones. these administrative zones are five regions, further divided into 98 municipalities and as the smallest entity urban zones. urban zones in denmark delimit all urban settlements with a few or more buildings that have a location name. this category is therefore very broad since the smallest settlements only consist of very few buildings and the largest of more than 100,000. the urban zones can therefore also be used to look at the performance of the heat atlas depending on the number of buildings. in this part of the comparison, the goal is to look at the overall performance of the heat atlas and the data is not split into categories according to building type. instead, the mix of buildings within each zone is maintained to have a mix of building types in the calculations which represent the real-world mix of buildings. however, since all buildings without metered data are excluded in this analysis, and the distribution of observations is not equally distributed amongst buildings types, the comparison is not a complete representation of reality. in the comparison within urban zones, the buildings outside the urban zones are excluded. however, all buildings are included when comparing on the municipal or regional level. the second pathway of the statistical comparison is focused on the performance within the individual building types and the overall heat atlas performance for a set of randomly selected buildings. this analysis is done in order to investigate the performance of the heat atlas international journal of sustainable energy planning and management vol. 23 2019 9 lars grundahl and steffen nielsen have estimates reaching more than four times the metered value. overall, a tendency seems to be a higher accuracy with a higher number of buildings. this is also well in line with the results from the statistical analysis of random samples of buildings. the random sample script extracts a given number of buildings and summarizes the estimated heat demand and the heat consumption to calculate the difference between the two. the number of buildings extracted is 1, 10, 100, 200, 300, 400, and 500 respectively. this is repeated 5000 times, to generate a boxplot of the results. figure 4 left, displays the result for all building codes with 500 buildings in the random sample. the result displayed in figure 4 left is well in line with figure 3, with the range of the outliers declining with higher building numbers and with the majority of buildings approaching correct estimates. figure 4 right display similar results but only for detached single-family houses, which is the building category with the highest representation in the data. it is also a well-defined category, in which the variation between the buildings is expected to be smaller than in many of the other categories. it is seen that detached single-family houses approach a high accuracy already with more than ten buildings and that the outliers have a low spread at 100 buildings. this is the area with the most municipalities outside of the 10% margin of the metered value. when looking at the accuracy on a smaller scale, larger deviations occur, as seen in figure 3. the figure displays the accuracy in percent for all urban zones with more than ten buildings with metered values. it is seen in the figure, that the estimated heat consumption compared to the actual heat consumption in urban zones with 10–100 buildings in the majority of cases is between 50% and 200%, meaning between half and double of the metered heat consumption. some outliers, however, have estimates reaching more than four times the metered value. overall, a tendency seems to be a higher accuracy with a higher number of buildings. this is also well in line with the results from the statistical analysis of random samples of buildings. when looking at the accuracy on a smaller scale, larger deviations occur, as seen in figure 3. the figure displays the accuracy in percent for all urban zones with more than ten buildings with metered values. it is seen in the figure, that the estimated heat consumption compared to the actual heat consumption in urban zones with 10-100 buildings in the majority of cases is between 50% and 200%, meaning between half and double of the metered heat consumption. some outliers, however, figure 2: accuracy displayed geographically in the danish regions to the left and municipalities to the right. the value show the sum of the heat demand predicted by the heat atlas compared to the sum of the metered heat consumption within each region or municipality 102 % accuracy 99 % 89 % <90% 90%-95% 95%-105% 105%-110% 110%< 98 % 96 % 10 international journal of sustainable energy planning and management vol. 23 2019 heat atlas accuracy compared to metered data increasing numbers of buildings. however, many categories have a poor accuracy where they do not approach the metered value. figure 5 shows the accuracy there are also building categories with substantially lower accuracy than the average displayed in figure 4 left. all categories display an increased precision with figure 3: accuracy in urban zones sorted according to the number of buildings with metered values 0 50 100 150 200 250 300 350 400 450 10 100 1000 10000 a cc ur ac y in % number of buildings figure 4: accuracy depending on number of buildings, an accuracy of 1 means that the heat atlas estimation is the same as the metered heat demand. left: all building codes. right: detached single-family houses building category: all building category: 120 number of building in each run 11 10 100 200 300 400 500 1 10 100 200 300 400 500 10 8 6 4 2 0 10 8 6 4 2 0 a cc ur ac y a cc ur ac y number of building in each run international journal of sustainable energy planning and management vol. 23 2019 11 lars grundahl and steffen nielsen buildings to determine the heat demand with a high accuracy, especially when considering that some building types are not represented well in the metered data. thus, with the currently available data, the only category which can easily be subdivided further without the risk of too little data is the 120 (detached single-family houses), which already performs well in the heat atlas. the results are mainly important for the prediction of annual heat demands and estimation of necessary production capacity for district heating projects. the pipes to the individual buildings are normally sized based on the required capacity and not the annual energy consumption. when considering district heating in a new area, the larger consumers are often the ones determining the feasibility of district heating. this means that an accurate prediction of their expected heat demand is important for the economic feasibility of the district heating system. the heat atlas can give an estimation of this demand; however, with a high uncertainty in the results and for feasibility studies, the information from the heat atlas should be complemented with local data on heat consumption. on the other hand, the heat atlas is likely to give and relatively accurate estimate of heat demands in the general building stock in a town, especially in cases with many detached singlefamily houses. of the individual categories with 500 buildings in the random sample. the worst of category is 230 (power station, gasworks, waterworks, district heating station, incineration plant, a.o.) which approach an estimate of 150% of the metered value. overall, only category 120 (detached single-family houses) achieves a satisfying accuracy in regards to both approaching a correct estimation of the heat demands and simultaneously having a low spread, meaning that the outlier cases are still close to the metered heat consumption. other cases are also, on average, estimating correct values, but with a higher spread in the predictions and outliers relatively far from correct estimations. 5. discussion in many categories, the number of buildings without metered heat consumption supersedes the number of buildings with metered heat consumption data. this adds to the uncertainty of the results in these categories. the results depend on the parameters applied, which in this case are two relatively simple classifications. the bbr divides all buildings into 24 building types with 9 building age categories resulting in a 24 by 9 matrix, which has to represent all buildings. it might be possible to further improve the method by subdividing more, but there is a risk of ending with categories with too few figure 5: accuracy for all building categories with 500 random buildings. an accuracy of 1 means that the heat atlas estimation is the same as the metered heat demand building category a cc ur ac y 0. 0 11 0 12 0 13 0 14 0 15 0 16 0 19 0 21 0 22 0 23 0 29 0 31 0 32 0 33 0 39 0 41 0 42 0 43 0 44 0 49 0 51 0 52 0 53 0 59 0 0. 5 1. 0 1. 5 2. 0 2. 5 3. 0 12 international journal of sustainable energy planning and management vol. 23 2019 heat atlas accuracy compared to metered data [4] margaritis n, rakopoulos d, mylona e, grammelis p. introduction of renewable energy sources in the district heating system of greece. int j sustain energy plan manag 2014. doi:10.5278/ijsepm.2014.4.5. 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[14] lund h, thellufsen jz, nielsen s, moller b, aggerholm s, wittchen kb, et al. heat saving strategies in sustainable smart energy systems. int j sustain energy plan manag 2014. doi:10.5278/ijsepm.2014.4.2. [15] dou y, togawa t, dong l, fujii m, ohnishi s, tanikawa h, et al. innovative planning and evaluation system for district heating using waste heat considering spatial configuration: a case in fukushima, japan. resour conserv recycl 2018;128:406–16. doi:10.1016/j.resconrec.2016.03.006. [16] gils hc, cofala j, wagner f, schöpp w. gis-based assessment of the district heating potential in the usa. energy 2013;58:318–29. doi:10.1016/j.energy.2013.06.028. 6. conclusion the aim of this study was to examine the accuracy of the danish heat atlas compared to metered data. this was done by comparing the estimated demands of the heat atlas to metered consumption data from more than 1 million buildings. the results show relatively large deviations between the metered heat consumption and the estimated heat demand from the heat atlas. one building category 120 (detached single-family houses) performs well in both approaching a correct estimation of the heat demands and having a low spread. for all other categories, the results are either approaching an overestimation or underestimation or having a larger spread in the results. the results mean that the heat atlas should always be used with caution. in many real use cases, the estimated heat demand values for the majority of buildings are for detached single-family houses. for this group of buildings, the estimates can be considered valid. however, when other building types are included in the estimated heat demand sensitivity analysis of the consequences of changes in their heat demand should be performed. alternatively, actual heat consumption data should be sought for. acknowledgement the work presented in this paper is a result of the research activities of the strategic research centre for 4th generation district heating (4dh), which has received funding from innovation fund denmark (060300498b) and the thermos project, which is financed by the european union's horizon 2020 programme for research and innovation under grant agreement (723636). references [1] connolly d, lund h, mathiesen bv, østergaard pa, möller b, nielsen s, et al. smart energy systems: holistic and integrated energy systems for the era of 100% renewable energy 2013:4. http://vbn.aau.dk/files/78422810/smart_energy_ systems_aalborg_university.pdf. 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https://vbn.aau.dk/ws/portalfiles/portal/77244240/heat_roadmap_europe_pre_study_1.pdf http://vbn.aau.dk/files/77342092/heat_roadmap_europe_pre_study_ii_may_2013.pdf http://vbn.aau.dk/files/77342092/heat_roadmap_europe_pre_study_ii_may_2013.pdf https://vbn.aau.dk/da/publications/heat https://vbn.aau.dk/da/publications/heat http://10.1016/j.energy bceauthor66 international journal of sustainable energy planning and management vol. 19 2019 29 *corresponding author e-mail: r.a.alhasibi@umy.ac.id international journal of sustainable energy planning and management vol. 19 2019 29 – 44 abstract this study presents the development of various scenarios for energy planning for the transportation sector. the case study in this paper is the transportation system in the yogyakarta province of indonesia. the transportation sector has the highest energy demand of all the other sectors in this province. therefore, this sector is a significant contributor to greenhouse gas emissions. four scenarios were developed, business as usual, mode change, fuel switch and efficient vehicle. the business as usual scenario is the reference scenario. also, a scenario, called the mitigation scenario, which combines the mode change, fuel switch and efficient vehicle scenarios was also developed. an analysis of the energy demand projections and greenhouse gas emissions, in the form of co2, nox, and ch4, was conducted and the contribution of the aforementioned scenarios to low-carbon energy planning for the transportation sector was analyzed. long-range energy alternative planning software was utilized to simulate the scenarios. the efficient vehicle scenario resulted in the highest reduction in energy demand. at the end of the projection period, this scenario reduced energy demand for the transportation sector by 15.82% compared to the reference scenario. the mitigation scenario reduced energy demand by 20.45% compared to the reference scenario in 2050. by implementing an efficient vehicle scenario, global warming potential can be reduced by 15.80%. the implementation of the mitigation scenario reduced global warming potential by 24.76% compared to the reference scenario. 1. introduction yogyakarta is a province of indonesia with high economic growth compared to other provinces. the growth in the gross domestic product (gdp) in yogyakarta province from 2011 to 2017 is about 5.0% [1]. this indicates the consistent economic growth that led to high urbanization and improved income per capita. additionally, the growth of the population in yogyakarta province from 2010 to 2016 was about 1.18% which is considered a high growth rate in the population in indonesia [2]. the combined factors of gdp and population growth also led to an increase in energy demand. based on the regional energy outlook of yogyakarta province, the overall energy demand from this sector in 2015 was 34.02 pj and this will continue to increase to 44.26 pj in 2025. it has been predicted that over the period from 2015 to 2025, the energy demand in the transportation sector is 57.85% [3]. furthermore, the transportation sector is the most significant contributor to greenhouse gas (ghg) emissions. a more complex problem arise because all energy is imported from outside of the province. moreover, the fuel source is not available in the province. the only energy sources are in the form of renewable energy such as solar, wind, low carbon-based energy strategy for transportation sector development lilies setiartitia and rahmat adiprasetya al hasibib* a department of economics and business, universitas muhammadiyah yogyakarta, jl. brawijaya, kasihan, bantul, yogyakarta 55183, indonesia b department of electrical engineering, universitas muhammadiyah yogyakarta, jl. brawijaya, kasihan, bantul, yogyakarta 55183, indonesia keywords: transportation sector; ghg emission; ghg mitigation; scenario development; url: http://dx.doi.org/10.5278/ijsepm.2019.19.4 mailto:r.a.alhasibi@umy.ac.id http://dx.doi.org/10.5278/ijsepm.2019.19 30 international journal of sustainable energy planning and management vol. 19 2019 low carbon-based energy strategy for transportation sector development and biomass. the renewable energy source currently is not optimized to supply the energy need of the province. the techno-economy approach was used in energy planning for the transportation sector using a case study on the transportation system in iran in [4]. this study analyzed several scenarios compared to the reference energy system which substitutes railway technology, passenger vehicle technology, freight vehicle technology and uses compressed natural gas (cng) for light and heavy trucks. these scenarios were implemented in the energy flow optimization model. this study showed that energy consumption could be reduced by 14%. electric vehicles can play a greater role in reducing the ghg emissions caused by the transportation system [5]. this study showed that vehicle owners gain many benefits by driving electric vehicles. the relationship between energy intensity and energy demand in the transportation sector is discussed in [6]. this study used a decomposition method of the logarithmic-mean divisia index method (lmdi) and showed that energy intensity plays a dominant role in the reduction of energy demand for the transportation sector. the lmdi method was also used to analyze carbon dioxide in the passenger and freight transport sector in china [7]. based on this study, freight transportation increase in carbon dioxide emission reflecting the efficient way to reduce overall ghg emission in the transportation system. a reduction in energy demand leads to a reduction in ghg emissions. the reduction in ghg emissions in the transportation system of korea was analysed in [8]. the study considered five policies by which to reduce ghg emissions, these being: improved fuel efficiency, green car distribution, competitive green car distribution, public transportation shift, and modal shift reinforcement. by implementing these scenarios, energy demand reduced by 25.5% and ghg emissions were reduced by 21.6%. however, this study showed that the national level target could not be reached by reducing the ghg emissions produced by the transportation sector. a reduction in energy demand and ghg emissions in the transportation sector was achieved by the implementation of a fuel mix policy in [9]. this study competed for three objective variables which are energy consumption, fuel subsidy, and co2 emissions. implementing a retirement program for old vehicles was the most significant factor in reducing energy consumption and co2 emissions. this study found that the use of cng in the transportation system had a less significant impact on the reduction of fuel consumption and co2 emissions. decarbonizing the transportation system of sweden was reported in [10]. two scenarios were developed in this study which are a high percentage of electric vehicles and a high percentage of biofuels. the results showed that the lowest annual system costs were obtained by a high share of electric vehicles. the work in [11] investigated the decarbonization of the power and transportation sector in a residential area of austin, texas . the development of energy-related policies in the transportation sector was published in [12]. the relationship between variables and energy intensity was identified using document coding; then a fuzzy cognitive map was implemented to analyze the variables’ impact on climate change. this study suggested that climate change policies should be implemented in the turkish transportation system to reduce ghg emissions. in addition to ghg emissions, particulate matter (pm2,5) is one of the pollutants emitted by the transportation sector that must be considered. policy development regarding the reduction of pm2,5 and co2 emissions was reported in [13] in relation to india’s transportation system. the results of this study can be used by indian policymakers to quantify targets to reduce emissions generated by the transportation sector. comprehensive policy developments to mitigate the ghg emissions from the transportation sector in korea’s transportation sector were published in [14] using a bottom-up energy model. this study found that the adaptation of new technology in the transportation sector could reduce ghg emissions by 30%. four options for the energy strategy in the transportation sector were provided by this study. the possibility of a significant reduction in ghg emissions from the transportation sector was simulated in [15] based on modeling using a case study in new mexico. an energyefficient strategy was proposed in an energy strategy for the transportation sector to reduce energy demand and ghg emissions in [16]. the potential for energy efficiency in the transportation sector is very regionaldependent. each province in china has different characteristics that resulted in different energy management policies being implemented in the transportation sector. the contribution of this research is as follows: 1. this research proposes an analytical procedure to develop energy-related scenarios for the transportation sector, international journal of sustainable energy planning and management vol. 19 2019 31 lilies setiartiti and rahmat adiprasetya al hasibi which will have the most significant impact on energy efficiency and the reduction of ghg emissions [22]. moreover, leap facilitates the design of environmentalrelated scenarios [23]. the analysis of scenarios is considered the main feature of leap. driver variables such as gross domestic product (gdp), population, number of households, economic structure, and transportation modes are entered into leap as key assumptions. based on a specific data point, energy demand by sector can be forecasted based on the developed scenarios. the activity level of each sector or subsector, the energy production of the transformation sector, and the primary energy production rate are the main parameters of the leap model. the environmental impact of the energy sector is calculated by leap based on tier 1 ghg emission factors of the global warming potential (gwp) of the fifth report of the inter-governmental panel on climate change (ipcc). gwp potential was implemented as a technology and environmental database (ted) inside the leap software to calculate the ghg emissions as air pollution. the results of calculating the emissions can be analyzed based on sector or subsector and fuel type. each energy consumption and production has its own related ted of default emission factor based on ipcc to estimate and calculate the environmental impact of the energy sector. to forecast energy demand, the leap demand module can be designed based on the available data set. there is no specific structure of the demand module. leap provides high flexibility to allow users to design energy demand by sector or subsector, technological energy used, or energy purpose. leap provides four methods to analyse energy demand: final energy intensity, useful energy, the analysis of the stock, and transport analysis. 2.2. analytical procedure, data, and data sources energy consumption in the transportation sector in this study is evaluated in two steps. in the first step, two parameters of total transportation activity and the intensity of energy are calculated. total transportation activity is represented as travel demand. equation (1) calculates travel demand (tdi,t) in passenger-km or ton-km. vi,t is the overall number of vehicles in category i, avti,t is the average annual vehicle travelled of each vehicle category i in kilometers, and vori,t is the occupancy rate of each vehicle category i in passenger kilometers per vehicle kilometer. t is the year index used in the leap. vi,t is dependent on population and gdp 2. energy intensity and transportation activities are the primary variables to develop scenarios, 3. a bottom-up model is used in this research with the implementation of a real case in the transportation sector. the work is based on the research of determination of energy intensity that will be used to predict the energy demand of transportation sector. the data of energy intensity, especially for transportation sector, is not available regionally. the case study of this research is a very small province compare to another province in indonesia. it is a good start and may be replicated by another province. ghg analysis was also conducted in this paper. business as usual (bau) scenario is applied to predict the energy demand and ghg emission based on existing state. four alternative scenarios introduced energy saving to decrease ghg emission. this paper supports regional government effort to develop new energy strategy based on ghg intensity reduction. 2. research methodology two kinds of energy models, top-down and bottom-up, can be used to investigate the potential of reducing an energy system’s ghg emissions. the energy system includes the overall process from primary energy processing to final energy demand. the economic perspective is used in top-down models whereas the bottom-up model uses a systematic perspective to conduct energy system analysis. in combination with bottom-up models, energy technologies and energy sources can be selected by implementing optimization models to meet demands at minimum cost. in this study, long-range energy alternative planning (leap) software is utilized. leap, as an energy analysis tool, was developed by the stockholm environment institute (sei) [17]. 2.1. leap model the concept of leap is that users can use quantitative data on existing and projected demand [18]. leap is considered a good accounting framework of the energy demand-supply model. leap provides easy-to-use tools to input data sets and has been promoted in many studies [19]–[21]. in relation to ghg emissions, leap has the advantage of allowing users to design an energy forecast structure based on demand and supply data and is able to compare many different scenarios. the comparison provided by leap assists in the identification of policies 32 international journal of sustainable energy planning and management vol. 19 2019 low carbon-based energy strategy for transportation sector development data collection is an essential part of modeling to obtain a reliable model that can be accurately implemented. however, collecting complete and reliable data for all parameters and variables in leap is a challenging task due to a lack of integrated statistical data in indonesia. therefore, the data needed for leap modeling have been collected from several data sources. data on driver variables such as gdp, population, and the number of registered vehicles was collected from the national statistics council of indonesia. data related to primary energy supply was collected from pertamina, a national oil company in indonesia. electricity data was provided by pln, a national electricity company in indonesia. figure 1 illustrates the gdp and the gdp growth in yogyakarta province in indonesia, showing the fluctuations in the growth of the gdp. in this model, the value of the gdp is a constant price based on the 2010 value. in 2017, the gdp of yogyakarta province was to "6.15 billion usd. population data is another drive variable that was collected from the national statistics council this data is shown in figure 2. it can be seen that the growth in the population in yogyakarta province growth for passengers and cargo, respectively. the relation of vi,t and the growth of gdp and the growth of the population is described in (2) and (3) for passengers and cargo, respectively. ∆g and ∆p is the growth in gdp and the growth in the population respectively. ei is the elasticity of each model of transportation to the growth of gdp and the growth of the population, respectively. the energy intensity (eii,j,t) of the transportation sector is calculated by (4). in this equation, fei,j,t is the fuel economy for each fuel type j and each vehicle category i in vehicle kilometers per litre. this equation is also applied in each year t. the second step is to calculate the energy demand of the transportation sector (edi,t) by implementing equation (5). ghg emissions are calculated by equation (6) where efj,k,t is the emission factor of pollutant type k for fuel category j in year t. (pass-km or ton-km) ∑i,t i,t i,t i,t i td = v avt vor ,( 1) (1 )−= + ∆ ∗i,t i t iv v g e ,( 1) (1 )−= + ∆ ∗i,t i t iv v p e (3) (2) (1) , , i,t , ,, 1 (litre/pass-km or litre/ton-km)i j t i j ti j ei vor fe = ∑ (4) (litre) ∑i,t i,t i, j,t i, j ei = td ei (5) 2 , , ,(co eq) ∑∑∑t i t j k t i k j emission = ed ef (6) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.06 0.06 1.00 2.00 3.00 4.00 5.00 6.00 7.00 2011 2012 2013 2014 2015 2016 2017 pe rc en t b ill io n u sd gdp gdp growth figure 1: gdp and gdp growth in yogyakarta province. (source: national statistics council) 1 usd = 15,000 idr international journal of sustainable energy planning and management vol. 19 2019 33 lilies setiartiti and rahmat adiprasetya al hasibi by the ministry of energy and mineral resources in indonesia. similar data sources were used to develop table 2. the transportation sector activity in yogyakarta province is represented as travel demand per passenger. this activity is projected from 2015 to 2050 based on the master plan for national energy demand in indonesia. the transportation activity projections are based on the population and gdp projections. linear regression was decreased by 1.11% in 2017. the population of yogyakarta province in 2017 was 3,762,214. the total number of registered vehicles in yogyakarta province is shown in table 1 and table 2 shows the road and non-road transportation activities. the number of the registered vehicles has been taken from the national statistics council which is annually updated. other variables in table 1 have been extracted from the national survey of the transportation sector 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 3.35 3.40 3.45 3.50 3.55 3.60 3.65 3.70 3.75 3.80 2011 2012 2013 2014 2015 2016 2017 pe rc en t 10 6 x p er so n population population growth figure 2: population and population growth in yogyakarta province table 1: total number of registered vehicles and related variables [24] types of vehicle fuel share (%) total registered vehicles mileage (km) load factor fuel economy (km/l) passenger car 374,118 20,100 1.8 gasoline 94.30 11.0 diesel 0.70 14.0 biodiesel 5.00 14.0 bus 48,713 31,000 42.0 diesel 95.00 6.0 biodiesel 5.00 6.0 truck 158,994 31,000 8.3 diesel 93.00 5.0 biodiesel 7.00 5.0 motor cycle 3,438,740 8,000 1.3 gasoline 100.00 35.0 34 international journal of sustainable energy planning and management vol. 19 2019 low carbon-based energy strategy for transportation sector development and the population are also used in the other scenarios. the composition of used fuel and transportation mode remains the same along the projection period. 3.2. mode change (mc) the mc scenario is developed to show the impact of transportation mode change on the projected energy consumption and ghg emissions. the interpolation method is used in the mode change scenario. the mode change is interpolated from the transportation activity per mode from 2015 to 2025 and 2050. the percentage of mode change in 2025 and 2050 is based on the targets of the national energy policy of indonesia. the complete mode change is presented in table 3. 3.3 fuel switch (fs) in 2015, oil-based fuel and a small part of biodiesel are used in the transportation sector. new fuels such as electricity, natural gas, biogasoline, and biojet oil are introduced in the fs scenario. the assumption of the switch between each fuel type in this scenario is presented in table 4. as it was stated earlier in the introduction, yogyakarta province has no installed power plant. all electricity need must be supplied from outside of the region. the emission relate to the use of electricity will be emitted in the outside of the province. therefore, the emission factor of 0.86 kg co2/kwh has been added to this scenario [26]. this emission factor is 2015 value of the interconnection system of javamadura-bali. the electricity system of yogyakarta province is within this interconnection system. 3.4. efficient vehicle (ev) the ev scenario is based on the use of the new transportation engine technology which is more efficient in terms of fuel consumption. this scenario is implemented in the leap to project the population and gdp of yogyakarta province. based on this projection, the number of registered vehicles can be calculated based on (2) and (3) after which the travel demand in (1) can be projected. the activity of the transportation sector is used as the baseline scenario to which all the other scenarios refer. the annual vehicle travel is assumed to be constant for all scenarios along the projection period. the types of fuel used in the transportation sector are mainly gasoline and diesel. data on the ghg emissions caused by this fuel came from the database of the ipcc default factor of emissions for the transportation sector. the ghg investigated in this study are co2, ch4, and nox. the emission factors of these gases are integrated into leap as ted. the global warming potential (gwp) unit (ton co2 equivalent) of these gases is used to express a similar impact on the environment [25]. 3. scenario development this study considers the following four scenarios: business as usual, mode change, fuel switch, and efficient vehicle. the following sections briefly explain the development of each scenario. 3.1. business as usual (bau) the bau scenario reflects the projection of the future condition based on the current situation. this scenario is the reference scenario. in this scenario, the projection is based on the currently implemented policies. therefore, the projection of energy consumption and transportation activity is determined in light of the current trends and policies. the growth of gdp and the population is based on the projection of the national statistics council, as shown in figure. 3. projections of the growth of gdp table 2: activities of the non-road transportation sector [24] types of modes fuel share % activity unit passenger train 831.40 million pass-km diesel 100.00 cargo train 127.56 million ton-km diesel 100.00 passenger airplane 986.77 million pass-km avgas 0.03 jet oil 99.97 cargo airplane 94.92 million ton-km jet oil 100.00 international journal of sustainable energy planning and management vol. 19 2019 35 lilies setiartiti and rahmat adiprasetya al hasibi 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2015 2020 2025 2030 2035 2040 2045 2050 pe rc en t gdp growth population growth figure 3: projections of gdp and population growth table 3: mode change scenario mode change unit 2025 2050 passenger car to bus % from 2015 activity 2.14 7.50 passenger car to train % from 2015 activity 2.14 7.50 truck to cargo train % from 2015 activity 4.29 15.00 motor cycle to bus % from 2015 activity 2.14 7.50 motor cycle to train % from 2015 activity 2.14 7.50 table 4: fuel switch scenario fuel share (percent) fuel types 2015 2025 2050 electricity – 1.13 2.74 natural gas – 3.06 6.10 gasoline 72.47 37.03 – jet oil 9.36 9.16 – kerosene – – – diesel 15.86 2.95 – avgas 0.003 0.003 0.003 biodiesel 2.30 16.50 20.43 biogasoline – 27.31 40.84 biojet oil – 2.88 29.90 36 international journal of sustainable energy planning and management vol. 19 2019 low carbon-based energy strategy for transportation sector development figure 6, and figure 7 for the bau, mc, fs, and ev scenarios, respectively. the energy demand for the transportation sector in 2015 was 27.33 pj. in the bau scenario, the energy demand linearly increases with an average growth of 2.40% annually. compared to the energy demand in 2015, the energy demand in 2050 increases by 129.34% to 62.69 pj. the trend in the energy demand projection in the bau scenario as the result of the continuation scenario with no other intervention of energy-related policy. a reduction in energy demand can be achieved by the implementation of the mc scenario. the projected energy demand for the transportation sector in the mc scenario is presented in figure 5. compared to the results for the bau scenario, the energy demand in 2050 is 7.62% lower. in this scenario, energy demand in 2025 is 57.91 pj. figure 5 also shows that the mc scenario produces the same pattern for fuel types as the bau scenario. the implementation of the fs scenario results in different projections of energy demand. this scenario considers all the possibilities of new fuel technology that can be implemented in the transportation sector. the energy demand projections in this scenario are presented in figure 6 and are the result of using different compositions of fuel types. compared to the bau scenario, the total amount of energy consumption in the fs scenario is 59.01 pj, which is only 5.87% lower than the bau scenario. gasoline is no longer the dominant implemented in leap by reducing the energy intensity of each fuel type that is used in each transportation mode. as energy intensity reflects the use of fuel per passenger-km, a reduction in energy intensity is directly represented a more efficient transportation engine. the reduction in energy intensity is assumed to be 18% lower at the end of the projection period compared to the based year. the 18% reduction of energy intensity is based on the use of more advance vehicle technology [27]. 3.5. ghg mitigation (mit) the mit scenario is a combination of the mc, fs, and ev scenarios and is used to analyze its impact on energy demand and ghg emissions. 4. results and discussion this section briefly discusses the results of the simulation of the leap model. the discussion is divided into two parts. the first part discusses the projection of energy demand in the transportation sector. ghg emissions that are caused by the fuel used in the transportation sector are discussed in the second part. each pollutant that contributes to global warming is briefly explained. 4.1. the projection of energy demand based on the aforementioned scenarios, the projection of energy demand for the transportation sector in yogyakarta province is presented in figure 4, figure 5, 0 10 20 30 40 50 60 70 2015 2020 2025 2030 2035 2040 2045 2050 pj electricity natural gas gasoline jet oil kerosene diesel avgas biodiesel biogasoline bio jet oil figure 4: energy demand for the transportation sector in the bau scenario international journal of sustainable energy planning and management vol. 19 2019 37 lilies setiartiti and rahmat adiprasetya al hasibi than the energy demand in the bau scenario. however, the implementation of the ev scenario does not result in a different composition of fuel type for the transportation sector as oil-based fuel still dominates in this projection period. the projection of energy demand in the ev scenario is shown in figure. 7. the mc, fs, and ev scenarios are combined to form the mit scenario. the energy demand projections in the mit scenario are presented in figure 8 which shows that a reduction in energy demand and a change in the pattern fuel over the projection period, rather, this fuel has been replaced by biogasoline which is mostly used in road transport. in 2050, the demand for biogasoline will reach 24.10 pj. other bio-fuels used in the fs scenario are biodiesel and biojet oil, with the demand in 2050 being 12.05 pj and 17.64 pj, respectively. a more significant reduction in energy demand can be achieved by the implementation of the ev scenario which results in the energy demand for the transportation sector reducing to 52.77 pj in 2050 which is 15.82% less 0 10 20 30 40 50 60 70 2015 2020 2025 2030 2035 2040 2045 2050 pj electricity natural gas gasoline jet oil kerosene diesel avgas biodiesel biogasoline bio jet oil figure 5: energy demand for the transportation sector in the mc scenario 0 10 20 30 40 50 60 70 2015 2020 2025 2030 2035 2040 2045 2050 pj electricity natural gas gasoline jet oil kerosene diesel avgas biodiesel biogasoline bio jet oil figure 6: energy demand for the transportation sector in the fs scenario 38 international journal of sustainable energy planning and management vol. 19 2019 low carbon-based energy strategy for transportation sector development table 5 details the reduction in energy demand for the transportation sector by scenario and the percentage of reduction compared to the bau scenario, showing the potential to reduce energy demand in the transportation sector in yogyakarta province. the ev scenario achieves the highest reduction in energy demand along the projection period. in 2050, a reduction of 9.92 pj is achieved by the ev scenario which is 15.82% lower than the bau scenario. at the end of the projection period, the mc and fs scenarios reduce energy demand by of fuel type can be achieved simultaneously and results in a 20.45% reduction in energy demand compared to the bau scenario. energy demand for the transportation sector in 2050 is 49.87 pj. moreover, the use of oil-based fuel is reduced significantly. biofuel starts to dominate the type of fuel used in the transportation sector in 2020. at the end of the projection period, the demand for biofuel is 31.44 pj or 63.05% of the total fuel consumed in the mit scenario. the oil-based fuel most used in 2050 is jet oil for air transport at 14.24 pj. 0 10 20 30 40 50 60 2015 2020 2025 2030 2035 2040 2045 2050 pj electricity natural gas gasoline jet oil kerosene diesel avgas biodiesel biogasoline bio jet oil figure 7: energy demand for the transportation sector in the ev scenario 0 10 20 30 40 50 60 2015 2020 2025 2030 2035 2040 2045 2050 pj electricity natural gas gasoline jet oil kerosene diesel avgas biodiesel biogasoline bio jet oil figure 8: energy demand for the transportation sector in the mit scenario international journal of sustainable energy planning and management vol. 19 2019 39 lilies setiartiti and rahmat adiprasetya al hasibi and combine these gasses as gwp factor for all the scenarios. 4.2.1. carbone dioxide (non-biogenic) (co2) emissions the projected co2 emissions from 2015 to 2050 are shown in figure 9. in 2015, all scenarios emitted co2 gas of 1,918.07 thousand ton. in 2050, the co2 emissions in the bau scenario reached 4,423.92 thousand ton, which represents an annual growth rate of 2.42%. in contrast, the projected co2 emissions produced by the mc, fs, and ev scenarios in 2050 are 3,724.69 thousand ton, 3,982.92 thousand ton, and 4,096.06 thousand ton, respectively. co2 emissions in the mc, fs, and ev scenarios grow at an annual rate of 2.19%, 2.11%, and 1.91%, respectively. the projected co2 emissions produced by the mit scenario in 2050 are 3,329.49 thousand ton, which is an annual growth of 0.89% and is 24.74% lower than the bau scenario. 4.2.2 nitrogen oxide (nox) emissions the projected nox emissions from 2015 to 2050 are presented in figure 10. in 2015, all the scenarios emitted 16.25 ton of nox. in 2050, the volume of nox emissions produced in the bau scenario is 37.32 ton, with an annual growth rate of 2.40%. however, it is projected that in 2050, the mc, fs, and ev scenarios will emit 34.50 ton, 29.12 ton, and 31.41 ton of nox with an annual growth rate of 2.17%, 1.68%, and 1.90% 7.62% and 5.87%, respectively. however, the mit scenario has the greatest impact on the reduction in energy demand. for all the projections from 2015 to 2050, the mit scenario achieves a higher level of fuel reduction compared to the other scenarios. in 2050, the mit scenario results in a reduction of 12.82 pj which is 20.45% less than the bau scenario. in summary, the different scenarios reduce the projected energy demand and dependence on oil-based fuel in the transportation sector in yogyakarta province compared to the bau scenario by varying amounts which is important as the transportation sector consumes the most fuel compared to all other sectors. it should be noted that the projection results for energy demand are exposed to several uncertainties due to certain assumptions in relation to some variables. as an example, the load factor of the vehicle is assumed to be constant and remains the same during the projection period. this might not be the situation as the load factor is likely to change as the population grows. however, for planning purposes, the projected energy demand gives a good overview of fuel consumption in the transportation sector in yogyakarta province and will enable policy makers to compare fuel usage in the different scenarios. 4.2. the projection of ghg emissions co2, nox, and ch4 are the gasses emitted by the transportation sector which directly contribute to global warming. this section briefly explains each emitted gas table 5: comparison of the reduction in energy demand based on the bau scenario 2015 2020 2025 2030 2035 2040 2045 2050 business as usual (pj) 27.33 32.71 36.63 40.66 45.10 50.15 55.95 62.69 fuel switch (pj) 27.33 32.34 35.71 39.30 43.26 47.76 52.95 59.01 reduction (pj) 0.00 0.37 0.93 1.36 1.84 2.39 3.00 3.68 percentage of reduction (%) 0.00 1.14 2.53 3.34 4.09 4.76 5.36 5.87 efficient vehicle (pj) 27.33 31.97 34.97 37.89 41.01 44.46 48.35 52.77 reduction (pj) 0.00 0.74 1.67 2.77 4.09 5.69 7.60 9.92 percentage of reduction (%) 0.00 2.28 4.55 6.82 9.08 11.34 13.59 15.82 mode change (pj) 27.33 32.26 35.64 39.03 42.78 47.07 52.06 57.91 reduction (pj) 0.00 0.46 1.00 1.63 2.32 3.08 3.89 4.77 percentage of reduction (%) 0.00 1.40 2.72 4.00 5.15 6.14 6.96 7.62 ghg mitigation (pj) 27.33 31.57 34.03 36.55 39.27 42.32 45.82 49.87 reduction (pj) 0.00 1.14 2.60 4.11 5.83 7.82 10.13 12.82 percentage of reduction (%) 0.00 3.50 7.11 10.10 12.93 15.60 18.11 20.45 40 international journal of sustainable energy planning and management vol. 19 2019 low carbon-based energy strategy for transportation sector development projected ch4 emissions in 2050 for the mc, fs, and ev scenarios are 173.73 ton, 164.96 ton, and 158.29 ton, with an annual growth rate of 2.17%, 2.02%, and 1.90%, respectively. however, the mit scenario results in ch4 emissions of 139.96 ton in 2050 which is 25.57% lower than the bau scenario. 4.2.4. global warming potential (gwp) global warming potential (gwp) reflects the combined impact of co2, nox, and ch4 emissions on the atmosphere. gwp is expressed in co2 equivalent. the projection of gwp caused by co2, nox, and ch4 respectively. the lowest emission of nox is achieved by a combination of all scenarios. it is projected that the mit scenario has the lowest nox emissions in 2050 at 24.71 ton which is 33.78% lower than the bau scenario, having an annual growth rate of 1.21%. 4.2.3. methane (ch4) emissions in 2015, all the scenarios emit 81.99 ton of ch4. the projected emission values of ch4 from 2015 to 2050 are presented in figure 11. the annual growth rate of ch4 emissions in the bau scenario is 2.40%, resulting in projected ch4 emissions in 2050 of 188.05 ton. the 0 1 1 2 2 3 3 4 4 5 5 2015 2020 2025 2030 2035 2040 2045 2050 10 6 x to n bau ev fs mit mc figure 9: projected co2 emission of the indonesian transport sector in the different scenarios 0 5 10 15 20 25 30 35 40 2015 2020 2025 2030 2035 2040 2045 2050 to n bau ev fs mit mc figure 10: nox emissions by scenario international journal of sustainable energy planning and management vol. 19 2019 41 lilies setiartiti and rahmat adiprasetya al hasibi and mc scenarios. the highest reduction of nox pollutants is achieved by the fs scenario, followed by the ev and mc scenarios. the ev scenario achieves the highest reduction of gwp. however, the mit scenario achieves the lowest emissions for all pollutants and has the lowest gwp. 5. conclusion the transportation sector in yogyakarta province has the highest energy demand compared to all other economic sectors in this province. as a consequence, the gases under the different scenarios is presented in figure 12. the total gwp produced by the bau scenario in 2050 is 4,439.45 thousand ton co2 equivalent. the gwp for the mc, fs, and ev scenarios in 2050 is 4,110.42 thousand ton co2 equivalent, 3,995.58 thousand ton co2 equivalent, and 3,737.76 thousand ton co2 equivalent, respectively. however, the gwp for the mit scenario in 2050 is 3,340.24 thousand ton co2 equivalent, which is 24.76% lower than the bau scenario. in summary, the ev scenario achives the highest reduction in co2 and ch4 emissions, followed by the fs 0 20 40 60 80 100 120 140 160 180 200 2015 2020 2025 2030 2035 2040 2045 2050 to n bau ev fs mit mc figure 11: ch4 emissions by scenario 0 1 1 2 2 3 3 4 4 5 5 2015 2020 2025 2030 2035 2040 2045 2050 10 6 x to n c o 2 eq . bau ev fs mit mc figure 12: global warming potential by scenario 42 international 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[7] external benchmarking may be used to establish a range of energy performance indicators for an installation/facility or a specific product/service in the same field or sector. [8] developing an aggregate metric to measure and benchmarking energy performance kamal jemmad*, abdelhamid hmidat and abdallah saad laboratory of energy and electrical systems, national higher school of electricity and mechanics, hassan ii university, route el jadida, km7, casablanca, morocco keywords: energy performance; energy efficiency; benchmarking; indicator; central sterile service department url: http://doi.org/10.5278/ijsepm.3383 mailto:k.jemmad@gmail.com http://doi.org/10.5278/ijsepm.3383 70 international journal of sustainable energy planning and management vol. 23 2019 developing an aggregate metric to measure and benchmarking energy performance used for an output and the output itself [12]. metrics can be indicators (figures that indicate something) or index (several indicators combined into one) [17]. however, the two terms are widely used interchangeably in literature. indicators can fall into four groups: thermodynamic, physical-thermodynamic, economic-thermodynamic, and economic [15, 18, 19, 20, 21]. although economic indicators are useful at an aggregate level (i.e. the energy efficiency of the entire economy or the industrial sector as a whole), at a disaggregated level physical indicators give more insight into actual differences in energy efficiency levels. [18] thermodynamic indicators are more suitable to power plants and technical equipment such as rotating machines, boilers, etc. they are expressed as a ratio of 2 energy units such as kwh or joules representing the consumption versus the output as a heat content or work potential. by using conversion rates, these metrics values can be expressed in percentage as for electrical efficiency. [22, 23]. but still, patterson mentions that consumers, of course, do not value the end use service on the basis of its heat content or work potential. therefore, physicalthermodynamic indicators have the added advantage that they directly reflect what consumers are actually requiring in terms of an end use service [18]. in that sense, they are more useful compared to thermodynamic indicators in engineering applications in industry, tertiary and residential sectors. typically, indicators can be either: output divided by energy consumption called “energy productivity” – traditionally presented as “energy efficiency” [14, 24] – or energy consumption divided by output called “energy intensity” [19, 24, 25]. the specific energy consumption (sec) is a basic indicator which is a common indicator of energy intensity at the process level. [26]. it is sometimes also called the unit energy consumption (uec) or physical energy intensity (pei) [13]. the specific energy consumption (sec) is a mixed physical– thermodynamic intensity indicator. [26] the denominator value (output) can be determined in terms of dominant parameter or unit of activity. [10] the dominant parameters can be of different types: − dimensional parameters (area, volume). in commercial buildings, surface (in m2) is commonly used where energy use is primarily tied to plug loads, lighting and hvac systems. [27] although many relevant indicators were developed and used in their dedicated field. we estimate that there is still a need for development of new energy performance indicators due to many restrictions found in existing metrics as detailed in discussion section. to overcome these restrictions, we suggest to construct an indicator based on following conception elements: a) process oriented decomposition of the system b) aggregation of physical indicators with different units. c) creation of interdependence between scores of benchmarked systems. d) the use of a dimensionless number. e) the higher threshold value of the indicator is limited to 1. f) the indicator must increases when energy consumption decreases in this study, we propose an aggregated dimensionless “indicator for energy benchmarking” (ieb) to enhance the range of models of indicators dedicated to the engineering field. ieb is a process-oriented energy performance indicator to be used as a tool for assessing and benchmarking energy performance of low and middle level systems -according to energy indicators pyramid-. aware of existing differences and difficulty in defining some energy use related concepts such as efficiency, conservation, savings and performance. [9, 10, 11] we deal with energy performance indicators issues without discussing differences between these concepts. fortunately but strangely enough according to iea, there are fewer problems in defining the concept of energy efficiency indicators. [10] 2. literature review in this study the term “energy performance indicator” means the same as “energy performance indicator” (enpi) or (epi), “energy efficiency indicator (or index)” (eei), “energy use indicator” (eui), “energy intensity index” (eii), “measuring energy efficiency perfor mance” (meep) or others -used in literature as equivalent too. [12, 13, 14, 6, 10, 15, 16] 2.1. energy performance indicators basically, energy performance indicators are metrics intended mainly to assess how well the energy is used to provide the output. it consists of a ratio between energy https://www.linguee.fr/anglais-francais/traduction/interdependence.html international journal of sustainable energy planning and management vol. 23 2019 71 kamal jemmad, abdelhamid hmidat and abdallah saad bottom-up classification is: equipment/device, facility/ factory, sector, national economy. energy performance indicators used for benchmarking at the down levels of the pyramid are more representative and gives more insight about energy use. however the quantity of data required at this level can be limiting. [14, 15, 19, 35] 2.3. benchmarking energy performance indicators state of art: data analysis is a substantial step of the energy benchmarking methodology which consist of: assess current performance levels, produce tables, charts and graphs. [8] metrics are a main tool used in practice to perform this task. approaches distinguished can be classified into 2 categories: 1st category: comparison of actual specific energy consumption secact with a reference specific energy consumption secref. these energy intensity/sec-based models are often used due to their simplicity and acceptable accuracy. [36] many types can be used to determine a reference specific energy consumption secref depending on the aim of analysis: − average. [13, 37] − best plant based on an extensive survey of literature and exchange of information within the network during those years. especially countries that are generally considered to be among the most efficient. [38] − best practice observed. the complete production plant with the lowest specific energy consumption that already is in full operation; − best practical means. the production plant with the lowest specific energy consumption that can be realized using proven technology at reasonable costs; − best available technology: the production plant with the lowest specific energy consumption that can be realized using proven technology [13] 2nd category: calculate a benchmarking energy performance indicator or index. generally, a dimensionless index or indicator is constructed by aggregating system decomposition based on metrics cited in 1st category. many approaches are proposed in literature especially for industrial sector. we note following methods: best: benchmarking and energy savings tool is developed by worrell & price and lawrence berkeley − not properly technical (number of personnel, clients, rooms, beds, etc.). [28] − properly technical: for instance, in industry the physical production corresponds to a dominant output of the branch and is usually measured in ton (e.g. crude steel, cement, clinker). [20] − combination of many types: the output can also be expressed by a multi-parameters function: e.g. bakar et al. proposes a new energy index where the output is expressed as: area (m2) x number of occupants (person) in kwh/m2/ person. [29] consequently, metrics that don’t relate useful output to energy consumed are out of the scope. for instance, the power usage effectiveness pue developed by the non-profit organization of it professionals “green grid” is widely used by the it industry as an energy efficiency indicator for data centers [30, 31, 32]. defined by pue= total facility power/it equipment power, it is clear -as confirmed by its developer and other experts that pue is an infrastructure energy efficiency not a data center productivity metric and therefore does not provide guidance about energy use by it equipment. [30, 31, 32] 2.2. benchmarking energy performance many definitions are available. the definition of en 16231:2012 standard is a good one: benchmarking is the process of collecting, analyzing and relating performance data of comparable activities with the purpose of evaluating and comparing performance between or within entities. [8] energy benchmarking is useful for understanding energy use patterns, identifying inefficiencies in energy use, estimating potential for energy conservation, and designing policies to improve the energy economy. [33] different types of benchmarking exist: internal: compares performance against internal baseline or benchmark. external: compares performance against a metric “outside” of the organization identifies “best in class” performance. quantitative: data-driven; compares actual numbers. qualitative: based on best practices; compares actions. [34] energy performance benchmarking is processed at many levels of aggregation, generally known as the energy performance indicators pyramid. an example of 72 international journal of sustainable energy planning and management vol. 23 2019 developing an aggregate metric to measure and benchmarking energy performance the reference energy use represents the amount of energy an industrial sector would have used if no improvements in energy efficiency had taken place with respect to a certain base year (in this case 1995). the reference energy use is therefore also referred to as ‘frozen-efficiency’ energy use. the reference energy is based on the physical production of products of an industrial sector and the specific energy consumption for these products in the base year 1995: in which seci,j,0 is the specific energy demand for energy demand type j to produce product i in the base year (e.g. in gj per tonne of product) and pi,k the physical production of product i in year k. [39] energy star score the u.s. environmental protection agency (epa) supported the development of energy star energy performance indicators program (es-epi) for benchmarking energy performance of industrial facilities and energy star commercial buildings program for commercial buildings. energy performance indicators epi score ranges from 1 to 100. according to boyd et al.: the epi is a statistical benchmarking tool that provides a “birds-eye” view of sector specific plant-level energy use via a functional relationship between the level of energy use and the level and type of various production activities, material input’s quality, and external factors, e.g. climate and material quality. the epi uses stochastic frontier regression to estimate the lowest observed plant energy use, given these factors. [40] the physical production indicator: developed by farla and blok (2000) especially for the country-level analysis: where ei,0 is the energy consumption of (sub-)sector i and subscript 0 refers to the base-year of the analysis. ppii is the physical production index of sector i expressed by: , ,0 , reference , actual ,0 , ,0 , sec sec = ∑ ∑ i j i ki j k j i j i ki p e e p ( ) ,0 1 ,0 e physical production indicator ppi ppi m i icountry i i=   = ×     ∑ ( ) 1 ppi p n i x x x w = = ×∑ national laboratory (lbnl) based on decomposition of the entity to processes. [33, 36] the aggregated eei “energy efficiency index” is calculated as follows: where: eei = energy efficiency index n= number of process steps to be aggregated eii= actual energy intensity (ei) of process step i eii,b= benchmark energy intensity (ei) of process step i pi= production quantity for process step i etot= total actual energy consumption for all process steps the energy efficiency index (eei): developed by phylipsen et al. (2002) for the netherlands. in which eeia is the energy efficiency index for sector a, seca the specific energy consumption for sector a, secref;a the reference specific energy consumption for sector a, ei the energy consumption for product i; mi the production quantity of product i; seci the specific energy consumption of product i; secref;i a reference specific energy consumption of product i; ea the energy consumption in sector a, and i the products 1–n made in sector a. [38] the energy efficiency indicator (eei): developed by neelis et al. (2007a) in which k is the year of analysis with 0 denoting the base year 1995, j the type of energy demand (electricity, fuels/ heat, non-energy use), eeij,k the energy efficiency indicator for type of energy demand j in year k, eactual,j,k the actual energy use from energy statistics for type of energy demand j in year k and ereference,j,k the reference energy use for type of energy demand j in year k. 1 1 1 100 100* * , ⋅ = = ⋅ ⋅ ∑ ∑ ∑ n i i i= n n i i i i , i= o i= t t p ei eei p e p e i b ei b ( ), ,, sec 100 100 sec secsec ii ia i a a ref a i ref ii ref i ii ii e m e eei mm m = = = ∑ ∑ ∑∑ ∑ actual , , reference , = j kj k j k e eei e international journal of sustainable energy planning and management vol. 23 2019 73 kamal jemmad, abdelhamid hmidat and abdallah saad pérez-lombard et al. (2012) consider that initial value judgments for the definition and qualification of service output become essential as a first step in the energy efficiency indicators construction process. [11] however, definition of process/output intrinsic characteristics is out of the scope of this study. while some metrics are well known some are hidden/complex. in this study, we are not concerned by the determination of a specific metric for each process. our work consists of how to use metrics to build an aggregated dimensionless indicator for benchmarking and assessment of energy use/performance. it is supposed in next sections that the output/process values to be used in equations are already clearly defined within the professional community related to systems in study. 3.3. process indicator in the methodologies based on energy intensity -applicable to energy productivity too-, determining the benchmarks consists primarily of establishing the benchmark intensities for each of the sub-processes. [28] then, as recommended by iso 50001, indicators should be compared to a reference. [6] so we divide s e by a reference ref s e       , which by the way ensure a dimensionless value. so we get process indicator (pi) in the form: ref s epi s e =       until then, the use of ref s e       as a reference ratio is the common method as detailed in section 3. now, we suggest another procedure: decompose ref s e       into 2 reference values sref and eref. that is to say ref ref ref ss e e   =    it follows ref ref s epi s e = (3); or in another way (4) ref ref es pi s e = × let consider a set of m comparable systems; each system composed of n processs of different or identical units as presented in table 1. the process j belonging to system i is represented by the pair (sij, eij). let emin,j be the minimum value of the energy consumptions of all processes j in the set. emin,j = min {e1 j, e2 j, ..., e nj} = mini e ij (5) (1) (2) ppii,0 refers to the base-year of the analysis px=the physical production of product x; wx= the weight of product x in the index. the aggregate sec of each product (in a specific base-year) secagg,i,0=ei,0/ppii,0 is chosen as the weight wx in the physical production index. comparable results will be obtained if a best-practice sec for a specific product would be considered as the weighting factor. unlike the sec of a specific product, the aggregate sec will not have a meaning in itself, but will serve only to indicate the relative development of (physical) energy intensity in time. [26] 3. methodology aggregated dimensionless indicator for energy benchmarking in this section, we will present a developed energy performance indicator as a contribution to enhancing the range of models of indicators available especially in the engineering field. 3.1. construction basis the indicator proposed is intended for use especially in the engineering fields at the bottom and middle level of the energy performance indicator pyramid. that is to say, at the level of: company, factory/facility, and equipment/appliance. the systems targeted are mainly those powered by electrical energy. however it could be exploited for others energy sources. 3.2. basic metric selection the relation between energy and output is generally represented by 2 basic forms: s/e “energy productivity” and e/s “specific energy consumption”. and as reported by chang and hu 2010, each represents identical measures from different perspectives, and they are used interchangeably in traditional literature. [24] we need to check that the increase in energy performance is equivalent to the decrease in consumption ∆e<0. so, we choose to use s/e ‘’energy productivity‘’ as the basic form to construct the indicator. 2 2 2 1 1 1 1 1 2 1 2 2 1 ; indicator decreases 2 ; indicator increases < ⇒ < < ⇒ < st nd e e e case: e e s s s s s s case: e e e e e 74 international journal of sustainable energy planning and management vol. 23 2019 developing an aggregate metric to measure and benchmarking energy performance − it raises the bar higher: i.e. it is hard -however not impossibleto get , , ,0 max j ref min j ss e e   =    α . − creates interdependence between systems scores. if one system make a positif step in one of the two drivers (e, s), the score of the others will get lowered if they don’t follow. this characteristic can help induce diligence and assiduity even among the best of class. 3.4. aggregating processes indicators one of the major problems in creating indicators is the aggregation of different output units. sij can be mass, volume, bulk, km, etc. the construction of a dimensionless process indicator in section 3.3 simplifies now the aggregation. the proposed aggregation of processes indicators to system-level indicator is a weighted arithmetic mean wam. since energy saving is the ultimate goal behind the use of energy performance indicators; the weight chosen is energy consumption. in other words, the indicator must expose the effect of big energy consumers performance on the system energy saving. the aggregated dimensionless indicator for energy benchmarking (ieb) of a system i is represented by eq. (11): eq. (11) can be simplified to ( ) , ,01 , 1 = = × = ∑ ∑ n ij min jj max j ni ijj s e s ieb e α 12; however it is more insightful and instructive to calculate process indicatorsn (pi)ij (11) ( ) ( ) , ,0 1 1 , 1 1 = = = = × × × = = ∑∑ ∑ ∑ n ij min j n ijj ij ijj max j ij n ni ij ijj j s e e e pi s e ieb e e α we note emin,j,0 the first recorded value of emin,j . and smax,j is the maximum value of the outputs of all processes j in the set. smax,j=max{s1 j, s2 j, …, snj } = maxi sij (6) α is defined according to the analyst estimation in order to keep eref,j invariant for many years of benchmarking. e.g. if emin,j can fulfill this condition, then α=1 and eref,j= emin,j,0. from (4) and (7), we define the j process indicator of a system i (pi)ij as: by definition, (pi)ij is dimensionless. from (8) and (9); we (pi)ij≤1 deduce that (10) when using , , ,0 max j ref min j ss e e   =    α , each time numerator or denominator changes, all the systems will have their scores changing. which keep the users in a continued quest of energy performance improvement. the ratio , , ,0 max j min j s eα is different from other references examples such as ref s e      max as it presents additional advantages: ( ), , ,0 , , then, we set 7 ; where 0 1ref j min j ref j max j e e s s = < ≤ = α α (8) ( ) , ,0 , ij ref ij min j ij ref ij max j ij s e s e pi s e s e = × = × α (9) , , , , ,0 , we have , and , 1 then 1 ij max j min j min j ij min j ij ij max j i j s s e e e e e s s ∀ ≤ ≤ ≤  ≤    ≤  α α table 1: example of decomposition of m systems to n processes of different units per system process 1 … process j … process n (kg, kwh) (m3, kwh) (nbr of pieces, kwh) system 1 (s11, e11) … (s1j, e1j) … (s1n, e1n)  ⁞ ⁞ ⁞ ⁞ ⁞ system i (si1, ei1) … (sij, eij) … (sin, ein)  ⁞ ⁞ ⁞ ⁞ ⁞ system m (sm1, em1) … (smj, emj) … (smn, emn) international journal of sustainable energy planning and management vol. 23 2019 75 kamal jemmad, abdelhamid hmidat and abdallah saad α, emin,j,0 are fixed by definition. ei is decreasing, so 1 ei is increasing. sij is increasing. if sij<smax,j then smax,j is fixed. and according to ei, (ieb)i is increasing. if sij≥smax,j, then by definition sij=smax,j which means , 1.ij max j s s = consequently (ieb)i is increasing. in sum, within the context of energy efficiency ( ) 0 ; 0 ;i i ij de ieb ds ≤  ≥ is increasing while the energy consumption ei is reduced and the output is fixed or increased. 3.7. exceptional cases: output reduction dsij<0 practically, there is no need for benchmarking when the energy saving is due to output reduction. this kind of actions can go so far as to eliminate the output and the comparison loses its significance. however, it is worth to mention that small variations of output that do not affect energy consumption = 0;ij ij de ds can be supported as first. this step can help direct effort towards energy performance failure zones in the system. figure 1 summarizes the key steps followed in this paper to develop the ieb indicator. in next sections, both formulas will be used. 3.5. verification of: (ieb)i ≤ 1 according to (10), thus ( ) ( )1 1 1which means 1. n ij ijj n ij ijj e pi pi e = = ≤ ≤ ∑ ∑ 3.6. verification of monotonicity: indicator increases when consumption decreases if we note ei=∑ n j = 1eij (13) we can write ( ) , ,0 1 , 1 n ij min ji ji max j s ieb e e s= = ×∑α we assume that when a system energy consumption decreases dei≤0; the process output is either fixed or increased dsij≥0. ( ) ( ) ( ) 1 1 1 , so .then = = ≤ × ≤ × ≤∑ ∑ n n ij ij ij ijij ij ijj j pi e pi e e pi e (14) figure 1: flowchart of key steps followed to develop the ieb indicator 76 international journal of sustainable energy planning and management vol. 23 2019 developing an aggregate metric to measure and benchmarking energy performance output reduction. this criterion is not considered because there may be some considerable variations in output values of the multisystems. this can be due to drop in customer demand, technological development, health and environmental obligations, etc. that is why, it is more relevant to use compare frozen process to multisystem actual output levels. inequality of number of processes between systems: the process-oriented decomposition can involve some differences between benchmarked systems in the number of processes used to produce the output. if a process k is not existing in a system i, and the corresponding energy consumption is negligible eik « minj≠k eij; the (ieb)i will be computed without counting this process. eq. (15) will be used then for this system only. conversely, if a process k is existing only in a system m, and the corresponding energy consumption is negligible emk « minj≠k emj; the (ieb)m will be computed using eq. (11) or eq. (12). 3.8. selection process of indicators according to output variation the indicator selection process after output variation is described in figure 2. they do not perturb the indicator. particularly in this case, the indicator will be decreased according to monotonicity analysis as performed in section 3.6. this result is perfectly in concordance with our logic: reducing output with no benefit to energy consumption is a worthless action that need to be penalized by indicator score reduction. in case of considerable output variation < 0;ij ij de ds two situations can be distinguished: first: for a given process k if the corresponding energy consumption is negligible eik « minj≠k eij faced with this situation, the indicator of the system i concerned can be calculated without counting this process: second: if the eik is non-negligible, the indicator should be frozen to last score before the output reduction. to allow its reintegration in the multisystem, the process new output level must be within the actual range of output of benchmarked processes: sik ≥ smin,j (16). another criterion of reintegration may be discussed: the process new output level is back to last value before ( ) , ,01 , 1 n ij min ji j i max jj k s ieb e e s= ≠ = ×∑ α (15) figure 2: flow chart of the aggregated dimensionless indicator for energy benchmarking selection after output variation international journal of sustainable energy planning and management vol. 23 2019 77 kamal jemmad, abdelhamid hmidat and abdallah saad (cssd). “when the surgery is finished, all materials will be brought to the contaminated storage of the operating theatre, from where they are taken to the goods receipt of the cssd. there they are dismounted, disinfected, perhaps precleaned, and subsequently put into the washing machines. after washing, the materials are regrouped to form nets. the nets are put into the autoclaves where the sterilization takes place.” [42] figure 3 represents the architecture of a typical cssd including technical area. the figure shows the flow of medical instruments to be sterilized. an example of typical equipment and installation used in the cssd are presented in figure 4 and figure 5. 4.2. ieb calculation each cssd is decomposed to four main processes: awashing-disinfection, bpacking/sterilization, c sterile storage, dtechnical process. table 2 details main equipment used in each process to provide sterile 4. case study: benchmarking 2 central sterile service departments in this section, we apply the proposed indicator on 2 central sterile service departments cssd of 2 university hospitals in morocco to show its potential and operat ing mode. the two cssds benchmarked serve respectively “arrazi hospital” (586 beds) university hospital of marrakech city and mohammed vi university hospital (673 beds) of oujda city; both in morocco. 4.1. system presentation “the fundamental role of the sterile supply department ssd is to receive, clean, decontaminate, package, sterilize and distribute medical devices.” [41] “when these activities are centralized in one service within the hospital, it is called central sterilization service department or central sterile supply department figure 3: flow of medical instruments inside a cssd figure 4: main equipment in a cssd washing-disinfection packing & sterilization autoclaves washer disinfectors recerse osmosis water softening air compressor air handling unit technical area figure 5: typical technical installations in a cssd 78 international journal of sustainable energy planning and management vol. 23 2019 developing an aggregate metric to measure and benchmarking energy performance 4.3. case study discussion first, we outline that we are more interested in showing the operatory mode of the indicator than benchmarking the two presented systems. medical instruments. the ieb is computed on a 24-hour basis. table 3 presents results of indicators calculation by equation 11 based on collected data from survey on site. table 3. indicators calculation for cssds benchmarking marrakech and oujda university hospitals washing-disinfection packing/sterilization sterile storage technical service s (cart) e (kwh) s (cart) e (kwh) m3 e (kwh) s (cart) e (kwh) marrakech 3 156.02 9 283.96 4.2 74.52 9 128.40 oujda 6 159.64 6 245.12 4.73 33.7 6 267.17 smax,j, emin,,j,0 (α=1) 6 156.02 9 245.12 4.73 33.70 9 128.40 sij/smax,j marrakech 0.50 1.00 0.89 1.00 oujda 1.00 0.67 1.00 0.67 αemin,j,0 x sij/smax,j marrakech 78.01 245.12 29.92 128.40 oujda 156.02 163.41 33.70 85.60 (pi)ij = (αemin,j,0 /eij)x(sij/smax,j) marrakech 0.50 0.86 0.40 1.00 oujda 0.98 0.67 1.00 0.32 σ(αemin,j,0 /eij)x(sij/smax,j) marrakech 481.45 oujda 438.73 ei=σeij marrakech 642.90 oujda 705.63 indicators (ieb)i specific energy consumption ei(kwh)/s(beds) energy productivity s(beds) /ei(kwh) marrakech 0.75 1.10 0.91 oujda 0.62 1.05 0.95 table 2: main equipment used by processes in cssd process washing-disinfection packing/ sterilization sterile storage technical process main equipment washer-disinfector, pc, lighting, ultrasonic washing machine, cart washer* steam autoclave, sealing machine, pc , lighting lighting, pc* water softening reverse osmosis air-compressor air handling unit lighting output unit washer-disinfector cart ** autoclave cart volume of storage racks autoclave cart*** *only in oujda-city university hospital **the washer-disinfector cart is different in size from autoclave cart. *** the technical process provides different outputs (water, air, etc.) and therefore its related metric will be more complex than other processes. to ease the analysis, we prefer to use the number of sterilized carts as the final useful output; since these equipment serve mainly sterilization and disinfection processes. international journal of sustainable energy planning and management vol. 23 2019 79 kamal jemmad, abdelhamid hmidat and abdallah saad performance indicator. as such, they analyze the output production way and how energy has been used to produce this output regardless of energy type-related characteristics. in other words, they do not consider environmental impact, availability, or cost of energy used. nevertheless, they can be integrated in a global energy sustainability indicator. regarding existing models, experience shows that none of existing energy performance indicators could be claimed to be the best in all situations. [15] the indicator proposed in this study aims to enhance the range of models of indicators dedicated to the engineering field as described in section 2. we can distinguish some relevant issues about these indicators classified into 2 categories: 1st category: basic metrics: − some of the dominant parameters do not correspond well with production energy use: e.g. in hospitals, according to iea [10], the unit of activity is bed capacity or number of occupied beds, however not all the patients stay in bed. − multi-output systems cannot be represented by basic form. − no insight about energy use differences between processes inside the system. compared to this category of metrics, the construction of ieb upon its basic characteristics provides many advantages: − benchmarking systems with different outputs. − compensates the lack of representativeness of some units of activity used as the denominator in energy/output ratios (e.g. bed for hospitals or room for hotels). − identifies processes which are contributing the most in reducing and increasing energy consumption. − allows prioritization and targeting of energy saving actions. − creates competition between users within a system. 2nd category: complex metrics: generally, as ang emphasizes, each group of indicators tends to serve a certain purpose and the appropriate indicator to use depends on the objective. the models described in literature review present many strengths, of which we mention the aggregation of physical indicators defined in differing units which is a difficult task as evaluated by lbnl [46]. they also provide the same in a summary manner, the ieb inform us that marrakech cssd is clearly better than oujda’s cssd. moreover, the process indicators (pi)ij shows that marrakech cssd energy performance needs to be improved in washing-disinfection and sterile storage. in comparison, classic indicators “specific energy consumption” and “energy productivity” show a little difference –in favour to oujda city however-. which means that the two cssds have practically the same energy performance. furthermore, they don’t help to detect directly the failing processes. 5. discussion the ieb is intended for energy performance benchmarking of systems with different outputs or single output. performance of a single system over time can also be compared by considering each year as single system. the ieb indicator is limited to low and middle level systems according to energy indicators pyramid – and dedicated primarily to engineering applications in industry and service sectors. the ieb has the advantage to be implementable as an integral part of many energy management or energy efficiency standards, methodologies or tools such as en 16231:2012, iso 50001:2018, unido energy policy tool [37], minnesota technical assistance program (mntap) [43], benchmarking and energy management schemes in smes (bess) [44], energy efficiency benchmarking methodology (e2bm) [45]. on the other hand, aggregation of economic indicators at the economy level of energy pyramid is out of the scope of this study. besides, the ieb does not state the units of output to be used in metrics. rather than that, it represents a method of using standard metrics for benchmarking. each energy manager or analyst can use the suitable ones for his application. as a process-oriented indicator, the calculation of ieb by system decomposition does not seem appropriate for residential sector. decomposing households to processes, i.e. pieces, implies that the output of each piece need to be defined separately which is a daunting task. this stems from the facts that: firstly, the outputs in residential sector are very subjective. secondly, the households do not have necessarily the same architecture and composition of pieces inside to be compared in a relevant manner. the use of standard basic metrics is preferable in this case. it is important to mention too, that similarly to comparable indicators, ieb 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management vol. 19 2019 01–02 1corresponding author e-mail: poul@plan.aau.dk abstract this editorial introduces the 19th volume of the international journal of sustainable energy planning and management. the volume present work on oil and electricity use in africa, heating and cooling demands for buildings in algeria, spot and futures markets in the iberian electricity markets, transportation sector energy scenarios in indonesia and corporate willingness to adopt renewable energy sources in nigeria. 1. development and energy use in africa in [1], nyasha investigates the causal relationship between oil prices and economic development in kenya, finding a granger causality from economic growth to oil prices. activity is thus increasing oil prices – not vice versa. in fact, oil prices can be changed without affecting growth. with a stronger focus on sustainable development, ebhota[2] investigates access to electricity in subsaharan africa as well as potentials for small-scale hydro resources. noting the very high shares without access to electricity and “the inadequate and epileptic power supply that is ravaging the region”, ebhota also points to the potentials in small hydro power systems in the region. increased adaption of this technology could also have derived effects if developed locally. 2. energy planning and transportation setiartiti & al hasibi [3] investigate different scenarios for the transportation sector in their work on the indonesian province yogyakarta. the scenarios include business as usual (as reference), modal changes, fuel switch and efficient vehicles. based on leap modelling, the authors find, amongst others, that without any measures to address the transportation sector, by 2050, the energy demand for transportation in the province will be a factor 2.29 larger than the total energy demand in 2015. 3. energy planning and buildings kadraoui et al. [4] analyse the energy consumption of buildings in three algerian locations with respect to heating and cooling requirements. in some areas – algiers and tlemcen – heating constitutes a larger editorial international journal of sustainable energy planning and management vol 19 poul alberg østergaard* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords oil and electricity in africa; heating and cooling in algeria; iberian electricity markets; res adaption in nigeria; transportation in indonesia; url: http://dx.doi.org/10.5278/ijsepm.2019.19.1 2 international journal of sustainable energy planning and management vol. 19 2019 editorial international journal of sustainable energy planning and management vol 19 energy demand than cooling while in the third simulated location ghardaia located further from the mediterranean, cooling needs exceed heating needs. both cooling and heating calls for better house to attain acceptable comfort levels. 4. electricity markets and adoption of renewable energy da silva et al.[5] investigate the iberian electricity market with particular attention to relations between spot and futures prices. this contribution is a virtual contribution to the ijsepm special issue of the 2017 international conference on energy & environment [6]. finally, akinwale and adepoju [7] investigate the adoption of renewable energy technologies among micro and small enterprises in nigeria. while most have an immediate preference for fossil fuels for covering energy needs, a survey among 300 micro and small enterprises showed a willingness to instead adapt renewable energy sources. acknowledgements the international journal of sustainable energy planning and management appreciates the contributions from the reviewers that have assisted the authors in improving their work. references [1] nyasha s. oil price and economic growth in kenya: a trivariate simulation. int j sustain energy plan manag 2019;19. http://dx.doi.org/10.5278/ijsepm.2019.19.2. [2] ebhota ws. power accessibility, fossil fuel and the exploitation of small hydropower technology in subsaharan africa. int j sustain energy plan manag 2019;19. http://dx.doi.org/10.5278/ijsepm.2019.19.3. [3] setiartiti l, al hasabi ra. low carbon-based energy strategy for transportation sector development. int j sustain energy plan manag 2019;19. http://dx.doi.org/10.5278/ijsepm.2019.19.4. [4] kadraoui h, bekkouche smea, chikhaoui a. analysis of energy consumption for algerian building in extreme north-african climates. int j sustain energy plan manag 2019;19. http://dx.doi.org/10.5278/ijsepm.2019.19.5. [5] da silva rr, dias mf, madaleno m. iberian electricity market spot and futures prices: comovement and lead-lag relationship analysis. int j sustain energy plan manag 2019;19. http://dx.doi.org/10.5278/ijsepm.2019.19.6. [6] soares i, ferreira p, østergaard pa. energy markets, financing and accounting — special issue from 2017 international conference on energy &; environment. int j sustain energy plan manag 2018;15:1–2. http://dx.doi.org/10.5278/ijsepm.2018.15.1. [7] akinwale yo, adepoju ao. factors influencing willingness to adopt renewable energy technologies among micro and small enterprises in lagos state nigeria. int j sustain energy plan manag 2019;19. http://dx.doi.org/10.5278/ijsepm.2019.19.7. 497-1373-3-le.qxd 1. introduction the energy sector is in a state of change and uncertainty. a change is necessary due to the environmental damage and risks associated with the existing energy system such as climate change, pollution, security of supply concerns, and unpredictable future energy prices. numerous studies, debates, and public figures have highlighted the need for a radical change in the very near future, including the international energy agency who have recently stated that a radical change is necessary by 2017 [1]. unfortunately, the pace of change is relatively slow today, even with all of these concerns and the large international journal of sustainable energy planning and management vol. 01 2014 7 body of research to prove that a change is necessary. this could be attributed to numerous factors such as the strength of existing institutions in the energy sector and the lack of suitable policy and markets. in the authors’ opinion, one of the key issues obstructing change in the energy sector is uncertainty. a lot of this uncertainty is created by the variety of alternatives being proposed and debated for the energy sector. typically, every country will have a few very powerful institutions in each of the electricity, gas, oil, and renewable energy sectors. each of these institutions would like to remain powerful in the future and so, when debating the design of the future energy system, * corresponding author. e-mail: david@plan.aau.dk international journal of sustainable energy planning and management vol. 01 2014 7-28 a technical and economic analysis of one potential pathway to a 100% renewable energy system ������� ��� � ������ ������������� �������� � �� �� ������ � � � ��� � �� ������� � � ������� ���� ������ �� �� ��� � !"#�$ ���� %��� &�� �� ���' a b s t r a c t this paper outlines how an existing energy system can be transformed into a 100% renewable energy system. the transition is divided into a number of key stages which reflect key radical technological changes on the supply side of the energy system. ireland is used as a case study, but in reality this reflects many typical energy systems today which use power plants for electricity, individual boilers for heat, and oil for transport. the seven stages analysed are 1) reference, 2) introduction of district heating, 3) installation of small and large-scale heat pumps, 4) reducing grid regulation requirements, 5) adding flexible electricity demands and electric vehicles, 6) producing synthetic methanol/dme for transport, and finally 7) using synthetic gas to replace the remaining fossil fuels. for each stage, the technical and economic performance of the energy system is calculated. the results indicate that a 100% renewable energy system can provide the same end-user energy demands as today’s energy system and at the same price. electricity will be the backbone of the energy system, but the flexibility in today’s electricity sector will be transferred from the supply side of the demand side in the future. similarly, due to changes in the type of spending required in a 100% renewable energy system, this scenario will result in the creation of 100,000 additional jobs in ireland compared to an energy system like today’s. these results are significant since they indicate that the transition to a 100% renewable energy system can begin today, without increasing the cost of energy in the shortor long-term, if the costs currently forecasted for 2050 become a reality. keywords: 100% renewable energy; smart energy system; ireland; technical analyses; economic analyses; wind power; job creation; url: dxdoi.org/10.5278/ijsepm.2014.1.2 8 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system it is often very difficult to separate the optimum outcome from the vested interests. this is particularly true when debating renewable energy in the future [2, 3]. renewable energy is still at the development stage and it requires a radical change in the way the energy system is operated. therefore, its reliability, costs, and potential are often more difficult to illustrate and communicate. in line with this, the aim in this paper is to remove some of this uncertainty relating to the future design of the energy system, with a specific focus on renewable energy. to do so, the technical and economic impact of redesigning a national energy system to incorporate high shares of renewable energy in the future is quantified. ireland is used as a case study, but the methodology can be used for any other country and the results are applicable to other countries with similar climates and renewable energy potentials. the methodology utilised in this paper has been applied in numerous other studies by the authors such as a previous 100% renewable energy strategies [4–7]. in this paper, more details relating to the transport sector and the different stages of the transition to a 100% renewable energy system are presented. the results indicate that a 100% renewable energy system is technical feasible, but the structure will be very different in the future. in general, combustion will be replaced by electricity in almost all sectors. this is already evident in the electricity sector where primarily wind turbines are replaced power plants. in the heat sector individual boilers will be replaced by heat pumps, while in the transport sector oil will be replaced by electric vehicles and synthetic fuels. in terms of costs, based on 2020 price assumptions a 100% renewable energy scenario will be approximately 20% more expensive than a business-as-usual scenario, but under 2050 price assumptions they will be the same price. however, the key difference from a society perspective is not the total costs, but the method type of costs in these two energy systems. a business-as-usual scenario will result in a fuel-based system which is dependent on imports, while a renewable energy scenario will result in an investment-based system. this has a very positive impact on ireland’s balance of payment, since ireland currently imports 90% of its fossil fuels. in total, there is approximately €2 billion/year more spent within ireland when the investment-based renewable energy system is in place. this enables the creation of approximately 40,000–50,000 more direct jobs if all of the investments are spread out between 2020 and 2050. the economic analysis suggests that 100% renewable energy systems will most likely result in the same socioeconomic costs as a business as usual scenario. however, due to the type of costs in the investmentbased renewable energy system, the local benefits for countries that currently import fossil fuels mean that a 100% renewable energy system is more cost effective for society. 2. methodology any methodology used to develop future energy scenarios is open to deliberation, since the future is always uncertain. this section presents the key principles used to define the methodology in this paper followed by a brief overview of how these key principles were considered. it is supplemented by a range of data in the appendix. 2.1. key principles the key principles that define how the analysis is completed are that: • the analysis considers all sectors of the energy system, which are electricity, heat, and transport. • it is possible to analyse a radical change in technology • the analysis is completed over a long-term time horizon • renewable energy and demand fluctuations are accounted for hour-by-hour • the analysis is completed from a socioeconomic perspective firstly, the analysis will need to consider the whole energy system (i.e. not just one specific sector) along with a radical change in technology [8]. not only does this mean that electricity, heat, and transport need to considered from both a consumption and production perspective, but it should also be possible to assess radical technological changes in each of this sectors. the significance of this is evident when considering the transition necessary from the existing fuel-based energy system (figure 1) to a future renewable-energy based system (figure 2). unlike the existing energy system which consists of only a few linear relations between the resources and demand (figure 1), a future energy system will include numerous interactions between the resources, conversion processes, and demands (figure 2). therefore, when evaluating a future energy system, it is important to consider the impact that a technology can have across the entire energy system along with the consequences of a radical technological change in any one of these sectors. secondly, the timelines considered in this study will need to consider both the short-term fluctuations of intermittent renewable energy sources (ires) over a long-term time horizon. it is important to consider the short-term fluctuations of ires to account for intermittency and to ensure that the demand for electricity, heat, and transport is always met. the longterm time horizon is important from a technical perspective due to the lifetime of the technologies being considered. as outlined by the international energy agency (iea) [1], energy production units typically have a lifetime of more than 20 years, energy networks have a lifetime of approximately 40 years, and some energy-related infrastructure can have a lifetime of 100 years or more. consequently, the actions taken today will need to aid the operation of the future energy system displayed in figure 2 and not the existing energy system displayed in figure 1. this means that it is essential to plan for a long-term vision when evaluating energy systems for the future. without this long-term perspective, a lot of money and resources could be spent today on actions that do not fit with the future sustainable energy system. thirdly, the future energy system should be evaluated from a socio-economic perspective [9], since today’s energy markets often do not reflect benefits international journal of sustainable energy planning and management vol. 01 2014 9 david connolly and brian vad mathiesen mobility electricity cooling heating heat-only boilers fuels power-only plants power exchange resources conversion exchange and storage demand figure 1: interaction between sectors and technologies in today’s typical energy system. resources conversion exchange and storage demand mobility electricity cooling heating solar etc. fuels chp (or quad) power exchange heat pump fluctuating heat fluctuating electricity electricity storage thermal storage wind etc. fuel storage synthetic fuel figure 2: interaction between sectors and technologies in a future smart energy system. such as less pollution, lower ghg emissions, resource depletion, land-use change, waste, and security of supply. as outlined previously, a renewable energy system will be based on investments and not fuels. naturally this transition will require many organisations to change. however, designing the energy system for the profits of one individual organisation is not the key concern for the citizens in society. instead, it is the overall cost of energy, the type of resources used (i.e. environment), the number of jobs created, and the balance of payment for the nation that are examples of the key metrics which define a good or bad energy system from a society’s perspective. thus, future energy systems should be considered without imposing the limitations of existing institutions or regulations. for example, the existing electricity market is not designed for the future energy system in figure 2 and so the future energy system should not be designed within its framework [10]. therefore, when assessing the future energy system, it needs to be optimised from a societal perspective, and not from an individual organisation perspective. in summary, the methodology used in this study will try to include all sectors of the energy system, consider radical technological change, account for the hourly fluctuations of ires and demands, use a long-term time-horizon, evaluate the results from a socioeconomic perspective, and exclude the limitations associated with existing institutional designs. to complete the analysis under these principles requires a number of complex technical and economic relationships and so the energyplan tool will be used to aid the analysis in this study. 2.2. how energyplan is used to account for the key principles energyplan is an energy system analysis tool specifically designed to assist the design of national or regional energy planning strategies under the “choice awareness” theory [8]. it has been developed and expanded on a continuous basis since 1999 at aalborg university, denmark. as a result, it is now a very complex tool which considers a wide variety of technologies, costs, and regulations strategies for an energy system. the model can be downloaded for free [11] and the algorithms used to create the tool are described in detail in the user manual, hence these are not discussed here. instead, the key features available in the tool and how they are used to account for the key principals of the methodology are presented. 2.2.1. considering the whole energy system in line with selected methodology, energyplan considers all sectors in the energy system: electricity, heat, and transport, as outlined in figure 3. also, since the tool has been developed on a research basis, it includes a number of new technologies which incorporate radical technological change. this is demonstrated by the many analyses that energyplan has been used for to date. these include an analysis of the large-scale integration of wind [12] as well as optimal combinations of renewable energy sources [13], management of surplus electricity [14], the integration of wind power using vehicle-to-grid electric-vehicles [15], the implementation of smallscale chp [16], integrated systems and local energy markets [17], renewable energy strategies for sustainable development [5], the use of waste for energy purposes [18], evaluating marginal energy technologies in life-cycle assessments [19], the potential of fuel cells and electrolysers in future energysystems [20, 21], the potential of thermoelectric generation in thermal energy systems [22], various renewable fuels for transport [23], and the effect of energy storage [24], with specific work on compressedair energy storage [25, 26], pumped-hydroelectric energy storage [27, 28], and thermal energy storage [12, 29, 30]. in addition, energyplan was used to analyse the potential of chp and renewable energy in estonia, germany, poland, spain, and the uk [31]. energyplan has been used to simulate a 100% renewable energy system for the island of mljet in croatia [32], the local authorities of frederikshavn [33, 34] and aalborg [35, 36], as well as the countries of ireland [37], croatia [38], and denmark [6, 7, 23]. other publications can be seen on the energyplan website [11] and a comparison with other energy tools is available in [39]. based on this research, energyplan is clearly capable of analysing all sectors in the energy system along with new technologies. 2.2.2. accounting for intermittency and a long-term time horizon secondly, energyplan simulates the energy system on an hourly basis over one year. the hourly time-step is essential to ensure that intermittent renewable energy is 10 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system capable of reliably meeting the demands for electricity, heat, and transport. to ensure a long-term time horizon is considered, the analysis will focus on the steps towards a 100% renewable energy system by 2050. a 2050 scenario will ensure that any short-term actions will be in line with the long-term objectives of a lowcarbon energy system for ireland. 2.2.3. using a socio-economic perspective in relation to the socio-economic perspective, energyplan optimises the technical operation of a given system as opposed to tools which identify an optimum within the regulations of an individual sector. as a result, the tool focuses on how the overall system operates instead of maximising investments within a specified market framework or from one specific technology viewpoint. this is significant, as the structure of today’s energy system will not be the same in the future, and the merging of energy sectors will increase significantly, hence markets will become intertwined. the results quantify the primary energy supply (pes), renewable energy penetration, ghg emissions, and energy system costs. all costs are annualised according to equation 1, which consists of the total investment costs i, the installed capacities c, lifetimes n, an interest rate i (which is assumed to be 3% in this study), and the annual fixed o&m costs as a percentage of the total investment. (1) in this way, various scenarios consisting of different technology mixes can be compared with one another. the fuel costs, investment costs, and operation and maintenance (o&m) costs used in this study are presented in the appendix. energyplan does not calculate the job creation and balance of payment for the region, so this was completed outside the tool: the methodology used is described in detail in lund and hvelplund [40]. i ic i i o mannual n fixed= + ⎡ ⎣ ⎢ ⎤ ⎦ ⎥ + ⎧ ⎨ ⎪ ⎩⎪ ⎫ ( ) – ( ) & –1 1 ⎬⎬ ⎪ ⎭⎪ international journal of sustainable energy planning and management vol. 01 2014 11 david connolly and brian vad mathiesen fuel electricity heat hydrogen steam co2 hydro water hydro storage electricity demand cooling demand pp process heat demand fuel res electricity hydro power plant import/export fixed and variable heat pump and electric boiler boiler geothermal and solar heat electricity storage system chp cooling device electrolyser gas storage import/ export gas h2 storage absorption heat pump industry co 2 vehicles heat storage hydrogenation transport water cooling desalination plant biomass conversion heat demand transport demand figure 3: flow chart of resources, conversion technologies, and demands considered in energyplan [11]. 3. case study and the stages analysed these key principals have been used here to investigate the pathway towards a 100% renewable energy system for the republic of ireland. this is only used as a case study, since the energy system in ireland is very similar to many other countries around the world. recent years have highlighted that energy demand can change dramatically in a relatively short period of time. to put this in context, ireland’s largest power station, which is called moneypoint, was completed in 1987 and is still in operation today. since moneypoint came into operation, the demand for electricity in ireland has more than doubled. this means that the electricity system expected at the time of moneypoint’s construction was completely different to the electricity system which actually evolved over the 26 years since it came into operation. therefore, predicting the future energy system is a very uncertain practice and it is not the purpose in this paper. instead, the purpose here is to present scenarios of how the irish energy system could transition to a 100% renewable energy system by 2050, if alternative technologies were utilised for its energy production. the focus is thus on the design of the energy system and not on the expected evolution of the energy demands in ireland. it will become apparent during the results that the radical technological changes required for a 100% renewable energy system mean that the exact energy consumption at a certain point in time is not as important. the reason for choosing a specific country as a case study is so that realistic values can be obtained for the relationships between different pieces of data in the analysis. in brief, ireland has a population of approximately 4.5 million people in an area of around 70,000 km2. it is located in the north-west corner of europe so it has excellent wind and wave resources. in total, the energy available from wind power is approximately 600 twh/year based on technological constraints [41], of which approximately 55 twh/year will be economically viable in 2020 [42, 43]. based on a pelamis wave energy device [44], previous research estimated ireland’s theoretically available wave energy to be 28 twh/year [45]. in addition, ireland has a very large agricultural sector which means that there is a significant biomass potential. for example, corcoran et al. [46] calculated that if all suitable land was used for growing miscanthus energy crops in ireland, then there would be approximately 200 twh of biomass available each year. on the demand side, the forecasted 2020 energy demands for ireland will be used as a starting point in this analysis. these have been estimated by the irish energy authority [47], who are formally known as the sustainable energy authority of ireland. once again, just to emphasise that the specific demand is not essential for the analysis being carried out in this paper, due to the scale of the changes being proposed and due to uncertainties relating to future energy demands. however, a starting point is necessary, so these relatively short-term future projections have been chosen. in 2020 the electricity demand in ireland is expected to be approximately 30 twh, which will be supplied by approximately 6000 mw of condensing power plants. the heat demand is expected to be approximately 27 twh, which will almost entirely be supplied by individual boilers. there are currently 2 million dwellings in ireland [48], so it is assumed here that there are also 2 million individual boilers. the demand for industry is forecast to be around 25 twh, while the transport sector will require 70 twh of energy, including 1 twh of electricity to meet the demands for 10% of the private cars. ireland currently has 1.9 million private cars, 0.25 million vehicles below 2 t, and 0.08 million vehicles above 2 t [49]. therefore, it is assumed here that there are 2.15 million cars/vans and 80,000 trucks/busses. a detailed breakdown of the reference scenario is provided later when discussing the scenarios in section 4. using the 2020 irish energy system as a starting point, this analysis in this paper investigates the technical design and economic consequences of transitioning to a 100% renewable energy system. the transition proposed here is only one potential pathway to a renewable energy system: many others exist and even this particular pathway will change as more knowledge becomes available. however, the aim here is outline the key steps necessary towards 100% renewable energy, along with the technical and economic consequences of these steps. in total 7 different stages in the transition to a 100% renewable energy system are analysed here. below is an explanation of each stage, outlining the initial motivation for analysing these technologies. 3.1. reference as already discussed, the 2020 irish energy system is used as a starting point. this starting point defines the electricity, heat, and transport demands that will need to 12 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system be satisfied in each of the other scenarios. in reality these demands will change over time: increasing due to society’s desire to grow and consume more, but decreasing due to better efficiency. in this paper, changes in conventional demand have not been included in the analysis. this does not suggest that energy efficiency is not important. in fact, energy efficiency is often the most cost effective first step towards a more sustainable energy system [50]. however, this has not been included in this study since the focus here is to highlight how the supply side of the energy system will evolve, so future research could incorporate both the supply and demand. choosing a reference is also necessary to define the mix of power plants, the type of boilers, and the number of vehicles in the system being analysed. this forms the basis for other assumptions applied in the research. for example, during the next 6 stages of pathway proposed here, there are a number of assumptions from the reference which do not change in any of the scenarios, which are displayed in table 1. there is also a common procedure used to define the final amount of intermittent renewable energy sources (ires) which can be used in the reference and the other scenarios. in all steps, the cost of the energy system is calculated for a wind power penetration of 0-100% of the electricity demand, in steps of approximately 10%. the cheapest scenario is then defined as defined as the ‘optimal’ for that particular scenario. ires come in many forms, particularly from wind and solar. due to ireland’s climate conditions, wind power is the primary form of ires in this study (as mentioned earlier the technical potential is approximately 600 twh/year [41], of which approximately 55 twh/year will be economically viable in 2020 [42, 43].). in all scenarios, it is assumed that onshore wind power is the only source of intermittent renewable energy until it reaches a capacity of 10,875 mw: this corresponds to an annual electricity production of 30 twh/year. after this it is assumed that offshore wind is used for any additional ires that can be added to the system. in reality, there are other ires that could be used such as pv, tidal, and wave power, but here wind is used on its own to simply the analysis. by combing wind with these other ires, it would be possible to reduce the fluctuations from wind power [13]. finally, in all scenarios it is possible to trade electricity with britain over 1000 mw of interconnection, which is the expected capacity in 2020. however, this trading is seen as a last resort. the aim in these simulations is to design a flexible energy system in ireland which can manage its own intermittency. the indirect assumption here is that britain is also utilising a lot of wind power at the same time, which will make it difficult to balance wind with interconnection due to the high correlation between irish and british wind speeds [51]. 3.2. district heating the first key change in the system is the widespread implementation of district heating. there are three key objectives here: a) to save fuel by utilising waste heat in the energy system from power plants and industry b) to utilise more renewable energy by using heat from solar thermal and geothermal energy and c) to save money by using less fuel and by reducing the thermal capacity necessary in the heat sector i.e. by sharing the capacity in a common boiler instead of installing an individual unit in each building. district heating is installed in cities and towns, where homes are located close together so the development of district heating is economically viable. there is currently no heat atlas available for ireland, so the eu heat atlas developed in the heat roadmap europe project [52] is used to estimate the potential for district heating. this heat atlas suggests that approximately 33% of the heat demand in buildings in ireland is in areas with a heat density above 50 tj/km2, while 50% is in areas above 15 tj/km2. therefore, it is international journal of sustainable energy planning and management vol. 01 2014 13 david connolly and brian vad mathiesen table 1: common assumptions in all scenarios proposed in this paper. conventional electricity demand (twh) 30 end-user heat demand (twh) 27.6 transport demand (billion km) 103 average power plant efficiency (%) 48% chp electricity efficiency (%) 40% chp heat efficiency (%) 50% hydro capacity (mw) 250 hydro production (twh) 1 phes pump (mw) 300 phes turbine (mw) 300 phes storage (gwh) 2 phes pump & turbine efficiencies (%) 85% industrial electricity production (twh) 1.5 interconnection capacity to britain (mw) 1000 number of buildings 2,000,000 number of cars 2,150,000 number of busses/trucks 80,000 assumed here that 10 twh (37%) of the heat demand for buildings can be converted to district heating: 4 twh (15%) is assumed to be in small towns while 6 twh (22%) is in the large cities. natural gas and oil boilers are replaced by these new district heating installations. the heat for these new district heating networks is primarily supplied by combined heat and power (chp) plants, which are supplemented by thermal storage and peak-load boilers. losses in the district heating pipes are also accounted for by assuming that 17% of the heat produced does not reach the final consumer: thus 12 twh of heat must be produced for the district heating systems to supply 10 twh of delivered heat. the specific numbers altered for this transition are outlined in table 2 and table 3, which are based on the same methodologies described in heat roadmap europe [52]. 14 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system table 2: changes to the heat supply for stages 1–3. the assumptions in stage 3 are the same for all remaining scenarios. scenario 1. reference 2. district heating 3. heat pumps individual fuel consumption (twh) 32 20 13 coal (twh) 3 3 0 oil (twh) 15 7.5 0 gas (twh) 9 4.5 4.5 biomass (twh) 1.5 1.5 1.5 heat pump electricity (twh) 0.33 0.33 3.6 direct electricity (twh) 3.5 3.5 3.5 individual heat demand (twh) 28 18 18 coal (twh) 1.95 1.95 0 oil (twh) 12 6 0 gas (twh) 8.1 4.05 4.05 biomass (twh) 1.05 1.05 1.05 heat pump electricity (twh) 1 1 9 direct electricity (twh) 3.5 3.5 3.5 district heating supply (twh) 0 12 12 with decentralised chp (twh) 0 5 5 with centralised chp (twh) 0 7 7 includes losses of (%) n/a 17% 17% includes losses of (twh) 0 2 2 chp2 (mw) 0 750 750 chp3 (mw) 0 1100 1100 thermal storage (gwh) 0 11.5 14 boilers (mwth) 0 3500 3500 large heat pumps (mw) 0 0 185 electric boilers (mw) 0 0 185 table 3: the number of heating units for steps 1–3 (rounded to the nearest 1000). the assumptions in stage 3 are the same for all remaining scenarios. scenario 1. reference 2. district heating 3. heat pumps number of district heating substations 0 726,000 725,000 number of individual boilers 2,000,000 1,274,000 1,275,000 oil 870,000 436,000 0 gas 587,000 293,000 293,000 biomass 217,000 218,000 76,000 air heat pumps 0 0 0 ground heat pumps 72,000 73,000 652,000 electric heating 254,000 254,000 254,000 3.3. heat pumps district heating is ideal for areas with a high heat density, but it is too expensive in rural areas where the heat density is too low. in these areas an individual heat pump is proposed in this pathway since they are very efficient, typically the coefficient of performance (cop) is 3-5, and they enable the integration of more wind power. furthermore, it is also assumed in this step that largescale heat pumps and electric boilers are added to the district heating network. this enables the wind power to access the flexibility in the large thermal storage capacities connected to the district heating network. 3.4. grid regulation until now, it is assumed that 30% of the electricity being produced must come from power plants at all times. however, the electricity grid will become easier to operate as more flexibility is added to the energy system, while wind turbines will become better at providing ancillary services and responding to grid requirements. this will allow power plants to shut down completely for short periods so that wind power can provide all of the electricity required. it is difficult to identify an exact point when this will happen, but here it is assumed to occur at stage once the electricity and heat sectors have been fully integrated. this is based on danish experiences, where wind power has already provided over 80% of all electricity production during some hours [53]. in practice this will not be a single step in the transition to a 100% renewable energy system, but instead it will occur in mini-phases across steps 1–5. 3.5. demand side management (dsm) and electric vehicles & (evs) there are some electricity demands which can be used when it is suitable for the grid, since the end-user often doesn’t need to turn them on straight away. for example, at a residential level this includes washing machines and dishwashers while at an industrial level this often includes refrigeration and processing plants. similarly, when petrol/diesel cars are replaced by electric vehicles, this will also introduce a very flexible load into the home. in this step it is assumed that approximately 10% of the conventional electricity demand becomes flexible, while 80% of private cars are converted to electricity (see table 5 and table 6). 3.6. syn-methanol/dme although a high proportion of the private car fleet is expected to convert to electricity, there is still a significant amount of energy-dense fuel required for other vehicles such as trucks, busses, ships, and aeroplanes. one of the main solutions proposed to solve this challenge is biofuels, but recent research indicates that this is not a sustainable way to use our limited biomass resource [54, 55]. to ensure that there is enough biomass for a 100% renewable energy system, synthetic fuels are utilised here. hydrogen and carbon are combined at different ratios to make these synthetic fuels. in the pathway proposed here, it is assumed that the synthetic fuel produced is methanol or dimethyl either (dme), using the energy flows displayed in figure 4 [23]. the hydrogen can be produced using electricity from wind power while the carbon can be captured from the atmosphere, industry, or power plants. this process requires a lot of electricity so the total electricity demand is increased by 125%. however, this is in return from two really important benefits: a) oil can be replaced in large vehicles which require energy-dense fuel with electricity from wind turbines (via a synthetic fuel) and b) the wind power now has access to gas and fuel storage. to put this in context, ireland has approximately 33 twh of oil storage today [56], which is 18 times more than the electricity storage feasible in ireland’s only pumped hydroelectric facility (turlough hill has a storage capacity of ~1.8 gwh [57]). it is important to emphasise that this transforms the energy system as we know it today. at this stage, the energy system now has an extremely intermittent supply which is possible thanks to an extremely flexible demand (today it is the opposite). 3.7. syngas the only fuels that are not renewable at this point are those required for industry (see table 7) and for some of the power plants. the fuels in industry are necessary for various chemical and manufacturing processes as well as international journal of sustainable energy planning and management vol. 01 2014 15 david connolly and brian vad mathiesen table 4: grid regulation requirements in all scenarios. 4. grid scenario 1–3 regulations 5–7 min pp production (mw) 700 0 0 min chp production (mw) 200 0 0 min grid stabilisation share (%) 30% 0% 0% stabilisation share of decentralised chp plants (%) 100% n/a n/a maximum heat pump load in dh networks (%) 50% 50% 50% for high-temperature heat. the power plants need some fuels, primarily gas, so that there is some form of fuel available when there is not enough wind power. gas is the chosen fuel since these power plants are the most flexible so they are able to respond to changes in the wind power production. in this final step, all of the fossil fuels used in industry are replaced by syn-methane or biomass. using syn-methane means that the existing natural gas gird and storage facilities can also be used to aid the integration of wind power. the syn-methane is produced using almost the same process as for syn-methanol/dme, with the only difference being the chemical synthesis of the final fuel. however, it is important to mention that multiple sources of co2 can be used for both the production of synmethanol/dme and syn-methane. to account for this uncertainty, different sources of co2 are used for the production of syn-methane here. in total, two sources are utilised: biogas as outlined in figure 5 and gasified biomass as outlined in figure 6. it is important to highlight that the uncertainty levels increases as the transition progresses by each stage. stage 7 is therefore the most uncertain at present, so it is also the most likely one that will change in the transition proposed here. there may also be numerous niche technologies that contribute to the final stages such as electricity storage. 4. results and discussion the transition from the initial reference system to a 100% renewable energy system transforms how energy is provided. the most visible change is that the electricity sector becomes the backbone of the energy 16 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system table 5: transport fuel supply for all scenarios. scenario 1 4 5. dsm & evs 6. syn-methanol/dme 7. syngas oil 69 33.9 0 0 jet fuel (twh) 9 9 0 0 diesel (twh) 38 22.4 0 0 petrol (twh) 22 2.5 0 0 biofuels 5.4 0 0 0 biodiesel (twh) 2.7 0 0 0 bioethanol (twh) 2.7 0 0 0 electricity 1 13.2 13.2 13.2 power capacity (mw) dump charge 9000 9000 9000 battery capacity (gwh) dump charge 45 45 45 synthetic methanol/dme (twh) 0 0 35.7 35.7 fuel for cars & trucks (twh) 0 0 24.9 24.9 fuel for jets (twh) 0 0 10.8 10.8 hydrogen production (twh) 0 0 41.1 41.1 electrolyser capacity (mw) 0 0 16500 16500 electrolysis electricity (twh) 0 0 56.2 56.2 electricity for co2 capture (twh) 0 0 2.6 2.6 co2 captured (mt) 0 0 9.0 9.0 table 6: the number of vehicles in all scenarios. scenario 1–4 5. dsm & evs 6. syn-methanol/dme 7. syngas total cars and vans 2,150,000 2,150,000 2,150,000 2,150,000 conventional 1,935,000 430,000 0 0 electric 215,000 1,720,000 1,720,000 1,720,000 syn-methanol/dme 0 0 430,000 430,000 ev charging stations 215,000 1,720,000 1,720,000 1,720,000 total busses/trucks 80,000 80,000 80,000 80,000 conventional 80,000 80,000 0 0 syn-methanol/dme 0 0 80,000 80,000 system, with the demand for electricity increasing by over 400%. as displayed in figure 7, new electricity demands in heat pumps and electric vehicles increase the overall electricity demand by approximately 50%, but it is the introduction of synthetic fuels that play the most significant role. as mentioned earlier, the purpose of synthetic fuels is to put electricity from ires into energy-dense fuels which can be used for long-distance or heavy-duty transport. the transport sector today is approximately the same size, in energy terms, as the electricity sector, so transforming transport from oil to electricity has a major impact on the level of electricity consumed. it is important to recognise that this creates enormous levels of flexibility in the energy system because this connects the ires to a very large fuel storage system: for example, ireland currently has 33 twh of oil storage [56]. this changes the dynamics of the energy system from today’s ‘smart supply’ where production follows demand, to the future’s ‘smart demand’ where demand accommodates supply. in other words, the role of supply and demand is reversed in the smart energy system. this is evident from the scale of ires on the supply side of the electricity sector. figure 8 outlines how the role of wind power increases as the energy system progresses through each stage of the transition. the most economic wind penetration in the reference scenario is approximately 35%, which increases to approximately 85% in the 100% renewable energy system. international journal of sustainable energy planning and management vol. 01 2014 17 david connolly and brian vad mathiesen 2.9 mt co2 7 mt h2o 5.7 mt syngas electricity heat resource conversion process transport fuel transport demand electricity 158 pj electricity2 7.3 pj biomass1 77 pj electrolysis4 hydrogenation carbon sequestration & storage3 chemical synthesis methanol/dme 100 pj5 or 105 gtkm 96 gpkmh2 115 pj 8.6 mt figure 4: hydrogenation of carbon dioxide sequestered using ccr to methanol/dme. 1based on dry willow biomass. 2based on an additional electricity demand of 0.29 mwh/tco2 for capturing carbon dioxide from coal power plants [58]. 3if carbon trees were used here, they would require approximately 5% more electricity [59]. 4assuming an electrolyser efficiency of 73% for the steam electrolysis [60, 61]. 5a loss of 5% was applied to the fuel produced to account for losses in the chemical synthesis and fuel storage. table 7: industrial fuel demands for all scenarios. scenario 1–6 7. syngas coal 1 0 oil 10 0 gas 10.5 0 biomass 4 9.5 syngas 0 16 total 25.5 25.5 table 8: syngas production for all scenarios. scenario 1–6 7. syngas syngas production 0 57.5 biogas 0 10.0 biomass which is gasified 0 34.6 syngas from gasified biomass 0 27.9 hydrogen for syngas production 0 25.7 electricity for electrolysis 0 32.1 electrolyser capacity (mw) 0 5000 when accounting for the complete energy system, figure 9 indicates that the primary energy supply in the 100% renewable scenario is the same as the reference scenario (the difference is <2%). although it appears that the 100% renewable energy scenario is less complicated since it only contains ires and biomass, there are many more conversion technologies within this scenario than in the reference (see figure 2). for 18 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system biomass (glucose) 54 pj biogas 50 pj 75 pj h2o 2 mt h2 54 pj syngas resource anaerobic digester conversion process compressor transport fuel transport demand electricity 77.7 pj electrolysis1 hydrogenation chemical synthesis methane 100 pj2 or 93 gtkm 76 gpkm 2 mt 2.7 pj 4 mt figure 5: production of biogas from biomass which is subsequently hydrogenated to produce methane. 1assumed an electrolyser efficiency of 73% for the steam electrolysis [60, 61]. 2a loss of 5% was applied to the fuel produced to account for losses in the chemical synthesis and fuel storage. steam gasifier electrolysis1 hydrogenation chemical synthesis resource conversion process transport fuel transport demand methane 100 pj2 93 gtkm 76 gpkm 2.7 pj 53 pj 0.5 pj biomass 58.5 pj 74 pj 4 mt 5.5 pj3 marginal heat3 6.9 pj 1.7 mt h2o 2.4 mt h2 54 pj syngas compressor electricity 77.2 pj or figure 6: steam gasification of biomass which is subsequently hydrogenated to methane. 1assumed an electrolyser efficiency of 73% for the steam electrolysis [61]. 2a loss of 5% was applied to the fuel produced to account for losses in the chemical synthesis and fuel storage. 3assuming a marginal efficiency of 125% and a steam share of 13% relative to the biomass input. example, it includes biomass conversion plants such as gasification and biogas, as well electricity conversion plants such as the electrolysers, co2 hydrogenation plants, syngas plants, electric vehicles, and heat pumps. the introduction of district heating, the electrification of heat using heat pumps, and the electrification of private cars all reduce the primary energy supply (see figure 9). for district heating this is primarily because surplus heat from power plants replaces fuels in individual boilers. for the electrification of heat and transport, the primary energy supply is reduced since these technologies are more efficient than their combustion alternatives. a heat pump has a cop of 3 and an individual boiler has an efficiency of 80–95%, while an electric vehicle can travel 1 km using 25% of the energy that a conventional petrol or diesel car would use. as a result of these measures, the primary energy supply is reduced by 25% between the reference and stage 5 of the transition to 100% renewable energy. the subsequent increase is due to the multiple conversion processes necessary to create synthetic fuel (see figure 4, figure 5, and figure 6). the cost of this transition is naturally another critical metric that needs to be considered. therefore, the costs of each stage have also been estimated based on 2020 costs for fuels, co2, energy plants, vehicles, boilers, and district heating, which are available in the appendix. the results are displayed in figure 10, which indicate that the cost of the energy system will be the same for the first 4 stages. when the private car fleet is electrified the cost of the energy system is reduced by 5%, but the cost begins to increase again once synmethanol/dme and syn-methane production is introduced. as a result, the final 100% renewable energy system scenario is approximately 30% (€5 billion/year) more expensive than the original reference scenario. however, this is based on 2020 prices whereas the transition to 100% renewable energy will occur over a much longer time scale. for example, denmark is a front-runner in renewable energy and is aiming to be 100% renewable by 2050. therefore, the results have been repeated based on 2050 price forecasts. international journal of sustainable energy planning and management vol. 01 2014 19 david connolly and brian vad mathiesen 0 1. r ef er en ce 2. d ist ric t h ea tin g 3. h ea t p um ps 4. g rid re gu la tio ns 5. d sm & e vs 6. s yn -m et ha no l/d m e 7. s yn -m et ha ne 20 40 60 80 100 120 140 160 e le ct ri ci ty c o n su m p tio n ( t w h ) potential stage of a transition to 100% renewable energy electricity exports phes pump electrolysis flexible electricity & evs heat pumps electric heating conventional demands figure 7: electricity consumption for each potential stage of the transition to 100% renewable energy. 0 1. r ef er en ce 2. d ist ric t h ea tin g 3. h ea t p um ps 4. g rid re gu la tio ns 5. d sm & e vs 6. s yn -m et ha no l/d m e 7. s yn -m et ha ne 20 40 60 80 100 120 140 160 e le ct ri ci ty p ro d u ct io n ( t w h ) potential stage of a transition to 100% renewable energy phes turbine industrial chp pp chp hydro offshore wind onshore wind figure 8: electricity production for each potential stage of the transition to 100% renewable energy. 180 200 160 140 100 120 40 80 60 20 1. r ef er en ce 2. d ist ric t h ea tin g 3. h ea t p um ps 4. g rid re gu la tio ns 5. d sm & e vs 6. s yn -m et ha no l/d m e 7. s yn -m et ha ne p ri m a ry e n e rg y su p p ly ( t w h ) potential stage of a transition to 100% renewable energy ires biomass natural gas oil coal 0 figure 9: primary energy supply for each potential stage of the transition to 100% renewable energy. not all of the costs have been updated to 2050 prices, but instead only the fuel, co2, and wind power costs were adjusted (see appendix and table 9). using these assumptions, the 100% renewable energy scenario costs approximately the same as the original reference scenario (see figure 11): the exact difference is 3%, but considering the uncertainties associated with many of the forecasted costs, this is deemed the same. this is a very significant result because although the total costs are the same, the structure of the costs is altered dramatically. the dominant cost in the reference scenario is ‘fuel’, accounting for approximately half of the total costs. in the 100% renewable energy system, fuel is a relatively small part of the total costs. instead it is ‘investments’ and ‘operation and maintenance (o&m)’ costs which are the major forms of expenditure. this has a major impact on the balance of payment for ireland, since ireland currently imports around 90% of its fuel. if ireland transitions to an investment/o&m-based energy system, more money will be spent within ireland instead of being spent abroad by importing fuels. it is very difficult to be exact when calculating the impact of this change, but an estimate has been made here. it is assumed that the average irish employee earns _45,000/year and that the transition to 100% renewable energy occurs over a 30 year period, from 2020 to 2050. it is also assumed that the import share for investments, o&m, fossil fuels, biomass, and vehicles is 60%, 20%, 90%, 10%, and 10% respectively. based on these assumptions, over the whole period from 2020 to 2050, there would be 100,000 more direct jobs in the energy sector in the renewable energy scenario compared to the reference scenario. this is not the same 100,000 jobs over the whole period, since different sectors would create jobs at different times. for example, there would be a lot of jobs installing district heating pipes in the early stages of the 20 international journal of sustainable energy planning and management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system 1. r ef er en ce 2. d ist ric t h ea tin g 3. h ea t p um ps 4. g rid re gu la tio ns 5. d sm & e vs 6. s yn -m et ha no l/d m e 7. s yn -m et ha ne potential stage of a transition to 100% renewable energy 0 5,000 10,000 15,000 20,000 25,000 a n n u a l c o st s b a se d o n 2 0 2 0 p ri ce s (m € ) co2 fuel o&m investments figure 10: annual costs of each stage in the transition based on 2020 prices. table 9: investment costs assumed for onshore and offshore wind power in 2020 and 2050. investment (m€/unit) lifetime fixed o&m technology unit 2020 (years) (% of investment) onshore wind mwe 1.25 20 3.0% offshore wind mwe 2.30 20 2.9% 2050 onshore wind mwe 1.22 30 3.2% offshore wind mwe 2.10 30 3.2% 1. r ef er en ce 2. d ist ric t h ea tin g 3. h ea t p um ps 4. g rid re gu la tio ns 5. d sm & e vs 6. s yn -m et ha no l/d m e 7. s yn -m et ha ne stage of transition to 100% renewable energy 0 5,000 10,000 15,000 20,000 25,000 a n n u a l c o st s b a se d o n 2 0 5 0 p ri ce s (m € ) co2 fuel o&m investments figure 11: annual costs of each stage in the transition based on 2050 prices. transition, but this would move to wind power and electrolysers towards the latter stages. also, these 100,000 additional direct jobs are created if the investments are spread evenly over the whole period. in reality, this would not be the case since there would be years with high investments and years with low investment. the 100,000 additional jobs over the whole period is an average. this means that the 100% renewable energy scenario can provide energy at a similar price to the reference, while at the same time producing no co2 emissions and creating approximately 100,000 more jobs. this is in line with similar conclusions from other studies for denmark [6, 7]. 4.1. limitations creating scenarios for the future is also subject to many uncertainties and limitations. to reduce this, the assumptions and methodologies used to create the scenarios in this study have been clearly presented. from a technical perspective, the most uncertain aspect of the pathway presented here is the production of synthetic fuels. although many of the individual components for the production of synthetic fuels are already in use today, there are only a few pilot studies that have combined them all together. this means that the efficiencies assumed here may not fully reflect what will be possible in reality, although it is currently unclear whether they will be better or worse. the analysis here has also been limited to the supply side of the energy system, so reductions in the energy demand have not been accounted for. this is not a reflection on the importance of reductions in the energy demand, since this is likely to play a key role in a sustainable energy system. instead it is has been omitted so the focus could be on the supply side. similarly, only wind power was considered here whereas in reality this electricity will come from a mix of wind, solar, wave, and tidal power. the other significant uncertainties are primarily related to costs. the costs of expanding the electric grid are very uncertain, firstly due to the fact that the demand for electricity is increased by over 400%, but also because the design of the electricity system with these new synthetic fuel plants is still very unclear. for example, a lot of this electricity may not be transported over long distances and therefore the grid itself might not be expanded proportionally to the increase in electricity demand. similarly, the cost for eliminating the need to provide grid regulations is not included here. in other words, it is assumed that this is included in the cost of ‘smarter’ technologies which are used in the energy system. for example, it is assumed that an electric car will include the cost of knowing when to charge at a time which is beneficial for the rest of the electric grid. the costs of the synthetic fuel plants are also very uncertain since there is currently no largescale demonstration plant in operation, but since these are the final steps in this transition, there is still a lot of time for more knowledge to be developed in relation to these final two steps. finally, it is important to remember that the pathway proposed here is only one proposed pathway to 100% renewable energy. many others could also be pursued so future work could analyse variations of this pathway. for example, some of the steps could be removed and different iress could be utilised depending on the local context. 5. conclusions this paper has outlined how an existing energy system can be transformed into a 100% renewable energy system. technically the same end-user demands are met at all stages of this transition, but due to some radical changes in the conversion technologies utilised, the final demand for electricity is over 4 times higher in the renewable energy system. seven different stages are defined here, and in general there are more uncertainties as the transition progress by each stage. however, for the first 5 stages, all of the technologies required are in existence today, although they require some development to achieve the final targets suggested here. in conclusion, the technology currently exists to begin the transition to a 100% renewable energy and it is very likely that technology will be developed sufficiently to provide all end-user demands solely based on renewable energy, especially when intermittent renewable energy is connected to the flexibility of liquid or gaseous fuels. in terms of costs, based on 2020 and 2050 fuels, the first five stages of the transition to 100% renewable energy are either socio-economically the same or cheaper than the reference. the final two stages are more expensive based on 2020 prices, but approximately the same cost based on 2050 prices (note that for the investment costs, only wind power was updated to 2050). this only reflects part of the story, since the structure of the costs in each alternative is as international journal of sustainable energy planning and management vol. 01 2014 21 david connolly and brian vad mathiesen important as the costs themselves. the reference scenario is primarily a fuel based system so most of the energy system costs are based on importing fuel into the energy system, since ireland currently imports 90% of its fuel. in contrast the renewable energy system is primarily based on investments and o&m costs, so more money is spent in the local economy. here the impact of this has been estimated, with the results indicating that approximately 100,000 additional jobs can be created in the energy sector in the 100% renewable energy scenario. these are only direct jobs, so this can be seen as a conservative estimate since it does not include indirect jobs, for example in shops and cafes, or jobs created due to the development of technologies for export. in conclusion, based on forecasted prices for fuel, co2, and wind power for the year 2050, a 100% renewable scenario is approximately the same cost as an energy system like today’s, but it will result in the creation of approximately 100,000 additional direct jobs. the results in this paper are significant since they demonstrate the technical and economic potential of renewable energy in a country that has sufficient renewable resources and currently imports fuel. the first steps in the transition proposed here have already been completed in denmark and sweden, where district heating, chp, thermal storage, and large-scale heat pumps are well-known 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management vol. 01 2014 a technical and economic analysis of one potential pathway to a 100% renewable energy system table 11: individual heating unit cost assumptions [62]. heating system: new building: one-family house (2020) heat pump district air to brine to electric heating heating unit oil gas biomass water water heating substation average heat capacity (kw/unit) 22.5 11.5 12.5 10 10 5 10 technical lifetime (years) 20 22 20 20 20 30 20 average investment (1000€/unit) 6.6 5 6.75 12 16 4 2.5 additional investment (1000€/unit) 0 2 1.6 0 6 0 3 fixed o&m (€/unit/year) 270 46 25 135 135 50 150 variable o&m (€/mwh) 0 7.2 0 0 0 0 0 table 12: district heating cost assumptions. it is assumed here that all district heating is low-temperature district heating. this is suitable for the smart energy system since it is designed for low-energy buildings and low distribution temperatures, which enables more heat sources to be utilised. low-temperature technology district heating network heat density for consumer (tj/km2 land area) 45–50 net loss (%) 17 average technical lifetime (years) 40 investment costs (1000 €/twh) 522,000 fixed o&m (1000 €/twh/year) 3,960 variable o&m (€/mwh) 0 table 13: cost assumptions for vehicles [63]. it is assumed that all vehicles have a technical lifetime of 13 years. vehicle costs from the danish energy agency year 2025 vehicle investment annual o&m (€/vehicle) (% of invest) cars diesel 12,822 7.21% petrol 11,480 8.19% electric vehicles 12,971 11.16%* methanol/dme 14,104 6.55% busses diesel 161,074 1.23% methanol/dme 163,960 1.20% trucks diesel 161,074 1.23% methanol/dme 163,960 1.20% *the battery costs are included in the o&m costs. international journal of sustainable energy planning and management vol. 01 2014 27 david connolly and brian vad mathiesen table 14: investment costs assumed for the year 2020 and 2050, which are primarily based on the forecasted prices for the year 2020 [23, 50, 64–70]. for the 2050 analysis, the wind power investment costs were updated as outlined in table 9. investment lifetime fixed o&m production type unit (m€/unit) (years) (% of investment) solar thermal twh/year 440 20 0.001% chp mwe 0.84 25 2.30% large-scale heat pumps mwe 2.7 20 0.20% thermal storage gwh 3 20 0.70% centralised thermal boilers mwth 0.15 20 3.00% centralised electric boilers mwe 0.15 28 1.00% average power plant* mwe 0.89 26.0 1.82% coal power plant mwe 1.98 30 1.77% peat power plant mwe 1.69 30 3.25% ocgt mwe 0.40 25 2.00% ccgt mwe 0.68 25 1.51% wind onshore mwe 1.25 20 3.00% wind offshore mwe 2.3 20 2.90% hydro power mwe 1.9 50 2.70% hydro storage gwh 7.5 50 1.50% soec electrolyser mwe 0.57 20 2.46% hydrogen storage gwh 10 30 0.50% pump mwe 0.6 50 1.50% turbine mwe 0.6 50 1.50% pump storage gwh 7.5 50 1.50% waste chp twh/year 250 20 1.82% biogas plant twh/year 376.5 20 11.25% gasification plant mwgas 0.649 20 9.77% biodiesel plant mw-bio 0.272 20 1.00% bioethanol plant mw-bio 1.92 20 3.32% co2 hydrogenation mw-fuel 0.90 20 2.46% carbon capture mt 30 25 0.00%^ chemical synthesis mw-fuel 0.49 20 3.96% smart meter device 0.0002 30 2.00% electric grid mwe 0.165 45 1.00% *based on the current mix of power plants in ireland. ^included in the investment cost. << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true /dscreportinglevel 0 /emitdscwarnings false 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 27 2020 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 27 2020 01–03 abstract this editorial introduces the 27th volume of the international journal of sustainable energy planning and management, which reports some of the latest developments in energy systems analyses of smart energy systems as well as district heating. the issue looks into district heating in estonia and norway – as part in a renewable energy transition and flexibility-providing measure. other analyses look into future prices of renewable energy-based power production systems and optimal design of carbon-neutral energy systems combing energyplan and eplanopt. 1. introduction this editorial introduces the 27th volume of the international journal of sustainable energy planning and management. this volume is a special issue from the 5th international conference on smart energy systems 4th generation district heating, electrification, electrofuels and energy efficiency, held in copenhagen, denmark in september 2019. papers from previous conferences have been published in previous special issues in this journal [1–5] as well as in energy [6–8]. previously published work has centred on five core topics – transformation and planning [9–12], the operation of grids [13–17], building systems [18], heat and resources [19], and balancing energy systems with a high proportion of renewables [20–22]. 2. district heating-based systems volkova et al. [23] take a starting point in district heating remaining an important part of the estonian energy system in the future, however, district heating should evolve towards 4th generation district heating [24,25]. in the analyses, 146 estonian district heating systems are considered with regard to development potentials in consumption, distribution and generation. with energy savings, improved pipes, and a switch to biomass, carbon-neutral heating may be increased from one third up to 72%. the analyses furthermore link up to the development of a mobile app previously reported in this journal [9]. askeland et al. [26] investigate the role of district heating in energy systems with a high proportion of hydropower, taking norway as an example. while norway by many is foreseen having an important role as a “balancing country” for fluctuating renewable energy integration elsewhere in europe [27], norway is also a country with a high present degree of electrification and an ongoing further electrification. one option, which is investigated by askeland and co-authors is the effect of an introduction of 4th generation district heating on the potential surplus of electricity from norway. using energyplan [28–30], the authors find that there are limited effects and that employing heat storage does not generate much additional flexibility in the energy system. new developments in 4th generation district heating and smart energy systems poul alberg østergaard*a, rasmus magni johannsena, henrik lunda, brian vad mathiesenb a department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark b department of planning, aalborg university, a.c. meyers vænge 15, 2450 copenhagen sv, denmark keywords: district heating; energy systems analyses; energyplan; eplanopt; url: http://doi.org/10.5278/ijsepm.3664 mailto:poul@plan.aau.dk http://doi.org/10.5278/ijsepm.3664 2 international journal of sustainable energy planning and management vol. 27 2020 new developments in 4th generation district heating and smart energy systems 3. energy systems analyses prina et al. [31] also employ the energy systems analysis model energyplan in their analyses; here it is coupled with eplanopt [32] to provide a multi-objective evolutionary algorithm-based environment for determining optimal scenario configurations. by applying the setup to the austrian region niederösterreich the authors find that “in order to decarbonize the energy system the increase of the installed power of renewables is not enough to reach the co2 reduction objective. integration methods like the already mentioned storage systems, power to gas, power to heat or power to mobility become relevant.” siddiqui et al. [33] investigate electricity-price forecasting in a traditional carbon-based energy system with integration of fluctuating renewable energy sources. while fluctuating renewable energy sources may have low marginal costs, the authors’ analyses demonstrate that if fluctuating renewables are to be coupled with storage, then the resulting price will not be competitive against fossil-based alternatives. acknowledgements the work presented in this special issue stems from the 5th international conference on smart energy systems 4th generation district heating, electrification, electrofuels and energy efficiency. as editors of the journal and/or as organisers of the conference, we acknowledge and appreciate the contributions from the reviewers that have assisted in improving the articles to the standard they have today. references [1] østergaard pa, lund h, mathiesen bv. smart energy systems and 4th generation district heating. int j sustain energy plan manag 2016;10:1–2. https://doi.org/10.5278/ijsepm.2016.10.1. 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[33] siddiqui s, macadam j, barrett m. a novel method for forecasting electricity prices in a system with variable renewables and grid storage. int j sustain energy plan manag 2020;27. https://doi.org/10.5278/ijsepm.3497. https://doi.org/10.5278/ijsepm.2018.16.4 https://doi.org/10.5278/ijsepm.2018.16.4 https://doi.org/10.5278/ijsepm.2019.20.6 https://doi.org/10.5278/ijsepm.2017.12.4 https://doi.org/10.5278/ijsepm.2017.13.2 https://doi.org/10.5278/ijsepm.2017.13.2 https://doi.org/10.5278/ijsepm.2018.16 https://doi.org/10.5278/ijsepm.3490 https://doi.org/10.1016/j.energy.2018.08.206 https://doi.org/10.1016/j.energy.2018.08.206 https://doi.org/10.1016/j.energy.2014.02.089 https://doi.org/10.1016/j.energy.2014.02.089 https://doi.org/10.5278/ijsepm.3683 https://doi.org/10.1016/j.renene.2019.03.137 https://doi.org/10.1016/j.apenergy.2015.05.086 https://doi.org/10.1016/j.apenergy.2015.05.086 https://doi.org/10.5278/ijsepm.3504 https://doi.org/10.1016/j.energy.2018.02.050 https://doi.org/10.1016/j.energy.2018.02.050 https://doi.org/10.5278/ijsepm.3497 _goback international journal of sustainable energy planning and management vol. 19 2019 45 1corresponding author e-mail: hkadraoui@yahoo.fr international journal of sustainable energy planning and management vol. 19 2019 45–58 abstract the objective of this study is to diagnose and quantify energy consumptions of a typical residential building with local materials. three sites belong to different radiative regimes: algiers on the southern mediterranean shore, tlemcen on the west and ghardaïa in the sahara of algeria. the followed method is based on an approach for assessing heating and cooling energy needs, the solar gains, internal lighting loads, occupants and equipment are not considered. annual heating and cooling requirements are calculated, according to climate data from 2014. we are also interested in a technical and economic study to have a monthly and annual estimation of heating and cooling needs in kwh and algerian currency per m3 (da/m3). the results show that this residential building is not affordable to live in. facade walls, roof and ground are the major sources of heat losses in buildings (more than 70% of the total losses). the evaluation is devoted to adapt the construction to the region’s climate. the integration of passive and active architectural concepts is an absolute necessity to improve the building’s energy performance. 1. introduction in algeria the building sector accounts for around 36% of the total energy consumption [1], so energy efficiency of buildings, which means providing minimum energy consumption in order to achieve the optimum comfort of living and use of the building, is very important. energy consumption of a building depends on its characteristics (shape and structural materials), installed energy systems (heating system, cooling system, ventilation) [2]. however, prediction of energy consumption is a great challenge which will be related to the several factors including weather conditions, geographic location, and seasonal changes. a well-conducted assessment of an annual heating or cooling needs for an existing residential building requires extensive data to accurately describe the building envelope weather conditions and building use. the diagnosis of energy performance of a building (dep) provides information on the amount of energy actually consumed or estimated in terms of heating and cooling related to thermal comfort. this is done initially through the calculation of annual energy requirements using the heating and cooling degree days method [3]. the energy consumption depends not only on the thermal performance of the building envelope but also of the (comfort) temperature. as a consequence, according to buildings analysis of energy consumption for algerian building in extreme north-african climates hicham kadraoui1, sidi mohammed el amine bekkouche2 and abdelhak chikhaoui1 1 département de physique, laboratoire d’automatique de tlemcen (lat), university of tlemcen, bp. 119, tlemcen r.p. 13000 algeria 2 unité de recherche appliquée en energies renouvelables, uraer, centre de développement des energies renouvelables, cder, 47133, ghardaïa, algeria keywords: degree days; energy consumption; diagnosis; loss of envelope; annual and monthly energy need; url: http://dx.doi.org/10.5278/ijsepm.2019.19.5 mailto:hkadraoui@yahoo.fr http://dx.doi.org/10.5278/ijsepm.2019.19 46 international journal of sustainable energy planning and management vol. 19 2019 analysis of energy consumption for algerian building in extreme north-african climates architectural requirements, an increase of the temperature of about 1 °c can cause an increase in the energy consumption from 6% to 20%. it is therefore necessary to quantify and analyze the meteorological parameters that influence energy requirements. the control of heat transfer is one of the most promising methods and important research areas in the field of thermal engineering for buildings which helps to orient building designers to respect the compromise between comfort and energy cost and to propose preferred solutions. in the literature, several research studies on the best performing buildings show that the reduction of energy consumption requires an architectural design that uses appropriate technologies and design principles based on a reflection on climate and the environment [4] . ekici and aksoy [5] listed the parameters that influence the building’s energy requirements as follows: physical and environmental parameters (daily outdoor temperature, solar radiation and wind speed and direction) and design parameters (shape factors, transparency of the surface, orientation, thermal properties of the building material and distances between buildings). in another work, hongting et al. [6] have analyzed the main factors that may affect the characteristics of building energy consumption. the results led to conclude that the building envelop, lighting and air conditioning system are the main factors. in the literature, a few methods have been proposed to estimate the heating and cooling energy demands. an examination of the energy consumption characteristics proved that the shape of the building is one of the factors that affects the energy consumption of buildings [7]. on the other hand, m. olfa [8] has shown that too much or poorly managed solarization can be uncomfortable, the orientation can have consequences on heating, cooling and lighting consumption. the building materials used must be effective against overheating. yang et al. [9] used the overall thermal transfer value (ottv) method and the heating degree-days technique to analyze heating and cooling needs in five sites of china, representing the five major climatic zones. different designs of the building envelope were studied and heat gains in the building during the four warmest months were estimated. in the contribution [10], the proposed model of energy balance allowing to estimate the monthly and nomenclature tcomf : comfort temperature (°c) text: monthly average of outdoor temperature (°c) dj: number of degree-days in the heating and/or cooling season dpenvelop: heat loss (w/k). ui: overall heat transfer coefficient (w/m2 k) si: surface of the building element (m²) bi: heat transfer reduction coefficient k: thermal conductivity of the thermal bridge (w/m k) lpb_i/m_j: low floor i wall j lpi_i/m_j: intermediate floor i wall j lph_i/m_j: top floor i wall j lmen_i/m_j: shear wall i wall j lrf_i/m_j: shear wall i wall j hsp: average ceiling height n: number of habitable space niv: number of levels sh : living space (m2) sdep: déperditive surface excluding low-floor (m2). θconv: conventional air flow extraction per unit of living space (m3/h/m²). ηinf: air flow due to infiltration caused by thermal draft phenomena (m3/h). η4pa: permeability under 4 pa of the zone (m3/h). η4pa_env: permeability of the envelope (m3/h). smeconv: conventional value of the sum of the inlet air modules under 20 pa per unit of living surface (m3/h/m²). η4pa_env/m²: conventional value of permeability under 4 pa (m3/h). international journal of sustainable energy planning and management vol. 19 2019 47 hicham kadraoui, sidi mohammed el amine bekkouche and abdelhak chikhaoui annual energy consumptions of an agricultural studio in the saharan climatic conditions. the results indicated that the application of external insulation on facades and roofs can allow a 56.05% reduction in energy loads over a thickness of 6 cm. priority has also been given to active concepts to reduce energy demand . another work is to study the thermal behavior of a room located in morocco. through several simulations of the outer envelope taking into account the thickness of the envelope, insulating materials and glazed surfaces, the choice of insulation of the walls has a considerable influence on the energy requirements [11]. in the same context, ozel [12] devoted part of his research work to enhance the thermal insulation properties according to cooling requirements during the hot period in the antalya region. tsikaloudaki et al. [13] take account of the influence of windows, in particular their thermophysical properties, to cover both heating and cooling needs. in the mediterranean regions, windows with low thermal transmittance and controllable properties can assist significantly toward the enhancement of building energy performance especially during the cooling season [14]. however, building systems provide a significant increase in the energy efficiency of the building and the heating and cooling energy demand are associated with high energy efficiency potentials, for this purpose the influence of the envelope of the building on energy consumption was examined by stojanovi et al. [15]. in another research, ali-toudert et al [16] describe the principal results obtained from a method applied to the estimation of the required energy demand of a multizone building for two regions with different climatic regimes, algiers and ghardaia. the found values confirm that the pilot’s house can go to a reduction of 55% for cooling and 89% for heating if this low-energy building is located in algiers. if this building is subjected to ghardaia climate, the energetic consumption corresponds to a saving of 29% for cooling and 94% for heating . in the paper [17] tronchin et al have analyzed the choice of the best energy efficiency measures derived from the cost optimal level methodology underlined the importance of the building typology, the reference market and also the building location in applying this methodology. the use of solar energy in buildings is an important contribution to reducing the consumption of fossil fuels and harmful emissions to the environment. an energy technoeconomic assessment methodology is used by ogundari et al [18]. they determine that the energy efficient lighting system is appropriate with 40% energy savings relative to the conventional lighting systems. the study established the pv-energy-efficient lighting system as the most feasible off-grid electric power supply alternative for implementation. for affordable and economical cost, most published publications [19,20] focus on the total energy consumption (heating and cooling) requirements for residential buildings in order to investigate all possible ways to reduce energy costs. in this paper, the calculation method has as object a specific regulatory calculation of the conventional energy consumption of an existing building for heating, ventilation and cooling. the production of domestic hot water, free and internal loads related to lighting, occupants and equipment are not considered. the method refers to an integrated approach for assessing the heating and cooling energy performance of residential buildings. 2. case study: building description, geographical location and climatic data this section provides information related to the amount of energy actually consumed and to thermal comfort, starting with investigating the energy performance of the building according to the thermo-physical properties of its envelope, moving on to the classification of the selected climatic zones and lastly we trying to determine the comfort zone for each site. 2.1. building description the studied house is a multi-zone structure with three levels; it has an area of 293 m2. (fig.1) illustrates the geometry of the reference building, as well as the openings position. the windows (1.55 x 2.10 m2) and doors (0.92 x 2.65 m2) contribute to the energy balance; depending on several parameters such as: properties of materials, local climate, orientation, frame and relative areas. thermophysical properties of materials for each system element are presented in table 1. [21,22]. 2.2. geographical location and climatic data as already mentioned, this study focuses on the evaluation of the energy consumption of the previous residential building when it is subjected to three climatic zones of algeria. algeria has a wide variety of climatic zones; the köppen-geiger map remains an update reference through its research on climate change scenarios. the northern part has a mediterranean climate, while the rest of the country has mostly a desert climate. however, there are transition climates between these two main types of climate, in particular the semi-arid climate causing severe drought in some periods even outside the summer season. 48 international journal of sustainable energy planning and management vol. 19 2019 analysis of energy consumption for algerian building in extreme north-african climates climate in the highlands is so dry that these plains are sometimes thought of as part of the sahara. the temperatures in the sahara desert, are daily variations of more than 44° c. the sunshine duration, average temperature and precipitation over the year are accessible by clicking on “places in algeria” on the indicated website [23]. monthly temperature curves at three different locations are illustrated (fig.3). nevertheless, algeria is a country in the subtropical zone where the prevailing climate is hot and dry. to cover all the possible cases, the choice of eligible areas was fixed on three zones (fig.2) dispatched on the whole algerian territory. the geographical coordinates of the selected cities are shown in the following table 2: northern algeria is a temperate zone; its climate is similar to that of other mediterranean countries. the first floor 9.97 m 11.8 m ground floor second floor west east south north 4.89 m 5.08 m sitting room 36.89 m2 hall 32.3 m2 kitchen 19.6 m2 bathroom + wc 6.97 m2 bathroom + wc 3.97 m2 room 18.21 m2 room 32.76 m2 hall 7.88 m2 terrace 59.94 m2 up up room 4 16.8 m2 room 1 18.68 m2 room 2 17.74 m2 hall 24.42 m2 cupboard cupboard bathroom + wc 5.1 m2 room 3 18.21 m2 up figure 1: geometry and descriptive plane of the residential building international journal of sustainable energy planning and management vol. 19 2019 49 hicham kadraoui, sidi mohammed el amine bekkouche and abdelhak chikhaoui 2016, bekkouche et al. had established a psychometric chart for ghardaïa region dedicated to the identification of the corresponding comfort area fig.4. the monthly neutral temperature is obtained from the monthly mean temperature through auliciems equation [28,30]: tn = 17,6 + (0,31 × tmean) ° c • for the alger site, ambient comfort temperatures range from 21.1 ° c in winter to 25.9 ° c in summer. the comfort zone can be extended by +/2 ° c, which gives adaptive comfort range between 19.1 and 27.9 ° c. • for the tlemcen site, ambient comfort temperatures range from 20.8 ° c in winter to 25.1 ° c in summer. the comfort zone can be extended by +/2 ° c, which gives adaptive comfort range between 18.8 and 27.1 ° c. • for the ghardaïa site, ambient comfort temperatures vary between 21.1 ° c in winter and 28.6 ° c in summer. the comfort zone can be extended by +/2 ° c, which gives adaptive comfort range between 19.1 and 30.6 ° c. 3. evaluation of the heat losses of the building envelope and quantification of energy consumptions the aim of this section is to present the calculated results of total annual building energy consumptions. needs in heating and cooling due to the envelope calculated for buildings, expressed in (kwh) are given as follows [29, 31]: 2.3. comfort zone the comfort depends not only on the temperature but even more on the humidity of the ambient air. in 1991 givoni [25] suggests a bioclimatic diagram located the comfort zone between 18 and 25 ° c in winter and between 20 and 27 ° c in summer for temperate climates in calm air conditions [26], with an increase of 2°c for the upper limit for hot regions. this diagram is based on an analysis method [27,28] to derive the area of thermal comfort from the climate data (dry-bulb temperature dbt and absolute humidity ah). it not only helps the limits of thermal comfort for a given site but mostly to give recommendations on the choices of architectural and technical processes. in table 1: layer thickness, walls composition and thermal transmittance values of building elements system element material and wall composition layer thickness m thermal transmittance values u (wm-2 k-1) exterior walls mortar cement stone mortar cement plaster 0.015 0.400 0.015 0.010 2.6096 ground tiling cement stone heavy concrete 0.025 0.100 0.150 0.180 2.5654 roof tiling mortar cement concrete plaster 0.025 0.015 0.120 0.015 3.6955 window with single glazing 5.3400 wooden door 3.1959 thermal bridges low floor – external wall intermediate floor – external wall 2.3900 tlemcen ghardaïa alger figure 2: geographic location of climate sites http://en.wikipedia.org/wiki/dry-bulb_temperature 50 international journal of sustainable energy planning and management vol. 19 2019 analysis of energy consumption for algerian building in extreme north-african climates si: loss surface (m²) bi: the heat losses reduction coefficient ui: the surface heat transmission coefficient per degree of difference between the inside and outside (w/m² k) for the calculation of the heat losses reduction coefficient, a number of factors should be considered:  the wall surfaces separating the unheated space from the heated zone, aiu (m²)  the wall surfaces separating the unheated area from the outside, the floor or other unheated space, aue (m²).  the type of unheated space.  the insulation state of the adjacent walls to the unheated space.  the insulation state of the unheated space. for a wall in contact with the outside, b = 1, b = 0.8 if the wall is buried or the floor is laid on a crawl space. the values of the heat transfer reduction coefficient should be given in references [29, 31] according to an area ratio and the overall heat transfer coefficient. thermal bridges usually happen at connections between building components and where a building structure changes its composition. for instance, a twodimensional thermal bridge can occur at the connection of a wall and floor or the junction between wall and carpentry . such phenomena have serious consequences: an increased heat flow rate and moisture problems. for the calculation of heat loss through thermal bridges, we use the following equation: dj: heating and cooling degree days degree days are a specialist type of weather data, calculated from readings of outside air temperature. they are used extensively in calculations relating to building energy consumption. 3.1. calculation of envelope losses for each piece the losses are to be calculated for each of the walls (wall, ceiling,windous). the input data are heat transfer coefficient u (w/m² k) and wall surfaces, si (m²). dpenvelop: heat loss, (w/k). the calculation of heat loss for each term is made from the following equations: = =needs envelopc 24q dj 24 dp dj / 1000 (01) envelop ceilings walls windows doors floors thermal _ ridges ventilation dp dp dp dp dp dp dp dp = + + + + + + (02) i n ceilings ceilings _ i ceilings _ i ceilings _ i i 1 dp b s u = = = ∑ (03) table 2: climate zoning and geographic coordinates of the three sites sites zones altitude longitude algiers (bouzaréah) zone a 36°47'24" north 3°1'4" east tlemcen zone b 34°52'41" north 1°18'53" west ghardaïa zone d 32°29'27" north 3°40'24" east m o n th ly a ve ra g e t e m p e ra tu re s °c tlemcen algiers (bouzareah) ghardaia temperature comfort 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 ja nu ar y fe br ua ry m ar ch ap ril m ay ju ne ju ly au gu st se pt em be r o ct ob er n ov em be r d ec em be r figure 3: monthly average temperatures for selected climatic regions [24]. i n walls walls _ i walls _ i walls _ i i 1 dp b s u = = = ∑ (04) i n windows windows _ i windows _ i windows _ i i 1 dp b s u = = = ∑ (05) i n doors doors _ i doors _ i doors _ i i 1 dp b s u = = = ∑ (06) i n floors floors _ i floors _ i floors _ i i 1 dp b s u = = = ∑ (07) international journal of sustainable energy planning and management vol. 19 2019 51 hicham kadraoui, sidi mohammed el amine bekkouche and abdelhak chikhaoui the ventilation in a building ensures the comfort of the occupants at the level of air quality. it involves the introduction of fresh air, which will have to be heated to obtain the desired temperature in the house. the losses generated by the air exchange, in w/k, is calculated by the following formula : dpvent : heat loss through the air changes due to the ventilation system per degree in temperature difference between the inside and outside (w/k) dpperm : heat loss through the air changes due to the air permeability of the building per degree in temperature difference between the inside and outside (w/k) θconv : conventional extract air flow per unit of living space (m3/h/m²). sh: living area (m²). ηinf : air flow due to infiltration caused by thermal draft phenomena (m3/h) texmean : the mean value of outside temperature (°c) ventilation vent permdp dp dp= + (09) vent conv hdp 0.34 sθ= (10) perm infdp 0.34η= (11) 0.667 inf pa mean0.0146 (0.7 19 tax )η − η − (12) k: thermal conductivity of the thermal bridge (w/m k), which depends both on the type of insulation and its link type (as the length of the thermal bridge). the retained values are given in references [29,31]. l defines the length of the thermal bridge according the various links lpb_i/ m_j : length of the thermal bridge, low floor i wall j lpi_i/m_j : length of the thermal bridge, intermediate floor i wall j lph_i/ m_j : length of the thermal bridge, top floor i wall j lmen_i/ m_j : length of the thermal bridge, carpentry i wall j lrf_i/m_j : length of the thermal bridge, shear wall i wall j lrf_i/m_i = 2 hsp (n-niv) with hsp: the average ceiling height, n: number of apartments and niv: number of levels. selected design techniques passive solar heating thermal mass effects exposed mass + night purge ventilation natural ventilation direct evaporative cooling indirect evaporative cooling comfort zone dbt ah 5 5 10 10 15 15 20 20 25 25 30 30 35 40 45 50 figure 4: psychometric “szockoloy” chart: determination of passive and active control zones for ghardaïa province [29] thermal _ ridges pb _ i / m _ j pb _ i / m _ j pb _ i / m _ j i, j pi _ i / m _ j pi _ i / m _ j pi _ i / m _ j i, j ph _ i / m _ j ph _ i / m _ j ph _ i / m _ j i, j rf _ i / m _ j rf _ i / m _ j rf _ i / m _ j i, j mrn _ i / m _ j men _ i / m _ j men _ i / m _ j i, j dp b k 1 b k 1 b k 1 b k 1 b k 1 = + + + + + ∑ ∑ ∑ ∑ ∑ (08) 52 international journal of sustainable energy planning and management vol. 19 2019 analysis of energy consumption for algerian building in extreme north-african climates the unit cost is 1.779 da (0.0169 eur), above this threshold, and for a consumption greater than 125 kwh; the price will become 4.179 da (0.0396 eur) per kwh, ie that from 1 january 2016 the electricity and gas regulation commission will integrate two new consumption tranches: for consumption above 250 kwh, the unit cost is 4.812 da (0.0388 eur) and for consumption of more than 1000 kwh , the price will become 5.48 da (0.0442eur). the following figures formally combine the predicted values given in table 3 to maintain the minimum comfort in terms of temperature. two situations must be analyzed from a house with and without air exchange. η4pa : permeability under 4 pa of the zone (m3/h) η4pa : permeability of the envelope (m3/h) smeconv : conventional value of the sum of the inlet air modules under 20 pa per unit of living surface (m3/h/m²) η4pa_env/ m 2 : conventional value of permeability under 4 pa (m3/h) sdep : deperditive surface excluding low-floor (m2). for a window without joint η4pa_env/m2 = 2.5m3/h, for other cases, it is equal to 1.7 m3/h. in case of air exchange, we assume that the ventilation system is made in the high and low inlet openings, the corresponding values of smeconv and θconv are respectively 4 et 2,1450. 4. diagnostic, quantification of energy losses, technical and economic studies this section is devoted to calculate the annual heating and cooling requirements for the indicated house in (fig.1). the first case concerns the study of a perfectly tight house, unlike the first and in the second case, the house is permeable to the air (ventilation). in this study, respiration and the human radiation, appliances and multimedia are also potential sources of energy supply that will not be considered. the estimated consumption is based on energy costs and readings of energy counters. before any study and to quantify the major energy losses, we seek the percentage of heat loss of each element to properly target the greatest heat loss in this housing, this is announced in (fig.5). a preliminary investigation of heat loss through the envelope allows us to see that the roof, exterior walls and floor are the main sources of heat. on average, they include 77.1% of total losses. therefore, experts have found that the best way to reduce energy consumption is to improve exterior thermal insulation in the building envelope. it is also worth to be interested in a technical and economic study to determine the cost of the corresponding energy. the procedure for calculating the relative cost per quarter is adopted in accordance with the method used by the algerian state (sonelgaz). sonelgaz is a public company, responsible for the production, transmission, distribution of electricity and gas in algeria. for a consumption less than 125 kwh, 24 pae _ env 4 pa _ depenv / m sη = η (14) thermal bridges roof exterior walls ground door + window 23,15% 6,31% 29,04% 10,74% 30,75% 4,78%5,42% thermal bridges air perme ability roof exterior walls ground door + window 19,89% 9,22% 26,42% 24,95% figure 5: share of total losses for the existing building : (a) permeable house to the air infiltration, (b) perfectly tight house. 4 pa 4 pa _ env conv h0.45sme sη = η + (13) international journal of sustainable energy planning and management vol. 19 2019 53 hicham kadraoui, sidi mohammed el amine bekkouche and abdelhak chikhaoui t h e rm a l lo s s e s ( w /k ) ground floor 0 50 100 150 200 250 300 sitting room room kitchen bathroom room 1 room 2 bathroom hall room room 4 room 3 hall first floor 2nd floor elements of the envelope figure 6: losses due to heating of each room table 3: required building energy consumption for each site site month average outdoor temperature °c heating cooling degree days dj without air exchange with air exchange c kwh cost da/m3 c kwh cost da/m3 t lem cen january 10.4 +374.1 11338.9 101.26 13209.5 118.22 february 12.0 +293.7 8900.9 79.17 10352.2 92.32 march 13.9 +266.6 8079.1 71.72 9376.2 83.47 april 15.2 +219 6636.6 58.65 7689.5 68.19 may 17.8 +142.9 4330.7 37.75 4996.6 43.78 june 22.1 +11.7 354.5 2.35 411.6 2.88 july 24.4 –60.7 1841.2 15.19 2137.8 17.87 august 24.1 –52.3 1587.6 12.89 1842.7 15.20 september 22.3 +3.6 09 0.65 126.3 0.70 october 18.5 +124 3757.7 32.55 4329.5 37.74 november 15.5 +208.2 6309.3 55.68 7306.8 64.72 december 12.9 +296 8971.5 79.81 10423.5 72.97 a lgiers (b ou zaréah ) january 11.7 +334.1 10127 90.28 11781.9 105.28 february 11.3 +313 9486.4 84.47 11041.2 98.57 march 13.8 +267.5 8107.3 71.97 9409.3 83.77 april 14.8 +229.5 6954.8 61.53 8061.9 71.56 may 18.6 +118.7 3598 31.11 4143.5 36.05 june 24.0 – 45.0 1363.6 10.86 1582.4 12.84 july 26.1 –113.1 3428.9 29.57 3988.7 34.65 august 26.9 –136.4 4133.5 35.96 4812 42.11 september 23.7 – 44.1 1336.4 10.61 1550.7 12.55 october 22.6 –3.1 93.9 0.61 108.8 0.65 november 15.4 +211.5 6409.3 56.59 7423.7 65.78 december 12.5 +308.4 9347.3 83.21 10865 96.97 (continued) 54 international journal of sustainable energy planning and management vol. 19 2019 analysis of energy consumption for algerian building in extreme north-african climates values during the summer months especially june, july and august. by finding, annual energy consumption in the three sites relative to the heating and cooling which keeps the temperature at 22.5° c, and in the case of an airtight house (including the kitchen, baths, and room) throughout the year without breaking is estimated at 62218, 64387 and 82879 kwh/year for the sites of tlemcen, algiers (bouzareah) and ghardaia, respectively. however, depending on the chosen temperature, the financial estimate for the whole of the habitable volume 4.1. discussion building heating extends from november to april, whereas annual heating needs are significant, representing about 51.76%, 53.65% and 69.06% of the annual heating and cooling needs for tlemcen, algiers and ghardaia respectively. according to statistics, air infiltration cause an average increase in energy consumption of about 8.65% in algiers, the minimum increase (8.1%) is observed in tlemcen , while the maximum of 11.54 % is observed in ghardaia. we note that the increase in energy consumption due to air infiltration reached record table 3: required building energy consumption for each site (continued) site month average outdoor temperature °c heating cooling degree days dj without air exchange with air exchange c kwh cost da/m3 c kwh cost da/m3 g h ard aïa january 12.3 +314 9516.4 84.75 11063.7 98.77 february 14.5 +222.8 6754.2 59.71 7832.5 69.48 march 15.9 +204.6 6200.2 54.69 7177 63.54 april 22.8 –11.1 336.3 02.21 389.7 2.63 may 26.7 –131.7 3992.5 34.68 4647.3 40.62 june 30.0 –225.9 6845.7 60.54 7993.9 70.95 july 35.4 –399.9 12118.6 108.33 14216.8 127.35 august 35.5 –405.1 12278.4 109.78 14406.1 129.06 september 31.4 –267.6 8109.4 72.00 9580.4 85.33 october 24.6 –66.3 2010.3 16.72 2334.6 19.66 november 17.7 +144 4363.8 38.05 5036.6 44.14 december 11.4 +341.6 10352.5 92.32 12047.3 107.68 h e a tin g n e e d s (k w h ) 14000 12000 10000 8000 6000 4000 2000 0 ja nu ar y fe br ua ry m ar ch ap ril m ay ju ne ju ly au gu st se pt em be r o ct ob er no ve m be r de ce m be r site : tlemcen site : alger (bouzareah) site : ghardaia figure 7: net heating energy needs h e a tin g n e e d s (k w h ) 14000 12000 10000 8000 6000 4000 2000 0 ja nu ar y fe br ua ry m ar ch ap ril m ay ju ne ju ly au gu st se pt em be r o ct ob er no ve m be r de ce m be r site : tlemcen site : alger (bouzareah) site : ghardaia figure 8: net cooling energy needs international journal of sustainable energy planning and management vol. 19 2019 55 hicham kadraoui, sidi mohammed el amine bekkouche and abdelhak chikhaoui site : tlemcen e n e rg y c o m su m p tio n s (k w h ) 12000 14000 10000 8000 6000 4000 2000 0 ja nv ie r fé vr ie r m ar s av ril m ai ju in ju ille t ao ut se pt em br e o ct ob re no ve m br e de ce m br e with air exchangewithout air exchange site : algiers (bouzareah) ja nv ie r fé vr ie r m ar s av ril m ai ju in ju ille t ao ut se pt em br e o ct ob re no ve m br e de ce m br e with air exchangewithout air exchange e n e rg y c o m su m p tio n s (k w h ) 12000 14000 16000 10000 8000 6000 4000 2000 0 site : ghardaia ja nv ie r fé vr ie r m ar s av ril m ai ju in ju ille t ao ut se pt em br e o ct ob re no ve m br e de ce m br e with air exchangewithout air exchange e n e rg y c o m su m p tio n s (k w h ) 12000 14000 16000 10000 8000 6000 4000 2000 0 figure 9: monthly energy consumption for heating and cooling for each site. 56 international journal of sustainable energy planning and management vol. 19 2019 analysis of energy consumption for algerian building in extreme north-african climates to conserve energy leading to a decrease in heating demand. to remove thermal bridges, it is convenient to choose the external thermal insulation. in addition, the use of brick in building walls in the saharan regions has a potential in terms of improvement of indoor thermal comfort compared to heavy stone and cinder block and may be the main cause in reducing energy consumption [32]. on the other hand, night ventilation initially aims to reduce the need for cooling. the presence of openings in this house could be exploited to promote natural ventilation at night in summer. the air infiltration rate must not exceed 2.8 m3/hour per linear meter in a differential pressure test of 75 pa [33]. degrees days of heating are much more important in the regions of tlemcen and algiers requiring larger heating needs. however, an active heating system using solar air collectors integrated into the building’s façade is a promising solution in this case. the major inconvenience of this technique is often encountered in summer when temperatures exceed 27 °c (frequently in july and august). to ensure the reliability of this technique, it is necessary to control automatically the opening and closing the air ventilation valve[29]. the need for cooling in ghardaia is more expensive than heating. it can be concluded that in terms of energy consumption, the climate of algiers and tlemcen is more favorable. 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journal of sustainable energy planning and management vol. 24 2019 155–162 research and experimentation abstract currently, one of major institutional challenges italy is facing in the field of integrated sustainability is to further develop the local governance capacities in order to facilitate the energy transition; this challenge, which, up to now, was caused by poor adoption of technologies, can be solved through the socio-environmental-energy nexus, through open innovation processes and sharing approach. this paper examines and describes a series of technological, social, economic and community empowering activities in the centocelle district of rome, that have been developed following the social urban network model. the paper describes the theoretical basis of the model and the model itself, then it goes on pointing out all the activities in the district such as the establishment of a social-web, smart labs, living labs, circular economy practices and their consequences and impacts on the district itself. as a main result of the social part of the project the authors account for the birth of a new social organization, known as the community cooperative of centocelle neighborhood. as the main outcome of the technological part of the project the authors detail the trybe app, i.e. a digital facilitator for the centocelle district. 1. introduction this article is situated within the context of a research into sustainable models of smart cities and smart communities. the focus of the article is on the central role of citizens as actors of sustainable growth processes and urban regeneration in a smart sense through the use of governance technologies. according to demitri [2], a smart city is a set of urban planning strategies aimed at optimizing and innovating public services. this model of a smart city is able to relate the city’s physical infrastructure to the human capital, intellectual and social life thanks to the widespread use of new communication technologies, mobility, environment and energy efficiency, in order to improve the quality of life and meet the needs of citizens, companies and institutions. article 20 of 221/2012 act (italian digital agenda) [3], defines a smart community as a community built to form a connective structure (open, aware and focused) and, at the same time, an adaptive structure, capable of generating data and knowledge and making one’s behavior evolve. therefore, a city is smart when its inhabitants are smart in terms of skills, relational capacity of inclusion and tolerance and when governance models are aimed at giving centrality to relational goods and attention to common goods. moreover, a smart city creates smart community co-creation: the case of centocelle project francesca cappellaroa, roberta chiarinib, claudia melonib and claudia snelsb a eneasspt department for sustainability, italian national agency for new technologies, energy and sustainable economic development, c.r. casaccia, via anguillarese 301, 00123 rome, italy b enea-dte-sen energy department, italian national agency for new technologies, energy and sustainable economic development, c.r. casaccia, via anguillarese 301, 00123 rome, italy keywords; energy transition; active citizenship; socio-environmental-energy nexus; co-design; sustainable behaviours; url: http://doi.org/10.5278/ijsepm.3339 mailto:claudia.meloni@enea.it http://doi.org/10.5278/ijsepm.3339 156 international journal of sustainable energy planning and management vol. 24 2019 smart community co-creation: the case of centocelle project opportunities to foster civic participation and builds public value. as a consequence, a smart city is strictly connected to the creation of a smart community. as meloni [4] affirms “training in social competences, structure of communities, active participation and spreading of cultural processes are initiatives that can activate sustainable behaviors in the citizens because profoundly anchored to tangible needs (mobility, economy, security, health, ageing…)”. therefore, in a smart community, citizens are able to participate in decisions, to co-design sustainable initiatives and to promote conscious behaviours concerning energy and sustainability issues. starting from a structural and functional socioenergy, homology and nexus [5,6], the approach of this study is based on mutuality and reciprocity aspects that could depend on a new structured system for the alliance between society and a policy of sustainable energy. this delicate promotion of the socio-environmental-energy nexus, comes from intensified studies on: a) secondary institutions and projection strategies [7], b) pre-cultural dynamics, c) ontologies of social-technical transitions and the multilevel perspective [7]. studies on new social organizations that influence energy technologies adoptions [8] are the basis for this nexus. in addition, it usefully takes in account how socio-economic aspects and technology are in reciprocity to influence each other in a projection strategy and in a democratic mutuality [9]. for this mutuality and democracy of relationship they have to share same organizational principles and forms of expression that gather social and energy behavior in a common perception [10]. 2. methodology this research consists in the development of a methodology for the co-creation of a smart neighborhood community capable of actively participating in decisions, activating informed behavior among citizens through actions of best practices concerning energy and sustainability issues. the activity has been conducted within the project known as “development of an integrated model of a smart urban district” funded by the italian ministry for the economic development through the “electric system research” program agreements. it lasted 39 months from 1st october 2015 until 31st december 2018; significant partners have participated in the project, such as research agencies, national universities, private companies, the centocelle council, various associations and the general public. the project focuses on a systemic approach in which smart technologies are integrated to offer efficient and sustainable urban services to meet citizens’ needs. to achieve that, a relevant cultural and relational network has been deemed necessary to create new conditions in order to grow and reorganize the social capital of a community that represents a crucial resource in terms of quality of life and welfare. in centocelle (rome) urban district, a demonstrator of smart community was created; this paper describes acknowledgement of value the added value of the research named “a smart community in centocelle district” is the setting up of an innovative methodology for the development of a local smart community, the promotion of co-governance, the participation in community life and the improvement of sustainable behavior, achieved through training and organizational processes, living labs and ict technologies, tested in the centocelle neighborhood in rome. this methodology is significant for the centocelle district as it integrates technological and social aspects; furthermore, it facilitates processes to support transition towards urban sustainability, integrating sustainability meanings in environmental, energy and social resolutions. the main output and results of this research offers to the district council a better facility support in the comprehension and outlining of strategies that strengthen urban and social regeneration and give, as feedback, the value of an informal path of collaboration between community and government. dario pulcini, councilor for environmental policies, municipality v – roma capitale international journal of sustainable energy planning and management vol. 24 2019 157 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels some experimental activities carried out with the aim of implementing a local smart community according to a model designed by enea [11]. the idea behind the social urban network is that, through training courses, individual attitudes, synergies of social groups and so-called “smart” enabling technologies, it is possible to bring out resources and potential that reside in the local “communities” contributing to improve people’s quality of life and the very direction of “urban and social regeneration”. the activity involves the development of a methodology based on a technological infrastructure and on initiatives aimed at triggering and enabling a process of growth in the participation and social cohesion of a community for the creation of a smart community. this method, called “social urban network” (sun), is based on a system for the interaction of citizens in the urban context through an urban interactive installation and an urban social network. the architecture of the social urban network is composed of three main parts that concern the virtual, physical and conceptual world of the community in order to well represent what is the context offered to the citizen today, that is, a hybrid between physical and virtual worlds. the developed methodology, therefore, focuses on the sharing of initiatives related to energy and environmental awareness in the community, sustainability, social planning of individuals or groups of citizens in such a way that the urban and social regeneration process can come together in a shared collective synergy. one of the pivotal roles for the developing of a significant internal self-organization is the role of the “facilitators”, i.e. citizens who, spontaneously or organised in non-profit associations or in professional contexts, are proposed to facilitate the specific topics. in the centocelle demonstrator, some groups of citizens have been engaged through participatory initiatives acting on several smart community dimensions, such as co-governance, circular economy, sharing knowledge and proactivity. citizens were involved in both the energy and social aspects at different levels; in fact, in a specific activity, named smart home, some citizens have been engaged to increase their own level of awareness within their home energy consumptions [12]. a platform [13] and an app were developed to support this achievement. 3. smart technologies for sustainable behaviors in this perspective, smart technologies are crucial for enabling sustainable behaviors related to energy and social aspects, and the introduction of these technologies is also crucial in other projects on the italian territory [14]. in the centocelle project, the projections and the convergences of new social organization and human-techno capacities have been empowered through the implementation of a coordinated set of activities that develops in the web (social networks, web portals) and on the social scene (interactive installations, local initiatives) as well as new technologies (for example smartphones app and digital rewards systems). this infrastructure is named social urban network (sun) and it aims to stimulate the community to share information, to express their needs for the improvement of their quality of life and to give feedback on the effectiveness and efficiency of the provided urban services. the centocelle sun, named “centoc’è” is composed by a front-end and a back-end, both managed by the sun manager. the structure of the centocelle sun is illustrated in figure 1. the front-end consists of a web page (www.centoce.it), a facebook page, a facebook open group and a twitter channel. news and events concerning the district, are usually published on the facebook page that is linked to a social streaming subpage of the web portal. the facebook group is instead more focused on arising problems and opportunities in the district, and in general, focused on more dialectical issues. if something is very significant, it can be discussed in the group, it can be shared in the page and thus, in the portal. so, this makes the webportal the core of the sun front-end, where every significant issue is recollected. on the other hand, the sun back-end is mainly made of a customized web based social analyzer (netnoc app), which can trace citizens’ sentiments and feedback from all the social networks and from the portal itself. the netnoc app records, for every post on the centoc’è facebook page, the following items: time of publication, number of likes, reactions, comments, replies and shares. for every post the netnoc app also computes three metrics: engagement, interactions and netnoc score. we have also installed, as part of the sun, a smart node, which is a 45’’ non-touch screen where citizens http://www.centoce.it 158 international journal of sustainable energy planning and management vol. 24 2019 smart community co-creation: the case of centocelle project can see the community streaming subpage of the centoc’è webportal, advertisings of local initiatives and a short promo of the trybe app. as part of our technological operations in the district, we decided to design and create the trybe app, a digital governance tool created to improve the model of the urban platform in the centocelle neighborhood of rome. trybe app is made of the following elements: • a google map based map where the projects are geo-located with pins, • an asynchronous chat, • a digital clipboard for notes, • a progress bar, • an helpdesk. the map and two progress bars can be seen in the screenshot in figure 2. after signing in to the app the user can add a new proposal choosing among four categories: culture, nature, social and green. once the category has been chosen, users can fill in a form with their proposal. when the submission is accepted users can add the key actions they intend to do to develop their proposal and they can get access to the resources that the district is offering to support their project. in order to reach the final stage of their proposals users must also interact with the helpdesk via an asynchronous chat. in the app users can also access to their “medal collection”: here each user can see how many (if any) digital badges related to the trybe app they have earned. digital badges put learners in control of their credentials by enabling them to claim and display the badge on any platform. digital badges are portable rather than tied to one specific system (e.g., badging platform, learning management system, social media site) and they contain rich metadata that provide information about achievements such as who earned it, who issued it, the criteria required, and in many cases even the evidence and demonstrations of the relevant skills. digital badges are released by enea via the first italian ims global certified platform, c-box (available at www.iqcbox.it). social urban network sun frontend twitter web portal www.centoce.it smart node social analyzer social dashboard facebook page sun backend facebook group figure 1: centocelle sun structure http://www.iqcbox.it international journal of sustainable energy planning and management vol. 24 2019 159 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels five kinds of digital badges are available in the c-box platform: 1. open badge which is a participation or check-in event badge; 2. competence badge which represents the ensemble of knowledges, competences and abilities acquired during the participation to an event or an experience; 3. job description badge; 4. recollection badge; 5. soft skills badge. in the demo district of centocelle, enea has designed and released only open and competence badges: namely 1 open badge and 10 competence badges with the trybe app and 1 open badge and 4 competence badges for the college student smart lab. another activity developed in the framework of the centocelle demonstrator is related to the integrated sustainability actions connecting environmental, energy and social issues. this was part of an engagement process aimed at involving citizens in the sustainable transformation of their district towards the creation of a smart community. in particular, in centocelle, an urban living-lab (ull) was created where urban innovation is conceived, designed, developed and evaluated as a result of a district stakeholders’ active participation [15]. in fact, in order to help the promotion of healthier and more eco-sustainable life-styles, any innovation process should be open and its creative phases should be guided directly by the user. a collaborative approach based on a user-driven open innovation process is renown as living-lab, [16]. figure 2: screenshots of the trybe app 160 international journal of sustainable energy planning and management vol. 24 2019 smart community co-creation: the case of centocelle project actually, the centocelle ull puts high attention on experimentation and co-creation process, allowing the exchange of interdisciplinary knowledge among scientific communities, citizens, companies and local administration. one of the main issues discussed during the centocelle ull phases, was the promotion of a circular economy transition at urban level. according to emf [17], circular economy (ce) is an emerging concept for a systemic shift from unsustainable linear models (based on take-make-dispose approach) towards circular models. the application of ce at urban level aims to achieve the maximum value from the use of all resources, products and waste, fostering energy savings and impacts reduction [18]. as a result, implementing circular economy at urban level can enable gaining business and economic opportunities, also providing environmental and societal benefits. therefore, a circular economy contributes to building long-term resilience and sustainability in urban area. results of these practices have been analyzed in terms of potential energy-environmental advantages related to the adoption of circular economy approach at urban level. in particular, during the ull phases different ce models were identified within centocelle district, such as coworkings, community gardens, km0 practices, second-hand markets. these models are based on ce strategies, such as regeneration, sharing, optimization and closing-the-loop [17]. this research has investigated the benefits related to ce strategies adoption. as a result, several benefits have been highlighted in terms of energy saving, waste prevention and co2 emissions reduction. other relevant engagement processes have concerned the establishment of two smart educational laboratories: one for facilitators and one for college students. the laboratories act as creative spaces for the development of project and communication ideas, focused on the themes and objectives for integrated sustainability (economic, environmental and social). therefore, some of the facilitators’ proposals focused on sharing economy, energy and environmental issues. in particular, “recyclability” is the name of a proposal that entailed the creation of an ‘urban factory of the reuse and recycle’ through demo services; “culturhub” is another proposal that focuses on a centre that can offer a range of sociocultural services through educational and formation programmes; finally “real ideas co-lab”, aims to create an incubator of ideas for sustainable projects about district services designed by the citizens. the accompanying activity of the facilitators also led to another important result: the creation of a neighborhood community cooperative, called cooperactiva, the first community cooperative in a complex urban area. specifically, the cooperative is a multiplier of its experience and a new adapter of needs being defined. this new economic operator, governed by the district facilitators, aims to contribute to the struggle that public and social operators daily lead against the digital, social, economic and infrastructural divide that characterizes the suburbs of the big cities. it will do so through a social business plan that will create work for the inhabitants of the neighborhood with activities connected to sustainable integrated tourism, energy issues, culture and creativity, circular economy, collaborative digital and neighborhood services. cooperactiva has achieved the aim of making some citizens entrepreneurs and investors not only managers of common assets. in particular, social workers protected by italian law 142/2001, have shown that they are taking the path towards the social economy where shortly, energy community could be triggered. the phase of adjustment and evolution of the governance and the routes of hybridization with the local government is still underway, demonstrating a certain management capacity. further possibilities to widen the fields in which the cooperative can operate are those of: • assisting the accompaniment of other local and non-local cooperative forms; • strengthening the relationship with the 5th municipality of rome • training service for future social workers • sponsorship research and self-financing management • public and private mix services • energy transition integration. finally, cooperactiva will reinvest all its profits in projects and activities for the benefit of the neighborhoods concerned. it is the first time that this particular form of business, which offers citizens the opportunity to be active protagonists in the management of common goods to respond to their needs, is experimented in a complex urban reality like that of the outskirts of the capital. it is a collective institution and / or community enterprise for urban / local co-governance through the co-management of urban common goods and / or the provision of collaborative social-digital district services in a logic of sustainable local development. international journal of sustainable energy planning and management vol. 24 2019 161 francesca cappellaro, roberta chiarini, claudia meloni and claudia snels the whole task on centocelle community has been realized by enea research team on smart cities and communities; municipality v – roma capitale; luiss university labgov (laboratory for the governance of commons) that has developed and tried out a co-city methodological protocol for the local co-governance; transition italia, that had lead an urban facilitation laboratory for the circular economy; fusolab association for the content management of the social urban network centoc’è; periagogè association for the definition of a training methodology for a school smart lab; art attack srl that has developed the ict architecture of the social urban networks; pomiager srl for the development of trybe app. 4. conclusions the centocelle project has validated the model that will allow centocelle neighborhood to become not only a smart community but also a self-governed community. the success of the model discussed in this article is strictly related to a deep community engagement. however, such an engagement can only be obtained for matters that are already emerging within a community, i.e. a community cannot be motivated to feel engaged in a theme which is not coming from the community itself. another central point of the model is that, in order to succeed at a community level, the community itself has to accept and actively promote a self-sustainable economic policy, that can be harnessed through constant participation of local associations, crowdfunding projects and other initiatives aimed at enhancing the human capital. finally, the model demonstrates that, when dealing with social dynamics, outcomes are often related to unpredictable factors related to human behaviors of individual citizens within the society. a task of the project has focused its attention on developing a group of district facilitators able to promote initiatives for urban and social regeneration of the neighborhood, based on circular economy principles. to achieve that a living-lab was created, an open innovation environment where transformative and regeneration processes are guided directly by users; in this way the facilitators could be directly involved reducing the distance between different roles and capacities. inspired by the principles of centric and polycentric community, such as the american models of “smallest unit neighborhood”, centocelle has developed many organizational centers that reproduce common principles promoted by a new and innovative organization of governance as the center of interpretation of the priority needs for the community itself: the cooperative of community cooperactiva that is continuously evolving. the process carried out in the centocelle district, has investigated the level of acceptance of an innovative technology through some surveys on families involved in its testing, highlighting: • the desire to redesign the technology itself on the basis of knowledge of involved subjects. • the need for energy efficiency has come second ahead of structuring a technology of integrated services. in addition, the sun model has received additional enhancements inputs as well as the trybe app. the experiment in centocelle has highlighted that the citizens take into great consideration integrated sustainability and, in particular, energy transition, referring to the cultural conditions and adaptation in which they want to renew themselves, fixing the limits of adaptation through the lens of new social structures and in relationship of energy technology offer. consequently, the centocelle project delivers an exhaustive contribution to theories and studies on governance and on energy communities focusing on: • the importance of organizational governance considered as the space that facilitates the emersion of new sustainable projects. • the importance of developing energy communities within an expanded framework of social capacities that are linked to other issues (not only the energy one). • the importance of making internal and external roles, capacities, spaces converge in order to build a new knowledge process. the gap that this study highlights is that energy transition cannot be treated as an a-priori task, but an aspect of the community that transpires after an experience of convergence between socio-technical performance and behavior. the energy-society combination will be achieved through the perspective of energy communities, in which groups of citizens will be able to gain environmental, economic and social benefits by sharing the production and consumption of energy (prosumers) from renewable sources. 162 international journal of sustainable energy planning and management vol. 24 2019 smart community co-creation: the case of centocelle project acknowledgements this article was invited and accepted for publication in the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come [1] references [1] østergaard pa, maestoso pc. tools, technologies and systems integration for the smart and 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(2009). living lab: an open and citizen-centric approach for innovation. international journal of innovation and regional development. 1. 356-370. http://doi.org/10.1504/ijird.2009.022727 [17] ellen macarthur foundation, (2015), growth within: a circular economy vision for a competitive europe, sun, mckinsey center for business and environment. https://www. ellenmacarthurfoundation.org/assets/downloads/publications/ ellenmacarthurfoundation_growth-within_july15.pdf [18] emf, ellen macarthur foundation, (2017). cities in the circular economy: an initial exploration. https://www.ellenm acarthurfoundation.org/assets/downloads/publications/citiesin-the-ce_an-initial-exploration.pdf http://doi.org/10.5278/ijsepm.3450 http://doi.org/10.5278/ijsepm.3450 http://www.marcodemitri.it https://www.agid.gov.it/sites/default/files/repository_files/leggi_decreti_direttive/dl-18-ottobre-2012-n.179_0.pdf https://www.agid.gov.it/sites/default/files/repository_files/leggi_decreti_direttive/dl-18-ottobre-2012-n.179_0.pdf http://eai.enea.it/la-rivista/anno-2017 http://www.communitycatalysts.co.uk/products/micro-enterprise/ (ultimo accesso 10710/14 dickinson h., glasby j. (2010). http://www.enea.it/it/ricerca_sviluppo/lenergia/ricerca-di-sistema-elettrico/accordo-di-programma-mise-enea-2015-2017/efficienza-energetica-negli-usi-finali/smart-city-smart-community/report http://www.enea.it/it/ricerca_sviluppo/lenergia/ricerca-di-sistema-elettrico/accordo-di-programma-mise-enea-2015-2017/efficienza-energetica-negli-usi-finali/smart-city-smart-community/report http://www.enea.it/it/ricerca_sviluppo/lenergia/ricerca-di-sistema-elettrico/accordo-di-programma-mise-enea-2015-2017/efficienza-energetica-negli-usi-finali/smart-city-smart-community/report http://www.enea.it/it/ricerca_sviluppo/lenergia/ricerca-di-sistema-elettrico/accordo-di-programma-mise-enea-2015-2017/efficienza-energetica-negli-usi-finali/smart-city-smart-community/report http://doi.org/10.5278/ijsepm.3335 https://www.smarthome.enea.it http://doi.org/10.5278/ijsepm.3336 http://doi.org/10.5278/ijsepm.3336 http://doi.org/10.1504/ijird.2009.022727 https://www.ellenmacarthurfoundation.org/assets/downloads/publications/ellenmacarthurfoundation_growth-within_july15.pdf https://www.ellenmacarthurfoundation.org/assets/downloads/publications/ellenmacarthurfoundation_growth-within_july15.pdf https://www.ellenmacarthurfoundation.org/assets/downloads/publications/ellenmacarthurfoundation_growth-within_july15.pdf https://www.ellenmacarthurfoundation.org/assets/downloads/publications/cities-in-the-ce_an-initial-exploration.pdf https://www.ellenmacarthurfoundation.org/assets/downloads/publications/cities-in-the-ce_an-initial-exploration.pdf https://www.ellenmacarthurfoundation.org/assets/downloads/publications/cities-in-the-ce_an-initial-exploration.pdf _goback _ref12282836 1 appendix/supplementary material: interconnection of the electricity and heating sectors to support the energy transition in cities verena heinisch a*, lisa göransson a, mikael odenberger a, filip johnsson a a department of space, earth and environment, chalmers university of technology, gothenburg, sweden here the supplementary material to the research article “interconnection of the electricity and heating sectors to support the energy transition in cities” is presented. the article has been published in the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come [1]. please find the full article under: http://dx.doi.org/10.5278/ijsepm.3328 * corresponding author – e-mail verena.heinisch@chalmers.se http://dx.doi.org/10.5278/ijsepm.3328 2 appendix a model description this work presents a linear dispatch and investment optimisation model to analyse urban energy systems with an hourly time resolution. the objective is to minimise the total cost (consisting of annualised investments, fixed and variable o&m costs, and fuel costs), as expressed in eq. (1). electricity and heat balance equations [eqs. (2) and (3)] ensure that the demand for electricity and heat in the city is met each hour. heat pumps and electric boilers simultaneously consume electricity and produce heat, and are thereby part of the electricity and heat balances. chp units produce electricity and heat, according to their power-to-heat ratios, as given in eq. (4). while electricity can be imported from the national electricity grid, the amount is limited by the transmission capacity into the city, as shown in eq. (5). electricity generation and heat production is limited by the installed capacity as in eqs. (6) and (7); a solar generation profile determines the output per installed capacity for solar pv. an urban emission target is set by eq. (8). storage technologies for electricity and heat can be utilised according to eqs. (9)–(14). for thermal storage technologies, the c-factor limits how much energy can be charged and discharged per hour. li-ion batteries can be fully charged and discharged each hour (i.e. c-factor of 1), while for flow batteries the charge and discharge per hour is limited to 50% of the installed capacity. 𝑀𝐼𝑁 𝐶𝑡𝑜𝑡 = ∑ (𝐶𝑖 𝑖𝑛𝑣 𝑠𝑖 + ∑ (𝐶𝑖 𝑟𝑢𝑛𝑝𝑖,𝑡𝑡∈𝑇 + 𝐶𝑖 𝑟𝑢𝑛𝑞𝑖,𝑡))𝑖∈i + ∑ 𝐶𝑡 𝑒𝑙 𝑤𝑡𝑡∈𝑇 (1) 𝐷𝑡 𝑒𝑙 + ∑ 𝑝𝑖,𝑡 𝑐ℎ 𝜂𝑖 𝑖∈𝐼𝐸𝑙𝑆𝑡 + ∑ 𝑞𝑖,𝑡 𝜂𝑖 𝑖∈𝐼𝑃𝑡𝐻 ≤ ∑ 𝑝𝑖,𝑡 + 𝑤𝑡 + ∑ 𝑝𝑖,𝑡 𝑑𝑐ℎ 𝑖∈𝐼𝐸𝑙𝑆𝑡𝑖∈𝐼\𝐼𝐸𝑙𝑆𝑡 (2) 𝐷𝑡 ℎ + ∑ 𝑞𝑖,𝑡 𝑐ℎ 𝜂𝑖 𝑖∈𝐼𝐻𝑆𝑡 ≤ ∑ 𝑞𝑖,𝑡 + ∑ 𝑞𝑖,𝑡 𝑑𝑐ℎ 𝑖∈𝐼𝐻𝑆𝑡 𝑖∈𝐼\𝐼𝐻𝑆𝑡 + 𝑋𝑡 (3) 𝑝𝑖,𝑡 = 𝛼𝑖 𝑞𝑖,𝑡 ∀ 𝑖 ∈ 𝐼𝐶𝐻𝑃 (4) 𝑤𝑡 ≤ 𝑀 (5) 𝑝𝑖,𝑡 ≤ (𝑠𝑖 + 𝑦𝑖 )𝑍𝑖,𝑡 ∀ 𝑖 ∈ 𝐼𝑒𝑙 (6) 𝑞𝑖,𝑡 ≤ 𝑠𝑖 + 𝑦𝑖 ∀ 𝑖 ∈ 𝐼ℎ (7) ∑ ∑ 𝑝𝑖,𝑡𝐸𝑖,𝑡 𝑖∈𝐼𝑡∈𝑇 ≤ 𝐸𝑙𝑖𝑚 (8) 𝑠𝑙𝑖,𝑡 𝐸𝑙𝑆𝑡 = 𝑠𝑙𝑖,(𝑡−1) 𝐸𝑙𝑆𝑡 + 𝑞𝑖,𝑡 𝑐ℎ − 𝑞𝑖,𝑡 𝑑𝑐ℎ (9) 𝑝𝑖,𝑡 𝑐ℎ ≤ 𝐶𝑖 𝑓 𝑠𝑖 ∀ 𝑖 ∈ 𝐼𝐸𝑙𝑆𝑡 (10) 𝑝𝑖,𝑡 𝑑𝑐ℎ ≤ 𝐶𝑖 𝑓 𝑠𝑖 ∀ 𝑖 ∈ 𝐼𝐸𝑙𝑆𝑡 (11) 𝑠𝑙𝑖,𝑡 𝐻𝑆𝑡 = 𝑠𝑙𝑖,(𝑡−1) 𝐻𝑆𝑡 − 𝐿𝑖 + 𝑞𝑖,𝑡 𝑐ℎ − 𝑞𝑖,𝑡 𝑑𝑐ℎ (12) 𝑞𝑖,𝑡 𝑐ℎ ≤ 𝐶𝑖 𝑓 𝑠𝑖 ∀ 𝑖 ∈ 𝐼𝐻𝑆𝑡 (13) 𝑞𝑖,𝑡 𝑑𝑐ℎ ≤ 𝐶𝑖 𝑓 𝑠𝑖 ∀ 𝑖 ∈ 𝐼𝐻𝑆𝑡 (14) 3 nomenclature: t the set of all time-steps i the set of all technologies in the urban energy system 𝐼𝑃𝑡𝐻 subset to i for all power-to-heat technologies, i.e., heat pumps and electric boilers 𝐼𝐸𝑙𝑆𝑡 subset to i for all electricity storage technologies 𝐼𝐻𝑆𝑡 subset to i for all thermal storage technologies 𝐼𝐶𝐻𝑃 subset to i for all chp units 𝐼𝑒𝑙 subset to i for all electricity generating units (incl. chp) 𝐼ℎ subset to i for all heat production units 𝐶𝑡𝑜𝑡 total system costs to be minimised [€] 𝐶𝑖 𝑖𝑛𝑣 capex (annualised) including the fixed o&m costs for technology i [€/mw/year] 𝐶𝑖 𝑟𝑢𝑛 opex for each technology i (including fuel cost) [€/mwh] 𝐶𝑡 𝑒𝑙 cost to import electricity to the city from the national grid [€/mwh] 𝑠𝑖 capacity of technology i invested in [mw(h)] 𝑝𝑖,𝑡 electricity generation by technology i at time t [mwh/h] 𝑞𝑖,𝑡 heat generation by technology i at time t [mwh/h] 𝑤𝑡 electricity imported to the city each hour [mwh/h] 𝐷𝑡 𝑒𝑙 electricity demand per hour [mwh/h] 𝐷𝑡 ℎ heat demand per hour [mwh/h] 𝑝𝑖,𝑡 𝑐ℎ electricity charged to electricity storage units [mwh/h] 𝑝𝑖,𝑡 𝑑𝑐ℎ electricity discharged from electricity storage units [mwh/h] 𝜂𝑖 efficiency (or cop) for different technologies 𝑞𝑖,𝑡 𝑐ℎ heat charged to thermal storage units [mwh/h] 𝑞𝑖,𝑡 𝑑𝑐ℎ heat discharged from thermal storage units [mwh/h] 𝑋𝑡 heat production profile for industrial excess heat [mwh/h] 𝛼𝑖 power-to-heat ratio for chp units m transmission capacity limit for importing electricity [mw] 𝑦𝑖 existing capacity of technology i [mw] 𝑍𝑖,𝑡 generation profile for solar power (varies for solar power, equal to one for all other technologies) 𝐸𝑖,𝑡 emissions resulting from the utilisation of the different technologies i [tonneco2/h] 𝐸𝑙𝑖𝑚 limit imposed on emissions allowed in the urban energy system [tonneco2] 𝐶𝑖 𝑓 c-factor for charging and discharging thermal storage units and flow batteries 𝐿𝑖 losses from the thermal storage [mwh/h] see göransson et al. [2] for details on the implementation of thermal power plant cycling constraints and costs (implemented for the chp plants in this model); these equations and variables have been omitted here for the sake of simplicity. appendix b data and technology assumptions table a 1 gives the cost assumptions for the different electricity, heating, and storage technologies utilised in the modelling, as well as assumptions linked to life-time, efficiency, and power-to-heat ratios (for chp plants). table a 2 shows the cost assumptions, efficiencies, losses, and c-factors for the thermal storage technologies. for the annualised investment costs in the model, an interest rate of 5% is applied. solar pv generation is based on merra data and a generation profile calculated with the model presented in [3]. the utilised solar profile results in 1,047 full-load hours for the city of gothenburg. 4 table a 1: technology-related assumptions used in the model, (s, m and l correspond to small, medium and large units). investment cost [€/kwel] fixed o&m cost [€/kw] variable o&m cost [€/mwh] life-time [years] efficiency [%] power-toheat ratio electricity generation solar pv medium costs 600 10 1.1 25 a solar pv low costs 300 20 1.1 25 a natural gas gt 390 7.92 0.4 30 37 biogas gt 378 7.92 0.7 30 37 chp electric chp bio (s/l) 6000/3000 278/133/86 7.9/3.9 40 13.3/27.6 0.14/0.3 chp biogas 1100 26 3 30 55 1.6 chp gas 950 20 1.6 30 52.5 1.3 chp waste (m/l) 760/6500 211/150 23.3/23.7 40 23.2/23.5 0.3 heat production thermal electric boiler 50 1.5 1 20 95 heat pump (s/m/l) 800/530/530 1.5/1/1 2/1.6/1.6 25 3 (cop) hob bio (s/m/l) 590/540/490 29.3 1/0.85/0.7 25/20/20 115 b hob biogas 50 1.7 1 25 104 b hob gas 50 1.7 1 25 104 b hob waste (m/l) 1550/1240 65.3/50.7 5.5/4.1 25 106 b hob oil 400 2.5 1.5 20 90 electricity storage [€/kwh] [€/kw(h)] li-ion batteries 150 0.5 15 90 flow batteries (energy) 50 30 70 flow batteries (capacity) 1100 54 30 100 a for the pv generation, a solar profile based on the geographical area limits the output per kw installed for each hour, b for the energy content in the fuel, the lower heating value has been used, which is matched with a higher value for the efficiency, assumptions based on the iea world energy outlook 2016 [4], as well as the technology data for energy storage provided by the danish energy agency [5] table a 2: assumptions made in relation to the different thermal storage systems, (m and l correspond to medium and large units). thermal storage investment cost [€/kwh] life-time [years] efficiency [%] c-factor loss [%/h] constant loss [%/h] pit storage (m/l) 4/1.25 25 98 1/6 1/240 4.6/240 pit with heat pump (m/l) a 0.857/0.268 25 98 1/6 1/240 tank storage 26.5 25 98 1/168 1/240 4.6/240 tank with heat pump a 5.7 25 98 1/168 1/240 borehole storage 0.46 25 98 1/3,000 1/240 a data only for storage, not the corresponding heat pump. 5 table a 3 summarises the costs and emission levels for the modelling of the fuels, which can be utilised in the urban energy system. table a 3: fuel cost assumptions fuel type fuel cost [€/mwh] emissions [kgco2 equ/mwhfuel] natural gas 34.27 207 biomass (low/high) 20/40 0 biogas (low/high) 48/77 0 waste 1 132 oil 66.18 264 in figure a 1, the electricity price that is assumed to be paid on electricity imported to the urban energy system from the national grid is plotted. the electricity price curve assumption stems from a northern european dispatch model and has been taken from a future scenario that includes an increased share of variable renewable electricity generation [6]. figure a 1: price (in €/mwh) for electricity imported to the city from the national electricity grid, as applied in the modelling. the price curve is derived from the results of a northern european dispatch modelling [6], the x-axis shows all hours of the year. the investigated district heating system currently includes chp units that are fired by biomass and natural gas, as well as a small heat pump and hobs fired by biomass, natural gas and oil. the biomassfuelled units, as well as the heat pumps are operated in the cases presented in this work. figure a 2 shows the shares of the urban heating demand that can be supplied by waste heat in the modelling. at this point, no costs have been assigned for the utilization of waste heat. we assume a decrease in the amount of waste heat that is available in the city as compared to the current system, due to possible changes in the process designs of refineries, which are currently the main suppliers of waste heat. both the future availability and price of waste heat are uncertain. figure a 2: urban heat demand profile and waste heat production profile, as utilized in the modelling. 6 references in appendix: [1] østergaard pa, maestoso pc. tools, technologies and systems integration for the smart and sustainable cities to come. int j sustain energy plan manag 2019;24 2019. http://doi.org/10.5278/ijsepm.3450. [2] göransson l, goop j, odenberger m, johnsson f. impact of thermal plant cycling on the costoptimal composition of a regional electricity generation system. applied energy 2017;197:230– 40. http://doi.org/10.1016/j.apenergy.2017.04.018. [3] norwood z, nyholm e, otanicar t, johnsson f. a geospatial comparison of distributed solar heat and power in europe and the us. plos one 2014;9:e112442. http://doi.org/10.1371/journal.pone.0112442. [4] international energy agency. world energy outlook 2016. paris, france: 2016. [5] danish energy agency. technology data for energy storage. 2018. [6] taljegard m, göransson l, odenberger m, johnsson f. impacts of electric vehicles on the electricity generation portfolio – a scandinavian-german case study. applied energy 2019;235:1637–50. http://doi.org/10.1016/j.apenergy.2018.10.133. microsoft word ijsepm titelblad vol 25 editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    rendsburggade 14, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, western norway university of applied sciences, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands  dr tao ma, shanghai jiao tong university, china  rasmus magni johannsen, aalborg university, denmark    issn     2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark (front page & logo)  ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss and emd international international journal of sustainable energy planning and management vol. 26 2020 5 *corresponding author e-mail: mtgarcia@udc.es international journal of sustainable energy planning and management vol. 26 2020 05–18 abstract the increase seen in household electricity prices in the european union over recent years was strongly influenced by the regulation component. this paper focuses on an empirical assessment of both supply-side and demand-side policies in the european union over the period 2000-2015. more specifically, on the supply side, it analyses renewable energy support policies and the electricity industry liberalisation process and, on the demand side, energy taxes, thus contributing to the debate on the effect of these factors on household electricity prices. using pooled ordinary least square clustered at country level and regarding solar photovoltaic energy support policies, the results suggest that both the costs of quota obligation systems and the electricity sector liberalisation process have raised household electricity prices. energy taxes, however, do not have a significant influence on such prices. based on these results, recommendations are proposed for policy-makers. 1. introduction the energy policy of the european union (eu) establishes affordable household electricity prices as one of its main objectives in the framework of the energy union: secure, competitive and sustainable energy [1]. from a supply-side point of view, the development of renewable energies (res-e) has been an essential concept. the eu has made great efforts to promote such clean production technologies, as shown by the 2020 energy strategy [1], the 2050 energy roadmap [2], and the 2030 climate and energy package [3]. among other aims, these regulations seek to increase the share of res-e in energy consumption over time in order to reduce the impact of climate change. res-e are physically integrated into the wholesale electricity market and can influence its efficiency and competitiveness. due to the low marginal costs of these clean production technologies, res-e can lead to a reduction in wholesale electricity prices by displacing marginal technology based on fossil fuel. however, res-e have been developed by establishing public support policies that have mainly been financed via the electricity market, by increasing the final price paid by consumers. this has sparked a debate about the effects on household electricity prices of including res-e in electricity markets (see table 1). table 1 shows that research on res-e and household electricity prices in the eu has been based on case studies and empirical assessments in all member states. the results of case studies are inconclusive. for example, bode [4] and dillig et al. [5] found that res-e support policy in germany reduced both wholesale electricity prices and final electricity costs. similarly, sáenz de miera et al. [6] showed that wind energy in spain led to an assessment of supply-side and demand-side policies in eu-28 household electricity prices maría teresa garcía-álvareza,*, laura cabeza-garcíab and isabel soaresc a university of a coruna, campus elvina s/n, 15071, la coruna, spain. b university of leon, campus vegazana s/n, 24071, león, spain. c university of porto, rua dr roberto frias s/n, 4200-464 porto, portugal. keywords: household electricity prices; renewable energies; liberalisation; electricity market; url: http://doi.org/10.5278/ijsepm.3417 6 international journal of sustainable energy planning and management vol. 26 2020 an assessment of supply-side and demand-side policies in eu-28 household electricity prices wholesale electricity price reductions that were greater than the increase in costs for consumers arising from the support policy. however, sensfuß et al. [7] and frondel et al. [8] found that res-e net support payments were not offset by wholesale electricity price reductions in germany. similar results were obtained by figueiredo and pereira da silva [9] for wind energy in spain and portugal. the results of other research at eu level seem to show a positive correlation between res-e deployment and household electricity prices (ragwitz et al. [10] and acer [11], using models developed in eu projects; moreno et al. [12] and pereira da silva and cerqueira [13] using panel data). on the other hand, with regard to liberalisation in the energy industry, the aim of the eu has been to ensure that consumers receive the full benefits of market deregulation in terms of lower domestic electricity and gas bills. verbruggen et al. [14] establish that liberalisation involves unbundling of the main functions, access for third parties and privatisation which should allow for more exchange and ‘foreign shopping’ by the incumbent energy companies. recently, however, the possible benefits of greater competition have been questioned as this has not always been established effectively [15, 16]. table 2 shows research on liberalisation in the electricity industry and household electricity prices in the eu, which is also inconclusive. by means of regression analysis, ernst and young [17] found for the eu-15 that the liberalisation process resulted in lower electricity prices and lower price-cost margins. but thomas [18] found, using a qualitative analysis, that the liberalisation process was not related to lower electricity prices. cruciani [19] showed that the eu liberalisation process resulted in increases in both household and industrial electricity prices. fiorio et al. [20] found that unbundling resulted in lower household electricity prices in the eu-15. by analysing electricity prices and consumer satisfaction survey data, fiorio and florio [21] showed that there is greater consumer satisfaction when a country has both public ownership and liberalisation. more recently, florio [22] studied the impact of the liberalisation process in the eu-15 over the period 1990-2007 using panel data models and found lower household electricity prices in member states with state-owned companies. however, also using table 1: overview of the effects of res-e on electricity prices in the eu case study results country bode (2006) res-e support policy probably reduced both wholesale electricity prices and final electricity costs. germany sáenz de miera et al. (2006) wind energy development entailed wholesale electricity price reductions that were greater than the increased costs for consumers arising from the support policy spain sensfuß et al. (2008) res-e net support payments were not offset by wholesale electricity price reductions germany frondel et al. (2010) res-e did not result in lower household electricity prices germany dillig et al. (2016) res-e involved a net saving of 11.2 billion euros in 2013 germany figueiredo and pereira da silva (2018) res-e reduced electricity prices but these savings were not passed on to household consumers. portugal and spain empirical assessment ragwitz et al. (2005) consumer burden due to greater res-e support policies might be only partly offset by reductions in wholesale electricity prices eu-15 acer (2015) general upward trend in eu household electricity prices as a consequence of res-e eu-15 moreno et al. (2012) electricity prices rose with the deployment of res-e eu-27 pereira da silva and cerqueira (2017) positive correlation between res-e deployment and household electricity prices eu-28 trujillo-baute et al. (2018) positive and statistically significant impact of res-e promotion costs on household electricity prices eu-28 (23 member states) international journal of sustainable energy planning and management vol. 26 2020 7 maría teresa garcía-álvarez, laura cabeza-garcía and isabel soares panel data methods, pereira da silva and cerqueira [13] showed that liberalisation resulted in a reduction in household electricity prices in the eu-28, over the period 2000-2014. the implementation of demand-side policies should also be considered as these might also have an impact on household electricity prices. maxwell et al. [23] found that increases in electricity consumption result in an increase in household consumers’ electricity costs as fossil fuel might be required to meet demand. the energy efficiency directive proposes various instruments to reduce energy consumption, with the focus on energy taxes to facilitate a shift towards more sustainable consumption patterns [24] by reducing demand [25] and thus mitigating the increase in electricity prices. in this context, research has mainly focused on the effects of energy efficiency policies on energy consumption. table 3 shows that the results obtained are not unanimous. balaras et al. [26] found that the use of instruments such as energy taxes to reduce energy consumption in buildings successfully reduced energy consumption for heating in some eu member states in northern europe. geller et al. [25], however, pointed out that energy demand is relatively price-inelastic in the short term but not in the long term. similar results were obtained by table 2: overview of the effects of liberalisation of the electricity industry on electricity prices in the eu study type of analysis results countries ernst and young (2006) regression analysis lower electricity prices, reliable and secure supply, and effective interaction with other policies (such as climate change and sustainable development) eu-15 thomas (2006) qualitative method liberalisation process was not related to lower electricity prices as from 2000 eu-15 fiorio et al. (2008) regression analysis unbundling resulted in lower household electricity prices. eu-15 cruciani (2010) panel data increases in both household and industrial electricity prices (without the expected development of a more efficient system) eu-15 florio (2014) panel data lower household electricity prices in member states with state-owned companies. eu-15 pereira da silva and cerqueira (2017) panel data reduction in household electricity prices eu-28 (23 member states) table 3: overview of the effects of energy taxes on energy consumption in european countries study type of analysis results countries balaras et al. (2005) simulation energy taxes reduced energy consumption for heating in some member states in northern europe. denmark, france, greece, poland and switzerland de almeida et al. (2011) qualitative method energy taxes, among other energy efficiency policies, seemed insufficient to reduce energy consumption belgium, bulgaria, czech republic, denmark, france, germany, greece, hungary, italy, norway, portugal and romania. meyer et al. (2014) case study energy taxes reduced demand but the effect was rather slow in the last ten years of the study. denmark broin et al. (2015) panel data energy efficiency policies (including energy taxes) reduced energy consumption. eu-15 sorrell (2015) qualitative method need to combine energy efficiency policies (including energy taxes) with behavioural interventions to reduce energy consumption. eu-15 and other countries 8 international journal of sustainable energy planning and management vol. 26 2020 an assessment of supply-side and demand-side policies in eu-28 household electricity prices broin et al. [24], who showed that financial policies required at least seven years to have an effect on energy consumption. however, meyer et al. [27], sorrell [28] and de almeida et al. [29] indicated that the introduction of energy efficiency measures, such as energy taxes, seemed insufficient to reduce energy consumption in the eu. in this context, the objective of this paper is to contribute to the debate on the effects of the above supply-side and demand-side policies on household electricity prices. the main novelty of our paper is the following: (i) previous research on the impact of res-e on household electricity prices mainly used variables related to the share of res-e in electricity generation capacity and/or the contribution of res-e to electricity supply. little consideration was given to the effects of the specific type of res-e support policies or their incentive amounts for household electricity prices. this analysis is essential in order to better understand the impact of these clean production technologies on household electricity prices. an exception was trujillo-baute et al. [30] who used the generalised method of moments (gmm) to analyse the impact of renewable promotion costs on industrial and household electricity prices in the eu, although this study only covered the period 2007-2013. our paper analyses a longer period of time (2000-2016), which might allow policy-makers to gain more information on specific effects on household electricity prices. this paper also considers the effects of the two main solar photovoltaic (pv) support policies in the eu (both the feed-in tariff and tradable green certificates) as well as their incentive amounts. solar pv is considered because of its great potential for electricity generation in the eu. over the period 2005-2015, the contribution of solar pv to total electricity generated from renewable sources increased from 0.1% to 12.0% (eurostat), allowing this technology to position itself as one of the most important renewable technologies. (ii) previous research does not include demand-side policies in the analysis, which were mostly studied from the point of view of their effects on energy consumption. nevertheless, consumers’ behaviour may also have effects on electricity prices. this paper analyses the effect of a specific demand-side policy, energy taxes, on household electricity prices. (iii) this paper also contributes to the debate on the effects of electricity industry liberalisation on household electricity prices as greater competition in this industry might not be effective. the remainder of this paper is structured as follows. section 2 presents the problem. section 3 describes the sample and variables and proposes the methodology. section 4 shows the main results and discusses them. finally, section 5 presents the main conclusions. 2. problem formulation renewable production technologies have been developed thanks to public support policies mainly financed via the electricity market [23, 31]. there are two main res-e support policies in the eu: the feed-in tariff (fit), and the quota obligation based on tradable green certificates [32]. development of these policies is a long-term, evolving process that needs enduring support [14]. fit, in either the premium-price or the fixed-price options, is the res-e energy support policy that has been most widely used in the eu. premium-price fit adds a bonus to the wholesale electricity price, whilst fixed-price fit establishes guaranteed prices for fixed periods of time. the quota obligation, on the other hand, allows res-e producers to sell certificates in addition to electricity. in this context, the type of res-e support policy and their incentive amounts seem to be key for ascertaining the impact of these clean production technologies on household electricity prices. nevertheless, the literature on res-e and household electricity prices has mainly centred on the analysis of variables related to the share of res-e in electricity generation capacity and their contribution to electricity supply [4, 7, 11, 12, 10, 13]. an exception is trujillo-baute et al. [30] who used the generalised method of moments (gmm) to analyse the impact of renewable energy promotion costs (both price-based and quantity-based instruments) on industrial and household electricity prices in the eu over the period 2007-2013. their results showed that the impact of res-e promotion costs is positive and statistically significant, although international journal of sustainable energy planning and management vol. 26 2020 9 maría teresa garcía-álvarez, laura cabeza-garcía and isabel soares relatively small. however, this study only covers the period 2007-2013, although most res-e energy support policies were adopted in the eu in the early years of the previous decade (from year 2000). in our paper, the analysis is applied to solar pv energy because its fast growth in recent years. thus, this clean production technology is characterised by being “the most promising alternative energy based on environmental, economic and safety criteria in the eu” [33] (p. 54). taking into account previous literature, and that res-e support policies have mainly been financed via the electricity market, the following hypotheses are presented to differentiate the specific impact of each res-e support policy: h1a fit, as a solar pv support policy, positively influences household electricity prices. h1b tradable green certificates, as a solar pv support policy, positively influence household electricity prices. h1c the higher the tariff price in fit, the higher household electricity prices are. h1d the higher the prices of tradable green certificates, the higher household electricity prices are. the liberalisation process, on the other hand, can have a positive or a negative impact on household electricity prices. taking into account both the aims of the european commission to enable consumers to receive the full benefits of market liberalisation, and the majority of the previous empirical research, the following hypothesis is proposed: h2 the eu electricity industry liberalisation process reduces household electricity prices. regarding energy efficiency policies, it is not clear if these lower consumption (with a consequent reduction in electricity prices). taking into account the previous empirical research as well as the aims of the energy efficiency directive, combined with the expected results in energy prices, the final hypothesis is proposed: h3 energy taxes on electricity consumption might, by reducing demand, mitigate the increase in electricity prices. 3. empirical design this section discusses the sample, the variables and the methodology used in the empirical assessment. 3.1. sample to test the above hypotheses, the eurostat database was used to obtain data over the period 2000-2016 as it contains the most precise information, which is constant over time, standardised among member states and belongs to the european commission. the acer market monitoring reports [11] and the member state res-e progress reports [34] were also used for data collection. the analysis starts in 2000 as most res-e energy support policies were implemented in the eu in the early years of that decade. similarly, most liberalisation processes were implemented in the member states at the end of the nineties. the study period ends in 2016 because the most recent member state res-e progress report was published by the european commission in 2017 (the last data of that report is for 2016). cases for which there was no information on any of the variables were not considered in the study in order to avoid missing values in the estimates and to have the same sample size in all models. as a result, we ended up with an unbalanced panel of 23 countries1 and 303 observations. 3.2. measuring variables 3.2.1. dependent variable in this study, the dependent variable is the logarithm of household electricity prices, following ito [35] and pereira da silva and cerqueira [13]. household electricity prices are measured as the average national price applicable for medium-size household consumers (consumption band dc with annual consumption between 2500 kwh and 5000 kwh) (in euro per kwh) (electr_prices). 3.2.2. explanatory variables this paper analysis the effects on household electricity prices of the two main solar pv energy support policies in the eu (fit and the quota obligation system based on tradable green certificates). three dummy variables were created to measure these effects: (i) res-e energy promotion policy1, which refers to the 1 the countries included were belgium, cyprus, czech republic, denmark, estonia, finland, france, germany, greece, hungry, italy, ireland, latvia, lithuania, malta, poland, portugal, romania, slovenia, slovakia, spain, sweden and the united kingdom. 10 international journal of sustainable energy planning and management vol. 26 2020 an assessment of supply-side and demand-side policies in eu-28 household electricity prices nonexistence of a specific promotion policy in solar pv energy (pv_pol1), (ii) res-e energy promotion policy2, which refers to the existence of a quota obligation in solar pv energy (pv_pol2), and (iii) res-e energy promotion policy3, which indicates the existence of fit in solar pv energy (pv_pol3). the analysis also studies the impact of the incentive amount. more specifically, in fit, the tariff refers to the price obtained by a solar pv energy producer for electricity sold to the grid (in euros/mwh) in fit observations and 0 otherwise (tariff_price). in the case of premium tariffs, it is the electricity market price plus the bonus. for fixed-price tariffs, it is the amount of the tariff. there are different schemes for solar pv energy in the eu as the tariff amount varies with the size of the facility. following jenner et al. [36], the tariff price variable is the mean value of each solar pv tariff across both size and location. regarding quota obligations, the certificate price variable considers the prices generally obtained through a market mechanism (in euros/mwh) together with electricity market prices (in euros/mwh) in solar pv energy producers with the quota system and 0 otherwise (quota_price) [37]. as certificate prices also vary with the size of the solar pv facility, this variable refers to the mean value of each solar pv certificate price across both size and location. liberalisation policy is introduced in the model as a dummy variable taking the value 0 before the year of the electricity sector liberalisation and 1 afterwards (liberalisation_pol) [13]. finally, in order to consider the effect of energy taxes, since the eurostat database does not break down taxation on different energy products, this variable considers the implicit tax rate on energy for household consumers. the european commission points out the importance of electricity taxes, which amount to a large share of total energy taxes, for sustainable development in the eu [38]. in this context, the analysis measures the implicit tax rate on energy for household consumers as the ratio between energy taxes paid by households and final household energy consumption (in euros per tonne of oil equivalent) (fiscal_pol). finally, it is necessary to consider that electricity prices respond to demand changes in the short term. trujillo-baute et al. [30] and romero-jordan et al. [39] establish that there might be a delay in the response of consumers’ demand to changes in electricity prices due to a “long-term habit inertia” or a “memory effect”. therefore, household electricity prices of the previous year (electr_prices-1) have been introduced in the model to determine whether this effect is significant. 3.2.3. control variables following previous empirical papers [40, 6, 42, 41], three relevant variables were controlled to analyse household electricity prices: a) the contribution of res-e to electricity supply, measured as the ratio between res-e electricity generation and total electricity supply (% of the total gross electricity supply) (res-e_ contribution). the results reported in the literature are not conclusive. some studies found a negative relation between this variable and household electricity prices. their explanation is that res-e resulted in lower wholesale electricity prices that offset the increase in costs of the support policies [5, 6]. however, other research found a positive relation between both variables as the reduction in wholesale electricity prices was insufficient to offset the cost of res-e support policies [13, 23]. b) the market share of the largest generator in the electricity market, measured as the ratio between the net electricity production of the largest generator and total net electricity production in the electricity market (% of total generation) (share_lgenerator). if the liberalisation process does not reduce the market share of incumbent companies, it might be ineffective for lowering household electricity prices [40, 41]. c) the economic situation, in which gross domestic product (gdp) is used as a proxy variable. a positive relationship is expected between this variable and the development of clean production technologies as countries with a better economic situation might have more resources to invest in res-e [42]. the final effect of this variable on household electricity prices will again depend on whether the possible wholesale electricity price reduction arising from res-e is, or is not, offset by the cost of the res-e support policy. 3.3. model a pooled ols (ordinary least square) regressions clustered at country level was performed with the stata12 program2. in addition, endogenous explanatory and control variables were lagged by one year to control for endogeneity problems in the model 2 the cluster option also implies the estimation of standard robust errors. international journal of sustainable energy planning and management vol. 26 2020 11 maría teresa garcía-álvarez, laura cabeza-garcía and isabel soares proposed. initially, the possibility of employing a panel data methodology, such as the two-step difference gmm model drawn up for dynamic panel data models by arellano and bond [43], was considered. however, this methodology was not applied because the results would not be reliable as the number of instruments would be larger than the number of countries (see figure 1 for a better understanding of the methodology employed). the pooled ols we run is as follows: electr_prices electr_prices it-10 1 pv_pol tariff_price 4 quota_pricei2 3 i i liberalisation_pol 6 fiscal_pol5 i i 7 res-e_contribution 8 share_lgeneratorit-1 i 9 gdpi 2016 d 2000 a ßi ß ß ß ß ß ß ß ß t i t ε = + + + + + + + + + + +∑ = where: 2016 2000 dt t ∑ = is a set of time dummy variables and εi is the error term. 4. results and discussion the descriptive statistics are shown in table 4 while the correlation coefficients of the variables used in the regression analysis are listed in table 5. once the non-normality of the explanatory and continuous control variables was confirmed, and considering that pearson’s correlation coefficient did not work well for discrete variables as it was very sensitive to violations of normality assumptions, spearman’s rank correlations were calculated. although some of the variables were significantly correlated, analysis of the variance inflation factors (vif) revealed no evidence of multicollinearity, as all of them remained under 10 [44]. table 6 summarises the results of the regression analysis. as explained in the section on the variables, pv_pol is a qualitative variable that places pv support policies in three categories (non-existence of a specific pv support policy, fit, and quota obligation). to make this variable operative, three dummy variables were defined, but it was only possible to add k-1 dummies to the regression models in our case 2 because in the other case the parameters cannot be estimated. the results are therefore presented by pairing the dummies panel data structure pooled ols cluster option pooled ols cluster option, with lagged endogenous variables pooled ols cluster option, without lagged endogenous variables gmm is there an endogeneity problem? sufficient crosssectional units is there an endogeneity problem? panel data methodology no no no yes yesyes fixed effects and random effects models figure 1: problem-solving methodology 12 international journal of sustainable energy planning and management vol. 26 2020 an assessment of supply-side and demand-side policies in eu-28 household electricity prices to clarify what their coefficients really mean. it is sufficient to state the results of the combination of dummies pv_pol2 (quota obligation in solar pv energy) and pv_pol3 (fit in solar pv energy), as the results of the remaining combinations may be inferred from the previous one. regarding solar pv energy support policies, the results do not support either hypotheses 1a or 1b as both the fit (pv_pol3) and tradable green certificate (pv_pol2) variables are not statistically significant. the analysis goes further by adding the effect of the incentive amount of both policies. the results do not support hypothesis 1c as the tariff price (tariff_price) in fit policies is not statistically significant. this finding therefore seems to indicate that the incentive amount set in fit policies is not passed on to final consumers or offset by wholesale electricity price reductions. related to this finding, although their analyses are at country level, bode [4] and dillig et al. [5] showed that fit did not involve an increase in household electricity prices in germany. similarly, sáenz de miera et al. [6] indicated that fit in spanish wind energy did not result in an increase of costs for consumers arising from the support policy. on the other hand, the results support hypothesis 1d as certificate prices (quota_price) are statistically significant (β=0.001 p=0.017) and have statistically significant impacts on household electricity prices. therefore, solar pv net support payments cannot be offset by wholesale electricity price reductions. this finding is in line with trujillo-baute et al. [30], who indicated that quantity-based support policies (which include a quota obligation system based on tradable green certificates) had a positive and statistically significant impact on household electricity prices in the eu over the period 2007-2013. hypothesis 2 must be rejected because the electricity sector liberalisation process (liberalisation_pol) had a positive and significant influence on household electricity prices (β= 0.016 p=0.097). this finding is in line with those obtained by thomas [18] and cruciani [19]. these studies, which use quantitative and qualitative methods respectively, showed that liberalisation has not achieved its aim in the eu related to the development of a more efficient system with lower household and industrial electricity prices. our result shows that the reforms outlined in the electricity sector liberalisation process in the eu seem to have been insufficient to achieve more competitive household electricity prices. the explanation may lie in the persistence of entry barriers related to long administrative procedures to create new electricity generation facilities, or the possible market power of incumbent companies [16, 45]. hypothesis 3 must be rejected as energy taxes (fiscal_pol) are not statistically significant. the table 4: descriptive statisticsa variables mean maximum minimum std. dev. electr_prices 0.110 0.238 0.055 0.033 tariff_price 14.069 55 0 17.767 quota_price 1.512 40.8 0 5.313 fiscal_pol 179.744 441.56 72.01 76.999 res-e_contribution 15.506 100 0.036 12.585 share_lgenerator 56.677 100 15.3 26.971 gdp 537,566.9 3,134,100 5,424.4 750,717.03 other explanatory variables % (number of observations = 1) liberalisation_pol 67.33 (204) pv_pol1 21.45 (65) pv_pol2 16.50 (50) pv_pol3 62.05 (188) a n = 303 international journal of sustainable energy planning and management vol. 26 2020 13 maría teresa garcía-álvarez, laura cabeza-garcía and isabel soares t ab le 5 : c or re la ti on m at ri xa v ar ia b le s 1 2 3 4 5 6 7 8 9 10 11 1. l e l e c t r _p r ic e s 1 2. p v _p o l 1 –0 .3 28 ** 1 3. p v _p o l 2 0. 06 0 –0 .2 32 ** 1 4. p v _p o l 3 0. 23 1* * –0 .6 68 ** –0 .5 68 ** 1 5. t a r if f _p r ic e 0. 11 7* –0 .5 21 ** –0 .4 43 ** 0. 77 9* * 1 6. q u o t a _p r ic e 0. 08 0 –0 .2 31 ** 0. 99 5* * –0 .5 65 ** –0 .4 40 ** 1 7. l ib e r a l is a t io n _ p o l 0. 24 9* * –0 .1 16 * 0. 17 7* * –0 .0 37 0. 00 7 0. 16 8* * 1 8. f is c a l _p o l 0. 43 37 ** –0 .3 83 ** –0 .0 98 † 0. 39 9* * 0. 30 2* * –0 .1 18 * 0. 10 8† 1 9. r e s –e _ c o n t r ib u t io n 0. 08 2 0. 12 5* 0. 24 5* * –0 .0 81 0. 04 9 0. 24 6* * 0. 20 7* * –0 .0 25 1 10 . s h a r e _ l g e n e r a t o r –0 .1 15 * –0 .0 96 † –0 .2 59 ** 0. 27 9* * 0. 17 1* * –0 .2 36 ** –0 .4 23 ** –0 .0 98 † –0 .2 73 ** 1 11 . g d p 0. 27 8* * –0 .2 35 ** 0. 28 4* * –0 .0 19 0. 14 1 0. 28 3* * 0. 26 4* * 0. 44 5* * 0. 28 1* * –0 .4 91 ** 1 a n = 3 03 † p < 0 .1 0; * p < 0 .0 5; * * p < 0 .0 1 14 international journal of sustainable energy planning and management vol. 26 2020 an assessment of supply-side and demand-side policies in eu-28 household electricity prices results suggest that energy taxes do not lead to lower energy prices, motivated by a reduction in energy consumption. de almeida et al. [29] and sorrell [28] stress that energy taxes alone cannot promote more sustainable energy consumption. reinforcing actions might therefore be necessary to achieve energy efficiency goals in the eu. finally, the results of the model analysed suggest that household electricity prices are influenced by those of the previous year (electr_prices-1) (β= 0.916 p = 0.000). our findings point to a delay in the response of consumers’ demand to changes in electricity prices due to “long habit inertia” or “memory effect”. these results are in line with those obtained by agnolucci [46], gam and rejeb [47] and romero-jordan et al. [39]). regarding control variables, the market share of the largest generator in the electricity market (share_ lgenerator) and the country’s economic situation (gdp) do not seem to significantly influence household electricity prices. the initial model was repeated by substituting the country’s economic situation (gdp) with the logarithm of gdp. the results remain the same. however, the results support a negative and significant influence of the contribution of res-e to electricity supply (res-e_contribution) on the dependent variable (β= -4.93-04 p = 0.050), in line with other studies [7,13]. this finding seems to indicate that the expected reduction in wholesale electricity prices stemming from res-e might not offset the cost increase of res-e support policies. the initial model was repeated substituting the contribution of res-e to electricity supply (res-e_contribution) with the generation capacity of res-e to total electricity generation capacity as a percentage of total electricity generation capacity (res-e_capacity). the results regarding the main explanatory variables remain the same. this paper improves and expands on the existing literature in some key areas. most prior studies do not consider the effect of demand-side policies on household electricity prices. these should be analysed to find the specific effect that consumer’s behavior can have on electricity prices. regarding the effect of supply-side policies (both res-e development and the liberalisation process) on household electricity prices, the results in the literature on res-e development are inconclusive as they report, using both qualitative and quantitative methods, both reductions (for example, bode [5]; sáenz de miera et al. [23]; dillig et al. [6]) and increases (for example, sensfuß et al. [20]; frondel [24]; moreno et al. [21]; pereira da silva and cerqueria [7]; figueiredo and da silva pereira [50]). moreover, most studies do not consider the effects of the different types of res-e support policies as well as their incentive amount on household electricity prices. one exception is trujillobaute et al. [30], who analysed the effects of both res-e price-based and quantity-based instruments on industrial and household electricity prices in the eu. however, this study only covers the period 2007-2013, although most res-e energy support policies were adopted in the eu in the early years of the first decade. therefore, the study of res-e support policies from the year 2000 might allow policy-makers to gain more information about their specific effects on household electricity prices. with regard to the electricity sector liberalisation process, there is also a debate about its effects on household electricity prices as greater competition in this industry might not be effective, as shown in streimikiene et al. [48] and thomas [18]. the study of table 6: linear regression analysisa variables model electr_prices-1 0.916** (60.46) pv_pol2 –0.006 (–0.41) pv_pol3 0.015 (0.74) tariff_price –3.54-04 (–1.02) quota_price 0.001* (2.57) liberalisation_pol 0.016† (1.73) fiscal_pol –3.00-05 (–0.42) res-e_contribution –4.93-04* (–2.07) share_lgenerator 4.84-05 (0.32) gdp 2.66-09 (0.37) r2 0.920 f 4367.39** number of countries 23 number of observations 303 a standardised coefficient with t-value in brackets † p< 0.10; * p < 0.05; ** p < 0.01 international journal of sustainable energy planning and management vol. 26 2020 15 maría teresa garcía-álvarez, laura cabeza-garcía and isabel soares these issues might provide relevant insights to achieve more competitive household electricity prices. our results suggest the importance of reviewing both supply-side and demand-side policies to define measures to hold back an increase in household electricity prices. tradable green certificates have led to high levels of remuneration for mature technologies, which may impact household electricity prices. the certificate prices set by this support policy should be reviewed to obtain more competitive household electricity prices. policy-makers should also review the liberalisation model to identify the most appropriate types of reform for achieving the goals of energy policy. finally, energy taxes do not seem to be a suitable measure for lowering household electricity prices. policy-makers might consider the possibility of complementing these actions with public campaigns to promote citizens’ environmental awareness. such actions would induce more sustainable consumption, with the consequent reduction in household electricity prices. 5. conclusions achieving affordable household electricity prices is one of the mail goals of the eu energy policy in the framework of the eu 2020, 2030 and 2050 strategies. nevertheless, household electricity prices have risen in recent years. this paper provides an empirical evaluation of both supply-side and demand-side policies in the european union over the period 2000-2016. the results indicate that both the supply-side policies analysed here had an impact on household electricity prices. regarding res-e (more specifically, solar pv) support policies, the cost of quota obligations based on tradable green certificates, but without fit, seems to have resulted in higher household electricity prices. the liberalisation process also seems to have raised household electricity prices. however, energy taxes did not have a significant influence on these prices. policy-makers should consider the possibility of reviewing both the certificate prices of res-e technologies and the specific reforms set in motion by the liberalisation process in order to reduce household electricity prices. moreover, the adoption of public policies to promote environmental awareness might be an effective complementary measure for energy taxes. further research might study the effects of alternative res-e (biomass, minihydraulic, solar thermoelectric, etc.), alternative energy efficiency measures (energy labels and ecodesign) and specific reforms introduced via liberalisation (unbundling, ownership type, etc.) on household electricity prices. acknowledgements the authors acknowledge contributions from the 4th international conference on energy & environment: bringing together engineering and economics (icee 2019), 16-17 may 2019, guimarães (portugal) and the ijsepm special issue (ferreira et al. 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and second for short-term generating incentives for non-conventional energy resources mainly focused on small and medium projects (on-grid and off-grid) [3]. the funds related to electrification in rural areas offgrid in colombia are provided by financial support fund for the energization of non-interconnected areas, known as “fondo de apoyo financiero para la energización de las zonas no interconectadas (fazni)” [4]. the resources of fazni are sponsored by generating agents of the wholesale colombian energy market and international electrification programs. with respect to auctions 2,200 mw of installed capacity was approved on 22nd october 2019 [5]. related to incentives 71 mw were approved, where 78 projects correspond to solar resources on 31st january 2020 [6]. furthermore, the government of colombia agreed in the methodology to assess the implementation of solar power projects in rural areas using ahp: a case study of colombia jhon jairo pérez gelves*, guillermo andrés díaz florez department of electrical engineering, la salle university, carrera 2 nº10-70 bloque c piso 7. bogotá d.c., colombia keywords solar power projects; analytic hierarchy process (ahp); rural areas; colombia; url:https://doi.org/10.5278/ijsepm.3529 mailto:jjperez@unisalle.edu.co https://doi.org/10.5278/ijsepm.3529 70 international journal of sustainable energy planning and management vol. 29 2020 methodology to assess the implementation of solar power projects in rural areas using ahp: a case study of colombia world summit on climate change in paris (cop21): increase the use of renewable energy resources; reduce greenhouse gas emissions by 20%; ensure the resilience of the electricity generation matrix against climate change; and mitigate the effects of climate variability [7]. colombia is considered as latin america’s fourth largest economy measured by gross domestic product (gdp) at purchasing power parity (ppp) in 2019 of international monetary fund estimated in 791,9 billion usd [36], with an approximate population of 49.1 million according to the national administrative department of statistics (dane) [3]. in 2017, the total of energy produced by colombia was 5,170.9 pj (123.5 mtoe), the exports reached 4,258.1 pj (101.7 mtoe), being an exporting country mainly oil and coal. the consumption was 1,231.8 pj (29.42 mtoe) divided into: industry 28.11%; transport 36.02%; others 34.67%; and non-energy use 1.18% [8]. the co2 emissions of colombia represents 0.22% of the world and the electricity consumption was 73.5 twh in 2017 [8]. colombia’s electric power generation capacity is roughly 16,750 mw. hydro-power accounts for 10,960 mw (about 66%) and thermal generation units for 4,850 mw (about 29%), of which 3,509 mw come from gas power plants and 1,340 mw from coal-fired power plants [9]. the remainder is produced by smaller power plants. table 1 presents the main energy and socioeconomic indicators for colombia, including: gdp (ppp); rural population; rural poverty gap; access to electricity in rural areas; and forest area. 1.1. brief review of state of art there is an extensive literature on planning renewable energies and in particular on using solar applications. this brief review of state of art is focused on: sustainable indicators; access and affordable energy using solar systems; and solar decision-making methods. currently indicators are a powerful tool for sustainable assessment. narula [11] built a multidimensional index known as sustainable energy security which was applied for various energy sources for residential sector in india. razmjoo and sumper [12] investigated on sustainable energy development index applied for developing countries. a paper developed by jaroszewska et al. [13] explores the relations between energy efficiency systems and sustainable energy management the results correspond to tourism sector in polish. sdgs and specifically goal 7, “affordable and clean energy,” energy management will play an important role in developing countries. ogundari et al. [14] evaluates the energy lighting adequate on off-grid between photovoltaic (pv) solar and diesel generation, the results show that the pv system is four times less expensive. nigeria has a very strong dependence on fossil resources, this condition imposes barriers to the entry of renewable energy specially pv systems, this solution allows reduce or eliminate fuel fraud, more cost competitive and technological learning. groth [15] basically compares on-grid with off-grid households and found huge differences in tanzania, pv systems can be an important link to reduce socio-economic impacts. regarding to studies using the ahp approach focused on renewable applications the literature is diverse [16– 18]. in iran, where geographical conditions produce an especially high level of solar radiance, azizkhani et al. [19] elaborated an ahp based on technical features, economic parameters, geographical location and solar radiance on the earth’s surface. algarin et al. [20] built table 1: energy and socioeconomic indicators in colombia, data from [10] variable 2014 2015 2016 2017 2018 gdp, (billion-ppp) (current internationalusd) 348.48 359.45 366.45 372.93 381.88 gdp per capita (constant-lcu) 16,640.4 16,933.5 17,053.4 17,026 17,200,4 rural population (% of total population) 20.58 20.23 19.89 19.5 19.22 poverty gap at $1.90 a day (2011 ppp) (%) 2.0 1.8 1.8 1.6 1.7 access to rural electricity (% of total population, on interconnected areas) 89.89 91.79 92.76 92.74 99.6 forest area (% of land area) 52.75 52.72 52.70 – – international journal of sustainable energy planning and management vol. 29 2020 71 jhon jairo pèrez gelves, guillermo andrès dìaz florez a decision-making procedure for selecting different renewable resources in colombia based on multi-criteria decision analysis. one of the most interesting aspects of the latter work is that it includes techno-economic, social, and environmental-risk criteria. ayag [31] developed a decision-making method for evaluating solar plants locations based on geographical, economic and social factors. also there is another approaches specially developed for non-expert decision making [21]. this work presents a method to compare the electric power production from renewable and non-renewable sources using a multistage qualification for micro-level decision-makin . likewise, ozdemir and sahin [17] developed an applied work at igdir university to determine the best location for a solar photovoltaic plant between three alternatives using measurements of solar radiance and geographical information. pellegrini et al. [22] aim to identify technological and non-technological barriers in district heating systems using an ahp classification. 1.2 the potential of solar energy in colombia colombia is located in northwestern south america and covers 1,038,700 square km2 of land. it is a rich country in natural resources suited to the production of electricity, such as: solar, wind, hydro, and biomass. the average solar irradiation of the country is approximately 4.5 kwh/m2/day [23], in comparison with the average irradiation of the world, 3.9 kwh/m2/day [24]. colombia experiences two seasonal periods: summer, from december 1st to april 30th, and winter, from may 1st to november 30th [25]. figure 1 illustrates the annual average for daily horizontal global irradiation in colombia in 2014. colombia is divided into 31 departments comprised in 5 regions known as: pacific; amazon; andean; orinoquía and caribbean, each with different levels of solar irradiation as shown in table 2. nevertheless, there are some departments with a great potential. are the case of the departments of la guajira and cesar with an average irradiation between 5.0 – 6.0 kwh/m2/day. 1.3 aim of the study this article aims to assess the implementation of solar power projects in rural areas of colombia that can be applied on small and medium projects (on-grid and off-grid). the goals are: (i) to develop a methodology to assess new criteria in developing countries such as: technical-economic factors, social factors, and environmental risk; (ii) to determine criteria and sub-criteria based on data from the nslcc and ideam; and (iii) to find and assess the best alternatives for localization of solar energy projects in colombia. this paper is divided into three main parts: section two presents the materials figure 1: daily horizontal global irradiation in colombia, annual average. developed from ideam available data [23] table 2: average irradiation by regions of colombia [23] region average irradiation (kwh/m2/day) pacific 3.5 – 4.0 amazon 3.5 – 4.0 andean 4.0 – 4.5 orinoquía 4.5 – 5.0 caribbean 4.5 – 5.0 72 international journal of sustainable energy planning and management vol. 29 2020 methodology to assess the implementation of solar power projects in rural areas using ahp: a case study of colombia and methods for the ahp theoretical framework, a description of the data, and the proposed methodology. section three provides the descriptive analysis and the selection of criteria and sub-criteria, along with the results of the application of the ahp method. section four presents the discussion and conclusions. 2. methods and data many problems related to engineering, economics, health and education need solutions that may have different interests. this hierarchical analysis technique allows addressing these differences in a rational and numerical way. the method of ahp was introduced by saaty [26] as a tool for dealing with complex decision-making. this methodology can be applied in the selection of renewable energy projects [17] [34] [35]. this section related to the methodology is divided into: theoretical framework; data; and flowchart of methodology. 2.1. theoretical framework one of the most important characteristics of ahp is that it allows for the measurement of subjective aspects of a decision. furthermore, the model quantifies the consistency of decision maker’s assessment, figure 2 illustrates the general diagram related to ahp process. in general terms an ahp contains the following steps: (i) developing a model: an ahp analysis consists of building hierarchy and can be divided into: goals; criteria; sub-criteria; and alternatives. using the scale proposed by saaty [26] accord ing to table 3, establishes saaty’s pairwise comparison scale. the importance of two criteria can be calculated, where the jth criterion is equally or more important than the kth criterion. this approach allows to compare different alternatives, which can be very useful in renewables decision-making [27] [28]. (ii) determining weights matrix for the criteria and sub-criteria: decision makers must establish in the ahp process the relative priorities (weights) for the criteria. these weights are relative because depends of the relationship with pairwise comparison. hence, the criteria should not have the same importance [29]. in this step the weights for the criteria and sub-criteria are derived eq. (1), according to table 2. 1,2 1, 2, 2, , ,2 1 1 1 1 1 1 k k k j k i a a a a a a a          =              (1) goal criteria 1 criteria 2 criteria n alternative 1 alternative 2 alternative n weights figure 2: general diagram of ahp process table 3: pairwise comparison between criterion according to saaty’s value of aj,k interpretation 1 j and k are equally important 3 j is slightly more important than k 5 j is more important than k 7 j is strongly more important than k 9 j is absolutely more important than k international journal of sustainable energy planning and management vol. 29 2020 73 jhon jairo pèrez gelves, guillermo andrès dìaz florez where a corresponds to matrix of priorities (weights) and aj,k relative priorities between criteria. and j, k refers to pairwise comparison criteria. the matrix must have nxn dimensions (n represents order de matrix). (iii) computing the vector of priorities: the next step consists to derive the normalized pairwise comparison matrix anorm from matrix a, set the sum of the entries on each column equal to 1. the criteria weight vector w is composed of the average of the entries in each row, according to eq. (2) and (3): where āj,k is the matrix anorm; and is the weight of the jth criterion. (iv) checking the consistency of judgments: in order to achieve consistency in the ahp process, is necessary to apply the consistency index (ci) and the consistency ratio (cr) as is presented in the eq. (4) and (5). if cr eq. (4) is smaller than 0.1, the result is acceptable [31-32]. where, λmax: is obtained by summing the priorities and dividing by the number of criteria. n= number of criteria. the consistency ratio is defined in eq. (5) as follows: where, ci: consistency index ri: index of a quasi-random matrix. (v) making a final decision: the goal is to calculate the overall priority for each alternative. this procedure consists on the global weight values of the criterions. and sum of the global weights of the alternatives, evaluating all alternatives. 2.2. data in the 1990s, colombia developed national standards of life surveys sponsored initially by united nations and , , , = ∑ j k j k n jl k a a a (2) , n j ll j a w n = ∑ (3) ( ) 1 max nci n λ − = − (4) ci cr ri = (5) national planning department. the design and execution of the survey considers the methodology called the living standards measurement study [30] which was promoted by the wb. this survey was conducted in 2016 by the dane and measures living standards and to characterize the population in urban areas, intermediate cities and rural areas of colombia, thus covering a nationally representative sample. the nslcc 2016 sample contains information from questionnaire interviews of 14,800 households divided into: urban (8,974 households), intermediate cities (2,154 households), and rural areas. (3,673 households). the present study is developed exclusively in rural areas, therefore the nslcc data used in this paper includes rural sample that corresponds to 3,673 households and data available at ideam. the data used related to nslcc are: energy use (cooking and electrification); monthly income; potable water; flood overflows; landslides; garbage collection; and violent acts. with respect to ideam the data used corresponds to include solar irradiation. the data are divided into: binary; category; and continuous as described as follows: (i) binary: electrification; potable water; flood overflows; landslides; garbage collection; and violent acts. (ii) category: energy use for cooking. (iii) continuous: monthly income and solar irradiation. the database was pre-processed, eliminating missing values, and cleaning empty data for a proper handling of the data. 2.3. flowchart of methodology this methodology makes it possible to assess the localization of solar power projects in rural areas of colombia and to select the departments best suited for this type of project. figure 3 presents the proposed methodology using an ahp approach based on nslcc survey and ideam data. figure 3 illustrates the methodology for determining the location of the alternatives for solar projects in colombia. the methodology hierarchically presents main criteria, criteria, sub-criteria and alternatives. table 4 presents the criteria and sub-criteria based on techno-economic, social and environmental risk. therefore, the parameters of the sub-criteria are presented in detail as follows as: (i) techno-economic criteria: include solar irradiation, energy poverty, and income of the rural areas. goal criteria 1 criteria 2 criteria n alternative 1 alternative 2 alternative n weights 74 international journal of sustainable energy planning and management vol. 29 2020 methodology to assess the implementation of solar power projects in rural areas using ahp: a case study of colombia (ii) social criteria: include owned electricity, owned potable water, and violent acts. (iii) environmental risk criteria: include flood overflows, landslides, and garbage collection. 3. results the application of the proposed methodology was carried out in colombia, according to the implemented criteria and sub-criteria with nslcc and ideam data. 3.1. prioritization and selected data this subsection presents a prioritization and selected data according to the data available in the nlscc. due to the fact that in the nslcc many departments there is no data, were selected several departments belonging to different regions of colombia. the departments selected were: antioquìa (ant), atlàntico (atl), bolìvar (bol), boyacà (boy), caldas (cal), caquetà (caq), cauca (cau), cesar (ces), còrdoba (cor), tott assessment of the location solar projo ectcc s in colombia tett chnical economical social environmental risks solar irradiation income (i) energrr y povertrr ytt (ep) ((ssii)) owned electricitytt (oe) owned potable water (op) violent acts (vavv ) flood overfrr lows (fo) subsidence on the grounr d and avalanches (sa) garbage collection (gc) main criteria la guajia ra .......................................................................................... chocò alternatives to assessment of the location solar projects in colombia techno-economic social environmental risks solar irradiation income (i) energy poverty (ep) (si) (si) owned electricity (oe) owned potable water (op) violent acts (va) flood overflows (fo) subsidence on the ground and avalanches (sa) garbage collection (gc) main criteria la guajira .......................................................................................... chocò alternatives figure 3: flowchart methodology assessment of location solar projects in colombia table 4 definitions of criteria and sub-criteria factor (criteria and sub-criteria) definition techno-economic solar irradiation (si) solar radiation is radiant energy emitted by the sun, particularly electromagnetic energy in kwh/m2/day in each department income (i) average monthly income of households in the departments in usd (year 2016 usd) energy poverty (ep) type of fuel used by households for cooking (solid; transition and modern fuels) social owned electricity (oe) the household has electricity owned potable water (op) the household has potable water violent acts (va) the household is vulnerable to armed conflict or violent acts environmental risks floods (fo) the area suffered flood or over floods subsidence of the ground and avalanches and avalanches (sa) the area suffered subsidence of the ground garbage collection (gc) the area has garbage collection international journal of sustainable energy planning and management vol. 29 2020 75 jhon jairo pèrez gelves, guillermo andrès dìaz florez cundinamarca (cun), chocò (cho), huila (hui), la guajira (gua), magdalena (mag), meta (met), nariño (nar), norte de santander (nsd), quindío (qui), risaralda (ris), santander (san), sucre (suc), tolima (tol), and valle del cauca (val). the nslcc does not include information about the following departments in rural areas: arauca (ara), casanare (cas), putumayo (put), amazonas (ama), guainìa (gua), guaviare (guv), vapuès (vau) and vichada (vic). the prioritization of data is presented in table 5 and the departments chosen for each region are in italics. 3.2. consistency and alternatives obtained the weights given for each sub-criteria take into account the prioritization as follows as: (i) techno-economic criteria. a higher priority is given to departments with higher solar irradiation, lower income, and lower use of cooking fuel. (ii) social criteria. the priority is given to departments with lower levels of electrification and potable water, and that have experienced violent acts. (iii) environmental risk criteria. the preference is for areas with lower frequency of floods and ground subsidence and higher levels of garbage collection. table 6 illustrates the result of the priorities. the ci and cr were calculated using equations (4) and (5). the values obtained are 0.0742 and 0.0512, respectively. the consistency ratio is adequate and appropriate [17] [32– 33]. nevertheless, when there is inconsistency the process should be reviewed again. for this case, the ahp model is consistent. table 7 presents the overall priorities derived, taking into account each one of the sub criteria analyzed for each alternative. the results of each alternative are presented in table 6. according with the proposed methodology and applying ahp approach, the first overall priority is gua with a value of 35.5%; the second alternative is ces with 20.4%; and the third alternative is cor at 16.5%. these departments all belong to the caribbean region further, have high levels of solar irradiation and energy poverty. the next department is ant, one of the most table 5: results of criteria and sub-criteria by selected departments department si (kwh/m2/day) i (monthly-usd) ep (%) oe (%) op (%) va (%) fo (%) sa (%) gc (%) gua 2,007.50 261.85 88.6 0.0 37.1 37.1 0.0 2.9 5.7 atl 1,916.25 457.41 59.5 39.2 76.0 34.2 0.0 5.1 0.0 ces 1,916.25 566.35 46.0 46.8 83.9 15.3 0.0 4.0 7.3 mag 1,916.25 270.15 71.2 25.4 89.8 25.4 3.4 3.4 0.0 bol 1,733.75 266.98 66.7 33.3 69.2 41.0 0.0 12.8 12.8 cor 1,733.75 291.66 77.0 20.7 91.4 13.8 0.0 1.7 1.7 suc 1,733.75 489.60 52.4 35.7 95.2 66.7 0.0 4.8 2.4 ant 1,642.50 380.86 30.5 67.7 98.9 59.3 0.9 6.7 3.1 boy 1,642.50 495.78 70.9 26.0 95.9 70.1 1.0 3.1 6.7 hui 1,642.50 297.20 44.3 54.0 98.3 58.3 1.3 10.6 18.3 met 1,642.50 497.17 17.2 79.1 89.6 35.1 0.0 13.4 14.9 val 1,642.50 469.55 14.8 82.8 94.5 68.6 2.5 5.5 6.1 cal 1,551.25 392.39 37.5 60.8 98.9 40.9 1.7 0.6 4.5 ris 1,551.25 312.47 66.7 32.3 97.0 63.6 0.0 0.0 3.0 tol 1,551.25 346.03 54.6 43.5 94.9 27.3 1.1 4.1 2.2 cun 1,460.00 529.13 34.3 62.9 96.9 55.4 0.3 3.8 5.7 san 1,460.00 351.56 41.7 57.7 100.0 50.0 0.6 1.3 5.1 nsd 1,387.00 381.25 62.9 35.3 94.1 35.3 1.2 1.8 11.2 caq 1,368.75 534.40 62.6 36.6 44.3 0.8 0.8 1.5 2.3 cau 1,368.75 360.98 60.6 38.2 96.2 78.7 0.6 6.4 12.1 nar 1,368.75 232.84 54.1 44.2 96.4 76.8 2.3 11.3 24.4 qui 1,368.75 535.55 31.0 69.0 100.0 99.0 0.0 3.0 1.0 cho 1,277.50 343.45 18.5 81.5 81.5 32.3 1.5 50.8 3.1 76 international journal of sustainable energy planning and management vol. 29 2020 methodology to assess the implementation of solar power projects in rural areas using ahp: a case study of colombia important departments in terms of commercial and industrial development, was 8.6%. located in the central northwestern part of colombia with a narrow section that borders the caribbean sea. the next is met a department that belongs to orinoquía, as known as eastern plains, the next border to venezuela. this department is an important agricultural and livestock center of the country, with a result of 7.4%. val is an important industrial and commercial department. therefore, a large sugar cane producer, had a result of 5.6%. regarding these latter results (ant, met, val) there are no significant differences. finally, in the andean region the departments of cal and cun represent 3.6% and 2.5% respectively. cun is located in the center of colombia and in general terms is the most developed department in the country. cal and cun do not have high levels of solar irradiation. furthermore, these departments have high levels of income and electrification in comparison with the departments of the caribbean and orinoquía regions. 4. discussion and conclusions the selection of solar power projects is a complex task due to diverse interests. decision makers are forced to choose the location of solar power projects under uncertain conditions, and incorrect decisions can have consequences in the development of renewable generation projects for developing countries. for this reason, the main goal of this work is to develop a methodology based on several criteria and sub-criteria divided into technical-economic, social, and environmental-risk for assess the implementation of solar projects in rural areas using an ahp approach. decision makers, local authorities, and researchers need to choose investments not only based on levels of table 6: consistency of the criteria selected sub-criteria si i ep oe op va fo sa gc overall priority si 0.369 0.576 0.370 0.234 0.277 0.233 0.154 0.151 0.170 0.282 i 0.123 0.192 0.370 0.390 0.277 0.181 0.198 0.194 0.170 0.233 ep 0.123 0.064 0.123 0.234 0.166 0.233 0.198 0.194 0.170 0.167 oe 0.123 0.038 0.041 0.078 0.166 0.181 0.198 0.194 0.170 0.132 op 0.074 0.038 0.041 0.026 0.055 0.130 0.110 0.065 0.057 0.066 va 0.041 0.027 0.014 0.011 0.011 0.026 0.110 0.108 0.094 0.049 fo 0.053 0.021 0.014 0.009 0.011 0.005 0.022 0.065 0.094 0.033 sa 0.053 0.021 0.014 0.009 0.018 0.005 0.007 0.022 0.057 0.023 gc 0.041 0.021 0.014 0.009 0.018 0.005 0.004 0.007 0.019 0.015 table 7: list of alternatives ordered by overall result si i ep oe op va fo sa gc overall priority criteria weights 0.282 0.233 0.167 0.132 0.066 0.049 0.033 0.023 0.015 gua 0.109 0.075 0.059 0.065 0.020 0.009 0.007 0.005 0.004 35.4% ces 0.064 0.053 0.033 0.018 0.013 0.009 0.006 0.004 0.004 20.4% cor 0.043 0.043 0.034 0.012 0.011 0.009 0.006 0.004 0.003 16.5% ant 0.019 0.024 0.012 0.009 0.006 0.008 0.003 0.003 0.001 8.6% met 0.015 0.014 0.010 0.012 0.008 0.007 0.004 0.003 0.001 7.4% val 0.017 0.011 0.010 0.008 0.003 0.003 0.003 0.002 0.001 5.6% cal 0.010 0.009 0.004 0.004 0.003 0.002 0.002 0.001 0.001 3.6% cun 0.005 0.004 0.005 0.004 0.001 0.002 0.002 0.001 0.000 2.5% international journal of sustainable energy planning and management vol. 29 2020 77 jhon jairo pèrez gelves, guillermo andrès dìaz florez irradiation, therefore considering social and environmental criteria that prioritize developing communities and provide electrical coverage under safe and reliable conditions. this methodology should act as a feasible and practical tool to be applied in developing countries. the methodology was applied in colombia, nevertheless, can be applied in other developing countries. the data was ordered corresponding to twenty-three departments starting from of solar irradiation and selected eight departments that belong to different regions of the country; the data is from the nslcc conducted in 2016 and the ideam irradiation measure. in the aim of finding the suitable and possible location, were selected the following sub-criteria: solar irradiation; energy poverty; income; owned electricity; owned; potable water; violent acts; floods; landslides; and garbage collection. in our study, the results of the alternatives give the highest priority to the caribbean region and, to the departments the gua, ces and cor which make up 72.4% (overall priority). other departments with development potential for solar power plants are ant, met, and val (belonging to the andean, orinoquía and pacific regions respectively). nonetheless, between these departments the percentage of the alternatives are not comparable with the departments of the caribbean region. currently the government of colombia is employing an aggressive strategy for long-term energy planning that looks to implement electric power projects focused on renewable energy. the government’s stated objectives are: (i) to strengthen the resilience of the power matrix against larger shocks associated with climate change (like the el niño event); (ii) to promote competition and increase price efficiency through long-term energy contracts; (iii) to mitigate the effects of climate change by harnessing renewable energy resources; and (iv) to reduce ghg from the power sector in order to achieve the countries commitments signed at cop21. acknowledgement this paper belongs to an ijsepm special issue on sustainable development using renewable energy 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https://doi.org/10.1016/j.measurement.2018.07.020 https://doi.org/10.1016/j.measurement.2018.07.020 https://doi.org/10.1016/j.rser.2018.07.035 https://doi.org/10.1016/j.rser.2016.11.103 https://doi.org/10.1016/j.rser.2016.11.103 https://doi.org/10.5278/ijsepm.2018.17.6 https://doi.org/10.5278/ijsepm.2019.20.5 https://doi.org/10.5278/ijsepm.2019.20.5 _goback _hlk45359970 _hlk45708605 _hlk45214363 _hlk45214809 _hlk45731881 _hlk45286367 _hlk45360147 _hlk45360202 _hlk45360217 _hlk45272178 _hlk45360232 _hlk45361457 _hlk45361478 _hlk45360245 _hlk45360380 _hlk45287852 _hlk45732082 _hlk45359182 _hlk45709039 _hlk45359439 _hlk45359578 _hlk45361570 _hlk45732150 _hlk45289804 _hlk45290760 _hlk47868584 . international journal of sustainable energy planning and management vol. 24 2019 147 *corresponding author e-mail: savis.gohari@ntnu.no international journal of sustainable energy planning and management vol. 24 2019 147–154 research and experimentation abstract sustainable energy transition implies different, but interlinked strategies, technologies and policies, implying a complex array of overlapping systems that are shaped by diverse actors’ interventions. the formal mechanisms of sustainable transition are ill equipped to address and conform with the political-power dimensions. furthermore, there is no determined blueprint for sustainability transitions and the existing governance systems hitherto have been inefficient and implicated in unsustainability. this paper argues that energy transition requires conceptualization of co-creative governance, and the dynamic interplays between power relations in the face of conflict of interests. thereby, this paper goes beyond the traditional division of governance network between private, public and academia to investigate the political structure underpinning the functionality of governance. to assess how sustainable energy transitions can be materialized, the aim is to understand how different multilevel governance systems deal with the competing interests, asymmetrical power and mobilization of resources for goal achievement in the case of zero village bergen. the purpose is to shed light on political and institutional challenges that are common to other sustainable transition initiatives. the method used is semi-structured interviews with private and public actors. the findings describe how the latent conflict between different involved actors’ interests has led to prolongation, recurring controversies, stagnation, and moments of adaptation. 1. introduction the challenge to make a city sustainable is not primarily on technology, but on service transformation and improvement [1, 2]. the latter is beyond the capacities and reaches of the traditional government alone, and innovative form of governance is needed [3]. the governance approach emphasizes the plurality of actors, indicating that there is no single actor, who has enough steering capacity to determine the strategic actions of the other actors [3, 4]. dependencies between actors create patterns of relations between them, and the inevitable inconsistency between their interests make the processes of bargaining, coalition formation, and conflict mediation imperative. in these processes, many actors may be forced or convinced to change their original or real attitude and set new goals. based on their new goals, new networks will be formed, and actors may play new roles. such loops can be repeated, again and again, until a particular condition is satisfied. therefore, the outcome of sustainable energy planning is subject to change during the actors’ networks’ lifecycle in different phases of initiation, emergence and implementation or uptake. on the other hand, the multiplicity of actors and hidden informal exercise of power to protect special interest can exacerbate the political and managerial complexity, ambiguity and uncertainty. this can lead to prolongation, recurring controversies, stagnation, and unwilling adaptations, and challenge transparency, accountability and legitimacy of sustainable energy planning as a co-creative governance challenge. lessons from the zero village bergen savis goharia,* and stig larssætherb anorwegian university of science and technology, department of architecture and planning bnorwegian university of science and technology, department of energy and process engineering keywords: sustainability; zero-emission; governance; planning; bergen; url: http://doi.org/10.5278/ijsepm.3353 http://doi.org/10.5278/ijsepm.3353 148 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy planning as a co-creative governance challenge. lessons from the zero village bergen system function. analyzing both the ‘structures’ and ‘functions’ enables planners to take a more systemic view of decision-making, while still accounting [in a non-linear way] for the numerous dynamic interactions of multiple structures across scales and policy spheres. governance structure and function are interconnected and affect each other constantly, thereby analyzing the dynamics of transition governance without considering the interconnection between governance structure and function is incomplete [6, 7]. 2.1. governance structure to illustrate the governance structure, i.e. the way actors stand in a network and interact with each other, this paper adopts avelino and wittmayer’s [8] multiactor perspective (map) which is developed to understand transition politics by focusing on shifting power relations. in this model, (figure 1), the functionality, the planning process. thus, strengthening the institutional governance is critical for taking cooperative action and for implementation of effective policies. however, there is a lack of empirical studies to investigate the dynamics of governance, and mechanisms of sharing resources, shifting power relations and fostering knowledge flows within sustainability transition [5]. while this paper fills the knowledge gap, it considers the contextual basis of the governance functionality that a specific governance system may embed a distinctly opposite output in another context. thus, it concentrates on the transformation of governance in a single case of zero village bergen. 2. theoretical approach potts and vella [6] argued that any analysis of a governance system must consider how it is structured and organized, but also the way in which the structures in the figure 1: multi-actor governance structure model [8] acknowledgement of value the work presented by gohari and larssæther is very interesting as it discusses the obstacles for sustainable transition within a multilevel governance system. the work is extremely relevant and published at the right time, when the zvb area plan is approved by the government in 2019, and there is much to learn for the future development of bergen. the application of the multi-actor model of avelino and wittmeyers as a useful methodology to detect actors’ constellations and their interests and power is extremely relevant for sintef, as one of the knowledge communities. the authors’ focus on the role of the knowledge community is very enlightening for dealing with other pilot areas within the zen center and beyond that for other areas on national and global scale. daniela baer, researcher, sintef, norway international journal of sustainable energy planning and management vol. 24 2019 149 savis gohari and stig larssæther actors are, how they exercise their power and the (shifting) power relations between them [8]. 2.2. governance function the structure and position of each actor at different levels of governance give them some functional attributes that lead to actions that are no longer in the direction of their positional affiliation [10]. the functional governance explains how different components influence and shape actors’ actions/decisions over time. functionality is explained by different levels of connectivity (direct-indirect or formal-informal) and power relations between actors to have access to information, knowledge or other forms of resources. planning and decision-making in the face of inconsistent interests bring the idea of power into focus [11] and asymmetrical power relations can make the decision-making conflictual [12, p.31]. accordingly, investigation of transition governance functions requires an understanding of the interaction between all different components, such as interests, power, conflict, roles and resources. 3. methodology the main body of empirical materials in this study consists of five qualitative semi-structured interviews and follow-up conversations (on later stages) with seven central actors, involved in the zero village bergen (zvb) case in autumn 2013. the zvb is a single case study [13] that does not allow for statistical generalization of findings. however, through seeking out sufficient variability in informants and triangulation of statements it is possible to use analytical generalization to put forward theoretical propositions [13]. zvb has been a pilot project at the research centre on zero emission neighborhoods (zen) at the norwegian university of science and technology (ntnu) in trondheim. this center serves as an innovation hub for co-creation between different stakeholders across sectors, functioning as a lighthouse to develop solutions in real-life contexts to support the development and dissemination of zen-related knowledge. the authors are partly connected to the zen centre, but this study is performed independently of this institution and is not formally a part of the research performed under zen work packages. interviews were taped, transcribed, coded and analyzed by template analysis [14]. to protect the identity of informants, no detailed description of their position and role in the case is disclosed and their quotations are anonymous. however, the authors corrected grammatical i.e. the actors’ interactions are seen along the three axes: (1) informal-formal, (2) for profit-non-profit and (3) public-private. similar to the quadruple helix, actors are structured in four actor categories; 1. state; 2. market; 3. community; 4. third sector, which universities/academia belong to. a rationale behind the choice of map is its deep attention to the role and power of the university as a social entrepreneurial and cooperative organization, conceptualizing an intermediary between the three others [8] in this model, sectors are not fixed entities, indeed the boundaries between them are contested, blurring, shifting and permeable[8]. in addition, an actor can be a person, organization, or a collective of persons and organizations, which is able to act [8, 9]. a person, who has a legal right to intervene in a process, is thus a stakeholder (e.g. the residents), until he/ she takes an action and plays a role to influence the outcome and becomes an actor. actors and institutions can exist at multiple scales/levels of governance, interconnect with other actors across the system, and fulfill more than one role, due to the existing interdependencies [10]. accordingly, it is relevant for the transition governance to sustainability to assess who the different * http://zerovillage.no/om-prosjektet/andre-forhold/ figure 2: illustration plan for zero village bergen* 150 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy planning as a co-creative governance challenge. lessons from the zero village bergen governor of hordaland and hordaland county council • 2013 the ministry of the environment approved the area plan with remarks; new prognosis on airport noise pollution challenges the planned development • 2014 public hearing demanded further clarifi cation of energy and planning process • 2016 revised plan was sent to the county governor of hordaland • 2017 opposition from the county governor o was sent to the ministry of climate and envionment (moce) • 2018 the ministry of climate and environment upheld the objections from the county governor • 2019 the area plan for zvb was finally approved by the ministry of local government and administration in this section, we describe how centrally involved actors have experienced selected elements and episodes in a specific moment in the process (late autumn 2013). figure 3 shows the position of actors in a governance system, based on the model, adapted from avelino and wittmeyer [8]. in the early phase of the project in 2009, the most critical issue in zvb was the site selection, which had to meet the stringent zeb technical criteria. as a part of this process, bybo contacted the central decision makers errors, using brackets to protect the original wording. in situations where it was uncertain whether a correction might change the core of an interviewee’s content and intended meaning, the errors remained unchanged. 4. zero village bergen (zvb) zvb consists of a new neighborhood on the outskirts of bergen (16 km south of bergen city center). the plan includes approximately 720 dwellings (92 000 m2), divided between terraced houses (68% of total floor area) and apartment blocks (25%). 7% of the floor area is dedicated to nonresidential purposes such as offices, shops and a kindergarten. in addition, a common parking garage is planned. a forest and a lake, as well as a residential area and a road, surround the area. the planned development area is currently in use as a greenfield with some semi detached houses. the closest public transportation hub is the light rail, 1.5 km to the north, but there is a bus stop on the site with bus frequency approx. every 15 minutes. below is a brief summary of the project’s progress so far: • 2009 zeb (later zen) is established bybo joined as an industrial partner • 2010 bybo/zeb choose ådland as a site; bergen city council started making an area plan, which faced opposition from county figure 3: the governance structure adapted from avelino and wittmeyer [8] international journal of sustainable energy planning and management vol. 24 2019 151 savis gohari and stig larssæther the owner of the chosen property was willing to sell at a lower price because the current type of land-use was not very profitable. so, the reasonable price of this site might have an influence on the site selection even though it should not. in my opinion, if a pilot project means putting projects in the cheapest land, then it is not a very good example of spatial planning. several interviewees also pointed to a larger political discourse around the planning regime, addressing a seemingly great opposition between politicians and bureaucrats. the role and influence of politicians in this issue attracted criticism from the county, here in the words of one of our interviewees: it is a culture in bergen municipality to work in a way, in which things are done in a straight line and [are handled] directly by the city commissioner, the city council and the city committee. this is expanded on by a second interviewee from the county: this is an ingrained culture in hordaland county, where the politicians do not care about the plan and building act. the act does not apply there, and it can be disregarded. planning is just a bureaucratic hassle. the statements of the interviewees above reflected their perspectives towards the politicians in bergen municipality and the private actors, who through informal channels of influence have made the culture/ [nature] of the planning process less democratic according to their view. this statement from one of the central politicians involved in the zvb case shows how this matter was perceived from their position: it is a widely held opinion that if the politicians in the municipality go against the bureaucrats, we have it coming from the administration of the county governor. or the administration in the county. i have seen this from people working as politicians on the county level. there are some un-democratic forces where the bureaucracy) tries to go against the publicly elected will. according to this informant there seem to be informal networks working between the administration on various levels, involving municipal, county level and state level representative at the county governor’s office. it is also interesting to note how the most important tool of the administration in the formal planning process the planning and building act, was perceived by the same politician in the statement below: the plan and building act is the most anti-democratic and illegitimate tool i have ever come across, which is not in the public interest. it is impossible to fully in the region and exercised their informal power/ influence to gain the essential support for the project. here in the words of our interviewee in bybo: we have tried to influence [the people] to speed up the process, such as the politicians in bergen, the chamber of commerce and the hordaland bench to represent us in the parliament. we discussed the project with them and gave them the information to gain their support. and we were successful to be heard when we needed it. in addition, bybo had to have a more formalized communication with the property division of the municipality to choose a site. in response, the municipality introduced some pre-regulated residential areas. however, the area that bybo was interested in, i.e. ådland, was agricultural land not regulated for housing purposes. according to one of the interviewees: when we evaluated the municipality’s suggested properties, we realized that there would be a competitive bidding for them. a public property – needs to be sold in a market (….) in practice, none of the properties were feasible for us. the choosing of ådland created a conflict with several public agencies, among which the county governor of hordaland was the strongest opposer. for the county governor, the choice of ådland, represented a narrow view, focusing only on reducing footprints of buildings: the whole idea of city planning has been scrapped and sidelined. [reducing carbon footprints of buildings] was a very myopic focus and its influence on the whole planning process was ignoredwithin this small circle. [reducing carbon footprints of buildings], everything should be done right as spatial planner i find this totally ridiculous. such a narrow focus on energy emissions was also criticized by other interviewees from the hordaland county administration: there was a list of [technical] criteria – [but] who did decide that it should be like this? the site selection was not put forward for public hearing. [the site selection] should usually happen as a part of the municipal planning process that will be weighted according to the other aspects, which requires a large political consensus behind it. but suddenly one can depart from this because of a whole new set of criteria?! we do not have a mandate to do that. however, the politicians can. one of the interviewees at the municipality administration pointed out the economic dimension in the selection process where the property owners’ price expectations might have played a dominant role: 152 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy planning as a co-creative governance challenge. lessons from the zero village bergen that of elected politicians. despite of these limitations, we still see this as an interesting illustration of a quadruple helix innovation system in which the knowledge community plays an active part. in the current wave of smart city initiatives municipalities and universities are increasingly taking part in cross-sectoral partnerships and platforms. the current case study has demonstrated that there is a substantial potential for role conflict here, between public authorities as guardians of the common interest, and the formal and informal bindings that occur when they form alliances with commercial actors who will also seek to pursue their self-interest [15, 16]. it is here important to strike the balance between securing democracy and legitimacy of planning through “due process” and the need for new forms of governance with respect to dealing with pressing energy and climate concerns. it is, however clear to us that the knowledge community holds the potential of reducing conflict between private and public actors by creating arenas where common narratives can be developed across diverse societal interests over time. in pursuing this role, it is crucial that we combine insights into the paradoxes and dilemmas of real-life cases, being aware that our preconceived expectations about the role of the knowledge sector in unfolding governance processes may be challenged. as a result, instead of considering decisions as resulting from the intention and interests of independent actors, attention should be paid to the interaction patterns and the ways in which individual actors and organizations evolve over time. reflecting on the multi-actor model from avelino and wittmeyer, we see that the temporal dimension of the role of actors is not given the focus it deserves. in this regard, we stress the need for developing governance models that better capture the iterative nature of real-life planning processes. acknowledgements: this article was invited and accepted for publication in the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come [18]. references [1] errichiello, l. and a. marasco. open service innovation in smart cities: a framework for exploring innovation networks in grasp the complexity of the act, and the way it balances the public interests in business and other things, and the way it governs the bureaucracy. in the unfolding narrative of zvb, the zeb/zen center has held a central position along several dimensions (see figure 3). bybo has also actively used its affiliation with the research community to position itself as a frontrunner for low or zero emission buildings, implying their environmental interest and motivation. however, bybo is also a commercial actor with a clear profit motive/economic interest and these differences in interests, views, and goals of bybo and zeb/zen have resulted in conflicts with the planning and governmental authorities. the political and legal dependency of bybo and zen on the public authorities for the site selection, has created a great amount of uncertainty for them which complicated the implementation of the planning process. both the localization outside regulated areas for housing and neglecting the transportation issues in the initial concept for zvb has generated great resistance and conflict among public authorities. thus, the scientifically grounded project framing from zen/zeb played a critical and counterproductive role in the planning process. the strategic use of informal networks also compromised the professional identity and perceptions of “due process” among many public actors. to understand the dynamics of governance through which the actors acted in this case, it is important to focus on the way in which bybo has drawn on their social network and bond with the zeb/zen center. zvb by carrying the status of a pilot project in a longterm and ambitious research center had a much higher chance of receiving political support, than without this label. the linkage with zeb/zen has also empowered and equipped the developers with a series of “greater good” arguments, such as branch-leading ways of addressing climate concerns and, branding bergen 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https://doi.org/10.3828/tpr.63.2.422x602303814821 https://doi.org/10.1057/978 http://doi.org/10.1177/1473095214553519 http://doi.org/10.1177/1473095214553519 http://doi.org/10.1080/01944368208976167 http://doi.org/10.1080/01944368208976167 http://doi.org/10.1080/1523908x.2015.1112259 https://doi.org/10.1007/978 _goback _hlk21082611 international journal of sustainable energy planning and management vol. 20 2019 37 1corresponding author e-mail: lisa.brange@energy.lth.se international journal of sustainable energy planning and management vol. 20 2019 37–50 abstract lower system temperatures in district heating (dh) grids are important factors for system efficiency. lower system temperatures lead, for example, to lower heat losses and higher production unit efficiency. one obstacle to lower supply temperatures are so-called bottlenecks in dh networks. bottlenecks are areas in dh networks of very low differential pressure, which makes it difficult to supply them with sufficient heat. there are many potential solutions to bottlenecks. however, the current decision-making process generally does not include every potential bottleneck solution and also often does not include every important factor that affects the outcome. the aim of this study is to propose a structured and general modus operandi, in order to identify the best bottleneck solution for a specific situation. in this study we conducted analyses of previous bottleneck studies, workshops and interviews. the results show a decisionmaking process developed to be a tool when choosing a bottleneck solution. coupled to the decision-making process, a summary of the advantages and disadvantages of different factors and bottleneck solutions is presented, as well as a description of a real case in which the decisionmaking process is used. 1. introduction district heating (dh) facilitates the use of renewable heat sources, excess heat and heat from, for example, combined heat and power units [1,2,3]. dh technology is currently going through a transition to the 4th generation of dh, which is described by lund et al [4]. in this transition, lower system temperatures are vital parameters. according to a study on prosumers’ impact on technical parameters in distribution networks, this will facilitate prosumer introduction to the dh network [5]. this is because of the increased efficiency of such installations when the supply temperature in the dh network is lower. this is for instance shown a study describing heat pumps that increase the temperature of prosumer excess heat [6] and in a study about solar collectors in district heating networks [7]. lower system temperatures are also shown to increase the possibility of utilising waste heat and lead to higher efficiency in combined heat and power units and flue gas condensation [8,9]. another important and current development in dh systems is that there is a change in the way in which energy systems are viewed, which is shown in many recent studies that describe smart energy systems and the 4th generation of district heating [10, 11, 12, 13]. previously, energy systems were often regarded as separate systems focusing on, for example, electricity, heating and transport, whereas the new perception is a holistic view of a single integrated energy system. the aim of this development is to increase the efficiency of the systems and achieve an energy system based on 100% renewable energy sources. however, there are many obstacles that must be overcome to achieve efficient and smart dh networks, one of which are bottlenecks. other examples being discussed include future heat savings [14] and thermal energy storage [15]. decision-making process for addressing bottleneck problems in district heating networks lisa brange*, kerstin sernhed and marcus thern department of energy sciences, faculty of engineering, box 118, 221 00 lund, sweden keywords: district heating; bottlenecks; planning; optimisation; url: http://dx.doi.org/10.5278/ijsepm.2019.20.4 http://dx.doi.org/10.5278/ijsepm.2019.20.4 38 international journal of sustainable energy planning and management vol. 20 2019 decision-making process for addressing bottleneck problems in district heating networks bottleneck problems, as well as which solutions that are most often used. the results show that 75% of the dh companies that responded have, or have had, bottleneck problems and that the origins of dh bottlenecks are most often expansion, densification and interconnection of dh networks. the most used bottleneck solutions are higher supply temperature, bigger pipe area, more pumping, increased cooling in substations, local heat supply (lhs) and demand side management (dsm). the results are collected via a literature study and a survey. the results in [28] describe how well the most used solutions in [27] work in different network configurations, for example, in a ring feed network and in a network with large altitude differences. the results also show the cost of different solutions. only direct costs are quantified, not costs and savings related to added values such as the possibility of lowering the supply temperature or using less pumping. the results are developed through simulation of a dh bottleneck situation in the dh simulation programme netsim [31] together with a cost study. the results in [29] describe different risks, possibilities and added values coupled to the most used solutions in [27]. the results also show issues coupled to the economy of bottleneck solutions, the parameters taken into account when choosing a bottleneck solution and more detailed information about bottleneck origin. the results are developed through an in-depth interview study with six different swedish dh companies and by simulations in the same simulation tool, netsim, that was used in [28]. the decision on which bottleneck or optimisation solution to choose often appears to be based on gut feelings and rough economic estimates, as shown in a previous bottleneck study [29]. the results of another bottleneck study indicate that the dh network is regarded as comprising three separate components (production, distribution and consumption) and not as a whole interconnected system that forms part of the energy system [27], which also reduces the number of imaginable solutions. this perspective and traditional way of doing things may therefore exclude potentially very favourable solutions, which affect both system efficiency, the environment and the economy. structured planning is regarded as being very important to achieving a renewable energy system [32]. thus, the present study provides a decision-making process with regards to how to choose between different bottleneck solutions. coupled to this process, the various advantages and disadvantages of a number of bottleneck bottlenecks are areas in dh networks in which it is difficult to maintain a sufficiently high differential pressure, often due to high flow velocities in the pipes leading to the area. from an optimisation perspective, the area with the lowest differential pressure (dp) in a dh network may also be regarded as a bottleneck with regards to network optimisation. such areas are also decisive for the supply temperature in dh networks. thus, in order to be able to continuously decrease the supply temperature, it is important to always work on areas of weak dp and try to improve the conditions in such areas. one research area associated with lower supply temperatures in dh networks concerns the effect of lower supply temperatures in existing dh network. this is studied, for example, by rämä and sipilä [16]. from a building perspective, it is possible to supply buildings with the correct amount of heat with a lower supply temperature, as shown by skaarup østergaard and s. svendsen, who tests the effect of a lower supply temperature in five danish single-family houses from the 1930s [17]. however, another study show that the reduced temperature difference that often arises leads to more pressure losses and therefore higher costs [18]. furthermore, large and old dh networks often have a higher hydraulic resistance, which is discussed in a study on the utilisation of low-temperature industrial excess heat for district heating [19]. this results in even higher pressure losses in such systems. thus, it may be both difficult and costly to reduce the supply temperature in existing dh networks that are dimensioned for a specific temperature difference. there are many studies that discuss the optimisation of dh pipes in low temperature dh networks, although often from a heat loss perspective [20, 21, 22]. some studies on lower supply temperatures in dh networks also consider the changed pressure situation, but only regard classical solutions associated with the distribution part of the dh network, for example, a larger pipe dimension or more pumping [23, 24, 25, 26]. the present study seeks to broaden the view of the types of arrangements that could be made to optimise the pressure situation in dh networks, thereby also simplifying the introduction of lower supply temperatures. this holistic approach to bottlenecks and pressure problems in dh networks has been previously considered in some studies [27, 28, 29]. this holistic perspective is important for the introduction of dh with lower supply temperatures, as described by li and wang [30]. the results in [27] describe the present bottleneck situation in swedish dh networks, the origin of these international journal of sustainable energy planning and management vol. 20 2019 39 lisa brange, kerstin sernhed and marcus thern workshops. the first workshop was conducted with dh experts from the same dh company but who had different positions. the decision-making process was then updated and presented, evaluated and improved again in the second workshop. this workshop was conducted with dh experts from different dh companies but who had roughly the same position. through this procedure, the opinions and perceptions of both people in different positions within one company and from different companies could be obtained. this led to more varied input and thus more comprehensive results. all the companies involved in the workshops owned, managed and developed dh networks as one of their main tasks. they also handled data, administration and contact regarding dh consumers. in the first workshop, the participating dh experts comprised one energy system analyst, one person working with dh network support at the company, one optimisation manager and one plant manager for the distribution network. the head of the energy system analysis department was also supposed to participate but was prevented from doing so. instead, her comments were provided by one of her employees. the dh experts in the second workshop were participants in a strategic council administered by swedenergy. they all worked on the long-term development of their dh networks and represented dh companies in many different parts of the country. in the third step, the definitive decision-making process was developed using input from the workshops. the results regarding the advantages and disadvantages of different bottleneck solutions were coupled to specific factors. the chosen factors were mainly outlined by analysing the risks and opportunities in [29] and encapsulating them in eight factors. the factors and their evaluation criteria can be seen in table 1. additional factors than those proposed could, of course, be relevant, solutions are illustrated and discussed to assist in analysing which bottleneck solutions could be performed and how they differ. an example case is also presented to demonstrate how to use the decision-making process. the results are partly based on the results in [27, 28, 29] and partly on workshops and interviews with experts in the field. the purpose of this methodology is to achieve as comprehensive results as possible by using all the knowledge in the separate papers regarding bottlenecks and complement it with expert knowledge. a bottleneck solution may have many contradictory goals. thus, the decision-making process is inspired by multi-criteria decision-making (mcdm) [33], which is a well-established tool used in many energy planning studies [34, 35, 36]. however, the proposed decisionmaking process has been simplified, compared to mcdm, in order to enhance its usability. for example, it does not involve any quantitative ranking system, except for in the part in which the economy is regarded, and potential bottleneck solutions are rejected throughout the decision-making process. a similar idea of decisionmaking process is proposed by saleki [37] who uses it to identify the most optimal renewable buildingintegrated power source. however, this decision-making process is less detailed and is clearly focused on smallscale electricity generation. 2. methodology the results regarding the decision-making-process were developed in three steps. in the first step, previous bottleneck studies [27, 28, 29] were analysed and the relevant aspects of bottleneck solutions were analysed and categorised. based on this, a preliminary decision-making process was outlined. in the second step, the decision-making process was presented, evaluated and improved in two table 1: factors describing the potential advantages and disadvantages of bottleneck solutions, and their evaluation criteria factor evaluation criteria reliability considered the stability of the solution and whether it would be reliable enough as a single solution. simplicity considered how much work would need to be conducted to accomplish the solution. swiftness considered how quickly the solution could be introduced. no investment cost considered whether there would be any substantial investment cost. costliness considered how costly the solution would be throughout its lifetime. additional customer interaction considered whether the solution would lead to customer interaction that was regarded as positive by customers. environmental outcome considered how the solution would affect environmental values. no extra maintenance demand considered whether the solution would lead to greater or lesser maintenance demand in the dh network. 40 international journal of sustainable energy planning and management vol. 20 2019 decision-making process for addressing bottleneck problems in district heating networks from the large dh network. the heat demand for the plateau for the design outdoor temperature (dot) of –16 °c degrees was 24 mw. the heat demand for the large dh network was 850 mw for the same outdoor temperature. for the dot, the supply temperature to the plateau was 105 °c and the return temperature was 50 °c. the lowest differential pressure in the plateau for the dot was 44 kpa and the pressure gradients for the supply pipes were between 0 pa/m and 300 pa/m. the main bottleneck pipe was one of the pipes between the production unit and the plateau area. the supply pressure gradient for this pipe was around 400 pa/m. the lowest supply temperature for the plateau during the year was 70 °c and the corresponding return temperature was 35 °c. the total length of the pipes in the plateau was around 115 km. 3. results and analysis in this section, the results regarding the advantages and disadvantages of different bottleneck solutions (table 2) are presented first. this is followed by a presentation of the decision-making process (figure 1). lastly, a real bottleneck case in which the decision-making process is used in order to find the most optimal bottleneck solution is presented, to assist in showing how the other results might be used. the results are presented from a district heating developer perspective. 3.1. advantages and disadvantages of bottleneck solutions table 2 shows the advantages and disadvantages of some frequently used bottleneck solutions. this table is intended to be helpful when working through the decision-making process and it provides a general picture of factors coupled to the studied solutions. if a factor is green, it is regarded as an advantage to the solution; if a factor is red, it is regarded as a disadvantage to the solution; and if a factor is yellow, the factor may be either advantageous or disadvantageous to the solution, depending on the situation and the local conditions. the colours are shown from the perspective of dh network developers because they will have the final mandate to implement the solutions. the general results for each solution are also described. 3.1.1. increased supply temperature increased supply temperature achieved positive ratings for reliability, simplicity, swiftness and no investment costs. nevertheless, it was a costly solution if not used for very short periods and in small networks, and gave no but the factors mentioned in table 1 are nearly always important. in the workshops mentioned above, the different factors were evaluated for nine proposed bottleneck solutions. the preliminary results were initially outlined through polls and discussions in the two workshops. in the polls, all workshop participants assigned colours to the factors and bottleneck solutions. if a factor was regarded as an advantage for a bottleneck solution, it was assigned a green colour, if it was seen as a disadvantage for a bottleneck solution, it was assigned a red colour and if it was either an advantage or a disadvantage for a bottleneck solution, it was assigned a yellow colour. the combined colour results and the workshop discussions were then combined with input from previous bottleneck studies [27, 28, 29] into final results. the bottleneck solutions included were based on the most used bottleneck solutions in [27] but were customised in order to simplify the polling process. it is important to note that this evaluation was performed from a bottleneck solution perspective. a number of the solutions could also be applied to other important district heating issues, which could then change which advantages and disadvantages would be relevant. the example case that describe how to use the decision-making process was developed by analysing a real bottleneck case in a swedish dh network in an interview. the interviewees were representatives of the responsible dh company: one network analyst and one person working with dh network support at the company. the company had already performed all investigations and studies required beforehand and the interview considered the results of their investigations. thus, no own studies regarding the case were conducted by the authors. the results regarding economy were discussed without numbers on the grounds of confidentiality. bottleneck solutions that were not included in the rest of the results were included in the case interview. this was because the interviewed dh company had thought of more solutions than the ones investigated in the present study. these solutions were included in the case description as it was regarded as important to demonstrate that every dh developer could use the decision-making process independently of how the bottleneck area looks and which bottleneck solutions that are available. the bottleneck case area discussed in the interview is called the plateau and is a dh area comprising around 1250 consumers located in a larger dh network. it is situated close to the outskirts of the dh network but not on the very outskirts. the area is ring fed from several pipes international journal of sustainable energy planning and management vol. 20 2019 41 lisa brange, kerstin sernhed and marcus thern affecting environmental factors, even if the operational situation and, thus, the operational environmental outcome of the dh network could be improved. the yellow colour for the no extra maintenance demand factor depended on whether a new pipe would be installed (extra maintenance demand) or an old pipe would be exchanged for a new, bigger pipe (equal or less maintenance demand). 3.1.3. increased pump work – existing pump increased pump work with the existing pump was given positive ratings for reliability, simplicity, swiftness, no investment cost and costliness but gave no additional customer interaction. the extra electricity demand led to a poorer environmental outcome. the yellow colour for the factor no extra maintenance demand depended on more pump work possibly causing more wear on the pipes. however, as for the increased supply temperature solution, this depended on how, and the extent to which, this solution was used. additional customer interaction. furthermore, the environmental outcome was often negative because of the increased heat losses and decreased efficiency in certain production units. the yellow colour for the no extra maintenance demand factor was based on the fact that a higher supply temperature was coupled to more wear on the pipes and thus more leaks, which increased the maintenance demand. however, this partly depended on how much and how often the supply temperature had to be increased, because multiple increases and decreases caused more wear on the pipes than occasional increases. 3.1.2. increased pipe area increased pipe area was given a positive rating for reliability but was often complicated due to earthworks. the solution was also regarded as not being very swift, having a high investment cost and not engendering any additional customer interaction. the yellow colour for the environmental outcome factor depended on the material use and installation process table 2: advantages (green), disadvantages (red) and factors that can be both advantageous and disadvantageous (yellow) for some important factors and bottleneck solutions increased supply temperature increased pipe area increased pump work – existing pump increased pump work – new distributed pump increased cooling local heat supply – liquid or gas fuel local heat supply – solid fuel local heat supply – prosumers dsm reliability simplicity swiftness no investment cost costliness additional customer interaction environmental outcome no extra maintenance demand 42 international journal of sustainable energy planning and management vol. 20 2019 decision-making process for addressing bottleneck problems in district heating networks exception of the environmental outcome factor, as it was a costly installation that would require maintenance. the permit process for solid fuels was often more complicated than for gaseous or liquid fuels, which is why simplicity and swiftness were negatively rated. the yellow colour for the environmental outcome factor depended on the different outcomes, based on whether the solid fuel consisted of coal or wood-based products. 3.1.8. local heat supply – prosumers the prosumer solution was given a positive rating for environmental outcome and additional customer interaction but was not very reliable as a bottleneck solution. there were many factors that were assigned a yellow colour. one reason for the yellow colour for the simplicity and swiftness factors was that an agreement with the prosumer could be difficult and time consuming to achieve. however, if standard models were already in place, the process would be much faster and easier. simplicity also received a yellow colour because it depended on how much work and adjustments the dh developer would need to make and also because the prosumer load could be difficult to manage with regards to, for example, supply temperature and temporal availability of heat. the yellow colour for the no investment cost and costliness factors depended on how the connection of the prosumers to the dh network and the agreement between the dh developer and the prosumer regarding, for example, connection cost would look. another reason why costliness received a yellow colour was that it depended on the energy prices that were contracted. lastly, the yellow colour for the no extra maintenance demand depended on that the maintenance demand could be both more and less extensive. it could be more extensive with increased control demand and valves that would require maintenance. it could also be less extensive if many new and more state of the art components were installed instead of retaining the old components. 3.1.9. demand side management dsm was given a positive rating for environmental outcome and additional customer interaction. the yellow colour for the reliability factor depended on the outline of the agreement with consumers and who had ultimate control of the load management affecting the reliability of this solution. the simplicity factor received a yellow colour because the simplicity of dsm varied depending on whether there were already general agreements in place that could be utilised or whether they would have to be developed, as well as 3.1.4. increased pump work – new distributed pump increased pump work with a new, distributed pump was given a positive rating for reliability but a negative rating for all other factors as it was both costly, complicated to build and maintain, gave no additional customer interaction and used electricity, which negatively affected the environmental outcome. 3.1.5. increased cooling increased cooling at the consumers was given positive ratings for additional customer interaction, environmental outcome and no extra maintenance demand. the yellow colour for the reliability factor depended on a high degree of cooling in substations being perishable, but the solution was reliable as long as the cooling was regularly checked. the yellow colour for the simplicity and swiftness factors depended on their outcome being partly determined by how many consumers would need to be involved, partly by whether the problems were easily fixed and partly by the consumers’ attitude if the substations were consumer owned. also, there could be a great deal of analytical work involved in identifying the right consumers and establishing how to decrease their return temperature. the no investment costs and costliness factors were yellow because their outcome depended on whether or not the company would pay something to achieve the decreased return temperature or whether the consumer only would pay. furthermore, the analytical work could be costly in terms of person hours, which added uncertainty to the costliness factor. 3.1.6. local heat supply – liquid or gas fuel this solution was given a positive rating for reliability but a negative rating for the remaining factors, with the exception of simplicity and swiftness. it was namely a costly installation that would require maintenance. the environmental outcome depended on the fuel used and the fuel that was replaced. however, liquid and gas fuels usually referred to fossil fuels, which is why the outcome was usually negative for the environment. the yellow colour for the simplicity and swiftness factors depended on the installation of an extra production unit possibly being preceded by a difficult and slow permit process. if, however, the production unit was smaller and if it was not intended to be a permanent but rather an interim solution, the permit process could be much swifter and easier. 3.1.7. local heat supply – solid fuel this solution was given a positive rating for reliability but a negative rating for everything else, with the international journal of sustainable energy planning and management vol. 20 2019 43 lisa brange, kerstin sernhed and marcus thern bottleneck solutions as possible at the start of the process and then reject solutions that are not possible to implement or are considered less favourable, on a step-by-step basis. the steps involved are those necessary in order to thoroughly evaluate the solutions, based on the workshops. the reason for the order of the steps is to facilitate an effective process. the idea is to eliminate solutions quickly during the process in order to conduct as few timeconsuming evaluations as possible. if conducted correctly, reiteration of the steps should not be necessary. however, different dh developers may naturally use the decisionmaking process in a way that best suits their situation. step 1 – problem description first, a problem description must be performed in order to illustrate the issue. the following questions should be answered: • what are the characteristics of the bottleneck area? • what is the magnitude of the problem? • which is the probable cause of the bottleneck? step 2 – inventory of bottleneck solutions in the second step, an evaluation of available bottleneck solutions is to be performed. an example of a study necessary in this step is a literature study of the potential ways of regulating differential pressure in dh networks. this step will result in a list of bottleneck solutions. in whether the underlying control and it system were in place or had to be developed. the same considerations explain why the swiftness, no investment cost and costliness factors received a yellow colour. the number of consumers who would need to be involved and the equipment that would need to be installed also affected the no investment cost and costliness factors. there were many reasons why the no extra maintenance demand factor received a yellow colour. two reasons were that ownership of the equipment affected the amount of maintenance required and that the control and it system would have to work properly. another very important reason was that the need for it safety would be very high for these types of systems, which could increase the maintenance demand. 3.2. decision-making process an illustration of the decision-making process can be seen in figure 1. explanations of the different steps are also described. the work process for the decision-making process starts at step 1 with a problem description and then follows each step until the basis for decision is reached. in the description of each step, the most important factors for this step from table 2 have been denoted in order to help the reader connect the two instruments. thus, input from table 2 could be used in the evaluation of different bottleneck solutions. the overall idea of the decision-making process is to come up with as many 2 i n ve n to ry o f b o tt le n e c k so lu tio n s 7 b a si s fo r d e c is io n 1 p ro b le m d e sc ri p tio n remaining solutions 4 r is ks solutions that involve too excessive risks remaining solutions risk analyses 3 p re c o n d iti o n s solutions that are to difficult to perform remaining solutions local conditions administration and law time factors 5 a d d e d v a lu e s remaining solutions analyses of synergy effects, added values, company goals etc. 6 e c o n o m y solutions valued less economic remaining solutions economic evaluation with costs and gains of remaining solutions from earlier steps too expensive solutions develop a list of possible solutions if possible, make a first rough selection solutions that are clearly less favourable will not work or figure 1: the proposed decision-making process for identifying the most optimal bottleneck solutions in dh networks 44 international journal of sustainable energy planning and management vol. 20 2019 decision-making process for addressing bottleneck problems in district heating networks are particularly relevant to this step are additional customer interaction, environmental outcome and no extra maintenance demand. the following question should be answered: • which bottleneck solutions are clearly less favourable than others? step 6 – economy in the economy step, an economic evaluation of all remaining bottleneck solutions is performed. the reason why this is the last step, even though it is often regarded as the most important issue for dh developers [29], is that all information from previous steps is to be included in some way in the economic evaluation. previous bottleneck studies namely show that there is a lack of a lifecycle perspective regarding bottleneck costs and savings [29], which could result in the most optimal bottleneck solution not being chosen. in this step, the bottleneck solutions that are too expensive are rejected. the factors in table 2 particularly relevant to this step are no investment cost and costliness. the following questions should be answered: • how much does each bottleneck solution cost during its lifetime, including all parameters, both costs and savings? • which bottleneck solutions are too expensive to implement? step 7 – basis for decision this step marks the end of the decision-making process. there should now be sufficient information on the remaining bottleneck solutions to make an informed decision. if only one solution remains, the choice will be easy. if many solutions remain, the company will instead have to evaluate the solutions based on the information revealed earlier in the decision-making process. all factors in table 2 are particularly relevant to this step. 3.3. utilisation of the decision-making process in a real bottleneck case the case results will be presented synoptically as the idea of the case description is to show an example of how the decision-making process could be used. step 1 – problem description the bottleneck area described in this case was called the plateau. this was the area with the lowest differential pressure in the dh network and therefore the area that this step, experienced persons may already perform back-of-the-envelope economic calculations in order to reject solutions that will be too expensive. however, it is very important not to reject a solution that could turn out to be favourable. a factor in table 2 that is particularly relevant to this step is costliness. the following questions should be answered: • which bottleneck solutions could theoretically be used? • could any of the solutions be rejected and, if so, which solutions? step 3 – preconditions in this step, the preconditions of the bottleneck area are to be investigated. examples of such conditions include physical local conditions, administrative and legal conditions and time-bound conditions. input data in this step include knowledge from network simulations, knowledge of the dh bottleneck area and consumers and knowledge of administrative and legal processes. in this step, all solutions which, for some reason, are not possible to implement are to be rejected. the factors in table 2 particularly relevant to this step are swiftness and simplicity. the following question should be answered: • which bottleneck solutions are not possible to use as a solution for some reason (technical, legal, etc.)? step 4 – risks in this step, risk analyses and assessments are performed and bottleneck solutions with too high risks are rejected. the factors in table 2 particularly relevant to this step are reliability, environmental outcome and no extra maintenance demand. the following question should be answered: • which bottleneck solutions are associated with too high risks to be used as bottleneck solutions? step 5 – added values in this step, analyses of added values are performed through, for example, network simulations, knowledge of the dh network and environmental calculations. all the added values coupled to the remaining solutions are to be considered and listed. if it is clear that some of the remaining bottleneck solutions become less favourable because of the lack of added values coupled to these solutions or the nature of the added values coupled to the other solutions, the less favourable solutions may be rejected. the factors in table 2 that international journal of sustainable energy planning and management vol. 20 2019 45 lisa brange, kerstin sernhed and marcus thern the reason why this solution would have to be implemented in the future is that a permit was not granted to carry out earthworks in the streets in question in the coming few years because of street refurbishment work that has been planned for the future. there was, however, a good chance of being granted a permit to install new pipes during this refurbishment work. local heat supply with a production unit was a possible bottleneck solution. however, the plateau was situated in a nature conservation area, why it was only possible to receive a temporary permit. the permit, moreover, would not apply to solid fuels due to increased transports and greater requirements for air purification coupled to this kind of heat supply unit. an electric boiler could not be installed in the plateau due to limitations in the electric grid. a heat pump would have too low a coefficient of performance to be viable due to the high supply temperature needed. in addition, no heat sources were available for a heat pump in the plateau. prosumer heat sources were also not available. simulations showed that only a small production unit could be installed due to the small size of the existing pipes. this meant that it would only be possible to install a small, gas or liquid fuel powered and temporary local heat supply unit. dsm was a possible bottleneck solution but, according to the simulations, would not provide sufficient flow reduction in the future when new consumers would become connected to the dh network in the plateau. this is primarily because in this area, the hourly peak heat power demand was only 10 % higher than the daily average heat power demand of the critical outdoor temperature. more cooling at the consumers was a possible bottleneck solution but, according to simulations, it would not provide sufficient flow reduction in the future when new consumers would become connected to the dh network in the plateau. it was not possible to install a local accumulator or accumulators as a solution for the bottleneck problem in this area because it would be too difficult to load the accumulators. this was because of the shape of the heat demand curve. improved energy efficiency could be a possible bottleneck solution for this area. time factors important to this area were that solutions would have to be installed rather quickly in order to solve the bottleneck problem and that more extensive solutions would be needed in the future when more consumers were to become connected to the plateau. determined the prerequisites for many parameters in the dh system, such as pumping power and supply temperature. over the last 10 years, new consumers have been connected in the area, which has increased the bottleneck problem. further expansion of the plateau and therefore also the installation of new consumers was planned for the future. in the plateau, there were around 1250 dh consumers, many of them comprising onefamily houses. there were many pipes leading to the plateau, meaning that the plateau was ring fed. step 2 – inventory of bottleneck solutions the bottleneck solutions investigated for this area comprised higher supply temperature, more pumping with the main pump, installation of a new distributed pump, bigger pipe area, local heat supply with a production unit or with prosumers, dsm, increased cooling at the consumers, local accumulator/ accumulators and improved energy efficiency in the area. no solution was rejected in this step because there was insufficient knowledge of the solutions. solutions rejected: none step 3 – preconditions solutions considered in this step: higher supply temperature, more pumping with the main pump, installation of a new, distributed pump, bigger pipe area, local heat supply with a production unit or with prosumers, dsm, increased cooling at the consumers, local accumulator/accumulators and improved energy efficiency. it was not possible to use a higher supply temperature as a bottleneck solution because the supply temperature was already the highest possible. it was not possible to use more pumping with the main pump as a bottleneck solution because the pump was already pumping at maximum capacity. it was also not possible to use more pumping with a new, distributed pump as a bottleneck solution because simulations showed that this solution would be too complicated due to the many ring pipes to the plateau. in order for the pump to increase the differential pressure sufficiently in the whole plateau area, it would need to be located outside the plateau. an issue with this location was that it would be very difficult, if not impossible, to be granted a permit to build a new pump station there. a bigger pipe area could be a possible bottleneck solution in this area in the future, even though, according to the simulations, the pipe would have to be very long. 46 international journal of sustainable energy planning and management vol. 20 2019 decision-making process for addressing bottleneck problems in district heating networks solutions rejected: improved energy efficiency step 5 – added values solutions considered in this step: bigger pipe area, local heat supply with a production unit running on gas or liquid fuel, dsm and increased cooling at the consumers. some added values of a bigger pipe area was that this solution was very robust and provided the dh network with redundancy. also, this was the only permanent solution that had the capacity to eliminate the bottleneck problem in the future, when the consumer base and the heat demand in the plateau would increase. one added value of local heat supply with a production unit running on gas or liquid fuel was that the fuel could be more environmentally beneficial than the existing peak fuels. other added values were that total production capacity would increase, which would provide more peak heat capacity and therefore more redundancy in the dh network. the added value of dsm was that this solution would increase contact with customers, which could lead to a better relationship between them and the company. one added value of better cooling, similarly to dsm, was better customer contact. other added values were that better cooling reduced the pumping power and created an increased yield of flue gas condensation throughout the entire year. solutions rejected: none step 6 – economy solutions considered in this step: bigger pipe area, local heat supply with a production unit running on gas or liquid fuel, dsm and increased cooling at the consumers. a new pipe area would be very expensive because a very long pipe would be required in order to solve the bottleneck problem. a local heat supply unit would not be very expensive because of its small size. a gas powered heat supply unit would be less expensive than one running on liquid fuel due to the easily accessible gas network situated close to the heat supply location. dsm would be favourable for the economy because it would not be a very expensive solution to install and would also generate savings coupled to the avoidance of short start-ups and stops of production units. increased cooling would also be favourable to the economy due to the positive effects on the dh network resulting from this solution and the fact that the company did not own the substations and would therefore not pay solutions rejected: higher supply temperature, more pumping with the main pump, installation of a new, distributed pump, local heat supply running on solid fuel, local heat supply with prosumers, and an accumulator/accumulators. step 4 – risks solutions considered in this step: bigger pipe area, local heat supply with a production unit running on gas or liquid fuel, dsm, increased cooling at the consumers and improved energy efficiency. risks associated with a bigger pipe area comprised the risk of not receiving a permit to carry out earthworks and personal safety risks when installing the pipe, particularly because of heavy traffic on the streets selected for the route of the pipe. another important risk was the risk of the consumer base not developing as predicted. one risk associated with local heat supply using a production unit running on gas or liquid fuel was that it was only possible to receive a temporary permit due to the plateau being situated in a nature conservation area. other risks included the risk for the local residents regarding noise and air pollution, increased maintenance demand, vulnerability to power failures and unfavourable environmental outcomes if the fuel would consist of fossil oil. the main risk of dsm was that consumers would have final control of the equipment, meaning this solution could be unpredictable. the main risk of increased cooling at the consumers, similarly to dsm, was that consumers would have final control of the equipment. the main risk of improved energy efficiency was the control issue. however, for this solution, the energy company had no control at all of the solution, unlike for dsm and increased cooling at the consumers. all the company could do regarding improved energy efficiency was to run information campaigns. the only risk that was deemed too large to accept was the risk of not having any control at all over the improved energy efficiency solution. this solution was therefore rejected as a bottleneck solution, but could be performed as a general strategy in the dh network. however, the uncertainty about the resulting energy savings was too significant to include possible energy savings derived from this solution in the bottleneck solution package. international journal of sustainable energy planning and management vol. 20 2019 47 lisa brange, kerstin sernhed and marcus thern choose often being made based on experience and with minimal resources being assigned to the decisionmaking process. thus, the results in the present paper aim to shed light on bottleneck solutions other than conventional solutions and promote a systematised modus operandi in order to identify the most optimal bottleneck solution for a specific situation. in the workshop discussions, it often seemed to be the case that little time and resources were dedicated to this kind of decision-making, even if there was a will and aim to conduct more thorough work and therefore be able to make more informed decisions. the proposed decision-making process helps with this issue as it presents a predetermined operating method that helps structure the work required. thus, the work regarding how to start and perform the decision-making process can be eliminated. coupled to the lack of time and resources assigned to decision-making for companies, it is important for dh companies to regard this kind of work as a form of investment. it will probably lead to more suitable solutions being implemented and thus more efficient dh networks. from a broader perspective, this could lead to more efficient dh networks, with better environmental and economic outcomes, to the benefit of the entire energy system. one interesting fact identified in the workshops is that the economic calculation is often performed as one of the first steps when choosing a bottleneck solution. in the proposed decision-making process, this is instead positioned as the last step before the decision-making. the reason for such a design is that factors other than only the direct costs of installing the solution may affect the economy and should be included in the calculation in order to make an informed decision. however, backof-the-envelope calculations could be performed in an earlier stage in the process, although it is then important to not exclude solutions that could turn out to be favourable. one disadvantage of the proposed decision-making process is that there is a risk of solutions being discarded too early in the process. other disadvantages are that the decision-making process is not completely objective as it is the decision-maker who evaluates the input data, rates the solution partly quantitatively and partly qualitatively and decides which solutions should be rejected. however, the decision-making-process is thought to be a comprehensible tool that is actually going to be used by dh developers who have limited for any service or maintenance. for customers with a price model including a flow fee, this solution would often be economically viable because of the reduced heating costs. solutions rejected: local heat supply with a production unit running on liquid fuel step 7 – basis for decision solutions considered in this step: bigger pipe area, local heat supply with a production unit running on gas, dsm and increased cooling at the consumers. in the basis for decision, four solutions were considered. sooner or later the pipe area would have to be increased due to the expansion of the plateau and the temporary permit for the local supply unit. however, economically, and in terms of knowledge of future plans, it would be better to postpone this large investment for as long as possible. in addition, it was not possible to connect a bigger pipe area immediately due to permit problems. firstly, the company would thus improve the cooling at consumers and start up a dsm project in order to manage the current bottleneck problems. a small, temporary gas powered peak heating unit would also be installed to increase the redundancy in the plateau and the dh network. a bigger pipe area would then be installed in the future when the other solutions were no longer sufficient to solve the bottleneck problem and the temporary peak heating unit would have to be phased out due to the temporary permit. 4 . concluding discussion the results describe a decision-making process regarding which dh bottleneck solution to choose. the decisionmaking process may also be used to choose which optimisation steps to implement. the advantages and disadvantages of different bottleneck solutions are also shown and coupled to the decision-making process. in addition, the results describe a real bottleneck case, in which the decision-making process is used to identify the most optimal solution. this is an example of how the decision-making process can be used. this work is important because 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marta.jaroszewska@imp.gda.pl international journal of sustainable energy planning and management vol. 24 2019 75–84 research and experimentation abstract as a key aspect of tourism competitiveness, sustainability plays an important role in profiling europe as a tourism destination in key source markets. as in any other region(s), comprehensive engagement and involvement of key stakeholders plays an essential component and role in developing europe as a sustainable tourist destination. this type of engagement and involvement requires a cross-border collaboration in order to establish a common region identity as a means of managing complex processes of globalization. the initial requirement for such an interaction is to identify appropriate relevant stakeholders for european sustainable tourism and to facilitate cross-border dialogue and interactions. in the field of energy, it is important to take into consideration both energy sustainability and energy efficiency. energy effectiveness can be described as the interaction between energy produced and energy induced/invested. sustainable energy can be assessed from the perspective of consumption/production or the impact it has on the environment and society. this study focuses on level of implementation of circular economy in the energy sector of tourist smes in poland, which can be also understand as a level of implementation of ideas such as high efficiency energy systems and sustainable energy management. the area of research is polish coastal area, which is a part of the south baltic region. this region has exceptional potential for becoming a forerunner in achieving sustainable tourism goals of the eu. utilizing the “sustainable energy theory”, the purpose of this research is to examine energy management problems with regard to sustainable development for smes involved in polish tourism in the south baltic region. a structured interview method was used as well as a comparative analysis method. the main conclusion is that the tourism sector in polish part of south baltic region is, at different levels, ready to implement a change from linear economy in the context of energy. in the case of poland although there are some challenges, it is still very encouraging in that people are beginning to see and view sustainable management, whatever the problems or solutions, as a core living item and not something that can be ignored or pushed aside any longer. 1. introduction the eu tourism development policies are mainly focused on driving europe towards maintain its competitive position as a leading tourism destination worldwide but at the same time developing more sustainable tourism forms. however this is only possible if tourism-related small and medium enterprises (smes) implement sustainable management solutions in terms of both technological and sustainable energy management: are tourism smes in poland ready for circular economy solutions? marta jaroszewskaa*, patryk chajaa and anna dziadkiewiczb a department of distributed energy, institute of fluid-flow machinery polish academy of sciences, fiszera 14 st., 80-231 gdańsk, poland b marketing department, faculty of management, university of gdańsk; armii krajowej 101 st., 81-824 sopot, poland keywords: sustainable energy; tourism smes; energy system planning; circular economy; model of sustainable energy management; url: http://doi.org/10.5278/ijsepm.3342 mailto:marta.jaroszewska@imp.gda.pl http://doi.org/10.5278/ijsepm.3342 76 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy management: are tourism smes in poland ready for circular economy solutions? non-technological innovations. in this regard, understanding tourism smes’ perceptions about the challenges they face for implementing sustainable development strategies and what is required to overcome such challenges is essential. during the past thirty years, many concepts such as eco-thinking, sustainable development, sustainability, and green growth have been introduced to solve global problems, related to the prevailing increase of consumption, and mass growth-oriented production [1–4]. the ce concept covers different actions that can be taken, some of which are: introducing new technologies [5], changes in national policies [6], demonstration of good-practices [7] or influence and role of people towards changes in energy systems [8–10]. the circular economy (ce) concept, on which this article is based on, is of great interest to both academia and practitioners, because it is viewed as operational and feasible for businesses to implement sustainable development [11,12]. it cannot be traced back to one single date or author rather to different schools of thought. the ce is considered to have been introduced by the economists david pearce and r. kerry turner [13], who defined a set of principles which were different from the linear ‘takemake-dispose’ model, based on continuous economic growth. the main aim of the circular economy is considered to be economic prosperity followed by environmental quality but its impact on social equity/equality and future generations is barely mentioned [14]. according to the european commission [15], some of the ways to achieve resource efficiency include light-weighting, durability, efficiency, substitution, eco-design, industrial symbiosis, and leasing or renting. according to the ellen macarthur foundation [16], most approaches such as “cradle to cradle”, biomimicry and blue economy have contributed to further refine the concept of ce. thus the ce goes further than just ‘eco-thinking’, ‘sustainable’, ‘green’, and environmentally friendly technologies. the ce relies on value creation through reduction, re-use, recycling and recovery of resources, enabled through new types of business models and forms of consumption that create and enhance to becoming active ‘users’ rather than passive ‘consumers’ [17]. nowadays, there are numerous examples of activities that promote the development of business innovations, consistent with sustainable development [18]. the ce concept is an attempt to transition the product-oriented business model in which enterprises are focused on the product into a model based on services [19]. this system is often called product-service system (pss) and it imposes upon the enterprises the product life extension, considering the fulfilment of customers’ needs [18] together with solving their problems. from the business perspective, the circular models involve both, so-called soft-changes such as: • skills and knowledge, including entrepreneurship and capacity-building; • organisational innovation, including integrated solutions and systems, logistics, business models, and policy supporting tools; • social innovation, including: new production and consumption models, citizens’ involvement, product service models, and design services; • financial instruments; • awareness, dissemination and internationalisation; acknowledgement of value sustainable energy management in polish tourism will take its roots from the principles and concepts of the circular economy. once the inventory of resource stocks and energy flows is established, we will co-design and shape a concept of circular tourism preserving polish landscapes and local knowledge/cultures (circular economy 2.0). energy will where possible be of renewable sources and therefore local tourism will be planned taking into account the distribution nature of these sources. low technologies enabling solutions with lower energy consumption will be preferred because there are more resilient. energy design for polish tourism will aim at not only producing enough energy for the needs of the related activities, but will also aim at feeding and transferring extra energy back into the local network for local citizens to make use of free of cost (ecosystem benefits). alexandre lemille, advocate of a circular economy 2.0, adviser on eu h2020 and interreg projects: international journal of sustainable energy planning and management vol. 24 2019 77 marta jaroszewska, patryk chaja and anna dziadkiewicz • multi stakeholder involvement, and technolo gical innovation, including: design of materials and processes, product design, and resource management. the aim of this article is to identify the key problems for the tourism smes with their energy systems and proposes solutions that can be implemented. it therefore investigates the readiness of the tourism sector smes from the south baltic region for implementation of the change from linear economy to circular economy with the specific focus on energy in poland. the types of smes that are taken into account are: hotels, restaurants and spas. the paper’s structure is as follows in section 2 the role of energy in the circular economy is described and it characterizes the present level of adaption by the smes from the south baltic region relating to the rules of circular economy in the context of energy section 3describes the method of inquiry to collect the biggest challenges. in section 4 the results of inquiry are presented. section 5 concludes the paper. 2. the role of energy in the circular economy the role and purpose of this paper is to investigate the level of readiness for circular economy and because of the fact that energy is part of circular economy it is mainly associated with energy efficiency and therefore we should also mention the known barriers to energy efficiency. these barriers are: 1. risks (e.g. financial risk in investing in new technologies) 2. imperfect information (lack of information and knowledge of “best practices” on technologies and solutions that may be used to improve energy efficiency), 3. hidden costs (e.g. project inadequate to the needs of investor which affect because of additional costs, or costs that are costs of implementing the solution itself such as the training of staff), 4. access to capital, 5. split incentives (e.g. the need of investor/owner of the company differ from the need of employee) and 6. fixed and bound rationality (e.g. no need towards looking for the best solution but choosing the first that meets the demands). all of the six above mentioned barriers affect the problems involved with the implementation of changes in the energy system, and thereby are also considered in this work, smes [20]. ce allows for economic development while minimising the consumption of raw materials, waste production, emissions and energy losses through the creation of advanced chains of manufacturing and consumption processes in which production waste is used as raw materials [21,22]. in the case of the energy industry, the ce focus on the optimization of three basic aspects [23]: a. use of energy sources energy production b. use of by-products and excess energy cooperation between manufacturing industry and cooperation at the urban level c. energy consumption by the final recipient relation and communication with the client visual representation of the role of energy in ce is presented in figure 1. in the processes of ce, following activities can be distinguished: • design of manufacturing processes and services, e.g. planning of recycling of materials created in the production of energy • energy production, e.g. use of renewable and waste energy, energy conversion figure 1: the role of energy in circular economy [24] 78 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy management: are tourism smes in poland ready for circular economy solutions? • recovery of energy inventory, e.g. recycling of materials from generating units as energy or raw materials • waste disposal, e.g. disposal of unused waste the influence of ce economy on the cooperation of the manufacturing industry and cooperation at the municipal level, for example: • utilization of by-products of the manufacturing industry (e.g. oil, biogas) • the use of redundant energy created in the manufacturing industry (e.g. heat from a smelter) • use of ash (production of fertilizers) in the ce processes for cooperation with the final recipient, we distinguish activities related to: • energy distribution, e.g. smart grid products and services • services, e.g. heating, electricity, lighting as a service (performance fee, e.g. 22°c home temperature), other services related to the functioning of real estate, services ensuring energy efficiency • final energy consumption, e.g. response to demand (e.g. reduction of demand (e.g. demand response and load reduction), bilateral exchange of electricity and heat, use of waste heat of building ventilation (e.g. from heat pumps). this is a typical demand side response (dsr) service. dsr is focused on intelligent energy use. through demand side response services, businesses and consumers can turn up, turn down, or shift demand in real-time. • virtual production unit/ virtual power plant the solution allows for reliable and easy participation of many companies on the balancing market. it can be easily stated that ideas stand that stand behind the role of energy in circular economy are among others: high efficient energy systems, sustainable energy management and implementing technologies based on renewable sources as well as sustainable use of available resources. it is worth noting at the end of this paragraph, that in the era of exhausting natural resources and progressing urbanization, the ce is the only viable direction for the sustainable development of the world. 2.1. the status this paper analyses the situation in poland in this regard, observed during the implementation of cirtoinno project, which was realised in south baltic region covering areas of sweden, denmark, germany, poland and lithuania (figure 2) under the eu interreg programme. research shows, that there is a huge variety and disparity in the level of implementation of circular economy rules in the context of energy by smes from the tourism sector [26,27]. it is also not surprising that those countries with greater sources of renewable energy use with a higher level of awareness of climate change (or even climate crisis and which is more and more commonly used in literature [28]) are also the countries where the level of implementation of circular economy is higher. this is especially evident in regards to sweden and denmark. accordingly the countries with lower sources renewable energy and lower awareness of climate change are also the countries with a lower level of implementation of circular economy. in this paper the authors focused on analysing the situation of poland. generally it can be stated, that in poland the level of implementation of circular economy is low. when asking business owners from the tourism sector about circular economy, the reply shows, that most often they are unaware of the term or that they do not have a clear picture as to what circular economy really is1. however in the context of energy, business owners make use of circular economy even if they are not aware of it. poland with its continuously changing regulations and indeed changes in the energy sector may 1the statement is based on the results from the survey, which was a part of realized project, entitled cirtoinno: circular economy tools to support innovation in green and blue tourism smes, work package 4 (project no. sthb.01.02.00-22-0058/16), under the interreg south baltic programme, 2016-2019. a model of sustainable energy management projected on the basis of design thinking approach and then tested during an advisory service among 96 tourism smes in the south baltic region, including 28 smes from poland was one of the outputs. the structured interview method was used in the paper as well as a comparative analysis method figure 2: visual representation of the south baltic region [25] international journal of sustainable energy planning and management vol. 24 2019 79 marta jaroszewska, patryk chaja and anna dziadkiewicz not be easy for investors although there some supporting users , especially for smes that can help to produce more innovative solutions in businesses as well as implementing training and workshops (for business owners and for employees) in order to increase the level of awareness of energy, climate change and solutions that can be used in hotels, restaurants and/or spas. 3. methods having understood the general level of implementation of circular economy by the tourism-related smes the next step is to identify the key problems, that drive investors from implementing ongoing trends. it is also important to identify what level of awareness business owners have for solutions in circular economy concerning energy. the method chosen for collecting data is a questionnaire filled by the tourism smes from the south baltic region. due to the specific characteristics of different countries from the south baltic region it was decided, that for the purpose of this paper only tourism smes from poland will be addressed in the questionnaire. the aim of this part is only to present research results concerning implementation of circular economy solutions for energy in polish enterprises situated in the south baltic region of poland. the study was carried out as part of an international project cirtoinno with projects partners from poland, sweden, denmark and lithuania in the period 2017-2019. a structured interview method was used in the paper as well as implementing a comparative analysis method. the research was conducted in 2018 among 98 enterprises representing the tourism business. the enterprises were asked questions regarding their business model, energy (heat, cold), water, transport, flow of resources, chain of suppliers, management, water, waste management as well as questions regarding behaviour of owners, employees and clients/quest ad knowledge regarding circular economy. as the entire study is too broad to be presented here the authors have selected only parts of the results relevant to the subject of the paper. the questionnaire part regarding energy contains 16 open questions, the same for all three types of smes (hotels, restaurants and spas) and respectively 4, 2 and 1 additional open questions specific of the operation characteristics of hotels, restaurants and spas which gives total of 20, 18 and 17 questions respectively). the questions cover both the attitude towards circular economy methods regarding energy for the owner and the employee as well as the behaviour, knowledge and readiness towards implementing changes for both guests and clients. most of the questionnaires were sent to business owners who filled them in and sent back to the authors, while other conducted in the form of an interview. after that all of the answers were collected and analysed in order to find the key problems , that drive investors from implementing ongoing trends for circular economy. the type of analysis used is qualitative analysis. from all of the answers concerning the key problems in implementing circular economy solutions those that appeared most frequently were chosen and analysed. also the areas where there is no problem in implementing circular economy solutions were identified (if existing). description of the results is presented with the division for three groups, which are: heat, power and transport. each of the subsections is structured first by outlining the areas where the level of readiness is high (if existing) and thereafter describing the areas where the challenges are similar for all three different types of smes and finally the challenges that are specific for the sme type (if existing). at the end of each subsection there are listed solutions for the companies that can be used to turn the company into one that works in line with circular economy in the context of energy. 4. results 4.1 heating in this section, thermal energy will be described as well as the energy needed for hot water supply. in the region of heating there is no area where the level of readiness for implementing circular economy is high. it is observed that most companies are only aware of how much they pay for heating and for hot water and what is the source of heating, that they are using (district heating or individual heating). in most cases replies from the questionnaires indicated that their desire is to pay less for heating and hot water but that they also lack of knowledge on how to achieve this. which is an example of “imperfect information” barrier to energy efficiency. one of the biggest challenges mentioned by the companies was for the amount of investments that needs to be made in order to improve the energy system and increase energy efficiency. even with financial help from support programs it still resulted in that in most of the cases the costs of such changes where still too great for the companies. 80 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy management: are tourism smes in poland ready for circular economy solutions? and that is barrier of “access to capital”. another challenge observed for all three types of smes was their unawareness as to the kind of changes, which should and/or could be made. unfortunately the information which can be found in this area (eg. online) is often misleading. the challenge, and also example of “imperfect information” is to understand the needs, such as: heating demand, hot water demand, resources available onsite and harnessing the system. the following challenge, that companies face are the different kinds of problems concerning the building itself. most of the changes in the energy system of the building need some level of additional construction work to be carried out. it was pointed out by some companies, that there are cases, in which they are not the owners of the building and not the decision making parties and it is a challenge to persuade these parties to implement changes, which is a clear case of “split incentives”. in the case of old buildings construction work is not an easy task since it could well include for example: adding building insulation or installing renewable energy generation units, e.g. in gdańsk old town it is not possible to install any photovoltaic panels on the roofs of old buildings. the specific challenge for hotels is to optimize the usage of energy, which to a large extent is dependent on and influenced by their guests. it is not easy to control the energy usage of guests and that can be seen as a “risk” changes requiring a low level of investment changes requiring a high level of investment – understanding bills, analysing thermal energy consumption and costs related to thermal energy and aiming to reduce thermal energy consumption – identifying and verifying the main heat consumption and aiming to reduce the amount of energy consumed – posting up and displaying information in appropriate places on how to use thermal energy more responsibly – carrying out an energy audit – selection of an operator offering energy produced from res – posting up and displaying information in appropriate places on how to responsibly use resources – installing aerators limiting water consumption – identifying the possibilities of reducing heat loss in a building – purchasing devices of thermal energy produc tion from renewable sources as well as becoming a prosumer – using an intelligent thermal energy manage ment system – purchasing new water-consuming equipment (e.g. dishwashers, washing machines) – modernizing the building in terms of reduc ing heat loss through e.g. utilizing building insulation – thermo-modernisation, achieving a zero or positive energy output of a building 4.2 power as in the case of heating there is no area for power observed where the level of readiness to implement circular economy is high. similarly, it is observed that most of the companies are aware of how much they pay for electricity. however in most cases they were not aware of how much electricity they were using every month/year and what’s more in some of the companies there was even the problem of interpreting the electricity bills, which is a clear case of “bounded rationality”. similarly, the challenges faced by the companies were for example: a lack of funds (“access to capital” for carrying out changes in the energy system as well as the problem of the energy system being highly depend on the behaviour of guests. changes requiring a low level of investment changes requiring a high level of investment – interpreting bills, analysing electricity consu mption and electricity costs and aiming to reduce electricity consumption – identifying and verifying the main source of energy consumption and aiming to reduce the amount of energy consumed – posting up and displaying information in appropriate places on how to responsibly use resources – carrying out an energy audit – selecting an operator offering energy produced from res – purchase of devices producing electricity from renewable sources as well as becoming a prosumer – the use of an intelligent electrical energy management system international journal of sustainable energy planning and management vol. 24 2019 81 marta jaroszewska, patryk chaja and anna dziadkiewicz 4.3 .transport transport in the tourism sector may not seem obvious when talking about hotels, restaurants and spas, but during the questionnaire, stage authors realized that it plays a big role in these businesses. it is required for various purposes, e.g. transportation of goods needed for business operation, transportation of guests as well as in the entertainment for the guests. it is worth mentioning, that transport is the only sector where the level of knowledge was shown to be high. from analysing responses in the questionnaire it can be seen that business owners (or managers) are aware of the different solutions, which may be used and that most of them also understand how they have been using these solutions in their businesses. there is one main challenge that is faced by all three kinds of business types and that is the lack of funding/ funds that can be used for investments (“access to capital”). there is a huge difference between vehicles that run on petrol or diesel and the e-vehicles and most of the time the costs of choosing a more ecological solution is too high. also, when it comes to investing in solutions for entertainment for guests the biggest challenge is the cost. the other challenge that was mentioned by certain companies was the requirement for power for the solutions that fit in circular economy, which is a good example of “rissk” and “hidden costs”. on the one hand the cost of power in poland is increasing leading to another problem for these companies. on the other hand, some of the companies are located in places where they must work using their own generators, which again generates and leads to further costs. there are no challenges observed in the questionnaires specific for the business type. changes requiring a low level of investment changes requiring a high level of investment – providing relevant information in visible places on how to use transport more responsibly – enabling the use/rental of environmentally friendly equipment: e.g. bicycles / scooters – changing the main means of transport to those using organic/bio fuels panies there was even the problem of interpreting the electricity bills, which is a clear case of “bounded rationality”. similarly, the challenges faced by the companies were for example: a lack of funds (“access to capital” for carrying out changes in the energy system as well as the problem of the energy system being highly depend on the behaviour of guests. changes requiring a low level of investment changes requiring a high level of investment – interpreting bills, analysing electricity consu mption and electricity costs and aiming to reduce electricity consumption – identifying and verifying the main source of energy consumption and aiming to reduce the amount of energy consumed – posting up and displaying information in appropriate places on how to responsibly use resources – carrying out an energy audit – selecting an operator offering energy produced from res – purchase of devices producing electricity from renewable sources as well as becoming a prosumer – the use of an intelligent electrical energy management system 5. conclusions despite having a high potential of contributing to their local community, it’s natural resources, it’s economic advancement, and sustainable development, polish tourism smes may not only suffer from challenging economic choices but also decisions that they have to make based on energy management trade-offs. when analysing inquiry responses it can be observed that there are all of the six barriers to energy efficiency occurring, and they are: risks, imperfect information, hidden costs, 82 international journal of sustainable energy planning and management vol. 24 2019 sustainable energy management: are tourism smes in poland ready for circular economy solutions? access to capital, split incentives and fixed and bound rationality. one can conclude that the most frequently mentioned challenges for polish tourism smes were a lack of resources such as financial and human, lack of expertise and resources for proper energy management activities, lack of entrepreneur’s awareness and interest in their sustainable practices, lack of in-house know-how and lack of established polish guidelines on sustainable practices. there are some innovations, developments and trends which will most likely influence the work of sustainability tourism businesses in 2019-2020. one of them is the spreading, re-distribution of “over tourism” from the current most popular cities in south baltic region to the less popular smaller towns, rural areas and villages. this will impact the holiday experience of 99% of domestic and international tourists, which will become a major concern for many tourism managers on how to manage their hotels, spas and restaurants in a sustainable way in regard to technological and non-technological “soft” issues of running their businesses. sustainable tourism has awakened consumer’s sense of responsibility in relation to being eco-friendly and conscious with the hope, that this will only grow and help drive behavioural change across a range of environmental issues. the role of technology and how it can assist in delivering effective tourism management solutions is also essential. technology is a tool to be used and is not the answer in itself. however, we are already seeing the effective use of circular solutions to influence flows of visitors in and to some destinations. the opportunity to monitor the energy use in real time can ultimately assist capacity management and with open access to data this could help plan visitor flows and improve supply chain management. the main conclusion is that the tourism sector in south baltic region is ready and well prepared and equipped on different levels for implementing the change from linear economy to circular economy in the context of energy. in the case of poland the biggest challenge (that was mentioned in all of the receive questionnaires) is the lack of capital to implement circular economy solutions. it is worth to know that in poland there are some challenges but at the same time and what is encouraging is that the people are beginning to see sustainable management, whatever the problems or solutions, as a core living item and not something that can be ignored or pushed aside any longer. authors would like to mention that that the trend of research in circular economy regarding energy and level of implementing circular economy solutions (e.g. high efficient energy systems and sustainable energy management) is a new subject. research described in this paper was the preliminary research which goal was to identify key problems in implementation circular economy solutions. authors plan to perform research which will include more technical view of the problems as well analysis of the real example of implementing circular economy solutions. acknowledgements this article was invited and accepted for publication in the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come [29] this work was supported by the supreme project that has received funding from the european union’s horizon 2020 research and innovation programme under grant agreement number 692197 project financed from financial resources for science in the years 2017-2018 granted for the implementation of an international co-financed project the contents of this publication are the sole responsibility of the authors and can in no way be taken to reflect the views of the european union, the managing authority or the joint secretariat of the 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https://circulareconomy.europa.eu/platform/sites/default/files/cirtoinno-handbook_eng-rev.-4.pdf https://doi.org/10.1016/j.resconrec.2019.03.019 https://www.theguardian.com/us-news/2019/jun/25/climate-crisis-al-gore-global-economy-needs-major-upgrade-fast https://www.theguardian.com/us-news/2019/jun/25/climate-crisis-al-gore-global-economy-needs-major-upgrade-fast http://doi.org/10.5278/ijsepm.3450 http://doi.org/10.5278/ijsepm.3450 international journal of sustainable energy planning and management vol. 20 2019 5 *corresponding author e-mail: roberta.roberto@enea.it international journal of sustainable energy planning and management vol. 20 2019 05–20 abstract conventionally, district heating (dh) networks have been developed with a centralized logic, with large generation units designed to provide space heating to distributed users. some networks have already evolved to a stage in which multiple generation units are distributed throughout the network and are supplying heat from different sources and with different schedules. ict technologies can be the basis for a live optimization of the network, which can be implemented by minimizing energy supply cost for the users or minimizing greenhouse gases emissions. this paper proposes an optimization analysis of the energy generation in a real distributed energy system (des) coupled to a district heating (dh) in turin by maximizing the des operator profit and minimizing greenhouse gases emissions. the results show the limited effect of the demand profile variation in comparison with the potential benefits of optimization strategies against the current operation of the case study under analysis, the main reason being the good flexibility of the available heat generation units. thus, the installation of distributed storage units should be preferred in dh networks characterized by a large share of non-flexible generation options, such as solar energy or waste heat from industries, or where the energy prices show large variations over the day. 1. introduction in recent years, the energy policies have focused on the improvement of energy efficiency, reduction of carbon emissions and reliability of the energy supply. in this context, district heating (dh) can contribute significantly to use more efficiently the energy sources and at the same time to integrate renewable energy in the heating sector. dh is a technology that has evolved considerably over the last years, as demonstrated by analysis on low temperature district heating [1,2] and on the role of the 4th generation dh in the future smart energy systems [3]. in addition, the centralized logic of dh, characterized by large generation units designed to provide space heating to distributed users, is giving the floor to new thermal grids in which multiple generation units are distributed throughout the network. these multiple units are called distributed energy systems (dess) and they have been recognized to have a key role a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study roberta roberto a,*, raffaele de iulioa, marialaura di sommab, giorgio graditib, giambattista guidic and michel noussand a enea italian national agency for new technologies, energy and sustainable economic development cr saluggia, strada per crescentino 41, 13040 saluggia, italy b enea italian national agency for new technologies, energy and sustainable economic development cr portici, p.le enrico fermi 1, 80055 portici, italy c enea italian national agency for new technologies, energy and sustainable economic development cr casaccia, via anguillarese 301, 00123 s. maria di galeria (roma), italy d fondazione eni enrico mattei, future energy program, corso magenta 63, 20123 milano, italy keywords: district heating networks; renewable energy sources; distributed generation; energy storage; sector coupling; url: http://dx.doi.org/10.5278/ijsepm.2019.20.2 6 international journal of sustainable energy planning and management vol. 20 2019 a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study nomenclature c constant in eq. (12) (kwh/€) cigas carbon intensity of natural gas (kgco2/nm 3) cigrid carbon intensity of power grid (kgco2/kwh) dr maximum ramp-down rate (kw) f objective function of the multiobjective optimization problem fc cost function (€) avoid f co 2 avoided co2 emissions (kgco2) oper f co 2 co2 emissions related to the des operation (kgco2) fr revenue function (€) g natural gas volumetric flow rate (nm3/h) h heat rate (kw) k coefficient in eq. (12) lhvgas lower heat value of natural gas (kwh/nm3) netco2 net co2 emissions (kgco2) p electric power (kw) prof total operator’s profit (€) ur maximum ramp-up rate (kw) x binary decision variable greek symbols δt length of the time interval (h) η efficiency π energy price (€/kwh) (€/nm3) πwc white certificate price (€/wc) ω weight in eq. (17) superscript/ subscripts chp combined heat and power d index of day da day-ahead market dem demand dhn district heating network e electric energy energy gas natural gas grid power grid heat heat i index of technology max maximum min minimum ref reference self self-consumption sold sold t index of time th thermal u index of user users final users wc white certificates abbreviations chp combined heat and power da day-ahead market des distributed energy system dh district heating dhn district heating network in the future energy system [4]. consequently, a new network configuration with multiple energy sources from decentralized locations allow considering new operation logics such as demand side management, that is well explained by cai et al. [5], and that actually include also a new actor of the energy market: the ict information and communication technologies molp multi-objective linear programming tou time of use wc white certificates international journal of sustainable energy planning and management vol. 20 2019 7 roberta roberto, raffaele de iulio, marialaura di somma, giorgio graditi, giambattista guidi and michel noussan emissions, and the pareto frontier was found by using the compromise programming method. a stochastic multi-objective optimization model was developed in [12] to find the optimal operation strategies of a des on the pareto frontier, by taking into account both energy costs and co2 emissions. the pareto frontier was found through the weighted-sum method, and the problem was solved by using branch-and-cut. a mixed-integer model was proposed in [28] for the optimal scheduling of distributed energy resources supplying energy to a building cluster while considering both economic and environmental aspects, and the multi-objective optimization problem was solved by using the surrogate lagrangian relaxation method. the main benefit of using a multi-objective approach consists of finding trade-off solutions for the diverse stakeholders participating in des management. in such a context, the objectives can be formulated from different perspectives, e.g., the des operator who is interested in maximizing his profit, and the civil society, which is interested in minimizing the environmental impact. these two objectives can be conflicting, and there is no one single solution that can satisfy all the stakeholders. moreover, from a high-level perspective, a multiobjective approach in this context can provide essential information on the benefits and impacts related to des deployment, by also fostering incentives and polices to encourage des local integration and facilitating collective decisions. the aim of this work is to study the effects on an existing dh network when distributed heat storage systems are installed. dh users usually show a “standard” heat load profile, leading to a standard aggregated profile for the network. due to the progressive upgrade from consumers to prosumers, thanks to the introduction of distributed storage or generation capacity, the demand profile is potentially changing, thus leading to a different aggregated load profile. the present article evaluates the consequences due to that changing considering both economic and environmental optimization strategies thanks to the use of the multi-objective optimization model described in paragraph 2.2 – optimization model. it allows finding the optimal operation strategies of the des, which maximize the des operator’s profit while also reducing the co2 emissions, thanks to identification of different trade-off points on the pareto front. the extreme points of pareto front have been obtained under the economic optimization for one side and the environmental optimization for the other side, while all “prosumer” defined as a unit/member, which both consumes and produces energy. initially, the concept of prosumer was strictly related to power grids but the role of thermal prosumers in dh is enhancing thanks to the integration of des in the heating network. des are usually characterized by small-size technologies providing electrical and thermal energy close to end-users [6]. the benefits of des are multiple: economic in view of their potentiality to reduce energy costs; environmental on account of their possibility to integrate several energy resources, including renewables, and to maximize the energy efficiency of the entire system in view of the reduction of network losses thanks to production of energy close to end-user, or avoiding the waste of energy due to distributed energy storages. [7–9]. on the other hand, in order to better exploit these benefits, an optimized daily operation management is fundamental, and it has to take into account several challenges concerning with the unbalance among supply and demand sides. this unbalance is given by the typical instantaneous variation of user energy demand, and the limited operation flexibility of certain technologies within the system to deal with the fluctuation in energy demand [10–12]. the integration of energy storage systems is a key aspect in supporting the demand and supply matching in des [13]. in the literature there are several works focusing on the operation optimization of des through formulating mixed-integer optimization models for scheduling multiple energy devices with the aim to minimize the daily energy cost [14–23] . however, the economic benefits are valid for the short run and they cannot be pursued without considering the environmental problems, such as reducing co2 emissions, in order to guarantee the sustainability of energy supply in the long term. on account of that, alarcon et al. [24] show that global warming and environmental problems are essential drivers in the decision-making process for des integration. as a result both economic and environmental aspects have to be considered for the des effective integration, but it is challenging since the economic and environmental objectives can be conflicting [11]. the multi-objective approach has been widely investigated in the context of des [25–27]. with specific reference to the des operation optimization, a multi-objective optimization model was proposed in [10] with the aim to achieve the optimal operation strategies of a des by considering minimization of energy costs and environmental impacts in terms of co2 8 international journal of sustainable energy planning and management vol. 20 2019 a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study are used to estimate the environmental impact of the des. a simplified layout of the system is reported in figure 1. the current operation of the des is compared to an economic optimization (maximizing the des operator profit) and to an environmental optimization (minimizing the co2 emissions). these three strategies are evaluated in the system without heat storage and in two additional heat storage operation logics that will be explained in detail in the following sections. 2.2. optimization model the optimization model allows identifying the optimal operation strategies of the des by considering both economic and environmental aspects. the aim is to maximize the des operator’s profit, while also minimizing the net co2 emissions in the hourly operation schedule of the des on annual basis. the optimization problem is formulated as a multi-objective linear programming problem (molp), which is solved through the weighted-sum method by using branch-and-cut. in the following, the operation constraints related to the energy technologies in the des and the dhn, as well as the energy balances constraints are defined. then, the objective functions and the optimization method are described. 2.2.1. problem constraints for all the technologies present in the des, the common constraint is the capacity constraint, formulated below for the chp: the internal points, corresponding to the trade-off points between economic and environmental objectives, have been obtained by subdividing the weight interval into 100 equally-spaced points. as a result, several operation solutions to the des operator are offered according to his economic/environmental priority. a sensitivity analysis has been also performed to evaluate the effects of the variation of key factors such as day-ahead (da) market price and the natural gas price on the optimized operation of the des. 2. methodology this section firstly describes the problem and defines the system layout; furthermore, the optimization model is explained focusing on problem constraints and objective functions. finally, the real case study for the application of the model is presented illustrating technical characteristics of the technologies and heat load profiles. 2.1. problem description the main research question of this work is to evaluate the economic and environmental effects of different operation logics of distributed storage systems and of the generation units, to meet the optimized the supplydemand matching. in this paper different configurations are compared, by analysing the economic incomes for the des operator, which is generally the main driver in real applications, and the calculated co2 emissions of the system, which electric grid u1 : office building gas grid chp system condensing boilers conventional boilers u2 : residential building cluster figure 1: layout of the dh generation plant and network international journal of sustainable energy planning and management vol. 20 2019 9 roberta roberto, raffaele de iulio, marialaura di somma, giorgio graditi, giambattista guidi and michel noussan the thermal energy balance is formulated as: 2.2.2. objective functions and multi-objective optimization method the economic objective is formulated as the annual des operator profit to maximize. it is related to the total revenue for selling power from chp back to the grid, for selling thermal energy to the dh users and for getting white certificates (wc) derived by the related italian incentive scheme (for chps with a size lower or equal to 1 mwe and a primary energy saving higher than 0, the incentive scheme is based on white certificates (wc), each certificate attests the saving of a toe and has an economic value), and to the total energy cost for buying grid power as well as gas for the boilers: where the various functions for revenues and costs are formulated below: the environmental objective is formulated as the annual net co2 emissions to minimize, consisting of the emissions related to grid power and gas consumption and the avoided emissions related to power sold back to the grid [25]: in this constraint, the power provided by the chp at time t in day d (a continuous decision variable) is bounded by the minimum rated power and maximum power, if the chp is on (the binary decision variable is equal to 1, xchp,t,d = 1). the total power provided by the chp consists of the sum of power provided for self-consumption and power sold back to the grid: moreover, for the chp, the ramp-rate constraint is also included. this constraint allows limiting the variation in power generation between two successive time-steps within the ramp-down and ramp-up limits: the amount of natural gas consumed by the chp is formulated as: where ηchp,e is the electrical efficiency of the chp and lhvgas is the lower heat value of natural gas. the heat rate recovered by the chp is formulated as: where ηchp,th is the thermal efficiency of the chp. as for the condensing and conventional boilers, the amount of gas consumed by them can be formulated similarly to eq. (4), by considering the thermal efficiency values of the different types of boilers. the operation constraint related to the dhn limits the heat rate transported by the dhn by considering the maximum heat rate allowable for the dhn to satisfy the dh users (user 2) load [29]: energy balances allow to satisfy the users electrical and thermal demand. the electricity balance for the office building (user 1) is formulated as: min max chp chp,t,d chp,t,d chp chp ,t ,dp x p tp dx ,≤ ∀≤ (1) = ∀+self soldchp,t,d chp,t,d chp,t,dp p p t , d (2) − ∀≤ ≤chp chp,t,d chp,t,d chpdr p p ur t , d1 (3) = ∀ηchp,t,d chp t d chp e gasg p lhv t d, , ,( ), , (4) = ∀η ηchp,t,d chp,t,d chp ,th chp ,e'h p t , d (5) { }maxi,u2,t,d dhn t , d , i chp ,convboil , convboil ,coh h ndboil∈≤ ∀ 1 2 (6) = ∀+selfu ,t,d chp ,t ,d grid ,t ,d dp p p , t ,1 (7)   ∀ ∀ ∈    = ∑u,t,d i i ,u,t ,d chp,convboil , u, t , d , i convboil , condboi h l h , 1 2 (8) = + + −r r r csell ,grid sell ,users w c energyprof f f f f (9) = π ∆∑ ∑r sold dasell,grid chp,t,d t dd tf p t,( ) (10) = π ∆∑ ∑r demsell,users u t d heatd tf h t3, ,( ) (11) = π ∆ = + − ∑ ∑ ∑ ∑ η η r w c w cd t d t chp t d r e f e chp t d r e f th chp t d gas f w c t withw c p h g lhv ck, , , , , , , , ( ) , ( ( ) (12) { } = π + π ∆ ∈∑ ∑c grid gasenergy grid t d t d i t dd t chp convboil convboil condbo f g i i t l p , , , , , 1, 2, ( ) , , (13) oper a void co conetco f f= −2 22 (14) 10 international journal of sustainable energy planning and management vol. 20 2019 a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study requirements on variables are first relaxed, in order to solve the relaxed problem by using a linear programming method. if the values of all integer decision variables turn out to be integers, the solution of the relaxed problem is optimal to the original problem. if not, the convex hull (the smallest convex set that contains all feasible integer solutions in the euclidean space) is needed since once it is obtained, all integer decision variables of the linear programming solution are integers and optimal to the original problem. the process of obtaining the convex hull, however, is problem dependent, and can itself be np hard. valid cuts that do not cut off any feasible integer solutions are added, trying to obtain the convex hull first. if the convex hull cannot be obtained, low-efficient branching operations may then be needed on the variables whose values in the optimal relaxed solution violate their integrality requirements. the objective value of the current optimal relaxed solution is a lower bound, and can be used to quantify the quality of a feasible solution. the optimization stops when cpu time reaches the pre-set stop time or the relative gap falls below the pre-set stop gap [7]. the flowchart summarizing the methodology used to find the optimized operation strategies of the des is shown in figure 2. given the input data, such as the energy demand, the energy prices, the carbon intensity values and the technical characteristics of the technologies in the des, by solving the optimization problem above, it is possible to find the pareto front consisting of the best possible trade-offs between the economic and environmental objectives. considering that each point on the pareto front corresponds to a different operation strategy for the des, the operator can choose it based on his economic and environmental priorities. 2.3. description of the case study the case study presented in this work is based on an existing dh system in the city of turin, where around 240,000 m3 of residential buildings and 50,000 m3 of offices are heated by a central plant, which is supplying around an annual average of 11 gwh of heat to the users. a natural gas engine is in operation to supply mostly of the heat demand, while backup and integration natural gas boilers are available to provide additional capacity for the peak loads. the same heating plant is also supplying heat to a large office building. data about the analysed dh system are referred to the airu (italian association of urban heating – where: the optimization problem involves two objective functions, which are the annual operator’s profit to maximize and the annual net co2 emissions to minimize. the weighted-sum method is used to solve this multiobjective optimization problem, through formulating one single objective function as a weighted sum of the minus-profit (-prof), and the net co2 emissions, netco2, to be minimized: it should be noted that the weighted-sum method is highly indicated for these types of problems, since it is easy to implement and allows to find all the solutions belonging to the pareto front in case of convex problems and in the presence of two objective functions [24,30]. in eq. (17), when ω = 1, the solution that minimizes the minus-profit (maximizes the operator’s profit) is found, whereas when ω = 0, the solution that minimizes the net co2 emissions is found. for ω varying in the interval 0–1, the trade-off solutions between the economic and environmental objectives can be found on the pareto front. these trade-off solutions represent the set of nondominated solutions of the multi-objective optimization problem, known as the pareto front. when an optimization problem has a single objective, the definition of “best solution” is one-dimensional and there is only a single best solution (or none, eventually). conversely, a multiobjective optimization problem has no a single solution, but a set of non-dominated solutions belonging to the pareto front. a solution belongs to the pareto front if no improvement is possible in one objective without losing in any other objective [24]. the problem formulated is linear and involves both discrete and continuous variables. this mixed-integer linear problems is solved by using branch-and-cut. mixed-integer linear programming problems are usually hard to solve since a set of decision variables is restricted to integer values. branch-and-cut as a powerful instrument for mixed-integer linear problems is therefore used. in this method, all integrality { } = + ∆ ∈∑ ∑operco grid t d grid i t d gasd t chp convboi f p ci g ci l convboil con t i dboil 2 , , , , , 1, 2, ( ) , (15) a void sold co chp t d gridd t f p ci t= ∆∑ ∑2 , ,( ) (16) f c prof + 1netcoω ω= − 2( ) ( ) (17) international journal of sustainable energy planning and management vol. 20 2019 11 roberta roberto, raffaele de iulio, marialaura di somma, giorgio graditi, giambattista guidi and michel noussan 2,600 kwth respectively. the network losses of the dh network are 11.9%. the total heat demand profiles were obtained by considering three years of operation data (2015–2017), for which an hourly measure of the heat consumption of the buildings was available. the analysis presented in this work has been performed on average monthly profiles, for three main reasons: (1) to limit the influence of the periods of missing data points and measurement errors, (2) to obtain acceptable computational times for the optimization tool and (3) to obtain a representation that could be generalized to other similar situations. the simulation of the distributed heat storage sys tems has been performed by considering a cumulated 2016) [31]. the share of heat production is split by 42% from chp and 58% from boilers (there is currently no information on the share for each boiler). the technical characteristics of the technologies in the des are shown in table 1. the chp is a natural gas engine with a rated nominal electric power of 970 kwel and a nominal heat output of 1,163 kwth; it consumes 13.69 gwh of natural gas for the production of 5.25 gwh of electricity and 5.02 gwh of heat. information about the annual amount of excessive thermal energy produced by chp are not provided, but since the chp runs only for around 5,000 hours, the engine is never used to produce electricity only. the condensing boiler and the two conventional boilers reach a cumulated heat output of 895 kwth and input data • energy demand • energy prices • carbon intensity • technical characteristics of technologies in the des problem constraints • energy balances • capacity constraints for technologies • capacity constraints for the dhn economic objective min (-prof) environmental objective min netco 2 single-objective optimization (ω=1): economic optimization min (-prof) single-objective optimization (ω=0): environmental optimization min netco 2 multi-objective optimization ω ϵ ]0, 1[ economic/environmental optimization pareto front non-dominated solutions min cost satisfactory economic/environmental trade-off: final solution figure 2: flowchart of the multi-objective optimization model table 1: technical characteristics of technologies in the des technology size efficiency electrical thermal chp deutz tcg 2020k 970 kwe 0.386 0.463 condensing boiler viessmann vitocrossal 300 895 kwth – 0.93 conventional boilers 2x viessman vitomax 200 2x 2600 kwth – 0.90 (2) 12 international journal of sustainable energy planning and management vol. 20 2019 a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study the other input data for the optimization tool refer to the energy prices and carbon intensity values. based on the italian bta6 tariff for industrial use [32], the time of use (tou) tariff varies in the range 0.074-0.096 €/kwh. the tariff for industrial use is also adopted for the unit price of natural gas assumed as 0.343 €/nm3. for both the prices, reference is made to the energy quotas. the da market price is built based on [33]. the price for selling thermal energy to end users is assumed as 0.089 €/kwh. moreover, with reference to the white certificates, according to the italian regulation, each certificate attests the saving of a toe, and its value is assumed as 100 €. finally, the carbon intensities of the power grid and natural gas are equal to 0.330 kgco2/kwh and 0.202 kgco2/kwh (1.927 kgco2/nm 3), respectively [34]. 3. results and discussion the optimization model has been implemented by using ibm ilog cplex optimization studio version 12.6. the problem can be solved in a few minutes with a pc with 2.60 ghz (2 multi-core processors) intel® xeon® available heat storage of 1,600 kwh for the residential buildings (corresponding roughly to 70 m3 when considering 20°c of temperature difference) and 1,000 kwh for the office building (equal to 42 m3). the heat storages have been designed starting from the heat profiles of the users and the operational logics to be implemented. the resulting sizes (1,600 kwh for residential and 1000 kwh for the office) are in accordance with usual design logics for heat storage systems. an average value of heat losses for the charge/discharge cycles of 1% has been considered, with reference to daily operation cycles of the heat storage systems figure 3 shows the comparison between the current heat loads of the users (case 0), with two alternative charge-discharge logics: one to flatten the heat load profile (case 1) and the other one which is following the average da electricity market price on the market to support the chp operation (case 2). the reason of this choice is to evaluate potential strategies to exploit available storage driven by the traditional approach of avoiding significant peak loads (case 1) or try to maximize the chp operation during the hours in which the economic benefit is higher (case 2). case 0, office 300 1000 500 200 100 0 0 1000 500 0 1000 500 0 300 200 100 0 300 200 100 0 0 4 8 12 16 20 0 hour month january february march april october november december 4 8 12 16 20 case 0, residential case 1, residential case 2, residential case 1, office case 2, officeh e a t d e m a n d ( k w ) figure 3: average monthly heat loads for the offices and the residential buildings international journal of sustainable energy planning and management vol. 20 2019 13 roberta roberto, raffaele de iulio, marialaura di somma, giorgio graditi, giambattista guidi and michel noussan net co2 emissions in the range 53%–59% when compared to the current operation of the different cases. in detail, the best economic performances of the des are attained for case 2 under the economic optimization. in this case, the users heat loads follow the trend of the average da electricity market price to support the chp operation. therefore, in correspondence of high da market prices, a large amount of electricity from the chp is sold back to the grid, by allowing maximizing the revenue for the operator. moreover, this type of operation strategy allows to cover the peak users heat loads with the thermal energy recovered from the chp, and reduce the usage of boilers, thereby minimizing the energy costs. conversely, the best environmental performances of the des are attained for case 1 under the environmental optimization. in this case, the des operation strategies are not sensitive to the electricity prices, and the chp is fully committed to satisfy the users electrical and thermal loads, by avoiding the usage of grid power and minimizing the usage of boilers, thereby minimizing the co2 emissions. moreover, a large amount of electricity from the chp is sold back to the grid, and as shown in eq. (16), this allows increasing the amount of co2 emissions avoided. therefore, in this case, the des optimized operation strategies allow minimizing the net co2 emissions. e5 cpu and 32g ram. a comparison of the economic and environmental results of the simulations is reported in table 2. by comparing the results, a strong difference emerges from the optimized operation of the des in comparison with the current des operation strategies. these latter are based on the common practice logics and on/off operation of the chp unit with a rather fixed time schedule, which is shown for the illustration purpose in figure 4 for the month of january. in real applications small plants are rarely equipped with advanced control logics that allow a dynamic regulation based on the market prices for electricity, especially for des that have many years of operation. however, some applications are available in newer systems, especially in denmark and sweden [35–37]. these applications are also depending on the economic trade-off between exploiting the potential of price differences among hours, and the additional installation and operational costs for such systems. considering the results of table 2, in the current operation logic the use of distributed storage leads to a reduction of net co2 emissions as well as of economic profits (up to a decrease of around 10% for both indicators). however, the optimized operation strategies of the des lead to a significant increase of economic profits from 21% to 37%, and a considerable decrease of table 2: synthesis of the main results of the annual simulation economic profits (€) net co2 emissions (t) case 0 case 1 case 2 case 0 case 1 case 2 current operation 83,210 78,099 75,237 2,188 2,042 1,977 economic optimization 102,394 102,285 103,034 933 931 930 environmental optimization 100,691 100,100 101,221 900 892 897 0 100 200 300 400 500 600 700 800 900 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 p o w e r (k w ) hour el_chp figure 4: current operation strategies of the chp unit (month of january) 14 international journal of sustainable energy planning and management vol. 20 2019 a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study 3.1. focus on optimization logics the optimization tool, as described in the methodology section, defines the operation of the generation plant by choosing the load of each component to produce the amount of electricity and heat required by the users, by taking into account the network losses. an example of the hourly thermal energy supply strategy for the month of january is reported in figure 5, in the case of the environmental optimization considering the demand profile with distributed storage (case 1). the largest amount of heat is produced from chp. this result highlights the importance of chp for the environmental purpose, since it offers the possibility to exploit the thermal energy recovered for meeting the thermal users’ demand. when the thermal energy recovered by the chp is not enough to satisfy the demand, the condensing boiler is preferred to the conventional ones due to the higher conversion efficiency. the corresponding optimized operation strategies of the des for electricity, with da market price and time of use (tou) electricity tariff are illustrated in figure 7, for the same month and the same simulation hypotheses. it can be noted that the operation strategies are not sensitive to the electricity prices. in detail, grid power is never used to satisfy the electrical load of the office building, and a large amount of electricity provided by the chp is sold back to the grid, independently from the da market price. as shown in eq. (16), selling a larger electricity back to the grid allows increasing the amount of co2 emissions avoided, thereby minimizing the annual net co2 emissions. on the other hand, it can be noted that there are no significant differences when comparing the optimized operation strategies across cases, as the final values for economic profits and emissions show differences under 1%. this finding suggests that the use of distributed storage systems is not providing significant benefits in comparison with generation plant optimization in the case study evaluated in this work, when considering economic revenues and net co2 emissions as indicators. however, the availability of other energy sources characterized by a strong variability (e.g. solar energy, waste heat from industries with an irregular production cycle) could lead to a better exploitation of these systems. in the analysed case study, the installation of solar collectors would be limited by the reduced available space, and consequently its integration to the system should have a negligible contribution. thus, the installation of energy storage systems should be preferred in dh networks with a low flexibility of the supply side. heat storage systems may also become a key component in case of strong energy price fluctuations within the same day, but tailored operational strategies are needed to fully exploit their potential. the availability of distributed energy storage systems could also lead to a decrease of the peak demand on the dh network, if operated with proper logics. to fully exploit their potential, their management should be coordinated by a common platform, which should be able to provide live information on optimized operation based on the heat demand and generation costs. 0 250 500 750 1000 1250 1500 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 h e a t ra te ( kw ) hour total conv boilers total cond boiler total chp total thermal energy demand figure 5: thermal energy balance, environmental optimization – case 1 (month of january) international journal of sustainable energy planning and management vol. 20 2019 15 roberta roberto, raffaele de iulio, marialaura di somma, giorgio graditi, giambattista guidi and michel noussan operation strategy mostly depends on the operation strategies of the des for electricity shown in figure 8. the optimization strategies for the other cases show some slight differences in specific hours, but a predominant use of chp is common across the scenarios. the hourly thermal energy supply strategy for the month of january is reported in figure 8, in the case of the economic optimization considering the demand profile with distributed storage (case 2). it can be noted that the chp is mostly used during the hours corresponding to the users peak loads. this 0 0.02 0.04 0.06 0.08 0.1 0.12 0 200 400 600 800 1000 1200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 e n e rg y p ri c e ( €/ kw h ) p o w e r (k w ) hour electricity sold grid power da market price tou tariff figure 6: optimized operation strategies of the des for electricity, environmental optimization – case 1 (month of january) 0 500 1000 1500 2000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 h e a t ra te ( kw ) hour total conv boilers total cond boiler total chp total thermal energy demand figure 7: thermal energy balance, economic optimization – case 2 (month of january) 0 0.02 0.04 0.06 0.08 0.1 0.12 0 200 400 600 800 1000 1200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 p o w e r (k w ) hour electricity sold grid power da market price tou tariff e n e rg y p ri c e ( €/ kw h ) figure 8: optimized operation strategies of the des for electricity, economic optimization – case 2 (month of january) 16 international journal of sustainable energy planning and management vol. 20 2019 a multi-objective optimization analysis to assess the potential economic and environmental benefits of distributed storage in district heating networks: a case study all the internal points of the pareto fronts, which correspond to trade-off points between the economic and environmental objectives, have been obtained by subdividing the weight interval into 100 equally-spaced points. 3.2 sensitivity analysis a sensitivity analysis has been performed to evaluate the effects of the variation of key factors such as da market price and the natural gas price on the optimized operation of the des for all the three cases analysed. figure 10 shows the comparison of pareto fronts in the three cases analysed obtained with the current da market price, and by considering an increase and decrease of the market price equal to 25%. figure 9 shows the comparison of the pareto fronts for the three cases discussed above, where economic and environmental optimization points are the limits of these fronts. the extreme points on the left side of pareto fronts have been obtained under the economic optimization, where the economic objective function (-prof) is minimum, thereby corresponding to the maximum annual operator’s profit. conversely, the annual net co2 emissions are maximum. instead, the extreme points on the right side of the pareto fronts have been obtained under the environmental optimization, where the economic objective function (-prof) is maximum, thereby corresponding to the minimum annual operator’s profit, and, conversely, the annual net co2 emissions are minimum. 880 890 900 910 920 930 940 -104 -103 -102 -101 n e t c o 2 e m is si o n s [t c o 2 ] -100 -99 pareto case 0 pareto case 1 pareto case 2 -(profit) [k€] figure 9: comparison of pareto fronts for the different cases analysed 880 890 900 910 920 930 940 950 960 -140 -130 -120 -(profit) [k€] -110 -100 -90 -80 pareto case 0_current da market price pareto case 0_+25% da market price pareto case 0_-25% da market price pareto case 1_current da market price pareto case 1_+25% da market price pareto case 2_ -25% da market price pareto case 2_current da market price pareto case 2_ +25% da market price pareto case 2_-25% da market price n e t c o 2 e m is si o n s [t c o 2 ] figure 10: comparison of pareto fronts for the three cases analysed and with different da market prices international journal of sustainable energy planning and management vol. 20 2019 17 roberta roberto, raffaele de iulio, marialaura di somma, giorgio graditi, giambattista guidi and michel noussan decrease at all points of the pareto fronts as compared with those obtained with the current gas price. this is mostly due to the increase of the energy cost related to the operation of the chp. moreover, with a higher gas price, the chp results to be less convenient, thereby leading to a lower revenue related to selling electricity back to the grid and to wc incentives. this operation strategy also leads to an increase in the net co2 emissions as compared with those obtained with the current gas price. the lower amount of thermal energy made available from the chp leads to a larger usage of boilers, with consequent higher co2 emissions. conversely, when the gas price decreases by 25%, for all the three cases analysed, the pareto front reduces to a single point, showing that the optimized operation strategies are the same for all the points of the pareto front, and correspond to those found under the environmental optimizations. the reduction of gas price leads to a very high economic convenience in the usage of the chp, which leads to achieve the best environmental performances of the des as well. 4. conclusions and future work this paper presents an analysis to assess the effect of the installation of distributed heat storage systems in an existing district heating network. a simulation based on real demand profiles for the users is used to compare different optimization strategies with the current operation logics, by including some potential profile variations obtained through the management of the heat storage systems. it can be noted that for all the three cases, when the da market price increases by 25%, the annual operator’s profits significantly increase at all points of the pareto fronts as compared with those obtained with the current da market price. this is mostly due to the increase of revenue related to the electricity provided by the chp sold back to the grid. conversely, the net co2 emissions significantly reduce as compared with those obtained with the current da market price. this result is due to the fact that a larger amount of electricity from the chp is sold back to the grid, thereby increasing the amount of co2 avoided. the contrary occurs when the da market price decreases by 25%, since the annual operator’s profits reduce at all points of the pareto fronts as compared with those obtained with the current da market price, whereas the annual net co2 emissions increase. when the da market price reduces, a lower amount of electricity from chp is sold back to the grid. this leads to a reduction in the related revenue for the operator. from the environmental perspective, this leads to a lower amount of co2 emissions avoided, as well as to a lower amount of thermal energy made available from chp to meet the thermal user demand, which in turn leads to a larger usage of boilers, with consequently higher co2 emissions. figure 11 shows the comparison of pareto fronts in the three cases analysed obtained with the current natural gas price, and by considering an increase and decrease of the gas price equal to 25%. it can be noted that for all the three cases, when the gas price increases by 25%, the annual operator’s profits 880 920 900 980 960 n e t c o 2 e m is si o n s [t c o 2 ] 940 1000 1020 -200 -180 -160 -140 -120 -100 -(profit) [k€] -80 -60 -40 -20 0 pareto case 0_current gas price pareto case 0_+25% gas price pareto case 0_-25% gas price pareto case 1_current gas price pareto case 1_+25% gas price pareto case 1_-25% gas price pareto case 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development with a case from nigeria. this is followed up by a sustainability assessment of nine sample countries. moving on to the more local scale, potentials and barriers for photo voltaic systems with cases from germany, nigeria and tanzania are presented. finally, analyses focusing on the spatial dimension of energy system are presented. this last part addresses both the delimitation between rural and city energy systems and how they should combine and the optimal design of district heating systems. 1. energy planning and sustainability in this volume, khaleel and chakrabarti [1] look into the nigerian energy system and the planning of the development of the energy system. in this study, the authors compare different modelling approaches for projection of energy/electricity demands in the country. razmjoo[2] investigate sustainable energy develop ment index (sedi) and its application to a set of nine countries – albania, bulgaria, croatia, china, india, iran, jordan, peru and tunesia. in the work, the countries are evaluated according to technical, economic, social, environmental and institutional sustainability. 2. photo voltaic systems for energy development ugulu[3] look into photo voltaic systems, but from a starting point in unreliable grid supply in nigeria resulting in the majority of urban households having individual fuel-based generator systems. photo voltaics are falling in price, yet penetration rates are still modest in nigeria – largely due to high up-front investment costs. keiner et al. [4] also investigate photo voltaics and residential smart energy systems with autonomous production, conversion and storage systems – including the extent to which electric vehicles may replace stationary batteries. self-consumption rates are positively affected by electricity storage – but the cost of energy is increased in parallel. groth [5] address rural electrification in tanzania – focusing on photo voltaic systems and mini grid systems. such off-grid mini systems are assessed as being important bridge technologies before interconnection to national power systems. see also the work on rural electrification by dominguez et al.[6] 3. the geography of energy systems möller et al. [7] look into the geographical limitation of sustainable energy regions, focusing on the interplay between rural municipalities’ and cities’ energy planning and energy systems development. a recurring theme in many regional energy plans is that rural areas have options that cities do not have. in their analyses, möller editorial international journal of sustainable energy planning and management volume 21 poul alberg østergaard* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords: energy planning; sustainability assessment; photo voltaic systems; energy regions; url: http://dx.doi.org/10.5278/ijsepm.2019.21.1 http://dx.doi.org/10.5278/ijsepm.2019.21.1 2 international journal of sustainable energy planning and management vol. 21 2019 editorial international journal of sustainable energy planning and management volume 21 [4] d. keiner, c. breyer, m. sterner, coupling heat and electricity storage technologies for cost and self-consumption optimised residential pv prosumer systems in germany, int. j. sustain. energy plan. manag. 21 (2019). http://dx.doi.org/10.5278/ ijsepm.2019.21.4 [5] a. groth, socio-economic impacts of rural electrification in tanzania, int. j. sustain. energy plan. manag. 21 (2019). http:// dx.doi.org/10.5278/ijsepm.2019.21.6 [6] c. dominguez, k. orehounig, j. carmeliet, modelling of rural electrical appliances ownership in developing countries to project their electricity demand: a case study of sub-saharan africa, int. j. sustain. energy plan. manag. 22 (2019). http:// dx.doi.org/10.5278/ijsepm.2564 [7] c. möller, m. faulstich, s. rosenherber, urban-rural relations in renewable electric energy supply – the case of a german energy region, int. j. sustain. energy plan. manag. 21 (2019). http://dx.doi.org/10.5278/ijsepm.2019.21.7 [8] k. kuriyan, n. shah, a combined spatial and technological model for the planning of district energy systems, int. j. sustain. energy plan. manag. 21 (2019). http://dx.doi. org/10.5278/ijsepm.2019.21.8 and co-authors look into osnabrück, germany – and surrounding rural municipalities. kuriyan and shah [8] develop a combined spatial and technological tool for designing and analysing district heating systems as a part of the thermos project. optimisation of district heating system design in multinode systems turn out to be time consuming, thus optimisation of the design process is one of the targets in the authors’ work. references [1] a.g. khaleel, m. chakrabarti, energy modelling as a tool for curbing energy crisis and enhancing transition to sustainable energy system in nigeria, int. j. sustain. energy plan. manag. 21 (2019). http://dx.doi.org/10.5278/ijsepm.2019.21.2 [2] a.a. razmjoo, investigating energy sustainability indicators for developing countries, int. j. sustain. energy plan. manag. 21 (2019). http://dx.doi.org/10.5278/ijsepm.2019.21.5 [3] a.i. ugulu, barriers and motivations for solar photovoltaic (pv) adoption in urban nigeria, int. j. sustain. energy plan. manag. 21 (2019). http://dx.doi.org/10.5278/ijsepm.2019.21.3 http://dx.doi.org/10.5278/ijsepm.2019.21.4 http://dx.doi.org/10.5278/ijsepm.2019.21.4 http://dx.doi.org/10.5278/ijsepm.2019.21.8 http://dx.doi.org/10.5278/ijsepm.2019.21.8 _goback 261-1397-1-le.qxd 1. introduction improving energy efficiency is currently worldwide believed to be the cheapest, fastest and most environmental friendly way to meet a significant portion of the worlds’ energy needs. improved energy efficiency reduces the need for investing in energy supply. therefore, countries need to pursue energy efficiency policies more diligently in the long-term regardless of the development of fuel prices [1]. the european union (eu) has set itself the objective of achieving 20% primary energy savings in 2020. in portugal, the national energy strategy (nes 2020) approved by [2] also foresees the approval of a national energy efficiency action plan (neeap) in its energy international journal of sustainable energy planning and management vol. 02 2014 81 efficiency guidelines. moreover, the portuguese nes 2020 aims to foster the industrial cluster of energy efficiency, creating 21000 new jobs by 2020. since there is a strong interest on the promotion of energy efficiency through retrofit investments in buildings, it is somehow of public interest the monitoring of its impact on the employment. therefore, the aim of this paper is to provide a consistent estimate of the contribution of the previously identified retrofit energy saving measures in the building sector (residential, private services and public services) in net employment generation, i.e., considering both the potential job creation and the potential job destruction resulting from the reduction of energy consumption. * corresponding author, e-mail: chenriques@iscac.pt international journal of sustainable energy planning and management vol. 02 2014 81-92 a prospective analysis of the employment impacts of energy efficiency retrofit investment in the portuguese building stock by 2020 ��������� ����� �������� ��� ������ �������������� � ���������� ���� ������� �� ��������� �� �������� ����� ������ ���� ���� ��� ����� �� �!��" �������� �������� #������ �� ��������� �� �������� ��$�� %�� ��&�� '����� ������ &� '���� ����!�((� �������� �������� ��'$�� �������� %�� ������ &� �������� �((� ����!��� �������� �������� )� ���� �� $ ����� � �� � � *��+������ �� �������� �������� �+ ,��� &� ���+�� �"-� ��� !-�# �������� �������� a b s t r a c t energy efficiency plays a significant role in increasing the security of energy supply and mitigating climate change. although this role is indubitable, there is an ongoing discussion about the employment impacts of promoting energy efficiency measures, in particular of building retrofit investments. the purpose of this paper is to provide an estimation of the number of net jobs associated with the most common retrofit investment options in the building stock of portugal. the examined investment options aim at improving the thermal properties of the building envelope and include the insulation of external walls and roof and the substitution of window frames and single glazed windows. the implementation of a methodological framework for the assessment of employment benefits is based on input-output (i-o) analysis, providing consistent estimates for depicting the significant contribution of energy saving measures in the building sector (residential, private services and public services) in net employment generation. keywords: input-output analysis, energy efficiency, buildings, retrofit investment, employment. url: dx.doi.org/10.5278/ijsepm.2014.2.7 82 international journal of sustainable energy planning and management vol. 02 2014 a prospective analysis of the employment impacts of energy efficiency retrofit investment in the portuguese building stock by 2020 the paper is organized as follows: section 2, briefly reviews the latest literature on the subject; section 3 presents the methodological framework used herein; section 4 presents the implementation of the methodology in the portuguese context after a brief characterization of the building sector in portugal; section 5 provides some illustrative results, and finally section 6 highlights some conclusions and presents future work developments. 2. review of previous studies the macroeconomic effects of energy efficiency are mostly expressed in the form of employment or economic growth [3]. a number of studies have sought to estimate the employment potential of several energy efficiency measures in terms of employment factors, though chief methodological challenges remain when determining job creation [4]. in this context, [5] presented an analysis of the employment impacts of two types of energy conservation efforts, namely retrofitting of buildings and increased energy efficiency in the industrial sector in the united states of america (usa). [6] evaluated several dimensions of low cost techniques in building construction in india and estimated the generation of on-site employment that occurred from these interventions. [7] provided a template for economic evaluation of domestic energy-efficiency programs. in their study they estimated the number of jobs resulting from the implementation of various energy efficiency technologies in the irish dwelling stock over a ten-year period. [8] analyzed the macroeconomic impacts of increasing energy efficiency in the usa’s residential and commercial building stock, using input-output (i-o) analysis. [9] examined the social impacts (employment and fiscal revenues) of an energy conservation program in germany. [10] estimated the net employment impacts of a large-scale energy efficiency retrofit programme in hungary, simulating five scenarios. [11] presented the results of the implementation of an efficiency strategy in germany until 2020, which is focused on cost-effective measures. the outcomes obtained show that improved energy efficiency results in a variety of positive effects on the economy and the environment, namely on additional employment and economic growth. [12] have demonstrated in their study that there is a triple win available of warmer homes, greater energy efficiency and economic growth if carbon taxes revenue can be used to benefit consumers and fuel poor households in particular in united kingdom (uk). [13] analyzed the potential of a national building energy rating and disclosure policy to create jobs and reduce energyrelated expenditures in commercial and multifamily residential buildings in usa. among the energy efficiency measures available, energy retrofit measures are known to be some of the most cost effective ways of saving energy and reducing greenhouse gas emissions. in addition, such measures can result in a significant number of local and national employment opportunities. according to [14] energy efficiency retrofit investments in buildings can be more labour-intensive than any other key climate intervention. retrofits require the upgrade of old buildings, involving the physical and operational upgrade of thermal conditions of buildings, leading to lower energy consumption. in portugal the scientific literature on this field of research is not abundant. in this framework, and to our knowledge, only in [15] some preliminary results are reported regarding the trade-off analysis of the main impacts due to the implementation of the same four specific energy efficiency retrofit measures herein tackled on the overall employment and gdp. a systemic methodology has been proposed by introducing a bottom-up approach in a previous version of a top-down multiobjective linear programming (molp) i-o model with interval coefficients that allows the assessment of avoided energy consumption and co2 emissions associated with the retrofit measures. however, besides the fact that the previous methodological approach only considers the average trade-offs for a prospective year, ignoring the accumulated effects, further insights are also necessary for the study of employment generation, requiring the models’ closure, namely by explicitly considering the induced effects. therefore, this paper is aimed at computing besides the projected accumulated direct and indirect employment effects, the expected accumulated induced effects (type ii multipliers) corresponding to those originated by the re-spending of income resulting from both direct and indirect effects from 2009 (the base year of our study) until 2020. finally, the possible negative impacts of these energy retrofit measures will also be analysed by considering the potential reduction of energy consumption and the corresponding backward and forward sectoral linkages on job generation. 3. methodological framework i-o matrices allow the representation of each sector’s production process through a vector of structural coefficients that describes the relationship between the intermediate inputs consumed in the production process and the total output. the supply side is split into several processing industries that deliver their total output (production), for intermediate consumption or final demand. these relationships can be illustrated through the following equation: xi = + yi 3.1 where xi is the output of sector i, xij is the input from sector i to sector j, and yi is the total final demand for sector i. the monetary values in the transactions matrices can then be converted into ratios called technical coefficients. this is done by dividing each cell of the domestic intermediate matrix by its column total (output at basic prices). considering the hypothesis of constant returns to scale, eq. 3.1 becomes: xi = xj + yi 3.2 in which the coefficients aij are the amount of input delivered by sector i to sector j per unit of sector’s j output, known as technical coefficients (or direct coefficients). the productive system at a national level can then be represented through the following basic i-o system of equations: x = ax + y 3.3 where a is a matrix of technical coefficients, y is a vector of final demand, and x is a vector of the corresponding outputs. in order to finally calculate the output multipliers, one needs to derive leontief inverse matrices. eq. 3.3 can then be rearranged to: x = (i – a)–1y, 3.4 aij j n = ∑ 1 xij j n = ∑ 1 where i is the identity matrix with convenient dimensions and (i – a)–1 is also known as the leontief inverse. each generic element, bij, of (i – a) –1 represents the total amount directly and indirectly needed of good or service i to deliver a unit of final demand of good or service j. 3.1. employment multiplier concepts and basic assumptions usually in models that account for job creation, jobs are measured in terms of job-years or full time equivalency. in our study, a job is a metric that represents the amount of resources necessary to employ one person for forty hours per week for a full year (i.e. full time employment – fte). although precise definitions vary, direct jobs herein considered refer to the jobs generated from a change in spending patterns resulting from an expenditure or effort taken in a retrofit project [16]. thus, the direct job contribution of a retrofit measure in terms of employment can easily be obtained by considering the direct job coefficients (jobs per output) of each activity sector engaged in all the activities of that retrofit measure. indirect jobs are generated in the supply chain and supporting industries of an industry that is directly impacted by an expenditure or effort [16]. induced jobs are generated by the re-spending of income resulting from newly created direct and indirect jobs [16]. since the employment to output ratio is given for each sector in an i-o table, the overall significance and contribution of an industry to total employment can also be calculated by assuming that the sectorial employment ratios are fixed. thus, the indirect contribution of an industry to either total output or employment is not simply observable unless the multiplier and flow-on effects are taken into account. therefore, the type i employment multiplier may be interpreted as the impact on the overall employment if the final demand in sector j increases by one unit. the employment multiplier for sector j, e mj , is thus defined as follows: 3.5 where ei denotes the number of persons with fte per one euro output for each sector i, bij is the i, j th element e e bj m i ij i n = = ∑ ( ) , 1 international journal of sustainable energy planning and management vol. 02 2014 83 carla oliveira, dulce coelho and patrícia pereira da silva of the closed leontief inverse matrix and n is the number of sectors. these multipliers would represent the number of new jobs created expressed as total employment for every new employee to meet increased final demand of new output, but one may wish to relate the simple or total employment effect to an initial change in employment, not to final demand (and output) in monetary terms. in this situation the employment multiplier, ej, is: 3.6 finally, induced effects represent the response by all local industries caused by increased (decreased) expenditures of new household income and interindustrial transfers generated (lost) from the direct and indirect effects of the change in final demand for a specific industry. because the purpose of this type ii employment multiplier is also to estimate the flows of money in and out of households and the effect of these transactions upon industries (i.e., the induced effect), it is necessary to ‘endogenise the household sector’. this consists on treating households as an additional industry by adding an extra row and column into the direct requirements table for ‘compensation of employees’ and ‘household expenditures’ coefficients, respectively. a short example of the application of this methodology in our study will be provided when grasping some illustrative results in section 5. 4. implementation of the methodology in portugal the building sector represents about 40% [17] and 30% [18] of total energy consumption in the european union and portugal, respectively. therefore, the reduction of energy consumption in the building sector is an important measure for reducing the co2 emissions and energy dependence [17]. according to the energy efficiency plan (eep) [19] the building sector offers the greatest energy saving potentials. the eep is focussed on the instruments aimed at promoting the process of retrofit in public and private buildings and thus improving the energy performance of the components and appliances used in them. in portugal, the first regulation related to energy performance and thermal comfort of buildings was endorsed in 1990 and required that new buildings and e e b ej i ij ji n = = ∑ ( ) 1 great refurbishments of existing buildings implemented measures to improve building energy performance. in the sequence of the previous european directive on the energy performance of buildings [20] that was addressed to the member states, a package of new regulation was enforced in portugal in 2006 and is currently binding. in the building sector, the portuguese legislation includes regulations regarding the energy and indoor air quality performance in buildings through the national system of energy certification and indoor air quality in buildings (sce) [21], according to the requirements and statements contained in the regulation of building conditioning of energy systems (rsece) [22], and according to the regulation of the characteristics of thermal behaviour of buildings (rccte) [23]. this new legislation package is stricter than the previous one and is either applicable to the new or older buildings needing great rehabilitation interventions. therefore, the major potential for energy efficiency improvements exists in buildings, which have been constructed before 1990, when the first thermal insulation regulation was enacted. these buildings represent 71% of the existing building stock and 20% of this percentage have been constructed before 1945. in order to estimate the direct, indirect and induced employment effects associated with the implementation of energy efficiency retrofit investment in the portuguese building sectors it was first necessary to use an i-o symmetrical product by product table for total flows. the i-o table herein used was also used in [24] and is given at current prices of 2008. our analysis is focussed on buildings from the residential, private services and public services sector, considering two different construction stages: buildings dating back to 1945 and buildings constructed within the range of 1946 to 1990. four key categories have been identified as important to be integrated into a retrofit project: window frames, window glazes and roof and wall insulation. the total investment costs associated with the implementation of the retrofit investments considered were first disaggregated to account for the economic sectors directly involved with each retrofit investment. moreover, we assumed that the impact on employment regarding these interventions is expected to occur within the country. fig. 1 depicts the sectoral distribution of the investment for each of the interventions herein tackled, which was based on several experts’ opinions 84 international journal of sustainable energy planning and management vol. 02 2014 a prospective analysis of the employment impacts of energy efficiency retrofit investment in the portuguese building stock by 2020 (academics and practitioners in the field of energy efficiency). the unit investment costs (at basic prices) are given in table 1 and were estimated for 2008 (the base year of our study) and were based on [25] and [26] 5. illustrative results the illustration of the methodology followed in section 4 will be performed for single glazed window replacement in single dwellings with four facades built before 1945, being analogous in the remaining retrofit investment options and therefore omitted. according to the building stock characterization provided in [27], the average window glazed area of this type of buildings is 17.2 m2 and the useful floor area is about 225 m2. therefore, the total investment cost per building might be obtained through the costs provided in table 1, corresponding to 1290 € and the total investment per useful floor space is 5.73 €. the coefficients for job generation are then obtained by considering the information regarding the activity sectors directly engaged with this retrofit measure (see table 2 and table 3 below). the results obtained in table 3 are observable in the second row of table 4. for an illustrative purpose we will only provide the sectoral distribution of the total estimated employment effects (direct, indirect and induced employment) for each energy efficient strategy in single dwellings with four facades, although this could be depicted for all types of buildings herein considered (see fig. 2). if the option of single glazed window replacement is followed either with frames or not, the manufacturing industry contributes with the highest job generation potential, followed by construction. if the options of roof or wall insulation are privileged construction has the highest job generation potential followed by the manufacturing industry and services. after analysing the total results of table 4 it might be concluded that the buildings with highest job generation potential belong to private and public services, international journal of sustainable energy planning and management vol. 02 2014 85 carla oliveira, dulce coelho and patrícia pereira da silva table 1: unit costs of each retrofit measure. year of construction retrofit measure (€/m2) < 1945 1946–1990 roof thermal insulation 18 13 opaque facades 35 25 double glazed windows 75 75 window frame 151 151 100%50%0% chemical products products from nonbasic metals metallic products construction gross trade retail trade window frame window glaze roof insulation wall insulation figure 1: sectoral distribution of each retrofit investment. table 2: data for computing job generation with single window glazing replacement in single dwellings with four facades built before 1945. window glaze direct employment indirect induced investment investment (€/1000 m2 coefficients employment employment activity sectors assignment useful floor space) (fte jobs /106€) coefficients coefficients chemical products 0% 0 3.6013 2.9391 6.5661 products from non-metallic minerals 80% 4587 12.1864 1.8772 3.4555 basic metals 0% 0 3.9551 2.9546 6.2627 metallic products 0% 0 14.6715 1.5612 3.0656 construction 15% 860 14.9514 1.9184 3.5698 gross trade 2% 115 14.4030 1.6539 3.4778 retail trade 3% 172 28.7788 1.2642 2.2322 involving the replacement of single by double glazed windows and with or without frame replacement. this fact occurs due to the higher extension of the glazed area in this type of buildings. in the residential sector the highest job impacts are obtained with external thermal insulation of the opaque facade in dwellings with four facades built before 1945, when the construction materials had lower quality levels. 86 international journal of sustainable energy planning and management vol. 02 2014 a prospective analysis of the employment impacts of energy efficiency retrofit investment in the portuguese building stock by 2020 table 4: employment impacts for each building type and retrofit measure (fte/ 1000 m2 of useful floor space). building function building type n° of facades retrofit investment direct jobs indirect jobs induced jobs total residential single dwelling 4 window frame 0.1268 0.1056 0.2225 0.4550 (<1945) window glaze 0.0754 0.0632 0.1173 0.2558 facade insulation 0.3472 0.3244 0.6241 1.2956 roof insulation 0.0914 0.0903 0.1740 0.3557 2 window frame 0.0737 0.0614 0.1294 0.2645 window glaze 0.0438 0.0368 0.0682 0.1487 facade insulation 0.2018 0.1886 0.3628 0.7533 roof insulation 0.0914 0.0903 0.1740 0.3557 apartment building, 4 window frame 0.1125 0.0937 0.1973 0.4034 3 floors window glaze 0.0668 0.0561 0.1040 0.2268 (1946–1990) facade insulation 0.1721 0.1608 0.3093 0.6421 roof insulation 0.0440 0.0435 0.0838 0.1712 2 window frame 0.0664 0.0553 0.1164 0.2381 window glaze 0.0394 0.0331 0.0614 0.1339 facade insulation 0.1015 0.0949 0.1825 0.3790 roof insulation 0.0440 0.0435 0.0838 0.1712 private services apartment 4 window frame 0.9513 0.7922 1.6688 3.4124 building, 3 floors window glaze 0.5652 0.4742 0.8794 1.9188 (<1945) facade insulation 0.2264 0.2115 0.4070 0.8450 roof insulation 0.0610 0.0602 0.1160 0.2371 apartment building, 2 window frame 0.5310 0.4422 0.9314 1.9046 4 floors window glaze 0.3154 0.2647 0.4908 1.0710 (1946–1990) facade insulation 0.0451 0.0422 0.0811 0.1684 roof insulation 0.0330 0.0326 0.0628 0.1284 public services apartment building, 4 window frame 0.3765 0.3136 0.6605 1.3506 3 floors (<1945) window glaze 0.2237 0.1877 0.3481 0.7595 facade insulation 0.0896 0.0837 0.1611 0.3344 roof insulation 0.0610 0.0602 0.1160 0.2371 public services apartment building, 4 window frame 0.3765 0.3136 0.6605 1.3506 3 floors (1946–1990) window glaze 0.2237 0.1877 0.3481 0.7595 facade insulation 0.0640 0.0598 0.1151 0.2389 roof insulation 0.0440 0.0435 0.0838 0.1712 table 3: direct, indirect and induced job generation for single window glazing replacement in single dwellings with four facades built before 1945 (fte/ 1000 m2 of useful floor space). activity sectors direct employment indirect employment induced employment chemical products 0.0000 0.00000 0.00000 products from non-metallic minerals 0.0559 0.04903 0.08822 basic metals 0.0000 0.00000 0.00000 metallic products 0.0000 0.00000 0.00000 construction 0.0129 0.01181 0.02123 gross trade 0.0017 0.00108 0.00301 retail trade 0.0049 0.00131 0.00479 total 0.0754 0.0632 0.1173 the prospective results for 2020 were obtained taking into account the necessary estimated retrofit investments per useful floor space according to the information provided in [26]. fig. 3 illustrates the assignment per useful floor space of the retrofit measures that are expected to take place in the current building stock until 2020. the neeap incentives for the investment on the replacement of non-efficient glazed areas in the residential sector was herein considered, which accounts for 200 thousand dwellings until 2015. in addition, we have also considered the neeap incentives regarding thermal insulation (roof and facades), which considers 100 thousand dwellings to be refurbished until 2015. for the public and private service sectors we have considered that 39% of the total stock building area needs retrofit investment, where 3% of these are extremely damaged builds [26]. according to our assumptions, the useful floor space (in 1000 m2) possibly subject to a retrofit intervention from 2009 until 2020 is given in table 5, corresponding to an expected maximum average annual investment of 13 321 million euros in the residential buildings, 12 630 million euros in private service buildings and 2 200 million euros in public service buildings. the direct, indirect and induced employment totals (see table 6) are then obtained by using the data provided in table 4 and table 5. from the last column of table 6 it might be concluded that the energy efficiency retrofit measures with a higher impact on total employment are those related to single international journal of sustainable energy planning and management vol. 02 2014 87 carla oliveira, dulce coelho and patrícia pereira da silva window frames primary sector 4% extractive sector 1% electricity and gas 0% transports and communication 3% accommodation and food services 4% financial services and insurance 2% real estate services 1% natural water and sewarege 3% manufacturing industry 29% construction 10% other services 27% wholesale and retail trade 16% window glaze primary sector 4% extractive sector 3% electricity and gas 0% transports and communication 4% accommodation and food services 4% financial services and insurance 2% real estate services 1% natural water and sewarege 1% manufacturing industry 29% construction 9% other services 28% wholesale and retail trade 15% roof primary sector 5% extractive sector 0% electricity and gas 0% transports and communication 3% accommodation and food services 4% financial services and insurance 2% real estate services 1% natural water and sewarege 0% manufacturing industry 14% construction 25% other services 28% wholesale and retail trade 18% facade primary sector 4% extractive sector 0% electricity and gas 0% transports and communication 4% accommodation and food services 4% financial services and insurance 2% real estate services 1% natural water and sewarege 1% manufacturing industry 13% construction 27% other services 27% wholesale and retail trade 18% figure 2: sectoral distribution of the total estimated employment effects for a single dwelling with four facades (considering 1000 m2 of useful floor space). 88 international journal of sustainable energy planning and management vol. 02 2014 a prospective analysis of the employment impacts of energy efficiency retrofit investment in the portuguese building stock by 2020 table 6: direct, indirect and induced job totals per each type of building and retrofit measure. retrofit direct jobs indirect jobs induced jobs total building function building type n° of facades investment (fte) (fte) (fte) (fte) residential single dwelling 4 window frame 214 178 375 768 (<1945) window glaze 127 107 198 432 facade insulation 293 274 527 1093 roof insulation 77 76 147 300 2 window frame 124 104 218 446 window glaze 74 62 115 251 facade insulation 170 159 306 636 roof insulation 77 76 147 300 apartment building, 4 window frame 525 437 921 1883 3 floors (1946–1990) window glaze 312 262 485 1059 facade insulation 402 375 722 1499 roof insulation 103 101 196 400 2 window frame 310 258 544 1111 window glaze 184 154 286 625 facade insulation 237 221 426 885 roof insulation 103 101 196 400 private services apartment building, 4 window frame 951 792 1669 3412 3 floors (<1945) window glaze 565 474 879 1919 facade insulation 226 212 407 845 roof insulation 61 60 116 237 table 5: accumulated useful floor area for each retrofit measure (1000 m2). building function building type windows facades roof residential single dwellings (<1945) 1687500 843750 843750 residential apartment building, 3 floors (1946 – 1990) 4668750 2334375 2334375 private services apartment building, 3 floors (<1945) 1000000 1000000 1000000 private services apartment building, 4 floors (1946 – 1990) 2500000 2500000 2500000 public services apartment building, 3 floors (<1945) 500000 500000 500000 public services apartment building 3 floors (1946 – 1990) 500000 500000 500000 windows public services apartment building, 3 floors (1946-1990) 5% residential single dwellings <45 15% residential apartment building, 3 floors (1946-1990) 43% private services apartment building, 3 floors (<1945) 9% public services apartment building, 3 floors (<1945) 5% private services apartment building, 4 floors (1946-1990) 23% facades and roof apartment building, 3 floors (1946-1990) 7% single dwelling, (<1945) 11% apartment building, 3 floors (<1945) 13% apartment building, 3 floors (1946-1990) 30% apartment building, 4 floors (1946-1990) 33% apartment building, 3 floors (<1945) 6% figure 3: assignment of retrofit investments according to the useful floor space. based on the portuguese energy balance [18] and on the i-o table derived in [24] we have also obtained the expected avoided imports of primary energy according to the electricity production mix of the base year for each international journal of sustainable energy planning and management vol. 02 2014 89 carla oliveira, dulce coelho and patrícia pereira da silva 400 386 energy savings (gwh) 350 300 250 200 150 100 50 0 window facade roof 339 112 350 334 energy savings (gwh) 300 250 200 150 100 50 0 window facade roof 339 112 table 7: energy reduction kwh/year/m2. roof window window+frame façade buildings <1945 65.00 30.50 43.30 156.30 buildings 1946–1990 65.00 43.10 50.50 28.70 glazed window replacement with or without frame substitution, except for older single dwellings where facade insulation has a higher contribution. this fact might be the result of the poor quality of the materials construction used in these older types of buildings. in order to obtain the possible negative impacts of energy efficiency savings on employment we have considered that the building heating and cooling systems are obtained from electric loads. this assumption does not comply with the recent building stock (particularly in the residential sector), but it is reasonable to assume that the building stock built before 1990 mainly uses electricity for space heating and cooling. the energy savings potential was computed through the consideration of the information provided in table 7 which is based on [27]. fig. 4 illustrates the total expected energy savings obtained for each retrofit measure taking into account the total heated area and the replacement of single by double glazed windows with and without frame replacement (upper side and lower side of fig. 4). the corresponding electricity saved at basic prices of 2008 would be approximately of 472 millions of euros (according to the data provided in the adjusted i-o matrix given in [24]). table 6: direct, indirect and induced job totals per each type of building and retrofit measure (continued). retrofit direct jobs indirect jobs induced jobs total building function building type n° of facades investment (fte) (fte) (fte) (fte) apartment building, 2 window frame 1327 1105 2329 4761 4 floors window glaze 789 662 1227 2677 (1946–1990) facade insulation 113 105 203 421 roof insulation 83 81 157 321 public services apartment building, 4 window frame 188 157 330 675 3 floors (<1945) window glaze 112 94 174 380 facade insulation 45 42 81 167 roof insulation 30 30 58 119 public services apartment building, 4 window frame 188 157 330 675 3 floors (1946–1990) window glaze 112 94 174 380 facade insulation 32 30 58 119 roof insulation 22 22 42 86 figure 4: expected energy savings in gwh per retrofit measure. retrofit measure, taking into account the total heated area and the replacement of single by double glazed windows with and without frame replacement (left hand side and right hand side of fig. 5). it is worth noting that only the direct impacts regarding the expected electricity savings have been herein considered. the computation of the avoided co2 emissions has been obtained by considering the average emission factor of 0.369 of t co2/mwh considered in [28], also taking into account the total heated area and the replacement of single by double glazed windows with and without frame replacement (left hand side and right hand side of fig. 6). in this case only the direct impacts were accounted for. the data depicted in table 8 was achieved considering a best and worst scenario regarding single glazed window replacement. on the upper side it can be observed the expected job generation with the replacement of single by double glazed windows and frames. on the lower side of this table, the expected job generation only with the replacement of single by double glazed window is presented. after analysing table 8 it is possible to conclude that the retrofit measures tackled in this study have a great potential in job generation creating much more jobs than 90 international journal of sustainable energy planning and management vol. 02 2014 a prospective analysis of the employment impacts of energy efficiency retrofit investment in the portuguese building stock by 2020 120000 100000 80000 60000 40000 20000 0 oil 47290 18599 29423 14329 energy (10ˆ3euros)energy (toe) 100404 avoided energy imports 94511 natural gas coal 8 100000 90000 80000 70000 60000 50000 30000 40000 20000 10000 0 oil 44333 17436 27583 13433 energy (10ˆ3euros)energy (toe) 94125 avoided energy imports 88600 natural gas coal 777 77 figure 5: avoided imports of primary energy in tonnes of oil equivalent (toe) and at purchaser prices (103 euros). 160000 142501 avoided co2 emissions (t) 140000 120000 100000 80000 60000 40000 20000 0 window facade roof 125188 41394 140000 123171 avoided co2 emissions (t) 120000 100000 80000 60000 40000 20000 0 window facade roof 125188 41394 figure 6: avoided co2 emissions per retrofit measure in tonnes (t). table 8: net job creation until 2020 considering windows with or without frame replacement. job job net job creation destruction creation direct jobs 5902 359 5543 indirect jobs 5155 2824 2331 induced jobs 10503 5426 5076 total jobs 21561 8609 12951 average jobs/year 1960 783 1177 direct jobs 4348 337 4012 indirect jobs 3875 2647 1228 induced jobs 7326 5087 2239 total jobs 15550 8071 7479 average jobs/year 1414 734 680 the expected destruction by the energy savings accomplished. nevertheless, it is worth noting that the rebound effect was not handled in this study. 6. conclusions the main purpose of this study was to assess the impact of four specific energy efficiency retrofit measures on direct, indirect and induced jobs in several types of buildings, representing 71% of the building stock in portugal. the measures chosen to perform the analysis involved the thermal insulation of roof and the opaque facades and the replacement of the existing glazed windows with more efficient ones. the difference of the results obtained by considering the replacement of frames in windows was slightly different regarding the opposite option. the first option allowed for lower levels of energy consumption and also higher levels of net job generation. this situation occurs because of the higher investment required for the implementation of this measure. regarding the destruction of employment, both situations are identical although the first one generates slighter negative impacts. the target buildings belong to the residential, private services and public sectors and have been constructed before 1990, the year of the enactment of the first portuguese regulation related to thermal performance of buildings. this study also highlights that energy efficiency investments have advantages over a set of other climatic alternatives, namely the increase of energy security and higher social benefits, because the electricity bill can be reduced, higher comfort levels can be attained and also because of its positive net impact on employment generation, what is in accordance with current european, and namely portuguese, energy policy. future work is currently under way in order to encompass other impacts of energy efficiency measures which allow providing a broader view of the employment effects of a global energy conservation plan for portugal, combined with information on total energy savings directly and indirectly linked to this energy conservation plan; the corresponding effects on the portuguese balance of payment as a consequence of that plan, eventual policy suggestions for its implementation and, finally, the estimation of the state budget effects, including positive effects of increased employment and increased incomes and reduced unemployment payments. acknowledgments the authors would 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 24 2019 115 *corresponding author e-mail: ivan.dochev@hcu-hamburg.de international journal of sustainable energy planning and management vol. 24 2019 115–124 research and experimentation abstract because of the physical properties of heat energy, information about the spatial pattern of building heat demand is important for designing climate protection measures in the heating sector (efficiency improvements and renewable energy integration). many cities in germany currently prepare ‘heat demand cadastres’ – thematic maps, depicting building heat demand. the growing trend towards open data points into the direction of making these cadastres public, so that different actors can make use of them. however, making such data public may violate the legal requirement of protecting private data. we present a way of tackling this problem with an approach for the aggregation of spatially represented heat demand. using an algorithm based on graph theory, we group buildings such that the tracing of energetic characteristics and behaviour to individuals is rendered unfeasible. our method also allows additional constraints to be introduced, for example, aggregating with respect to plot boundaries. we discuss how the building groups can be visualised in a map by presenting a method of generating customised geometries for each group. finally, we present a visualisation of both specific heat demand (in kwh/(m2*a)) and total heat demand (in kwh/a) in one and the same map. this aids the analysis of more complex questions involving energy efficiency and heat supply. local and their utilisation also requires understanding the spatial patterns of demand and supply. at the same time the need for more cooperation and coordination between public and private actors in urban planning as defined for example in the copenhagen charter [2] has caused spatial data to be made increasingly public. there are currently many examples of municipal and regional authorities that operate geoportals allowing open access to numerous spatial datasets natural environment, built environment, technical and transport infrastructure and many more. this trend has also reached the energy sector with the introduction of publicly accessible energy-relevant datasets on both the supply and the demand side – e.g., solar or geothermal energy potentials but also building energy demand maps. spatial aggregation and visualisation of urban heat demand using graph theory. an example from hamburg, germany ivan dochev*, hannes seller and irene peters hafencity university hamburg, überseeallee 16, 20457 hamburg keywords: urban heat demand; data protection; aggregation; graph theory; visualisation; url: http://doi.org/10.5278/ijsepm.3346 1. introduction the building sector is a large contributor to co2 emissions (in the higher latitudes mainly through space heating). reducing these emissions through energetic refurbishing of buildings and integration of renewable energy sources has become a major focus of climate protection policy. so-called “urban building energy models” (ubems) [1] are being developed to support these measures. with the use of gis, these models become spatial models, allowing the visualisation of the spatial pattern of heat demand in thematic maps, or “heat demand cadastres”. space is of the essence in heat planning as heat transport (distribution grids) is traditionally associated with losses and costs. renewable energy sources, on the other hand, are in many cases http://ivan.dochev http://hcu-hamburg.de http://doi.org/10.5278/ijsepm.3346 116 international journal of sustainable energy planning and management vol. 24 2019 spatial aggregation and visualisation of urban heat demand using graph theory. an example from hamburg, germany mapping is to support planning. for strategic energy planning at the city level, the size of the aggregation units may be less important. however, for the concrete planning of individual projects, a finely grained heat demand map is very useful, even necessary, as the location of energy sources in relation to energy sinks is a major criterion for project viability. additionally, data at a coarser spatial level run into averaging-out effects that mask spatial variability. to avoid this, we set a requirement to aggregate only until the minimum data protection requirement was achieved. in addition, heat demand maps greatly facilitate the analysis of potential for district heating, which is considered a key technology for a sustainable heat supply in urban contexts with a high share of a relatively inefficient building stock. since district heating infrastructure tends to follow the street network of a city, the method presented here respects the street layout of a city. it goes without saying that the aggregation should partition the urban space, i.e. form groups that do not spatially overlap, as this would counteract the consideration of the intrinsically local nature of heat energy. finally, aggregation in thematic maps can be split into two distinct tasks – defining the aggregated groups and defining the geometry to represent them, the latter being a non-trivial issue. the requirements for the algorithm were then: (i) grouping buildings to satisfy a minimum unit count, (ii) optimising unit count to make it as close to the required minimum as possible, (iii) producing spatially non-overlapping groups that respect the street layout, and (iv) generating a geometry for each individual group. 2. state of the art the easiest way of approaching the aggregation task is to use existing spatial units like census tracts, postal code areas or similar. however, all of these units are predefined which lowers the flexibility of the aggregation and does not satisfy (ii). the “urban block” unit (the areas in-between the street network) comes close to satisfying all requirements for aggregation. urban blocks however, energy consumption and demand reflect personal behaviour as well as the condition of property such as buildings (which to a large extent are privately owned). therefore, a potential conflict arises between the need for open data and the need for personal data protection. different countries and authorities go about this issue in different ways. we concentrate on the case of germany, where data protection requirements in this context are relatively strict. the context in which this paper originated was our work on the gewiss project hamburg [3] and our cooperation with the hamburg ministry of environment and energy (behörde für umwelt und energie bue) in developing the hamburg “heat demand cadastre” (wärmekataster), which was published in 2017. the cadastre is a thematic map depicting demand for space heating and hot water. it is based on consumption corrected heat demand values from the iwu typology [4] and the german vdi standard [5]. see [6] for methodological details since many buildings are privately owned, however, the cadastre had to adhere to data protection requirements. even though the heat demand at the building level was only estimated based on the type and age of the building (no measured consumption), it could not be released as it was, but had to undergo aggregation. the aggregation requirement defined by the bue states that aggregated building groups had to include a minimum of five units. a unit in a residential building is the dwelling unit, while each non-residential itself comprises a single unit. this definition raises some questions, in particular who is to be protected: individuals in their function of building users or real estate property owners? while this is still to be explored, we developed a method for performing the required aggregation, which provides the flexibility to be adjusted for alternative formulations of the aggregation criterion that might be developed in the future (e.g., a change in the minimum required count for each group). we also added some further requirements to increase the usability of the cadastre. the purpose of heat demand acknowledgement of value solving the data protection issue when developing the hamburg heat demand cadastre proved to be much less trivial and more practically difficult than we expected. the presented aggregation method is what we currently use, without it, we would not have been able to publish the cadastre in its current form. mr. roland schwörer, renewable energy– heat concepts, hamburg ministry of environment and energy international journal of sustainable energy planning and management vol. 24 2019 117 ivan dochev, hannes seller and irene peters two, as a pre-step to cartographic generalisation. data protection could fall into the second category, but we could not locate examples for this in the context of urban energy mapping. there is however a body of literature on spatial grouping and generalisation of objects. yan et al [16] propose using delaunay triangulation to describe adjacency relations, filter the connecting triangles and then calculate building parameters (size, orientation, shape) to arrive at building groups. wang and eick [17] use a contour-line based density algorithm to derive polygons from point objects and then a poly-snn algorithm to cluster the polygons into new polygons. beilschmidt el al [18] use a quadtree for the description and fast query of adjacent points. in a similar context to beilschmidt but using delaunay triangulation is the work by jänicke el a. [19]. most of these works were designed in the different, broader, context of point aggregation. the closest to our work is the work by yan et al, but the specifics of our context – finding a balance between map usability for energy planning and data protection – led to differences in the method. 4. methodology 4.1. number of units per building adhering to the “five plus” rule is not a straightforward task, since the digital cadastre of hamburg (alkis) does not contain number of dwelling units per building. therefore, we need to estimate this value. we intentionally underestimate the unit counts, to err on the side of caution, avoiding the cases where our estimation is too high and a building group is presented as having more than five units, when in reality it has less. we use the number of stories of the building as a proxy for the number of dwellings assuming that there is at least one dwelling per floor. these assumptions are summarised in table 1. it is obvious that this leads to an underestimation for most of the buildings, but it is a precaution that serves to make our algorithm safer. per definition follow the street layout (iii) and have a known geometry already made available by the public authorities of hamburg (iv). a further argument for their use is that some official data, mainly about demography, is available at this level. having energetic data at an aggregation level which corresponds to an official unit of governmental statistics allows for multi-sectoral analysis (for example analysing connections between heat demand and socio-demographic data). although the urban block only partially satisfies requirements (i) and (ii), we use it as a starting point of our aggregation. an alternative to existing spatial units is the use of a raster grid. the first problem with this approach is that the resulting groups depend on the raster grid position. shifting the grid around in the cartesian plane would change the content of each cell. in other words, the allocation of a building to a cell is arbitrary and depends upon the initial position of the raster. a further problem is that it does not satisfy the requirements for having as few units as possible (ii) and following the street layout condition (iii). note that we do not consider our task to be a “clustering” task in the normal sense. cluster algorithms, although a broad group of algorithms, are generally designed to optimize for within-group homogeneity and between-group heterogeneity and have an exploratory character. our task was not exploratory. we had to first group in such a way that each group has a minimum size, while having homogeneous groups (“clustering”) was a secondary objective. the difference is subtle. an example is the standard “k-means” method. it requires a desired number of clusters as input, while we needed a desired minimum count within the clusters. 3. literature review in the area of energy planning, the focus is increasingly on the spatial dimension of consumption and generation and numerous tools are being developed for simulation and optimization at local levels [7–11]. simultaneously, as decentralized generation leads to the emergence of “prosumers”, ict allows for new forms of public participation [12–14]. in cartography, the problem of building aggregation is part of the broader map generalisation problems. weibel and jones [15] summarise that there are two forms of generalisation – one is cartographic, where the goal is high quality map symbology at different scales and database generalisation, with the goal of deriving reduced databases for storage or computational efficiency, and table 1: rules for estimating the number of units per building building use floors estimated units residential and mixed-use with residential 1 to 3 1 3 to 5 3 >5 number of floors non-residential any 1 any building use without heat demand any not considered for aggregation 118 international journal of sustainable energy planning and management vol. 24 2019 spatial aggregation and visualisation of urban heat demand using graph theory. an example from hamburg, germany buildings. we present the method by means of an example urban block (figure 1). in a first step, we compute all the distances between all pairs of buildings in the urban block. let this be represented by a complete graph g, where each node is a building and each edge is the straight line between all pairs of two buildings. from graph g, using the scipy python library implementation [20] of kruskal’s algorithm [21], we compute a minimum spanning tree (mst). a mst is such a subtree of g, that spans all the nodes of g and has a total edge length that is minimal compared to all other subtrees of g that span all the nodes of g. the mst is represented with red lines (edges) in figure 1 (left). describing the buildings with their mst is advantageous because now we can group by removing edges from the mst (figure 1 centre). we remove the edges based on their length, starting from the longest. if removing an edge leads to a connected component (group) that is below the minimum dwelling count, we restore the edge and proceed to the next edge. after we have iterated over all the edges we give a unique identification number (id) to each connected component. since there are five groups in the example (the small building in the west is an exception, see below) the ids are from zero to four (due to python’s zero indexing, see figure 2). we then append the id to the urban block identifier of each building within the same component. which group receives which id is irrelevant as long as the ids are unique and the groups are defined. in this way, we define the building groups. although this is the basic logic of the grouping, we introduce two additional rules. firstly, for the purpose of neighbourhood energy planning, well-defined building complexes 4.2. defining the building groups since the urban block satisfies many of the defined requirements, we start at this spatial unit. although most urban blocks contain more than five units, there are a few exceptions. we deal with these by manually merging these few urban blocks with neighbouring ones. urban blocks with less than five units and very small heat demand are filtered out. we could tackle this in an automated way, but since these exceptions are few and far between, we leave this as a manual step prior to running the algorithm. the idea is to partition the urban block into building groups with a unit count as close as possible to the minimum required. firstly, all buildings receive an id corresponding to the id of the urban block (for example “710005”). then we group within the urban block by appending an additional integer to the urban block id – “710005_1”, “710005_2” etc. the problem then lies in generating the additional ids in a meaningful way that respects the requirements. there are two obvious possibilities – to group spatially or based on building function. for energy planning, a grouping based on function makes sense, since buildings with different functions have different typical demands and load curves etc. and summary statistics for a group of homogenous buildings are more meaningful. however, this will impede the use of the map, since it is visually difficult to represent spatially intertwining groups of buildings (this is why we have requirement of spatial non-overlap (iii)). for this reason, we group spatially. however, we respect plot boundaries, which tend to encompass buildings of similar use in many cases (see below). in order to produce spatially clustered groups, we need to describe the spatial relationships between figure 1: splitting the minimum spanning tree of the urban block into spatially well-distinguishable groups. red lines depict the edges of the mst, blue lines the edges that were removed during the aggregation process international journal of sustainable energy planning and management vol. 24 2019 119 ivan dochev, hannes seller and irene peters “anonymised”. the behaviour of the algorithm is dependent upon a parameter, which controls how small and how far away does a building have to be to be excluded. consult the github repository for more details [22] . 4.3. creating geometry representation after all buildings in the urban block receive a group id (or are anonymised) the question remains how to present their heat demand. for specific heat demand (i.e. per m²) at the group level we use the area-weighted average of the specific heat demand [kwh/(m²*a)]. one way of spatially representing this value is to use the existing building geometries and symbolise each with the colour that reflects the specific heat demand of the building group (figure 2). the problem is that from the viewpoint of the map user it is difficult to understand that the colours refer to values for the groups and not for the individual buildings. this can be written in the legend, however it is not directly visible. moreover, when groups have similar values one cannot distinguish which buildings are in which group (for example between 710005_4 and 710005_2). labelling each group (figure 3. left) does not help to overcome this. labelling each building (figure 3. right) does, but it overloads the map with annotations. an alternative to the building geometry is to use the plot geometry, but plots come in various shapes and sizes and using them as basis fails in areas where there is a single building in a large plot. therefore, we generate a custom-made group geometry. we use an approximation of a concave hull using a combination of two polygon buffers. this approach is of similar use (e.g. large prefabricated apartment blocks, hospital complexes or school campuses) are of great importance, since they are large consumers and can play a role as “anchors” for district heating. therefore, it would be advantageous to attempt to group the individual buildings in these complexes into the same building groups. attempting to cluster only spatially will not take this into account in many cases. we use the plot boundaries as a proxy for finding such complexes. for this, we apply an initial re-weighting to the complete graph g. we multiply the distance between two buildings in the same plot with a factor of 0.05. in this way, the mst algorithm considers such edges as being shorter than they truly are and are more often part of the mst. when we then sort the edges based on length, these edges are further down in the list and are less often split. since building functions generally follow plot boundaries (school or hospital buildings, but also industrial buildings of similar use are usually within the same plot), the algorithm will tend to put them in the same group, although the purely spatial logic might dictate something else. the second adjustment to the splitting logic is the introduction of a maximum distance between the buildings in a group. there are situations in urban space, where a single building is in a highly isolated location even within an urban block a small hut within a park complex, or a small workshop in agricultural land on the outskirts of a city. since such buildings often are irrelevant to the purpose of the mapping (heat demand), the algorithm may split them from a group and note them as figure 2: building groups represented with building geometries 120 international journal of sustainable energy planning and management vol. 24 2019 spatial aggregation and visualisation of urban heat demand using graph theory. an example from hamburg, germany energy efficiency) and total heat demand in kwh/a (or mwh/a). while heat loads, heating system types, heating system temperatures or building refurbishment state can also be of interest, we concentrate on the specific and total heat demands, as the most widely depicted in heat demand maps. if we use the typical coloured filling for symbolising the groups (figure 4 left), we run into the same issue as the plot representation – if buildings are far away from each other, the polygon will be big and noticeable, but its size is actually irrelevant. the purpose of the polygon representation of the building group is to represent the buildings’ characteristics and designate which buildings are in which group. the size of the polygon however is not in any way a function of any heat demand related characteristics. buildings with very large footprint areas will have a large polygon representation, but so will small buildings with large distances in-between. in order referred to as “aggregate polygons” available as sql code at github [23]. although we do not use the code itself, we adopt its approach. in essence the method buffers each building geometry outwards at a given distance and dissolves the overlapping polygons to produce a single buffer (figure 3). then a second buffer is generated, but with negative distance, which means it buffers inwards from the previous buffer. in the process the areas in-between buildings become parts of the buffer area. the orthogonality of the geometry representation stems from the buffer options. we use a “metre limit” of 2.5 meters, as in [23]. the options for the buffer generation are part of the buffer class of the geos library [24]. 4.3. visualisation there are generally two numeric heat demand characteristics that are used in our context – specific heat demand in kwh/(m²*a) (which can be interpreted as a measure of figure 3: geometry representation with two buffers. see [23] figure 4: visualising aggregated final energy heat demand (final energy) kwh/(m2*a) <50 50 – 100 100 – 150 150 – 200 >200 heat demand (final energy) kwh/(m2*a) gwh/a <50 50 – 100 100 – 150 150 – 200 >200 <0.5 0.5 – 5 international journal of sustainable energy planning and management vol. 24 2019 121 ivan dochev, hannes seller and irene peters distinguishable. an important point is to adjust for colour blindness, but this would require changing the basic green-yellow-red palette. this adjustment is beyond the scope of this paper. 4.5. software used the presented algorithm was written in python using the numpy [26], scipy [20] and shapely [27] libraries and the pyqgis library of the open-source gis software qgis [28]. we used qgis also for the visualisations. the code is available on github[22]. 5. results we applied the described methods to a dataset of 300 000 buildings (residential and non-residential) in the city of hamburg. the algorithm produced 40 000 building groups. the size of the groups was between five and nine units. we use the geometry representation and the visualisation approach to produce figure 5. we use a digital orthophoto [29] as background map. to avoid giving visual significance to the size of the polygon, we use only its outline (figure 4 right). we colour the outline based on specific heat demand and additionally adjust its thickness as function of the total heat demand. this has the advantage that it allows a more integrated analysis of heat demand. for example, it allows the quick visual localisation of large ‘heat sinks’ with low or high energy efficiency. this is advantageous for planning since it points towards appropriate measures. for example, a large heat sink with low specific heat demand is likely a target for renewable heat supply, while a large heat sink with high specific heat demand is likely first a target for an increase of efficiency through energetic refurbishment. for the colour scheme, we use an already relatively known colour scheme in germany – the green yellow-red colour gradient of the energy certificates according to the energy efficiency ordinance in germany (enev) [25]. we adjust the tone, depending upon the background map and reclassify the scale into 50 kwh/(m²*a) bins, to make the classes more figure 5: proposed visualisation of the aggregated heat demand (building groups). background map: [29] 122 international journal of sustainable energy planning and management vol. 24 2019 spatial 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_ctvl001bf60f671f5de464f838e6fba7750a57a _ctvl00163097cf9fe1442798041aec39bb17bc3 _ctvl0013293e725ad4a4c2a8ade0d6fac96450f _ctvl00104219f09036d4d26b0d7181860b47a17 _ctvl001b0ad194b6a844210a707184f098c2045 _ctvl001360eb89f5dbb4b039132a5342ec62598 _ctvl001d7871a7d32234a3989911aaa1e6cd78c _ctvl001f37820aac7804c7188eab10402297036 _ctvl0019251c6a6d9f940ab89667f057ffb5027 _ctvl0017bcd5066b2154e6db0f0802f111f31b5 _ctvl001298e11c812524a5fabf6318ffdd6a697 _ctvl0019434308510194c2383ac125d70e0146a _ctvl001b8e93969e717447588d0879f3a924647 _ctvl0014fedf48d33834f9a96b66423fb324028 _ctvl00144f9a733a526480792223791576a99d0 _ctvl00170427a8048274765a311f093e29b2617 _ctvl001360afcf03c884215a9f6c4d7d93c1251 _ctvl001b295f03c4d24482cb10f6717a3689077 international journal of sustainable energy planning and management vol. 19 2019 13 international journal of sustainable energy planning and management vol. 19 2019 13–28 1corresponding author e-mail: ebhotawilliams1@yahoo.com abstract this study overviews the power status, salient barriers to adequate power access and the role of small hydropower in improving power accessibility in the region. the study notes that – over 50% of the population in 41 countries in the region have no access to electricity; the prediction of electricity access growth rate in ssa from 43% in 2016 to 59% in 2030; about 607 people, which is 90% of world’s population without access to electricity in 2030 will leave in the region and the rural areas access is below 20%; over 90% of the households in about 25 countries of ssa rely on waste, wood, and charcoal for cooking; the average grid power tariff in ssa is us$0.13 per kwh as against the range of us$0.04 to us$0.08 per kwh grid power tariffs in most parts of the developing world. also, it was found that the sections of power supply system – generation, transmission and distribution facilities are affected by insufficient funding, poor maintenance and management and over dependence on foreign power supply technologies; and the region is endowed with huge shp resource that is insignificantly tapped. lack of workable shp development framework; insufficient fund; effect of the electricity market in the region; lack of effective synergy among the stakeholders; insufficient and outdated hydrological information about shp resources; inadequate human and manufacturing facility development were the identified factors responsible for shp underdevelopment. domestic development of shp technology is required to effectively develop shp to improve access to power in the region. this will require massive human capacity building and the use of locally soured materials and production facilities. 1. introduction energy poverty poses a serious obstacle to the socioeconomic development of sub-saharan africa (ssa). the power situation in sub-saharan africa (ssa) is in a pathetic state despite several intervention measures [1]. the challenges that trail the power sector in the region seem as fresh as they were two decades ago and even deepened in some areas. the level of energy inadequacy in the region negates the longstanding efforts to change the narrative. truly, this is heart breaking considering the resources and efforts that have been expended. the electricity access rates of most countries in the region are about 20% and twothird of the population lack access to modern energy services. the population without access to electricity by region, is shown in fig 1. the electricity demanded by the region, from 2000 to 2012, increased by 35% to reach 352 twh and an average rate of 4% annual electricity demand increase is expected through 2040. in 2017, the international energy agency (iea) reported that [2]: electricity access rate in ssa will grow from 43% in 2016 to 59% in 2030; and about 607 people, which is 90% of world’s population without access to electricity in 2030 will leave in the region. power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa williams saturday ebhota* department of mechanical engineering, durban university of technology, steve biko road, durban, south africa. keywords: small hydropower; power; turbine design; pelton turbine; propeller turbine; sub-saharan africa; url:: http://dx.doi.org/10.5278/ijsepm.2019.19.3 http://dx.doi.org/10.5278/ijsepm.2019.19 14 international journal of sustainable energy planning and management vol. 19 2019 power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa the residential sector average annual electricity consumption is about 488 kwh per capita, which equals only about 5% of the united states consumption [3]. additional information about electricity in ssa are as follows:  the region shares 13% of the world’s population but accounts for only 4% of the world’s energy demands.  the total grid-connected power generation capacity in 48 countries in ssa is about 83 gw with south africa accounting for 50%, generated mostly from coal [4].  only 13 countries in ssa have power systems capacities over 1 gw. these account for over 80% of the power capacity in ssa. while 27 countries have their grid-connected power systems less than 500 mw, 14 countries are below 100 mw [5].  the installed capacity in ssa is 44 mw per a million people [5].  the wide range of electricity generating sources in ssa include [2]; renewable energies contribute (hydropower-22%, solar-1% and others, such as biomass, geothermal and wind -3%); fossil fuel (natural gas-15%, diesel/heavy fuel-23%, and coal-35%) and nuclear energy contributes 1%. power infrastructural development in emerging economies attracts international investments, supports and aids because of the dominant role access to electricity plays in the socioeconomic development of a country or region. sadly, these interventions and supports are yet to give the expected results in some regions especially in the southern india and ssa. several research, review and opinion articles have been published on this and how energy can be provided to meet the demands [6-13]. these papers are often similar and at times with different approach for different countries and regions. hence, this study will examine power access, to identify issues bordering on power access, the deployment of fossil fuel in ssa and their health consequences. the economic significance of the exploitation of small hydropower (shp) in ssa and the various ways of developing shp systems to change the narrative of power inadequacy will be presented. 2. methodology the present power issues in ssa in terms of accessibility, causes and consequences of inadequate access to energy will be examined. the study will take a look at the various sources of energy in the region, drawbacks of fossil fuels and the expected attributes of modern energy systems. further, considerations will be given to the role of shp in meeting greater power accessibility in the region and the attributes of modern energy systems that will promote the reduction of ghg emissions. the study will rely on centred on quantitative information and data taken from text books, government documents, published research articles, verified websites, news media, thesis, local and international organisations’ reports and outlooks on power accessibility in ssa. the international organisations include international renewable energy agency (irena), united nations (un), world bank, ren21, international energy agency (iea), and world energy council (wec). the systematic steps and the layout of this study are shown in fig 2. 700 m ill io n p e o p le 600 500 400 300 200 100 2000 2000 1600 2000 sub-saharan africa india southeast asia other developing asia other 2010 2016 1200 800 400 2004 2008 2012 2016 figure 1: population without access to electricity by region [2] international journal of sustainable energy planning and management vol. 19 2019 15 williams saturday ebhota the households in about 25 countries in ssa rely on waste, wood, and charcoal for cooking. the share of the population that primarily rely on different cooking fuels by region are shown in fig 4. 3.3. greenhouse gases (ghg) emissions the traditional practice of cooking with biomass coupled with the use of fossil fuel gave rise to drudgery, fires, burns, ghg emissions, poisoning, economic prosperity impediment, and respiratory diseases leading to premature death in the region. population without access to electricity and clean energy for cooking across the ssa, are shown in fig 5 (a) and 5 (b), respectively [2]. the framework convention on climate change (unfccc) of the united nations has recognised the challenge of greenhouse gases (ghg). the goal of the convention is to stabilise ghg concentrations to a level that would prevent hazardous anthropogenic meddling with the climatic condition of the atmosphere [17]. the world’s co2 emissions from fuel combustion -1971 to 2016 and world’s co2 emissions from fuel combustion 1971 to 2016 by region measured in metric tons of co2 equivalent (mtco2) are shown in fig 6. the use of energy was reported to be the highest source of ghg due to co2 emissions, a by-product of fossil fuel combustion. coal accounts for 29% of the 3. electricity production, access, and consumption in ssa 3.1. electricity access the type of energy resource available for electricity generation in a region determines the source of power supply for the region to access. this section (subsections 3.1 to 3.3) takes a look at the share of ssa in the world’s total primary energy supply (tpes), fossil fuel deployment and greenhouse gases emissions and electricity access the international renewable energy agency (irena) reported in 2012 that the average rate of electrification in ssa is about 35%. it added that the situation is worse in the rural areas which were below 20%. further, over 50% of the population in 41 countries in the region had no access to electricity [14]. the region’s share of the world totals primary energy supply (tpes) is very small, as shown in fig 3. although one billion sub-saharan africans are expected to have access to electricity in 2040, about 530 million people will lack access, especially in the remote areas [15]. 3.2. fossil fuel and biomass developing asia and ssa dominate the over 2.8 billion people, which is about 38% of the global population, that lack access to clean cooking energy. over 90% of te ra jo ul e (t j) 0 84 167 251 335 419 502 586 670 1990 1995 2000 2005 2010 2015 americas europe asia africa oceania bunkers figure 3: world tpes (tj) from 1990 to 2016 by geographical region [16] ssa power status summary common causes of inadequate power supply sources of power fossil fuels and ghg emissions delivery of modern energy systems shp and is significance in ssa figure 2: the layout of this study 16 international journal of sustainable energy planning and management vol. 19 2019 power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa amongst africa’s major forms of fuel for power generation, coal emits the highest ghg while hydro produces an insignificant amount, as represented in fig 8 (a). in 2015, electricity and heat generation emitted about two-thirds of global co2 emissions which is about 42%, while transport accounts for 23% as illustrated in fig 8 (b). although the use of renewable energy has gained ground in ssa, the region still global tpes but represents 44% of the world co2 emissions while carbon-neutral fuels represent 18% of tpes [19] (fig 7 (a)). greenhouse gas emissions in 2012 decreased in north america (-3.7 %), annex ii europe (-0.5 %) and annex i eit (-0.8 %), but increased in china (3.1%), africa (5.6%), asia excluding china (4.9%) and the middle east (4.5%) as represented by fig 7 (b). mena latin america indonesia china india other developing asia sub-saharan africa developing countries developed countries 0% 50% 100% 0% 50% 100% solid fuel lpg and natural gas electricity otherkerosene 20152000 figure 4: share of population with that primarily rely on various cooking fuels by region [2] million 0.1 1 10 10...100 million 0.1 1 10 10...100 (a) (b) figure 5 [2]: (a) population without access to electricity; (b) clean energy for cooking across 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1971 1975 1980 1985 1990 1995 2000 2005 2010 2016 (a) 1971 1975 1980 1985 1990 1995 2000 2005 2010 2016 (b) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 coal oil natural gas other oecd china non-oecd americas non-oecd asia bunkersmiddle east non-oecd europe and eurasia africa figure 6 [18]: world co2 emissions from fuel combustion -1971 to 2016; (b) world co2 emissions from fuel combustion 1971 to 2016 by region international journal of sustainable energy planning and management vol. 19 2019 17 williams saturday ebhota cient power generation, transmission and distribution infrastructure [21]. industries and others electricity users in the region that are connected to the power grid experience an average of 56 days of power outage annually and this represents 15% darkness yearly [22]. consequently, firms lose 6% of sales revenues in the informal sector. the losses can be as high as 20% where back-up generation is inadequate [23]. hence, the region is in desperate need of power for socioeconomic growth [22, 23]. due to the inadequate installed capacity, there is low energy consumption [24] and access, as a result, the commercial sector is compelled to deploy expensive generators. these generators serve as backup power suppliers and in some cases the only sources of electricity. substantially relies on fossil fuel for electricity and heat generation global total primary energy supply (tpes) demand, which depends mainly on fossil fuels, doubled from 1971 to 2012, as depicted in fig 9 [20]. according to iea, a further increase is expected in the use of fossil fuel through to 2030 in the new policies scenario [2], as shown in fig 9 (b) and this will result to co2 emissions increase. 4. inadequate power supply impacts on the economy: high cost of running a business in ssa the economy of ssa is starving of energy due to gross inadequate access to electricity resulting from insuffi 35% 32% 44% 29% 20% 21% 18% 1% 0% 20% 40% 60% 80% 100% (a) percent share tpes co2 oil coal gas other* 6% 4% 2% 0% -2% -4% w or ld a fri ca a si a ex cl ud in g c hi na m id dl e ea st la tin a m er ic a c hi na * a nn ex ll a si a o ce an ia o th er a nn ex ll e ur op e a nn ex i ei t a nn ex ii n or th a m er ic a % ch an ge (b) figure 7: (a) global primary energy supply and co2 emissions; change in co2 emissions by region (2011-2012) [17] 1990 2015 m ill io n to nn es o f c o 2 1200 1000 800 600 400 200 0 1971 1980 1990 2000 2010 2015 oilcoal gas other m ill io n to nn es o f c o 2 1200 1000 800 600 400 200 0 1971 1980 1990 2000 2010 2015 manuf. ind. and construction electricity and heat residential transport other energy industries other 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% figure 8: (a) co2 emissions by fuel: (b) co2 emissions by sector [18] 18 international journal of sustainable energy planning and management vol. 19 2019 power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa sufficient electricity to meet the demand, as required by the growing population and urbanisation and for economic growth. the region’s total installed capacity without south africa (sa) is about 80 gw and this is equivalent to that of the republic of korea and one tenth of latin america. south africa generates around 40 gw while nigeria which is over three times sa’s population, generates only 7% of sa generation capacity. the factors responsible for power supply inadequacy in ssa are numerous and there are peculiarities and differences in these factors amongst the countries of ssa. these limitations are found in the main sections of a power supply system – generation, transmission and distribution. across the region, facilities in these sections are experiencing insufficient funding, poor maintenance and management and over dependence on foreign power supply technologies and assistance, these have been identified by studies [30–33]. other common factors are under developed manufacturing infrastructure, the exorbitant cost of power projects and under developed human capacity in the power sector[34]. this section, therefore, identifies and discusses the key factors that are responsible for ssa power access inadequacy in subsection 5.1 to 5.3. 5.1. power supply facility the chronic electricity shortages coupled with insufficient transmission and distribution networks are fundamentally the causes of inadequate electricity access and consumption in most countries in ssa. many countries in ssa do not generate enough electricity to distribute to the populace and the little generated does not wholly get to the users. a large amount of power is lost along the transmission lines due to sub-standard, and maintenance of power transmission and distribution facilities issues. across the entire region, step down and the step up transformers are nigeria has the largest number of diesel and petrol power generating sets market in africa with a promising growth of 8.7% [25]. the power generators importation, mainly from china, germany and the united kingdom to nigeria is expected to grow from $450 million in 2011 to about $950.7 million by 2020 [26]. although these generators are reliable, they run on fossil fuels (diesel and petrol) and this comes with consequences. these include air pollution and the high cost of doing business as the use of diesel or petrol generator costs about three times more than grid based supply. annually, over $22 billion ($149 million for diesel, and $703 million for petrol) is spent on fuel for dedicated electric generators in nigeria and this was described as the highest in the world [2, 27]. the average grid power tariff in ssa is us$0.13 per kwh as against the range of us$0.04 to us$0.08 per kwh grid power tariffs in most parts of the developing world [23, 28]. the estimated cost of power generated by diesel generating set is us$0.25/kwh [29]. the deployment of a generator for manufacturing impacts hugely on the production costs and air pollution, making businesses that operate in ssa with much higher running costs than their equals elsewhere. this holds for businesses across all sectors, such as telecommunication, manufacturing, bank, agricultural and business services. there is a direct correlation between the use of generators and emissions gases because the generators burn fossil fuel, either diesel or petrol, and emit a lot of ghg and pollutants to the atmosphere. 5. salient causes of inadequate electricity access according to the world bank, the power systems infrastructure in the region cannot adequately generate gtoe 14 12 10 8 6 4 2 0 fossil non fossil (a) 2016 122gw 86% 82% 14% 18% coal gas oil nuclear hydro solar pv other renewables (b) 1971 2012 2030 253gw 7% 21% 18% 12% 25% 16% 22% 35% 15%23% 1% 3% 1% 1% figure 9: (a) world tpes [17]; (b) installed power generation capacity in ssa by fuel in the new policiea s scenario [2] http://0.25/kwh international journal of sustainable energy planning and management vol. 19 2019 19 williams saturday ebhota figure 10: half-hazard distribution line often undersized, under service, sub-standard and overload. the power distribution cables or wires also experience the same technical issues and in many cases are in terrible forms, as shown in fig 10. however, the situation is different in sa, as everything regarding power distribution cables in most cities seems to be right. this is one of the reasons that make sa accounts for 50% of the total power generated in the region. 5.2. providing power sector investment funds the power sector in ssa is receiving attention from both national and international players resulting in huge investments. many power projects have been executed and several others are still on going and table 1 presents significant power installations in 2013. the estimated annual investment required to adequately boost power access is $40.8 billion, which is equivalent to 6.35% of africa’s gdp [5]. government alone cannot bridge this large financial gap. hence, the government-private partnership is needed to provide a substantial proportion of the fund needed under a longterm power purchase agreements (ppas). if the investments in power generation, transmission, and distribution components are not stepped up, over 670 million people will lack access to electricity in subsaharan africa by 2030. 5.3. ineffective reforms since 2006, power sector reforms have been enacted in over 80% of ssa countries, this includes about 75% and 66% countries having their power sector privatised and table 1: power generation installed capacity and gross domestic product (gdp), 2013 [5] gdp (purchasing power country capacity (mw) parity, ppp), 2013 nigeria 7,044 972.65 sudan 3,038 153.09 ghana 2,812 103.65 congo, dem. rep. 2,444 50.47 mozambique 2,382 28.40 ethiopia 2,094 129.86 zambia 1,985 57.07 zimbabwe 1,970 25.92 kenya 1,766 124.02 tanzania 1,659 117.66 côte d’ivoire 1,521 65.55 angola 1,509 166.11 cameroon 1,238 69.98 corporatized state-owned utilities, respectively [33]. the utility performance continues to be dwindling despite the reform measures. 6. delivery of modern energy systems to ssa the challenges that trail ssa meeting its power demand are complicated by the current global position on fossil fuel and the negative environmental impacts resulting from the use of large hydropower (lhp) systems. there is a global outcry for affordable, secure, available, and environmentally sustainable energy systems [35–38]. the united nations have thrown its weight behind this by making energy for all by 2030 as one of the sustainable development goals (sdgs). the world energy council (wec) in its perspective, opines that modern energy supply should be 20 international journal of sustainable energy planning and management vol. 19 2019 power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa 7.1. small hydropower potentials in ssa small hydropower refers to the generation of electrical power from a water source on a small scale, usually with a capacity of not more than 10 mw. however, there is still no internationally agreed upon definition of small hydropower as capacity classification varies from country to country, as shown in table 2 [58, 59]. for rural and electrification of remote areas in developing countries, shp or micro– hydropower has been described as the most effective energy scheme [60]. a schematic of a hydropower plant is shown in fig 11. the technology is environmentally benign, extremely robust and long lasting – lasting for 50 years or more with little maintenance [61]. other striking benefits include [62, 63]: minimal vandalisation of power facility; reduction in transmission losses; reduction in network problems (especially during raining season); reduction in illegal electricity connections to the national grid; the resource is in abundance and largely untapped; it emits low ghg (co2) and is regarded as a clean renewable energy source; it can create jobs; and it encourages energy diversification of systems thereby enhancing energy supply reliability in the region, etc. the global quest for cleaner energy to replace or minimise the use of fossil fuels which are the bulk of electricity generation in ssa favours the use of shp. this will consequently reduce ghg emissions [64]. aggressive use of renewable energy in ssa will reduce co2 emissions by 27% in the region [1]. hydropower is a part of the solutions required to overcome electricity inadequacies in both urban and rural areas. the use of hydroelectric lessens the global dependence on fossil fuels, promotes variable renewables via hybrid renewable energy system (hres) and storage. apart from power generation, hydropower provides several socioeconomic benefits that limit poverty and manage water effectively. the search for the best ways of supplying power to remote and rural areas and alternatives governed by three pillars, called energy trilemma – energy security, energy equity, and environmental sustainability [39]. this is happening at the time that the region has the highest population that lack access to electricity and the highest poverty. it will be beneficial now and in the future and avoid waste of resources for ssa to concentrate more on the development of energy infrastructure that will promote energy sustainability: i. ghg emissions reduction – supplying clean, reliable, and renewable energy with low or no ghg emissions. ii. deployment of low-cost and high power generation efficiency schemes iii. energy security increasing access to clean, affordable and adequate energy in rural and urban cities of ssa. 6.1. emerging power supply schemes the electricity access challenge affects the rural dwellers most, as about 80% of the population in the rural areas have access to electricity. to overcome this scourge, things have been done differently from the grid connection. electricity access in the region will be improved in remote and rural communities by the decentralised technologies, such as off-grid and minigrid systems. these are emerging power schemes that have dominated the discussions, research, development and the deployment of renewable energy to urban, remotes and rural areas in recent time [40–51]. the decentralised electrification technologies exploit available re resources in a given place to provide clean, adequate, affordable and reliable power supply. the main re resources for electricity generation in ssa are hydropower, wind, solar, geothermal, wave and biomass. this study will only consider the significance of small hydropower system in improving electricity access and the wellbeing of the people in ssa. this power scheme has been tested and trusted in many countries and several studies have described shp is a reliable electrification for rural areas in ssa [7, 11, 46, 52–57]. 7. developing small hydropower in ssa more development of shp resources required in ssa to bridge power access inadequacy and to promote greater use of clean energy. hence, this section discusses in subsection 7.1 to 7.3 – the shp potential in ssa; a summary of systematic steps of shp development; and the key limiting factors of shp development in the region. table 2: various size classifications of shp [59, 65] country micro (kw) mini (kw) small (kw) united states < 100 100-1000 1–30 china – < 500 0.5–25 ussr < 100 – 0.1–30 france 5-500 – – india < 100 101 –1000 1–15 brazil < 100 100 –1000 1–30 norway < 100 100 –1000 1–10 nepal < 100 100 –1000 1–10 various < 100 < 1000 < 10 international journal of sustainable energy planning and management vol. 19 2019 21 williams saturday ebhota 7.2. developing shp site the development of shp system can be divided into site assessment, civil works activities and electromechanical section development. the site assessment involves the hydrological, geological, and topographical study of the natural resource, such as river. in the site assessment and evaluation, data collection is the first stage of the sequence of activities that shp development requires. this stage can be divided into four phases: planning, project approval, construction and exploitation. the assessment establishes the economic viability of the site. designing of the civil work components based on the site to fossil fuel in ssa is receiving tremendous attention. this has led to several power schemes utilising res, such as solar, geothermal, wind and shp. however, hydropower has been identified as a re potential, second to solar in terms of abundance and distribution, capable of adding substantially to power access in the region. the world bank has stated that only 8 percent of the hydropower potential in ssa has been developed [66]. the shp scheme has been described as an efficient power supply system for rural area and stand–alone electrification. it is a re generation system that produces electricity at low cost, between 0.02/kwh and 0.05/kwh usd [68, 69]. a geospatial assessment study [70] of small–scale hydropower potential defines mini and shp as 0.1–1 mw and 1– 10 mw respectively. fig 12 shows the potentials of mini and shp in selected locations in 44 ssa countries. the study observed that: i. about 10,216 mini hydropower potential sites were identified in ssa with an estimated generation capacity of 3,421 mw. also, these mini potential sites are concentrated in central africa countries with congo dr and angola having the highest exploitable potential of about 975 mw. ii. there are around 5383 shp identified sites across ssa, with the highest concentration in south and central africa. the estimated power capacity that can be generated by sites is 21,800 mw. about 33% of these sites are in dr congo, south africa, and sudan. the estimated power pools of the sub regions in ssa is shown in fig 13. potential energy kinetic energy reservoir intake penstock electrical energy long distance power linespowerhouse generator river turbine mechanical energy figure 11: a schematic of a hydropower plant [67] ssa-mini/shp per country (mw) 1.1-10.0 ssa-shp (mw) 0.1-1.0 ssa-mini (mw) 0.1-50 51-250 251-500 501-1000 1001-3000 figure 12: mini and shp potential in the selected points in ssa 44 sub-saharan countries [70] http://0.02/kwh http://0.05/kwh 22 international journal of sustainable energy planning and management vol. 19 2019 power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa coupled with the energy poverty of ssa, the huge shp resource in the region is insufficiently tapped, as seen in fig 14 [72]. the deployment and development of shp in ssa are limited by lack of technology capacity; insufficient fund; ineffective framework and regional trade agreements; inappropriate power generation and distribution policies; unreliable hydrological data of potential sites; insufficient domestic product manufacturing participation and competitiveness; inadequate and unorganised shp research and development (r&d); and lack of regional political will. however, these limitations are sometimes different from one country to another [73]. table 3 presents shp development barriers peculiar to the difference regions in ssa [31, 34, 74]. evaluation results is followed. the selection and sizing of the hydro turbine and the generator or alternator are carried out based on the capacity of the water body obtained via the hydrological study. 7.3. inadequate deployment and challenges of shp in ssa the deployment of shp scheme in rural areas, and standalone electrification will provide improved access to clean and affordable electricity, and diversification of energy in ssa. it meets the modern attributes of power source to replace or reduce the use of fossil fuel, which is the main source of electricity generation in the region [71]. significant deployment of hydropower will reduce co2 emission by about 27% in the region[1]. despite these known merits 16,000 14,000 12,000 10,000 8,000 6,000 4,000 m w 2,000 0 9,922 9,245 13,652 9,891 8,584 5,614 3,994 5,721 eastern africa western africa mini hydro small hydro southern africa central africa total un-restricted potential figure 13: small hydropower potential per african power pool [70] west africa south africa middle africa eastern africa installed capacity (mw) available shp potential (mw) 0 1000 2000 4000 5000 6000 70003000 figure 14: the distribution of shp potential by regions of ssa [72] international journal of sustainable energy planning and management vol. 19 2019 23 williams saturday ebhota in china and this is one of the reasons that makes the rate of shp development in china very high. the building of domestic capacity for hydro turbine manufacturing in the region will substantially reduce the cost of shp projects, o&m and reduce downtime. the technical skills and manufacturing sector needed to develop shp in the region are lacking and this creates challenges for domestic shp components and system manufacturing. the building of shp technical personnel and maximising of manufacturing capacities will systematically ameliorate and eliminate some of the identified issues, such as high cost of shp project, and o&m [30]. china is making tremendous progress in shp because they do not outsource; both the human expertise and the manufacturing facilities are abundantly available in the country 8.2. other steps to improve the development of shp it requires a multifaceted approach to overcome the present power challenges and to meet the future energy need of the region. the measures to address them must table 3: region–based shp development barriers in ssa [30, 74] regions of africa shp barriers in ssa eastern lack of hydrological and up to date data insufficient awareness of shp lack of road infrastructure to access sites in the in remote areas lack of public–private partnership with both domestic and foreign investors inadequate human capacity power distribution cost middle north lack of a clear cut renewable energy policy lack of motivation and suitable shp site lack of shp merits awareness by the public lack of support policies and technical capacity south lack of shp components and system, insufficient human capacity on shp unfavourable climatic condition west lack of reliable and up to date hydrological data inadequate shp project financing and no incentive to attract domestic and foreign shp investors various degrees of insufficient technical expertise for equipment design, manufacturing, civil construction, operation and maintenance effect of climate change on water bodies like a river other common barriers the long distance between potential sites and consumption points low electricity demands due to low population density the long distance between consumers (scattered settlement) low utilisation factor prohibitive high capital costs 8. steps to improve the development of shp the section takes a look at ways of enhancing the development of shp systems in ssa and these are briefly discussed in subsections 8.1 and 8.2. 8.1. benefits of domestic manufacturing of hydro turbines operation and maintenance (o&m) costs of hydropower projects have increased by 40% since 2007 at inflation of 16% over the same time period. the cost rise is more challenging for the small plants’ o&m as more fund ($ per kwh) is required compared to larger counterparts [75]. there are several factors that account for the cost of shp, which include electric market structure and source of equipment, the capacity of the project, availability of shp technical personnel, the complexity of the site’s topography, etc. fig 16 shows that the cost of shp electro-mechanical equipment is relative in countries in ssa. the cost of the shp project is lowest 24 international journal of sustainable energy planning and management vol. 19 2019 power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa 9. conclusions the sluggishness of ssa’s economy is credited to the inadequate and epileptic power supply that is ravaging the region. frankly, this is heart breaking considering the resources and efforts that have been put to change the situation. the electricity access rates of some countries in the region are about 20% and two-third of the population lack access to modern energy services. industries and others electricity users in the region that are connected to the power grid experience an average of 56 days of power outage annually and this represents 15% darkness yearly. according to the world bank, the power systems infrastructure in the region cannot adequately generate sufficient electricity to meet the demand, as required by the growing population and urbanisation and for economic growth. the chronic electricity shortages coupled with insufficient transmission and distribution networks are fundamentally the causes of inadequate electricity access and consumption in most countries in ssa. the challenges that trail ssa meeting its power demand are complicated by the current global position on fossil fuel and the negative environmental impacts resulting from the use of large hydropower (lhp) systems. there is a global outcry for affordable, secure, available, and environmentally sustainable energy systems. globally, shp has been identified as environmentally friendly, cost effective and simple renewable power scheme suitable for standalone and rural electrification. domestic development of shp parts and systems will lower shp project cost and improve access to power in the region. this will require massive human capacity building and the use of locally soured materials and production facilities. be implemented simultaneously. china’s shp success model can be adopted by ssa to develop the huge shp potential available in the region. this will require massive capacity building to improve the current shp skill deficit and the development of manufacturing infrastructure to support domestic manufacturing of shp components and systems. other steps necessary to expedite the development of shp include capacity building via reversed engineering and technology adaptive programmes; the use of locally sourced materials for turbine and other components fabrication [77, 78]; execution of shp project through governmentprivate partnership scheme; establishment of a regional joint programme to promote the development and the deployment of shp; updated information on the potential sites should be provided; enactment of policy that compels existing power firm to provide fund for shp r&d; and formulation of policy framework that limits the bureaucratic process in the development of shp. domestic participation in the design and manufacturing of shp devices and systems in ssa will promote access to clean, and affordable electricity required to stimulate the region’s economy. the power supply in the region will always be threatened by: overdependence on foreign technology which comes with consequences of the high cost of power project execution, inadequate skilled personnel for installation, operation, maintenance and repair challenges. domestic manufacturing of hydro turbine can be achieved through the regional joint shp technology capacity building in the following areas: foundry technology; mechatronics; fluid mechanics; manufacturing processes; and material development engineering. figure 16: (a) costs of hydro electro-mechanical equipment by country [76]: (b) small hydropower installed capital costs by capacity in developing countries [67] international journal of sustainable energy planning and management vol. 19 2019 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https://www.irena.org/documentdownloads/publications/re_technologies_cost_analysis-hydropower.pdf https://www.hydropower.org/blog/a-geospatial-assessment-of-small-scale-hydropower-potential-in-sub-saharan-africa https://www.hydropower.org/blog/a-geospatial-assessment-of-small-scale-hydropower-potential-in-sub-saharan-africa international journal of sustainable energy planning and management vol. 25 2020 33 *corresponding author e-mail: clberg@dtu.dk international journal of sustainable energy planning and management vol. 25 2020 33–44 abstract the connection of cables from offshore wind parks to interconnection lines is receiving growing attention in europe. although important technical breakthroughs are enabling transmission system operators (tsos) to engage in such hybrid forms of architecture, substantial regulatory challenges are preventing progress. anchored in current european legal frameworks and targets, this paper reviews the national framework conditions that treat the development of transmission grids as regulated assets, focusing on the distribution of connection costs, the access grid tariff and the investment incentives faced by tsos. the paper develops an ideal regulatory framework and compares it to the current regulations in countries around the baltic sea in order to assess their suitability for supporting meshed offshore grids (mogs). the results of this paper highlight the heterogeneity of national regulatory frameworks and the deviations from our recommendations. it is found that germany lives up to the recommendations best, followed by denmark, which suggests they have the regulatory potential to pioneer a mog project in the baltic sea region. this is followed by consideration of two clusters of countries defined by their proximity to the ideal framework, assuming a three-step development of mogs, and following ever more progressive regulatory adjustments. 1. introduction offshore wind (ow) energy is expected to play a central role in decarbonising future energy systems. 25 gw of cumulated ow capacity will be connected to european grids by 2020 [1], [2], supported by technological improvements and cost reductions in manufacturing wind turbines [3]. in the baltic sea, simulations show that total installed ow capacity will be multiplied nine-fold between 2016 and 2030 [2] in response to favourable wind energy conditions, shallow waters, low tides and wave height. with respect to the european transmission grid, overall investment costs are expected to reach eur 125-140 billion by 2030 and up to 420 billion by 2050 if european decarbonisation targets are to be met [4]. advanced infrastructure solutions using the complementarity between subsea interconnectors and offshore wind farms (owf), such as meshed offshore grids (mogs), have been examined to address the investment challenge in a context of decarbonisation. a mog is a hybrid infrastructure combining ow farms connected to the transmission system with cross-border interconnections, as opposed to radial connection to a single country’s market and interconnectors. the main argument in favour of mogs is that they increase the value of both the interconnector and the investing in meshed offshore grids in the baltic sea: catching up with the regulatory gap bergaentzlé, claire-marie̕a*; pade, lise-lottea; truels larsen, laugea a technical university of denmark (dtu), energy economics and regulation. building 424, room 117, 2800 kongens lyngby, danmark keywords: meshed offshore grid; transmission system operator; regulation; offshore wind energy; baltic sea; url: http://doi.org/10.5278/ijsepm.3372 mailto:clberg@dtu.dk 34 international journal of sustainable energy planning and management vol. 25 2020 investing in meshed offshore grids in the baltic sea: catching up with the regulatory gap wind park, benefiting from the synergies from the dual-purpose infrastructure. mog architecture reduces ow park connection costs significantly and improves grid utilisation rates. connection costs in a radial connection line account for between 10% and 30% of the total project cost, depending on distance to the shore, and are only in use 40% of the time, which corresponds to the average load factor of ow energy [5], [6]. in the kriegers flak project, which connects several owfs to an interconnector linking denmark, germany and initially sweden, the feasibility study showed that this combined solution increases cable use from 36% up to 79% [7]. the latest pre-feasibility study for integrated offshore grids in the baltic sea also stresses the great economic potential of hybrid solutions in a context of high offshore wind development [8]. recent innovations in hvdc technologies also support hybrid architecture [9]. ultimately, social dynamics provide an additional driver for mog as current acceptability issues push ow projects further away from shore [2]. in spite of these benefits, the development of hybrid forms of architecture is still being significantly undermined by regulatory barriers. it is therefore critical to identify these barriers and lift them prior to engaging in future development [10]. the objective of this paper is to assess qualitatively the gap between current regulation and mog-friendly regulation in the baltic sea region (bsr) countries of denmark, estonia, finland, germany, latvia, lithuania, poland and sweden. while past studies have reviewed the perception of risks or the supportive regulatory set ups for wind developers [12]–[16], or the regulatory barriers to system operation or the administrative and legal processes associated with hybrid networks or offshore wind farms [17]–[22], this study focuses on the regulatory framework affecting invest ments in mog for tsos. in the north sea context, [23] estimate that the cost allocation of the new infrastructure involves a critical risk for project development. the first large scale project investigating new regulatory frameworks for hybrid offshore infrastructure in europe, nscogi, identified the main incompatibilities in regulatory frameworks [20], [24]. they include misalignments in the distribution of roles and responsibilities among the different actors and the coexistence of different technical rules affecting project coordination in the planning, financing and construction phases. the financing and the construction phase are particularly affected by the set of rules that frame the regulated recovery of grid expenses across countries and the potentially uneven financial risks faced by the tsos involved in a joint project. building on past research, this study identifies three key regulatory factors that affect joint investment in network infrastructure in a mog context, namely the connection cost distribution, the generation grid tariff and the investment incentives for grid development. in anchoring our analysis into current european targets for competitive and sustainable energy systems, this study qualitatively reviews the regulatory factors to define good practices. the good practices constitute an ideal framework that the regulatory set-up existing in the countries of the bsr is compared to. the outcome of the study provides indications on how to adjust current regulation and draws a stepwise approach to future mog in the baltic sea using a policy and regulatory viewpoint. this paper advocates using a super shallow methodology in the construction of the offshore infrastructure and argues for a grid access charge that only reflects the operating costs derived from the generator’s use of system (energy charge). regarding the investment incentives, a mog-friendly incentive package should at least address investment incentives for innovation and r&d specifically. thus, encouraging innovative capex while also incentivising least-cost spending on controllable investment projects, and coupling the tso’s profit to the expected mog benefits. section 2 describes the regulatory framework conditions that support regional investment in mogs. section 3 sets out an ideal regulatory framework and compares it to existing regulations in the bsr in order to assess the extent to which country regulations support mog development. section 4 discusses the policy implications of our findings, and section 5 offers conclusions. 2. key regulatory barriers current regulatory set ups are not meant to provide the tsos incentives to invest in mogs [25]. far from claiming that the regulatory challenges are the only factors hampering mog, this lack of adapted framework contributes to slowing down the path of development. to obtain a more accurate picture, other criteria such as the business potential for ow investment have to be included too. in a recent feasibility study assessing the costs and benefits for two distinct cases of mog in the bsr [21], shows that the economic international journal of sustainable energy planning and management vol. 25 2020 35 bergaentzlé, claire-marie; pade, lise-lotte; truels larsen and lauge from a pure market perspective, the ow developers should pay for the extra costs they incur to the transmission system. accordingly, a shallow method should apply where the system is not stressed, while a deep approach should be used at congested nodes [33]. from a more practical perspective, the investment risks associated with the connection costs create a strong disincentive for project developers to invest, questioning the relevance of the pure market-based approach in a context of transition [34]. besides, deep and shallow approaches raise several concerns in hybrid architecture involving interconnectors [35]. the deep approach adds a layer of complexity across countries, raising an issue with the requirements for transparency set out in the res directive [36]. this approach is also inconsistent with electricity market regulation (ec) no. 714/2009 [38] specifying tsos as the only responsible entity for investments in cross border interconnections, and further emphasising the importance of the legal definition given to the hybrid infrastructure. in the case of shallow cost sharing, the legal question to address is where the interconnection and the owf connection cable start and terminate, which is likely to give rise to differences in interpretation and to dampen the completion of hybrid projects. the connection methodology used in mogs should be identical regardless of the transmission system’s owner in order to avoid discrimination. 2.2. grid access charges for generators the european agency for the cooperation of energy regulators (acer) identified greater harmonisation of grid access tariff design across national regulations as an additional step towards integrated electricity markets, provided that transmission tariff designs promote economic efficiency [39], [40]. in the case of mogs, the legal definition of the infrastructure itself and the diversity of the economic signals sent by the national grid access tariffs are two important limitations. the tariff must comply with non-discriminatory criteria [30] and must take into account the restrictions arising from the legal definition of the grid infrastructure (connection cable and interconnector) in the hybrid architecture. according to regulation 714/2009 and commission regulation (eu) no. 838/2010 [41], applying an access fee to a european interconnector is contrary to the law. the access tariff for ow parks in a mog is therefore limited to the connection to the interconnector through a connection cable. benefits of this solution outperform the total cost of a traditional infrastructure scenario if sufficient generation capacity is connected. this optimization study assumes no regulatory barriers hamper the project and indicates the higher end of the benefit potentials that can be unlocked when a mog-friendly regulation applies in the given wind development conditions. taking its point of departure in a number of existing studies [20], [23], [26]–[28], this paper pinpoints three key aspects of the regulation that constitutes critical barriers to mog development. • distribution of connection costs; • grid access charges; • the set of incentive instruments for recovering grid costs. while the incentive instruments have been studied within the context of the developing european electricity market [29], this paper argues that a similar approach can be used in the case of mogs. 2.1. distribution of connection costs mogs combine cross-border interconnectors, which are paid for by tsos pursuant to directive 2009/72/ ec, with connection infrastructure, where the rules for cost distributions between tsos and ow developers are specific to each country. in the case of renewables, and in particular ow, these costs are significantly higher than those for connecting traditional power plants because of their resource-dependency [31]. accordingly, the rules that apply regarding how connection costs are distributed between tso and ow developer will directly affect the commercial viability of ow projects. the methodology for sharing the costs of a new connection line distinguishes three broad approaches: super-shallow, shallow or deep. the full responsibility for bearing the expansion and reinforcement costs goes from the tso in the supper-shallow case to the wind developer in the deep case and is shared in the shallow case. the shallow and deep approaches give a locational signal in linking the connection costs to the physical expansion of the network. these approaches drive cost efficiencies from a system-planning perspective, but they also create significant system access difficulties for resource-dependent power plants [32], potentially resulting in a trade-off between the least-cost location in terms of network development and the optimal location in terms of wind conditions. 36 international journal of sustainable energy planning and management vol. 25 2020 investing in meshed offshore grids in the baltic sea: catching up with the regulatory gap • capital-intensive: covering the investment risk should be prioritised while keeping overall expenditure low; • innovative: limited information will be available to both parties; • capable of unlocking large efficiency gains at the system level (eg. reduced back-up, limited price volatility, accelerate co2 reductions etc.). cost plus regulation is the basis of rate-making. this regime allows the expenses registered in the regulated asset base (rab) to be fully covered by the tariff while granting the operator a ‘fair’ rate of return (ror) as profit [46]. the main characteristic of this regime is that it secures revenue adequacy while being criticised for its over-investment effect [47]. current regulatory regimes were developed in response to over-capacity in infrastructure, their main objective being to achieve efficiency gains. the main incentive instruments they introduce, namely price and revenue caps and performance-based regulation (pbr), have been aimed primarily at limiting moral hazard and increasing productive efficiency and quality of service while attempting to enhance allocative efficiency in introducing rent-sharing mechanisms [46]–[53]. the combination of these instruments is theoretically appropriate for driving costs down and maintaining a high quality of service. however, the practical implementations of the incentive package may deviate from effectively bringing costs down, especially the capital costs, and from supporting innovative solutions, making it poorly suited to triggering mog investments as developed hereinafter. empirically it can be observed that the incentive instrument (also known as the efficiency or x-factor) usually only applies to the controllable operation expenditures (opex), leaving the capital expenditures (capex) out of the incentive mechanism. the capex continue to be regulated following a cost-plus scheme and continue to generate profit. this has three main implications. the financial risk associated with capital investment is minimised, which supports large investments, including in mogs. nevertheless, without any specific driver to appropriately reward the extra risk incurred by new technical and organisational solutions, the tsos will tend to favour business as usual investments. for example, the higher financial risk associated with capex in mog is due to the project’s novelty and the limited information leading to a higher risk of cost overruns and inaccurate ex-ante cost estimates. besides, since each utility presents different regulated asset bases, depreciation rates and grid development plans, implementing a common fixed charge is poorly relevant. harmonisation should consequently be sought on the tariff design rather than the tariff level. the grid access tariff is made to recoup the investment (capital) costs and the utilisation (operating) costs of the grid infrastructure. it is usually represented as a two-part tariff, including a fixed charge and an energy charge that is paid as a function of the energy consumed or produced. it is set by the national regulatory agencies (nras) and varies between the different european countries [42], [43], resulting in as many different signals [44] that impact on ow investors’ perceptions of risk and profit [45] . at the mog, this situation may influence location choice based on whose tso offers the most advantageous grid use conditions. ultimately, un-harmonised tariff designs in a mog may discriminate against some operators and, even more so, differentiate grid utilisation between the different users. regulation (eu) no. 838/2010 [41] took the first step towards a convergence in tariff designs, since it sets a cap on the energy component within the tariff of between 0 and 0.5 eur/mwh, approximating to the real value of the operating costs l. however, many disparities across countries remain, for example, regarding whom the tariff should apply to: the consumers only, or both consumers and producers? the tariff designs also differ widely. while some countries use only an energy-based cost component to cover the grid costs (denmark), others use multi-part tariffs combining the energy component with capacity-based cost components (belgium, france) or send locational (congestion) signals (sweden). 2.3. investment incentives as pointed out in the promotion project, ‘a meshed offshore grid will be achieved by the joint investment in transmission lines, as is the case for interconnectors nowadays’ [28]. investments in electricity networks are made by tsos in response to binding legal obligations (e.g. to achieve interconnection targets or connect renewable energies) and to a set of regulatory incentives. the incentives consist of instruments and mechanisms that constitute the regulatory package used by nras to review and monitor the tso’s expenses and to incentivise good practices. a mog-friendly incentive instrument package should be designed taking the characteristics of such investments into account, which can be summarised as being: international journal of sustainable energy planning and management vol. 25 2020 37 bergaentzlé, claire-marie; pade, lise-lotte; truels larsen and lauge incentive to develop future decarbonised networks and be non-discriminatory. it should also be easily implementable without requiring heavy bureaucratic adjustments from the nras. accordingly, the super-shallow approach is preferred, since it avoids the risks and complexities associated with the legal definition of the assets, and because of its lower financial risks from the ow development perspective. ow-friendly tariff designs for all generators regardless of their point of connection should apply an energy component only, complying with european requirements set forth in [41]. the generators would thereby pay for their own grid utilisation costs. locational signals should be avoided in the tariff to avoid locational distortions, and the remaining fixed costs should be entirely socialised to the end-users. finally, a mog-friendly incentive package should at least address investment incentives for innovation and r&d, thus encouraging innovative capex while also incentivising least-cost spending on controllable investment projects, and coupling the tso’s profit to the expected mog benefits. 3.2. empirical analysis most baltic sea countries, including all the baltic states and sweden, use a deep methodology for radial connection where the ow developer pays all the connection and reinforcement costs [61]. sweden is currently developing an agreement to shift all or part of the connection costs from the ow developers to the swedish tso, but the final framework is still under discussion [62]. poland and finland use a shallow approach. currently the export cable from the owf to the grid connection node is not considered a transmission system in poland and the ow developer is responsible for this part. current the division of responsibility is such that the investor builds the export cable including a substation if needed, the export infrastructure is connected to a grid connection point owned by the tso. if necessary, the onshore grid and the grid connection station are reinforced by the tso. in finland, the ow developer bears the costs for the construction of its own power cable and any additional structures needed to enable the connection to the network. if another connection is constructed to the same switchyard during the following ten years, the connection fee paid by the wind power developer is partly reimbursed. the shallow approach also applies in denmark for open-door procedures and near-shore projects. only in the kriegers flak and horns rev 3 projects leaving all capex, including the routine expansion and reinforcement activities out of the incentive mechanism in a context of a network investment boom is likely to result in a substantial rise in the tariff paid by the ratepayers. the simple socialisation of capex should accordingly be completed by introducing additional incentive mechanisms directed at both limiting the uncontrolled rise of spending, and supporting innovative investment choices in distinguishing between controllable and non-controllable capex and using different rors [54], [55]. the financial risk should be reflected in the remuneration of these specific assets using a specific reward (e.g. increased weighted average capital cost (wacc) or premium) without resulting in an increase in other categories of capex that are deemed controllable. as regulated firms, network operators may have little incentive to conduct r&d activities, and empirical studies show a decline in research spending since the unbundling reforms [56], [57]. as with capex, r&d costs should be authorised and targeted [58]. the pbr instruments that apply to opex target short-term reliability targets such as the reduction of outages and only capture the benefits expected from mogs to a limited extent. developing new performance-based indicators [59] that couple profit-making to mog benefits would encourage investments in meshed architecture. in california, for example, incentive mechanisms were developed to support investments in smart grids and demand flexibility [60]. similar performance-based indicators could be constructed to associate mog benefits with tsos’ profits. 3. the ideal regulatory framework and the baltic sea countries this section compares the current regulations of the baltic sea countries with the ideal framework and identifies regulatory gaps. 3.1. criteria for evaluation a regulatory framework is considered a driver to mog when it facilitates the deployment of decarbonized energy sources in internalizing the investment risks associated with their resource-dependency nature, while limiting market distortions in the region across technologies and actors. especially, a supportive set of rules must be established in accordance with the european legal framework, should give the right 38 international journal of sustainable energy planning and management vol. 25 2020 investing in meshed offshore grids in the baltic sea: catching up with the regulatory gap locational and only account for seasonal changes. in sweden, the capacity charge is dominant and is complemented with a locational component that supports connections to the least stressed networks. for feed-ins, charges are higher in the northernmost location, whereas for consumption the converse applies: that is, the charges are the highest in the southernmost part of the country. in addition, all the scandinavian countries receive exemptions from regulation (eu) no. 838/2010 [41] (see 2.2) and can apply an energy charge of up to 1.2 eur/mwh. finally, all eight countries in this study use different incentive packages. estonia and poland use a cost-plus regulation in which all authorised total (opex+capex) expenditures (totex), including those for research, are passed through in the tariffs, no cost-efficiency requirement applies to the capex, and no separate treatment applies to the different items of expenditure. performance instruments are absent from the estonian regulation, while the polish regulator decided to remove its performance targets in 2017. latvia and finland both also authorise the passing through of capex in the tariffs and use a hybrid regulation aimed at supporting capital investments and the modernisation of specific quality-related assets respectively. the latvian regulator linked the tso’s revenue to a financial penalty of 10% from the previous year’s net turnover if the latter fails to match grid development forecasts, especially concerning new connections. latvia also uses a set of performance incentives directed at reducing interruptions of supply [63]. the finnish regulation incentivises improvements in quality of service in using a 0% x-factor applying to opex (thereby removing the incentive for cost reductions) and in (tendered projects), a super-shallow approach is used where energinet.dk bears the costs of grid connection to the offshore connection point. the super-shallow approach is also used by the two german tsos having access to the coastline (tennet and 50hertz). the german regulatory framework (energiewende) is particularly favourable to the development of wind energy since it provides that in the context of tendering, the ow developer receives compensation when no connection is available at the time of commissioning. given the legal obligations, tsos have demanded a framework (laid out in the o-nep and the bundesfachplan offshore) for long-term ow planning and connection that facilitates their connection activities and mitigate the potential excess cost due to low coordination. grid access tariffs for generators in the bsr only apply in the three scandinavian countries [43]. in the other countries, producers do not pay for using the grid. different signals therefore apply between the group of countries using a tariff and the others, and different signals also apply between the scandinavian countries, since they all use different tariff levels (relative share paid by the consumer and the generators) and tariff designs (table 1). as for the tariff level, the relative share of the cost of network access paid by the danish producers amount to 3% (against 97% paid by the end-users). in finland and sweden, this distribution is 19% and 36%, respectively paid by the producers and the rest socialized to the consumers. the tariff design in denmark is entirely based on an energy component. for each unit of energy fed into the network, the producers pay a fixed fee to the tso. in finland and sweden a capacity charge also applies. finland has a point ofconnection approach, but price signals are not table 1: tso tariff characteristics in the bsr sharing of network operator charges locational signal tariff structure (%) producer consumer capacity energy denmark 3% 97% no 0 100 estonia 0% 100% n/r n/r n/r finland 19% 81% no 7 93 germany 0% 100% no n/r n/r latvia 0% 100% n/r n/r n/r lithuania 0% 100% n/r n/r n/r poland 0% 100% n/r n/r n/r sweden 36% 64% yes 74 26 source: [43]. note: the split between the energy and capacity cost components reflects a base case computed by entso-e for purposes of comparison. n/r = not relevant http://energinet.dk international journal of sustainable energy planning and management vol. 25 2020 39 bergaentzlé, claire-marie; pade, lise-lotte; truels larsen and lauge tax-based funding. it is unclear how this change will affect the tsos’ activities. finally, germany uses a revenue cap regulation in which the efficiency incentive applies to all controllable totex. germany therefore applies a distinction between controllable and non-controllable capex, the latter being considered strategic to the energiewende (e.g. cost for interconnection, for renewables plant connection and r&d) and being entirely passed on through the tariff. the tsos’ eligible expenses must comply with several efficiency factors to receive a full return on equity. a common x-factor applies to the controllable totex regardless of the operator, and an individual efficiency requirement set by international efficiency benchmarking tailors the efficiency objectives at each tso level. short-term quality performance objectives complete the mechanism. table 2 summarises our ideal regulatory framework and shows the results of the different country benchmarks. (+) indicates that the regulatory framework in a country is in line with our recommendations. (o) indicates that the regulatory framework needs to be slightly improved. finally (-) indicates that the regulatory framework is a barrier to investing in mogs. the above comparison stresses the heterogeneity of the framework conditions among the baltic sea countries and shows that some countries are closer than others to having a mog-friendly regulatory set-up. authorising the continuation of depreciation for the early replacement of strategic assets for quality. finland also uses a dedicated innovation incentive granting up to 1% of the total annual turnover in r&d activities, encompassing new technologies, knowledge or operating methods [63]. sweden and lithuania fully cover all capex and use an incentive regulation with a 1% x-factor on controllable opex.1 in both countries financial incentives are used to improve the quality of delivery. lithuania in particular significantly increased its capital spending (+67% between 2013 and 2014 [64]), while the nra supports future investments for grid expansion, reconstruction and reinforcement [65]. denmark uses a cost-plus regulation on its totex and applies a return on capital based on the inflation rate [54], meaning that the tso’s profit is not coupled to its regulated asset base, and leaving market conditions to drive the tso’s investment choices. the authorised totex are entirely passed through in the tariff without explicit regulation of the quality of supply, nor any specific cost-efficiency or performance requirements [63]. research, demonstration and development activities are currently funded through the network public service obligation (pso) charge. however, the pso is expected to be fully phased out by 2022 and to be replaced by 1 lithuania uses a special hybrid incentive cap scheme with a 50/50 price/ revenue cap. table 2: country overview of framework conditions regulatory framework condition good practices d en m ark e ston ia f in lan d g erm an y l atvia l ith u an ia p olan d s w ed en connection cost methodology super shallow cost recovery + – o + – – o – grid access tariff energy-based tariff / no access fee for producers + + o + + + + – mog-friendly investment incentive full recovery of r&d costs + + + + + + + + clear r&d incentive – – + + – – – – limits the financial risk on capex + + + + + + + + specifically supports capex – – o + + + – – limits capex overspending o – – + – – – – incentive on opex/pbr – – o o o o – o 40 international journal of sustainable energy planning and management vol. 25 2020 investing in meshed offshore grids in the baltic sea: catching up with the regulatory gap finland apply a regulation that actively supports r&d. germany, lithuania and latvia specifically support capex, as they encourage grid expansions for interconnection and renewable energy sources connection. this situation also hides differences in how the expenditure items are treated and socialised. finally, the regulatory schemes associated with opex, if any, are limited to duration and frequency interruption indicators and would require new indicators to be elaborated. during the planning, development and operational phases, the transparent dissemination of good practices will be particularly critical in reducing information asymmetry for nras and supporting successful projects. appropriate platforms should be introduced to share information in a transparent, reliable and unambiguous way. pooling key competences and sharing expertise would also alleviate nras’ differences in terms of their respective human and financial resources. this would also support the compilation of harmonised data sets across countries, upon which new performance indicators adapted to mog can be designed. other approaches to improving regional cooperation include increasing centralisation, for example, through the implementation of a regional independent system operator (iso) [6] or a supra-national tso [66], as well as setting up a strong european regulatory body [67]. the centralised option also has the advantage of limiting the prevalence of national interests in network expansion and is likely to assess competing alternatives more objectively. however, it also questions the notion of countries’ sovereignty. in either case, the alignment of regulatory frameworks assumes a strong commitment by nras, and beyond that by policy-makers, to use a regional scope that can potentially conflict with national interests [68], raising new questions regarding the binding power of european regulatory frameworks. 5. conclusions and policy recommendations this study has aimed to highlight the existence of regulatory barriers and to provide initial policy recommendations for how to bridge the gap between existing regulations and the regulatory framework that best supports the development of mogs in the baltic sea. the ideal framework developed based on the qualitative analysis performed on the key regulatory frameworks affecting network investment, namely offshore wind connection, grid tariff design and transmission 4. discussion it is important to note that, because the different measures are not ranked, the discussion is limited to how far or close the baltic sea countries are to having a consistent, pro-mog regulation. currently, only germany lives up to the recommendations in this paper. german’s regulatory framework offers low risk for ow developers, minimizes market distortions, and supports location choices based on wind conditions, rather than least cost for the system. looking at the grid connection and tariff only, denmark also has suitable regulatory arrangements for connection and access fees. efforts should therefore concentrate on implementing specific regulatory drivers to incentivise hybrid investments as developed hereafter. the connection and grid access conditions that apply in the rest of the bsr suggest that poland and finland need only minor adjustments to prioritise changes in their respective connection cost allocation methods, whereas the remaining countries, sweden, lithuania, latvia and estonia, are lagging behind and will need to take greater steps to create homogeneous connection signals supporting mogs. alignment in connection frameworks will require strong ex-ante coordination mechanisms to be laid down at the regional level to offset the potential impact of the super-shallow approach on system costs. one possible way of addressing this is to set up a regional task force involving all relevant stakeholders: the nras, maritime spatial planners, tsos and representatives of the wind sector with the role of identifying and selecting future ow park locations, network corridors and hubs based on available maritime lands, wind conditions and economics parameters for offand onshore network investments. the significant differences in different countries’ grid access tariffs suggest discrepancies among the tsos, as well as a failure to create a level playing field at the regional level. this conclusion is not only valid in the bsr but also extends to all european countries. regarding the investment incentive package set out in the tsos’ cost recovery framework, the incentives for r&d spending and capex are secured in all the countries, the main differences arising from specific drivers and, more rarely, from over-investment brakes on capex. most countries dedicate a certain budget to r&d activities, fixed as a certain level of the tso’s turnover (usually 0.5%% to 1%). only germany and international journal of sustainable energy planning and management vol. 25 2020 41 bergaentzlé, claire-marie; pade, lise-lotte; truels larsen and lauge regulation. lastly, the incentive instrument package is dominated by nra decisions taken with limited political interference and with no common framework from the layer of european governance. the harmonisation of incentive instruments is considered the most challenging because of this decentralised degree of governance, and this is likely to require the implementation of transnational coordination platforms. in contrast, the alignment of grid access tariff signals may require the least effort, and the european countries’ commitment to the paris agreement should further encourage policy-makers to put vre-friendly connection frameworks on top of the energy policy agenda. confronting regulatory good practices with the various regulations in the countries around the baltic sea shows how suitable or restrictive current frameworks may be in supporting ow development and investment in mogs, allowing us to suggest country-specific solutions. the comparison of regulatory frameworks also drives attention to similarities and discrepancies between the observed countries and highlights clusters of countries that share similar regulatory frameworks. such groupings can be essential to successful hybrid projects, as they provide indications for which set of countries should be targeted first when initiating mog projects, as well as insights to lay down adapted regulatory pathways for coordinated action. for example, germany and denmark have a supportive regulatory framework for mogs and have rather similar regulatory arrangements, suggesting that the chances of success for a hybrid project are likely to be higher between these two countries, as the kriegers flak project already tends to suggest. assuming that the timings of regulatory adjustments are identical regardless of the regulatory barrier, as the remaining countries latvia, lithuania and finland would enter into a second wave of development at a later stage. 6. acknowledgements this article has been written as part of research within the baltic integrid project (registration number: r1.255, project number: #r018), which received funding from the interreg baltic sea region programme 2014–2020, part-financed by the european regional development fund. the content of the article reflects the authors’ views alone. network incentive instruments were compared to the existing regulation in the countries of the bsr. this comparison allowed us to identify the regulatory gaps between the best theoretical practices and empirical observations and to make policy recommendations. departing from the assumption that ow promotion is consistent with achieving european targets and the paris agreement, and using a transmission grid development perspective, the recommendations in this paper stipulate a line of action combining i) least financial risk for ow developers with respect to network infrastructure, and ii) a high degree of coordination in the methodologies used to set the distribution of connection costs, access grid tariff designs and investment incentives for the tsos. using a single set of approaches for infrastructure cost allocations and grid designs on the meshed grid scale and beyond, at the level of a whole country’s territory, seems unavoidable in supporting unbiased development. eventually, a coordinated set of investment incentives adapted to hybrid projects will lead to optimal techno-economic choices and to cost-cutting. high-level coordination on the regional scale, facilitated by european jurisdiction, is advocated to initiate convergence in the regulatory framework conditions of different countries. the current lack of coordination in deciding the regulatory frameworks for network development between european countries arises from the latter’s different energy policies, which are themselves based on the subsidiarity principle set out in the european legal framework. this results in heterogeneous signals that distort investment choices and hinder the creation of a level playing field across countries. nonetheless this level playing field, which should be constructed upon economically sound signals, is critical to the prospect of efficiently developing and operating shared infrastructure. the different layers of governance involved in shaping each of the three regulatory framework conditions are also likely to affect 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[59] r. davis, “acting on performance-based regulation,” electr. j., vol. 13, no. 4, pp. 13–23, 2000. https://doi.org/10.1016/s10406190(00)00109-3 [60] cpuc, “adopting metrics to measure the smart grid deployments of pg&e, sce, and sdg&e. california public utilities commission (cpuc). decision 12-04-025. san francisco, april 19,” 2012. https://doi.org/10.1016/j.enpol.2019.01.047 https://doi.org/10.1016/j.enpol.2019.01.047 https://doi.org/10.1007/s11149-010-9126-z https://doi.org/10.1007/s11149-010-9126-z https://doi.org/10.1093/icc/4.4.769 https://doi.org/10.1016/j.respol.2008.04.010 https://doi.org/10.1016/j.respol.2008.04.010 https://doi.org/10.1016/s10406190(00)00109-3 _ref508194517 _ref7774307 _goback international journal of sustainable energy planning and management vol. 23 2019 15 *corresponding author, email: meschede@upp-kassel.de international journal of sustainable energy planning and management vol. 23 2019 15–26 abstract renewable energy and storage systems are widely discussed to minimise the impact of global warming. this study analyses the impact of probabilistic weather data on the design of renewable energy systems. the main objective is hereby the determination of the robustness of a recently state-of-the-art design process of a 100% renewable energy and storage system with varying probabilistic input data. the island of la gomera, canary islands, is taken as a case study and simulated with energyplan for different probabilistic input time-series. although all analysed systems show some variance in their annual economic and energetic results. the combination of vehicle-to-grid and power-to-hydrogen shows the best economic performance. hereby, small island energy systems depending heavily on wind energy show higher variations than those with high shares of solar energy. this analysis illustrates clearly that the choice of one historical reference year is not suitable to determine the expected performance of an energy system. to learn about their sensitivity, synthetic probabilistic inputs as applied in this study are a good way to determine both the expected mean values and their variance. 1. introduction renewable energy and storage systems are widely discussed to minimise the impact of global warming. in this context, special attention is put on islands (for further information see [1,2]). on the one hand, islands are particularly vulnerable regions that suffer from the effects of global warming and climate change. on the other hand, they are often analysed as blueprints and testbeds for technical solutions because of their isolation and the possibilities associated with this to evaluate the energetic and economic effects (for further information see [2–5]). to meet the fluctuating generation of renewable energy systems such as wind turbines and solar photovoltaics (pv), the utilisation of energy storage technologies is indispensable. in this context, lund et al. [6] show that the utilisation of all kinds of energy storage technologies and the understanding of a smart energy system on the whole including sector coupling have several advantages compared to a single focus on electricity systems and electricity storage technologies. recently, especially energy storage systems have been implemented and tested on islands. well known and widely discussed examples are the canary island of el hierro (for further information see [7–9]), the azores island of graciosa (for further information see [10,11]), the german island of pellworm (for further information see [12]) and the danish island samsø (for further information see [13–15]). furthermore, many scientific studies analyse the energy systems of several islands and archipelagos. the impact of electric vehicles on the on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study of la gomera island henning meschede1*, jens hesselbach1, michael child2 and christian breyer2 1 university of kassel, mönchebergstraße 19, 34109 kassel, germany 2 lut university, yliopistonkatu 34, 53850 lappeenranta, finland keywords: 100% renewable energy; small islands; smart energy system; canary islands; probabilistic time-series url: http://doi.org/10.5278/ijsepm.3142 http://upp-kassel.de http://doi.org/10.5278/ijsepm.3142 http://dx.doi.org/10.5278/ijsepm.3324 16 international journal of sustainable energy planning and management vol. 23 2019 on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study of la gomera island due to this, the utilisation of synthetic, probabilistic input data that can reflect a wide variance of possible situations in combination with principles of monte carlo simulations are discussed in a few scientific articles. arriagada et al. [30] discuss monte carlo methods for analysing the influence of probabilistic wind, solar and energy demand on an energy system in northern chile. also, dufo-lópez et al. [31] use probabilistic timeseries to optimise off-grid energy systems. in their first work the energy supply for a hospital in congo is optimised [31], and the second paper deals with a stochastic-heuristic methodology to optimise the size of components and the system control [32]. dunkelberg et al. [33] show an approach to generate probabilistic timeseries of industrial processes and, based on this discussion, the design of decentralised energy systems in the plastic processing industry. meschede et al. [28] present a methodology to generate synthetic time-series of the energy demand of a hotel and use this as inputs to evaluate the robustness of a decentralised energy system for a hotel. in another study, meschede [34] reflects on the impact of probabilistic weather data on the electric demand shifting potential of a water system on a small island. in all cases, the energy systems show high shares of renewables with fossil fuel driven auxiliaries. regarding this review it is shown that many studies analyse the energy transition on islands. moreover, the topic of the temporal resolution of energy system simulation is widely discussed. although some studies reflect the impact of probabilistic time-series on renewable energy systems for various applications, there is still a gap of knowledge to analyse the impact of these stochastic energy demand and weather data on the energy transition of medium sized islands. with regard to this, the presented paper analyses the impact of probabilistic weather data on the design of renewable energy systems. the main objective is hereby the determination of the robustness of a recently state-of-the-art design process of a 100% renewable energy and storage system with varying probabilistic input data. the island of la gomera is taken as a case study. an earlier published study on hypothetical future energy system designs for la gomera presented in [35] is the baseline. from this, the most promising three scenarios are analysed: vehicle-to-grid, hydrogen-based transport and a combination of both. while in the baseline study only one set of input time-series of one reference year was used, the current paper goes further by analysing the impact of probabilistic inputs on the result. furthermore, the research compares the designs of a overall energy system is discussed for the åland islands in [16]. the authors conclude that battery electric vehicles are a key pillar for a 100% renewable energy system on these islands. an economically optimal design of a carbon neutral energy systems for the whole archipelago of the canary islands is analysed in [17] with focus on the interconnection of the islands. the results underline that a carbon neutral energy system is possible through sector coupling and extension of the transmission grid. a more detailed analysis of one particular interconnection between tenerife and la gomera is analysed in [18]. here, the authors only consider the electricity system and determined that the interconnection of these islands leads to the lowest levelized cost of electricity. in addition, some studies also focus on large islands and entire island states such as ireland in [19]. blechinger et al. [5] and meschede et al. [20] conducted global assessments of renewable energy systems on islands while further overviews of island specific studies are summarised in [21] and [22]. regarding the scientific literature on energy system simulation, a lot of research analyses the temporal resolution. commonly, one-hour resolution is seen as a good compromise between computational efforts and accuracy [23–26]. nevertheless, smaller time steps than one hour show more accurate results in the field of short but high load peaks, which affect mainly grid stability [25]. in addition to the temporal resolution, also the chosen input data might have a strong impact on the performance of renewable energy systems, and energy storage systems in particular. especially for smaller grids, such as those found on islands, high fluctuations in both the energy demand and energy supply timeseries can be observed. these result in more unbalanced systems and influence the utilisation of and requirements for energy storage. furthermore, as for example addressed by østergaard et al. [27] for the danish electricity sector, energy demand depends on the day of the week while weather data does not. furthermore, meschede et al. [28] analysed the different occupancies of a touristic facility and determined that, especially in summer, weekends and weekdays are highly different for the case of la gomera. therefore, fixed time-series of both energy demand and weather do not reflect all possible combinations within one dataset. thus, the representation of further, probabilistic variances is missing. the uncertainty of the performance might further influence the economic risk of renewable energy systems as shown for a small hydro-plant in [29]. international journal of sustainable energy planning and management vol. 23 2019 17 henning meschede, jens hesselbach1, michael child and christian breyer as a case study. la gomera belongs to the spanish canary islands located in the atlantic ocean approx. 100 km west of the moroccan coast. the archipelago consists of seven main islands, of which la gomera is the second smallest. the population of this island is approx. 22,000 inhabitants while its annual electricity demand in 2016 was 71.63 gwh [39]. the demanded electricity is generated in a central diesel power plant of 22.9 mw installed capacity. furthermore, 9.4 gwh of fossil gas and 14.41 gwh fossil oil are used for cooking and heating. for the latter, decentral heating with small units is realised. district heating is not installed. for mobility 3,817 tons of diesel and 3,311 tons of petrol were used in 2014 [40]. regarding possible future energy systems three different designs are analysed within this study: 1. scenario 2030-h2 2. scenario 2030-v2g 3. scenario 2030-combi the scenario 2030-h2 analyses power-to-hydrogen technology to store surplus renewable energy. hydrogen is used in both combined heat and power plants and in the mobility sector. within this scenario, wind is the main renewable energy source to cover electricity demand. in addition to that, the scenario 2030-v2g focusses on the utilisation of battery electric vehicles (bev) as the main storage solution for variable renewable energy supply. in contrast to the scenario 2030-h2, solar pv is the main source for electricity. finally, the scenario 2030-combi combines both aspects, i.e. power-to-hydrogen as well as vehicle-togrid (v2g) participation. in this scenario, solar pv is the main source. moreover, the installed capacities of all renewable energy sources are the highest for all three scenarios. summarised, all scenarios reduce the utilisation of fossil fuels to zero, hence only 100% renewable energy scenarios are simulated. in all three scenarios demand shifting is allowed. regarding the consideration of demand side management, the assessment of the demand shifting potential in [34] visualises the limitations of the utilisation of fixed rates as the rate depends on the demand and weather data. in this study a mean value is therefore used. the scenarios and the determination of the plant’s nominal capacities were based on the work done in [35]. moreover, the same cost assumptions as presented there are applied in this study. they are summarised in table 1. reference and a standard year to the results gained by using probabilistic years. in this context, a reference year is based on one specific historical year while a standard year is an average year built on observations of several historical years. the widely used tool energyplan is used to simulate the system. 2. methodology in this section both, the simulation tool energyplan as well as the chosen case study and the simulated scenarios are presented. 2.1. simulation tool energyplan to evaluate energy systems and 100% renewable energy systems in particular, simulation tools are indispensable to consider the different inputs and plants. lund et al. [36] discuss various tools and classify them either as optimisation or simulation tools. hereby, optimisation tools such as homer have internal algorithms that minimise or maximise an objective function and hence the energy system design (i.e. plant size and capacities). in contrast, simulation tools such as energyplan allow the user to define the energy system design and thus these tools allow the mapping of different energy transition paths and scenarios [36]. overviews of different tools, their advantages and case studies can be found in [36,37]. for this study energyplan is used for annual simulation of the energy system since this work is based on the previous energy systems presented in [35]. energyplan has been developing since 1999 at aalborg university in denmark and is widely used in scientific projects to simulate energy systems on national and regional scales. in this work version 12.5 of the tool and the matlab toolbox for energyplan version 1 are used. in a nutshell, in energyplan different technologies can be considered to satisfy all thermal and electric energy demands (electricity, heat and transport sectors). energy demand and weather are determined by hourly time-series for one year. moreover, different energy storage options can be used to balance the energy system. furthermore, energyplan offers the possibility to define energy imports and exports to and from the system. detailed information on energyplan can be found in [38]. 2.2. case study and simulated scenarios to analyse the impact of probabilistic input data on the energy system design, the island of la gomera is chosen 18 international journal of sustainable energy planning and management vol. 23 2019 on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study of la gomera island the generated power of a wind turbine is simulated using a characteristic curve of the enercon e-70 wind turbine with a nominal power of 2 mw [41]. therefore, the wind speed at hub height is needed which is calculated using the hellmann exponent g and an exponential extrapolation. often historical data of one specific year is used. nevertheless, this year cannot reflect all aspects and characteristics of the system. in this study three different reference years regarding input time-series for electricity demand and solar radiation as well as temperature are analysed, and the results are compared. in total, the years 2013, 2015, and 2016 are used. the load data is provided by [39], its temporal resolution is 10 minutes. half-hourly solar irradiance and temperature time-series are provided by [42]. all other inputs (i.e. heat demand, wind power, traffic and water demand) are based on synthetic approaches and hence are not varied. this is especially true for the used wind data. since the generated wind power is simulated with synthetic data, the identical time-series is used in all reference year scenarios. some characteristics of the chosen years are summarised in table 3. (2)   =     g h ref ref h v v * h an overview of the technical aspects of all scenarios can be found in table 2. hereby, the installed capacities represent the values observed for the minimum annualised energy cost in each scenario according to the analysis done in [35]. 3. data tools such as energyplan simulate energy systems for one specific year. thereby, input time-series of various data characterise these systems. these inputs include time-series of, for example, power consumption, weather data or consumer behaviour. in the case of energyplan, the conversion of weather data to generated power is not possible within the tool. indeed, energyplan needs time-series of generated power instead of weather data. due to this, for pv and wind turbines weather timeseries like wind speed have to be converted into generated power in a pre-processing step using suitable simulation tools. for this paper, the pre-processing is realised with simulation models in matlab/simulink presented in [28]. the generated power of a pv plant is the product of the cell efficiency, the plant efficiency, the area and the irradiance. ppv = ηcell* ηplant*a*i (1) table 1: cost assumptions for 2030 (taken from [35]) capex opex lifetime wind turbines 1300 €/kwel 2.5 of capex/a 25 years photovoltaics 700 €/kwp 1% of capex/a 30 years combustion power plants 900 €/kwel 1% of capex/a 25 years electricity storage 150 €/kwhcap 5% of capex/a 10 years hydrogen storage 200 €/kwhcap 0.5% of capex/a 50 years table 2: installed capacities in all scenarios 2030-v2g 2030-h2 2030-combi pv capacity in mw 52.5 37.5 62.5 wind capacity in mw 12 20 12 combustion engine (biofuel) capacity in mw 22.9 22.9 22.9 stationary battery capacity in mwh – 13 v2g storage capacity in mwh 197.1 – 197.1 electrolyser capacity in mw – 11.5 3.86 hydrogen storage capacity in mwh – 35 5 international journal of sustainable energy planning and management vol. 23 2019 19 henning meschede, jens hesselbach1, michael child and christian breyer irradiation to the long-time average monthly irradiation, is represented by a normal distribution for the case of la gomera [28]. in contrast to this, wind speed time-series vwind (hoy) are generated through first-order markov-chains, i.e. they depend on the wind speed of the last time step vwind (hoy-1). thereby, the seasonal term is removed by setting up individual transition probability matrices tmp for each month month (hoy). a random number r is used to finally determine the current wind speed depending on the tpm and the previous value. vwind (hoy) = f (tpm,month (hoy),vwind (hoy-1),r) (4) for the generation of probabilistic traffic volumes the daily profile given in [43] for the case of tenerife island is used as a basis and varied by a normally distributed random number with standard deviation of σ°=°= 0.1. the resulting range of the traffic volume and its daily distribution is shown in figure 1. hereby, the box represents 50% of the observations from the first quartile q1 to the third quartile q3 (i.e. from 25th to 75th percentile). the red line shows the median. outliers are represented by red cross and defined as values below q1−1.5(q3−q1) and above q3+1.5(q3−q1). the profile shows a morning peak from 7 to 8 am and second, less sharp peak from 2 to 6 pm. the same probabilistic profile is used for every day, thus there is no differentiation of weekday, weekend or holiday. nevertheless, the distribution shown in figure 1 implicates strong variations of the peak values and thus might be acceptable for a first estimation of the influence of the traffic volume on the energy system’s performance. thus, in total 12 combinations (3 scenarios à 4 modifications each) are analysed. for the reference year there were 9 runs (3 years x 3 methods) and for each probabilistic input 100 runs are performed. in this study, neither additional runs nor any termination criteria are energyplan uses hourly time-series, hence the simulated power data have to be compressed. to do so, three different methods to reduce the data resolutions are applied. these methods are: – mean: the mean value of all observations within a certain hour is used. – max: the maximum value of all observations within a certain hour is used. – min: the minimum value of all observations within a certain hour is used. in addition to different historical reference years, an infinite number of further probabilistic reference years exists. hereby, “standard” years occur more often than extreme years. one aim of this paper is a sensitivity analysis of the design based on one historical reference year and its comparison to probabilistic years. regarding this objective the generation of synthetic input data based on probability is crucial for the analysis. based on previous studies with similar intentions the following time-series are seen as most critical: – wind speed – solar irradiance – traffic volume the approaches to generate probabilistic solar irradiance and wind speed profiles are presented in [28] and are applied in this study. synthetic solar irradiance time-series i (hoy) are generated using the hourly clearness index kt (hoy), the relation of the daily irradiation to the average daily irradiation of the selected month fd, and the ratio of the monthly irradiation to the long-time average monthly irradiance of the hour fm. i (hoy) = fd * fm * kt (hoy) * g0 (hoy) (3) the first two factors, i.e. the hourly clearness index and the relation of the daily irradiation to the average daily irradiation, are based on the case-specific probabilistic density function (pdf). in addition, the third determining factor, i.e. the ratio of the monthly table 3: characteristics of reference years 2013 2015 2016 annual electricity demand in gwh 67.57 68.31 71.63 peak electrical load in mw 12.1 12.4 12.2 annual solar irradiation in kwh/m² 1954.6 1982.0 1988.8 average wind speed at 60 m in m/s 6.66 6.66 6.66 mean ambient temperature in °c 21.3 21.3 21.4 20 international journal of sustainable energy planning and management vol. 23 2019 on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study of la gomera island with results of previous studies (e.g. [16] and [34]). the annual costs of scenario 2030-h2 are always higher than those of both other scenarios. regarding scenario 2030-v2g, the annual costs of the best case (i.e. the minimum value shown in table 5) can reach the maximum costs in scenario 2030-combi. the results of the annual costs are summarised in table 5. in the following all three scenarios will be more deeply analysed. the marking of all different reference years in figure 2, figure 3 and figure 4 underline that these (three respectively) nine different reference years show a wide variance of possible energy demand and supply characteristics. the analysis of the probabilistic weather data shows that both wind and solar data have even higher uncertainties resulting in a range of about 6% of the baseline value. furthermore, the results reflect that the combination of different technologies has nearly the same uncertainties of annual costs (standard deviation of 199.74) as vehicle-to-grid only (standard deviation of 179.98). thereby, the variances due to probabilistic wind profiles and probabilistic solar profiles are almost equal. in contrast, in the hydrogen-based transport scenario where wind turbines and electrolysers are key components, the choice of wind data is much more implemented. table 4 summarises the varied input data analysed within this work. 4. results and discussion the choice of the reference year leads to significantly different economic and energetic results. the annual costs of the energy system vary between 10.87 and 11.28 m€ if a combination of different technologies is chosen. this indicates that an underand overestimation of up to 3.6% is possible due to the choice of reference year. similar results and sensitivities for the choice of the reference year can be found in [28] for the case of a hotel where the uncertainty due to the choice of reference year is up to ±4.8%. furthermore, also [31] shows for the case of a hospital a relative standard deviation of ±2.7% of the total costs of the optimised systems. hence, both studies underline that the variance of the results of this study due to probabilistic input data is reasonable. nevertheless, the results in this study underline also that the technology mix represented by scenario 2030combi shows the lowest annual costs of all analysed scenarios as evaluated in [35]. this finding is also in-line figure 1: range of varied traffic volume for one day 14 12 10 8 6 4 2 0 tr af fic v ol um e hour of day 1 2 3 4 5 6 7 8 9 10 1110 12 13 14 15 16 17 18 19 20 21 22 23 24 table 4: short description of varied input data number of runs methodology reference year 9 (3 × 3) 3 different reference years (2013, 2015 and 2016) based on 10-minute load data [39] and halfhourly irradiation data [42]; 3 different methods to compromise load data to hourly data (i.e. mean, max, min) probabilistic wind 100 probabilistic wind profiles based on [28] probabilistic solar 100 probabilistic irradiation profiles based on [28] probabilistic traffic 100 traffic profile based on [43] with normally distributed hourly deviation (σ = 0.1) international journal of sustainable energy planning and management vol. 23 2019 21 henning meschede, jens hesselbach1, michael child and christian breyer higher electrical generation through variable renewable energy systems (i.e. wind and solar power) results in lower annual costs of the energy system due to the lower variable costs of biofuel. nevertheless, the consumption of biofuel does not show the same intensity of correlation as is obvious in the right graphic of figure 2, figure 3 and figure 4. in both scenarios using power-to-hydrogen (i.e. scenario 2030-h2 and scenario 2030-combi), the sensitive to the annual costs (total standard deviation of 249.77, only regarding observations with probabilistic wind inputs results in standard deviation of 268.78). regarding previous work a high sensitivity of renewable energy systems towards probabilistic wind speeds is also stated in [32], [34], and [44]. all scenarios show linear correlation of renewable energy systems electricity generation and annual costs. table 5: annual costs in k€ for different energy system designs with varying input data reference* minimum maximum mean combi 10,892 10,796 11,553 11,091 reference year 10,873 11,284 11,104 probabilistic wind 10,796 11,490 11,119 probabilistic solar 10,969 11,553 11,279 probabilistic traffic 10,858 10,869 10,863 v2g 11,552 11,437 12,165 11,738 reference year 11,535 11,882 11,734 probabilistic wind 11,437 12,111 11,760 probabilistic solar 11,622 12,165 11,913 probabilistic traffic 11,541 11,547 11,544 h2 13,299 12,964 14,224 13,538 reference year 13,307 13,564 13,428 probabilistic wind 12,964 14,224 13,688 probabilistic solar 13,511 13,921 13,737 probabilistic traffic 13,299 13,299 13,299 * reference values for historical year 2016 based on [35] figure 2: annual results of scenario 2030-v2g: annual electric generation of renewable energy systems over annual costs (left) and annual biofuel consumption over annual costs (right) 98 99 100 101 102 103 104 105 106 107 108 11400 11600 11800 12000 12200 12400 annual costs in k€ annual costs in k€ reference years solar wind traffic 0 10 20 30 40 50 60 70 80 90 11400 11600 11800 12000 12200 12400 reference years solar wind traffic bi of ue l c on su m pt io n in g w h/ ye ar r e s e l. ge ne ra tio n in g w h/ ye ar 22 international journal of sustainable energy planning and management vol. 23 2019 on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study of la gomera island inputs as well as for the reference years can be seen. in contrast, the observations show no clear correlation for probabilistic wind inputs. nevertheless, the sensitivity of consumed biofuel is almost the same for both probabilistic weather inputs as well as for the reference years in both scenarios. in scenario 2030-v2g the observations of the annual consumed biofuel result in standard deviations of 1.82 for using probabilistic solar data, 1.85 for using probabilistic wind data and 1.66 for the reference years. similar results can be found in scenario 2030-combi (standard deviations of 1.95, electrolyser operates independently of any varying inputs (see figure 5). hence, further balancing technologies like stationary batteries (scenario 2030h2) or v2g (scenario 2030-combi) have to balance the annual generated electricity depending on the temporal distribution of supply and demand. in figure 6, the sums of v2g charge are shown over the annual biofuel consumption for the scenarios 2030v2g (left) and 2030-combi (right). in both graphics a clear linear correlation between the sum of charging and the consumption of biofuel for probabilistic solar figure 3: annual results of scenario 2030-h2: annual electric generation of renewable energy systems over annual costs (left) and annual biofuel consumption over annual costs (right) 98 99 100 101 102 103 104 105 106 107 108 12500 13000 13500 14000 14500 re ne w ab le e l. ge ne ra tio n in g w h/ ye ar bi of ue l c on su m pt io n in g w h/ ye ar annual costs in k€ reference years solar wind traffic 0 10 20 30 40 50 60 70 80 90 12500 13000 13500 14000 14500 annual costs in k€ reference years solar wind traffic figure 4: annual results of scenario 2030-combi: annual electric generation of renewable energy systems over annual costs (left) and annual biofuel consumption over annual costs (right) 114 115 116 117 118 119 120 10600 10800 11000 11200 11400 11600 re ne w ab le e l. ge ne ra tio n in g w h/ ye ar bi of ue l c on su m pt io n in g w h/ ye ar annual costs in k€ reference years solar wind traffic 0 10 20 30 40 50 60 70 80 90 10600 10800 11000 11200 11400 11600 annual costs in k€ reference years solar wind traffic international journal of sustainable energy planning and management vol. 23 2019 23 henning meschede, jens hesselbach1, michael child and christian breyer designs for the island of la gomera. therefore, the systems – optimised for one reference scenario – are stressed with various historical and probabilistic input time-series to analyse their sensitivities. to generate probabilistic time-series of different influencing variables, historical observations of several years are used in the cases of wind speed and solar irradiation. furthermore, three historical reference years are used to reflect the electricity demand. the probabilistic traffic volume is generated based on an analysis of the traffic volume for the neighbouring island of tenerife and the assumption of normal distributed traffic volume for each hour of the day. 1.92, and 1.99, respectively). moreover, varying traffic inputs as assumed in this work seem to have no influence on the annual performance of an energy system although v2g and thus the temporal distribution of traffic volume are determining inputs for the hourly balancing of the system. this supports the positive assessments of this technology determined in different case studies, such as [16], [43], and [45]. 5. conclusion and outlook the objective of this study is the assessment of the robustness of different 100% renewable energy system figure 5: sum of hydrogen production over biofuel consumption in scenario 2030-h2 (left) and in scenario 2030-combi (right) 36 36.2 36.4 36.6 36.8 37 37.2 37.4 37.6 37.8 38 60 70 80 90 biofuel consumption in gwh/year reference years solar wind traffic 13.5 13.6 13.7 13.8 13.9 14 14.1 14.2 14.3 14.4 14.5 0 5 10 15 20 25 biofuel consumption in gwh/year reference years solar wind traffic s um o f h yd ro ge n pr od uc tio n in g w h/ ye ar s um o f h yd ro ge n pr od uc tio n in g w h/ ye ar figure 6: sum of v2g charge over biofuel consumption in scenario 2030-v2g (left) and in scenario 2030-combi (right) 38 39 40 41 42 43 44 25 30 35 40 s um o f v 2g c ha rg e in g w h/ ye ar reference years solar wind traffic 38 39 40 41 42 43 44 0 5 10 15 20 25 s um o f v 2g c ha rg e in g w h/ ye ar reference years solar wind traffic biofuel consumption in gwh/year biofuel consumption in gwh/year 24 international journal of sustainable energy planning and management vol. 23 2019 on the impact of probabilistic weather data on the economically optimal design of renewable energy systems – a case study of la gomera island [6] lund h, østergaard pa, connolly d, ridjan i, mathiesen bv, hvelplund f et al. energy storage and smart energy systems. 3-14 pages / international journal of sustainable energy planning and management, vol 11 (2016) 2016. http://doi. org/10.5278/ijsepm.2016.11.2. 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[44] falconett i, nagasaka k. comparative analysis of support mechanisms for renewable energy technologies using http://doi.org/10.1016/j.renene.2009.11.019 http://doi.org/10.1016/j.enconman.2014.09.062 http://www.gobiernodecanarias.org/agricultura/agricultura/temas/datos_agroclimaticos/tf05.html http://www.gobiernodecanarias.org/agricultura/agricultura/temas/datos_agroclimaticos/tf05.html http://doi.org/10.1016/j.energy.2016.11.097 262-1192-1-le.qxd abbreviations dgeg – direcção-geral de energia e geologia, portuguese energy and geology agency hdd – heating degree days ine – instituto nacional de estatística, national institute of statistics nuts – nomenclature of territorial units for statistics ols – ordinary least squares 1. introduction since the energy crisis in the 70’ s energy demand has been on the agenda of researchers in economy, planning and engineering. in 2006, 76% of world electricity consumption was concentrated in urban areas [1] when cities comprised less than half of the total population [2]. with the foreseen growth of urbanization it international journal of sustainable energy planning and management vol. 02 2014 19 becomes imperative to study the dynamics of cities and their impact on energy use. there are many models of energy or electricity consumption in cities, most of them relating it with income and price, typically, through the calculation of elasticities and their significance level. applying econometric methods has been a frequent choice in the literature using, for example, a multiple first-order linear model [3], general-to-specific modeling, or co-integration analysis using time series or panel data [4–7]. here our aim is to find possible patterns linking city growth and energy use. therefore, this work focusses on the application of scaling laws to the specific case of electricity consumption in urban areas of continental portugal. although this application has been made to other countries such as china [8–9], germany [8] and spain [10] this study come as the first one, as far as we * corresponding author e-mail: ana.goncalves@ist.utl.pt international journal of sustainable energy planning and management vol. 02 2014 19-32 scaling laws and electricity consumption in cities: a sectoral view ��������� �� ��������������������� �������� � ��� ��� ������� � ������� ���� ��� � � ����� �������������� ������������ � ������������ ������ ����������� ������� ! ��������! � " ���"� ������#�������$��� �!� �����%�!&�� a b s t r a c t with the use of electricity being increasingly concentrated in urban areas it becomes important to understand the influence of cities, and their size, on patterns of consumption. we tested the application of the scaling law to the portuguese urban system, across time and municipalities, with special focus on the sectoral consumption of electricity from 1994 until 2009. results showed that the scaling law is not suitable to describe a city’s electricity consumption throughout the years. in the cross-sectional results, the scaling law proved to be applicable for all cases, although the scaling exponent varies both in time and across sectors. for the residential sector the decrease of the scaling exponent might be related with the electrification of the energy system and with the increase of average income. for the service sector the scaling exponent was fairly constant, above 1, during the 16 years of the study. the largest variation was found for the industrial sector whose scaling exponent decreased 15–20% in the time frame analyzed, though in this sector electricity consumption appeared to be the one with the weakest relation with city size. url: dx.doi.org/10.5278/ijsepm.2014.2.3 20 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view know, that explores the time dynamics of the coefficients of the scaling law. furthermore, we perform a sectoral analysis to identify possible differences in the observed patterns. 2. urban scaling laws inspired by the connection between physiological characteristics of some biological organisms and their body mass, bettencourt et al. [8] tested the existence of a scale relation between city size and a set of indicators. this relation is described by equation (1): i = α sβ (1) in this equation, i is the indicator that we are trying to relate with city size (s) using a scaling relation of exponent β and a normalization constant (α ) equal to the value of the indicator per capita when city size is 1, i.e., when there is no scaling effect. in equation (1) the scaling exponent β also represents the elasticity of the indicator in relation to population. this elasticity gives the proportional variation of the indicator associated to a proportional variation of the population. for the case of energy related variables bettencourt et al. tested total and residential electricity consumption obtaining for the former a β of 1.07 (for germany) and, for the latter, ( β = 1.00 for germany and β = 1.05 for china). 3. data and methodology the source of data for annual electricity consumption at the municipal level between 1994 and 2009 was the portuguese energy agency dgeg (direcção-geral de geologia e energia). in order to use the same unit of data collection municipalities were used as the minimum scale for the demographic data which was taken from ine’s (instituto nacional de estatística) database. to identify which municipalities correspond to urban areas we defined two conditions based on the parishes’ classification (urban, semi-urban and rural), which was set using the official thresholds of total population and population density for the year 2001. this was the only year for which we had demographic data of parishes’ population and municipalities’ electricity consumption. the conditions used are described in table 1. equation (1) applied to the consumption of electricity in municipalities takes the form: elmun,t = α smun,t β (2) where the indicator is now the consumption of electricity el in municipality mun in year t (elmun,t) and city size s relates to that same municipality and year. to use ordinary least squares (ols) regression we applied the logarithm to equation (2). ln (elmun, t) = ln (α) + β ln(smun, t) (3) when necessary, the following tests were run to verify the conditions for the validity of the application of ols: • for heteroscedasticity (the variance of the error of each observation varies with, at least, one explanatory variable: graphical and breushpagan/cook-weisberg tests [11–12]; • for error autocorrelation with time series data: acf (autocorrelation function) and durbinwatson test [13–14]; for both the regressions and tests, we used two software packages for statistical analysis, stata 11 and r 2.15.2. 4. time-series approach one alternative to the traditional cross-sectional analysis of the scaling law is to interpret is as the evolution throughout time of one entity, in this case, of one city. to better understand this concept we can make a parallel with the studies of ecology. when the scaling law is applied to cross section urban data, its equivalent in ecology is finding common scaling relations between different species of mammals; whereas an application to a time series (one city across time) finds its parallel in the understanding of the dynamics of growth of one specific species. table 1: criteria of urban municipalities (percentage of population). urban semi-urban # municipalities condition 1 15% 50% 24 condition 2 40% – 99 the application of scaling laws to the urban consumption of energy has already been tested for crosssection sets of data for different countries with surprising results. however, although it has been hypothesized by bettencourt et al. [8] that scaling laws can be used to describe the relation between population growth and the use of energy evolution (among other indicators) for a single city, such relation has never been empirically tested. in this section we test this approach in the portuguese urban system, more precisely, to electricity consumption in portuguese cities as defined in section 3. for this test, we applied equation (3) where in each regression we used electricity consumption and population for a city between 1994 and 2009. for reasons of simplicity, we will refer, from now on, to the scaling coefficients resulted from these regressions (that use time series data) dynamic scaling coefficients. as a methodological note, it is important to mention that all regressions made within this section showed the presence of autocorrelation after the application of the durbin-watson test. to correct the autocorrelation we used the cochrane-orcutt method already included in the r software in the ‘bstats’ package. 4.1. total consumption the dynamic scaling coefficients obtained for total electricity consumption can be found in figure 1 where the results have been divided into nuts ii regions (which correspond to 5 continental regional coordination commissions) and the diameter of the circle is proportional to the r2 value of the corresponding linear regression. in the literature, the values of the scaling coefficient, obtained in cross-sectional analyses, are confined to the interval [0, 2], being close to 1 for most of the studies [15–16]. however, the dynamic scaling coefficients found have a very large range of values, going from −14 to + 25. some regressions with a more extreme β value have a considerably high r 2 (larger than 0.80), however there are many cities for which the r2 value is very low (close to 0) which indicates a weak correlation between the size of a city and its electricity consumption, along time. in these cases, the resulting scaling coefficient is not significant at the 5% level. to better understand the meaning of these results we show in figure 2 and figure 3 the example of some specific cities: lisbon and porto, the largest portuguese cities, montemor-o-velho, figueira da foz and penafiel which are some of the cities with the lowest and highest values of β and santarém as an example of a municipality with low r 2 and nonsignificant scaling coefficients. the graphs in these figures show the evolution of electricity consumption and population between 1994 and 2009 in two different ways. in figure 2 we can observe the relation of the two variables throughout the years. every time there is an identifiable trend in the points presented, an arrow with the direction of the evolution in time was added. as an example, in lisbon, between 1994 and 2009 population decreased and electricity use monotonically increased. the absence of an arrow signifies that in the time period analyzed there was no identifiable trend between the two variables as it is the case of santarém. figure 3 shows the relative values (with 1994 as the base year) and evolution of both population and total electricity consumption for the mentioned municipalities. as it is possible to observe in figure 2, there are cases (such as santarém) where the scattering of the points led to a poor linear regression with a very low r 2. for such cases it is very difficult to identify the scaling relation tested. some of the cities that show a high correlation factor have negative scaling coefficients. this is due to an inversion of the relation between electricity consumption and population, i.e., the population decreases whilst electricity consumption increases (see the examples of lisbon and porto). one of the most interesting aspects of figure 3 is that, whatever the population growth (or de-growth) trend is, total electricity use has a generally increasing evolution. this tendency was followed not only by the six international journal of sustainable energy planning and management vol. 02 2014 21 ana gonçalves and tiago domingos 40 30 20 10 00 algarve alentejo lisbon center north −10 −20 β figure 1: dynamic scaling coefficient results for total electricity consumption divided by nuts ii regions. municipalities that we use here as examples but in a wide majority of the municipalities (the only two exceptions, barreiro and santo tirso, had a falling electricity consumption mainly due to reductions in the industrial sector). beyond that, on average, electricity use doubled over the 16 years of the analysis. on the other hand, population trends seem to be more uneven. including porto and lisbon, 24% of the municipalities had fewer inhabitants in 2009 when compared to 1994. in the case of our examples of fig. 3 it is clear that the negative values of β −1 obtained correspond to those municipalities with an increasing consumption of electricity despite a population decrease (e.g. lisbon, porto and montemor-o-velho), as already mentioned. if we divide both sides of equation (2) by city size, we see that β −1 is the scaling exponent for per capita electricity consumption. so, in the cases, such as those of porto or lisbon, where β −1 is positive or zero, per 22 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view 4.0e + 09 lisbon = −1.0 r 2 = 0.61 population 450.000 500.000 3.5e + 09 3.0e + 09 550.000 600.000 650.000 2.5e + 09 2.0e + 09 1.6e + 09 porto population 200.000 1.4e + 09 1.2e + 09 250.000 300.000 1.0e + 09 7.0e + 07 montemor-o-velho population 24.500 25.000 6.0e + 07 5.0e + 07 25.500 26.000 4.0e + 07 3.0e + 07 2.0e + 07 2.3e + 08 penafiel population 69.000 1.9e + 08 1.5e + 08 1.1e + 08 70.000 71.000 72.000 73.000 7.0e + 07 3.5e + 08 santarém population 63.400 63.600 3.0e + 08 2.5e + 08 63.800 64.000 64.200 2.0e + 08 1.5e + 08 1.0e + 08 1.7e + 09 figueira da foz population 61.000 1.4e + 09 1.1e + 09 5.0e + 08 8.0e + 08 61.500 62.000 62.500 63.000 63.500 2.0e + 08 β = −14.2 r 2 = 0.81 β = 4.5 r 2 = 0.02 β = −20.0 r 2 = 0.85 β = 25.2 r 2 = 0.84 β = −0.6 r 2 = 0.62 β figure 2: total electricity consumption (kwh) versus population (points) and the regression fit (line) between 1994 and 2009 for six portuguese municipalities. capita consumption is growing or constant. the cases where β−1 is negative are the odder ones, with per capita consumption decreasing along time; these cases are now being further investigated in order to understand what might be the cause of this decrease. the disparity of relative growth of electricity consumption and population and the differences encountered, from city to city, in the scaling exponent seem to indicate that the scaling law, as stated in equation (1), should not be applied as a general description of the electricity use in portugal. 4.2. total consumption’s scaling exponent analysis to finalize this analysis we tried to understand what influenced the scaling coefficients obtained. as discussed above, urban municipalities’ electricity consumption seemed to increase in a similar way even international journal of sustainable energy planning and management vol. 02 2014 23 ana gonçalves and tiago domingos 1.8 1.4 1.0 0.6 19961994 1998 2000 lisbon year porto year 2002 2004 2006 2008 2010 1.4 1.2 1.0 0.8 0.6 19961994 1998 2000 2002 2004 2006 2008 2010 2.2 1.8 1.4 1.0 0.6 19961994 1998 2000 montemor-o-velho year penafiel year 2002 2004 2006 2008 2010 2.6 2.2 1.8 1.4 1.0 0.6 19961994 1998 2000 2002 2004 2006 2008 2010 2.2 1.8 1.0 1.4 0.6 19961994 1998 2000 santarém year legend: population electricity consumption figueira da foz year 2002 2004 2006 2008 2010 2.6 2.2 1.8 1.0 1.4 0.6 19961994 1998 2000 2002 2004 2006 2008 2010 = −1.0β = −14.2β = 4.5β = 20.0β = 25.1β = −0.6β figure 3: relative values of total electricity consumption versus population between 1994 and 2009 for six portuguese municipalities (base year 1994). for those with very different β values. hence, the disparity of the scaling coefficient was more strongly linked with the evolution of the municipalities’ population. figure 4 shows the relation between the inverse of β and the relative variation of municipalities’ size and the resulting linear regression. relative variation of size was calculated as: (4) in this graph were included only the municipalities whose regressions had a scaling coefficient significant at the 5% level. with this condition, a total of 21 municipalities were excluded from the graph of figure 4. notwithstanding the reduced number of municipalities, it is possible to observe a pattern in figure 4. as hypothesized before, the variability of the scaling coefficients obtained seems to be correlated to the variation of population, even if it is not a strong relation. in conclusion, the various analyses point to the fact that, although in some cases the regression shows a good fit (with significant scaling coefficients and high r2), the scaling law should not be applied with time series data as there is a huge range of values encountered. some of these values are below 0 which fall very far from the usual range found in the literature or in well-known scaling relations in nature. in addition, for many urban municipalities, the data points cannot be described by the scaling law equation as we could see in figure 2 and the case of santarém. %δsize = −s s s 2009 1994 1994 4.3. sectoral analysis results for a sectoral analysis are very similar to those for total consumption (figure 5). the main differences can be found for the industrial sector where a pattern between the inverse of β and the relative population growth is less evident and there are fewer municipalities with coefficient significant at the 5% level (74 out of 123). the conclusion that a scaling law, on its own, should not be employed to a time series without correction factors, is also true for each sector. 5. cross-section analysis after concluding that scaling laws may not be relevant to describe a single city’s energy use throughout time it becomes essential to study how the cross-section scaling relation evolves within a certain period of time. therefore, in this section, beyond testing the applicability of the scaling law to the total and sectoral consumption of electricity in portuguese cities, we also present a discussion about the time dynamics of its coefficients. the time frame used was between 1994 and 2009. another important aspect to explore is the calculation and analysis of the differences between the real and regressed values of electricity consumption for each city. identifying the urban municipalities that show a larger or smaller consumption than the one resulting from the direct application of the scaling law can provide insightful information on other drivers of the distribution of electricity use. 5.1. total consumption given that in this work we only used one explanatory variable, one of the best tools to test for heteroscedasticity is the direct visualization of the relation of the residuals and the variable itself. we used this test for all years, but as the graphical results were similar in all cases we only present the results for 2001 (figure 6). in this graph we can see the presence of a clear outlier, the municipality of sines, with the other observations having no clear pattern. another test for heteroscedasticity used was the breuschpagan/cook-weisberg test that failed when used for the whole set of municipalities. sines is an industrial center and the location of the biggest oil refinery in portugal, remaining, however, a quite small city. it is a clear exception, especially in terms of total and industrial energy consumption and, for that reason, will be excluded from these analyses. performing 24 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view β 0.00 0 0.5 1 1.5 −1.5 −2 −1 −0.5 −0.20 1/ −0.40 0.20 0.40 y = 1.48x − 0.01 r 2 = 0.63 0.60 0.80 1.00 % δsize figure 4: relation between β coefficient for total electricity consumption and the relative variation of city’s size. the breusch-pagan/cook-weisberg test again, excluding sines, we could not reject the hypothesis of homoscedasticity with, a range of χ 2 values between 0.31 and 1.03 which are below the threshold of 3.84 for 122 observations and the 95% interval level [12]. regressed coefficients (β and α ) were found to be significant at the 5% level for all years. their values are presented in figure 7. the most intriguing results is the decreasing trend of β showing that electricity consumption started to follow more closely the distribution of population over the years, e.g., evolved towards a linear scaling law. another fact to take into consideration is the increase of α. this may be explained by two facts: the growth of electricity consumption per capita along the years (around 50% increase between 1994 and 2009) and a compensation for the decrease of the β coefficient observed. if we look to the literature [8] we can see the β’s obtained in this work are consistent with the one found for germany for 2002 (1.07). however this comparison does not seem to be of great relevance due to the large range of values obtained for both sets of municipalities. international journal of sustainable energy planning and management vol. 02 2014 25 ana gonçalves and tiago domingos residential 40 30 20 10 00 algarve alentejo lisbon center north services −10 −30 β −20 40 30 20 10 00 algarve alentejo lisbon center north industrial −10 −20 β −0.5 −1 y = 1.0924x + 0.0029 r 2 = 0.7734 0.50 1.00 % δsize −0.5 0.50 1.00 % δsize 40 30 20 10 00 algarve alentejo lisbon center north −20 −30 β −10 −1.5 −2 −2.5 −1 y = 1.2904x − 0.0432 r 2 = 0.5141 0.50 1.00 % δsize 1 1.5 0.00 −0.5 −0.50 0 0.5 0.00 0 0.5 1.5 −0.50 y = 1.0501x + 0.2209 r 2 = 0.2086 0.5 0.00 0 2 1.5 1 2.5 −0.50 1/ β 1/ β 1/ β figure 5: dynamic scaling law results for different sectors of economic activity. both urban criteria used. households show only a slight increase in its share, whereas the service sector had an increase of around 6 percentage points. this was reflected by the share decrease of industry that went from around 48% in 1994 to around 37% in 2009 (table 2). furthermore, it is important to remember that, included in total electricity, there are several types of consumption from the different sectors of activity and the overall pattern may hide the behavior of electricity consumption of each one separately. the dynamics of total electricity consumption can be influenced by the dynamics of each sector in particular and by the increase of services share/reduction of the industrial share in total consumption. 5.2. residential sector bettencourt et al. (2007) found two different values for the scaling parameter β, 1.05 and 1.00, for electricity consumption of households in china and germany, respectively, although the relation was considered linear in both cases. following this work, hortabernús et al. (2010) did a similar study for the region of andalucía in 2005 obtaining a value of 1.04 for the scaling factor of residential electricity consumption. thinking of a set of cities in the same social context (i.e., similar average income, educational levels and respective distributions), household consumption represents individual needs that, rationally, should be 26 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view table 2: structure of urban electricity consumption divided by sectors for both urban criteria. year residential services industry others 1994 25.4% 20.6% 47.5% 6.4% 1995 24.8% 21.1% 47.5% 6.6% 1996 25.5% 21.8% 46.1% 6.7% 1997 24.9% 22.4% 46.2% 6.6% 1998 24.4% 23.1% 45.6% 6.8% 1999 25.2% 24.0% 44.8% 6.0% 2000 24.8% 24.2% 44.0% 6.9% 2001 24.5% 26.8% 41.8% 6.8% 2002 26.1% 24.0% 42.2% 7.6% 2003 26.1% 24.5% 41.5% 7.9% 2004 26.4% 24.4% 41.1% 8.2% 2005 27.3% 24.8% 39.7% 8.2% 2006 26.8% 25.6% 39.6% 8.1% 2007 27.0% 25.6% 39.3% 8.1% 2008 26.5% 26.2% 39.1% 8.3% 2009 28.4% 26.9% 36.4% 8.3% 222120 fitted values r e si d u a ls 191817 −1 0 1 2 3 figure 6: graphical heteroscedasticity test for total electricity consumption in 2001 (stata graphic output). 1993 1996 1999 2002 year 2005 2008 1.4 1.3 1.2 1.1 1.0 0.9 0.8 1993 1996 1999 2002 year 2005 2008 9.0 in 8.0 7.0 6.0 5.0 4.0 β α a possible explanation for the trend in the values found is related with the sectoral composition of electricity consumption. the structure of consumption remained relatively constant and is very similar for figure 7: parameters of total electricity scaling laws between 1994 and 2009 with 95% confidence intervals error bars. alike, whatever the size of the city, which is in line with the results obtained in the literature. for portugal, the fit of residential electricity consumption distribution to a scaling law is very good (r 2 around 0.94), as can be observed in figure 9, with the parameters found to be significant at the 5% level. nonetheless, once again, β coefficient results show a temporal dynamics that goes against the notion of this being a simple linear scaling relation (figure 8). one possible explanation for the non-linear behavior in earlier years might be the growing electrification of energy consumption, especially in thermal heating and cooking [17–19]. in rural areas and smaller cities, the use of gas and/or wood as the source of heating and cooking was the standard choice until recent years. during the 1990s, electrical thermal devices (both for temperature control and cooking) started to become more common. in fact, the proportion of electricity in the total energy spent for these uses more than tripled between 1996 and 2010 [18–19]. this led to an increase of electricity in the energy use of households affecting mostly the consumption of wood and bottled gas (table 3). as technological transitions are usually faster in larger cities where innovations are more easily accessible and innovators are concentrated [20], it can be expected that the spread of these electrical devices was not even within portugal. as the dissemination reached smaller cities, the electrification of heating became more uniform and, with it, the values of electricity consumption as we saw in fig. 8. this rationale could also explain the difference in the values obtained by bettencourt et al. (2007). germany is a country where residential heating technology is very mature and so similar in all regions. on the other hand, china is a developing country with large inequalities in life style between larger and smaller cities that, most probably, are also reflected in the type energy use of their inhabitants. distribution of electricity use is usually attributed to a number of variables linked with the characteristics of the dwellings [21–22]. as we have seen, at the level of municipality, this distribution can, apparently, be attributed solely to the number of inhabitants with little international journal of sustainable energy planning and management vol. 02 2014 27 ana gonçalves and tiago domingos table 3: percentage of energy carriers’ contribution to domestic final energy consumption [17–19]. energy carrier 1989 1996 2010 electricity 17% 28% 46% natural gas 2% 2% 10% bottled gas 20% 27% 14% wood 60% 43% 25% others 1% 1% 5% total 100% 100% 100% 1993 1996 1999 2002 year 2005 2008 1.2 1.1 1.0 0.9 1993 1996 1999 2002 year 2005 2008 in 8.0 7.0 6.0 5.0 4.0 β α figure 8: parameters of residential electricity scaling laws between 1994 and 2009 with 95% confidence intervals error bars. real modeled 1000 1.e + 09 1.e + 08 1.e + 07 1.e +06 10000 1000000100000 si e le ct ri ci ty c o n su m p tio n (k w h ) figure 9: comparison between the regressed and real values of residential electricity consumption in 2009. error. however, the scaling coefficient that describes this relation showed a temporal trend that we intend to study here. here we test the significance of electrification of the energetic system, the equality of income (given by gini coefficient) and total income. we also include a proxy to characterize weather and consequent heating needs, hdd (heating degree days). the analysis of this section was run using national data, which, in this case, refers only to continental portugal as only the municipalities in the continent were considered in the regressions made in the previous section. table 4 describes in more detail all data used. in relation to the electrification coefficient of the residential energy system (ecf ) the only data we found for specific residential breakdown of energy use was that collected by the national energy surveys made in 1989, 1996 and 2010 by both ine and dgge. to estimate the missing values (for 1991–95 and 1997–2009) we used the share of electricity in total households’ energy consumption in the years of the surveys and did linear interpolations. the negative impacts of using a low number of points can be relativized because it is not expected that electrification of the residential sector would have a high yearly variability. a test for collinearity showed that average income and electrification coefficient are correlated. to decrease the error of the regression and its interpretation, we used these variables in separate models (table 5). results confirm what has been previously hypothesized. taken individually, both income and the electrification coefficient are highly significant in the trend of β. in both cases, an increase of their value leads to a decrease of the scaling coefficient. gini coefficient and hdd, the weather proxy used, are not significant in the characterization of the deviations of residential electricity use. 5.3. service sector regarding the service sector, the only previous study is for the andalucía region in spain in 2005 [10], where a scaling factor of 1.21 was obtained. 28 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view table 4: variables for the econometric analysis of residential scaling coefficient parameterization. variable year symbol source residential scaling coefficient 1994–2009 β own calculations hdd 1994–2009 hdd eurostat average income 1994–2009 inc pordata gini coefficient 1994–2009 gini ine electrification of the energy system 1989;1996;2010 ecf dgeg & ine table 5: results for the parameterization of the residential scaling coefficient. (1) (2) (3) (4) (intercept) 1.14 *** 1.34 *** 0.80 ** –0.32 (1.14) (0.09) (0.26) (0.27) hdd 1.34e-05 1.10e-05 8.35e-03 –1.22e-03 (1.71e-05) (2.09e-05) (1.94e-02) (2.14e-02) gini –4.63e-04 –1.98e-03 5.82e-02 2.41e-02 (1.79e-03) (2.23e-03) (1.71e-05) (7.52e-02) inc –4.23e-06 *** –1.02e-01 *** (5.26e-07) (1.33e-02) ecf –0.83 *** –0.23 *** (0.13) (0.03) adjusted r2 0.86 *** 0.79 *** 0.86 *** 0.82 *** note: *** p < 0.001; ** p< 0.01; * p< 0.05; . p < 0.1 (1) βt = c0 + c1hddt + c2ginit + c3inct + ε (2) βt = c0 + c1hddt + c2ginit + c3ecft + ε (3) in(βt) = c0 + c1in(hddt) + c2in(ginit) + c3in(inct) + ε (4) in(βt) = c0 + c1in(hddt) + c2in(ginit) + c3in(ecft) + ε international journal of sustainable energy planning and management vol. 02 2014 29 ana gonçalves and tiago domingos 1993 1996 1999 2002 year 2005 2008 1.4 1.3 1.2 1.1 1.0 0.9 0.8 β 1993 1996 1999 2002 year 2005 2008 6.5 in 6.0 5.5 5.0 4.5 4.0 7.0 7.5 α figure 10: parameters of services electricity scaling laws in between 1994 and 2009 with 95% confidence intervals error bars. 1.e + 10 1.e + 09 1.e + 08 1.e + 07 1.e + 06 1000 10000 si real modeled 100000 1000000 e le ct ri ci ty c o n su m p tio n (k w h ) figure 11: comparison between the regressed and real values of services’ electricity consumption in 2009. the coefficients obtained for portugal were lower than the coefficients in horta-bernús et al. work but are still larger than 1 which implies that larger cities have higher services’ electricity consumption. furthermore, in contrast with what happened in subsections 5.1 and 5.2, the value of β remained relatively constant (figure 10). it is also relevant to mention that the r2 values obtained were between 0.74 and 0.83, a seemingly good fit showed in figure 11 and with coefficients significant at the 5% level. once again, α showed an upwards trend, although not monotonic. as β values for this sector are relatively constant (especially when comparing directly the first and last years), this increase is only explained by the rise of per capita consumption which was the largest of all sectors (more than 100%). looking at these results it seems plausible to hypothesize that this scaling relation is related with specific characteristics of cities. due to the nature of services companies’ businesses, location and distance to the client is, usually, more important than for other sectors. for example, the location of a restaurant, supermarket and/or bank branch is crucial for the success of the business, whilst for a metallurgical or toy factory it is much more important to maintain the overall production costs low. thinking on the basics of urban economics that reports the importance of transportation needs in terms of city structure [23–24], urban environment seems to be well suited for services in general, and, the larger the city is, the better. therefore, it seems logical to conclude that services are more concentrated in cities and that, the larger cities are, the larger this effect is. 5.4. industrial sector for the industrial sector, the heteroscedasticity visual test showed a presence of a clear outsider (sines) as happened in sub-section 5.1 (figure 12). again, we disregarded this municipality in the analysis performed and, afterwards, the values of χ 2 obtained in the breusch-pagan/cook-weisberg test were below the 95% threshold (a range of 0.02–0.77). the results obtained were different from the ones obtained in previous sectors (figure 13). values of r2 for the industrial sector were the lowest of all, being, approximately 0.6 and the 95% confidence intervals obtained were considerably larger than for the other sectors (an average deviation of 16%, 10% and 5% for the industrial, services and residential sectors, respectively). these facts indicate that, in case of industry, city size and electricity consumption do not have such a strong correlation as the one observed for households and services, which can also be observed through the larger dispersion of values in figure 14. nonetheless, looking at figure 13 we can observe a decrease of the scaling coefficient (15% for the first criterion and 20% for the second) along the years, yet always above 1. even with a lower accuracy of the results it is possible to conclude that industries were highly concentrated in larger urban areas and, although this concentration has diminished, it still exists. the little information available together with the observation of a weaker correlation between city size and electricity consumption prevent us from explaining these observations. a comparison with the value found in the literature [10] seems to be counterproductive as, in this paper, the value of the adjusted r2 was even lower (0.28) than the ones obtained in our study. 6. conclusions to study the distribution of electricity consumption is one of the most relevant issues about urban modeling, especially due to a higher energy use in cities than in rural areas. in this work we studied how can simple scaling laws describe electricity use in portugal. first, we observed that the scaling law is not suitable to describe a city’s electricity consumption growth as some results are not significant and the range of scaling coefficients is very large. in relation to a cross sectional analysis it was important to study the different sectors separately. the residential sector is the sector for which the urban scaling law obtained better correlation coefficients. in this case, the shape of the scaling law changed through time evolving towards a linear relation. a parameterization study showed that this evolution was linked with the progressive electrification of the residential energy system in the last two decades and with the overall increase of families’ income. the set of both these analyses showed that it is possible to create scenarios for 30 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view 4 2 0 −2 14 16 18 20 22 fitted values r e si d u a ls figure 12: graphical heteroscedasticity test for industry sector in 2001. 1993 1996 1999 2002 year 2005 2008 1.8 1.6 1.4 1.2 1.0 0.8 1993 1996 1999 2002 year 2005 2008 8.0 in 6.0 4.0 2.0 0.0 β α figure 13: parameters of industrial electricity scaling laws between 1994 and 2009 with 95% confidence intervals error bars. 1000 1.e + 10 1.e + 09 1.e + 08 1.e + 07 1.e + 06 10000 1000000100000 si e le ct ri ci ty c o n su m p tio n (k w h ) real modeled figure 14: comparison between the regressed and real values of industrial electricity consumption in 2009. future electricity consumption of this sector distribution using a simple scaling law, which coefficient can be parameterized, if needed, using two variables. services, on the other hand, showed a relatively constant scaling exponent. technology shifts that influenced the scaling law for households do not apply for this sector as fireplaces and small size gas heaters (the traditional forms of heating) are only used by residential consumers. we could assess that there is a clear concentration of services electricity consumption in the larger cities which we attributed to the attraction that large urban areas provide to markets. the industry sector comes out, in the structural analysis of electricity demand, as the one with larger share. in fact, the time dynamics shown is similar to that of total consumption with an accentuated decrease of the scaling exponent. however, it is also the sector with the lowest accuracy and worst correlation indicating that city size is not as relevant as it is for services and households. given the share of industry in total consumption it would be important to find an explanation for the decrease in β and the low accuracy obtained. the lack of data at the municipality scale largely contributes to the existing difficulties of finding these answers. it should be referred that, even after the validation of the possibility of creating models for urban electricity use only with cities’ population, it is also important to assess the relevance of this variable when considered together with other variables that might affect electricity consumption. as future work we will focus on determining a model that could answer these questions and help us understand the mechanisms behind energy consumption, with special emphasis to the industrial sector. although there are still a few questions left to be studied in more detail, the results obtained were surprising, especially regarding the time evolution of the scaling exponent for total, residential and industrial electricity consumption. furthermore, we observed the relevance of technology shifts in the distribution of residential electricity consumption explaining the deviation from a linear relation in the first years of the study. 7. acknowledgments this work was only possible due to the financial support given by fundação para a ciência e tecnologia through phd 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[24] m. fujita, p. krugman, and a. j. venables, the spatial economy: cities, regions, and international trade. cambridge, ma: the mit press, 1999. 32 international journal of sustainable energy planning and management vol. 02 2014 scaling laws and electricity consumption in cities: a sectoral view << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 265-1338-1-le.qxd 1. introduction energy is a key resource for social and economic development worldwide. however, the economic growth may lead to an expansion of lifestyle aspirations, which, in turn, increases energy consumption and associated impacts [1]. the brazilian electricity consumption has been increasing over the last decade. for instance, in the residential sector, such consumption increased from 72,752.0 gwh in 2002 to 111,971.0 gwh in 2011, as shown in figure 1. nowadays, the residential sector represents 23.6% of the total electricity consumption in brazil [2]. therefore, there was an increase of 53.9% of the total electricity consumption for the residential sector over the last decade, approximately 4.9% of compound annual growth rate (cagr). international journal of sustainable energy planning and management vol. 02 2014 7 the energy consumption in residential buildings depends on the activities carried out by occupants, which refers directly to the household energy end-use [3]. therefore, several studies addressing the electricity end-use of residential buildings have been undertaken in brazil [4–6]. the estimation of the energy end-use in houses is a topic of interest for many stakeholders including utilities, customers, policy makers and appliance manufacturers, and it is an active research subject for at least four decades [7]. these studies can contribute to the development of strategies to enhance the energy efficiency in residential buildings. danielski (2012) [8] danielski [8] studied the variation in energy end-use of apartments in sweden. the buildings were constructed based on the stockholm program for * corresponding author, e-mail: arthurssilva07@gmail.com international journal of sustainable energy planning and management vol. 02 2014 7-18 knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil �������� ����� �� ������ ����� ���� �� ��� �� ����������� �� �� � � ���� ����� ���� ��� �� ���� � �������� ���� ��������� ��������� ����������� ������������ �� ���� ������������������ ������������ ���� ������� � ���� ! "# � ������ $���� "�������%�� a b s t r a c t the objective of this paper is to show the importance of measuring electricity end-uses in order to promote energy efficiency in low-income houses in southern brazil. sixty low-income houses were surveyed, and data of socioeconomic variables, electricity use, and usage pattern were measured and obtained. confidence intervals were assigned to obtain representative electricity end-uses and usage patterns. the results showed that the electric shower has the greatest electricity end-use, i.e., 33.5 to 40.3%, followed by the refrigerators, with end-use of 27.4 to 33.1% with 90% non-parametric confidence interval. usage patterns were obtained for appliances and lighting for each room and also for the electric shower. the results of this study will provide basis for determination of guidelines for low-income houses and government programmes for energy efficiency, rational use of energy and renewable energy. keywords: low-income houses, electricity end-uses, electricity usage pattern url: dx.doi.org/10.5278/ijsepm.2014.2.2 8 international journal of sustainable energy planning and management vol. 02 2014 knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil environmentally adapted buildings, which has requirements for the efficiency of new buildings. the study showed that there is much variation in energy consumption between houses, although they were similar in use and shape. the energy simulation approach showed that the energy consumption prior to construction were underestimated by 19% relative to the actually measured values. the difference can be explained by the time interval the construction and energy measurement, the shape factor of the building and the relative size of the common areas. carlson et al. [7] analysed how the averaged data of household electricity consumption could be inadequate for energy policy and decision-making. data from the residential energy consumption survey of the united states, containing information of 4382 dwellings from 1978 to 2009 were used. four scenarios were defined for the study: the average scenario, the typical scenario, the scenario where natural gas is not used, and the last scenario where electricity is not used (only natural gas). the authors have found that the use of averaged data would overestimate the number of contributing appliances to a specific electric load. the consumption of certain equipment varies widely among houses, but the results showed that about eight appliances were responsible for 80% of the energy consumption. to achieve 50% of energy consumption, only four appliances need to be monitored for the averaged scenario (central air conditioners, refrigerators, water heating and lighting). kelly [9] used the english house condition survey to assess the main drives behind the residential energy consumption. 2531 cases were assessed through the structural equation modelling statistical technique, which allows the calculation of both direct and indirect effects that explain energy consumption. the energy consumption were direct and indirectly correlated with several factors and showed that the largest factors explaining the energy consumption were the number of occupants, the household income, the floor area, the energy patterns, temperature effects and energy efficiency indicator. mcloughlin et al. [10] analysed the influence of the dwelling and occupant characteristics on the residential electricity consumption patterns within a 4200 irish houses survey. the authors conducted a multivariate linear regression to four parameters: electricity consumption, maximum demand, load factor and time of use, with occupant socioeconomic variables. the maximum electricity demand was influenced by the household composition, water heating and cooking type. the time of use was influenced more by the occupants characteristics, as the head of the household age and the household composition, rather than the dwelling characteristics. another finding was that when the age of the head of the household was between 35–55, it generated the highest energy consumption, probably due to children. the number of bedrooms influenced the total electricity consumption and the load factor was influenced by both the dwelling type and the number of bedrooms. in general, the wealthier people are, the more energy they will consume. according to druckman and jackson [11], an increase in socioeconomic levels leads to an expansion of the energy consumption pattern and associated environmental impacts due to the enhancement of comfort, recreation and leisure. ghisi et al. [6] found the same trend for brazilian houses, where wealthier families consume more electricity than poorer families. in the last decade, the brazilian minimal wage raised from r$200 to r$622 [12–13], which has probably contributed to the growth of the total electricity consumption in the residential sector nationwide. 2002 2003 e le ct ri ci ty c o n su m p tio n (g w h ) 2004 2005 2006 2007 2008 2009 2010 2011 120,000 100,000 80,000 60,000 40,000 20,000 0 figure 1: total electricity consumption in the residential sector of brazil from 2002 to 2011 [2]. in this context, the brazilian government has been developing programmes to improve the energy efficiency at low-income houses. in midwest brazil, for example, the energy utility performs donation of efficient refrigerators, compact fluorescent bulbs, and promotes the replacement of electrical conductors in the houses, benefiting so far, more than 32,000 low-income houses [14]. the estimated savings are 4,285.41 mwh per year and reduction of 536.48 kw on the peak load demand. the national institute of metrology and industrial quality (inmetro), through the brazilian labelling programme, the national energy utility (eletrobras), and national programme of electricity conservation (procel) performs labelling of various equipment, including electric showers, refrigerators, televisions and light bulbs according to their energy efficiency. these energy efficiency labels are indicators that help buyers in the decision making process and encourage them to save electricity. as for the electric shower, government programmes such as the growth accelerating programme (pac) have encouraged the use of solar water heating in lowincome houses. researches indicate appropriate solar fraction in most regions of brazil, justifying their feasibility against the use of electric shower, reducing electricity consumption and peak load demand, with low payback [15–16]. in order to improve such programmes, it is important to know the electricity end-uses and usage patterns of brazilian low-income houses. thus, the objective of this paper is to show the importance of measuring electricity end-uses in order to promote energy efficiency in lowincome houses in southern brazil. 2. method in order to estimate the electricity end-uses and usage pattern, the following steps were carried out: (1) data collection, (2) data treatment, and (3) data analysis. 2.1. data collection electricity end-uses could be drawn from generalized statistics with large amounts of data, as already done by some national institutes in brazil. however, these data consider general characteristics for electrical appliances in the houses, besides general conditions of use and operation. considering these facts, this study chose to work with a small sample size, but high data quality through measurements and interviews. data collection was undertaken through household interview surveys using questionnaires and two weeks of monitoring electrical appliances to register the electricity consumption, for summer and winter seasons. measurements were performed in 2012. a researcher team was responsible for contacting the householders personally, by visiting each house of the social housing area, or with the help of social assistance service and community agents. 2.1.1. house selection sixty low-income houses were surveyed in the metropolitan region of florianópolis, southern brazil. these houses were randomly chosen due to the difficulty to find householders that showed motivation to participate in the research. thus, the sample size does not intend to statistically represent the whole population of low-income housing of florianópolis. low-income houses were classified in accordance with national laws and guidelines on social housing [17]. figure 2 shows the characterization of the built area and the number of occupants in the sample. the built area of the houses varied in 25 m2 to 85 m2, with median of 53 m2. the number of occupants in the houses varied in one to eight, with median of three occupants. 2.1.2. questionnaires three questionnaires were used during the household interview surveys: (1) socioeconomic questionnaire; (2) electricity end-use questionnaire; and (3) electricity usage pattern questionnaire. an example of the electricity end-use questionnaire, for illustration purposes, is shown in annex. in the socioeconomic questionnaire, the number of occupants, and total and per capita income were collected. in the electricity end-use questionnaire, the characteristics of each electrical household appliance were determined, including: type, model, power rating, and the room in which the equipment is placed. the household monthly electricity consumption recorded by the local energy utility was also obtained, for the last 12 months from the measurement day of each house. in the electricity usage pattern questionnaire, the usage pattern of each electrical appliance was estimated by interviewing householders. the questionnaire was structured as to allow the collection of data on an hourly basis, in which the duration of each usage event was estimated in seconds or minutes for each hour of the day. international journal of sustainable energy planning and management vol. 02 2014 9 arthur santos silva, fernando luiz, ana carolina mansur, abel silva vieira, aline schaefer and enedir ghisi the usage patterns of electrical appliances were estimated for both summer and winter seasons. 2.1.3. monitoring equipment the electricity consumption of electrical appliances was measured during a minimum period of two weeks in each household. for this purpose, two meters were used: (1) powerball t8 and (2) cem 1000. the powerball t8 meter was employed to determine the total usage time and total electricity consumption of electrical appliances during the monitoring period. this meter was used to monitor electrical appliances rated up to 2.2 kw, including, but not limited to: fridge, freezer, washing machine, microwave, television, computer, fan, iron, coffee machine, hair dryer. electric shower heads were not monitored using this meter, because their power can range up to 8.0 kw. eq. 1 was used to determine the electricity consumption of electric shower heads, considering the manufacture power rating and the usage time pattern estimated by householders. (1) where: ec is the electricity consumption (kwh); p is power rating (kw); t is the usage time (h); t is the evaluated period (days). ec p t dt t = × ∑ 0 the cem1000 meter was used to measure the electrical characteristics of lamps, including: instantaneous power, power factor, voltage and current. this equipment was not used to register the electricity consumption over the monitoring period, but rather to define the instantaneous power rating. therefore, the electricity consumption of light bulbs was estimated using eq. 1, considering the instantaneous power rating measured and the usage time pattern estimated by householders. 2.2. data treatment data treatment was performed so as to determine representative values and confidence intervals of electricity end-uses and usage patterns estimations. three analyses were carried out: (1) electricity usage patterns and end-uses; (2) electricity consumption validation analysis; and (3) confidence intervals. 2.2.1. electricity usage patterns and end-uses the usage patterns are related to how the occupants use each electrical appliance, and its time of use. these patterns were used to find representative schedules for each electrical appliance. the data obtained with the electricity end-uses questionnaire and the measurements were used to calculate the average power rating of each appliance, using eq. 2. 10 international journal of sustainable energy planning and management vol. 02 2014 knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil 90 80 70 60 50 40 30 20 8 7 6 5 4 2 3 1 0 5 4 3 2 1 −1 0 −2 outlier individual value 3rd quartile median s u b tit le s 1st quartile subtitle built area (m2) number of occupants figure 2: built area and number of occupants of the sample. (2) where: apa is the average power rating for each appliance (kw); ec is the electricity consumption over the monitoring period (kwh); t is the usage time over the monitoring period (h). the average power rating was grouped with the data of the electricity usage pattern questionnaire in order to determine the hourly electricity consumption, using eq. 3. (3) where: echa is the electricity consumption of an appliance for each hour of the day (kwh); apa is the average power rating (kw); th is the usage time for each hour of the day (h). the electricity consumption of each hour of the day was summed to find the total average daily electricity end-use for each appliance. it was calculated using eq. 4, as each hour of the day would have different usage pattern. (4) where: ecda is the total daily average electricity consumption (kwh); ech is the electricity consumption for each hour of the day (kwh). the monthly electricity consumption for each appliance was estimated multiplying the total daily average electricity consumption by 30.42 days (365 days divided per 12 months). the total monthly electricity consumption at households was determined using eq. 5. (5) where: ecmt is the total monthly electricity consumption (kwh); ecma is the monthly electricity consumption for each appliance (kwh); n is the number of appliances. finally, the electricity end-use of each appliance was calculated using eq. 6. (6)e ecm ecm a a t % = × 100 ecm ecmt a i n = = ∑ 1 ecd eca h= ∑ 0 24 ech ap ta a h= × ap ec t a = where: e%a is the electricity end-use for each appliance (%); ecma is the monthly electricity consumption for each appliance (kwh); ecmt is the total monthly electricity consumption (kwh). 2.2.2. electricity consumption validation analysis the estimated electricity consumption for each house was compared with monthly electricity consumption recorded by the local energy utility. when the difference between estimated and recorded total electricity consumptions was greater than 20%, the house was excluded from the sample. after the excluding process, 53 houses were left to perform the electricity end-use and usage pattern analyses. 2.2.3. confidence intervals parametric and non-parametric statistical analyses were performed so as to determine the confidence intervals of electricity consumption patterns and average installed power in each room. for the parametric statistical analysis, student’s t-test was used assuming the sample was normally distributed. for non-parametric statistical analysis, wilcoxon rank sign test was undertaken assuming the sample was not normally distributed, but rather symmetric according to the median. the wilcoxon rank sign test is employed to estimate confidence intervals for median values of small samples. according to siegel [18], this test describes well behavioural variables, such as usage patterns. in comparison to the student’s t-test, the wilcoxon test compares the difference between median values rather than the difference between mean values. the analyses were carried out with minitab 16 statistical software. two confidence intervals were used: the 90% and the 80%. the 90% interval was used for the electricity enduses data, applied to mean and median values, as the data is well fitted with low variability. for the usage pattern schedules data, the 80% interval was used as the data present large variability. 2.3. data analysis data analysis was carried by determining the usage pattern schedules for rooms and electrical appliances. the schedules were assumed to represent the whole year, by grouping information of summer and winter periods of the house sample. one year of measurement for obtaining only electricity end-uses would be impracticable. international journal of sustainable energy planning and management vol. 02 2014 11 arthur santos silva, fernando luiz, ana carolina mansur, abel silva vieira, aline schaefer and enedir ghisi the electrical appliances in the same room were grouped in order to determine the average daily usage pattern schedule. the usage pattern was considered ranging between 0 and 1 for events representing nonand fullpower usage, respectively. these average schedules were weighted by both their average power and their share on the total electricity consumption of each house, in order to determine the representative schedules. the power data was transformed in power density, by dividing the installed power in each room for each house for its floor area. these power densities are associated with the usage pattern schedules. pearson’s correlation statistics was applied to the electricity consumption and socioeconomic variables in an attempt to find explanations to the achieved results; 95% reliability was considered for the correlation. 3. results the final results of the analysis performed in this research are presented in this section, which were divided by electricity end-uses, usage pattern and correlation analysis. 3.1. electricity end-use table 1 shows the electricity end-uses for the houses with a 90% confidence interval by wilcoxon’s test. the outlier values were disregarded and the ranking was based on the median of the sample. the “other” end-use refers to appliances that individually do not contribute as a representative end-use and also exhibits large variability on the sample. it is noticed that no air conditioning equipment was found in the house sample. according to table 1, electric shower, refrigerators, television and lighting together represent from 73.8% to 91.7% of the total electricity consumption. the end-use results did not show significant difference between summer and winter seasons, and were generalized for the whole year. the work of ghisi et al. [6] showed that the electricity consumption of electric shower represents 14 to 28% in summer and 26% in winter for the region sampled. the refrigerator features 33 to 34% in summer and 30% in winter. the electricity consumption in the bioclimatic zone where florianópolis is located ranges from 7.74 to 8.41kwh per day over summer and around 8.91kwh per day over winter. the data collected in the 53-house sample showed daily average of 7.23 kwh and 7.79 kwh, for summer and winter, respectively. the monthly average electricity consumption is 214 kwh and its median, 194 kwh. wide variation on the data can be identified, with values ranging from 80 to 400 kwh per month. figure 3 shows the frequency of monthly and daily absolute electricity consumption of the 53-house sample. 3.2. usage pattern schedules due to the large variability in the data regarding the appliances power and their usage pattern, the solution adopted was to create representative schedules for the 53 houses. figures 4, 7 and 8 show representative usage patterns, summarized in a power usage fraction per room, which is a value from 0 to 1 indicating the partial power usage in each hour of the day. figure 4 shows the usage patterns of all household appliances. it can be seen that the power fractions are small relative to total power installed in each room, reaching a maximum fraction of 0.33 in the bedroom. this fraction is somehow a concurrency coefficient of usage of electronic equipment of the building. it may be emphasized that the average values for each room are shown without confidence intervals. figure 5 shows the power density with appliances for each room with 80% confidence interval, which represents the whole sample with the parametric analysis test. to interpret figure 5, for the bedroom the average power is 18.28 w/m2, varying from 10.21 to 26.36 w/m2, with 80% reliability. 12 international journal of sustainable energy planning and management vol. 02 2014 knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil table 1: median electricity end-uses for the whole year with 90% confidence interval with non-parametric test. electric value shower refrigerator television lighting clothes washer microwave other lower limit 33.5% 27.4% 8.4% 4.5% 0.7% 0.4% 8.0% median 36.8% 29.9% 10.2% 5.2% 0.9% 0.6% 10.5% upper limit 40.3% 33.1% 12.2% 6.1% 1.1% 0.9% 13.5% figure 6 is shows the electricity consumption, when figures 4 and 5 are analysed together by multiplying the power fraction in each hour of the day by the power density value. from figure 6, it can be stated that at 20h, in the bedroom, 3.38 to 8.56 wh/m2 are used with 80% reliability. the results did not follow any trend, but it is noticed that on later hours of the day for the bedroom, the electricity power fraction is greater in the bedrooms than on the other hours. in the kitchen, the electricity consumption is greater in 12:00. there are appliances in standby mode between 0:00 and 07:00 in all rooms, and a small fraction in the living room in this period. figure 7 shows the usage pattern of lighting, with the power fraction starting at 17:00, because in other hours of the day the fraction is zero. in this case, 80% confidence intervals are presented on lower, median and upper levels. sometimes the lower level or the median is zero, and the bar does not appear in figures. all routines for the environment are associated with power densities shown in the same figure 7, with the student’s t-test and 80% reliability. for the bedroom, for example, the average lighting power density (figure 7-d) is 3.82 w/m2, with the average ranging from 3.35 to 4.29 w/ m2, with 80% reliability. it can be stated that in the case of the bedroom, at 20:00, lighting is used in a fraction from 0.167 to 0.333, which represents from 10 to 20 minutes in this full hour. by combining the power fraction with the average power in the room, for example, at 20:00, there is a consumption of 0.56 to 1.42 wh/m2, with 80% reliability. international journal of sustainable energy planning and management vol. 02 2014 13 arthur santos silva, fernando luiz, ana carolina mansur, abel silva vieira, aline schaefer and enedir ghisi kwh/month kwh/day 12 14 10 8 f re q u e n cy 6 4 2 0 80 160 240 320 400 electricity consumption 64 8 10 12 14electricity consumption figure 3: electricity consumption of the 53-house sample in kwh per month and per day. 0.50 0.40 0.30 p o w e r fr a ct io n time (hours) 0.20 0.10 0.00 0 1 2 3 4 5 6 7 8 9 1 0 11 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 kitchen bedroom living room figure 4: household appliances usage patterns for each room (average values). 0 20 40 average power density (w/m2) 60 80 100 kitchen bedroom living room figure 5: household appliance power density for each room, with 80% confidence interval. 14 international journal of sustainable energy planning and management vol. 02 2014 knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 time (hours) 2.00 0.00 e le ct ri ci ty c o n su m p tio n ( w h /m 2 ) 0 1 2 3 4 5 6 7 8 9 1 0 11 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 kitchen bedroom living room figure 6: household appliance electricity consumption for each room, with 80% confidence interval. 0 1 2 power density (w/m2) 3 4 5 kitchen 1.0 0.5 0.0 17 18 19 20 time (hours) (a) lighting usage pattern in the kitchen (b) average lighting power density in the kitchen p o w e r fr a ct io n 21 22 23 0 1 2 power density (w/m2) 3 4 5 1.0 0.5 0.0 17 18 19 20 time (hours) (c) lighting usage pattern in the bedroom (d) average lighting power density in the bedroom p o w e r fr a ct io n 21 22 23 bedroom 0 1 2 power density (w/m2) 3 4 5 1.0 0.5 0.0 17 18 19 20 time (hours) (e) lighting usage pattern in the living room (f) average lighting power density in the living room p o w e r fr a ct io n 21 22 23 living room figure 7: lighting usage patterns and lighting power density for each room. figure 8 shows the usage pattern of electric shower, which is the largest electricity consumer of the sample. the ranges for the patterns are of 80% confidence with non-parametric test, and the power interval have 80% confidence with the student’s t-test. for the usage time (figure 8-a), it is clear predominance at 7:00 and 19:00. the fraction of average power is 0.10, while varies from 0.06 to 0.16 with 80% reliability at 7:00. for 19:00, the average is also 0.10, but varying from 0.03 to 0.16. 3.3 correlation analysis the analysis shown in table 2 presents some correlations between total income with the number of inhabitants, total and electric shower electricity consumption with 95% reliability. for example, the total income was correlated with the number of inhabitants in a proportional way (high and positive value for the person’s index), and the p-value is lower than 0.05, which meets the 95% reliability. the number of inhabitants was correlated to the electric shower electricity, lighting, other appliances (see table 1) and total electricity consumption. the total income was correlated with the electric shower electricity consumption and the total consumption. in figure 9 some correlations are shown, for the household total income and number of inhabitants, with the total and electric shower electricity consumption. 4. conclusions in this study, a sample of low-income houses in southern brazil was selected for the determination of electricity end-uses. the importance of measuring electricity consumption and to perform appropriate interviews and quantification was shown, helping to obtain more realistic results. the greatest electricity end-use found was the electric shower, followed by refrigerator, television and lighting, although other studies indicate differently for some regions of brazil. the usage patterns obtained are useful for system sizing that can be proposed (such as solar water heating, photovoltaic system, air conditioning system) and for the quantification of future energy savings. besides, the usage patterns help to assess the international journal of sustainable energy planning and management vol. 02 2014 15 arthur santos silva, fernando luiz, ana carolina mansur, abel silva vieira, aline schaefer and enedir ghisi table 2: pearson’s correlation results between economic and electricity consumption variables with 95% reliability. total lighting number of income consumption total consumption variables value inhabitants (r$) (kwh/month) (kwh/month) total income (r$) pearson’s 0.583 – – 0.401 p-value 0.000 – – 0.006 electric shower electricity pearson’s 0.582 0.464 – – consumption (kwh/month) p-value 0.000 0.001 – – other electricity consumption pearson’s 0.293 – – – (kwh/month) p-value 0.041 – – number of inhabitants pearson’s – – 0.323 0.593 p-value – – 0.024 0.000 0.20 0.15 0.10 p o w e r fr a ct io n 0.05 0.00 0 1 2 3 4 5 6 7 8 9 1 0 11 time (hours) (a) usage pattern 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 36003100 power (w) (b) power 2600 figure 8: electric shower usage patterns, with 80% confidence interval. thermal performance of the building through thermoenergetic analysis, as they represent the occupant behaviour. the correlation analysis showed high relationship between the household electricity consumption with the number of inhabitants and total income. through this method, it was possible to define the appliances responsible for larger electricity consumption in the low-income houses of southern brazil. thus, it is possible to set goals to energy efficiency, such as investing in technologies of solar water heating and government programmes to encourage the use of energy-efficient appliances according to national laws and labels. however, these solutions are based on technical and economic feasibility, which can be different for each climate and solar irradiation availability in the regions of brazil, which indicates that more specific researches must be performed. in general, the results shown herein will provide a basis for other studies, whose primary focus is the determination of guidelines for low-income housing, guiding and reinforcing government programmes for energy efficiency, rational use of electricity and renewable energy use. 5. references [1] chung-sheng, z.; shu-wen, n.i.u.; xin, z. effects of household energy consumption on environment and its influence factors in rural and urban areas. energy procedia, 14 (2012), pp. 1. http://dx.doi.org/ 10.1016/ j.egypro. 2011.12.1015 [2] brasil. balanço energe′ tico nacional 2012: ano base 2011. empresa de pesquisa energe′ tica (epe). rio de janeiro, 2012a. 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[13] brasil, 2011. decreto n. 7655, de 23 de dezembro de 2011. [14] brasil, 2012b. programa de eficiência energe′ tica 2012 enersul: rede energia. são paulo. available in: < http://www.redenergia.com/enersul/ > acessed in: 2013, january. [15] naspolini, h.f. and rüther, r. the impacts of solar water heating in low-income households on the distribution utility’s active, reactive and apparent power demands. solar energy, 85(9) (2011), pp. 2023–2032. http://dx.doi.org/10.1016/ j.solener.2011.05.011 [16] martins, f.r.; abreu, s.l.; pereira, e.b. scenarios for solar thermal energy applications in brazil. energy policy, 48 (2012), pp. 640–649. http://dx.doi.org/ 10.1016/ j.enpol.2012.05.082 [17] pmf prefeitura municipal de florianópolis, 2011. plano municipal de habitação de interesse social: produto 08. secretaria municipal de habitação e saneamento ambiental (smhsa), florianópolis, sc, jun. 2011. available in: < http://www.pmf.sc.gov.br/> accessed in: 2012, october. [18] siegel, s. estatísticas não paramétricas para ciências do comportamento. editora bookman. second edition, 2006. acknowledgements the authors acknowledge the funding of studies and projects (finep) for the financial resources that enabled this research. international journal of sustainable energy planning and management vol. 02 2014 17 arthur santos silva, fernando luiz, ana carolina mansur, abel silva vieira, aline schaefer and enedir ghisi 18 international journal of sustainable energy planning and management vol. 02 2014 knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil q u es ti on n ai re e le ct ro n ic e q u ip m en t as se sm en t in te rv ie w er d at e: t im e of a pp li ca ti on -b eg in ni ng : en d: n am e: a dr es s: h ou se c od e: l ig h ti n g ch ar ac te ri za ti on g en er al m on it or in g e n er gy b il ls l ig ht in g ch ar ac te ri za ti on m on it or in g c e m 1 00 0 d ay s c on s t ax ( r $/ kw h) p ow er v ol c ur r ea ct ip ow er d at e am on g um p1a 2a s oc ia l o th er v al ue t yp e of ra ti ng ta ge re nt (p ow er ) ve p w . fa ct or m ea su ti on ta x? ta xe s (r $) r oo m la m p p os it io n (k w ) (v ) (a ) (k w ) (k v a r) (p .f ) re m en ts (k w h) e le ct ro n ic e q u ip m en t e qu ip m en t ch ar ac te ri za ti on m on it or in g t 8 p ow er ag e c ic le t im e c on su c on su r oo m e qu ip m en t l ab el /m od el ra ti ng (y ea rs ) ti m e (h :m m ) m pt io n m pt io n (k w ) ti m e (k w h) e qu ip m en t ch ar ac te ri za ti on m on it or in g t 8 p ow er ag e c ic le t im e c on su c on su r oo m e qu ip m en t l ab el /m od el ra ti ng (y ea rs ) ti m e (h :m m ) m pt io n m pt io n (k w ) ti m e (k w h) m on it . o n se t b eg in ni ng : __ /_ _/ __ _ ho ur __ _: __ _ c on su m pt io n: __ __ __ __ k w h m on it . o n se t e nd in g: __ /_ _/ __ _ ho ur __ _: __ _ c on su m pt io n: __ __ __ __ k w h a n n ex : e xa m p le q u 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 24 2019 21 *corresponding author – e-mail: sbea@dtu.dk international journal of sustainable energy planning and management vol. 24 2019 21–32 research and experimentation abstract in the light of insufficient climate policy on the global and national scale, some ambitious cities are becoming frontrunners of the climate action. copenhagen, denmark, is one of them and aims to achieve a co2-neutral energy system in 2025. reaching this goal requires, among other, changes in energy supply portfolio, which can be assessed using energy systems modelling. the aim of this study is to construct and evaluate scenarios for sustainable electricity and heat supply in greater copenhagen with a particular focus on the new district, nordhavn. the energy scenarios are modelled with the energy system model balmorel, and they are assessed and compared with focus on heat and electricity prices and co2 emissions. sensitivity analyses are conducted considering changes in the coefficient of performance (cop) of heat pumps and the discount rate. the results show that expanding copenhagen’s district heating system to nordhavn is a promising solution from a socio-economic perspective. if it is chosen that the heating supply in nordhavn should come from a local source, power-to-heat technologies are preferred. despite the narrow geographical focus, the challenges discussed in this paper and the method developed are relevant for other urban areas in europe that aspire to have sustainable energy systems. fossil fuels in 2035 [2]. devising copenhagen’s roadmap towards the carbon-neutrality goals requires a feasibility evaluation, which can be conducted with energy systems modelling. the role of combined heat and power plants (chps) and heat pumps (hps) is considered here, in view of varying availability of biomass and waste and the possibility of wind power providing more than 100% of electricity supply. compared to a simple feasibility study, modelling takes into account a dynamic system integration across energy sectors, cost-efficient utilization of storage facilities, cross-border electricity fluctuation and endogenously computed electricity prices. therefore, the optimization of investment decisions is dynamic and coherent, because the model can calculate key input parameters determining the economic feasibility. modelling the future low-carbon energy systems case study of greater copenhagen, denmark sara ben amer*, rasmus bramstoft, olexandr balyk and per sieverts nielsen department of technology, management and economics, technical university of denmark, produktionstorvet, building 424, 2800 kgs. lyngby, denmark keywords: energy systems modelling; local energy planning; urban energy systems; energy scenarios; balmorel; url: http://doi.org/10.5278/ijsepm.3356 1. introduction co2 emissions from the energy sector contribute to the climate change significantly. while policies are required for setting the framework conditions, in an increasingly decentral energy sector, the involvement of local municipalities and communities is crucial. copenhagen aspires to become co2 neutral by 2025 [1]. this goal encompasses power, heating and transportation. heating uses up to 40% of the total energy consumption and is the sector over which danish local municipalities have strongest influence. this paper focuses mainly on heating, electricity and fossil-fuel free transportation. copenhagen is one of 33 municipalities in the capital region and region zealand which are to be free from mailto:sbea@dtu.dk http://doi.org/10.5278/ijsepm.3356 22 international journal of sustainable energy planning and management vol. 24 2019 modelling the future low-carbon energy systems case study of greater copenhagen, denmark evaluated an integrated power, heat and transport system in nordhavn, where hps and electric vehicles (evs) were implemented. while all this literature has touched upon the future energy system in copenhagen, to our knowledge there is no-peer reviewed research on energy planning and investment decision-making for the area of gc, which takes into account the synergies across energy sectors and geographical space. this article’s contribution lies in developing and applying a modelling tool, which can be used for local energy planning in a national and regional energy system context – taking the future energy mix, the nordic electricity market and electricity prices into account. since the balmorel tool used allows both investment and operation optimisation, this study also contributes to the area of energy scenario development, providing knowledge background for complex decisions of designing the future heating supply. wider socio-economic consequences, such as employment, are out of scope of this article and are discussed e.g. in ref. [16]. this paper is structured as follows: section 2 describes the methodology, section 3 outlines the input data and assumptions, section 4 presents the findings, and section 5 discusses the results. the paper concludes in section 6. 2. methodology 2.1. energy systems modelling with balmorel the overall methodology for this paper is scenario development and analysis. we use the energy system model, balmorel, to model our scenarios. balmorel is an open-source energy system optimisation tool, this paper’s purpose is to construct and evaluate scenarios for energy supply in greater copenhagen (gc), by comparing different electricity and heating supply mixes, prices and co2 emissions. a similar approach for another town is taken e.g. by ref. [3]. the results form a basis for providing recommendations for the municipal energy planning activities, focusing on integrated energy supply. this study aims to answer the following research questions, focusing on copenhagen and nordhavn: • what scenarios are plausible as of 2020, 2025, 2035 and 2050? • based on the results of the modelled scenarios, which energy mix is preferable from a socioeconomic perspective? • how sensitive are the results to selected assumptions? methods for modelling of decentralized and community energy systems have been reviewed e.g. by refs. [4,5]. this special issue contains articles which focus on modelling of a specific swedish municipal energy system [6] and a local district heating system in poland [7]. the danish examples of municipal analyses are: modelling of energy scenarios implementing hps, wind power, biomass and electrolysers in sønderborg [8] and heat supply and heat savings in helsingør [9]. ref. [10] found out that large-scale hps operate better when connected to the distribution instead of transmission grid in copenhagen's dh system. ref. [11] showed how heat savings, hps and low-temperature dh could be implemented in copenhagen. refs. [12,13] highlighted the need for aligning local energy planning with national strategies. ref. [14] assessed options for locating a hp in nordhavn. ref. [15] acknowledgement of value i am not formally involved in the research conducted by sara ben amer et al., but i believe that both the methodology and results authored by them could have a positive effect on my own area of activity, by providing perspectives for planning the future co2-neutral copenhagen. niels bethlowsky kristensen, climate and energy planner in the city of copenhagen abbreviations chp combined heat and power gc greater copenhagen cop coefficient of performance hp heat pump dh district heating p2h power-to-heat ev electric vehicle international journal of sustainable energy planning and management vol. 24 2019 23 sara ben amer, rasmus bramstoft, olexandr balyk and per sieverts nielsen a trade-off between technological details and spatial and temporal resolution is necessary. the geographical area for this paper includes nordhavn, the gc area, the rest of denmark, constituted by nine other areas, and countries linked with denmark via transmission lines and the common nordic electricity market: germany, sweden and norway. in this study, the temporal resolution is 4 representative seasons (weeks) and 56 time periods (representing every 3rd hour throughout the selected seasons), within each season. thus, the full year is represented by 224 chronological time-steps. the chronological order of the selected time-steps enables the mathematical model to use stretching methods, ensuring that the production and storage levels i.e. both energy and capacity, are sufficiently replicated, as compared to a time resolution of a full year. 2.2. energy scenarios this article focuses on gc: the city of copenhagen and surrounding municipalities, inhabited by 1.3 million people [20]. nordhavn is a new district in the city of copenhagen, expected to have 40,000 new residents and 40,000 workplaces by 2030 [21]. the dh network will be extended in the part of nordhavn closest to the already existing pipes, but more remote areas may use other solutions, due to the expected low energy consumption of buildings. we model and evaluate the following energy scenarios for gc and nordhavn, analysing years 2020, 2025, 2035 and 2050: • reference: the model chooses freely to invest in nordhavn in either technology: seawater hp, heat storage, solar heating and ground-source hps. • seawater hp: investing in a large seawater hp with thermal storage in nordhavn. • dh extension: extension of copenhagen’s dh capacity to cover all nordhavn1. • individual solutions: optimizing investments in nordhavn in: solar thermal collectors, groundsource hps, thermal storage and electric boilers. in this study, we exclude air-to-air and air-to-water hps, because the first one can only cover up to 80 % of the space heating demand and can only deliver heat in the room where it is installed, and the latter is likely to exceed required noise levels in dense city areas [22]. although expensive, ground-source hps suit the urban environment best, because they are silent and perform stably over the 1 the dh network is assumed here to be already expanded, thus the cost of expansion is not part of the optimisation implemented in gams language [17]. it is a partial equilibrium model, built upon a bottom-up approach. balmorel simulates the energy system's supply and demand and optimizes the operation of and investments into production units, calculating the most cost-effective mix of technologies for a given scenario [18] by minimizing the total system costs, including annualized investment costs, operation and maintenance and fuel costs, incorporating constraints e.g. heat and electricity coverage for each time period, emission limits. to represent the costs and technical bottlenecks in electricity and heat transportation, balmorel distinguishes geographical levels (countries, regions and areas) [18]. using time series, the model represents variation in intermittent technologies such as wind and solar power, demands and storages. balmorel is a deterministic model, which allows optimising the energy system with varying yearly foresight, i.e. myopic, partial, and full foresight. myopic foresight refers to a situation where no information regarding future years is given. in full foresight mode, the model contains detailed assumptions about future energy targets, cost reductions, fuels prices etc., and thus can provide globally optimal solutions. in reality, we have a limited knowledge about the future: policy frameworks, fuel prices, technology costs developments etc. therefore, in this paper, a partial foresight looking at one simulated period ahead is applied, reflecting a partial knowledge about the future: the situation that decision-makers have perfect foresight only within the simulated year and within the following simulated year. except for applications mentioned in ref. [17], balmorel has been used in the context of copenhagen in refs. [2,19]. in this paper, we build upon the existing balmorel model and further extend the modelling framework to include nordhavn, as a separate part of the gc area. such an approach allows local energy planning in an integrated national and nordic energy systems context. moreover, by implementing specific technological options energy scenarios, we conduct a comprehensive assessment, supporting future decision making for local energy planning. the modelling framework is adapted to the specific case of gc, but could be applied for other cities around the world. energy systems modelling requires the generation technologies, space and time to be aggregated so that the non-linear and complex reality is represented. due the high computational time of the optimisation in balmorel, 24 international journal of sustainable energy planning and management vol. 24 2019 modelling the future low-carbon energy systems case study of greater copenhagen, denmark the projected heat demand for nordhavn is based on ref. [17]. figure 1 shows the yearly values for heat and electricity demand modelled in this paper. the heat demand curves shown in the upper part of figure 1 (please note the axes) are different because in gc the demand decreases, while no additional heat savings are expected in nordhavn, which predominantly consists of new energy-efficient buildings. figure 1 also depicts the projected electricity demand for the two areas, represented by the demand profile from eastern denmark. the electricity demand is contained within eastern denmark, corresponding to a bidding area in the power market nord pool. this demand covers both the “classical” demand and demand for evs and is adopted from the entso-e global climate action scenario [23]. we assume that the transportation sector is decarbonised in the future, calling for biofuels especially for long-haul transportation. to simulate this, we have year. to reduce the size of area required for drilling, vertical pipes instead of horizontal can be used. we assess the scenarios with the following criteria: average heat and electricity price and co2 emissions. 3. input data and assumptions 3.1. energy demand and supply the balmorel model contains data for electricity and district heat demand for denmark, sweden, norway and germany. this article focuses on the copenhagen area, represented in the model as two areas: gc and nordhavn. the district heating network in gc covers 17 municipalities and is one coherent system, where heat can be exchanged among different district heating providers. in gc heat is produced primarily in 4 chp plants (using biomass, natural gas and coal) and 3 waste incineration plants and, if needed, stored in heat accumulators. there are also 30 peak load units [14]. recently, chps in gc have undergone a retrofit to enable burning biomass. figure 1: projected heat demand in gc and nordhavn (top) and electricity demand (down) in eastern denmark (gwh). please note that heat demand values for nordhavn are presented on the right axis 0 10 20 30 40 50 60 70 80 90 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2020 2025 2030 2035 2040 2045 2050 h ea t d em an d n or dh av n (g w h) d is tri ct h ea tin g de m an d g re at er c op en ha ge n (g w h) greater copenhagen nordhavn (right axis) 0 5000 10000 15000 20000 25000 2020 2025 2030 2035 2040 2045 2050 e le ct ric ity d em an d in e as te rn d en m ar k (g w h) international journal of sustainable energy planning and management vol. 24 2019 25 sara ben amer, rasmus bramstoft, olexandr balyk and per sieverts nielsen the resulting transition of the electricity generation mix over time, for all the simulated countries and for denmark, with a split between western and eastern danish grids i.e. dk1 and dk2, respectively. the general trend in the decarbonisation pathway of the power system is the increased penetration of the variable renewable energy sources: wind and solar. moreover, in dk2, where gc is located, an increased penetration of solar and wind power causes biomass to be phased out in 2035. 4.2. heat production figure 3 illustrates the resulting transition of the heating sector in denmark, gc and nordhavn. in denmark and gc, a decrease in dh demand is expected, mainly due to the assumed heat savings, see also section 3.1. currently, a large share of heat in the copenhagen dh network is produced using biomass, municipal waste and coal. however, due to co2 emission reduction and renewable energy targets, coal is to be phased out. figure 3, similarly to figure 2, illustrates that a phase out of biomass in copenhagen after 2025 is socio economically optimal. this result complies with the expectation that scarce biomass needs to be freed up for decarbonising the part of transport where electricity is not technically possible yet. the results also show that power-to-heat (p2h) has a promising socio-economic potential. implemented excess heat production of 14 pj for denmark, which represents the excess heat supply for producing 50 pj biofuels in denmark [24]. the transition to electric vehicles is, as mentioned, included in the projected electricity demand. 3.2. techno-economic data ref. [25] describes the data applied in the modelling, except for data on nordhavn, based on ref. [26]. the investment and o&m costs and efficiencies come from refs. [22, 27], except for the seawater hp, whose investment cost is based on refs. [28, 29]. the cop of 3 is based on ref. [30], o&m costs are the same as the ground-source hp, considering that sea temperature is constant at depth. fossil fuel prices are based on ref. [23], biomass prices on ref. [31]. this study is conducted from the socio-economic perspective: excluding subsidies and taxes and applying 4% discount rate over 20 years of investment. 4. results 4.1. electricity production the optimised electricity generation portfolio influences the electricity prices, which are essential for determining the optimised heat production mix, seen from a socio-economic perspective. figure 2 illustrates figure 2: electricity production per fuel in 2020, 2025, 2035 and 2050 in all the simulated countries (left) and in denmark (right), divided into western (dk1) and eastern denmark (dk2) (pj) 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2020 2025 2035 2050 e le ct ri ci ty g e n e ra tio n ( p j) all countries 0 50 100 150 200 250 2020 2025 2035 2050 2020 2025 2035 2050 dk1 dk2 denmark solar wind hydro renewable gas biomass municipal waste nuclear other fossils natural gas coal 26 international journal of sustainable energy planning and management vol. 24 2019 modelling the future low-carbon energy systems case study of greater copenhagen, denmark network, so all of the danish excess heat capacities are located here, see also ref. [32]. 4.3. heat and electricity price table 1 shows the simple annual average heat and electricity prices obtained from the modelling and indicates that prices vary over years. since the excess heat production covers a high share of the dh demand in copenhagen, the annual average heat prices are lower in copenhagen than nordhavn in all modelled years except for 2035. this indicates that dh expansion to nordhavn could be a relevant solution. moreover, p2h technologies are focusing on nordhavn, a local seawater hp seems to be a promising technology in case the copenhagen’s dh network is not extended there. local hp technologies are socio-economically viable if the area is not connected to the copenhagen dh network, however, in case a connection is possible, the model finds this solution more feasible than installing hps. as discussed in section 3.1, transport is expected to use biofuels in long-haul transportation. we simulate this by implementing excess heat production (biorefineries) in the model. the gc area has highest potentials for cost-efficient utilisation of the excess heat in the dh figure 3: heat production mix in 2020, 2025, 2035 and 2050 in denmark, gc and nordhavn (pj) 0 20 40 60 80 120 140 2020 2025 2035 2050 d is tri ct h ea t g en er at io n (p j) denmark 0 5 10 15 20 25 30 35 2020 2025 2035 2050 copenhagen excess heat electric solar biomass municipal waste natural gas coal 0.00 0.01 0.02 0.03 0.04 0.05 0.06 2020 2025 2035 2050 2020 2025 2035 2050 2020 2025 2035 2050 2020 2025 2035 2050 reference seawater district heating individual h ea t g en er at io n (p j) nordhavn sea water hp ground source hp electric boiler dh fuel mix (copenhagen) international journal of sustainable energy planning and management vol. 24 2019 27 sara ben amer, rasmus bramstoft, olexandr balyk and per sieverts nielsen seawater hp to 2.8, and of the ground-source hps to 3.5, and changing discount rate to 2% and 6% instead of 4%. table 2 shows the resulting differences in heat and electricity prices. overall, changes occur both in average heat and electricity prices. the influence of cop is mainly visible in nordhavn (where a seawater hp would be installed) and is within the range of 5-9% increase in average heat price. as expected, a lower discount rate results in a lower heat price in both copenhagen and nordhavn. the opposite happens for a higher discount rate. this effect is especially visible in 2025 and 2035, where many new investments take place. this result shows that our findings highly depend on the choice of discount rate. 5. discussion in this paper, we find that the expansion of copenhagen’s dh network to nordhavn shows a promising perspective seen from a socio-economic point of view. in case the heating demand in nordhavn is supplied by a local source, p2h technologies are chosen. these results are in line with the findings in ref. [26], where analyses of heat supply alternatives for nordhavn, focusing on changing electricity price, cop of hps, investment cost and heat demand, were conducted. in that report, almost all the cases showed that expanding the copenhagen’s dh network would pay off from a socio-economic perspective, but lower electricity prices would significantly improve the cost-effectiveness of hps. the results in this article are obtained by using the energy system model balmorel. although it is a detailed model, it uses a number of assumptions and simplifications. to show how results depend on some of the assumptions, we conducted sensitivity analysis. the choice of heat supply may also depend on qualitative aspects, such as security of supply and comfort, which were excluded in this analysis. moreover, our socio-economic analysis does not include taxes, while heavily invested in, so the correlation between electricity and heat prices is visible and the rise in the price of heat in nordhavn follows the projected increase in the electricity price. to provide a deeper understanding of this correlation, figure 4 illustrates the dynamics between heat production and electricity and heat prices for copenhagen and nordhavn in 2035. figure 4 shows that waste incineration plants and excess heat are supplied continuously as base load production throughout the year in copenhagen. moreover, p2h technologies generate heat at periods with low electricity prices, and heat storages are used when economically feasible. the correlation between p2h generation and electricity prices is evident when focusing on nordhavn in 2035. 4.4. co2 emissions the pathway of co2 reduction in denmark and copenhagen shows a steep reduction already between 2020 and 2025 in the electricity and district heating systems, followed by the transition to carbon-neutrality. in the simulations, the co2 emissions by 2020 are calculated to be 4860 ktons/y in denmark, where gc contributes with 640 ktons/y. compared to the 2018 data from the city of copenhagen, which shows 925 ktons from electricity and dh sectors [33], the calculated number (encompassing all municipalities in gc) is low. however, the recent conversion to biomass is expected to reduce the co2 emissions from dh and electricity substantially. the model shows that gc can reach zero emissions in the dh and electricity sectors in 2025, whereas denmark still emits 1200 ktons co2/y in 2025. copenhagen achieves its target by phasing out fossil fuels. by 2035 the model projects denmark to be nearly carbon-neutral regarding electricity and district heating production. 4.5. sensitivity analyses we have conducted sensitivity analyses to examine how results change depending on altering the cop of the table 1: annual average heat in copenhagen and nordhavn (eur/gj) and electricity prices in eastern denmark (eur/mwh) average heat price (eur/gj) average electricity price (eur/mwh) copenhagen nordhavn eastern denmark (dk2) reference 2020 1.5 1.9 22.5 2025 1.8 1.9 21.7 2035 4.1 3.7 38.1 2050 1.5 6.0 62.1 28 international journal of sustainable energy planning and management vol. 24 2019 modelling the future low-carbon energy systems case study of greater copenhagen, denmark is the biomass base power and heating production. the current tax structure, where biomass is free from taxes, means that it is a more profitable solution than e.g. hps, which are affected by electricity taxes. for comparison, ref. [34] has conducted a detailed modelling of the framework conditions for dh in the nordics. the economic attractiveness, seen from a private economic perspective, may be reduced for e.g. p2h technologies. this is because taxes constitute about 50% of the final electricity tariff for customers. on the other hand, there are exemptions for users that consume more than 4000 kwh electricity for hps a year. a real-life illustration of the current tax structure figure 4: dynamics between heat production and electricity and heat prices for gc (top) and nordhavn (down) in 2035 in the reference scenario international journal of sustainable energy planning and management vol. 24 2019 29 sara ben amer, rasmus bramstoft, olexandr balyk and per sieverts nielsen slight changes in cops of the hps modelled only have little influence on the results, but our findings highly depend on the choice of discount rate. despite the narrow geographical focus, the challenges discussed in this paper and the method developed are relevant for other urban areas in europe that aspire to have sustainable energy systems. by assessing a number of scenarios for energy supply, their consequences can be compared to provide recommendations for the planning process not only in gc, but also in other similar projects elsewhere. the method developed could be also used by energy planners in other cities, beyond copenhagen, especially where a decision on planning with socio-economic perspective has to be made. it is useful for developing sustainable energy plans for new urban developments and, especially in cities with high dh penetration, to decide for a relevant heat supply option. recently, more and more cities are creating development projects-urban labs, which will encompass residential, commercial and industrial buildings, as well as smart and sustainable infrastructure, including energy systems. acknowledgements this article was invited and accepted for publication in the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come [35]. this although this analysis is conducted for denmark specifically for gc, the method and tools applied can be used for a similar analysis of other geographical location. in this way, the perspectives can be broadened, creating valuable insights into energy planning in smart sustainable cities. 6. conclusions in this paper, we have developed and applied a method for energy system modelling of greater copenhagen with the balmorel model. we consider the developed model a suitable tool to represent an urban area while keeping connections to the rest of denmark and nordic electricity market. we have constructed and evaluated scenarios for energy supply of nordhavn focusing on heat and electricity generation mixes and prices, and co2 emissions. all of the scenarios resulted in a steep reduction in co2 emissions already between 2020 and 2025 in the electricity and district heating systems, followed by a transition to carbon-neutrality. we found that dh expansion to nordhavn and a seawater hp are plausible solutions. p2h technologies, municipal waste, heat storages and excess heat would be main supply technologies in the future energy transition. to examine the sensitivity of the scenarios, we conducted a sensitivity analysis, where we reduced the cop of hp technologies and tested how discount rates of 2% and 6%, influenced the results. table 2: changes in average heat and electricity prices due to the lower cop of hp and discount rate, as compared to the reference (%) average heat price average electricity price year copenhagen nordhavn eastern denmark seawater hp cop=2.8; ground-source hp cop=3.5 2020 0% 9% 0% 2025 0% 9% 0% 2035 0% 5% 0% 2050 2% 7% 0% 2% disc. rate 2020 −3% −6% −4% 2025 −36% −28% −28% 2035 −35% −26% −24% 2050 −7% −9% −3% 6% disc. rate 2020 0% 9% 5% 2025 47% 32% 34% 2035 25% 14% 17% 2050 −3% 4% 4% 30 international journal of sustainable energy planning and management vol. 24 2019 modelling the future low-carbon energy systems case study of greater copenhagen, denmark [11] mathiesen, b.v., lund, r., f., connolly, d., ridjan, i., nielsen, s. copenhagen energy vision 2050: a sustainable vision for bringing a capital to 100% renewable energy, 2015. http://vbn. aau.dk/files/209592938/copenhagen_energy_vision_2050_ report.pdf. 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archishman.bose@ucc.ie international journal of sustainable energy planning and management vol. 22 2019 95–108 abstract industrial facilities including power plants are potential sources of cheap and low-carbon waste heat, which is often not utilized due to lack of techno-economically viable options. the present paper is based on a case study focussing at albena tourist resort in bulgaria to design and develop a potential mobile thermal energy storage (m-tes) system for waste heat utilization from an existing biogas-based combined heat and power (chp) plant. besides techno-economics, integration of the system within existing premises, freight weight, space constraint and hotel occupancy are crucial factors. scheduling, along with the frequency of container change determines both the economic and social viability of such a project. a conceptual system design tailored to maximize energy utilization within the given constraints has been made. core of the system is 5 containers of 15.9 tons each, with one pulling truck for minimal visibility of the transportation and a two-day container discharge cycle. a net reduction of 558 to 885 mwh per year of electricity consumption from existing electric boilers was calculated with a payback period of 7 years for yearlong operations and 14 years for summer operations. the corresponding co2 savings was 96.7%. hybridization with solar thermal systems can provide a complete substitution of the use of traditional energy sources for domestic hot water. 1. introduction industrial activities, including power generation, have significant potential of supplying waste heat, often released unused due to lack of technologically viable options [1, 2]. recovery and re-use of waste heat, besides increasing the efficiency of industrial systems, provides an attractive low-carbon and low-cost energy source [3, 4], together with the reduction of primary energy need [5] for end users. on-site waste heat utilization is an established technology due to ease of integration and operation with existing systems. however, the technical viability of waste heat utilization in district heating networks is limited by the requirement of a supply temperature of 70°c in district heating networks [4]. furthermore, the economic viability of development of a district heating network for off-site heat utilization depends on the appropriate relation between the amount of heat available and that transported from the source to sink [2, 5, 6] mobile thermal energy storage (m-tes) systems employing latent heat have been studied as an alternative techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry archishman bose*,a,b, mohammad samir ahmeda,c, denitsa dobrinova kuzevaa,d, and johannes van kasterenc,e a innoenergy scandinavia, valhallavägen 79, 114 28 stockholm, sweden b department of energy (denerg), politecnico di torino, corso duca degli abruzzi 24, torino 10129, italy c department of built environment, eindhoven university of technology, 5612 az eindhoven, the netherlands d department of industrial engineering & innovation sciences, eindhoven university of technology, 5612 az eindhoven, the netherlands e innovation lab, eindhoven university of technology, horsten 1, 5612 ax eindhoven, the netherlands keywords mobile thermal energy storage (m-tes), waste heat, phase change material (pcm), tourism industry, techno-economic assessment url: http://dx.doi.org/10.5278/ijsepm.2544 http://dx.doi.org/10.5278/ijsepm.2544 96 international journal of sustainable energy planning and management vol. 22 2019 techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry 2. mobile thermal energy storage (m-tes) the heart of the m-tes system is the phase change material (pcm), where the waste heat is stored as latent heat in a container. to recover the heat stored, plant equipment like heat exchanger, pump, valve and other fittings are necessary. the system is initiated from the m-tes container being charged by the waste heat at the heat source. the container is then transported to the users by vehicles, usually trailer trucks, and the heat is released. after discharging, the container is transported back to the heat source to start a new cycle. the conceptual layout of the m-tes system with a biogas chp plant is shown in figure 1. 3. case study the present study is based on the resort city of albena, situated on the black sea coast of bulgaria, 30 km north of varna, with the coordinates of 43.368°n and 28.08°e. primarily a summer resort with over 34 hotels in operation in summer, a few hotels operate during winter. the peak hosting capacity is 20,000 including staff. the average hotel capacity is 400 visitors, with an occupancy of 80% during peak season operations. the energy consumption analysis of albena is complex. the operation peak, based on the tourist activity, typically occur in the months of july and august. the average summer day temperature being around 30°c [10], the energy need for space cooling is considerable. however, domestic hot water demands the highest share of consumed final energy with above 40% of the annual energy consumption of albena. electricity is the primary energy source for generating hot water with an average electric boiler efficiency of 95%. to district heating, where the source and use locations are at considerable distances [7, 8]. the capability of latent heat storage to store large amount of heat within the limited space of container is of considerable advantage. the distance of the source and demand, the temperature of the source and the type of end-use plays a crucial role in the design and viability of such systems [1, 9]. ability of integration with new and existing biobased combined heat and power (chp) plants allows m-tes systems to support the development of such technologies as well. hotels are usually energy intensive in operations due to the need to maintain higher comfort levels with greater thermal treatment of space and requirement of additional facilities like swimming pools. moreover, the compliance with standards and customer satisfaction often forces the hotel management to operate the services at their maximum potential. these result in considerably high energy consumption and subsequent high energy costs of operations. in this paper, an m-tes system was studied to provide heat to a resort city comprising multiple hotels. techno-economic system design and operation strategy has been developed to ensure sustainable operations and integration of the chosen technology into the tourism industry. nomenclature variables/ parameters abbreviation capital expenditure capex combined heat and power chp domestic hot water dhw mobile thermal energy storage m-tes net present value npv operation expenditure opex organic rankine cycle orc payback period pbp phase change material pcm photovoltaic pv biogas based power plant transporting containers to and from charging point heat discharge points hotel loads heat flow figure 1: conceptual layout of the m-tes system international journal of sustainable energy planning and management vol. 22 2019 97 archishman bose, mohammad samir ahmed, denitsa dobrinova kuzeva and johannes van kasteren district heating network are an efficient and wellestablished option for transporting heat when the distance between source and end user is limited to 1-2 km [11]. for places without nearby district heating networks, establishing such a system is subject to several limitations and complexities unless otherwise subsidized or financed by the government. the initial investment cost being high, as well as the requirement of multiple permissions and clearance for the civil construction, makes development of such facilities extremely difficult for small scale purposes. in addition, for operation hours lower than 4000 hours per year, the fixed energy costs for the users is higher than alternatives [11]. indeed, an inspection of the present location revealed the complicacies of crossing of highways and agricultural lands of the underground pipelines, that would be limiting to constructing a district heating network. on the other hand, using the available highway and road facilities, and the minimum land requirements for the charging and discharging units on-road transportation of waste heat would be much advantageous. both the project cost and complicacies would be thus reduced. furthermore, the possibility to transfer heat to other locations based on the demand makes the m-tes system attractive for waste heat utilization in the present case study. 3.1 heat source in the case study, waste heat is available from an energy crop anaerobic digestion chp plant, located appro ximately 10 km away from albena resort area. the chp unit has a rated electricity output of 1 mw, operating at an electrical efficiency of 31%. it employs a turbocharged system, resulting in exhaust gas temperature of 340°c, pressure 1.09 bar and mass flow rate of 5.6 tonnes/hr. being a base load power plant, and for a minimum temperature of exhaust of 150°c, a steady availability of 400 kw of waste heat is ensured, based on plant data. heat requirement of the digester is presently met by burning a fraction of the produced biogas. nearby buildings, mostly office spaces and green houses are supplied by the waste heat from the chp only for a few months in winter. however, this accounts for a minimal usage of the total heat generated. as for the operation during other seasons, the waste heat from the exhaust of the chp is completely wasted. being in an agricultural zone, the local use of waste heat is limited. on the other hand, use of waste heat in organic rankine cycles (orc) suffers from economies of scale, specifically, below 100 kw [12]. with a thermal efficiency of current high temperature orc of 24% [13], a 96 kw-electric system can be conceptualized. with a low feed-in tariff and complicacies of grid integration of small scale power generators in bulgaria, this would therefore constrain further electricity generation from the waste heat. heat pumps, solar heating as well as the use of biomass boilers, more specifically pellet boilers are commercial technologies. of these, solar heating and heat pumps are established technologies locally. one of the main criticisms of solar heating however is the use of space which could be alternately used for generating electricity by roof mounted solar photovoltaic (pv) panels. use of heat pumps without large storage would increase the electricity demand, leading to sharp peaks in the demand profile. this in turn would lead to the rise in the electricity purchasing price as per the local laws. in this context, waste heat being available locally at low/no cost, assessing the techno-economic feasibility and practical of applicability waste heat utilization by m-tes system was found to be worth evaluating. this would also lead to the maximization of the use of local resources within the present case study. 3.2. heat demand domestic hot water (dhw) generation, space heating and pool heating result major heat requirements in hotels. due to higher energy requirement for dhw and easier system integration, the m-tes system was designed to provide dhw energy need in the present case study. average hot water consumption per day per guest is typically around 160 litres as per data collected from the case study. distribution temperature of dhw is 55°c assuming supply water temperature of 20°c, the net energy demand of hot water is 6.53 kwh/guest-night. considering peak operations with 80% occupancy, around 16,000 people were estimated to stay daily in albena during summer. however, the distribution of the hotels within the resort city limits the complete implementation of the technology without major overhaul of the existing infrastructure for the movement of bulky and heavy containers. the present technology was analysed to be suitable to serve around 10 hotels with an average total of 4,000 tourists. substitution of 26 mwh of heat demand for dhw generation per guest-night was therefore considered technologically feasible. 98 international journal of sustainable energy planning and management vol. 22 2019 techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry thermal oil, thus preventing direct contact of the pcm with potentially adverse environments. however, this would require the thermal oil to be maintained as a circulating flow between pcm and the heat source/demand. thus, additional heat exchangers and expansion systems for oil would be necessary, increasing the design complexity and decreasing system efficiency. furthermore, the exhaust gas temperature of 340°c necessitates the selection of thermal oil, capable of withstanding high temperature, often increasing the system cost further. the thermo-physical properties of pcm and thermal oil is shown in table 1. 4.2. container design different configurations of the erythritol based m-tes storage systems exist [1]. cylindrical and cubical containers are mostly studied, and implemented on pilot scale, by kaizawa et al [17] and guo et al [7] respectively. nevertheless, direct contact cubical containers have been shown to provide a superior performance with respect to storage efficiency and modularity in operations. a cubical container, containing 66.3% by mass of erythritol and 17.2% by mass of thermal oil in direct contact was hence considered for the case study and represented conceptually in figure 2. the remaining mass is made up of the shells, pipes and the container enclosure of the m-tes system. during charging of the container, heated thermal oil is pumped through the holes below the inlet pipeline which heats the pcm and melt them. as the heated oil melts the pcm, channels are created through which the lighter oil rises and subsequently melts more of the solidified pcm [17]. to facilitate the beginning of the heat charging, thin pipe connections between the inlet pipe and outlet pipe could enhance the melting of the solid pcm around these pipes by acting as fins. however, subsequent experiments are necessary to assess the overall benefit of the design modification. due to absence of monitoring system in the hotels, a typical hot water load profile of a commercial european hotel was assumed based after a study by agudelo-vera et al [14]. indeed, the profile varies considerably based on the day of the week, the type and location of the hotel and different tourist behaviour [15]. the hourly variation for hot water demand is crucial for both system design and to develop the operation strategies of the m-tes system and is discussed in the subsequent chapters. 4. system design selection of suitable phase change materials as well as the suitable container design is crucial to maximise thermal energy storage and cyclability, while minimizing heat loss at the same time. indeed, the container sizing, in accordance with the heat demand to be met would be significant in optimizing the overall m-tes system. accordingly, a comprehensive discussion on the selection of the pcm material, the container design and sizing have been presented in the following sections. 4.1. selection of pcm multiple studies have been conducted to determine the most suitable pcm materials for mobile heat storage applications [1, 7, 8]. temperature of both heat source and demand are crucial factors affecting the selection of the pcm, which in turn determines the storage capacity and system design [1]. erythritol, an organic pcm with a high heat storage capacity of 339 kj/kg, was selected for the present study. the melting point of 118°c being relatively higher than dhw temperature of 55°c, a stable hot water temperature can be generated without the need for auxiliary boilers. besides, erythritol being a food additive, it is nontoxic and environmentally friendly. erythritol is a very promising phase change material for higher temperature thermal storage having a melting point of 118°c. however, a major disadvantage is its water solubility. waste gas from the exhaust of power generation units, especially while using biogas contains significant amounts of water vapour. this would therefore limit the direct heat exchange between the pcm and the waste gas or the hot exhaust. one of the alternatives in this regard is to use thermal oil as the heat exchanging medium. the hot gas would exchange heat with the thermal oil, which would then heat up the pcm during charging. during release of heat, i.e., discharging, the heat would be released to the point of demand via the table 1: thermo-physical properties of erythritol and thermal oil [7, 16] parameter unit erythritol (pcm) thermal oil specific heat (kj/ kgk) 1.35 (at 20°c) 2.76 (at 200°c) 1.86 (at 140°c) 2.02 (at 200°c) latent heat kj/kg 339 – melting point °c 118 – density kg/m3 1480 (at 20°c) 1300 (at 200°c) 915.3 (at 200°c) international journal of sustainable energy planning and management vol. 22 2019 99 archishman bose, mohammad samir ahmed, denitsa dobrinova kuzeva and johannes van kasteren discharge, types of heat transfer are crucial factors with the maximum utilizable heat stored typically varying between 60 to 80%. [17] [7]. considering an average overall system discharge capacity of 70%, along with 10% auxiliary losses, net system efficiency of 63% can be obtained. this would result in a usable heat storage capacity of 468 mj per m3. the storage efficiency can, nevertheless, be improved through innovative container design like implementing thin connecting tubes between inlet and outlet pipes of container, however, subject to experiments. 4.3. container sizing the number of trips (n) over a period t, can be generically represented in terms of individual container energy storage volume vd (m 3), heat demand at user site over the period t, qd (mwh) and the specific usable heat capacity of the container, as per equation (2), where 0.13 mwh or 468 mj is the useable heat stored per m3 within the container. effectiveness and time for charging and discharging, are few of the limits to the size the container. additional constraints exist for the allowable size and volume of a container on road [7] based on available road facilities to transport heavy and bulky containers and road permit. as per local policy documents, the maximum permissible axle-load is 11.5 tonnes [18]. this would limit the maximum payload of a 12m container to 20.3 tonnes for a typical two axle tractor with a 13.6 m trailer and to 28.3 tonnes for a typical three axle tractor [19]. for a 6m long container the load decreases to 10.5 tonnes and = d d0.13 * q n v (2) due to lighter weight, thermal oil floats on top of pcm when the container is fully charged. during discharge, heat is released by flowing the thermal oil in the same direction, and hence solidifying the pcm. however, channels are created due to the flow of the thermal oil within the pcm while solidification, which are then used in subsequent charging cycle to re-melt the pcm. the heat of the proposed m-tes container is attributed by the latent heat of fusion of pcm; the sensible heat of pcm and the sensible heat of thermal oil as described in equation (1) [7]. q = mpcm * lfus pcm + mpcm * cp pcm * ∆t + moil * cpoil * ∆t where, mpcm, is the mass of the pcm, lfuspcm is the latent heat of fusion of the pcm, cp pcm is the specific heat capacity of the pcm and ∆t is the temperature difference of the charged and the discharged phase of the storage. moil and cpoil are the mass and specific heat capacity of the thermal oil respectively. the container was proposed to be charged to 200°c to utilize the high temperature of exhaust as sensible heat, even though this would result in higher temperatures of exhaust towards the end of the charging cycle. based on the thermophysical properties of erythritol and thermal oil as shown in table 1, a net heat storage capacity of 756 mj/m3 or 0.21 mwh/m3 of the m-tes container was obtained. nevertheless, solidification of the pcm at 118°c prevents the recovery of the sensible heat stored at lower temperatures due to the blockage of holes of the inlet pipe for oil flow. mathematically, this results in a loss of 20% of the stored heat. experiments have revealed that the container shape, the temperature of heat use, rate of (1) thermal oil outlet thermal oil inlet perforations at bottome of pipe buffer space at top of container perforations at top of pipe erythritol (pcm) thermal oil figure 2: simplified layout of the m-tes container 100 international journal of sustainable energy planning and management vol. 22 2019 techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry acceptability by hoteliers as well, intelligent scheduling is most crucial. essential. a minimum discharge period of a single container was considered as two days to limit the vehicle movement within the resort area table 3 shows the number of person-nights that the m-tes container can cater, based on two different durations of the operation cycle and an average demand of energy for hot water per person-night of 6.53 kwh. for a typical summer hotel in the studied region, with an operation spanning 184 days (01 may to 31 october), a 2-day cycle would thereby ensure a maximum supply of 235.5 mwh of waste heat (os a) per container per year. however, the maximum utilizable waste heat available increases to 374 mwh per container per year (os a) for yearlong operations. in fact, the yearlong operation is limited to the source of waste heat, with the biogas chp typically operating for 7,000 hours, equivalent to approximately 292 days. in comparison to a 2-day cycle, a 7-day cycle would lower the number of persons-nights served from a single container, and hence a lower utilization of the waste heat. this in turn would lower the economic returns. thus the seven day scenario was not pursued in the following arguments in this work. the occupancy of hotels plays a crucial role as well, in the operation of the m-tes system. discharging schedule through various operation strategies is possible to ensure the operation period of two days. peak load substitution is an effective strategy for energy conservation, also resulting in economic benefits. for containers unable to meet complete energy demand of dhw, operation strategy to ensure peak load substitution was suggested. indeed, such considerations would 15.9 tonnes respectively for the two types of trailer trucks respectively [19]. accordingly, a summary of four scenarios based on truck sizes was developed as represented in table 2. the maximum transportable load of 28.3 tonnes, with a net stored heat of 4.06 mwh was obtained, of which around 2.56 mwh would be useable. as discussed, for a heat demand of 26 mwh per night, 11 trips per day would be necessary for os a and 27 trips for os d. 5. operation strategy and social integration charging time plays the technological limiting role to the frequency of the number of cycles. available waste heat rate is 400 kw. as discussed, a container entering the charging station in steady state operations would require only the usable heat fraction to be recharged. for os a and os c, for example, the need to recharge 2.56 mwh and 1.44 mwh would ideally require around 7 hours and 3.6 hours respectively. however, experiments revealed that, the rate decreases considerably for indirect contact heat exchange systems, increasing charging time further [17]. moreover, to increase the final temperature to 200°c, the exhaust gas needs to be released at higher temperature to avoid temperature cross-over in the heat exchanger, lowering the available heat rate and further increasing the charging time. this would limit the number of trips per day to maximum two and four for os a and os c respectively. to integrate the m-tes system into the tourism industry, multiple considerations are necessary. use of latest state-of-the-art heavy-duty diesel trucks in accordance to eu regulations, would ensure minimization of emissions of fine particulate matters and different oxides of nitrogen, collectively called nox [20, 21]. system design improvements to ensure minimum noise during operation is crucial as well. these are essential for social acceptance of heavy-duty trucks within the resort premises. however, to avoid conflict with the perception of the people, mostly tourists, thereby increasing table 2: thermal energy storage capacity of m-tes container as per weight operation system (os) unit a b c d container mass t 28.30 20.30 15.90 10.60 pcm mass per container t 18.76 13.46 10.54 7.03 oil mass per container t 4.89 3.5 2.73 1.82 net stored heat energy mwh 4.06 2.91 2.28 1.52 useable heat stored mwh 2.56 1.83 1.44 0.96 table 3: thermal energy savings for hot water per m-tes container and possible operation strategies system unit a b c d useable heat stored mwh 2.56 1.83 1.44 0.96 days in continuous operation 2 daily heat energy supplied mwh 1.28 0.92 0.72 0.48 person equivalent of demand per night no. of guests 196 140 110 74 days in continuous operation 7 daily heat energy supplied mwh 0.37 0.26 0.21 0.14 person equivalent of demand per night no. of guests 56 40 32 21 international journal of sustainable energy planning and management vol. 22 2019 101 archishman bose, mohammad samir ahmed, denitsa dobrinova kuzeva and johannes van kasteren 5.1 scheduling of container change the daily peak of dhw, typically occurring in the morning and around evening for an average european hotel [14], constraints the container change-over period. midnight to early morning hours or in the afternoon between 14.00 to 16.00 hours were found most suitable with minimum impact on the daily activity of the tourists and hotel operations. therefore, to maximize the effectiveness of a two-day cycle, as discussed in the previous section, four discharge points at four hotels have been proposed, with the container movement being limited to two trips daily. with four discharge points and one charging point, a total of five containers would be put into service. a roster of the m-tes containers was developed between hotels and charging point. the rotation of the container charging and discharging was assumed to be uniform, subject to integration of the demand profile among the discharge points between hotels. therefore, ensuring an intelligent change-over schedule, typically requiring about 30 minutes, based on the knowledge of dhw demand profile and occupancy, can potentially be performed without or minimum operation of hotel electric boiler, as shown in figure 4. the roster would begin by charging the containers numbered 1 and 2 on the day 1, whereby, container 1 would be set at discharge point 1 in the afternoon. on the second day containers 3 and 4 would be charged, while containers 2 and 3 would be set at respective directly benefit the proposed m-tes systems to be coupled to solar thermal systems for dhw in hotels. often electric or oil-fired boilers are employed in addition to the solar thermal collectors to maintain a stable hot water system, especially at peak load periods. however, with adequate system sizing and scheduling, the m-tes system could replace such conventional boilers, enabling a complete substitution of traditional boilers in typical hotels and summer resorts as this study proposes. the percentage share of the full load demand met by the oss based on the occupancies, is presented in figure 3 for an average hotel in the present case study. a larger system, even though, would ensure higher substitution of energy demand, would result in longer running days in off-peak seasons with lower occupancy. this would reduce the potential of heat utilized and increase the complicacies in system operation and changes in operation schedules with occupancy. at 30% occupancy, typically occurring at the beginning or end of a tourist season, it would take 3.3 and 2.3 days for os a and b respectively to discharge as per the specific case study. smaller systems, on the other hand, would be able to cater a very high share of dhw demand at lower occupancy rates (92% by os c at 30% occupancy) without a change in the 2-days container change schedule, even though discharging schedule would vary nonetheless. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % demand met % demand met % demand met % demand met system a system b system c system d % d e m a d o f d h w m e t %dhw supplied at 80% occupancy %dhw supplied at 50% occupancy %dhw supplied at 30% occupancy figure 3: percentage of demand met by the m-tes container for an average hotel of capacity 400 person, based on occupancy and proposed operation strategy 102 international journal of sustainable energy planning and management vol. 22 2019 techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry necessary at both the charging and discharging points prior to the exhaust-oil and water-oil heat exchanger to compensate thermal expansion and contraction of oil. this also requires the discharge points to be adjacent to the hotels, specifically, boiler rooms to reduce heat loss and minimize construction cost of the connecting materials. existing boiler would be required to meet the demand based on operation schedule of the containers, occupancy and during shifting of containers. being a replacement of electric boilers for dhw generation, operating five containers would yield considerable savings in electricity consumption, however, subject to occupancy. a summary of the net savings obtained in three different operating conditions is listed in table 4. as discussed, for larger oss, and with lower occupancy, inability to discharge in two days would result in a lower electricity being saved than its true potential. 6. carbon dioxide savings the heating substituted was from electric boilers with an average efficiency of 95%. the specific emissions of the low voltage electricity consumed in bulgaria is 669 grams discharge points. on day 3 morning, container 4 would be set to discharge, and therefore, all four discharging points would be occupied. on the afternoon of the third day, container 5 would replace container 1 at the first discharge station and the roster cycle will continue accordingly. 5.2. integration with the existing system the scheme of integration of the containers to the waste heat source (charging point) and dhw network of the hotels (discharging point) is shown in figure 5. as mentioned above, an indirect contact heat exchanger has been considered with thermal oil. a buffer oil tank is table 4: electricity savings for multiple operation scenarios of the five container m-tes syste description / operation system a b c d energy saved in seasonal operation with 80% occupancy 992 709 558 372 energy saved in yearlong operation with 80% occupancy 1574 1125 885 590 energy saved in seasonal operation with 30% occupancy 576 576 558 372 charging morning m-tes 1 m-tes 1 m-tes 1 m-tes 1 m-tes 1 m-tes 1 m-tes 1 m-tes 1 m-tes 5 m-tes 5 m-tes 5 m-tes 5 m-tes 2 m-tes 2 m-tes 2 m-tes 2 m-tes 2 m-tes 2 m-tes 2 m-tes 3 m-tes 3 m-tes 3 m-tes 3 m-tes 3 m-tes 3 m-tes 4 m-tes 4 m-tes 4 m-tes 4 m-tes 4 d a y 1 d a y 2 d a y 3 d a y 4 afternoon afternoon afternoon morning morning afternoon morning 1 2 3 4 discharging figure 4: roster of thermal containers and scheduling for a 2-day cycle operation with 5 containers international journal of sustainable energy planning and management vol. 22 2019 103 archishman bose, mohammad samir ahmed, denitsa dobrinova kuzeva and johannes van kasteren both pcm and thermal oil were considered to cost 3,200 €/tonne; while the cost of steel was 589 €/tonne [7]. an additional 5% cost was accounted for the cost of insulation, material transportation and other misc ellaneous charges. a summary of the cost of os a, b, c and d have been presented in table 5. an average cost of 15,000€ per charging and discharging station was calculated. a significant cost of the charging station was that of the heat exchanger. 17,000€ was considered for the cost of transportation truck [24]. one truck would be sufficient to handle 5 containers while simultaneous operation of 2 trucks would be needed for 10 containers. the number of containers had been varied to provide a perspective on co2/kwh [22]. the waste heat from biogas was considered carbon neutral. the primary emissions from operating the system is related to the emissions from the transport of the m-tes container. a typical truck emits 100 g co2 per tonne-km [21]. neglecting emissions from auxiliary consumption of electricity, a saving of 96.7% of co2 emissions was obtained based on the energy mix of bulgaria. with increase in the renewable mix as per the national and eu targets, the grid emission factor could be predicted to decrease with much confidence. considering the eu-28 average grid emission factor of 447 grams co2 /kwh [22], 95.3% co2 emissions could be reduced still. sweden has the lowest grid emissions at 47 grams co2 /kwh [22]. such a low grid emission factor would also result in a net co2 saving of over 53%. on the other hand, considering an increase in the average emissions of the trucks to the 2014 eu average of 140 grams-co2 /tonne-km [23], the net co2 emission reduction would be 95.6%. thus, a rise in the truck emissions by 40% would cause the overall co2 emission benefits to reduce by only around 2%. therefore, it can be concluded with fair confidence, that comprehensive savings in the co2 emissions can be achieved by the m-tes system over electric boilers in the foreseeable future. 7. economic assessment the upfront costs of the pcm (erythritol), thermal oil, the balance of the plant, including pipes, pumps, heat exchangers, valves, were obtained from literature [9, 17]. oil buffer tank exhaust from generator oil buffer tank existing boiler heating applications container connected at charging point container connected at discharging point valve >150º c exhaust to ambient heat exchanger heat exchanger 340º c pump pump (a) (b) 55º c 118º c → 200º c 200º c → 118º c figure 5: integration of container (a) charging of container at biogas power plant (b) discharging of container at hote table 5 capital cost of one m-tes container for the hypothesized systems description cost (“1000 €) operation system a b c d pcm 60 43.1 33.7 22.5 thermal oil 13.8 9.9 7.8 5.2 steel plate and pipes 2.9 2.0 1.6 1.1 total 76.7 55 43.1 28.7 capital cost of balance of plant per container pumps 1.6 1 1 0.8 heat exchangers 3 2 2 1.8 valves and pipe fittings 2 2 2 2 104 international journal of sustainable energy planning and management vol. 22 2019 techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry generated income was based on the savings of electricity consumption from electric boilers. the electricity tariff obtained from the bills of the hotels of albena was 99.4 €/mwh. other assumptions made for the necessary financial evaluations are as follows: corporate tax: 10% [28]; debt equity ratio: 70:30; inflation rate: 3%; tax holiday period: 0 years; project lifetime: 20 years [7]; increase of opex per year: 2%; increase in electricity price per year: 1% [29]. the discounted clash flow of the different oss corresponding to three different scenarios of hotel operation and occupancy rates is shown in figure 7. the net present value, calculated as the cumulative cash flow over the project life of 20 years was obtained negative to very low for os d, rendering the system economically infeasible. with yearlong operation at high occupancy, larger systems provide a superior economic performance. however, a significant drop of system economic competence for large systems was noticed at lower occupancy rates. the payback periods of os a, b, and c were obtained as 9, 12 and 14 years for seasonal operations and 5, 6 and 7 years for yearlong operations with average occupancy of 80%. however, for a seasonal hotel with an average occupancy of 30%, in the present case study, the payback periods of os a, b and c would be 19, 14 and 14 years respectively. hence, a smaller system would provide superior economic resilience to occupancy, even though the payback period is relatively longer for higher occupancy rates. the total capex as well as the economy of scale with increased number of containers. this is because, even though the cost containers as well as that of the discharging station would increase linearly, only one charging station would be necessary. thus, the specific capex per container would be reduced with an increased number of containers. the overall upfront costs, of os a, b, c and d, based on the number of containers operated is shown in figure 6. the operation costs of the system comprise the cost of transportation, labour, waste heat and auxiliary electricity [24]. the waste heat was assumed to be available for free, since it is presently wasted. two trips would be performed per day, each being 1.5 hours long. thus, only three hours of employment of truck drivers would be needed each day, who would also be responsible for setting up the connections necessary for charging and discharging. in addition, no operation scenarios would require more than 292 days of operation per year. furthermore, the monitoring activities of the charging and discharging stations could be done by existing personnel at the power plant and the hotel. considering contractual agreement of three hours per day of employment to be made, a high end cost of labour was assumed at 8,000 €/year, including extra cost for night work as per the local labour laws [25]. cost of diesel was considered as 1€/litre [26] with a fuel efficiency of 28 litres per 100 km for heavy duty trucks [27]. a summary of the total operation costs for seasonal operations of the four oss with 5 containers in operation is provided in table 6. 0.00 0.25 0.50 0.75 1.00 1.25 1.50 system a system b system c system d c a p e x ( m ill io n e u ro s) 5 containers 10 containers figure 6: system capex for different containers used international journal of sustainable energy planning and management vol. 22 2019 105 archishman bose, mohammad samir ahmed, denitsa dobrinova kuzeva and johannes van kasteren study the percentage change in the resulting npv. the results are indicated in the following figure 8. electricity price is the most dominant factor affecting the economic viability of the proposed m-tes system. with a 25% rise in the electricity price, the npv is found to increase by almost 800%, a 9-fold rise. thus, with the predicted rise in the electricity costs, the m-tes system to assess the impact of the different factors, a sensitivity assessment was performed on the os c, operating during summer with 80% occupancy. npv, evaluated assuming a discount rate of 3% was selected as the factor for comparison. five factors, namely, debt fraction, discount rate, fixed capex and opex and electricity price were increased and decreased by 25% to table 6 opex components of the different m-tes system with 5 containers for seasonal operations description / operation system a b c d manpower costs (€/year) 8,000 cost of diesel for transport 2,100 costs auxiliary energy @ charging (€/cycle) 1,629.63 1,164.93 916.67 611.11 costs auxiliary energy @ discharging (€/cycle) 952.86 681.14 535.98 357.32 other aggregated costs (€) 1,000 net annual opex 13,629.42 12,946.07 12,552.63 12,068.43 seasonal operation of hotels (184 days) with 80% occupancy year-long operation of hotels with 80% average occupancy and 292 days available waste heat seasonal operation of hotels with an average occupancy of 30% os a 1.5 0 5 10 15 20 1.0 0.5 0.0 -0.5 os c c as h fl ow (m ill io ne ur o) os b os d project years figure 7: project cash flow diagrams for three different scenarios: seasonal operation of hotels (184 days) with 80% occupancy; year-long operation of hotels with 80% average occupancy and 292 days available waste heat; and seasonal operation of hotels with an average occupancy of 30% 106 international journal of sustainable energy planning and management vol. 22 2019 techno-economic design and social integration of mobile thermal energy storage (m-tes) within the tourism industry would be of significant economic gain. fixed capex is the second most dominant economic factor. a change of almost 600% in the npv was found from 25% variation of the capex. the corresponding changes from opex and discount factor would be 200% and 150% respectively. debt-equity ratio however is the least effective financial parameter. therefore, apart from the debt-equity ratio, the system economics is vulnerable to changes in most of the economic parameters, however to the highest extent by electricity price. acceptance of the proposed m-tes technology could be further increased by providing financial incentives to the chp plant operators for providing high temperature waste heat. however, this would increase the opex and hence decrease the economic returns of the proposed system. indeed, for summer operations at 80% occupancy for os c, a waste heat price of 15 €/mwh and 18 €/mwh would raise the payback to 19 and 20 years respectively from that of 14 years without any cost of heat. on the other hand, for yearlong operations at 80% occupancy, a waste heat price of 45 €/mwh could be afforded for a payback period of 20 years. increasing the number of cycles or increasing the days of operation are therefore crucial to realize improved financial benefits, as well as greater acceptance of the proposed system. 8. conclusion in this paper, a practical application to the m-tes system was developed using techno-economics and social integration strategies within the tourism industry. a complete scheduling with charging and a two-day discharging cycle for 5 containers was proposed. the occupancy of hotels is a key factor for system design and economic success, where, lower occupancy rates would render large systems economically incompetent. a 15.9 tonne container was found to provide considerable savings with acceptable financial returns, besides being able to maintain a constant container changeover schedule over large variation of occupancy. net savings of 558 to 885 mwh per year of heat generation from existing electric boilers were obtained with a payback period of 7 years for yearlong operations and 14 years for summer operations. a net co2 savings of 96.7% from substitution of electric dhw boilers could be achieved. economic barrier due to initial investment cost, especially for seasonal performance made the focused case challenging with a high payback period. however, authors are confident enough to find better economic performance with improved container design, increased operation days and number of trips of container truck, as well as policy instruments like carbon credits. indeed, with the predicted rise in the electricity prices, the economic benefit from the system would be much increased. acknowledgements the present work has been carried out as an extension of the industry involved academic/professional skill development project performed by authors as students of the innoenergy master program: msc select (environomical pathways for sustainable energy systems). electricity price discount rate fixed capex fixed opex debt fraction − 1 0 0 0 − 8 0 0 − 6 0 0 − 4 0 0 − 2 0 0 0 2 0 0 4 0 0 6 0 0 8 0 0 % change in npv −25% +25% figure 8: sensitivity assessment of five parameters including debt fraction, discount rate, fixed capex and opex and electricity price on the npv of os c operating during summer months with 80% occupancy. the base value of the parameters are as follows: debt fraction: 30%; discount rate: 3%; fixed capex: –4,51,973.60 €; fixed opex: 12,555.51 € for the first year; and electricity price: 99.4 €/mwh; international journal of sustainable energy planning and management vol. 22 2019 107 archishman bose, mohammad samir ahmed, denitsa dobrinova kuzeva and johannes van kasteren [9] a. hauer, s. gschwander, y. kato, v. martin, p. schossig, f. setterwall, 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http://www.bulgaria-labour-law.bg/overtime.html (accessed december 1, 2017) _ref191642245 _hlk4423419 _hlk4556391 _hlk4755184 _ref500077217 _hlk4420169 _hlk4559580 _ref500097327 _hlk4749313 _ref504771430 _ref504779543 _hlk4558275 _ref500100173 _ref504088770 _goback appendix for the article: “the role of 4th generation district heating (4gdh) in a highly electrified hydropower dominated energy system – the case of norway” inputs for 2016 norwegian energy system model kristine askeland1*, bente johnsen rygg2, karl sperling1 1department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark 2department of environmental sciences, western norway university of applied sciences, røyrgata 6, 6856 sogndal, norway url: http://doi.org/10.5278/ijsepm.3683 1. input variables in energyplan in the following tables, table 14, relevant inputs for the constructed 2016 energyplan model for the analysis presented in the paper “the role of 4th generation district heating (4gdh) in a highly electrified hydropower dominated energy system – the case of norway” are presented. table 1: demands in energyplan for the 2016 reference model demands variable value reference note electricity [twh/year] 132.6 [1] including network losses. individual heating [twh/year] 56.42 calculated as sum of all individual demands. oil 6.12 [2] assuming all oil products used in service and household sectors are for heating purposes. natural gas 0.3 [2] assuming all natural gas used in service and household sectors are for heating purposes. biomass 3.7 [2] assuming all biofuels used in service and household sectors are for heating purposes. heat pumps 7.4 [3][4] estimated based on reported electricity usage in [3] and using a cop of 2 for air-to-air heat pumps from [4]. direct electricity 35.2 [3] district heating [twh/year] 5.26 [5] excluding network losses industrial fuel demand [twh/year] coal 7.6 [2] oil 250.9 [2] natural gas 54.7 [2] biomass 2.4 [2] * corresponding author – e-mail: askeland@plan.aau.dk http://doi.org/10.5278/ijsepm.3683 mailto:askeland@plan.aau.dk transport fuel demand [twh/year] jp (jet fuel) 4.13 [2] diesel/dme fossil 34.2 [2] diesel/dme bio 3.8 [2] petrol/methanol 8.6 [2] natural gas 1.3 [2] lpg 0.13 [2] electricity 0.3 [2] table 2: electric supply capacities in energyplan for the 2016 reference model electricity supply variable value reference note wind power installed capacity [mwe] 883 [6] annual generation [twh/year] 2.12 [6] photo voltaic installed capacity [mwe] 13.6 [7] annual generation [twh/year] 0.02 [7] river hydro (unregulated hydro) installed capacity [mwe] 1,352 [8] annual generation [twh/year] 4.36 estimated assuming a 0.37 capacity factor from [6, p.26] pumped hydropower installed pump capacity [mwe] 1,392 [10] reservoir hydro installed turbine capacity [mwe] 30,274 [6] run-of-river hydro subtracted. storage capacity [gwh] 86,500 [11] annual generation [twh/year] 139.05 [1] subtracting estimated river hydro production. waste incineration waste input [twh/year] 4.21 [12], [13] number from 2017 as statistics only go back to this year. average heating values for waste used for conversion. annual electricity generation [twh/year] 0.36 [1], [12], [14] estimated based on data for thermal electricity production and share of thermal electricity production from waste incineration. annual heat generation [twh/year] 2.76 [5] natural gas chp generation capacity [mw] 473 [15] electric efficiency [%] 36 [4] interconnections transmission line capacity [mw] 8,895 [16] including new transmission line capacity available from 2020 and 2021. table 3: individual heating supply, capacities and efficiencies for the 2016 reference model individual heating supply variable value reference note direct electric heating heat demand [twh/year] 35.19 estimated electricity demand in energyplan. efficiency [%] 98 [4] heat pumps heat demand [twh/year] 3.7 estimated electricity demand in energyplan. cop [-] 2 [4] oil boiler fuel demand [twh/year] 6.12 calculated based on heat demand presented in table 1 and efficiency. efficiency [%] 92 [4] natural gas boiler fuel demand [twh/year] 0.1 calculated based on heat demand presented in table 1 and efficiency. efficiency [%] 100 [4] biomass boiler fuel demand [twh/year] 3.7 calculated based on heat demand presented in table 1 and efficiency. efficiency [%] 83 [4] table 4: district heating supply, capacities and efficiencies for the 2016 reference model district heating supply variable value reference note electric boilers capacity [mw-e] 313.7 calculation based on reported production from [5] and 2500 full load hours as defined in [4]. thermal efficiency [%] 98 [4] production [twh/year] 7.84 [5] heat pumps capacity [mw-e] 49.5 calculation based on reported production from [5] and 4000 full load hours as defined in [4]. cop [-] 2.9 [4] 1 mw sea-water heat pump with 70°c output. production [twh/year] 0.57 [5] not an input in energyplan. oil boiler capacity [mw] 152.9 calculation based on reported production from [5] and 1000 full load hours as defined in [4]. includes bio oil. assuming 20% excess capacity efficiency [%] 92 [4] heat production [twh/year] 0.13 [5] not an input in energyplan. natural gas boiler capacity [mw] 336.5 calculation based on reported production from [5] and 1000 full load hours as defined in [4]. assuming 20% excess capacity. efficiency [mw] 92 [4] heat production [twh/year] 0.26 [5] not an input in energyplan. biomass boiler capacity [mw] 364 calculation based on reported production from [5] and 4000 full load hours as defined in [4]. efficiency [%] 85 [4] heat production [twh/year] 1.24 [5] not an input in energyplan. excess heat [twh/year] 0.184 [5] 1. time series the most important time series used in the 2016 energyplan model are listed with references in table 5. table 5: overview of important time series used in the 2016 model in energyplan time series reference note electricity demand 2016 [17] reported hourly electricity demand in norway in 2016. individual heat demand constructed. see section 2.1 for further description. district heat demand constructed. see section 2.1 for further description. industrial excess heat assumed constant. waste incineration assumed constant. hydropower inflow [18] based on measured and modelled inflow data to 82 measurement points in 2016. wind power production [17] based on wind production in western denmark in 2015 under the assumption that wind conditions are similar on the west coast of norway, where most turbines are placed. 1.1 heating demands the hourly distributions for heating demands, both individual and district heating, are constructed based on the degree days. for the district heating profile the annual demand is split into 366 inputs that are weighted according to the average number of degree days in every single day. the average number of degree days is found using temperature data from [19] and weighting these according to the amount of district heating demand in the different counties. see table 6 for data used for the calculations. it is assumed that the heat losses and hot water demand in the network are constant throughout the year. a hot water demand share of 25% is assumed. an hourly profile is constructed assuming the same hourly demand in every hour of 1 specific day. a similar approach is used for the construction of hourly demand time series for individual heat demand, but here the temperatures are weighted according to population instead of district heating demand. the resulting hourly demand series for district heating and individual heating demands can be seen plotted in figure 1 and figure 2 respectively. figure 1: hourly time series for dh demand figure 2: hourly time series for individual heat demand 0 200 400 600 800 1000 1200 1400 1600 1800 dh demand 0 2000 4000 6000 8000 10000 12000 individual heat demand table 6: data used for construction of heat demand time series county dh production [twh] [20] population [21]/ share of total population weather station code [19] akershus 520 601,789/ 11.46% 4200 – kjeller aust-agder 21 116,617/ 2.22% 36200 – torungen fyr buskerud 157 279,335/ 5.32% 26900 – drammen berskog finnmark 8 76,062/ 1.45% 94280 – hammerfest lufthavn hedmark 332 195,942/ 3.73% 12320 – hamar stavsberg hordaland 286 519,864/ 9.90% 50540 – bergen florida møre og romsdal 153 266,191/ 5.07% 60945 – ålesund iv nordland 94 242,610/ 4.62% 79600 – mo i rana lufthavn oppland 147 189,319 3.60% 12680 – lillehammer sætherengen oslo 1,747 666,691/ 12.69% 18700 – oslo blindern rogaland 135 472,513/ 9.00% 44640 – stavanger våland sogn og fjordane 0 110,362/ 2.10% 57420 – førde – tefre telemark 98 173,175/ 3.30% 30255 – porsgrunn ås troms 151 165,334/ 3.15% 90450 tromsø trøndelag 703 453,538/ 8.64% 68125 sverresborg vest-agder 136 183,835/ 3.50% 39040 kjevik vestfold 136 246,862/ 4.70% 27330 – tønsberg taranrød østfold 165 292,127/ 5.56% 3290 rakkestad 1.2 electricity demand the electricity demand profile should reflect the hourly electricity demand in the country, however, excluding the electricity used for district heating. the basis for the electricity demand profile is the hourly demand profile reported by nordpool, [17], for 2016. however, it must be assumed that this profile includes electricity used in district heating. the demand profile for electricity in district heating is endogenously defined in the model, and is thus a simulation outcome. in order to subtract the electricity demand in district heating from the total electricity demand profile, an iterative approach is required. 1. run simulation with electricity profile for total electricity demand, including district heating 2. subtract resulting hourly profiles for electricity for electric boilers in dh and heat pumps in dh from the electricity profile used in step 1. 3. run simulation with new electricity profile from step 2. 4. adjust electricity demand with resulting electricity demand for electric boilers in dh and heat pumps in dh from the electricity profile used in step 3. 5. run simulation with new electricity profile from step 4. two iterations are run to minimise the difference between the resulting electricity in dh demand profile in the different iterations. there are differences in hourly demand profiles between the different iterations, as the resulting electricity demand in the dh sector depends on factors such as available electricity surplus, which changes between the iterations as adjustments are made to the exogenously defined electricity demand and demand profile. after 2 iterations, the resulting difference to the original resulting dh demand profile is reduced significantly. thus, it is decided to stop after two iterations. references [1] ssb, “ssb, table 08307: produksjon, import, eksport og forbruk av elektrisk kraft (gwh) 1950 2017.” [online]. available: https://www.ssb.no/statbank/table/08307. 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[accessed: 23-jan-2020]. 1. input variables in energyplan 1. time series 1.1 heating demands 1.2 electricity demand international journal of sustainable energy planning and management vol. 26 2020 19 *corresponding author e-mail: fernando.de.llano.paz@udc.es international journal of sustainable energy planning and management vol. 26 2020 19–32 abstract the european union has been developing its energy and environmental policy for the last 30 years. recent communications issued by the european commission confirm the leadership of the european union on reducing pollutant gas emissions and technological change towards a climate neutral economy. this work assesses the efficiency of european energy policy under a modern portfolio theory (mpt) approach. this proposal analyses the disaggregated european power portfolio: to make a more exhaustive analysis, focusing individually on each european country along the period 1990-2015. the efficiency of the energy and environmental policy of each member state is measured by their distance to the power generation efficient frontier. the quadratic optimization model used by mpt is complemented by a cluster analysis in order to identify different groups of eu member states according to their behaviour patterns regarding the application of their energy and environmental policies without overlooking the efficiency of that implementation. results stand out that france, slovakia and sweden belong to the “leader” efficient cluster for the analysed period. in turn, denmark, germany, greece and italy show a high consistency in the application of their energy and environmental policies as they improved their positions for the considered years. 1. introduction the eu energy and environmental policies have advanced in three different fronts: energy supply security, competitiveness and sustainability [1,2]. thus, since 1990 the technological –renewable energy sources (res)– and environmental –carbon emissions reduction and the eu emissions trading system (eu-ets)– objectives that were proposed have turned the eu into the world leader in climate change abatement [3,4]. the european union is responsible for 10% of the global greenhouse pollutant gas emissions. however, the eu is recognized as the global leader towards net-zero-greenhouse gas emissions economy since between 1990 and 2016 it has achieved a successfully double reduction of energy use by almost 2% and greenhouse emissions by 22%, while its gdp has reached an increase around 54%. the eu has recently proposed a european vision for a modern, competitive, prosperous and climate neutral economy [4]. this new energy and environmental targets proposal continues the previous framework developed from 1990 to the present. this work is aimed to assess to what extent the efficiency of the eu energy policy has changed for the last thirty years under a modern portfolio theory (mpt) perspective. coming from finance, this methodological approach allows to analyse the economic efficiency of an evaluation of the energy and environmental policy efficiency of the eu member states in a 25-year period from a modern portfolio theory perspective paulino martínez fernándeza, fernando dellano-paza*, anxo calvo-silvosaa and isabel soaresb a department of business, faculty of economics and business, university of a coruna, campus de elvina, 15071 – a coruna, spain. b economic scientific group and cef.up., university of porto, rua dr. roberto frias, 464 – porto, portugal keywords: european union; power mix portfolio; efficiency assessment; energy policy assessment; environmental policy assessment; url: http://doi.org/10.5278/ijsepm.3482 mailto:fernando.de.llano.paz@udc.es http://cef.up http://doi.org/10.5278/ijsepm.3482 20 international journal of sustainable energy planning and management vol. 26 2020 an evaluation of the energy and environmental policy efficiency a portfolio including real assets to produce electricity (electricity generation plants). it is an optimization-based technique which searches for a long-term investment decision with a minimum risk or, alternatively, a minimum cost considering a set of constraints. thus, the optimization process that allows obtaining portfolios with the lowest risk or the lowest cost derived from electricity production is defined in the literature with a social approach [5] as well as an environmental one, typical of public energy policy: thus, the closer the portfolio is to efficiency, the lower the social effort in terms of risk or cost assumed to produce electricity, and the more effective the energy policy applied will be. in line with this proposal in terms of risk, renewable energies are preferred to emission technologies because they do not incorporate the fuel cost component, which is characterized by high volatility. thus, the model will tend to incorporate a higher percentage of renewable energies when defining efficient portfolios with less risk. this is why the greater presence of renewable energies in a territory’s portfolio will be indicative of lower risk and greater proximity to efficiency: both economic and environmental. portfolio emissions are reduced with this greater presence of non-emitting technologies. this work offers a new element in the electricity generation technology portfolio analysis. the european union energy policy assessment using this methodological approach is usually presented in terms of aggregated data: just one european union portfolio containing the overall addition of all the eu member-state electricity productions. in this work a more exhaustive analysis is proposed as the focus is individually on each member state and for the period 1990-2015. the efficiency of the energy and environmental policy of each member state is evaluated by measuring its euclidean distance to the power generation efficient frontier [6]. from a methodological point of view, the customary quadratic optimization of the mpt is used for this purpose. additionally, taking into account the huge number of variables considered, all the member states were classified by using a clustering algorithm. as a result, it is also possible to analyse different patterns with regard to the application of national energy and environmental policies without overlooking the efficiency of that implementation considering the different behaviours featuring each cluster over the studied years. the key research question addressed by this work is if it is possible to identify clear trends when analysing the outcomes of the different energy and environmental policies implemented by the eu member states with a special focus on gas emission reductions. as mentioned before, the efficiency of these policies is evaluated by measuring its euclidean distance to the power generation efficient frontier. this seems to be a valid approach to draw conclusions about the economic and social efficiency of the different electricity generation technology portfolios because the methodology is setting portfolios optimising the generation cost-risk binomial in each country. after getting this evaluation done, three clusters including all the eu countries will be set according to the cost-risk efficiency of their electricity generation technology portfolios. the following questions could be answered when going in depth with the classification provided by the cluster analysis: • which member states have remained in the cluster with the highest level of cost-risk efficiency in the electricity generation? • which ones have improved their efficiency for the studied period (1990-2015) as a result of designing and implementing successful policies under an economic and social perspective? • which cluster has shown the best improvement in terms of cost-risk binomial? • how far are the different member states from the efficient positions when generating electricity and how much would this distance be worth in economic terms (euro/mwh)? • which member states have achieved the biggest reductions of gas emissions over the analysed period? do they belong to the cluster including the most efficient countries? 2. literature review portfolio theory has been widely used to analyse longterm energy planning [7–16] of energy and environmental list of abbreviations css carbon capture and storage technology gdp gross domestic product gmc global minimum cost portfolio gmv global minimum variance (risk) portfolio mpt modern portfolio theory pv solar photovoltaic generation technology res renewable energy sources international journal of sustainable energy planning and management vol. 26 2020 21 paulino martínez fernández, fernando dellano-paz, anxo calvo-silvosa and isabel soares policies that condition their design on a long-term horizon. it is within this context that portfolio theory can be framed: as a methodology that offers an answer to the problem of selecting long-term investments in the field of electricity generation technologies. so far the various analyses presented in the literature refer to the analysis of the european portfolio as a whole, but not country by country of the european union [7–10]. in this way, the work presented aims to analyse the outcomes of energy and environmental policies implemented by the eu member states with a special focus on gas emission reductions. the proposal is based on portfolio theory and clustering analysis. it is not the purpose of this paper to analyse each energy policy individually. we therefore propose an analysis of all the policies applied by each country based on the proximity to efficiency (efficient frontier) of the portfolios designed by these countries over time. therefore the study of the evolution of the portfolio efficiency of each country over the period considered (1990-2015) is presented. this work is in line with [17], which uses a multi-objective interval portfolio theory approach to provide decision support tools for investing in energy efficient technologies. in this line, it is proposed to the reader to review the work of [18]diminishing social acceptance of traditional fuels, and technological innovations have led several countries to pursue energy transition strategies, typically by massive diffusion of renewable electricity supplies. the german ‘energiewende’ has been successful so far in terms of deploying renewable power, mainly by applying particular feed-in tariffs, and by bundling public, academic, industrial and political support. so far though, only few eu member states proceed with a similar transition. in march 2014 ceos of europe’s major energy companies publicly opposed a fast and thorough transformation of electricity supplies to become fully renewable. in april 2014 the european commission published new state aid guidelines, generally mandating renewable energy support mechanisms (premiums, tenders in which a very interesting and relevant brief review of the transition process of the electrical sectors in europe can be found. the application of portfolio theory to the design and efficiency analysis of power generation assets is a valid methodology widely employed [7,8,11– 14,19,20]. this approach considers energy planning as a problem of long-term investment selection. the portfolio evaluation is proposed considering the cost and the economic risk of selecting different energy technologies [15,21]. this proposal is aimed to determine the minimum portfolio cost or risk depending on the objective function, or the maximum power output [22]. cunha and ferreira [11] develop and deepen the characterization of the different types of risk inherent to an investment in a real power generation asset such as small-hydro power technology. likewise, in [23] a good review of the concept of risk can be found in the theory of portfolios within the problem of investment selection. according to the mpt approach, a portfolio is considered efficient if it shows the lowest cost for a given level of risk or, alternatively, if it shows the lowest risk for a determinate level of cost. the model computes the efficient frontier, which is the geometric place in the risk-cost plane where efficient portfolios lie. every efficient portfolio is thus characterized by its risk and cost, calculated as a function of the risk and cost of the technologies involved and their participation share. this enables an efficiency assessment taking into account the distance from each member state power generation mix portfolio to this efficient frontier. mpt is also useful for land-use planning –to allocate scarce land and improve land-use possibilities– and lowland agriculture [24,25]. also for assessing the financial robustness of diversified forests in comparison with single-species forests [26]. castro et al. [27] use it for dealing with the uncertainty of conservation payments to preserve wildlife respectful production. halpern et al. [28] apply it to natural capital and social equity across space. hildebrandt and knoke [29] studied forest investment analysis under uncertainty with mpt. besides, mpt is applied to water-use planning [30], and to fish management: to analyse the behaviour of the population of salmon in north america [31] or to study the performance of salmon fishery portfolios [32]. continuing with its applications to fish, sanchirico et al. [33] used mpt to help in the management of ecosystem-based fishery; while edwards et al. [34] studied the management of wild fish stocks using the mpt. finally, kandulu et al. [35] applied mpt to assess the impact of the australian agricultural enterprises diversification as a strategy to stay protected against the economic risk derived from climate variability. 22 international journal of sustainable energy planning and management vol. 26 2020 an evaluation of the energy and environmental policy efficiency 3. dataset and methodology in this section the dataset source and structure are described, along with a full description of the mpt model used. 3.1. dataset detailed generation data for each country in the eu28 were used to implement the model. data include the production in twh for every year in the period 1990-2015 detailed by technology — nuclear, coal, natural gas, oil, wind, hydro, small hydro, offshore wind, biomass and solar photovoltaic (pv). these data were used to compute the co2 emissions of every country for each year of the analysed period. these data were also transformed into generation percentages by technology, country and year in order to compute two 26 28×r matrixes with the costs and risks of the generation portfolio for every one of the 26 years and 28 countries considered. this information will be compared with the base model and with the technological model explained in section 3.2. these two models are the footing to provide the european generation efficient frontiers. 3.2. model and model inputs the base model, used as a first reference for efficiency measure, is based on the modern portfolio theory or mpt [36]. the mpt model proposes a quadratic optimization mathematic approach for computing efficient portfolios of financial assets. when applied to power generation, the model includes cost and risks definition for each generation technology considered. the expected cost of the portfolio e(cp) consists of the average technologies’ generation cost (ci) weighted by the participation share of each technology (xt), as shown in eq. (1). (1) in turn, the expected risk for a portfolio is defined according to the standard deviation of each technology (σi) and the correlations among every couple of them, weighted by their individual shares in the portfolio, as seen in eq. (2). (2) the objective function searches for the minimisation of the generation portfolio risk meeting some constraints such as the participations shares have to be positive and total one, and the cost has to be equal to a determinate one. thus, the model can be expressed as in eq. (3). (3) the technological model includes additional constraints on the participation share of each generation technology (wi∗), following the literature [7,16] and according to the objectives of the european energy strategy. when applying mpt to power generation, the mentioned constraints incorporate both the physical generations limits by technology and the desired generation and emission policies. thus, the technological model can be expressed as in eq. (4). (4) the input costs, risks and co2 emission for the aforementioned base and technological model are shown in table 1 [9] for every technology used: nuclear, coal, coal with carbon capture and storage (ccs), natural gas, natural gas with ccs, oil, wind, hydro, hydro (mini), offshore wind, biomass and pv. table 2 shows the generation limits by technology used in the technological model, taken from [10]. besides, the joint generation share of coal, natural gas and oil must be less than the 18% of the css –coal and natural gas plants with ccs technology– generation. 4. clustering the data the next phase was to get the information clustered by implementing the algorithm of hartigan and wong [37]. this algorithm searches for cluster assignments that ( ) ( )p i i i e c x e c ∀ = ∑ 1 2 2 2 p i i i j i j ij i i j x x xσ σ σ σ ρ ∀ ∀ ≠   = +    ∑ ∑ ( ) 1 2 2 2 subject to: 0 1 p i i i j i j ij i i j i i i * p min min x x x x i x e c c σ σ σ σ ρ ∀ ∀ ≠ ∀   = +     ≥ ∀  =  = ∑ ∑ ∑ ( ) 1 2 2 2 subject to: 0 1 p i i i j i j ij i i j i i i * p * ii min min x x x x i x e c c x w σ σ σ σ ρ ∀ ∀ ≠ ∀   = +    ≥ ∀  =   =  ≤ ∑ ∑ ∑ international journal of sustainable energy planning and management vol. 26 2020 23 paulino martínez fernández, fernando dellano-paz, anxo calvo-silvosa and isabel soares jointly minimize the sum of the squares of the distances from points to the assigned cluster centre. as a result, this methodology gave rise to a reduction of the observations as it replaced the member states observations with those ones linked to the newly created three clusters for the years included. annex a contains further information about the clustering process. the clustering is made according to the generation percentages in the dataset and the calculated generation costs and risks for every member state and year considered. more specifically, the technologies generation participation shares were used to calculate – according to the costs and risks presented in table 1– the total generation cost and risk per country and year. cluster labelled 1 contains those countries showing the least risk; cluster labelled 3 contains those countries showing the highest risk. the components of each cluster are shown in table 3. the codes shown correspond to the iso 3166-1 alpha-2 standard. it is worth noting that both cyprus and malta were excluded of the analysis due to their insular nature. table 3 reveals how the number of countries in each cluster, particularly in clusters labelled 1 and 3, varies throughout the period studied. while in 1995 most of the countries were included in the leader group, in 2015 that majority is assigned to the bottom of the pile. this does not necessarily implies that the eu member states as a whole are doing worse. on the contrary, it means that the efficiency improvement makes it tougher to achieve the excellence when dealing with generation efficiency. table 3 also shows the following noteworthy facts: – france, slovakia and sweden are always assigned to cluster 1. – hungary and slovenia started and finished in cluster 1, after a short stay in cluster 2. – portugal is always assigned to cluster 3. – greece and italy are the only countries that finished in a better cluster than the one in which they started. table 1: costs, risks and emissions by generation technology technology cost (€/mwh) risk (€/mwh) co2 emission (kg/mwh) nuclear 30.04 2.84 coal 52.23 5.61 734.09 coal ccs 78.44 6.80 101.00 natural gas 38.79 3.51 356.07 natural gas ccs 63.60 6.67 48.67 oil 93.17 12.48 546.46 wind 60.69 6.46 hydro 38.62 10.29 hydro (mini) 42.95 3.59 offshore wind 73.81 7.21 biomass 96.62 12.76 1.84 pv 212.03 10.50 table 2: generation limits by technology technology maximum participation share nuclear 29.80% coal and css coal 23.40% natural gas and css natural gas 27.60% oil 0.80% wind 20.30% hydro 10.80% hydro (mini) 1.50% offshore wind 2.00% biomass 8.50% pv 5.50% table 3: clustered countries 1990 1995 2000 2005 2010 2015 cluster 1 be bg cz de es fr lv lt lu hu nl at si sk fi se be fr lt lu si sk se be fr lt sk se be bg fr lv lt lu hu si sk se be fr lv lu hu ro si sk se fr hu si sk se cluster 2 dk ee ie hr pl ro uk bg cz de es lv hu nl at ro fi uk bg cz de es hr lv lu hu nl at ro si fi uk cz de es hr nl at ro fi uk bg cz ie es hr it lt nl at fi uk dk de gr it cluster 3 gr it pt dk ee ie gr hr it pl pt dk ee ie gr it pl pt dk ee ie gr it pl pt dk de ee gr pl pt be bg cz ee ie es hr lv lt lu nl at pl pt ro fi uk 24 international journal of sustainable energy planning and management vol. 26 2020 an evaluation of the energy and environmental policy efficiency 5. clusters’ efficiency it is possible to depict each cluster risk-cost in a coordinate plane to obtain figure 1. the risk and cost of each cluster are computed as the average of the risks and costs of the countries included in it. figure 1 also shows the efficient and feasible frontiers of the aforementioned theoretical models (base and technological models). the solid line corresponds to the efficient frontier and the dashed one represents the non-efficient part of the feasible frontier. it is important to highlight that no portfolio can be found to the left of the feasible frontier. figure 1 shows that to a certain extent all the clusters have moved towards efficiency for the analysed years. nevertheless, some differences arise. cluster 3 appears to be the most regular in that movement and the one that has reduced its costs and risks further: a 19.39% reduction in cost and a 40.25% reduction in risk, as shown in table 4. however, cluster 2 suffered a 20.52% increase in the generation cost. between the former ones, cluster 1 has experienced more moderate reductions in cost (1.88%) and risk (22.91%) than cluster 3. notwithstanding, as figure 1 shows, member states are still far from the european efficiency objectives — represented by the technological model efficient frontier. therefore, it is important to measure the distance between the 2015 clustered portfolios and the efficient frontier. for that purpose, the first step is to calculate the intersection points between the efficient frontier considered and the segments linking the coordinate origin to every cluster centroid; the second one is to measure the euclidean distance between that intersection figure 1: efficient frontier and eu-member states clusters (1990-2015) table 4: cost and risk variations through the period 1995–2015 cluster cost variation 1995–2015 risk variation 1995–2015 1 –1.88% –22.91% 2 20.52% –34.78% 3 –19.39% –40.25% international journal of sustainable energy planning and management vol. 26 2020 25 paulino martínez fernández, fernando dellano-paz, anxo calvo-silvosa and isabel soares point and the corresponding cluster centroid. figure 2 shows that there is no intersection point between the clusters 1 and 3 and the technological model efficient frontier. table 5 includes these distances. it is important to note that, for the technological model and clusters 1 and 3, this table shows the euclidean distance from the cluster centroid to the technological model global minimum cost portfolio (gmc) –this is, the efficient portfolio that has the lowest cost and, consequently, the higher risk–, located in the lower-right extreme of the efficient frontier, as shown in figure 2. the technological model gmc portfolio has a cost of 40.88 €/mwh and a risk of 2.54 €/mwh. 6. results this work confirms that the member states exhibit a general trend to move towards efficiency. on the basis of the clustered information, that trend is a true fact. some member states stand out due to their leadership regarding the efficiency of their energy and environmental policies. among them, france, slovakia and sweden has belonged to the leader cluster since 1990. denmark, germany, greece and italy have shown a high regularity in the efficiency of their policies for the period 1990-2015. regarding environment, lithuania, 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cluster centroids table 5: distance from the clusters’ centroids to the efficient frontier cluster base model technological model 1 9.01 €/mwh 0.77 €/mwh 2 26.42 €/mwh 20.58 €/mwh 3 18.26 €/mwh 10.25 €/mwh 26 international journal of sustainable energy planning and management vol. 26 2020 an evaluation of the energy and environmental policy efficiency when analysing the percentage of res generation, france, slovakia and sweden show a higher average than the other member states in the period concerned. thus, it seems that a high percentage of res generation may improve not only the environmental efficiency but also the economic efficiency. it is also pertinent to point out that france has a large share of nuclear –non pollutant– generation. denmark, germany, greece and italy, for their part, exhibit as a whole a higher annual res growth rate –5.11%– than the european average – 1.59%. the growth primarily occurs in the period 2007-2015, changing from a joint res contribution of 10% to 23%. again, the conclusion may be that the stronger the commitment with res generation, the better the improvements in both environmental and economic efficiency. co2 emission variation can also be analysed for the period 1990-2015. there appears to be general trend to reduce co2 emissions in the eu member states, although luxembourg, netherlands, spain, portugal and ireland show a relevant increase in their emissions. on the other side, lithuania, denmark and slovakia are able to reduce their co2 emission by more than 50%, while estonia, sweden, france and the united kingdom lower their emissions by more than 40%. interestingly, all the countries that increased their co2 emission throughout the period 1990-2015 were assigned to cluster number 3 in 2015. the member states that most reduced their pollutant emissions –lithuania, slovakia, estonia and denmark– also show a higher res share in power generation. as a matter of fact, the res share of these member states grew at an annual percentage of 1.93% –higher than the european average of 1.59%– confirming the strategy for decarbonisation of the european generation portfolio. 7. conclusion and policy implication in this work, mpt is used to determine the efficiency of the eu power generation in the period 1990-2015. taking into account the high number of variables considered, some of the years initially considered were discarded and finally the information was clustered due to methodological reasons. after determining the optimal number of clusters to compute, the analysis focused on three clusters in each one of the following years: 1990, 1995, 2000, 2005, 2010 and 2015. these clusters were labelled from one to three according to their efficiency, being the cluster one the most efficient and the cluster three the least efficient. studying how the eu member states are assigned to the different clusters provides some useful information about the risk-cost efficiency of their energy and environmental policies. the cluster analysis assigned france, slovakia and sweden to the leader cluster (one) in every year considered. additionally, denmark, germany, greece and italy show a high consistency in the design and implementation of their policies, as they moved upwards throughout the period concerned. with regards to the evolution of every cluster over these years, all of them have moved towards efficiency. cluster labelled three exhibits the better performance with the highest cost and risk reductions (a 19.39% reduction in cost and a 40.25% reduction in risk). contrary to the major trend, cluster labelled two obtains a 20.52% increase in its generation cost over the twenty-five years included in this work. concerning the distance from the centroid of each cluster to the efficient portfolios frontier or to the gmc portfolio of the technological model, as expected, cluster labelled one, which includes the most efficient member states, is closer to efficiency. moreover, this analysis can even be more accurate because a measure of those distances in economic terms can also be provided: cluster number one is inefficient in less than 1€/mwh, while clusters number two and three are more than 20€/mwh and 10€/mwh far from the technological model efficient frontier, respectively. this member-state-based analysis can be considered a valuable tool because at present the national governments are in charge of the power generation portfolio design, apart from the framework including general guidelines, recommendations and objectives issued by the eu institutions. therefore, this analysis could be used to assess the risk-cost efficiency of the environmental and energy policies implemented by the different countries and rank them according to the aforementioned criteria. finally, an analysis of the power generation emissions in the different member states is also addressed. lithuania, slovakia, estonia and denmark are leaders in co2 emission reduction in power generation. besides, sweden, 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https://doi.org/10.1111/j.1540-6261.1952.tb01525 https://doi.org/10.2307/2346830 https://doi.org/10.2307/2346830 https://doi.org/https http://doi.org/10.5278/ijsepm.3552 international journal of sustainable energy planning and management vol. 26 2020 29 paulino martínez fernández, fernando dellano-paz, anxo calvo-silvosa and isabel soares annex a: clustering information historical generation data by country, technology and year are used for clustering. they also are the footing to calculate the generation cost and risk of every country, technology and year. using the information about risks and costs shown in table 1 and, specifically, the variances-covariances matrix shown in table a–1. thus, knowing the share of every electricity generation technology in every country and year, it is also possible to calculate the total generation cost and risk of every country and year using equations (1) and (2). results are shown in table a–2. the preceding tables contain the information used for clustering. finally, all the countries considered were classified in three different clusters. figure a–1 exhibits the sum of the squares of the distance from every point to the assigned cluster centre for all the years. summary of the clustering results is shown in table a–3. table a–1: variances-covariances matrix used in calculations (€/mwh) n uc le ar c oa l c oa l w it h c c s n at ur al g as n at ur al g as w it h c c s o il w in d h yd ro h yd ro (m in i) w in d (o ff sh or e) b io m as s p v nuclear 8.07 3.84 5.07 3.54 4.26 15.32 -0.07 -0.42 -0.46 -0.10 -6.40 0.20 coal 31.51 7.04 4.02 4.81 20.82 -0.21 0.03 0.03 -0.31 -14.09 -0.21 coal with ccs 46.27 5.43 6.60 27.16 -0.45 0.06 0.07 -0.68 -18.52 -0.46 natural gas 12.33 6.55 15.44 0.00 -0.08 -0.08 0.00 -3.16 0.05 natural gas with ccs 44.45 18.33 0.00 -0.16 -0.17 0.00 -3.38 0.11 oil 155.83 -4.02 -1.95 -2.11 -6.07 -86.44 -0.16 wind 41.69 0.94 1.01 4.68 -0.31 0.09 hydro 105.79 3.64 1.41 -0.33 0.56 hydro (mini) 12.92 1.53 -0.36 0.6 wind – (offshore) 52.04 -0.48 0.13 biomass 162.84 0.25 pv 110.27 table a–2: generation costs by country and year costs (€/mwh) risks (€/mwh) 1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015 be 38.0 38.1 36.7 37.5 39.2 50.3 2.7 2.7 2.5 2.5 2.3 2.2 bg 44.0 42.6 41.4 41.5 43.4 48.3 3.5 3.2 3.1 3.1 3.4 3.2 cz 47.6 47.8 47.5 45.0 46.2 50.8 4.4 4.3 4.3 3.7 3.4 3.1 dk 53.8 56.0 56.8 56.3 57.6 66.7 5.2 4.8 3.7 3.1 3.1 3.7 de 45.2 44.9 44.5 46.6 51.1 61.8 3.7 3.6 3.4 3.1 2.8 2.8 ee 54.9 52.3 51.4 51.5 54.3 55.8 5.3 5.4 5.2 5.2 4.8 4.4 ie 51.7 53.8 54.6 51.6 45.6 49.4 4.1 4.3 4.2 3.7 2.9 2.8 gr 60.5 59.8 56.6 55.8 53.6 65.9 5.5 5.4 4.8 4.5 4.0 3.6 es 44.3 46.4 47.5 47.6 49.5 56.7 3.4 3.5 3.4 3.0 2.6 2.5 fr 34.6 33.9 33.8 33.7 34.3 36.2 2.7 2.7 2.7 2.6 2.5 2.5 hr 57.3 53.8 49.0 49.1 43.5 46.6 5.9 6.5 5.7 5.5 5.8 5.4 it 67.1 67.9 57.8 50.6 48.4 63.5 6.7 7.0 5.1 3.7 3.1 2.8 cy 93.2 93.2 93.2 93.2 93.2 95.0 12.5 12.5 12.5 12.5 12.3 11.3 lv 42.1 45.1 40.7 39.8 39.7 47.6 6.3 6.9 6.3 6.3 5.1 3.9 (continued) 30 international journal of sustainable energy planning and management vol. 26 2020 an evaluation of the energy and environmental policy efficiency table a–2: (continued) generation costs by country and year costs (€/mwh) risks (€/mwh) 1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015 lt 41.5 35.5 35.5 34.1 47.8 54.5 3.4 3.0 2.8 2.6 3.5 3.0 lu 39.9 40.2 40.7 40.6 41.1 49.2 5.7 6.4 7.0 3.3 3.7 5.3 hu 41.2 47.3 45.9 41.4 42.0 42.3 3.0 3.7 3.5 2.5 2.4 2.3 mt 70.3 90.9 93.2 93.2 93.2 101.7 7.1 11.9 12.5 12.5 12.5 11.5 nl 46.0 45.7 45.3 46.5 46.0 50.1 3.3 3.2 3.1 2.9 2.9 2.9 at 44.0 44.0 43.3 44.5 45.5 48.6 6.0 6.3 6.5 5.5 5.5 5.8 pl 52.3 52.2 52.2 52.5 54.0 55.2 5.4 5.4 5.3 5.2 4.9 4.5 pt 62.5 62.9 55.8 56.6 51.2 55.3 5.6 5.4 4.3 3.8 3.4 2.9 ro 52.7 48.9 46.5 44.8 42.6 49.5 4.1 4.0 3.8 4.0 3.8 3.1 si 44.1 41.5 40.9 40.7 41.1 43.8 3.5 3.4 3.5 3.2 3.4 3.3 sk 42.1 39.9 37.0 37.6 38.7 43.0 3.0 2.9 2.7 2.7 2.7 2.4 fi 46.0 46.9 46.1 46.4 48.2 48.2 2.8 2.8 2.8 2.8 2.8 3.2 se 36.2 37.4 38.0 38.4 41.7 42.3 4.7 4.4 5.1 4.4 4.3 4.5 uk 51.6 45.8 43.0 43.8 44.3 52.1 4.5 3.4 2.9 2.9 2.7 2.3 1990 number of clusters w ith in g ro up s su m o f s qu ar es w ith in g ro up s su m o f s qu ar es w ith in g ro up s su m o f s qu ar es w ith in g ro up s su m o f s qu ar es w ith in g ro up s su m o f s qu ar es w ith in g ro up s su m o f s qu ar es number of clusters number of clusters number of clusters number of clusters number of clusters 2 4 6 8 10 12 14 2 4 6 8 10 12 14 2 4 6 8 10 12 14 2 4 6 8 10 12 142 4 6 8 10 12 142 0 0 20 0 40 0 60 0 80 0 0 0 20 0 40 06 00 80 0 12 00 20 0 60 0 10 00 14 00 20 0 40 0 60 0 80 0 50 0 10 00 15 00 0 50 0 10 00 15 00 0 10 00 4 6 8 10 12 14 1995 2000 2005 2010 2015 figure a–1: sum of the squares of the distance from every point to the assigned cluster centre international journal of sustainable energy planning and management vol. 26 2020 31 paulino martínez fernández, fernando dellano-paz, anxo calvo-silvosa and isabel soares table a–3: summary of the clustering results size centroid risk centroid cost sum of squares within cluster 1990 cluster 1 16 3.88 42.30 219.92 cluster 2 7 4.94 53.48 28.37 cluster 3 3 5.97 63.36 23.51 sum of squares between clusters / total sum of squares 84.2% 1995 cluster 1 7 3.66 38.08 55.03 cluster 2 11 4.08 45.94 48.71 cluster 3 8 5.52 57.37 233.26 sum of squares between clusters / total sum of squares 81.0% 2000 cluster 1 5 3.13 36.18 15.19 cluster 2 14 4.24 44.44 130.77 cluster 3 7 4.66 55.02 37.45 sum of squares between clusters / total sum of squares 85.6% 2005 cluster 1 10 3.32 38.54 85.10 cluster 2 9 3.71 46.03 31.99 cluster 3 7 4.16 53.56 43.04 sum of squares between clusters / total sum of squares 85.5% 2010 cluster 1 9 3.37 40.04 57.80 cluster 2 11 3.50 46.21 53.56 cluster 3 6 3.85 53.64 32.65 sum of squares between clusters / total sum of squares 82.3% 2015 cluster 1 5 2.99 41.51 40.00 cluster 2 4 3.22 64.46 15.95 cluster 3 17 3.57 51.08 186.98 sum of squares between clusters / total sum of squares 82.9% _goback _ref415330003 microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university international journal of sustainable energy planning and management vol. 25 2020 45 *corresponding author e-mail: steven.dahlke@firstsolar.com since original submission the author’s affiliation has changed, currently he is a research fellow funded by the us department of energy, hosted by first solar international journal of sustainable energy planning and management vol. 25 2020 45–60 abstract this paper presents empirically-estimated average hourly relationships between regional electricity trade in the western united states (us) and prices, emissions, and generation from 2015 through 2018. it provides new evidence of the short term impacts of integrating markets to inform electricity market policymakers. consistent with economic theory, the analysis finds a negative relationship between electricity price in california and regional trade, conditional on local demand. each 1 gwh increase in california electricity imports is associated with an average $0.15 per mwh decrease in the california independent system operator’s (caiso) wholesale electricity price. there is a net-negative short-term relationship between co2 emissions in california and electricity imports that is partially offset by positive emissions from exporting neighbors. specifically, each 1 gwh increase in regional trade is associated with a net 70-ton average decrease in co2 emissions across the western u.s., conditional on demand levels. the results provide evidence that electricity imports mostly displace natural gas generation on the margin in the california electricity market. a small positive relationship is observed between short-run so2 and nox emissions in neighboring regions and california electricity imports. the magnitude of the so2 and nox results suggest an average increase of 0.1 mwh from neighboring coal plants is associated with a 1 mwh increase in imports to california. 1. introduction those working on research and policy in the electricity sector often think about optimal market designs to meet society’s energy goals at the lowest cost. to this end, centralized wholesale electricity markets have grown significantly in the us over the past two decades. recent examples include the southward expansion of the midcontinent independent system operator market in 2013, and the northward expansion of the southwest power pool market in 2015. california is now deliberating with neighboring states about whether or not to regionalize its centralized market to increase electricity trade with neighboring states. this study addresses a literature gap by providing timely information and empirical evidence to aid policymakers in understanding the likely benefits, costs, and impacts of market integration in the western united states. for centuries, economists have puzzled over how to structure markets to maximize social welfare. economic philosophy suggests the value of a market comes from its ability to make information available to both parties involved in an exchange. efficiency increases when trading partners gain access to additional relevant information. the possession of relevant information allows integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states steven dahlkea* a colorado school of mines, division of economics and business, 1500 illinois street, golden, co 80401 keywords: market integration; electricity; energy; url: http://doi.org/10.5278/ijsepm.3416 mailto:steven.dahlke@firstsolar.com http://doi.org/10.5278/ijsepm.3416 46 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states market participants to reduce uncertainty, identify suitable trading partners, and properly negotiate contracts [1]. moreover, the cost to acquire relevant information and negotiate contracts determines the optimal organization of firms within a market [2,3]. in this way, centralized electricity markets are expanding across the u.s. because they increase availability of relevant information to market participants by posting prices, standardizing contracts, and eliminating costs associated with negotiating individual bilateral deals. centralized markets also eliminate export fees charged by transmission companies for transmitting power across market regions [4]. an important question for the western u.s. debate is whether the marginal benefits from a centralized wholesale market outweigh the marginal costs of transitioning to such a market. while market implementation costs for the western u.s. are difficult to estimate with precision, mansur and white (2012) [5] note that a similar market expansion in the pjm region in the northeastern u.s. had a one-time implementation cost of $40 million. this study suggests the immediate consumer savings from transitioning to a regional market largely outweigh costs of this magnitude. in addition to providing timely information for those working on electricity market policy in the western u.s., this paper builds on a broader scholarship of electricity market integration around the world. in the early 1990’s, the european union issued directives stating their explicit goal of an integrated electricity market, similar to what has occurred recently in california. since then, there have been many studies evaluating the progress and implications of european electricity market integration towards this goal [6–8]. supplementing this is a body of research evaluating market integration among sub-markets within europe, including scandinavia [9,10], southeastern europe [11], italy and its neighbors [12], and ireland and its neighbors [13]. other work has developed economic models to study effects of electricity market integration in other regions of the world, including eastern asia [14,15], western africa [16,17], and across the western hemisphere [18]. some analysis has been done characterizing the extent of integration within the western u.s. [19,20], and more recently on the emissions impacts of increasing integration through western u.s. via recent growth in an energy imbalance market [21,22]. to “market integration also provides valuable electricity system flexibility services to support renewable energy integration. the global literature broadly finds price convergence, reduced volatility, and regional market efficiency benefits after integration, while environmental and production impacts from market integration depend on local resource endowments and supply. this paper builds on and is unique from past studies in a couple ways. first, it utilizes highly granular electric system operator market data from california to quantify short term relationships between regional electricity trade, prices, and emissions. several other studies focus on price, but not emissions. this paper is also unique from the literature in that it focuses on the western united states in the context of recent market regionalization efforts stimulated by california. finally, due to the granular nature of the data and the econometric models employed, the results should be interpreted strictly as short run estimates related to market integration. as the capital stock evolves with generation retirements and new installations, the dynamics of the system will change from the estimates presented here. electricity markets today can broadly be categorized in two ways: centralized auction markets and decentralized bilateral trading. the market structure in the western united states varies by state. trades occur over a grid of electric transmission lines called the western interconnection. the western interconnection is not synchronized with the eastern united states, and electricity flows between these regions are minimal. in the western u.s. outside of california, the majority of electricity companies are privately-owned firms that are state-regulated monopolies in the locations where they sell power. most trade between companies utilizes decentralized, bilateral contracts. bilateral contracts are also heavily utilized to facilitate trade in california, however most electricity is then transacted through a centralized auction market operated by an independent non-profit entity called the california independent system operator (caiso). caiso collects bids and offers from buyers and sellers in california, and centrally schedules electric generation across the state to meet demand. caiso also calculates and publishes prices designed to reflect the marginal cost of delivering electricity to each location throughout the state at a given point in time. international journal of sustainable energy planning and management vol. 25 2020 47 steven dahlke studies of other regions with centralized electricity markets have measured economically significant monetary benefits associated with the market. mansur & white (2012) estimated $163 million in net gains from trade after expanding the centralized pjm market in the northeastern u.s., leading to roughly a doubling in trading efficiency compared to the bilateral market [5]. work by chan et al. (2017) suggests efficiency gains from centralized markets in the u.s. have induced behavioral changes among power plant owners that have led to savings in operations expenses by up to 15% [25]. these past successes have prompted energy policy makers to engage in serious discussions about expanding california’s centralized market. in october 2015, california senate bill 350, the “clean energy and pollution reduction act”, was signed into law [26]. among other things, this bill established the intent of the california legislature to expand caiso into a multi-state organization. the legislation required caiso to study the impact of a regional market, including overall benefits to ratepayers, environmental and emissions impacts, and more. the series of consultant studies referenced in chang et al. (2016) is the market operator’s response to this directive [4]. as discussed previously, the economic, legal, and social impacts of regionalizing california’s electricity market have recently been studied by various entities to help inform the political debate. however, because regional market discussions in california have been renewed relatively recently, the current academic literature on the topic is still relatively sparse. this analysis offers new insights, including estimates of recent shortterm relationships between increased trade and prices, emissions and electricity supply. looking to recent history as a reasonable guide, these short-term relationships provide empirically-based estimates of near-term impacts of increasing regional trade across the western u.s. through a regional market. economic theory suggests that, all else equal, eliminating barriers to trade across a regional market will decrease consumer costs and producer profits in areas that increase imports, while increasing prices, producer profits and consumer costs in areas that increase exports. furthermore, because california is a net importer, increased regional trade will reduce california prices, consistent with the empiric results presented in this paper. the online appendix discusses this economic theory in more depth [27]. the rest of this paper is organized as follows: section 2 walks through each step of the econometric analysis. section 3 discusses policy implications, next steps, and concludes. all the datasets and computer code necessary to replicate the analysis are publicly available and are stored in an analytic appendix online at https://osf.io/hcdn2/. 2. analysis electricity market data covering the western u.s. during the years of 2015-2018 were collected for this analysis. generation and price data are available for caiso, but not for other non-caiso balancing authorities in california, including those serving the cities of sacramento and los angeles. as a result, the analytic results for prices and generation are representative of caiso only. imports in these models come from neighboring states as well as from balancing authorities in california outside of caiso. conversely, emissions data is available for all of california. in this case, the model estimates the relationship between imports and emissions for california, inclusive of all balancing authorities in the state. furthermore, the california summary statistics presented in this section include balancing authorities in the state that are not in caiso. the data collected includes datasets that provide 5-minute observations of total caiso generation by fuel type, demand, and average system price [28,29]. table 1 shows that in caiso, electricity supply from solar and hydro have increased while natural gas decreased over the past four years. other fuels have remained relatively constant, including imports, which supply slightly less than 1/3 of caiso’s electricity demand. figure 1 plots the average daily fuel mix by hour in caiso during 2018, representing a “typical” day. it shows a daily reduction in natural gas and electricity imports during the morning when large amounts of solar come online, followed by significant increases at night when solar goes offline. if recent trends continue and solar capacity continues to displace natural gas, the need to rely on out of state electricity to balance daily changes in solar generation will grow. the data also includes plant-level information and hourly electricity imports spanning july 2015 (the earliest this data is available) through july 2018, from the u.s. energy information administration [30,31]. all balancing authorities that trade with california are https://osf.io/hcdn2/ 48 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states assigned to two regions, northwest or southwest, consistent with the organization of eia’s electricity data. table 2 lists all the electric balancing authorities in each region that trade electricity with california, as well as each region’s average net imports into california. it shows both regions have similar levels of electricity demand. table 3 presents the capacity mix of california plus each region that trades with california from 2016, the most recent year which plant level data is available. california generates the majority of its electricity using natural gas, while neighboring regions have a more balanced electricity mix between natural gas, coal, hydro, and other fuels. hourly environmental emissions data were collected from the u.s. environmental protection agency’s air markets program database [32]. historic hourly emissions at the state level of so2, nox and co2 were downloaded for california and all states that trade electricity with california, from may 2014 – june 2018. both so2 and nox cause respiratory problems, while co2 causes climate change. all three of these pollutants are emitted from the combustion of fossil fuels, but natural gas emits only trace amounts of so2 and nox. 2.1. prices this section describes the method for estimating the short-term relationship between increased imports and table 1: annual generation (gwh) and percent of total supply by fuel type, caiso. each column spans july 1 – june 30 of the listed years 2014–2015 2015–2016 2016–2017 2017–2018 solar 16,034 6% 17,850 8% 23,644 11% 26,912 13% wind 15,391 6% 13,503 6% 13,990 7% 15,344 7% nuclear 21,758 9% 17,749 8% 17,936 8% 18,539 9% hydro 16,004 6% 17,930 8% 28,453 13% 25,334 12% natural gas 110,447 43% 87,737 40% 68,234 32% 62,499 30% imports 75,744 30% 63,521 29% 62,445 29% 62,541 30% total 255,379 218,290 214,703 211,168 g en er at io n (m w ) 30000 20000 10000 0 0 2 4 6 8 10 12 hour 14 16 18 20 22 24 solar natural gas imports hydro wind nuclear figure 1: average daily generation in caiso, 2018 international journal of sustainable energy planning and management vol. 25 2020 49 steven dahlke table 2: balancing authorities and average net imports into california by region region balancing authorities in region average net imports (mw) northwest bonneville power administration, nevada power company, pacificorp east, pacificorp west 3,484 southwest arizona public service, salt river project, western area power administration desert southwest 3,205 caiso prices. the theoretical model presented in section 3 predicts that a decrease in trading costs across regions will decrease prices in the importing region, resulting in savings for consumers and revenue losses for producers. the econometric results presented in this section support this assertion. the model utilizes hourly data on imports, caiso average system prices, and net load from july 2015 – july 2018, plotted in figure 2. net load is total demand minus non-dispatchable wind and solar generation. this is a more relevant variable for table 3: electric generating capacity and percent of total capacity by fuel type and region installed capacity (mw) and percent of total capacity by fuel region coal hydro natural gas nuclear other solar wind california 1,703 11,751 44,791 2,323 5,502 11,026 5,976 2% 14% 54% 3% 7% 13% 7% northwest 11,129 23,366 16,196 1,200 1,691 1,680 7,713 18% 37% 26% 2% 3% 3% 12% southwest 6,115 5,926 10,736 4,210 165 1,014 237 22% 21% 38% 15% 1% 4% 1% figure 2: hourly caiso average system price (top), net imports (middle), and net load (bottom) 50 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states determining price on the supply side because it subtracts away noise in the form of wind and solar production that do not respond to short term changes in demand [33]. electricity prices are serially correlated and have unequal variance, causing incorrect estimates of traditional standard errors. to obtain proper statistical inference, standard error calculation methods that are robust to heteroskedasticity and auto-correlation (hac) are used throughout the entirety of the analysis, following the method implemented in zeileis (2004) [34].the data are more likely to show high levels of prices and imports during periods of high demand, confounding the bivariate relationship between price and imports. to deal with this, caiso net load is included as a control variable. other unobserved factors will also affect electricity price, including transmission congestion or changes in fuel prices. to account for these external factors, a set of date fixed effects are included, which difference out daily price averages from the model. doing this accounts for price effects from a particular day, month, or year from unobserved factors like persistent congestion or changes in fuel costs. as a result, the model estimates the average within-day relationship between price and imports, conditional on hourly net load. the model specification is described in equation set (2). αd represents the daily fixed effects that control for the average price each day caused by factors external to the model. the day fixed effects are programmed into the data as a set of variables equal in number to the total days in the dataset, with each variable equal to 1 during the 24 observations that occur during the respective day, and 0 otherwise. table 4 presents results from this model. column (1) shows results from a bivariate regression model to provide intuition into the data generating process. the positive coefficient of 0.014 indicates the observed simple correlation between price and imports is actually positive. this is because high levels of prices and imports both are more likely to occur during periods of high demand, transmission congestion, higher fuel costs, and other unobserved factors that increase the cost to supply electricity. the model in column (2) controls for these effects by including net load and daily fixed effects, and shows the relationship between prices and imports conditional on these other variables is in fact negative. for this reason, column (2) shows results from the preferred model specified in equation set (2). the coefficient on imports indicates that during the sample period from 2015-2018, a 1 gw increase in net imports is associated with an average decrease in caiso system price in the same hour by a multiple of e0.005, equal to 1.005, equivalent to a 0.5% decrease. this suggests an average short-term relationship of -$0.15, or an average $4,017 in consumer savings per gwh increase in imports. $0.15 is calculated as 0.5% of the average price observed during the data sample, $29.97/mwh. the consumer savings is calculated by multiplying the price effect by average caiso electricity demand observed in the data sample (26,261 mw). these results suggest a doubling of interregional flows between caiso and neighbors would be associated with an average caiso price decrease of $1.09, corresponding with short-term annual consumer savings of approximately $252 million. these short-term savings are well in excess of the likely administrative costs required to setup the regional market. this is based off the $40 million one-time cost required to implement a similar market expansion in the pjm market (mansur and white, 2012). i used a doubling of regional trade as the basis for the annual consumer savings calculation because the recent study commissioned by caiso assumed regional market integration would roughly double the limits on interregional electricity flows [4]. the immediate price reduction of $1.09/mwh from doubling regional trade is calculated by multiplying the average price marginal effect (-0.15) by the average level of net imports (approximately 7 gw) observed during 2015-2018. the annual consumer savings of ( )( ) 0 1 2 ln 1 min * t t t d t * t t t price imports netload price price price = + + + + = + − εβ β β α (2) table 4: results from price and imports models natural log of price (1) (2) imports (gwh) 0.014* −0.0051* (0.0011) (0.0010) net load (gwh) 0.015* (0.00045) fixed effects day observations 26,303 26,303 r2 0.032 0.29 adjusted r2 0.032 0.26 table notes: heteroskedasticity and autocorrelation-robust standard errors reported in below coefficients; ‘*’ denotes the probability of the coefficient being zero is less than 0.01. http://29.97/mwh http://1.09/mwh international journal of sustainable energy planning and management vol. 25 2020 51 steven dahlke $252 million is then calculated by multiplying the full price effect by average caiso electricity demand and 8,760 hours per year. these empirically estimated consumer savings are similar in magnitude to the production cost savings predicted by the caiso-commissioned simulation study. unfortunately, price effects in neighboring states outside of california are not estimated in this study because public wholesale price or marginal cost data is unavailable for non-caiso regions. the economic theory presented in section 3 predicts a price increase in these net-exporting states. the day fixed effects parameters (αd in equation 6) control for daily average changes in the outcome variable, leaving within-day variation in prices and imports to use for calculating the coefficient estimates. in this way, the model nets out all unobserved factors that confound the observed relationship between price and imports that vary on a daily level. this includes controlling for different outcomes between work days and weekends, seasonal effects, and annual macroeconomic effects. it is possible there are short-term factors not included in the model that affect both the outcome variable and imports, including within-day transmission congestion, fuel costs, outages in california, and available generation capacity. however, theory suggests all of these factors are positively correlated with both the independent and outcome variables in that they cause higher caiso prices and also make imports into caiso more competitive. thus, the existence of these factors would increase the estimated coefficient, suggesting the estimated effect provided in column (2). table 4 is a conservative, upper-bound estimate, and the true effect is more negative. furthermore, available generation capacity is largely accounted for in net load because when net load increases, available capacity decreases in a close relationship. in general, empiric economic studies often have difficulty disentangling the relative effects of supply-side factors (like imports) from demand-side factors, because both sets of factors simultaneously interact to determine price. however, in the case of wholesale electricity markets, most electricity consumers face prices that do not track short-term changes in wholesale prices. the lack of price response on the demand side minimizes the simultaneity bias concern [35,36]. if we consider a case where consumers did in fact respond to short term changes in price, theory suggests simultaneity would positively bias the model estimate relative to the true effect. this is because if consumers did respond to short-term wholesale price signals, the reduction in price from increasing imports would be mitigated by a positive demand response. in this case, the true effect would also be more negative than the estimated relationship. some degree of endogeneity is likely present between imports and electricity prices. in the short-term a caiso price increase will incent additional imports into caiso. in these models, a significant portion of electricity price variation is accounted for via the inclusion of caiso demand as a control variable. however, unplanned generation outages and transmission congestion are examples of other factors that can cause high prices. these effects cannot be directly controlled for due to data unavailability, but they are largely controlled for in an indirect manner by the inclusion of day fixed effects. in this context, the results can be interpreted as the within-day average effect of imports plus other within-day unobserved effects on price. to the extent that within-day unobserved variables that are correlated with imports cause price increases (including generator outages and transmission congestion), the short-term relationship estimate in column 2. table 4 would be positively biased, and the true effect of imports would be more negative. 2.2. emissions in this part of the analysis, hourly data on co2, lso2, and nox emissions from electricity generation by region are utilized to estimate the relationship between electricity imports and emissions. the approach used for this analysis is similar to other studies utilizing econometric-based methods with highly granular electricity market data to estimate conditional short-term relationships related to various policies and electricity prices, emissions, and generation [33,37,38]. however, these studies do not focus on market integration, rather they consider effects of renewable energy, storage, and electric vehicles, respectively. hourly co2 emissions in california, the northwest, and the southwest regions from july, 2015 until july, 2018 are plotted in figure 3. average emissions levels during the sample period for each region and pollutant are reported in table 5. figure 3 shows the so2 and nox series are highly correlated with co2 emissions and follow similar patterns. like the price data series, the distributions of emissions are positively skewed and exhibit similar patterns of serial correlation. to deal with these issues, a log transformation of emissions and hac robust 52 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states standard errors are utilized, similar to the procedure described in section 2.1. more specifically, models following the structures described in equation set (3) are estimated. in the first line of equation set (3), emi,t,ca represents hourly emissions in california, where i indexes each pollutant. importst,ca represents hourly total net imports into california, netloadt,ca is caiso’s hourly net load, and αd is a set of day fixed effects, one for each day in the data sample. in the second line, emi,t,r represents hourly emissions by region, with r indexing the northwest and southwest regions. exportst,r represents hourly exports from region r into california. hourly net load data for the northwest and southwest regions are not publicly available. to make up for this, a set of 24 hour fixed effects are included to control for average intra-day variation in demand. for each region, the models are simultaneously solved for the three pollutants as a set of seemingly unrelated regressions utilizing the method described in by henningsen and hamann (2007), and the associated software they built [39]. the seemingly unrelated regression approach yields more precise estimates compared to a set of independent regressions by modeling the covariance between pollutants. table 6 presents results for each region and pollutant. columns 2, 4, and 6 include the preferred model specifications for co2, so2, and nox emissions, respectively. the results show a significant decrease in california emissions associated with electricity imports. conversely, the northwest and southwest regions show a significant increase in emissions associated with exports. these estimates suggest that, on average, electricity trade into california is being supplied by a nonzero portion of fossil generation in exporting regions that displaces some fossil generation within california. each coefficient ß can be interpreted after an exponential transformation (eß) as the average multiplicative increase in price associated with a 1 gw increase in imports. these are most easily understood as percentage changes. considering column 2 for example, a 1 gw increase in imports into california is associated with an 8.3% (e0.080=1.083) decrease in co2 emissions in california, a 2.6% increase in co2 emissions in the northwest, and a 2.4% increase in co2 emissions in the ( ) ( ) { } { } { } { } , , 0 1 , 2 , , , 0 1 , 2 2 ln ln , , , , , 1,2015: 30,2018 ,  1:24    a i t ca t ca t ca d t b i t r t r d h t x em imports netload em exports i co so no r nw sw d jul jun h = + + + + = + + + + = = = = ε ε β β β α δ δ α γ (3) figure 3: hourly co2 emissions by region international journal of sustainable energy planning and management vol. 25 2020 53 steven dahlke southwest. multiplying these percentage changes by the average hourly co2 emissions level from 20152018 (previously displayed in table 5) indicates that, on average, a 1gwh increase in net imports into california is associated with a 321 metric ton reduction of california co2 emissions . this is close to the co2 emissions rate for the average combined cycle gas plant in the u.s. [40]. thus, it is likely that electricity imports are displacing marginal generation from combined cycle gas plants in california. all the estimated emissions effects for each pollutant and region are presented in table 7. the decrease in california co2 is partially offset by emissions increases in its neighboring regions. 1 gwh of exports to california is associated with a 284 metric ton increase in the northwest region, or a 214 metric ton increase in the southwest. a direct comparison of emissions effects between california and its neighbors requires taking the average of the emissions changes for the exporting regions, weighted by average california trade levels, shown in the fourth row of table 7. doing this suggests that every 1 gwh increase in trade is associated with a net reduction in co2 emissions by 70 tons, and net increases in so2 and nox emissions of 0.13 and 0.12 t, respectively. the estimated effects for table 5: average hourly emissions by pollutant and region, 2015–2018 emissions (t) co2 so2 nox california 4,018 0.019 0.28 northwest 11,138 5.12 6.48 southwest 8,751 2.38 7.27 table 6: results from emissions models california natural log of co2 emissions natural log of so2 emissions natural log of nox emissions (1) (2) (3) (4) (5) (6) imports (gwh) 0.030 -0.080* 0.024 –0.078* 0.017 –0.15* (0.013) (0.0030) (0.012) (0.0029) (0.019) (0.0044) net load (gwh) 0.071* 0.070* 0.075* (0.0012) (0.0012) (0.0015) fixed effects day day day r2 0.017 0.94 0.011 0.94 0.0038 0.79 northwest natural log of co2 emissions natural log of so2 emissions natural log of nox emissions exports (gwh) –0.057* 0.026* –0.062* 0.034* –0.066* 0.030* (0.017) (0.0026) (0.019) (0.0027) (0.019) (0.0027) fixed effects d,h d,h d,h r2 0.069 0.96 0.058 0.95 0.071 0.95 southwest natural log of co2 emissions natural log of so2 emissions natural log of nox emissions exports (gwh) 0.074* 0.024* 0.11* 0.035* 0.095* 0.018* (0.012) (0.0049) (0.015) (0.0072) (0.015) (0.0066) fixed effects d,h d,h d,h r2 0.17 0.92 0.19 0.84 0.14 0.94 table notes: heteroskedasticity and autocorrelation robust standard errors reported in parenthesis. * denotes the probability of the coefficient being zero is less than 0.01 “d,h” stands for day and hour fixed effects. all models are estimated with 26,253 data observations. adjusted r2 values are within 0.01 of the reported simple r2 for all models. 54 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states each pollutant and region are presented in table 7, with the overall net changes for each pollutant calculated in the bottom row. the positive relationship between trade and so2 and nox emissions provide evidence that some coal plants in both the northwest and southwest regions are increasing on the margin when exports to california increase. this is because natural gas plants only emit trace amounts of these pollutants. coal plants range widely in so2 and nox emissions rates, depending on the environmental technology at the plant and type of coal combusted. in 2015, the average so2 emissions rate for coal in the u.s. was approximately 1.64 t/gwh (u.s. eia, 2017) [41]. using this national average as an estimate of the rate in the northwest and southwest regions suggests that less than 10% of each gwh of california imports on average are supplied by coal. so2 emissions are subject to national caps in the united states under the acid rain program. as a result, increasing regional trade between u.s. states will not lead to long-term changes in these emissions. instead, the short-term increases in so2 associated with increasing regional trade must be offset by emissions reductions elsewhere in order to keep pollutant levels under the cap. as regional trade increases, emitting producers will increase profits by selling at a higher price to california consumers. these profits will be offset somewhat by having to pay for emissions reductions elsewhere in order to meet the so2 cap. nox emissions are not subject to a national or regional cap in the western u.s. as a result, increases in nox emissions due to regional trade are more likely to be sustained long term. to eliminate long-term nox emissions increases from regional electricity trade, it is important that an effective nox emissions cap is put in place throughout the regional market. california currently caps domestic co2 emissions as well as co2 emissions from out of state producers who sell into california. neighboring states do not have caps in place [42]. despite the lack of co2 policy in neighboring states, the fact that measured co2 emissions impacts from increased regional trade are still net negative suggests that california’s cap and trade program has been relatively effective in limiting the carbon content of imported electricity, and minimizing emissions leakage to neighbors. despite this evidence suggesting minimal leakage, recent research suggests leakage may be an important issue for california [21,22]. in table 6, columns 1, 3, and 5 report results from simple bivariate regressions of emissions, to provide additional intuition into the data generating processes. in california and the southwest, results from the bivariate regressions are greater than the multiple regressions. this is likely due to similar reasons as the price model in section 2.1: periods with both high emissions and high imports are positively correlated with periods of high demand and other supply factors that increase cost, which positively bias the bivariate results. once the models condition on these other variables, the positive inflationary effect disappears. the northwest region shows the opposite effect in that the bivariate regression result is less than the multiple regression result. unlike in california and the southwest, the northwest region has peak electricity demand during the winter due to electric heating. figure 4 plots relative monthly demand levels for these regions. it shows the northwest region demand peaks in the winter while the other regions peak in the summer. as a result, periods with high exports into california occur during periods with relatively lower local emissions in the northwest, resulting in an opposite, deflationary effect impacting the bivariate model relative to the multiple regression model. examining the residuals of the regression models illustrates the benefit of utilizing day fixed effects. the top panel of figure 5 plots the residuals from a regression model of co2 emissions with imports and net load as covariates, while the bottom plots the residuals from the same model except day fixed effects are included. the residuals in the top panel show non-stationary trends, in that different subsets of the data have non-zero means. this is problematic for model estimation. the residuals from the model with day fixed effects show a stationary series that more closely approximates white noise, indicating more efficient model estimates. the residuals still exhibit heteroskedasticity in that the variance of the series is not constant, and autocorrelation in that values are correlated with prior values. these table 7: estimated change in emissions (t) due to 1 gwh increase in trade co2 so2 nox california –321 –0.0014 –0.041 northwest 284 0.17 0.19 southwest 214 0.082 0.13 weighted avg nw & sw 251 0.13 0.16 net change (row 1 plus row 4) –70 0.13 0.12 international journal of sustainable energy planning and management vol. 25 2020 55 steven dahlke issues are present across all the models estimated in this analysis, and are addressed by using hac robust standard errors for inference of coefficient estimates. 2.3. generation the set of generation models for this analysis are designed to better understand the relationship between regional electricity trade and dispatchable electric generation in caiso. hourly generation data for nuclear, hydro, and natural gas generation are utilized, and plotted in figure 6. the same electric interchange data from eia, along with hourly generation data from caiso, are used. the model is summarized in equation (4). { } { } , 0 1 2 , , , , 1, 2015: 30, 2018 i t t t d i tgen imports netload i nuclear hydro natural gas d jul jun = + + + + = = εβ β β α (4) e le ct ri ci ty s al es in de x (j an = 1 ) 1.3 1.1 0.9 month jan feb mar apr may jun jul aug sep oct nov dec california northwest southwest figure 4: index of average monthly electricity sales by region, 2015–2017 r es id ua ls r es id ua ls 0.5 0.0 -0.5 -1.0 0 10000 20000 0 10000 20000 0.5 0.0 -0.5 no fixed effects day fixed effects figure 5: residuals from california co2 models with and without fixed effects 56 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states the three equations for each type of generation are simultaneously estimated as a set of seemingly unrelated regressions, the results of which are presented in table 8. like in previous sections, results from bivariate regressions are also included, although the models including net load day fixed effects presented in columns 2, 4, and 6 represent the preferred specifications. for all three fuel types, the bivariate model results are nuclear hydro natural gas nov-2015 may-2016 nov-2016 may-2017 nov-2017 may-2018 nov-2015 may-2016 nov-2016 may-2017 nov-2017 may-2018 nov-2015 may-2016 nov-2016 may-2017 nov-2017 may-2018 4000 3000 2000 1000 6000 4000 2000 20000 10000 0 m w h m w h m w h figure 6: hourly caiso generation by fuel type table 8: results from generation models nuclear (gwh) hydro (gwh) gas (gwh) (1) (2) (3) (4) (5) (6) imports (gw h) 0.00 0.00 0.072* –0.077* 0.47* –0.61* (0.01) (0.00) (0.023) (0.0039) (0.11) (0.011) netload (gwh) 0.00 0.15* 0.70* (0.00) (0.0021) (0.0054) fixed effects day day day r2 0.00 0.99 0.014 0.98 0.045 0.96 table notes: heteroskedasticity and autocorrelation robust standard errors reported in parenthesis. * denotes the probability of the coefficient being zero is less than 0.01. all models are estimated with 26,300 data observations. adjusted r2 values are within 0.01 of the simple r2 for all models. international journal of sustainable energy planning and management vol. 25 2020 57 steven dahlke larger than the models with additional control variables. this is due to the inflationary effect from the fact that high levels of both imports and generation occur during periods of high demand. the results in table 8 show that electricity imports have no observed short-term relationship with nuclear energy. as shown in the first panel in figure 6, nuclear energy in caiso often remains constant, and is not subjected to intra-day fluctuations. there are two large positive spikes in nuclear production, which are likely due to the operational practice of keeping a nuclear unit online as a replacement unit ramps up. the first unit will then shut down after the second unit comes online. occasionally, nuclear shows large changes in output, driven by a relatively few large units turning on and off. these changes occur too infrequently for any meaningful short-term statistical relationship to be estimated. as a result, the model returns a result of zero. the remaining results for hydro and natural gas suggest that every gwh of electricity imports is associated with an average 0.69 gw decrease in dispatchable generation in caiso. approximately 0.08 gw of this decrease is from hydro and the remaining 0.61 gw is from natural gas. the fact that natural gas makes up the majority of generation displaced by imports is consistent with the emissions results estimated in section 4.2. 3. conclusions and policy implications in summary, this paper analyzes short-term market relationships relevant to increasing regional electricity trade between california and neighboring states. specifically, it provides evidence characterizing potential short-term effects of increased regional trade on prices, emissions and generation. the study finds that from 2015–2018, a 1 gwh increase in california imports was associated with an average $0.15/mwh decrease in the caiso system electricity price, or $4,017 in consumer savings. extrapolating these results suggest that a doubling of imports would produce approximately $252 million in annual savings for caiso consumers. this estimate does not include long-term effects that would accrue from changes in investment decisions due to changing regional trade patterns, which other studies suggest will offset price effects in the long-term while producing additional avenues for savings for california consumers by enabling more cost-effective capacity investments. due to data limitations, this study does not consider price impacts outside of california from increased regional trade. electricity market integration studies from other regions, along with economic theory and the fact that california is a net importer of electricity on average suggests that increased regional trade will cause higher prices outside of california. this will partially offsetting the savings experienced in california and generate political economy concerns related to short-term rent transfers from consumers to producers outside of california. this analysis also finds that a 1 gwh increase in trade is associated with a 321 metric ton reduction in co2 emissions from california power plants. taking account of the offsetting effect from increased co2 emissions in neighboring regions suggests a net 70 ton decrease in co2 emissions for each gwh increase in regional trade. short-term net increases in nox and so2 outside of california are also observed, suggesting a small portion of exports to california are supplied by coal generation. as a result, increasing trade through a regional market will likely increase long term nox emissions absent a nox emissions cap. from the perspective of a researcher or analyst, centralized electricity markets are useful in that they produce lots of highly granular data that provide the basis for studies like this. it is currently difficult to estimate effects in non-market regions outside of california because public data is scarce. regulatory bodies like the federal energy regulatory commission and state public utility commissions should work to increase the availability of market data to enable more informed policy decisions. a possible next step after this analysis includes a more detailed empirical examination of electric producers trading with california. as the state continues trading electricity with its neighbors and continues its ambitious emissions reductions goals, it is important to better characterize generator responses to california electricity policies outside of california. this will lead to a better understanding of the full regional impacts from california’s evolving and dynamic energy policies. the empiric results of this study suggest significant savings for consumers can be achieved through regional electricity market integration, likely well in excess of market implementation costs. however, due to data limitations this analysis was not able to estimate consumer costs of regional trade outside of california, nor increases in profits to producers who can sell electricity at higher prices in california. this analysis provides empirical evidence suggesting improving electricity trade across http://0.15/mwh 58 international journal of sustainable energy planning and management vol. 25 2020 integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states the western u.s. through a regional market will lead to significant near-term monetary benefits, and help reduce co2 emissions across the region. it concludes that efforts to expand california’s market to the 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pricing and regulation; systems analyses; url: https://doi.org/10.5278/ijsepm.4302 mailto:poul@plan.aau.dk https://doi.org/10.5278/ijsepm.3247 2 international journal of sustainable energy planning and management vol. 29 2020 sustainable development using renewable energy systems planning for a 100% renewable energy system for the santiago island [13]. using a purpose-built gams (general algebraic modelling system) model, the authors analyse santiago island with a particular focus on renewable energy sources (res) in the electricity system, finding issues of costs and load balancing capability in high-res scenarios. this work complements other work on west african nations [14,15]. 3. technology and assessment in their article a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system [16], the authors present a technology assessment screening methodology to assist in the energy planning process. the authors also apply the framework to a wide range of technologies relevant in the energy transition. buzoverov and zhuk provide a comparative economic analysis for different types of electric vehicles [17] where they analyse three alternative means of electrification of transportation batteries, fuel cells, and aluminium-air electrochemical generators. they find interesting prospects for the aluminium-based solution. the work adds to previous studies of electric vehicles presented in this journal both with regards to drive-train analyses [18] and more widely the energy system impacts with focus on strategies for charging electric vehicles on the electricity market [19] and national studies of electric vehicle integration for portugal [20], indonesia [21], sweden [22], and chile [23]. in the article methodology to assess the implementa tion of solar power projects in rural areas using ahp: a case study of colombia [24], gelves and florez apply an analytic hierarchy process (ahp) to assess the location for the planning of photo voltaic installations in columbia. they find particularly good prospects along the caribbean coast when factoring in “techno-economic, social, and environmental-risk criteria”. similarly, quiquerez et al. investigated the location and optimal choice between photo voltaics and thermal solar collectors [25] and oloo investigated the spatial distribution of the solar energy potential in kenya [26]. other location studies in this journal have focused on heating demands and district heating systems [27–31], and biomass digesters [32]. praliyev et al. [33] investigate the production and cost effects of introducing solar tracking systems rather than fixed-angle pv systems in the jambyl region, kazakhstan. while both single and dual-axis tracking systems perform better than fixed-angle systems, the associated cost outweighs the production benefits by a large margin. 4. systems analyses in the article policy framework for iran to attain 20% share of non-fossil fuel power plants in iran’s electricity supply system by 2030 [34], godarzi and maleki presents a system dynamics approach to explore future high-res scenarios for the iranian electricity system. with low fossil fuel costs in iran, the introduction of res will increase costs and the authors stress that the electricity prices must be based on technology costs. previous work on iran in this journal has focused on the role of desalination in the energy system [35]. paliwal investigates “reliability and cost-based sizing of solar-wind-battery storage system for an isolated hybrid power system” in the article reliability constrained planning and sensitivity analysis for solarwind-battery based isolated power system [36]. applying monte-carlo simulation and particle swarm optimization, paliwal investigate hybrid systems with photo voltaics, wind power and battery storage. this is in line with previous work on similar isolated systems in kenya [37] based on assessments using homer, though this latter work also looked into non-technical barriers. a previous hybrid energy system study in the ijsepm focused on the himalayan region [38]. 5. pricing, regulation and engagement odgaard and djørup present review and experiences of price regulation regimes for district heating [39]. with a starting point in the favourable prospects identified for district heating as outlined in various studies [40] the authors look into how regulation can safeguard district heating consumers in a situation where they are supplied from an energy supply company which is a monopoly. as the authors state, both “privately and publicly owned dh supplies must be guided by various efficiency-enhancing measures” to ensure that companies are not simply exploiting their position and disregard efficiency improvement potentials. this follows up on previous work by one of the same authors on both district heating prices [41] and electricity prices in smart energy systems [42–44]. krog and coauthors analyse consumer involvement in the transition to 4th generation district heating [27] with a focus on how these can be “meaningfully and international journal of sustainable energy planning and management vol. 29 2020 3 poul alberg østergaard, rasmus magni johannsen and neven duic strategically included in the transition towards” 4th generation district heating (4gdh). a main focus in 4gdh research hitherto has been on the definition of the concept [45] and technical assessments of the potentials as in national cases of denmark and norway [46,47], while less attention has been devoted to consumer involvement. through a literature study, krog and coauthors investigate the current knowledge within the field – finding however limited material. they do stress the importance of adequately coordinating supply and demand initiatives. previous work has also demonstrated the need for an integrated planning approach and ownership structures that engage consumers [48–51]. qarnain and co-authors present an analysis of social inequality factors in implementation of building energy conservation policies using fuzzy analytical hierarchy process methodology [52] focusing on e.g. how social inequality and environmental injustice in society is linked to policy within the climate change mitigation area. previous studies in this journal have focused on barriers and potentials for energy conservation [53] and the role of heat savings in energy system scenarios [54,55] and employment generation [56]. references [1] østergaard pa, duic n. sustainable energy, water and environmental systems. int j sustain energy plan manag 2014;3. http://doi.org/10.5278/ijsepm.2014.3.1. 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investigating a set of energy sustainability indicators for developing countries based on sdgs and sustainable energy development index (sedi) method. in addition to investigating the sedi method, we will explore a group of indicators that has a greater effect on energy sustainability and describe it comprehensively. selecting the sedi method in this work has two main causes; firstly, this method has multidimensional attention to energy sustainability and secondly can be a good method to find strong and weak indicators for a country. also, the relations between selected energy indicators and sustainable development are described in this study. firstly, we gathered the required data for four years from 2012 until 2015 years from iea and world bank and then analysed it. in conclusion, according to existing data the sedi ranking of each country will be obtained.results show that in comparison with past years, all studied countries intend to achieve a remarkable growth in energy sustainability. 1. introduction one of the most important current issues in the world is energy supply that has remarkable effect on communities [1, 2]. in addition, energy supply is one of the most important factors for development [3, 4]. today, more than half of the world’s people are living in cities, which will be much more populated by 2050, reaching about two thirds of the world’s population [5]. on the other hand, increasing the world’s population will lead to more fossil fuels and global warming [6-8]. in this regard, un intends by 2030 to implement many practical goals to prevent more problems relating to human rights, especially in the energy field. one of the most important factors of sdgs is energy sustainability [9]. energy sustainability provides a better situation to energy consumers from various aspects such as access, affordable, technology and etc. also, energy sustainability has significant effect on the environment [10-12]. energy sustainability is a range spread of different subjects like policy, environment end efficiency [13]. 2. theoretical background indicators are conceptual tools for sustainability assessments that can be influential in many sectors. energy policymakers and energy experts using indicators are able to take better decision for activity areas [14]. with regard to these descriptions, some of the done studies can be presented for better understanding [15]. investigating energy sustainability indicators for developing countries a.armin razmjooa,* and andreas sumpera,b a escola te ̀cnica superior d’enginyeria industrial de barcelona (etseib), universitat polite ̀cnica de catalunya (upc), av. diagonal, 647, 08028 barcelona, spain b centre d’innovació tecnològica en convertidors estàtics i accionaments (citcea-upc), escola te ̀cnica superior d’enginyeria industrial de barcelona (etseib), universitat polite ̀cnica de catalunya (upc), av. diagonal, 647, pl. 2, 08028 barcelona, spain keyword: energy sustainability; indicator; sedi; developing country url: http://dx.doi.org/10.5278/ijsepm.2019.21.5 60 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries for two cities in the south-east of iran. in this study, total electrical energy production by pv array for zabol and zahak were 1700 (kwh/yr) and 1669 (kwh/yr),and the amount of wind turbine capacity was calculated at 9036 (kwh/yr) and 7263 (kwh/yr) for zabol and zahak respectively [17]. bhattacharyya et al presented a critical review and analysis of energy access programmers for sustainable development. in this article they emphasized an overall revision related to access energy methods and more use of renewable energy as one of the proper ways to access energy. also, an important energy indicator is investigated in this study [18]. mardani et al, by using multiple neves et al, investigated with a review of existing practices investigated energy sustainability indicators in order to local energy planning. they in this review showed that how indicators can be effective for energy planning and assessment different current problems. in addition, they showed, with use of the indicators can monitor the targets and do proper the actions [16]. with regard to energy accessibility importance especially electrical energy, razmjoo et al presented, technical study in order to investigate energy sustainability using renewable energies. they used homer software and with regard to wind-solar energy potential, analysed energy sustainability hybrid system nomenclature aer access to electricity urban and rural afw annual freshwater withdrawals cch climate change ccp changing consumption patterns cr coal reserve eae energy accessibility and equity, eaff energy affordability ec electricity consumption ecs economic sustainability eei enhance economy infrastructure ei energy intensity eim energy intensity management ens environment sustainability ep energy productivity es energy sustainability ese energy security et energy technology gni gross national income gdp gross domestic product gr gas reserve irs increase share of renewable energy in different sectors is institutional sustainability iti improvement transport infrastructures inv investment or oil reserve pb production biomass pc production coal pe production energy pg production gas piseg promote inclusive and sustainable economic growth po production oil rec renewable energy consumption rs resilient and sustainable. ss social sustainability tcec total final consumption in commercial tco2 total co2 tcnr total consumption natural resource tfc total final consumption tfct total final consumption in transport tfa total forest area tla total land area ts technical sustainability tnr total natural resources tpes total primary energy supply ulct use of low carbon technologies up urban planning usg use of smart grids and electric grid ws water & sanitation and access to health water vact actual number of indicators x actual number x max maximumnumber of indicators x min minimum number of indicators international journal of sustainable energy planning and management vol. 21 2019 61 a.armin razmjoo and andreas sumper all, we try to find a common gap between 10 studied countries. this work, in addition, is analysing energy sustainability using essential indicators and based on the sustainable energy development index method (sedi). in this regard, correct policies and measures developed to achieve improvements in energy sustainability. also discussed appropriate indicators for energy sustainability and choosing strategies based on them. 2. comprehensive description related to group of selected indicators achieving to energy sustainability needs to different factors such as use of appropriate indicators, and have energy planning. in this regard, indicators and subindicators could be influential as tools for measuring it [24-26]. indicators are a strong tool to help the policymakers and energy expert to measure energy sustainability which is useful to policymakers, energy analysts and statisticians. also, indicators give us a deeper understanding of the existing problems [27]. indeed, energy sustainability indicators, are selected by policymakers or energy experts [28]. they can demonstrate to us, what needs to be done to improve the weak points in regard to the current energy system of a country. thus, if we can identify and use them correctly, the political targets will be easily achieved [29]. in this research, we present effective indicators related to energy sustainability that are appropriate to implement in developing countries. these presented indicators are to identify the weak points in the line of achieving to energy sustainability. use of the seven selected indicators can help us to identify the main gaps in energy sustainability policy. the group of selected indicators in this study are strongly dependent on the energy field. according to the layout of table 2, seven selected indicators are the minimum number of an influential group relevant to energy sustainability. also, they are extremely related to sdgs (17 un goal), un-habitat iii (14 goals) and sedi indicators [73, 74]. each indicator alone has subindicators that more complete it. all indicators have a close relationship together because they together make an effective set to improve infrastructure a country, especially in energy. 2.1. environmental impacts the use of fossil fuels in the industry has led to significant industrial development [30]. today, a significant part of human energy needs is satisfied by fossil criteria decision-making method investigated energy sustainability, especially by renewable energy. they reviewed many related articles in this regardinto two main application areas such as sustainable energy and renewable energy and based on them presented their results [19]. assess energy technologies for rural electrification using a sustainability index has been done by mainali et al. they presented energy technology sustainability index (etsi) to this evaluation. also, they proved thatmature technologies have better sustainability performance than among the other options [20]. moreira et al investigated the effective indicators associated with energy sustainability. they used academic and institutional sources, analysed influential indicators in the line of the energy sustainability. in fact, they showed that indicators have an effect on all aspects of energy sustainability dimensions, thus, should be considered by policymakers and energy experts accurately. also, in this study they emphasized that for achieving energy sustainability, in addition to a mutual review, needs to have appropriate infrastructures in this regard. [21]. correct energy policymaking in denmark, investi gated by sovacool et al. they showed that how denmark by appropriate policy in the energy field, obtained a good situation in energy sustainability [22].energy services situation for rural development, investigated by kaygusuz et al. they investigated practical programs to access energy in this regard. they also in this study, to improve access energy for inhabitants, emphasized more attention to women [23]. there are four important reasons to write this research. first of all, this study presents a comprehensive discussion related to energy sustainability. second of all, effective sets of indicators are presented that has the remarkable effect on energy sustainability. these selected indicators are in the framework of a group which is related to sdgs (17 un goal), urban habitat and sedi method. also, these seven indicators, are as a valuable benchmark to policy-making and can be used to determine practical priorities and to monitor the progress of 10 developing countries.third of all, this work presents a conceptual discussion in regard to energy sustainability, and gives an answer to many questions related to it. actually, our focus in this research is based on identifying and presenting suitable indicators to measure energy sustainability in line sdgs (17 un goal), un-habitat iii (14 goals) and sedi for developing countries. fourth of 62 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries present variety of transportation system and vehicle used in the world that the most important them including airplane, train, bus, motorcycle, bicycle and electrical vehicles. also hybrid system such as electrical cars are expanded andbecome using day to day that has significant impact to reduce co2 emission and annual world sales of electric vehicles (evs) increased during recent years [44, 45]. the transportation system, if accompanied by proper planning, will increase job opportunities, market access, contribute to climate change (reducing air pollution), improve road safety. significant measures have been taken and ongoing in various cities for developing countries, particularly in the field of transport, such as the development of transport infrastructure, the creation of modern transportation systems like highways, public transportation, airport improvement in order to increase travel opportunities and more choices. these measures also have positive effects on the safety of roads and environmental issues [46, 47]. 2.4. use of energy & energy efficiency energy use is essential for all humans especially in buildings, industries and other sections [48-50]. according to recent estimates and should be more considered forecasts regarding the storage of oil, gas, and coal, energy consumption and in this regard should be more used of proper methods [51, 52] today, people are well aware of the different and hard ways to energy production and the environmental issues associated with it, and they themselves are also eager to save energy [53, 54]. also today, energy saving in the industrial and building sectors of, which are the most consumer sectors, is of great importance. there are several ways to save and manage energy consumption such as energy audits, training expansion save energy field and using the low consumption types of equipment and controller of energy. in fact, the role of the use of equipment and facilities for energy save has highly significant. all consumers and users, with the use of energy-saving technologies such as high-performance machines (hems), variable speed drives (vsds) and intelligent control systems for buildings (lighting and hvac systems), can have more control on the amount of energy consumption in industrial and building sectors. on the other hand, it saves a significant amount of electrical energy and energy costs, which will be economically significant [55, 56]. fuels [31]. but apart from these benefits, fossil fuels are the main source of carbon dioxide emissions, which is one of the greenhouse gases which results in environmental pollution and global warming [32]. todays, global warming and air pollution have become a major challenge in many countries around the world [33]. in fact, global warming and air pollution have widespread effects that cause environmental, climatic and health problems, and if they continue, severe consequences will be created around the world [34]. among fossil fuels, coal is considered the most polluting fuel source and natural gas as the cleanest fuel source [35]. thus, with these descriptions pollution prevention should be recognized as a key component of sustainable development and long-term planning. 2.2. renewable energy renewable energies or alternative energy, are those kind of the energies that are used to generate energy without net carbon emission [36]. renewable resources are affordable, available and clean also these energies are sustainable because they have the least environmental impact [37]. sustainable energy should be widely encouraged because it does not harm the environment and is widely used to reduce energy costs. [38]. today, the use of renewable energy has reduced a part of global power generation costs that was produced by fuel fossils [39-41]. according to the analysis by lazard’s 2017, that was about the levelized cost of energy among four kinds of conventional energy resources for electrical production in recent years, the cost of energy for both solarwind technology, then other resources has dropped by almost 6% compared to the year before last year.actually wind energy with $45 and solar with $50 in comparison with nuclear energy $148, coal $102 and gas $60 are most affordable and cleaner [75]. 2.3. transport urbanization is a social and physical process that requires a public and regular transportation sector[42]. transportation is primarily a special means of social activity that should be accessible to all people and affordable [43]. since transport is an important sector for energy and use of fossil fuels thus use of new vehicles and reducing dependence on fossil fuels in the transport sector is a priority that can be done by proper policy actions. at international journal of sustainable energy planning and management vol. 21 2019 63 a.armin razmjoo and andreas sumper 2.7. policy population growth in various cities and increasing use of energy especially in developing countries, has caused many problems including in the field of the environment. the long-term nature of sustainable development leads countries to design a sustainable global planning system [60]. in fact, appropriate policies must be adopted to prevent future problems, and long-term and appropriate measures. for instance measures such as implementation of sustainable development policies that have a significant impact on the conservation and proper utilization of energy resources and will take place in order to eliminate barriers and limitations of economic, organizational and general development prospects [61]. the adoption of correct and growth-oriented policies within the framework of modernization theory, will bring sustainable development in all sectors and at different global, regional and local levels [62]. policies such as sufficient energy supply, proper urban transport planning, environmental measures, educational and cultural programs are including applied policies for sustainable development [63]. 3. importance of indicators there are several important goals to measure energy sustainability which can be interpreted in a few questions and answers. what aspects of energy sustainability to measure are important? which ones is for conserving or developing? and how they can improve energy sustainability? [64]. to answer these questions, we should know that energy sustainability will not be obtained easily and it needs a long-time plan and a correct and practical policy. hence, to measure energy sustainability, identification of the weaknesses is very important, because it can help us to improve energy sustainability and achievement it [65, 66]. indeed, all aspects of energy sustainability are important and should be considered. but always all of them are not in priority. so one should be paid attention to most important aspects and these are as a necessity for help to policymakers [67] . therefore, to find the most important aspects of energy sustainability, we should define different indicators and criterion based on need [68]. these indicators and criterions, allow us to locate ourselves present condition relative to conditions that have prevailed in the past, then we can with regular 2.5. resource access of energy in developing countries today, developing countries are faced with a variety of energy challenges, which are increasing day by day. in fact, developing countries have more need to access energy for expand different industrials and remove basic problems such as health and education than developed countries because in developing countries still an important part of the population does not have access to basic energy services [57]. energy availability and energy affordability are important and very necessary. despite all the global advances, millions of households in developing countries have insufficient access to energy or cheap energy. this situation causes poverty, health damage, local service delivery constraints, increasing vulnerability to climate change, limiting the expansion of opportunities, reducing environmental sustainability at the local, national and global levels, and has a negative impact on education and health. on the other hand, it can be said that today access to energy should be a political goal. because most of the countries that have enjoyed better access to electricity have made significant progress since, indeed, their government has addressed this issue as a national political goal [58]. 2.6. resiliency now, the stability and security of energy supplies in parts of the world and especially in cities is threatened through unpredictable hazards such as natural disasters, internet problems, and various fluctuations. therefore, in this regard, it is necessary to prevent such problems by appropriately planning and creating the necessary infrastructure [59]. the frequency of recent incidents including natural disasters such as earthquakes, tsunamis, and hurricanes, and also difficulties caused by the economic downturn has highlighted the vulnerability of human settlements and makes the appropriate consideration of resiliency in the planning for future of urban areas of vital significance. the concept of flexibility is an approach to managing socio-ecological systems that address the development of preventive measures and disaster risk management. flexibility given the identification of future risks, a conceptual framework for assessing urban energy flexibility identifies planning and design criteria that can have to be a positive effect on some aspects of human life [59]. 64 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries order to strengthen the public support of policy measures and monitoring on assigned targets [71]. fig 1 shows a relation between energy sustainability and group of indicators for developing countries table 1 shows the relation between items and related indicators to sdgs (17 un goal), un-habitat iii (14 goals) and sedi. as can see in this table a group of indicators related to un17 goals and urban habitat themes presented that can have a good effect on sustainability. table 2 shows the most important subindicators which has positive impact on the group of selected indicators in this study. this table is most important because this table will be assigned the relationship between groups of indicators with sedi. this table has three main parts. first part is the group of indicators that planning move in the line of our self-targets [69]. indicators can be divided into different groups such as descriptive indicators, performance indicators, and efficiency indicators. overall, energy sustainability indicators should be simple, easy, useful, feasible, appropriate, benchmark, understandable and reasonable [69]. the main target of the indicators is collecting of the required information by multiple data and simplification them. actually, indicators are able to simplify the complex information. they are as influential tools in hand of policymakers and can be used to measure the main issues and to find appropriate ways[70]. also, indicators are used to supply correct and useful information to help policymakers in order to identify the main issues of a country. indicators increase the public awareness in policy resiliency resource access transportenergy sustainability environmental impact renewable energy use of energy figure 1: relation between energy sustainability and group of indicators for developing countries international journal of sustainable energy planning and management vol. 21 2019 65 a.armin razmjoo and andreas sumper sustainability and in the line of sdgs is selected and described. then with having four year data from iea and world bank, the sustainable energy development index (sedi) is investigated. for both the group of indicators and sedi method, related sub-indicators is obtained and analysed. for do these stages, firstly, we described in detail about sdgs (17 un goal) and un-habitat iii (14 goals) and then we determined which goals are most related to sedi. after that, we described the group of indicators and found the proper sub-indicators for them and determined which of them is related to sedi indicators directly and indirectly. finally, we collected related data with indicators and analysed them. after these stages, obtained the sedi rank for each developing countries. it is believed that the discussions and results drawn in the present study will be effective to energy experts and energy policy makers. have described them in above and have the remarkable effect on sustainability. the second part shows the sub-indicators related to the group that can be as a help for them. and the third part, is shows the related these sub-indicators with sedi indicators. as can see in this table, inv (investment) and rec (renewable energy consumption) sub-indicators have most repetition time than other sub-indicators in this table, because two mentioned sub-indicators can create most positive changes in the line of energy sustainability. 4. methodology for the objective selection in this study energy sustainability for 12 developing countries is considered based on sdgs (17 un goal), un-habitat iii (14 goals) and sedi method. firstly, seven influential indicators associated with energy table 1. relationship between items and related indicators to un17 goals and sedi group of indicators sdgs indicators un-habitat iii indicators sedi indicators environmental impacts cch, afw, ws, et, co2, ens cch, ws, afw, et, co2 env, ins, tec renewable energy eaff, es, inv, et, irs, rec inv, es, eaff env, soc , tec, eco, ins transport aer, ea, eaff, et, ec, iti, up, tfc,tfct, rs, usg up, iti, eaff, es, rs, tfct, usg soc, tec, eco, env use of energy aer, ccp, ea, eaff, ec, ei, eim, epi, ese, et, pb, pg, po, pc, tpes, rec, rs, tcec, tfc, tfct, usg ea, eaff, ese, aer, et, usg ec, usg env, tec, soc , ins resource of energy afw, cr, gr, or, la, fa, tnr, tcnr la, cr, gr, or, afw env, tec, soc resiliency aer, afw, la, eim , inv, iti, piseg, up, ws, eei up, ws, aer, eim, inv soc, tec, eco policy gni, gdp, piseg, ccp, es, ea, up, ulct, tnr, eim, ese, inv, rec, ese up, gni, gdp, rec, ese so, eco, tec table 2. group of indicators with sub-indicators group of indicators sub-indicator related sedi indicators environmental impact ulct, irs, ccp, et, inv env1-2, tec1-3, soc1 renewable energy eim,irs, eaff, et, inv, ts env1-2, tec1-3, soc1, ins1 transport aer, ea, irs, et, inv,up, usg tec1-3 ,eco2-3, env1-2, soc1 use of energy aer, rec, et, irs, tnr, inv, es, eim, ea tec1-3, ins1, eco1-3, env1-2, soc1 resource of energy tnr, tla soc1-2, tec1-3 resiliency up, ws, aer, et, is, inv soc1, tec3, eco2-3, ins 1 policy inv, ese, eaff, eim, es, tla,tpes sco1-2, eco1-3, tec1-3 66 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries energies are used as inputs include the primary energy resources. this part is including tec1-3 that for normalization it can be used of eq. 1. 5.2. economic sustainability economic always an important part for our living and has a vital role in the future and progress. gdp for all countries has important for growth and welfare inhabitants; actually, it is the main factor in development. the normalization of this dimension is better that have been the higher value, thus for normalization can be obtained by eq. 1. also, to obtain this dimension calculate per capita consumption of commercial energy, final energy intensity and share of productive use of energy data are needed. 5.3. social sustainability to assess the distributional effect of energy for a society, can obtain the accessibility to energy supply by calculating this dimension. per capita consumption of clean energies in the residential sector and income inequality (gni coefficient) is necessary to obtain this dimension. in this indicator, normalization can be calculated by eq. 1. 5.4. environmental sustainability this dimension has is related to environmental problems and the co2 issue. actually, global warming and climate change have been caused as a world problem and all a special obligation to reducing greenhouse gases. environmental sustainability can be calculated by obtaining a share of dirty fuels in residential energy consumption and carbon intensity. also for normalization this dimension the smaller value is better, thus eq. 2 will be used. 5.5. institutional sustainability institutional sustainability is one of the most important sectors in sustainability. it can show the level of local participation in the management and control of the energy system. the sector depends on several factors such as public participation, local skill base, local regulation and protection of investors and consumers is needed. calculate overall self-efficiency is important for this dimension. also, since has higher value is better for this part, thus for normalization can use of eq. 1. with regard to that these indicators have various dimensions and expressed with different measurement units, hence is used the normalization technique [72]. in this study after collect data and elementary calculation, 5. results and discussion as previously mentioned and emphasized, appropriate determination of indicators and sub-indicators can be influential for achieving energy sustainability by policymakers and energy experts. also, since the sedi consists five main indicators and several sub-indicators, thus for obtain proper results in this regard should be investigated from different aspects and dimensions. actually, if we can investigate all main indicators of sedi accurately and for each of them determine the proper sub-indicators, achieving desirable targets will be carried out easily. for calculate sedi, is necessary to obtain the technical sustainability, economic sustainability, social sustainability, environmental sustainability, and institutional environmental sustainability. when all indicators were obtained, should be normalized and obtained the average of them [72]. the main purpose of these indicators is a conceptual investigation in regards to sustainability for each country. each country needs to have an appropriate infrastructure in various sustainability sectors. sustainability depends on a variety of factors, which by their general integration, will make the development of a country. the close relationship between social development, economic development, environmental conservation and enhancement of life quality are essential in sustainability. the main concept of sustainability is to achieve the lasting satisfaction of human needs and improvement the quality of life. thus, it needs to select the proper method and investigating the most important sectors from the all different aspects. based on this review, we conclude that it is necessary to create a new method to improve the sedi in order to assess the sustainability performance. in this study, proper analyses with requirements on the concept of sustainability are made in order to set-up the general framework and the specific cases of country sustainability are discussed. 5.1. technical sustainability technical sustainability that can calculate with different data such as share of depletable (non-renewable) energies, depletion coefficient of local energy resource and overall system conversion efficiency is for improving the ability of the energy supply system to providing the now and future needs of society effective, reliable, and from clean sources. in this part resources such as crude oil, coal, natural gas, hydro-power, nuclear or renewable international journal of sustainable energy planning and management vol. 21 2019 67 a.armin razmjoo and andreas sumper 6. indices calculation this work investigates the strengths and weaknesses of a country with attention to their existing resources, economic, environment situation; hence the ranking is based on these mentioned factors. it is obvious that each country after considering these factors will obtain a specific ranking, although this study emphasizes that results are not absolute, using collected data of each country between 2012-2015 years and via iea information will lead to these results. therefore, if a country intends that to gain a better rank in future, it needs to strengthen the sectors that are weak in them, and that should minimize their problems. that means each country should determine its energy policy according to the results obtained, and act in this regard to follow the correct practices, which they can learn from developed countries. for calculating sedi we need to obtain technical, economic, social, environmental and institutional indicators as following [72]: each indicator should be normalized between 0 and 1 using the two following methods: in this study, undp method was used for normalization, actually when a definition indicator should have high-value eq.1 is better than used and when that the indicator should have low value is better than the use of eq.2 for evaluation. in two formula v is the indicator value, vact is the actual indicator such as a country, vmax is the maximum value of indicator and the vmin is the minimum value of the indicator. table 3 shows used method for sedi calculation. actually, in this table five essential indicators related to sedi with solvation methods have been presented. table 3. selected indicators for analysing sedi of for studied developing countries dimension indicators (units) used method tec 1 share of depletable (nonrenewable) energies in tpes tcnr tpes tec 2 depletion coefficient of local energy resource tec 3 overall system conversion efficiency tfc tpes eco1 per capita consumption of commercial energies tcec population eco 2 final energy intensity tfc gdp ppp eco 3 share of productive use of energy tfc–rec tfc soc 1 per capita consumption of clean energies in the residential sector tce population soc 2 income inequality gni cofficient env 1 share of “dirty fuels” in residential energy consumption tnr rec env 2 carbon intensity tco2 tpes ins 1 overall self sufficiency ep tpes pb po pg pc pe+ + + tflro rg rc tla                         act min max min v v v= v v − − max act max min v v v= v v − − (1) (2) 68 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries ens = env1 env2 (6) economic sustainability can be obtained as following formula ecs = (eco1 × eco3)/eco2 (7) table 4 shows obtained results by 2015-year data for sedi calculation. as it is clear, albania country has first rank and india has end rank between these countries in this table. table 5 shows obtained results by 2014-year data for sedi calculation. as can see in this table studied country in different indicators has a better score than together. technical sustainability can be obtained as following formula ts = (1-tec1 × tec2) × tec3 (3) for calculate economic benefit per capita there is a formula as following eb = eco1 × eco2 (4) social sustainability can be calculated as following formula ss = soc1 × (1-soc2) (5) also can be calculated environmental sustainability by below formula table 4. obtained results by 2015-year data for sedi calculation rank country tec eco soc env ins sedi 1 albania 1 0.479 0.132 0.921 0.682 0.642 2 croatia 0.309 1 0.144 0.918 0.366 0.547 3 jordan 0.366 0.332 1 1 0 0.539 4 iran 0.646 0.498 0 0.443 1 0.517 5 bulgaria 0.195 0.987 0.077 0.849 0.461 0.513 6 peru 0.589 0.343 0.024 0.842 0.75 0.509 7 tunisia 0.067 0.403 0.23 0.942 0.412 0.41 8 china 0.346 0.251 0.829 0 0.603 0.405 9 georgia 0.17 0.404 0.073 0.914 0.189 0.35 10 india 0 0 0.022 0.556 0.462 0.208 table 5. obtained results by 2014-year data for sedi calculation rank country tec eco soc env ins sedi 1 albania 1 0.42 0.119 0.995 0.635 0.633 2 croatia 0.499 1 0.138 0.977 0.393 0.601 3 peru 0.61 0.387 0.002 0.9 0.858 0.551 4 iran 0.736 0.464 0 0.496 1 0.539 5 jordan 0.311 0.367 1 0.989 0 0.533 6 bulgaria 0.221 0.935 0.074 0.92 0.463 0.522 7 tunisia 0.116 0.451 0.238 1 0.464 0.453 8 china 0.379 0.235 0.843 0 0.624 0.416 9 georgia 0.089 0.448 0.076 0.963 0.215 0.358 10 india 0 0 0.007 0.598 0.48 0.217 international journal of sustainable energy planning and management vol. 21 2019 69 a.armin razmjoo and andreas sumper totally, albania, croatia, and jordan have obtained the high score in sedi. in addition, fig 2 shows the total average illustrative diagram of sustainable energy development based on indicators. this fig has been created by a mathematical model also obtained results are relative for each dimension. table 9 shows a chart of considered countries based on sedi averagely. this table shows the amount of growth for these countries during four years in sedi. as can see croatia in all considered years, has a stable rank and is first. sedi ranking with a number for developing countries is obvious in fig 3. in this table moreover, score rank for table 6 shows obtained results by 2013-year data for sedi calculation. albania and croatia have obtained first and second rank in this table in sustainability energy development index (sedi). table 7 shows obtained results by 2012-year data for sedi calculation. as above mentioned in sedi analyses all studied country can have different scores and ranking. for instance, jordan country in this table that has investigated by 2012 data, has been acquired second ranking between other countries. table 8 shows a comparison results of sedi calculation for selected countries belongs 2012-2015 years. this table shows a total average ranking for a studied country that has investigated by four years’ data. table 6. obtained results by 2013-year data for sedi calculation rank country tec eco soc env ins sedi 1 albania 1 0.464 0.114 0.978 0.64 0.639 2 croatia 0.433 0.977 0.115 0.943 0.374 0.569 3 peru 0.725 0.371 0.002 0.88 0.864 0.568 4 jordan 0.425 0.388 1 1 0 0.562 5 iran 0.795 0.477 0 0.492 1 0.552 6 bulgaria 0.253 1 0.074 0.882 0.452 0.532 7 tunisia 0.098 0.466 0.204 0.964 0.507 0.447 8 china 0.393 0.223 0.762 0 0.618 0.399 9 georgia 0.183 0.357 0.084 0.912 0.252 0.357 10 india 0 0 0.016 0.603 0.487 0.221 table 7. obtained results by 2012-year data for sedi calculation rank country tec eco soc env ins sedi 1 albania 1 0.427 0.116 0.951 0.599 0.618 2 jordan 0.414 0.386 1 1 0 0.56 3 iran 0.702 0.512 0 0.541 1 0.551 4 croatia 0.32 1 0.106 0.947 0.34 0.542 5 peru 0.628 0.31 0.002 0.882 0.818 0.528 6 bulgaria 0.188 0.988 0.068 0.889 0.454 0.517 7 tunisia 0.052 0.451 0.194 0.96 0.526 0.436 8 georgia 0.317 0.179 0.074 0.981 0.195 0.349 9 china 0.331 0.201 0.566 0 0.611 0.341 10 india 0 0 0.017 0.656 0.486 0.231 70 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 albania 2 croatia 3 jordan 4 iran 5 peru 6 bulgaria 7 tunisia 8 china 9 georgia 10 india tec eco soc env ins sedi figure 2: total average illustrative diagram of sustainable energy development table 8. comparison obtained results of indicators calculation for obtaining sedi belongs 2012-2015 years rank country tec eco soc env ins sedi 1 albania 1 0.447 0.12 0.961 0.639 0.634 2 croatia 0.413 0.994 0.125 0.946 0.368 0.568 3 jordan 0.379 0.368 1 0.997 0 0.548 4 iran 0.719 0.487 0 0.493 1 0.539 5 peru 0.638 0.352 0.007 0.876 0.822 0.538 6 bulgaria 0.214 0.977 0.073 0.885 0.457 0.521 7 tunisia 0.083 0.442 0.216 0.966 0.477 0.438 8 china 0.362 0.227 0.75 0 0.614 0.39 9 georgia 0.189 0.347 0.076 0.942 0.212 0.353 10 india 0 0 0.015 0.603 0.478 0.219 table 9.sedi ranking of considered countries country albania croatia jordan iran peru bulgaria tunisia china georgia india year 2012 0.618 0.542 0.56 0.551 0.528 0.517 0.436 0.341 0.349 0.23 2013 0.639 0.569 0.562 0.552 0.568 0.532 0.447 0.399 0.357 0.22 2014 0.633 0. 601 0.533 0.539 0.551 0.513 0.453 0.416 0.358 0.22 2015 0.642 0.547 0.539 0.517 0.509 0.513 0.41 0.405 0.35 0.21 2012-15 0.633 0.552 0.548 0.54 0.539 0.521 0.436 0.39 0.353 0.22 international journal of sustainable energy planning and management vol. 21 2019 71 a.armin razmjoo and andreas sumper based on this study, there are two common issues between them that are the most important problems. one of them is that these countries are still dependent on fossil fuels as the main energy source. the other, is that in these countries there is not a practical policy for monitoring the operational system. in fact, in order to implement effective indicators in regards to energy sustainability, there needs to a strong policy. among studied countries, albania and croatia had the highest ranking in sedi from 2012-2015 years and india had ranked at the bottom. it should be mentioned that these analyses are not absolute for these countries and these results only were obtained based on their resources. thus, should be noticed that this study is relative and only can be showed the performance of these countries in energy sustainability based on existing data. for instance, as we can see in table 8, peru in technical and institutional sustainability indicators has a high relative score and in social indicator has low score among these countries. indeed, with regards to obtained results we can say that this study first identifies weak and strong indicators of each country’s sustainability especially in the energy sector and then compares them. also, it should be implemented the useful measures by policymakers, to improve each indicator related to social, economic and environment sectors. each country in four years’ investigation, the obtained number of them is obvious in the side of each country. 7. conclusion since evaluating sustainability performance is a multidimensional issue, then it is necessary that from different dimension views analysed and considered. at present, most countries in the world have regular programming and policy to reach sustainable development. indeed, sustainable development is vital for the future of each country, especially developing countries. the purpose of this research is investigating a set of appropriate energy sustainability indicators for the 10 developing countries according to sdgs and sedi method. this analysis has been carried out with various and real data from well-known organizations. firstly, we collected four years of required data that belonged 2012 to 2015 years from iea and world bank data organizations from and then analysed them separately. a comparison between considered countries showed that all parts of sustainability have to need to extend and enforce essential indicators to achieve sustain-ability equally. in addition, the results show that in comparison with past years, all studied countries, have seen remarkable growth in sustainability during these years. figure 3: sedi ranking with number 72 international journal of sustainable energy planning and management vol. 21 2019 investigating energy sustainability indicators for developing countries issue 29. pages 14642-14660 . 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[18] bhattacharyya, s.c., energy access programmes and sustainable development: a critical review and analysis. each research has many advantages and disadvantages. although this study, determined the strengths and weaknesses of each country, it is extremely dependent on the resource and policy system of each country. indeed, without a regular planning by policymakers and energy experts and with regards to existing capacities any country, an achievement to energy sustainability is challenging. thus, we presented a group of indicators with a comprehensive description, which is important to achieve energy sustainability and have a decisive role in achieving it. if these presented indicators get implemented by policymakers, it can be influential to improve energy sustainability. it could be mentioned that changes in the determined indicator structure, can lead to changes in the different sector of energy such as supply, intensity, and consumption. in fact, we based on principles and scientific perspectives, selected these indicators to measure energy sustainability. references [1] aslani, a., p. helo, and m. naaranoja, role of renewable energy policies in energy dependency in finland: system dynamics approach. applied energy, 2014. 113: p. 758-765. https://doi.org/10.1016/j.apenergy.2013.08.015 [2] kassem, y. the possibility of generating electricity using small-scale wind turbines and solar photovoltaic systems for households in northern cyprus: a comparative study. environments 2019, 6, 47; http://doi.org/10.3390/ environments6040047 [3] bagheri, b.s., et al., optimization and comprehensive exergybased analyses of a parallel flow double-effect water-lithium bromide absorption refrigeration system. applied thermal engineering, 2019. 152: p. 643-653. https://doi.org/10.1016/j. applthermaleng.2019.02.105 [4] razmjoo, a., a.j.e.s. davarpanah, part a: recovery, utilization,, and e. effects, developing various hybrid energy systems for residential application as an appropriate and reliable way to achieve energy sustainability. 2019. 41(10): p. 1180-1193. https://doi.org/10.1080/15567036.2018.1544996 [5] mavromatidi, a., e. briche, and c. claeys, mapping and analyzing socio-environmental vulnerability to coastal hazards induced by climate change: an application to coastal mediterranean cities in france. cities, 2018. 72: p. 189-200. https://doi.org/10.1016/j.cities.2017.08.007 [6] dadfar s. enhanced control strategies for a hybrid battery/ photovoltaic system using fgs-pid in grid connected mode. international journal of hydrogen energy. 2019: volume 44, international journal of sustainable energy planning and management vol. 21 2019 73 a.armin razmjoo and andreas sumper method of data handling (gmdh). journal of natural gas science and engineering, 2015. 26: p. 303-312. http://doi. org/10.22108/gpj.2017.100034.1000 [31] bose, b.k., global warming: energy, environmental pollution, and the impact of power electronics. ieee industrial electronics magazine, 2010. 4(1): p. 6-17. http://doi. org/10.1109/mie.2010.935860. 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27(6): p. 505-521. https://doi.org/10.1016/j. eiar.2006.12.005 [72] iddrisu, i. and s.c. bhattacharyya, sustainable energy development index: a multi-dimensional indicator for measuring sustainable energy development. renewable and sustainable energy reviews, 2015. 50: p. 513-530. https://doi. org/10.1016/j.rser.2015.05.032 [73] sustainable development goals, https://sustainable development.un.org [74] urban themes – un-habitat, https://unhabitat.org/urbanthemes [75] lazard.com,https://www.lazard.com international journal of sustainable energy planning and management vol. 29 2020 153 *corresponding author e-mail: bathri@gmail.com international journal of sustainable energy planning and management vol. 29 2020 153–170 abstract because residential buildings consume significant reserves of energy, they are among the largest contributors to climate change. carbon and greenhouse gas (ghg) emissions from buildings have negatively impacted the environment. in response, institutions around the globe have issued policies and regulations to minimize climate change problems. while these policies have succeeded to some extent, additional factors are present that need greater attention. among these other factors are social inequality and environmental injustice in society, both of which must be analyzed thoroughly before solutions can be suggested. this research seeks to examine these factors and their effects; we analyze the factors that cause social inequality and injustice and correlate those factors to the implementation of energy policies. we then pursue how these actions have consequences in civil society. results show that some 15 social inequality factors are omnipresent, but the top three include: i) the limited participation of women in environmental campaigns, ii) variances in the adoption of building energy regulations across the globe, and iii) ethnic/racial discrimination with regard to how environmental safety is prioritized. we analyze these factors through the fuzzy analytical hierarchy methodology (ahp), and our results are statistically validated through sensitivity analysis and a consistency check. analysis of social inequality factors in implementation of building energy conservation policies using fuzzy analytical hierarchy process methodology syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan* department of mechanical engineering, kalasalingam academy of research and education, anand nagar, krishnankoil 626126, srivilliputtur, virudhunagar district, tamil nadu, india. keywords: social inequality; environmental injustice; gender discrimination; energy consumption; residential buildings; url: https://doi.org/10.5278/ijsepm.3616 1. introduction while climate change affects everyone, certain minorities – including children, the elderly, and women – are more vulnerable than others [1]. social inequality occurs in a society when its resources are not accessible or available to all inhabitants. ideally, resources should be distributed regardless of race, social status, gender, wealth, or religion. in this research, our emphasis is on factors that generate social inequality due to buildings’ energy conservation policies and result in climate change. according to a united nations report, over 1.2 billion people still have no access to electricity, and 40% of the world always rely on solid fuels for cooking. compared to wealthier individuals, the poor have to spend a much larger percentage of their income to get electricity. a study notes that more than half of the population in 41 countries of sub-sahara african region have no access to power, and over 95% of households in this region rely on wood, waste, and charcoal for cooking [2]. moreover, the equipment available to more miserable persons is much less efficient, thus creating a further burden [3]. the increasing concern about macro energy variables such as gdp, household income, and energy consumption has been an emerging topic. the gdp of a country affects the energy inequality, as it is linked with macro variables like economic activity, energy consumption, and development of a country [4]. in all these three macro energy variables, energy consumers play a major role. the distribution and access to energy resources mailto:bathri@gmail.com https://doi.org/10.5278/ijsepm.3616 154 international journal of sustainable energy planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using may lead to significant social inequalities. measuring energy equality is a good way of monitoring and a tool for reducing it. wu et al., showed in his research that perfect energy equality would be achieved if the gdp and cumulative energy consumption is linear and directly proportional [5]. the total world electricity consumption in 2017 was 23.696 pwh, representing an increasing trend in electricity consumption globally [6]. the relation between the macro energy variables can be summarized into two scenarios: the first scenario portrays energy as a hurdling factor for economic growth and is necessary for industrial production, which involves labor and capital. the second scenario depicts a neutral stand on energy as neutral to economic development; this is because the energy that constitutes a small part of gdp cannot have huge impact [4]. however, considering that gdp and economic development are linked with labor and people, the inequality in energy distribution and access should be reduced. buildings consume approximately one-third of all energy produced, and because they emit large quantities of ghg [7] they are a major contributor to climate change. buildings do not utilize energy equally, and these inequalities may be classified into two types: (i) inequalities that arise due to a building’s distribution of energy; (ii) after effects of energy distribution that result in climate change. the energy use of a building is a resource that is vital for the activities of daily life, such as cooking, washing, and transportation [8, 9]. therefore, it should be distributed without any discrimination towards the building’s or dwelling’s inhabitants. if discrimination occurs with regard to resources, inequalities may be noted. for example, some countries provide tariffs that result in inequality in society. in addis ababa, ethiopia, wealthy people receive a greater subsidy than poorer people for residential electricity [10]. peak pricing with electricity tariff is unfair from the perspective of disadvantaged residents [11]. great britain and queensland have been sharply criticized due to their pricing policies regarding electricity tariffs in residential sectors [12]. those with a higher social status and greater wealth enjoy more privileges with lower energy prices; further, no cap or limit in the quantity of usage is placed on affluent customers so they demand and consume more electricity. to meet the greater energy demand, strategies such as power layoff, load shifting, demand response, load shedding are enacted in specific low-income areas. the result is social inequality concerning essential utilities. in the u.k., the energy sector has become privatized. that business model allows energy costs to accelerate, restrict energy usage by low-income groups, and creates assets at the expense of low-income households [13]. the result enforces the occurrence of unjust economic discrimination and inequality for british communities. the aftereffects of energy distribution, including overall impact and social inequality, can be seen on a global scale. goal 13 of the sustainable development goals of the united nations states that the poorest and the most vulnerable are the most affected. emissions from one country may have a profound impact on neighboring countries. one country’s co2 and ghg emissions are not proportionate to the disastrous climate change effects endured by the same country. most countries that produce low emission levels are more vulnerable to climate change. in figure 1, we can see quantiles showing that countries that produce high emissions (dark red) exhibit less vulnerability. similarly, countries with high vulnerability (dark green) produce lower emissions. countries in yellow represent balanced cases of emissions and vulnerability. the less intense colors show gradually decreasing or increasing levels of inequality among countries. the few countries with no data are depicted in grey. since global emission stakeholders cause climate change inequality, the solution to eradicate these inequalities should emerge from the leaders of ghg emissions, the strongest polluters. those nations that release the most emissions should shoulder the responsibility of eradicating inequality globally. figure 2 shows a perpetual cycle where climate hazards add to the burden of social inequalities. multidimensional inequalities expose disadvantaged groups to climate hazards, which, in turn, leads to income loss and a loss in other human, physical, or social assets. in 2005, hurricane katrina that occurred in the u.s. presented an example of the role of inequality in society. for example, the areas where wealthy households lived were better fenced and had protective infrastructures, whereas poorer neighborhoods had no preventive measures. due to omnipresent economic and racial inequalities, african americans lived in low-lying, poverty-stricken, vulnerable areas of new orleans that bore the brunt of the floodwaters. in contrast, the more affluent, privileged homes populate the high areas of the city. this spatial distribution is the result of socio-political and discrimination inequality in society. as a result, the impact of hurricane katrina was felt disproportionately [16]. international journal of sustainable energy planning and management vol. 29 2020 155 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan this research aims to provide the factors that are responsible for leveraging social inequality and social injustice, in energy usage predominantly at the domestic and residential level. the main objective of this research is to rank the factors based on the relevance of importance obtained by applying the fuzzy analytical hierarchy process method. this paper tries to answer the following questions:a) what are the factors responsible for inducing social inequality and injustice in society due to energy usage? b) which factor are the most and the least influential in imparting social inequality in society due to energy usage? 2. literature review the role of gender, geographical location, and ethnicity play a significant role in imparting energy inequality. therefore for better understanding, these topics are discussed in this section with practical examples by reviewing research works in the field of energy inequality. the research problem is also discussed in section 2.2. 2.1 experiencing energy inequality by different scenarios goal # 13 from the 2030 agenda of sustainable development on climate action seeks to achieve a more equitable world by reducing inequalities among countries [17]. figure 1: inequality in ghg emissions by country (2030) (source: [14]) disproportionate loss of assets and income suffered by disadvantaged groups greater exposure and vulnerability of disadvantaged groups to climate hazards group multidimensional inequality climate hazards figure 2: climate change – a vicious cycle of inequality (source: [15]) 156 international journal of sustainable energy planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using in developing countries, the availability of energy resources in domestic households is central, whereas, in developed countries, the affordability of all households is a core issue [18]. in both cases, these issues go beyond reducing environmental impacts and point to the inequalities in society. federal institutions should act and frame policies to reduce inequalities in energy consumption. according to a research by shi (2019), inequality in china’s energy consumption is due to circumstances beyond the control of individuals: their gender, family status, family background, and region of birth. shi also declares that the most disadvantaged group facing the most inequality in energy consumption are females born in rural areas with low-income family background [19]. mader states in his research that if the rich and the poor are given an equal distribution of wealth, the social costs of climate change and its mitigation could be accrued, thereby reducing inequality in energy consumption related to climate change [20]. to understand energy inequality, it is essential to clear ambiguity between energy poverty and income poverty. it is because energy poverty and income poverty are linked to energy inequality leading to social injustice in society. one good example of interlinking the inequalities is that the poor households spend a larger percentage of their income on energy than their wealthier counterparts. this larger percentage of spending by the poor deprives them of other necessary household expenses [21]. the minimum amount of energy consumption that is required to sustain a living is termed as energy poverty. alternatively, it can be defined as the level of energy consumed by a household below the determined expenditure or income poverty. whereas, the income poverty is based on the food and non-food items essential in daily routine to sustain a living or livelihood [21]. in the present contemporary society, there is a lack of precise definition of energy poverty. the research work by doughlas et al., has defined and successfully applied the poverty line that can be used as a standard benchmark of energy consumption necessary to nurture life [22]. if there exists an energy inequality and income inequality in a society, it is evident that it would eventually result in social injustice. this is because both inequalities are part of a large society. therefore, through this research work, the determinants of social injustice and energy inequality in society are introduced. inequality in energy consumption must be measured correctly to reduce it. for example, in some cases, inequality is measured by taking the country’s gdp as a weighted variable. that approach may show decreasing trends in inequality, whereas when inequality is measured using population distribution as a variable, it will show an even distribution. consequently, precise and detailed research is needed to determine how to reduce such inequality [23]. a major geographical cause of energy inequality is the regional imbalance of energy resources, and that energy consumers are situated at different geographical locations. for example, 80% of energy resources are concentrated in the northern or southern parts of china, but the majority of consumers are situated in different geographical areas. moreover, a region’s heterogeneity and its socioeconomic transformation strongly affect its energy inequality [24]. in india, an area’s social castes and religions present varying degrees of access to electricity. marginalized sections of the society receive unequal accessibility to electricity and cooking gas [25]. in zambia, an increase in electricity tariffs generated greater inequality with 0.7% or 0.5% (108,000 or 90,000) people ranking below moderate or extreme poverty lines. additionally, 60% of the electricity subsidy was taken by the richest quantiles; only about 1% was taken by the 20% poorest households [26]. south korea also displays an example of social injustice in electricity dissemination, consumption, and disposal. some residents are excluded from the decision-making process; their opposition to certain policies is simply neglected, which creates an environment of social injustice. certain regions produce 200% more electricity than they consume, but the resource is not transmitted to other metropolitan areas because of environmental and infrastructural disturbances [27]. the energy reforms and policies framed by the governments should not be driven only by political or economic pursuits, but also take into account the social ills, uneven distribution of wealth in society and poverty [28]. a study in kenya revealed that a rise in energy prices could lead rich people to invest in energy-efficient appliances and poorer people to cut down on energy consumption [29]. income is considered as one of the impact indicators of household energy use, and this energy use is responsible for driving the socioeconomic situation of homes and access to electricity [30] by removing energy access discrimination. according to a study conducted in hungary revealed that energy poverty in the region forced the inhabitants to illegal use of burning biomass for heating homes [31]. in the european union, energy liberalization is shown to have an impact on energy distribution, particularly in the residential international journal of sustainable energy planning and management vol. 29 2020 157 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan sector. one of the aims of liberalization is to provide affordable prices to all energy users to bring energy justice [32]. 2.2 problem description the energy utilized for daily routine purposes in society is an example of social injustice. in high-income countries, wealthy households enjoy subsidies in electricity bills, whereas poorer households could benefit even more if grants were offered to them [33]. research shows examples of societies in which one portion receives electricity, and a different portion of the society is deprived of electricity usage. even with the same energy provider, the same distribution network, and the same usage pattern, there is a vast gap in the price of electricity, which creates social inequality [34]. this research seeks to determine what factors lead to these discriminations in energy utilization and why some groups suffer social inequality and are deprived of energy accessibility. if a society is offered with electricity at the same price and with the same level of access, with no differences among the rich or poor, male or female, and with no regard to the consumer’s religion, then energy would be provided fairly and equally. india’s schedule caste, schedule tribes, and muslims are among the most disadvantaged groups in terms of receiving lpg gas for household cooking [25]. different types of inequality exist in society due to socioeconomic, regional, ethnic, and political reasons. but in a just society, all individuals should have access to daily routine actions such as having utilities to provide hot water in the early morning and the ability to travel to an office or other destination in a vehicle. successful routine activities are linked to energy utilization. if the daily routine’s energy usage is disturbed, then the common man’s life is concerned because he has fewer alternatives. something as basic as one’s access or not to energy is the foundation for social inequality and injustice. 3. methodology this section explains the importance of the analytical hierarchy process and the various steps associated with it. the application of the model to the research work, its validation, and sensitivity analysis is also discussed. in this research, to minimize vagueness and imprecision in human judgments, a fuzzy set theory with multiple criteria decision making (mcdm), first developed by zadeh in 1965 [60], was chosen. fuzzy set theory can handle more complex problems when compared to classical set theory, and fuzzy ahp has been derived from fuzzy set theory [35, 36]. although there are many tools in mcdm methodology, the fuzzy analytical hierarchy process (fuzzy ahp) has been used in this paper because it can handle multiple criteria of factors with ease. both qualitative and quantitative data can be effectively processed, so it is one of the most commonly utilized tools for mcdm methods [37]. fuzzy ahp, introduced by thomas l. saaty in 1980, is a technique that can accommodate both subjective and objective functionalities, and it can include dynamic expert participation while relatively evaluating problems [38]. in fuzzy ahp, a decision problem is decomposed into decision criteria, and a hierarchy decision model is constructed. the decision criteria are compared pairwise with the criterion preceding them in the hierarchy [39, 49]. compared to other multi-criteria decision making (mcdm) methods, ahp is extensively used and widely accepted method. ahp method handles multiple criteria with extreme simplicity comparably with other methods. in contrast with other fuzzy mcdm methods, ahp is easier to understand and easily handle qualitative and quantitative data. some of the characteristics that make it a good candidate for analysis are, the method does not need complicated mathematics for analysis. it consists of principles of decomposition, pairwise comparison, priority vector generation, and synthesis [40]. ahp methodology provides an opportunity for analysis of a system rather than concluding it true or false. it tries to provide a solution that fits the goal and objectives of a solution [41] when compared with anp and topsis. still, ahp is preferred because of its worldwide acceptance [38; 61]. therefore, ahp is used in this research. the steps involved in fuzzy ahp are as follows. step 1. framing a pairwise comparison matric for social inequality factors. (1) 11 12 1 21 22 2 1 2 ... ... ... ... ... ... ... n n n n nn a a a a a a a a a a      =        158 international journal of sustainable energy planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using step 2. normalization of the pairwise comparison matrix. (2) step 3. calculate the weight of each factor using equation 3. (3) step 4. obtain the global weight of each factor by multiplying the local weight of each factor by the local weight of its respective main factor. step 5. rank the factors based on weights to arrive at most influencing factors. 3.1 application of the proposed model to the case illustration many government policies have been implemented to overcome energy conservation factors into present-day societies. today’s societies are comprised of different levels and classes of people, including wealthy and poor, laborers, expatriates, foreigners, immigrants, and so forth. governmental implementation of these energy conservation policies tends to permit social inequality and discrimination among the inhabitants because they demonstrate ethnic, racial, and religious differences. to 11 12 1 21 22 2 1 2 ' ' ... ' ' ' ... ' ... ... ... ... ' ' ... ' n n n n nn a a a a a a a a a a      =        2 1 ' for , 1, 2, 3...ijij ijn a a i j n a − = = ∑ n i n ij a localweight n −= ∑ eradicate these social inequality factors, the first step would be to identify the factors responsible for inequality; in this research, the factors were collected through the delphi technique with 13 climate experts in the first stage. the thematic analysis was applied to classify the comprehensive list of factors into three themes, as shown in figure 4. when the number of opinions and decision-makers goes up, inconsistency and vagueness also increase [42]. to limit the impracticality and degrees of inconsistency, we chose a sample size of 13 experts. figure 4 provides a classification of the factors and subfactors. among the 13 climate experts, two are university professors with 15 years of experience; four are consultants with more than 15 years of post-graduation experience in a climate-related field. there are three policy makers possessing a postgraduate degree in a climate-related area from a government organization with over ten years of experience. the remaining four were engineers with a bachelor’s degree with over ten years’ experience in design and the construction of building climate control systems. figure 3 shows the design of this research, where the identification of social inequality factors through the delphi technique and thematic analysis. a model of factors is framed in a matrix for pairwise comparison. the next step is a pairwise comparison performed by the experts using the linguistic scale in table 1. in this step, each factor is compared pairwise to know which factor is more important than the other. the pairwise comparison matrix is normalized, and local weights are calculated. the consistency is checked to understand whether the performed tests are consistent or not. in this research work, the survey results are consistent because the consistency ratio value obtained is within the acceptable limits. now all the subfactors are compared, and global weights are calculated. table 1: linguistic scale for difficulty and importance linguistic scale for difficulty triangular fuzzy scale linguistic scale for importance triangular fuzzy reciprocal scale just equal (1,1,1) just equal (1,1,1) equally difficult (ed) equally important (ei) weakly more difficult (wmd) weakly more important (wmi) strongly more difficult (smd) strongly more important (smi) very strongly more difficult (vsmd) very strongly more important (vsmi) absolutely more difficult (amd) absolutely more important (ami) 1 3 ,1, 2 2       2 ,1, 2 3       3 1, , 2 2       1 2 , ,1 2 3       3 5 , 2, 2 2       2 1 2 , , 5 2 3       5 2, , 3 2       1 2 1 , , 3 5 2       5 7 , 3, 2 2       2 1 2 , , 7 3 5       international journal of sustainable energy planning and management vol. 29 2020 159 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan a pairwise comparison matrix constructed for main factors is provided in table 2 using the fuzzy scale provided in table 1. the local weight is obtained by using equations 2 and 3. the consistency check is conducted as explained in section 6. the global weights of the main factors and subfactors are given in table 6. develop social inequality factors from expert opinion delphi technique segregation of inequality factors thematic analysis calculate global weights rank the factors all levels are compared develop a pairwise comparison metric for factors normalization of factors and calculation of weights undergo consistency check all factors are consistent ahp methodolo gy phase i phase ii figure 3: analytical hierarchy process flowchart 160 international journal of sustainable energy planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using 3.2 validation of the model in this research work, the validation of the research model is done by two methods: a consistency check and a sensitivity analysis. because the inputs to this model come from human judgments, it requires a certain level of consistency [43]. if the value of the consistency index (ci) is equal to zero, then the matrix is perfectly consistent. however, the suggested value of consistency ratio (cr) should not be greater than 0.1 [43, 49]. in this study, the proposed matrix is consistent with a cr value of 0.0965 (i.e., less than 0.1). the cr can be checked as follows. regional and env. intl adoptions to regulations local energy regulation implementation regional hegemony intergovernmental cooperation adaptability to technological advancement natural catastrophes unequal distribution of natural resources suppressed women participation racial and ethnic discrimination inclusion of social equality in all reforms realization of the affected racial societal assessment of social inequality risks social mass media influence provision for education and awareness ambition for social equality social inequality factors figure 4: classification of social inequality factors table 2: pairwise comparison of main factors main factors regional and environmental (re) racial (ra) societal (so) local weight rank re 1,1,1 3/2,2,5/2 2,5/2,3 0.4991 1 r 2/5,1/2,2/3 1,1,1 5/2,3,7/2 0.3444 2 so 1/3,2/5,1/2 2/7,1/3,2/5 1,1,1 0.1564 3 international journal of sustainable energy planning and management vol. 29 2020 161 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan table 3: local weight and pairwise comparison of regional and environmental (re) subfactors iar leri rh ic ata nc udnr local weight international adoption to regulations (iar) 1,1,1 5/2,3,7/2 2,5/2,3 3/2,2,5/2 3/2,2,5/2 1,3/2,2 1,3/2,2 0.2378 local energy legislation implementation (leri) 2/7,1/3,2/5 1,1,1 1/2,1,3/2 1,3/2,2 5/2,3,7/2 1/2,1,3/2 1,3/2,2 0.1429 regional hegemony (rh) 1/3,2/5,1/2 2/3,1,2 1,1,1 5/2,3,7/2 2,5/2,3 1/2,1,3/2 1,3/2,2 0.1674 intergovernmental cooperation n (ic) 2/5,1/2,2/3 1/2,2/3,1 2/7,1/3,2/5 1,1,1 3/2,2,5/2 1,3/2,2 5/2,3,7/2 0.1425 adaptability to technological advancements (ata) 2/5,1/2,2/3 2/7,1/3,2/5 1/3,2/5,1/2 2/5,1/2,2/3 1,1,1 1,3/2,2 1/2,1,3/2 0.0897 natural catastrophes (nc) 1/2,2/3,1 2/3,1,2 2/3,1,2 1/2,2/3,1 1/2,2/3,1 1,1,1 1/2,1,3/2 0.1174 unequal distribution of natural resources (udnr) 1/2,2/3,1 1/2,2/3,1 1/2,2/3,1 2/7,1/3,2/5 2/3,1,2 2/3,1,2 1,1,1 0.1028 table 4: local weight and pairwise comparison of racial (r) subfactors swp red ise roe local weight suppressed women participation (swp) 1,1,1 3/2,2,5/2 3/2,2,5/2 1,3/2,2 0.3487 racial and ethnic discrimination (red) 2/5,1/2,2/3 1,1,1 5/2,3,7/2 2,5/2,3 0.3111 inclusion of social equality in all reforms (ise) 2/5,1/2,2/3 2/7,1/3,2/5 1,1,1 5/2,3,7/2 0.2037 realization of effected (roe) 1/2,2/3,1 1/3,2/5,1/2 2/7,1/3,2/5 1,1,1 0.1367 table 5: local weight and pairwise comparison of societal (so) subfactors aser smmi pea ase local weight assessment of social inequality risks (aser) 1,1,1 3/2,2,5/2 2,5/2,3 2,5/2,3 0.4138 social mass media influence (smmi) 2/5,1/2,2/3 1,1,1 3/2,2,5/2 1,3/2,2 0.2487 provisions for education and awareness (pea) 1/3,2/5,1/2 2/5,1/2,2/3 1,1,1 2,5/2,3 0.2008 ambition for justified social equality (ase) 1/3,2/5,1/2 1/2,2/3,1 1/3,2/5,1/2 1,1,1 0.1369 table 6: global rank and global weight of subfactors main factors weight rank sub factors local weight local rank global weight global rank regional and environmental (re) 0.4991 1 re1 0.2377 1 0.1187 2 re2 0.1428 3 0.0713 5 re3 0.1673 2 0.0835 4 re4 0.1424 4 0.0711 6 re5 0.0896 7 0.0448 12 re6 0.1173 5 0.0586 9 re7 0.1027 6 0.0513 10 racial (ra) 0.3444 2 ra1 0.3486 1 0.1201 1 ra2 0.3110 2 0.1071 3 ra3 0.2036 3 0.0701 7 ra4 0.1366 4 0.0471 11 societal (s) 0.1564 3 so1 0.4137 1 0.0647 8 so2 0.2486 2 0.0389 13 so3 0.2007 3 0.0314 14 so4 0.1368 4 0.0214 15 162 international journal of sustainable energy planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using (4) in equation 4, w is the eigenvector, wi is the eigenvalue, and λmax corresponds to the largest eigenvalue of the pairwise comparison matrix. the consistency index is given by (6) and n in this equation is the rank of the matrix. consistency ratio cr is given by (7) table 8 shows the consistency ratio by applying equation 4 to equation 7. table 7 provides the random index ratios to calculate consistency ratio. 3.3 sensitivity analysis according to chang et al. (2007), the final rankings may change if there is a minute change in the factor’s relative (5)1 2max 1 2 '' '1 n n ww w n w w w λ   = + +     1 1 2 21 ' ' ' ' n iji i n n w w aw w calculate and w and w aw n w w −            = = = =             ∑   max 1 n ci n λ −  =  −  ci cr ri = weights [45]. since most of the analysis is based on the experts’ subjective judgments, the stability of the ranking should be tested. to accomplish the proposed model, a sensitivity test is conducted, and the results are tabulated in table 9. table 10 provides the ranks of main factors. from the pairwise comparison table (table 2), the relative weight of the regional and environmental (re) factor is 0.4991, providing the highest weight among all three main factors. the weight of the re factor is varied to check the performance on the other two factors. the results, seen in tables 9 and 10, show that the re factor maintains its first position and the societal (s) factor maintains last position in ranking after the normalized value of 0.4991. therefore, according to the results in tables 9 and 10 and the ranks gained by the factors, the regional and environmental (re) factor is the most significant factor. table 7: random index (ri) and recommended consistency ratio values [44, 50] size (n) 3 4 5 6 7 8 9 ri 0.58 0.90 1.12 1.24 1.32 1.41 1.45 table 8: calculation of consistency ratio main factors w w' λ λmax ci cr re 0.4991 1.5790 3.1636 3.113 0.056 0.0965r 0.3444 1.0742 3.1190 s 0.1564 0.4783 3.0581 table 9: sensitivity analysis of main factors when varying regional and environmental (re) factors main factors values of main factors when regional and environmental (re) value changes from 0.1 to 0.9 re re = 0.1 re = 0.2 re = 0.3 re = 0.4 re = 0.4991 (normal) re = 0.5 re = 0.6 re = 0.7 re = 0.8 re = 0.9 ra 0.6189 0.5502 0.4814 0.4126 0.3445 0.3439 0.2751 0. 2063 0.1375 0.6888 s 0.2811 0.2498 0.2186 0.1874 0.1565 0.1561 0.1249 0.0937 0.0625 0.0312 table 10. rank of main factors when varying regional and environmental (re) factors main factors rank of main factors when regional and environmental (re) value changes from 0.1 to 0.9 re = 0.1 re = 0.2 re = 0.3 re = 0.4 re = 0.4991 (normal) re = 0.5 re = 0.6 re = 0.7 re = 0.8 re = 0.9 re 3 3 2 2 1 1 1 1 1 1 ra 2 1 1 1 2 2 2 2 2 2 s 1 2 3 3 3 3 3 3 3 3 international journal of sustainable energy planning and management vol. 29 2020 163 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan similarly, in figure 5 and table 11 the weights of the subfactors under varying re values of 0.1 to 0.9 are presented. the subfactor ra1suppressed women participation has maintained the first rank between the re values of 0.1 and 0.5, and re1-international adoption to regulation has gained top rank with re values from 0.6 to 0.9. however, factor s4-ambition for social equality has consistently maintained the last rank for the values of re between 0.4 to 0.9. thus, tables 11 and 12 clarify that ra1-suppressed women participation and re1table 11. global weights of subfactors when re changes from 0.1 to 0.9 sub factors re = 0.1 re = 0.2 re = 0.3 re = 0.4 re = 0.4992 (normal) re = 0.5 re = 0.6 re = 0.7 re = 0.8 re= 0.9 re1 0.0238 0.0476 0.0713 0.0951 0.1187 0.1189 0.1427 0.1665 0.1902 0.2140 re2 0.0143 0.0286 0.0428 0.0571 0.0713 0.0714 0.0857 0.1000 0.1143 0.1285 re3 0.0167 0.0335 0.0502 0.0669 0.0835 0.0837 0.1004 0.1171 0.1338 0.1506 re4 0.0142 0.0285 0.0427 0.0570 0.0711 0.0712 0.0855 0.0997 0.1140 0.1282 re5 0.0090 0.0179 0.0269 0.0359 0.0448 0.0448 0.0538 0.0628 0.0717 0.0807 re6 0.0117 0.0235 0.0352 0.0469 0.0586 0.0587 0.0704 0.0821 0.0938 0.1056 re7 0.0103 0.0205 0.0308 0.0411 0.0513 0.0514 0.0616 0.0719 0.0822 0.0924 ra1 0.2158 0.1918 0.1678 0.1439 0.1201 0.1199 0.0959 0.0719 0.0480 0.0240 ra2 0.1925 0.1711 0.1497 0.1284 0.1071 0.1070 0.0856 0.0642 0.0428 0.0214 ra3 0.1260 0.1120 0.0980 0.0840 0.0701 0.0700 0.0560 0.0420 0.0280 0.0140 ra4 0.0846 0.0752 0.0658 0.0564 0.0471 0.0470 0.0376 0.0282 0.0188 0.0094 s1 0.1163 0.1034 0.0904 0.0775 0.0647 0.0646 0.0517 0.0388 0.0258 0.0129 s2 0.0699 0.0621 0.0544 0.0466 0.0389 0.0388 0.0311 0.0233 0.0155 0.0078 s3 0.0564 0.0501 0.0439 0.0376 0.0314 0.0313 0.0251 0.0188 0.0125 0.0063 s4 0.0385 0.0342 0.0299 0.0256 0.0214 0.0214 0.0171 0.0128 0.0085 0.0043 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 table 12: ranking for subfactors by sensitivity analysis when re factors changes from 0.1 to 0.9 sub-factors re = 0.1 re = 0.2 re = 0.3 re = 0.4 re = 0.4991 (normal) re = 0.5 re= 0.6 re = 0.7 re = 0.8 re = 0.9 re1 9 8 5 3 2 2 1 1 1 1 re2 11 11 10 7 5 5 4 3 3 3 re3 10 10 8 6 4 4 2 2 2 2 re4 12 12 11 8 6 6 6 4 4 4 re5 15 15 15 14 12 12 10 9 7 7 re6 13 13 12 10 9 9 7 5 5 5 re7 14 14 13 12 10 10 8 7 6 6 ra1 1 1 1 1 1 1 3 6 8 8 ra2 2 2 2 2 3 3 5 8 9 9 ra3 3 3 3 4 7 7 9 10 10 10 ra4 5 5 6 9 11 11 12 12 12 12 s1 4 4 4 5 8 8 11 11 11 11 s2 6 6 7 11 13 13 13 13 13 13 s3 7 7 9 13 14 14 14 14 14 14 s4 8 9 14 15 15 15 15 15 15 15 164 international journal of sustainable energy planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using 0.0000 0.0500 0.1000 0.1500 0.2000 0.2500 re1 re2 re3 re4 re5 re6 re7 ra1 ra2 ra3 ra4 s1 s2 s3 s4 re = 0.1 re = 0.2 re = 0.3 re = 0.4 re = 0.4992 (normal) re = 0.5 re = 0.6 re = 0.7 re = 0.8 re= 0.9 figure 5: sensitivity analysis: performance of social inequality subfactors (by global weight) 0 2 4 6 8 10 12 14 16 re1 re2 re3 re4 re5 re6 re7 ra1 ra2 ra3 ra4 s1 s2 s3 s4 re = 0.1 re = 0.2 re = 0.3 re = 0.4 re = 0.4992 (normal) re = 0.5 re = 0.6 re = 0.7 re = 0.8 re= 0.9 figure 6: ranks of subfactors under varying re values of 0.1 to 0.9 (global weights) international journal of sustainable energy planning and management vol. 29 2020 165 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan international adoptions to regulations are the most significant factors that can impact social inequality in a greater way. both table 12 and figure 6 provide detailed ranks under varying re values of 0.1 to 0.9. 4. results and discussions the application of the fuzzy ahp to main factors shows the order of priority as re > ra > so: the regional and environmental factors exhibit the highest weightage followed by racial and societal factors. environmental injustice impacts residents across all geographical regions. in the u.s., the concept of environmental injustice has been influential in many sectors, including transportation, urban planning, energy development, food justice, and a variety of indigenous cases [46]. in 2017, 51 nations ratified the paris agreement [47], which brings positive benefits to climate change. this ratification by 51 countries shows the significance and weightage a region plays in bringing social equality and climate justice to a specific area. the racial (ra) factor attains the second-highest weightage with a weightage of 0.344. ethnic and racial factors are a major challenge that creates examples of social injustice and inequality. for example, in myanmar, minority farmers lost lives, property, and other assets due to the lack of a weather warning system during 2008’s cyclone nargis [48]. climate change affects men and women differently. gender inequality has heightened due to weather-related circumstances and climate changes. most of the time, women have been the victims, and the feminization of responsibilities has added burdens in creating social inequalities. due to socially accepted roles in the family, women must do more work than men [51]. the last priority in the main factors is the societal influence with a weightage of 0.156. if a society reflects an inequality and practices social injustice, then the effects of climate change are endured and force some communities and societies to migrate for survival. it is a challenge for society to adapt to a new geographical area, which leaves open the possibility of continuing inequality and prevalent climate change [51]. table 6 shows the global rank of each subfactor. the order of priority for ranking is ra1 > re1 > ra2 > re3 > re2 > re4 > ra3 > s1 > re6 > re7 > ra4 > re5 > s2 > s3 > s4. ra1-suppressed women participation” ranks highest among all subfactors. current studies report that female participation is vital in minimizing social inequalities; women participate more in climate change mitigation programs, and they support related policies. their engagement in programs inspires more efficient outcomes, and their suppression and non-involvement will lead to severe consequences [52]. moosa & tuana stress the importance of feminist philosophy for climate change mitigation. because women are more concerned with the environment and climate, they involve themselves more easily in mitigation activities, and their knowledge and commitment will help minimize social inequalities and climate change [53]. re1-international adoption to regulation achieves the second most significant weightage in table 6. adoption of international climate control policies and agreements, such as the kyoto protocol, montreal protocol, and the paris agreement, help to attain social justice and motivate international agreement among the nations. such agreements serve as a global platform to bring justice to communities globally. economic benefits might be shared with poorer income countries on the african continent, and environmental resources from these countries could be passed on to developed nations to balance social inequality and climate change. with a weight of 0.311, ra2-racial and ethnic discrimination is the third most important factor. a survey conducted in the u.s. in 2014 showed that 43% of white americans, 71% of hispanic americans, and 57% of black americans were concerned that climate change would impact them negatively [54]. according to the differential vulnerability hypothesis, non-whites considered that climate change to be more of a vulnerable challenge due to their less privileged position in society [55]. re3-regional hegemony ranks four in subfactors with a weightage of 0.835. regional hegemony can create indifference and promote social inequality and injustice among nations and communities. one of the best examples of regional hegemony is the withdrawal of the u.s., from the paris agreement on 1 july 2017. the u.s. is one of the top ghg-emitting nations of the world and a huge contributor to climate change. international pressures for the u.s to lower their ghg emissions were brought to bear as part of the ratifying paris agreement, but the u.s withdrew from the agreement and continues to emit ghg gases, resulting in bad climate change consequences in other nations of the world. in short, through its withdrawal from the paris agreement, the u.s took advantage of its strategic influence to emit ghg gases at its liberty [56]. re2local energy legislation implementation stands in fifth place among the subfactors. the implementation of local energy regulations will normalize the rules in a civil society for everyone, regardless of their social or financial status. a positive example of attaining social equality in society is, for instance, a region’s local energy tariff that is equally applicable to all. re4intergovernemental cooperation ranks in sixth position in table 6. intergovernmental cooperation is necessary to mitigate climate change and to provide support to eradicate bias among residents of a community. one of the best examples of intergovernmental cooperation is the political agreement attained by different governments to limit global temperature increases to 2 degrees centigrade [57]. the findings of this research brings in significant lessons for policy makers. first and foremost is fair income distribution should be an element of energy policies, one of the core element of energy policy should reduce income inequality. one of the ways to achieve this is making the energy price affordable to all sections of the society without discrimination [58]. access to energy in a rural area should be provided to bring equal access on par with urban counterpart. secondly, the empirical findings of this research work has shown that suppression of women has high weightage in causing social injustice; therefore, women participation in framing policy should be encouraged to mitigate social injustice in society [59]. third, the policymakers and energy policy should not yield to political influence that might give rise to a bias in energy distribution. instead, policymakers should bring in the policy to create energy equality and environmental justice for users of energy [28]. 5. conclusions, limitations and further scope among the 15 subfactors, the top five belong to re-regional and environmental main factor and the ra-racial main factor; the fuzzy ahp establishes that the societal main factor has the least weight. hence, the regional and environmental (re) and racial (ra) factors should be given greater priority. this is because international, intergovernmental cooperation helps to formulate effective and more practical climate change policies. the effective implementation and execution lie with the end-user and, specifically, with the participation of women and ethnic minorities committed to eradicating inequality among society. the results in table 6 also show that education and awareness, ambition for justified social equality, and social mass media has less impact in achieving social inequality when compared with other given factors. by addressing the barriers of social and energy inequality, equitable economic development could be achieved, which unlocks the full developmental potential of local society. lack of sufficient access to rural and poor energy may lead to a reduction in production and opportunities in society; in specific women, children and poor are more affected. on the contrary, providing energy equality may bring in the benefits of income equality, gender equality, and socioeconomic development of the society. it is mandatory to eliminate persistent energy and income poverty in households. providing equal access to energy without bias reduces the gap between rich and poor, this reduces social injustice in society by distributing the economic advantages equally. although this research has been conducted using experts’ input, the results are purely dependent upon their judgment and experience. as every individual judgment and perception is unique, this research reflects the experiences of these experts. a different set of experts may provide a different emphasis and priority. furthermore, a comparative study could be accomplished, and characteristics of factors could be studied by extending this research work to various mcdm tools such as dematel, ism, and topsis. the concept of energy inequality has widened over time and stills lacks clarity on mitigating factors that could bring in a change in energy distribution and access. there lies a need for urgent research to address the factors that could enable these inequality changes in society, particularly in rural areas. further research could be extended to address energy inequality issues with specific gender groups and in different socioeconomic consequences. acknowledgement this paper belongs to an ijsepm special issue on sustainable development using renewable energy systems [62]. international journal of sustainable energy planning and management vol. 29 2020 167 syed shuibul qarnain, muthuvel sattanathan and bathrinath sankaranarayanan references [1] gender inclusive climate action in cities, women for climate change, february 2019 https://w4c.org/sites/default/files/201902/w4c_report_gender%20inclusive%20climate% 20action%20in%20cities_bd.pdf [2] ebhota, w. s. 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planning and management vol. 29 2020 analysis of social inequality factors in implementation of building energy conservation policies using appendix a table a: details of focus group sl no designation experience qualification 1 professor 16 years phd 2 assoc. professor 15 years phd 3 head of department, sustainability 17 years (engineering design consultancy) master’s degree 4 head of department, mep building services 16 years (engineering design consultancy) master’s degree 5 project managerexecution of energy systems for buildings 15 years (engineering design consultancy) master’s degree 6 senior designer, mechanical 15 years (engineering design consultancy) master’s degree 7 policy expert energy conservation mechanical 10 years, government organization master’s degree 8 policy expert energy conservation electrical 12 years government organization master’s degree 9 policy expert energy conservation hvac 13 years government organization master’s degree 10 engineer in conservation and energy efficiency 14 years design consultancy firm bachelor’s degree 11 senior mep design engineer 10 contracting and design execution bachelor’s degree 12 sustainability engineer-mechanical 10 contracting and design execution bachelor’s degree 13 project manager-mep 12-contractor construction and design execution bachelor’s degree _hlk41112659 _hlk40937478 _hlk41113458 _hlk41114714 _hlk41114852 _hlk41017781 _hlk41120814 _hlk41120899 _hlk41120921 _hlk41120939 _hlk40887939 international journal of sustainable energy planning and management vol. 26 2020 47 *corresponding author e-mail address: ecarvalho@deea.isel.ipl.pt international journal of sustainable energy planning and management vol. 26 2020 47–66 abstract in this work the electric vehicle (ev) specific co2 emissions resulting from the ev integration on the portuguese power system are analysed, considering a large set of scenarios combining the system renewable capacity versus ev share, under a night charge scenario. for this purpose, a unit commitment and economic dispatch (uced) is applied to the power units scheduling. the optimization procedure is implemented in general algebraic modeling system (gams) and performs the dispatch of the thermal and hydro units, in order to minimize the operation costs. the model is applied to an entire year of operation in an hourly basis using a marginal methodology. according to the results obtained, for the scenarios considered, the ev specific co2 emissions range from 57 g co2/km, for high wind capacity and low ev penetration, to 129 g co2/km, for low wind capacity and low ev penetration. however, if a controlled charge strategy, aiming the minimizing of generation costs, is considered, the range of results is wider, varying from 26 g co2/km, for high wind capacity and low ev penetration, to 133 g co2/km for low wind capacity and low ev penetration. from the results, it can be concluded that, with the current wind capacity of the portuguese system, and with a night charge strategy, the impact of the ev in terms of co2 emissions is not beneficial when compared to the 95 g co2/km target, for penetrations lower than 1 million vehicles, but if a controlled charge is considered, it would be not beneficial for a ev penetration of 180 thousand vehicles. results also show that evs can be integrated in an environmental beneficial way, if increasing ev penetrations are combined with an increase in the installed wind capacity. 1. introduction presently, climate is changing and it exists an increasing consensus on the need to reduce the greenhouse gases emissions (ghg), in order to slow global warming. worldwide, the energy sector and the transportation sector are the two major contributors to the global emissions with, respectively, 41.4% and 24.5% of the world co2 emissions in 2017 [1], being also responsible for most of the fossil fuel consumption. the transportation sector is dominated by internal combustion vehicles (icev) and relies almost entirely on oil as primary energy source. about 94% of the world energy used for transportation in 2017 came from oil and projections estimate 82%, by 2050 [2]. besides, transportation is the sector which shows the highest level of dependence on a single primary energy source, being the road transportation the major contributor for the sector emissions. as a consequence, political, economic and environmental concerns arise, and worldwide, a fast growth is being verified in the power generation from renewable sources. moreover, these concerns also motivated efforts assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach ezequiel carvalhoa,*, jorge sousaa,b, joao lagartoa,b a isel instituto superior de engenharia de lisboa, rua conselheiro emídio navarro 1, lisboa, portugal b inesc id, rua alves redol 9, 1000-029 lisboa, portugal keywords: co2 emissions; electric vehicles; marginal emissions; renewable energy integration; unit commitment; url: http://doi.org/10.5278/ijsepm.3485 mailto:ecarvalho@deea.isel.ipl.pt 48 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach in terms of increasing energy efficiency as well as the search for new transportation solutions. electric vehicles (evs) present zero tailpipe emissions, higher efficiency than icev, lower noise and are considered to have a great potential to contribute to the ghg emissions reduction. moreover, the ev integration in the vehicle fleet presents an opportunity to decrease the energy demand from the transportation sector [3] and, consequently, the share of oil as primary energy source, thus reducing energy dependence. in addition to these advantages, considering that electric vehicles are off the road most of the time, some authors consider the possibility of their use in a perspective of grid support. the possibility of connecting an electric vehicle to the grid in a bi-directional way (v2g) with the purpose of, not only charging the battery, but also to provide power back to the grid was for the first time addressed by kempton and letendre in 1997 [4]. besides the potential to improve the integration of the intermittent renewable energy sources (res), evs could provide peak power, spinning reserves, and frequency regulation [5-7]. in [8], the authors concluded that the use of a ldv fleet equipped with v2g is a viable option for regulation but specially to support the intermittent renewable integration into the grid. in a similar concept, vehicle-to-home (v2h), the unused storage capacity of the ev can be made available for the residential energy system with high beneficial outcomes [9]. however, some authors consider that discharging power back to the grid is not an interesting option, essentially due to the battery degradation costs [10,11]. among the overall vehicle fleet, light-duty vehicles (ldv) accounted in 2010 for 52% of the world energy use in transportation [12] as well as, with approximately two thirds of the world co2 emissions originated from the transportation sector [13,14]. considering the high contribution to the sector emissions, much of the focus concerning new transportation solutions is targeted to the ldv fleet. worldwide many countries have defined ambitious targets concerning the electrification of the vehicle fleet [15], and the use of evs is expected to increase substantially in the next years [16,17]. for 2050, the european commission (ec) targeted a minimum reduction of 60% in the ghg emissions from the transportation sector when compared to 1990 values [18]. in line with this long term target the european parliament approved in february 2014 the ambitious target of 95g co2/km for the whole passenger vehicle fleet in 2020 [19]. recently, in 2019, the european parliament and council defined new emission targets, for the years 2025 and 2030. according to these targets, for 2030, reductions of 37.5% and 31%, based on 2021 values, are defined for, respectively, newly registered passenger cars and light commercial vehicles [20]. however, uncertainties exist about the ability of the evs to effectively reduce the ghg emissions. in fact, besides the advantage in terms of emissions resettlement, the expected impact on the overall co2 emissions is highly dependent on the power mix used to supply the evs, and so, effects can vary substantially from country to country [21]. this fact has been put in evidence by many works [22-25]. in [22], the impact of the ev on the co2 emissions, energy security and air pollution in india is analysed for a period between 2010 and 2050. the analysis was performed for several policy scenarios and results showed that only in the scenarios, in which policies put in place promote a deep decarbonisation of the generation mix, the reduction in co2 emissions is considerable. manjunath and gross [23] proposed the electric vehicles emission index (evei), which is a metric to compare the co2 emissions of a specific ev with a gasoline vehicle. the evei was computed for all the us, for the year 2010, and results showed that in states with higher shares of fossil fuels in the generation mix, the ev emissions were similar or even higher than the emissions of list of abbreviations ev electric vehicle evei electric vehicles emission index gams general algebraic modeling system ghg greenhouse gas icev internal combustion engine vehicle ldv light duty vehicle milp mixed integer linear programming pre special regime producers/produção em regime especial psh pumped storage hydro res renewable energy sources soc state of charge tso transmission systems operator uced unit commitment and economic dispatch v2g vehicle-to-grid international journal of sustainable energy planning and management vol. 26 2020 49 ezequiel carvalho, jorge sousa, joao lagarto the gasoline vehicle. the importance of the generation mix is also highlighted by [24], which compared ev and icev ghg emissions, in 12 european countries, using life-cycle assessment and concluded that the uk, germany and the netherlands must increase the penetration of renewables to ensure reductions in ghg emissions with increasing penetration of ev. moreover, [25] in a study comparing germany and italy found out that even if the share of renewables is similar in both countries the impact of ev does not lead to similar results in terms of reduction in co2 emissions. in fact, for germany, for lower installed capacity of renewables, there is almost no change in co2 emissions, whereas, for italy, co2 emissions are always reduced. this stems from the fact that the installed capacity in germany is not adequate to supply the increase in demand due to the ev, thus, there is a need to resort to imports from neighbouring countries. also, the ev co2 emissions depend on when the evs are charged. this fact was observed by [26] in a study for electric buses in germany, where the results showed that the co2 emissions impact was lower when charging occurred at night than when it occurred at noon. when the comparison is made between an uncontrolled charge and a controlled charge the differences in co2 emissions can be significant as [27] found out in a study for germany for 2030. the results showed that with an optimal controlled strategy of ev charging, aiming to shift ev demand to low load or high res generation hours, the co2 emissions can be reduced by 14% or 30% (depending on the methodology used to account for co2 emissions) when compared to an uncontrolled charge. in a work analysing the co2 emissions of a french-german commuter ev fleet, [28] concluded that the ev should be charged in germany in windy and sunny hours, and that the time of charging is much more important in germany than in france, since the later has more stable co2 emissions during the day. also, using a smart charging strategy to avoid grid overloading and for a scenario of complete electrification of private transport and a six fold increase of renewables installed capacity, [25] reported an increase in co2 emissions reduction of 31.5% and 26.3% in italy and germany, respectively, when compared to a charge made exclusively according to driver’s needs. furthermore, in an analysis for the swedish energy and transportation system, for 2050, [29] verified that when the evs are charged during night time, the annual system costs are 0.8% higher and the needed increase in transmission capacity is 10% higher than when ev are charged in a more flexible manner. 1.1. scope owing to the expected increasing importance of the ev in the ldv fleet worldwide and, in particular, in portugal, this paper aims to answer to the questions: what is the impact of an increasing ev penetration in the co2 emissions of the portuguese power system? how does this impact vary for different levels of installed wind capacity in the portuguese power system? 1.2. analytical approach to attain the aims of this paper, a scenario framework approach is used. a set of scenarios, combining increasing levels of installed wind capacity, for different ev penetration levels is analysed, for the portuguese power system. for this purpose, a unit commitment and economic dispatch (uced) model, formulated as a mixed integer linear programming (milp), is applied for the power units scheduling. the optimization procedure proposed is implemented in general algebraic modeling system (gams) and performs the dispatch of the thermal, reservoir hydro and pumped hydro units, in order to minimize the operation costs. the implemented model is applied to an entire year of operation on an hourly basis and assumes a marginal approach to account for co2 emissions. this methodology compares the generation which would be necessary if evs were not present, with the generation required to supply the entire new load (including evs). from the differences obtained in the optimization results, the marginal data which effectively respects to the evs, in each of the scenarios considered, is assessed. however, for the sake of comparison, the average co2 emissions of the power mix are also presented. besides, the co2 emissions for all scenarios considered are also computed for two different charging strategies. the first strategy considered is night charge, in which, the evs are charged according to drivers’ need, and the second strategy is a controlled charge, performed to minimize total generation costs, which, in turn, minimizes renewable curtailment. the main contribution of this work is to analyse the impact of increasing ev penetrations in the portuguese power system, applying an uced model developed to the portuguese power system, in order to account the emissions using a marginal approach. 50 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach 2. model description to achieve the purpose of the work, a uced model of the thermal and storage hydro units was formulated. the purpose of the model is to minimize variable costs of the generating units while satisfying a set of thermal and hydro unit’s constraints, as well as, overall power system constraints. in the formulated model, the thermal units were treated individually, whereas, the hydro units were treated as two aggregated units, one representing the set of reservoir units and, the other, the set of pumped-storage hydro (psh) units. in what concerns run-of-river hydro units, since they have reduced water storage, the generation from these units is considered as input data. 2.1. objective function the objective function, which includes the generation and start-up costs of the thermal units, as well as, a penalty for the curtailment of wind generation, is defined as: where t is the number of time periods t, j is the number of thermal units j, jgc is the generation cost of thermal unit j, in €/mwh, pj(t) is the power generated by the thermal unit j at period t, in mw, δt is the time interval between t and t+1, j suc is the start-up cost of thermal unit j, in €, yj(t) is a binary variable, associated with the start-up of thermal unit j at period t, crc is the renewable generation curtailment penalty, in €/mw and prc(t) is the renewable generation curtailment at period t, in mw (since prc(t) represents a non-supplied power, it assumes values lower or equal to zero). the minimization of eq. (1) is subject to a set of constraints, which refer to thermal units, reservoir hydro units, psh units, load balance and spinning reserve. 2.2. thermal units constraints the set of thermal units constraints is related with the technical limits of operation of the thermal units, which in this study refers to maximum and minimum power output, as well as, ramp-up and ramp-down power rates. these constraints are presented in eq. (2) to (4). where j minp and j maxp are the minimum and maximum power outputs of the thermal unit j, in mw, and uj(t) is a binary variable, which indicates if unit j is running in period t. where jupp and j downp are the ramp-up and ramp-down power rates of the thermal unit j, in mw/h. besides eq. (2) to (4), to guarantee the consistency of the operation of the thermal units during the simulation period, the following constraint must be added: where sj(t) is a binary variable which indicates if unit j shuts down in period t. 2.3. reservoir hydro unit constraints the constraints of the reservoir hydro unit are related with the technical limits of this unit and with the energy stored in the reservoir. the constraints are presented in eq. (6) to (8). where ph min and ph max are the minimum and maximum output powers of the reservoir hydro unit, in mw, uh(t) is a binary variable which indicates if the unit is running in period t, and ph(t) is the power output of the reservoir hydro unit, in mw. where ph up and ph down are the ramp-up and ramp-down power rates of the reservoir hydro unit, in mw/h. the energy stored by the reservoir hydro unit, which depends on the energy stored in the previous period, on the energy inflow and on the power output in the period, can be written as follows: where eh (t) is the energy stored, in the hydro unit in period (t), in mwh, and eh inf (t) is the energy inflow of the reservoir hydro unit in period t, in mwh. also, the limits of the energy stored in the reservoir hydro unit are considered in eq. (10): (1) ( ) ( ) ( ) 1 1 t j j j j j g su rc rc t j min c p t t c y t c p t tδ δ = =    ⋅ ⋅ + ⋅ − ⋅ ⋅      ∑ ∑ (2)( ) ( ) ( )j j j j jmin maxp u t p t p u t⋅ ≤ ≤ ⋅ (3)( ) ( )1j j jupp t p t p− − ≤ (4)( ) ( )1j j jdownp t p t p− − ≤ (5)( ) ( ) ( ) ( )1j j j ju t u t y t s t− − = − (6)( ) ( ) ( )   h hh min h h maxp u t p t p u t⋅ ≤ ≤ ⋅ (7)( ) ( )  1h h h upp t p t p− − ≤ (8)( ) ( )  1h h h downp t p t p− − ≤ (9)( ) ( ) ( ) ( ) 1h h h h infe t e t p t t e tδ= − − ⋅ + (10)( )   h min h h maxe e t e≤ ≤ international journal of sustainable energy planning and management vol. 26 2020 51 ezequiel carvalho, jorge sousa, joao lagarto where, eh min and eh max are respectively, the minimum and maximum storage capacities of the reservoir hydro unit, in mwh. the model also considers a final energy condition, which relates the final and the initial values of the energy stored in the reservoir hydro unit. the condition is written as follows: where eh fin and eh init are, respectively, the final energy and the initial energy stored in the reservoir hydro unit, in mwh. 2.4. psh unit constraints the constraints that must be considered for a psh unit are quite similar to those considered for the reservoir hydro unit but, these constraints must be extended to include the pumping capability of the hydro unit. thus, eq. (12) and (13) define the generation and pumping output power limits of the psh unit: where pph(t) is the power output of the psh unit when it is generating, in mw, pphp(t) is the power output of the psh unit when it is pumping, in mw, pph min and pph max are, respectively, the minimum and maximum power output limits, in mw and, uph(t) and uphp(t), are binary variables, which are equal to 1 when the psh unit is generating or pumping, respectively, in period t. the ramp-up and ramp-down power rates constraints are set respectively by eq. (14) and (15). where pph up and pph down are, respectively, the ramp-up and ramp-down power rates of the psh unit, in mw/h. since the psh unit is an aggregate representation of the psh units of the portuguese system, it must be assured that, at each period t, the overall generation and pumping output power must not exceed the maximum power output of the psh unit. this is expressed by the following constraint: the limits for the energy stored in the psh unit are imposed by the following constraint: where eph min and eph max are, respectively, the minimum and maximum storage capacity of the psh unit, in mwh, and eph (t) is the stored energy in the unit at period t, in mwh. the energy stored by the psh unit is given by: where, ηph is the pumping cycle efficiency and eph inf (t) is the energy inflow, in period t, in mwh. the constraint which relates the final and initial stored energy is written as follows: where eph fin and eph init are, respectively, the final energy and the initial energy stored in the psh unit, in mwh. 2.5. load balance constraints the model must also assure the balance between supply and demand in all time periods. this is accomplished by: where pl(t) is the load, referred to generation, in period t, in mw, pev(t) is the charging power of the ev battery, in period t, in mw, pr(t) and is the sum of run-of-river hydro and special regime generation, in period t, in mw. 2.6. spinning reserve constraints spinning reserve allows system operators to compensate for unexpected imbalances between load and generation, which may be caused by a sudden outage of a generating unit, unexpected increase in load demand or fails in the commitment of defined generation schedules. in this model, the spinning reserves requirements are accounted in the following constraint: (11)( ) ( )      1 1   t t h fin h init h inf h t t e e e t p t tδ = = − = − ⋅∑ ∑ (13) (12)( ) ( ) ( ) ( ) ( ) ( )         p p p ph ph ph min ph ph max ph ph ph max ph ph min p u t p t p u t p u t p t p u t ⋅ ≤ ≤ ⋅ − ⋅ ≤ ≤ − ⋅ (15) (14)( ) ( ) ( ) ( )     1 1 ph ph ph up ph ph ph down p t p t p p t p t p − − ≤ − − ≤ (16)( ) ( )  pph ph ph maxp t p t p− ≤ (17)( )   ph min ph ph maxe e t e≤ ≤ (18) ( ) ( ) ( ) ( ) ( ) 1 pph ph ph ph ph ph infe t e t p t p t t e tη δ = − − ⋅ + ⋅ +  (19) ( ) ( ) ( )       1 1   p t ph fin ph init ph inf t t ph ph ph t e e e t p t p t tη δ = = − = −  ⋅ + ⋅  ∑ ∑ (20) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) 1 p j j h ph l j ev r rc ph p t p t p t p t p t p t p t p t = + + = + − − + ∑ (21) ( ) ( ) ( ) ( ) ( ) ( ) 1 max max j j j h ph max h ph j l ev res p u t p u t p u t p t p t p t = ⋅ + ⋅ + ⋅ ≥ + + ∑ 52 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach where pres(t) is the required power reserve, in period t, in mw. 2.7. thermal generation costs the objective function of the model, presented in eq. (1), comprises the minimization of costs. besides the penalty to the wind curtailment, the costs considered are related with thermal generation. the thermal generation costs considered are the variable generation costs due to fuel consumption and co2 emissions, and the start-up costs. 2.7.1. thermal generation variable costs the variable costs associated with each thermal unit j, can be written as follows: where j gc is the variable cost of thermal unit j, in €/mwh, cjfuel is the variable cost of thermal unit j, in €/ mwh, due to fuel consumption and c j co2 is the variable cost of thermal unit j, in €/mwh, due to co2 emissions. the variable costs due to fuel consumption depend on the fuel price and characteristics, and on the unit’s efficiency, according to the following equation: where pcfuel is the fuel price in €/kg or €/nm 3, for coal and natural gas, respectively, ηj is the global efficiency of the thermal unit j, and lhv is the lower heating value of the fuel used, in mwht/kg or mwht/nm 3, for coal and natural gas, respectively. the variable cost due to co2 emissions, not only depends on the fuel quality and thermal units efficiency, but also on the specific co2 emissions of the fuel and the price of the co2 emissions allowances, according to the following equation: where eco2fuel is the specific co2 emissions of the fuel, in kg co2/kg, for coal, or kg co2/nm 3, for natural gas, and pcco2 is the price of the co2 emissions allowances in €/kg co2. 2.7.2. thermal generation start-up costs start-up costs are costs that the thermal unit incurs when it is turned on and are given by eq. (25) [30,31]. (22)2 j j j g fuel coc c c= + (23)fuelj fuel j pc c lhvη = ⋅ (24)2  2 2 co fuelj co coj e c pc lhvη = ⋅ ⋅ (25)2    j j j j su ab su fuel su coc c c c= + + where jsuc is the start-up cost of thermal unit j, in €, j abc is the abrasion cost of thermal unit j, in €,   j su fuelc is the start-up fuel consumption cost of thermal unit j, in €, and j suc co2 is the start-up co2 emissions cost of thermal unit j, in €. the abrasion cost is considered proportional to the installed capacity of the thermal unit and is given by: where sc j ab is the specific abrasion cost of thermal unit j, in €/mw, and p jmax is the maximum power output of thermal unit j, in mw, which is considered equal to the installed capacity. the start-up fuel consumption cost is given by: where sc j fuel is the specific start-up fuel consumption of thermal unit j, in mwht/mw, and p j min is the minimum power output of thermal unit j, in mw. the start-up co2 emissions cost is given by: 3. data and assumptions the assumptions made are mostly supported in extrapolations of the historical data as well as on predictions from the portuguese government and the portuguese transmission systems operator (tso). the analysis performed is based on the generation system and is not focused on the grid. eventual constraints that may occur, at the different grid voltage levels, are neither considered, nor analysed. all scenarios are run under the assumption of null exchanges with the neighbouring spanish power system, as this was considered a better option than use historical exchange profiles. 3.1. installed capacity the forecasted installed capacity for the simulation year was obtained from the portuguese tso [32] and respective values, by technology, are presented in table 1. from table 1, one can see that special regime, in which wind power is included, will account for more than 40% of the total installed capacity. the thermal capacity will only account for 25% of the total and the hydro installed capacity, due to planned new power plants, will reach almost one third of the total installed capacity. (26)j j jab ab maxc sc p= ⋅ (27)  fuelj j j su fuel fuel min pc c sc p lhv = ⋅ ⋅ (28)2 2 2  co fuelj j j su co fuel min co e c sc p pc lhv = ⋅ ⋅ ⋅ international journal of sustainable energy planning and management vol. 26 2020 53 ezequiel carvalho, jorge sousa, joao lagarto 3.2. thermal generation table 2 describes the technical characteristics of the thermal units considered in the simulations. regarding thermal units costs presented in table 3, thermal units’ efficiency is considered constant and independent of the power output. also, the start-up costs are considered constant. 3.3. fuel and co2 prices the prices and characteristics of the fuels, as well as, the co2 allowances price are presented in table 4. for the coal, it was considered the api2 index price and for natural gas it was assumed the title transfer facility (ttf) virtual trading point index. for the price of the co2 emissions allowances, the price considered was 10 €/ton, which corresponds to a value higher than the average eua bluenext index price between 2011 and 2017, which was 7.1 €/ton. 3.4. hydro generation as mentioned above, the hydro units, except run-of-river units, were considered as two aggregated units. one represents the set of reservoir hydro units and, the other, the set of psh units. the characteristics of the hydro units, such as installed capacity, and storage levels and capacity, were set accordingly with data available in [38,39]. the historical data of daily net inflows, in terms of energy, were obtained from [38]. in order to be used in the simulation year, the historical daily net inflows values were converted to an hourly basis and then scaled to an average year in terms of hydro availability. additional inflows correspondent to new hydro power plants were calculated with base on the technical data presented in [40] and on primary energy estimated in [41,42]. for the psh units, the pumping cycle efficiency considered was obtained from data regarding pumped power and respective generation power available in [43] and set to 80%. table 1: expected installed capacity in the portuguese power system [32] technology capacity (mw) share (%) thermal 7245 25.0 coal 1756 6.0 ccgt/cogeneration 5489 19.0 hydro 9535 32.9 pumped 4921 17.0 reservoir 2031 7.0 run-of-river 2583 8.9 special regime 12182 42.1 wind 6875 23.7 small hydro 750 2.6 photovoltaic 1500 5.2 cogeneration 2250 7.8 biomass 557 1.9 wave 250 0.9 total 28962 100.0 table 2: technical characteristics considered for the portuguese thermal units [33,34] power plant installed capacity pmax pmin efficiency ramp up ramp down start-up fue abrasion (mw) (mw) (%) (mw/h) (mwht/mw) (€/mw) coal sines 4 × 295 295 103 37 140 270 6.2 5 pego 2 x 288 288 101 37 145 296 6.2 5 natural gas ribatejo 3 × 392 392 127 57 267 366 3.5 8 lares 2 × 413 413 130 57 270 370 3.5 8 pego 2 × 419 419 130 57 270 370 3.5 8 t. outeiro 3 × 330 330 95 55 256 330 3.5 8 lavos 2 × 415 415 130 57 270 370 3.5 8 sines 2 × 415 415 130 57 270 370 3.5 8 54 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach table 5 presents the characteristics of the aggregated hydro units. due to their reduced water storage, run-of-river hydro generation was considered as input data, taking into account the historical data provided by the portuguese tso. these values were then adjusted to the simulation year, considering an average year in terms of hydro availability and scaled up according to the expected installed capacity. 3.5 special regime generation likewise run-of-river hydro units, historical data for special regime generation, provided by the portuguese tso was considered, and then adjusted to an average table 3: generation and start-up costs of the portuguese thermal generation units [31,35,36] power plant fuel consumption co2 emissions generation costs start-up costs (kg/mwht) or (nm3/ mwht) (kg/ mw) or (nm3/ mw) (kg/mwhe) (kg/ mw) (€/mwhe) (€/start-up) generation start-up generation start-up fuel co2 total fuel co2 abrasion total coal sines 138.6 859.1 895.1 2053.3 32.8 8.95 41.76 7751 2115 1475 11356 pego 138.6 859.1 895.1 2053.3 36.08 8.95 45.04 8361 2074 1440 11894 natural gas ribatejo 93.6 327.6 354.3 706.8 39.47 3.54 43.02 10001 898 3136 14035 lares 93.6 327.6 354.3 706.8 39.47 3.54 43.02 10238 919 3304 14292 pego 93.6 327.6 354.3 706.8 39.47 3.54 43.02 10238 919 3352 14292 t. outeiro 93.6 327.6 367.2 706.8 40.91 3.67 44.58 7481 671 2640 10793 lavos 93.6 327.6 354.3 706.8 39.47 3.54 43.02 10238 919 3304 14292 sines 93.6 327.6 354.3 706.8 39.47 3.54 43.02 10238 919 3304 14292 table 4: fuel prices, characteristics and co2 prices considered for the portuguese thermal units [37] power plant price lhv specific co2 emissions (€/ton) (€/mwht) (kwht/kg) (kwht/nm 3) (kg co2/gj) (kg co2/kg) (kg co2/nm3) coal 87.6 12.14 7.22 92.0 2.39 – natural – 22.50 – 10.68 56.1 – 2.16 co2 10.0 – table 5: characteristics of the psh and reservoir hydro units [38] unit energy (gwh) capacity initial final maximum minimum pumped-storage hydro 1885 1112 1112 1508 848 reservoir hydro 1478 776 776 1182 665 international journal of sustainable energy planning and management vol. 26 2020 55 ezequiel carvalho, jorge sousa, joao lagarto year in terms of hydro and wind availability and scaled up, for each technology, according to the expected installed capacity. 3.6. demand for the demand, historical data was also considered and then scaled up according to estimated growth. according to the assumed growth, a 56.3 twh power demand is expected, with a peak demand of 10.2 gw. 3.7. ev charging models in this work, two different ev charging strategies are considered. in both strategies, the evs are considered to charge in slow charging mode (3.7 kw), at home, work or public charging points. also, the complete set of the evs batteries is aggregated and modelled as one big battery which can be charged from the grid, according to the conditions of the strategy under study, and discharged when the vehicles are on the road. it is assumed that the average ev is equipped with a 24-kwh lithium battery (battery capacity of the previous nissan leaf model), and drive, in mean, 38 km a day [44]. for the ev efficiency, a value of 0.167 kwh/km, which corresponds to 6 km/kwh, is considered, with a 85% efficiency of charge [45]. 3.7.1. night charge according to [46] most of the evs charge will likely occur when the vehicles are parked at home. this offpeak charging strategy is assumed as the most likely to occur in the next years, given the existing price incentives for off-peak energy use. an off-peak electricity rate starting at 10 p.m. and consistent with a dual tariff policy is assumed to be in place. in this strategy, it is assumed that vehicles owners charge their vehicles, at night, mostly at home and, eventually in public slow charging stations. also, it is considered that, most consumers delay the starting of the ev charge until 10 p.m. to benefit from the off-peak low electricity prices, as well as, due to eventual power constraints at the residential level. in fact, given that most of portuguese households have a contract capacity lower than 7 kw [47], it is very unlikely to conciliate a hypothetical ev charge with the typical electrical load from home appliances connected in the evening. the evs are modelled as electrical loads and to simulate the beginning of the charge, a normal distribution (μ = 10 p.m., σ = 1 h) is considered. the battery charging profile considered in this strategy, has two constant current charging levels, and a period of approximately eight hours is required to fully recharge an empty battery. according to the batteries capacity, mean daily driving distance and efficiency considered, a full charge will provide 144 km driving range, value which corresponds, in mean, to about 3.8 driving days. thus, it is assumed that, in mean, each driver fully charges a depleted battery each 3.8 days. it is also assumed that the ev daily charging profile as a similar shape throughout the whole year. the resulting normalized ev load profile is presented in figure 1. 3.7.2. uced controlled charge in this charging strategy the charge of the evs battery is dispatched by the uced model in order to minimize the generation costs and, thus, to maximize the renewable integration. as the adoption of this approach takes into account the power system conditions, a more efficient management of the available power resources is expected. however, it is important to have in mind that the restrictions imposed to the battery’s state of charge (soc) and also the limited availability of the evs, in order to accept charge, may have a significant effect on the merit of the strategy. the aggregated evs battery has a variable energy level of stored energy, discharges when vehicles are on the road, and can be charged whenever the vehicles are parked and connected to the grid. this charging process may take place at home, in a public charging point or at work. as the daily charging of the batteries is performed by the uced model, in order to minimize the overall generation costs, this means that whenever possible, the hours with excess generation will be first chosen. however, even when there is no excess generation, the 3.5 3 2.5 2 1.5 1 0.5 0 17 19 21 23 1 3 5 7 9 p ow er (k w ) hour of the day figure 1: unitary ev load profile night charge 56 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach uced model has to guarantee a minimum soc level according to the assumptions. according to the restrictions imposed, a minimum soc of 30% must be maintained every hour in the evs battery in order to guarantee that drivers have enough battery to return home, as the “range anxiety” when driving an ev is a big issue [48]. also, considering that most drivers begin their trips in the morning after 7 a.m., a minimum battery’s soc of 70% must be guaranteed everyday by that hour. also, the maximum charging power allowed is defined by eq. (30). ev discharge the availability of detailed driving patterns is a major issue in order to create an adequate discharge model for the evs battery. the ev discharge model adopted for this strategy is based on existing traffic surveys for the portuguese vehicle fleet [49,50]. according to the data collected, as expected, the beginning of the daily trips is concentrated in two daily peaks, which are verified in the morning and in the evening. for the evs battery discharge, it is assumed that evs driving follows similar patterns to those of the conventional vehicles. for the purpose of defining a normalized ev discharging profile for this strategy, it is considered that: 30% of the daily ev power consumption is concentrated in the morning peak and follows a normal distribution profile (µ = 8 a.m. , σ = 1 h); 10% of the daily consumption is concentrated in the midday hours following a normal distribution profile (µ = 1 p.m. , σ = 1 h); another 30% of the daily power consumption is concentrated in the evening peak, also following a normal distribution profile (µ = 7 p.m. , σ = 1.3 h); the remaining 30% power consumption is distributed by two periods along the day 90% of this value is uniformly distributed in the period from 7 a.m. to 11 p.m. and the residual 10% is uniformly distributed in the night period, from 12 p.m. to 7 a.m. according to the previous assumptions for the evs consumption, the unitary daily discharging profile for the evs battery is presented in figure 2. the global hourly evs discharge profile, which corresponds to the evs consumption, is given by eq. (29): where, pev load(t) is the power consumption of the whole fleet in time t, in mw, pev load unit(t) is the unitary hourly discharge profile, and nv is the number of vehicles in the fleet, for the scenario under analysis. ev charging availability most of the time, even during the hourly peak transportation demand, only a small fraction of the vehicles (20% maximum) are driving [51]. we have assumed that in the traffic peak hours 25% of the vehicles are driving, while the remaining 75% are parked and, potentially available to receive charge (connected to the grid). the maximum admissible charging power for the evs fleet is given by eq. (30). in which, pev max(t) is the maximum admissible charging power of the evs aggregated battery, at time t, nv is the number of vehicles, pev is the line capacity for each vehicle, evp share(t) is the share of vehicles which are parked, at time t, and evc share(t) is the share of parked vehicles which are connected to the power grid (grid connection share), at time t. for the grid connection share a value of 0.5 is considered for the period from 7 a.m. to 10 p.m., while a value of 0.7 is considered for the night period from 10 p.m. to 7 a.m. the resulting profile for vehicle maximum charging power is presented in figure 3. (29)( ) ( ) .ev load v ev load unitp t n p t= (30)( ) ( ) ( )   . . . .evmax v ev v p share c sharep t n p n ev t ev t= 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 hour 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 d is ch ar ge p ow er (k w ) figure 2: unitary hourly ev discharge profile uced controlled charge 3.0 2.5 2.0 1.5 1.0 0.5 0.0 hour 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 p ow er g ri d c on ne ct io n (k w ) figure 3: maximum admissible unitary charging power uced controlled charge international journal of sustainable energy planning and management vol. 26 2020 57 ezequiel carvalho, jorge sousa, joao lagarto 4. results chronological simulations were performed considering a set of 49 scenarios with increasing levels of wind capacity: 5000, 5600, 6875, 7500, 8700, 1000 and 11000 mw, and increasing levels of ev penetration: 0, 0.18, 0.6, 1.5, 3.0, 4.5, and 6.0 million evs, which corresponds to 0, 3, 10, 25, 50, 75 and 100%, respectively, of the light-duty portuguese vehicle fleet. the co2 emissions associated with the evs were computed using a marginal generation approach, that is, the emissions of the additional generation needed to supply the evs. this is obtained by the difference between the emissions resulting from the generation needed to supply all the demand (including the additional ev demand) and the emissions of the generation needed to supply the demand previous to the ev integration, named as the base case. moreover, the average co2 emissions of the power mix are also presented. evaluating the ev specific co2 emissions defines the set of scenarios under which the ev performs better than the icev, taking the 95 g co2/km target for the later. 4.1. night charge in the night charge strategy, the evs are charged according to drivers’ need. for each scenario of wind capacity under analysis there is a base case that is used to compare with the corresponding scenarios with increasing ev penetration, as presented in table 6. the presented results show a wide variation of ev specific co2 emissions, ranging from less than 60 g co2/km, for scenarios with low ev penetration and high wind capacity, to more than 100 g co2/km, especially for scenarios with low penetration of ev and low wind capacity. scenarios in which the ev presents better performance than the icev in terms of co2 emissions are identified in table 6 (bold), corresponding to combinations of ev penetration/wind capacity with co2 emissions below 95 g co2/km. two key points must be emphasized in order to fully understand the results presented. firstly, as the marginal approach used in this work accounts the emissions of the additional generation needed to supply the ev, the analysis of the results must be focused on the available generation that is not used in the base case (without ev), as this will be the mix that supplies the ev. secondly, under the economic dispatch context, demand is supplied on a least cost basis. thus, under the conditions presented, where coal generation is less costly than gas, the merit order of the available technologies is wind, coal and gas. additionally, when the ev charging replaces the pumping from reversible hydro units, there will be an extra gain which results from the avoided pumping losses, which is also accounted for the ev. therefore, the ev can be supplied by a mix of avoided losses, wind, coal and gas. taking into account the co2 emissions of the thermal power plants presented in table 3, the ev specific co2 emissions range from 0 g co2/km, if evs are supplied only with wind power to a maximum of 175 g co2/km, if the evs are supplied only with generation from coal power plants. wind will only be available for the ev charging when there is curtailment in the base case. avoided losses will account for the ev only when the charging is synchronous with the pumping. coal and gas will supply the ev, in this order, up to their available capacity. needless to say, if no wind is available, the ev will be supplied firstly by coal units, which have a more negative impact in terms of co2 emissions than natural gas units. this is the case of the scenarios with wind capacity up to 7500 mw, in which no wind curtailment exists in the base case, as presented in table 7. table 6: marginal ev specific co2 emissions (g co2/km), with reference to scenarios which present ev specific emissions lower than 95 g co2/km (bold) – night charge evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 3% 129.3 103.1 65.6 115.8 82.3 83.9 57.2 10% 104.8 97.4 95.2 98.2 94.2 107.1 56.8 25% 83.8 87.2 96.1 101.6 95.6 78.4 68.7 50% 78.3 79.6 87.0 93.5 95.3 84.0 77.3 75% 73.0 75.4 80.9 85.1 88.8 85.0 81.3 100% 72.6 73.2 77.3 80.5 83.5 82.3 80.6 58 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach to illustrate one of these scenarios of lower wind capacity (5600 mw), the ev marginal mix is presented in figure 4. it can be observed that, for 0.18 million evs (3%), the additional demand induced by the ev is supplied by 1.9% of avoided losses, 32.7% of coal and 65.5% of natural gas. for increasing levels of evs, the share of natural gas increases over the coal in the ev supply mix. this results from the limited installed capacity of the less costly coal units, being the remaining ev demand supplied by natural gas. therefore, since natural gas specific co2 emissions are lower, the ev specific emissions decrease for increasing levels of ev penetration, as the share of coal also decreases. an illustrative example of a specific month of simulation is presented in figure 5 for two scenarios (1.5 and 4.5 million evs). from the analysis of the results presented in figures 4 and 5, it is clear the increased share of gas over coal and a consequent reduction of the ev specific co2 emissions, when increasing the ev penetration. figure 6, illustrates scenarios with a higher wind capacity (10000 mw), in which wind curtailment exists in the base case. from figure 6, it is clear that the ev succeeds in the integration of wind power that would be, otherwise, curtailed. in this situation of high wind capacity, the additional ev demand is supplied with a higher share of wind. in the particular case of 0.18 million evs (3%), the wind power that supplies the ev comes from wind (26%) that otherwise would be curtailed or used for pumping. moreover, since less pumping is needed, there is an efficiency gain due to the avoided losses from the pumping cycle, which accounts for 1.1% of the ev supply. for higher levels of ev penetration, the share of the wind integration reduces, as the amount of wind power is distributed for more evs. furthermore, such a high level of wind capacity, in the base case, not only induces curtailment, but also reduces the use of other technologies, such as coal that is the less costly thermal technology, which becomes available to supply the ev. consequently, the share of coal is considerably high, namely when compared with the 5600 mw wind capacity scenarios. the decline of the coal in the ev supply occurs now for higher ev penetration levels. it can also be seen in figure 6, that the share of coal is 31.3% for 0.18 million evs and increases to 46% for table 7: renewable curtailment, (in % of available wind generation) – night charge evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 0% 0 0 0 0 0.27 2.37 5.17 3% 0 0 0 0 0.12 1.78 4.61 10% 0 0 0 0 0 1.56 3.24 25% 0 0 0 0 0 0.26 1.21 50% 0 0 0 0 0 0.02 0.17 75% 0 0 0 0 0 0.02 0.15 100% 0 0 0 0 0 0.02 0.14 32.7 27.3 17.6 10.0 65.5 71.3 81.3 89.4 94.2 97.3 2.95.6 0.20.61.11.41.9 0% 20% 40% 60% 80% 100% 3% evs 10% evs 25% evs 50% evs 75% evs 100% evs coal gas avoid losses figure 4: marginal ev supply mix for increasing ev penetration with 5600 mw of wind capacity – night charge international journal of sustainable energy planning and management vol. 26 2020 59 ezequiel carvalho, jorge sousa, joao lagarto 0.6 million evs. however, for even higher ev penetration levels, since coal reaches the installed capacity, the same amount of coal generation will be used to supply a higher number of evs, which results in a coal share decrease. the co2 specific emissions of the ev, in each scenario, result from the generation mix that supplies the figure 5: generation by technology for 5600 mw of wind capacity and, respectively 0 evs (top), 1.5 million evs (middle) and 4.5 million evs (bottom), for the month of january – night charge figure 6: marginal ev supply mix for increasing ev penetration 10000 mw wind capacity scenarios – night charge 60 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach ev, with the combined effect of the high emissions of coal, the intermediate emissions of gas and the zero emissions of wind and avoided pumping losses. to illustrate some of the above-mentioned aspects, figure 7 presents the generation by technology for a single month of simulation, for the 10000 mw wind capacity without evs and with 1.5 million (25%) and 4.5 million (75%) evs. for the 25% ev penetration, wind is used to supply the ev, to lower the thermal generation to minimum (no gas and very little coal) and to increase pumping, which leads to additional hydro generation. for the 75% ev penetration, more wind will be directly used to supply this additional ev demand, reducing the amount of pumping and the consequent hydro generation. as this wind power is not enough to supply the ev in some periods, more thermal generation is used, mostly based on coal. for the periods in which the coal capacity is reached, gas units are also dispatched, as shown in figure 7 (bottom) for the last days of the month. the results presented in this section highlight the co2 emissions associated with the ev, based on the additional power generation needed for the ev charging. the ev emissions in each scenario result from the charging mix of coal (high emissions), gas (intermediate emissions), wind and avoided pumping losses (zero emissions). the analysis of a broad range of scenarios considered for the wind capacity, from the actual to more than double of the installed capacity, is not straightforward, as the additional wind power that results from more wind capacity is not necessarily used to charge the ev. in fact, in the base case more wind power in the figure 7: generation by technology for 10000 mw of wind capacity and, respectively 0 evs (top), 1.5 million evs (middle) and 4.5 million evs (bottom) for the month of january – night charge international journal of sustainable energy planning and management vol. 26 2020 61 ezequiel carvalho, jorge sousa, joao lagarto generation mix will replace thermal generation and only the eventually curtailed wind generation will be used to supply the ev. the remaining ev demand will be supplied by thermal generation, firstly by the least costly technology, which is coal, and then by gas. the impact of an increasing ev penetration is explained better by splitting the installed wind capacity into the non-curtailment and the curtailment scenarios. in the scenarios where no wind curtailment exists in the base case, the ev is supplied exclusively by coal and gas. as coal is firstly dispatched, but has a limited capacity, more ev integration leads to a decrease in the share of coal and the corresponding increase in the share of gas, with a positive effect in terms of co2 emissions. moreover, for the scenarios corresponding to the current wind capacity installed in the portuguese system (about 5000 mw), if a linear evolution of the ev specific emissions between the ev penetration scenarios is considered, it can be observed that only for a penetration of about 1 million evs, the emissions of the ev fleet are lower than the 95 g co2/km target. in the scenarios where wind curtailment exists in the base case, the ev emissions depend on a complex trade-off among the negative effect of coal, the intermediate effect of gas, and the positive effect of wind and avoided pumping losses. therefore, increasing the installed wind capacity in the portuguese system up to a certain level does not assure a positive impact on the ev specific emissions. also, critical to these results is the fact that coal generation, the most emitting technology, is cheaper than gas, thus first dispatched for charging the ev. nonetheless, comparing the ev specific emissions with the 95 g co2/km target set by the european union (eu) for the icev, the ev performed better in most scenarios analysed, especially those with low ev penetration and high wind capacity. in what concerns the marginal ev costs, values are presented in table 8. it can be verified, as expected, that the ev costs are lower for scenarios in which excess of wind generation is verified. for the purpose of comparison, table 9 presents the ev emissions considering a mix-based analysis. it can be verified that values are substantially different from the marginal values and follow a pattern. by one side, emissions decrease when increasing wind capacity, as more zero emissions generation is integrated. on the other side, emissions increase when increasing the ev table 8: marginal ev specific costs (c€/km) – night charge evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 3% 0.89 0.82 0.76 0.85 0.53 0.61 0.35 10% 0.84 0.82 0.80 0.77 0.66 0.70 0.42 25% 0.84 0.83 0.81 0.80 0.72 0.58 0.51 50% 0.84 0.84 0.83 0.82 0.77 0.67 0.59 75% 0.85 0.84 0.83 0.83 0.79 0.73 0.66 100% 0.85 0.85 0.84 0.84 0.81 0.76 0.71 table 9: ev mix based specific co2 emissions (g co2/km) – night charge evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 0% 38.0 35.6 30.6 27.8 23.5 20.0 17.6 3% 38.8 36.2 30.9 28.6 24.0 20.6 17.9 10% 39.8 37.3 32.4 29.8 25.5 22.5 18.7 25% 41.1 39.1 35.0 32.8 28.4 24.0 21.0 50% 43.1 41.2 37.7 36.1 32.6 28.1 25.1 75% 44.2 42.7 39.6 38.1 35.1 31.7 28.9 100% 45.8 44.0 41.1 39.7 37.0 34.0 31.7 62 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach penetration, as the integrated wind generation and potential avoided losses are distributed for a larger number of vehicles. 4.2. controlled charge in this strategy, charging is controlled by the uced and, whenever possible, charging will occur when there is available wind that, in the absence of evs, is used for pumping or eventually curtailed. however, a complex trade-off among battery’s soc, evs discharge, charging availability and wind availability is verified and, as the system must guarantee a minimum soc, by the morning, coal or gas generation will be used if no wind is available. tables 10 to 12 present the results obtained for table 10: marginal ev specific co2 emissions (g co2/km) for the uced controlled charge and, comparison between controlled charge and night charge values (%) evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 3% 96.31 133.34 69.05 96.48 98.60 25.96 51.80 –25.5% 29.3% 5.3% –16.7% 19.8% –69.0% –9.4% 10% 94.22 107.66 98.90 105.64 92.97 65.56 51.14 –10.1% 10.6% 3.9% 7.5% –1.3% –38.7% –10.0% 25% 94.24 105.28 98.61 101.27 93.73 71.05 63.25 12.4% 20.8% 2.6% –0.3% –2.0% –9.3% –7.9% 50% 81.12 86.13 94.46 99.08 97.69 83.65 77.56 3.6% 8.2% 8.6% 6.0% 2.5% –0.5% 0.4% 75% 77.67 80.98 88.52 93.47 97.83 89.01 79.44 6.4% 7.4% 9.4% 9.9% 10.1% 4.7% –2.3% 100% 89.30 78.81 84.86 88.22 91.56 89.98 87.23 23.0% 7.7% 9.8% 9.6% 9.7% 9.4% 8.2% table 11: marginal ev specific costs (c€/km) for the uced controlled charge and, comparison between controlled charge and night charge values (%) evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 3% 0.79 0.81 0.73 0.73 0.59 0.38 0.34 –11.2% –1.2% –3.9% –14.1% 11.3% –37.7% –2.9% 10% 0.80 0.80 0.77 0.74 0.62 0.52 0.38 –4.8% –2.4% –3.8% –3.9% –6.1% 25.7% –9.5% 25% 0.83 0.82 0.78 0.77 0.68 0.54 0.47 –1.2% –1.2% –3.7% –3.8% –5.6% –6.9% –7.8% 50% 0.83 0.83 0.81 0.80 0.74 0.64 0.55 –1.2% –1.2% –2.4% –2.4% –3.9% –4.5% –6.8% 75% 0.86 0.83 0.82 0.82 0.78 0.70 0.63 1.2% –1.2% –1.2% –1.2% –1.3% –4.1% –4.5% 100% 0.89 0.84 0.83 0.83 0.79 0.73 0.67 4.7% –1.2% –1.2% –1.2% –2.5% –3.9% –5.6% international journal of sustainable energy planning and management vol. 26 2020 63 ezequiel carvalho, jorge sousa, joao lagarto the uced controlled charge, as well as, the comparison of these values with those previously obtained for the night charge strategy. from the values presented in table 10, it can be seen that controlled charging performs better than night charge, mostly in scenario in which curtailment exists when the evs are not present. this is because in these scenarios, controlled charging provides a more effective integration of wind generation that otherwise would be curtailed. in what concern the ev marginal costs presented in table 11, it is verified that, in almost all scenarios, controlled strategy lead to a decrease in generation costs in what concerns the ev emissions, calculated with base on mix, the values are presented in table 12. when compared to the night charge strategy, as for the marginal ev specific co2 emissions, when accounting the ev mix based specific co2 emissions, the controlled charge tends to perform better in scenarios where wind curtailment is higher and ev penetration is lower, since with this type of charging strategy more generation with zero emissions is used to charge the ev. 5. conclusions nowadays, global warming is seen with growing concern. aware of this problem, governments, all over the world, are taking measures to tackle global warming. some of these measures are directed to promote the replacement of icevs by evs, due to the null tailpipe emissions of the later. however, the ev specific co2 emissions, resulting from the electricity generation, are highly dependent on the specific co2 emissions of the generation mix used to supply the ev demand. in this regard, caution must be taken when making aprioristic assumptions about the better performance of evs over icevs. in this work, the impact, in terms of co2 emissions, of increasing ev penetration in the portuguese vehicle fleet, is analysed for a whole year on an hourly basis. the analysis considers several scenarios for ev penetration, as well as, scenarios for the installed wind capacity. also, the advantages of replacing icevs by evs in the different scenarios are analysed and compared against the 95 g co2/km target set by the eu. among the different ways to account the ev specific co2 emissions, this work used the marginal power mix approach, which computes the ev specific emissions from the difference between the specific co2 emissions of the power system when supplying the demand, including the ev demand, and the specific emissions of the power system when supplying the demand without evs. thus, paramount to the impact of the ev penetration in terms of co2 emissions is the available generation that is not used without evs. if the evs are supplied only with wind power the ev specific co2 emissions table 12: ev mix based specific co2 emissions (g co2/km) for the uced controlled charge, and comparison between controlled charge and night charge values (%) evs wind capacity (mw) 5000 5600 6875 7500 8700 10000 11000 3% 38.5 36.5 30.9 28.4 24.1 20.1 17.8 –0.7% 0.7% 0.1% –0.6% –0.6% –2.4% –0.3% 10% 39.6 37.6 32.5 30.0 25.4 21.3 18.5 –0.7% 0.8% 0.4% 0.7% –0.2% –5.2% –1.0% 25% 41.8 40.3 35.2 32.8 28.2 23.5 20.7 1.7% 3.1% 0.5% –0.1% –0.5% –2.0% –1.7% 50% 43.4 42.0 38.7 36.8 32.9 28.1 25.2 0.8% 2.0% 2.5% 1.9% 0.9% –0.1% 0.2% 75% 45.1 43.7 40.9 39.6 36.8 32.4 28.6 1.9% 2.3% 3.4% 3.9% 4.6% 2.2% –1.1% 100% 49.5 45.3 42.8 41.4 38.8 35.8 33.2 8.2% 2.9% 4.1% 4.3% 4.9% 5.1% 4.7% 64 international journal of sustainable energy planning and management vol. 26 2020 assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach will be zero and this will be the case where evs are environmentally more beneficial. the worst situation would be the one where evs were only supplied from coal power plants, presenting specific co2 emissions of about 175 g co2/km. in between the referred situations would be the case where evs were supplied only from gas power plants, with specific co2 emissions of 70 g co2/km. according to the results obtained, for the scenarios considered, the marginal ev specific co2 emissions range from 57 g co2/km, for high wind capacity and low ev penetration, to 129 g co2/km, for low wind capacity and low ev penetration for the night charge strategy, whereas for controlled charge, it varies from 26 g co2/km, for high wind capacity and low ev penetration to 133 g co2/km, for low wind capacity and low ev penetration. the better performance of controlled charge is due to a better integration of wind especially in scenarios where wind curtailment exists. another conclusion derived from the results is the fact that with the current wind capacity of the portuguese system (about 5000 mw), the impact of the ev in terms of co2 emissions is not beneficial when compared to the 95 g co2/km target, for penetrations lower than 1 million vehicles. however, if a controlled charge strategy is put in place, the impact would not be beneficial only for ev penetrations of 180 thousand vehicles. notwithstanding, results also show that, even with coal having merit over gas, it is possible to integrate evs in the system, in an environmental beneficial way, if increasing ev penetrations are combined with an increase in the installed wind capacity. acknowledgements the authors would like to thank the icee 2019 4th international conference on energy and environment: bringing together engineering and economics, school of engineering, 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[52] p. ferreira, i. soares, r.m. johannsen, p.a. østergaard, policies for new energy challenges, international journal of sustainable energy planning and management 26 (2019). https://doi. org/10.5278/ijsepm.3552. https://doi.org/10.1109/t-vt.1983.23948 https://doi.org/10.1016/j.enpol.2008.06.007 https://doi.org/10.1016/j.enpol.2008.06.007 https://doi.org/10.5278/ijsepm.3552 https://doi.org/10.5278/ijsepm.3552 international journal of sustainable energy planning and management vol. 22 2019 39 *corresponding author e-mail: hivelasq@unal.edu.co international journal of sustainable energy planning and management vol. 22 2019 39–60 abstract in this paper, the exergy analysis of the performance of the resources consumption in the colombian energy mix is developed for the years 1975, 1993, 2012 and 2016, based on actual data measured by the colombian planning office of mining and energy (upme), typical exergy performance data of industrial processes a well as specific energy conversion yields for productive activities of the colombian energy mix. differently from the existent assessment methodology of the latin american energy organization (olade), in this work, a methodology based on the concept of exergy is used to assess the performance of the exergy consumption in each economic sector, without the need for differentiating between primary and secondary resources. the exergy performance of the utilization of the various energy resources through the different economic sectors is represented via grassmann diagrams from two points of view, namely representing the exergy losses by energy resource and determining the exergy losses by economic sector. the first approach focuses on the study of how the resources are used in the colombian energy mix, whereas the latter one focuses on how efficient the colombian economic sectors perform. as a result, a slight increasing trend of the evolution of the overall exergy efficiency of the energy consumption in the colombian energy sectors can be evidenced. these results prove to be useful in identifying the actual bottlenecks and forecast the future shortcomings that the planning offices and economic decision-makers will face in the scenario of a newly industrializing country with a growing and energy demanding population. 1. introduction since the industrial revolution, societies have increased their energy demand in an exponential way [1], rendering the efficient utilization of energy resources a fundamental issue, especially due to the economic and environmental problems associated with its misuse. thus, in order to use the energy resources more efficiently, firstly, the different flows and energy transformations involved must be clearly determined. according to the first law of thermodynamics, energy is rather a conservative magnitude and, as such, it is neither possible to destroy it nor to create it, being only possible to transform it from one form into another [2]. on the other hand, the second law of thermodynamics states that although energy cannot be either created or destroyed, its quality may be actually degraded [3]. thus, in order to perform a thorough energy conversion analysis, the restrictions imposed by the second law of thermody exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources hector i velasquez*,a, carlos a orozcoa, juan c. mayaa, daniel florez-orregoa,b and sergio loperaa a facultad de minas, universidad nacional de colombia sede medellín, colombia, av. 80 #65 223, medellín, ant., colombia. hivelasq@ unal.edu.co*, caaorozcolo@unal.edu.co, jcmaya@unal.edu.co, shlopera@unal.edu.co b departamento de engenharia mecânica, escola politécnica, universidade de são paulo, av. prof. mello moraes, 2231, são paulo, sp, brazil. daflorezo@usp.br keywords: exergy; efficiency; energy sector; economic activity; url: http://dx.doi.org/10.5278/ijsepm.2552 mailto:hivelasq@unal.edu.co mailto:hivelasq@unal.edu.co mailto:caaorozcolo@unal.edu.co mailto:jcmaya@unal.edu.co mailto:shlopera@unal.edu.co http://dx.doi.org/10.5278/ijsepm.2552 40 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources principles, such as the second law of the ther modynamics, impose on the productive systems. traditionally, two misconceptions have misled most of the economic development models. first, it has been assumed that the natural resources available in the biosphere are free. even worse, in many cases it has been considered that those resources are unlimited [5]. meanwhile, in most of the developing countries, politicians and specialists struggle for adapting other economic development models based on the experiences of radically different societies to their own scenario. not to mention that biased and uncommitted governments seldom guarantee the continuity of the planning policies of the previous governments, which keeps societies from structuring successful exergy planning scenarios lasting in time. even member countries of the organisation for economic co-operation and development (oecd), criteria are strongly based on the economic features in lieu of the thermodynamic efficiency criterion as for some strategic decision-makings [6]. thus, not even the advantages linked to the exergy assessment of the entire economic sectors or the concerns about climate change and the depletion of the natural resources have been able so far to persuade the governmental and planning institutions to challenge the dominating economic paradigm. only few scholars have embraced the second law of the thermodynamics and the concept of irreversibility for assessing the sustainability of the economic processes. among the most important contributions towards the integration of the concept of entropy to the economy modelling is the namics must be born in mind, leading to the concept of exergy. exergy is defined as the maximum work that can be obtained when a quantity of matter is led to the state of thermo-mechanical and chemical equilibrium with the environment, involving only reversible interactions with the components thereof, in order to produce the same components of the environment [4]. for this reason, this magnitude is also known as maximum potential work of a substance or a flow when it is defined the environment in which the system is contained. it is important to notice that, unlike the energy, the exergy is not subject to a law of conservation, since the irreversibility inherent to the real processes destroys at least part of this energy. thus, in light of the irreversible nature of the real processes, the exergy concept is more appropriate to evaluate the behaviour of the energy systems, as it combines the law of conservation of energy with the concept of entropy generation. thus, regardless the classification of the energy resources, namely a substance (e.g. fuel, wind, or waterfall) or exergy flow (i.e. heat flow rate or power), the performance of the assessment of any energy system, industrial plant or even an economic activity can be rationally achieved. for this reason, exergy efficiency represents a valuable indicator that quantifies the fraction of the total energy consumed in any system that can be potentially transformed into useful work. 1.1. scope and structure one of the main drawbacks of the dominant economic model consists of neglecting the limitations that physical nomenclature greek symbols φ ratios of the standard chemical exergy to the lower heating value (lhv) (adim.) η efficiency (%) latin symbols b exergy (pj) c carbon mass fraction in the substance (% mass) h hydrogen mass fraction in the substance (% mass) lhv lower heating value (mj/kg) mr mass flow of the substance considered as material or fuel input resource (kg/s) n nitrogen mass fraction in the substance (% mass) nc number of carbon atoms o oxygen mass fraction in the substance (% mass) s sulfur mass fraction in the substance (% mass) international journal of sustainable energy planning and management vol. 22 2019 41 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera planning public energy policies of a country. one of the main objectives for carrying out the exergy analysis of a country is to calculate its exergy efficiency and elaborate the representative exergy flow diagrams (grassmann diagrams), which show the exergy flows distribution from the extraction of the resources up to the final consumption, taking into account all the intermediate processes and exergy losses. for instance, in the works of ertesvag [17], wall et al. [18], and wall [19], the exergy flow diagrams of norway, italy and japan, respectively, have been reported. meanwhile, the time series analysis of the fossil energy resources consumption in three developing societies has been presented by kwakwa et al [20]. the authors studied the determinants of the sharp increase in the demand of fossils fuels for three subsaharan african countries (ghana, kenya and south africa). other african analyses dealt with the climate resilient and low-carbon power supply scenario for rwanda [21], in which the evolution of rwanda’s electricity demand towards 2050 is adopted for developing a power supply scenario that considers impacts of climate change on the country’s hydropower generation. finally, a review of the energy economy in brazil and portugal, two countries which are both characterised by high utilisation of renewable energy resources, explained how the discrepancies between the two renewable energy mixes lead to slight differences in the performance of the electricity generation and end-use, along with the socio economic aspects associated [22]. notwithstanding, the respective exergy flow diagrams of the energy consumption in the colombian energy mix have not been reported so far. thus, in this work, actual data on the energy consumption of each energy resource and economic sector over the time reported by the colombian planning office of mining and energy (upme) is used to perform an analysis of the energy consumption in the exergy mix of the colombian energy sectors over the years 1975-2016 by using the grassmann diagrams. to this end, two perspectives are considered; the first one comprises the quantification of the irreversibility associated with the consumption of each resource (or equivalently, the exergy efficiency by resource utilization). the second one focuses on the estimation of the irreversibility associated with each economic sector (namely, the exergy efficiency by economic sector). from the analysis of the grassmann diagrams, the historical events that led to the changes in the use of the energy resources over the time are also analysed. in this way, this paper examines the evolution of the colombian exergy mix over the time by showing work of the economist nicholas georgescu-roegen (1971) [7]. according to his revolutionary work, any production activity is, essentially, a process of trans formation of matter and energy that speeds up the eventual universal heat death, but locally on earth. in this way, the irreversible nature of the economic processes explains the growing scarcity of the natural resources and the increasing rate of production of nonrecoverable disposal of residues, aggravated by the irremediable energy degradation provoked at each recycling step. in other words, the dominating economic paradigm seemingly fail to take into account the exhaustion of mineral resources at the input end, and the building up of waste and pollution at the output end. accordingly, the issue of policies and the decisionmaking in the current global economic scenario demand a revisited insight that takes into account the irreversibility of the industrial processes and the search for the efficiency improvement as the key elements of the human endeavours. thus, it is at this point in which the exergy concept becomes as an indicator that allows objectivizing a political discussion into a more technical and quantifiable procedure [8]. among the first academic approaches on the largescale exergy analysis is the work of reistad [9], who studied the use of energy resources in the united states in 1970. similarly, utlu et al. [10] and rosen [11] carried out a comparative exergy and energy analysis of the energy mix of turkey and canada, respectively. despite their relevance, these works were based on very shorts intervals of time, thus making difficult the observation of the evolution of the use of the energy resources over a representative timeframe. the study of the evolution of the energy mix over longer periods has been considered in the works of hammond et al. [12], and bühler et al. [13] and [14], based on the energy analyses in the united kingdom (1965-1995), the danish industry sector (20062012), and the industrial sector in south africa (19942003), respectively. moreover, jadhao et al. [15] studied the evolution of the indian energy system during four decades and concluded that india needs to improve its efficiency at a faster rate than that of more industrialized countries in order to compensate for the negative effects of the rapid population and economic growth. in addition, more recently gong et al. [16] performed an exergy analysis of the swedish energy system in which the transportation sector reportedly contributes the most towards the non-renewable energy consumption of the national energy mix. according to the previous works, exergy analysis can be used as a decision-making tool for 42 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources subsequently transformed by a defined set of energy conversion systems (a transformation process) into a secondary source of energy, which is in turn consumed by an economic sector. the intermediate energy conversion processes of primary resources to produce secondary energy resources are performed so that the value-added products can be more easily handled or more efficiently converted into other forms of energy. furthermore, the beco determines the direct consumption or end-use of such primary and secondary energy resources between 1975 and 2012. the reported balances presented by the upme contain the energy losses, which facilitates the calculation of the energy yields for each economic sector, whereas this information can be used to extrapolate the losses in the future years. next, the exergy balances for each energy resource by each economic sector (namely, residential, commercial and public, industry, transportation, agriculture, mining, and construction sectors) can be calculated by using two ways: by calculating the available exergy resource and by calculating the exergy yield. some final important considerations must be pointed out: • only domestic demand is analyzed, without considering energy resource exports. • only the energy consumption or end use of the energy resources is considered, whereas the production of electricity by using the various resources involved in the colombian electricity mix is out of the scope of this study. • own consumption stands for the exergy necessary for a resource to be produced • the losses in the own consumption are not analyzed. as for the difference between the conventional approach and the propose methodology, it is worthy to notice that, the conventional olade methodology is chiefly based on the identification of four main components, namely the energy resources, the energy conversion systems, end-use systems as well as other processes non-classifiable into the main economic activities. by using the overall energy balances, this methodology aims to determine the breakdown of the energy resources consumption, either from the point of view of the specific end-use applications as well as from the economic sectors that they belong to. in other words, the olade methodology starts by identifying the source of the energy in the form of the primary energy resource, which is subsequently transformed by a defined set of energy conversion systems into a secondary the exergy flows involved in the different economic sectors and concludes with the calculation of the overall exergy efficiency of the country. the relevance of this work lies in three novelty. firstly, the grassmann diagrams of the energy consumption in the colombian energy mix, based on real data gathered over 1975 and 2016 by credited national energy institutes and other sources found in the literature are built. secondly, a novel methodology based on the exergy analysis, differently from the olade’s energy-based approach, is proposed, so that the need for differentiating between the nature of the energy resources is not anymore required. since the exergy concept is used, the energy degradation in the colombian economic sectors is automatically accounted for. last but not least, the relationship between the use of the resources and the historical events that led to the changes of the energy mix of the country is briefly discussed. preliminary results of this manuscript have been presented in the 31th international conference on efficiency, cost, optimization, simulation and environmental impact of energy systems, ecos 2018, in guimaraes, portugal, in june 17th – 22nd, 2018. 2. methodology the methodology used is schematized in the fig. 1. as it can be seen, the initial steps comprise the data collection, systematization and adaptation, relevant for the periods under study (1975-2016). an initial benchmarking process allows not only for determining the completeness of the available information for industrial processes and economic sectors around the world, but also to determine whether those values could be adopted for similar process or productive sectors in the colombian electricity mix. other important data gathered from open literature includes the thermophysical characteristics of the energy resources that allow for the chemical exergy calculation and exergy balances. the colombian energy balance (beco, in spanish) in which stems the data on energy consumption is based on the actual data gathered, statistically processed, verified and published by the upme [23]. the beco relies on the identification of four main components, namely the energy resources, the energy conversion systems, end-use systems as well as other processes non-classifiable into the main economic activities. thus, beco methodology starts by identifying the source of energy in the form of primary energy resource, which is international journal of sustainable energy planning and management vol. 22 2019 43 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera the last years. this situation necessarily entailed the integration of improved energy technologies that better comply with the new environmental policies. on the other hand, the fraction of petroleum that is transformed into secondary energy resources, such as gasoline and kerosene, is supplied to the transportation sector, where the end-use stage (namely, the transportation service) is finally accomplished. accordingly, each process stage has its respective energy efficiency, statistically calculated by olades researchers by means of energy audits, aiming to identifying opportunities to reduce energy expense and carbon footprint, as well as to estimate the energy losses associated to each step of the process. since the exergy analysis is relatively recent and thus less widespread than the conventional energy-based analysis, there is a lack of reliable data of performance indicators, such as exergy efficiency of the different economic sectors. thus, a detailed revision of the source of energy, which is in turn consumed by an economic sector. clearly, the intermediate energy conversion processes to produce secondary energy resources are achieved so that the value-added products can be more easily handled or more efficiently converted into other forms of energy. finally, the olades methodology aims to analyze the direct consumption or end-use of the primary and secondary energy resources. for instance, petroleum is often considered a primary energy resource extracted at its natural conditions from the well. thus, after extraction, the petroleum is partly exported out of the colombian energy mix whereas the balance is transformed or consumed internally. the fraction of petroleum internally consumed could have been found in the early industrial sector, specifically in kilns and furnaces in the ceramics and cement industry. however, it is important to notice that, due to the more stringent environmental regulations, the direct utilization of petroleum as fuel has undergone important changes in balance of the colombian energy matrix, taken from the upme, for the years between 1975 and 2016 delimitation of information between primary and secondary resources, without considering its production chain. only the available energy of each resource is considered and its end use in differents economical sectors. calculate energy yields for each year and each economic sector (residential, commercial and public, industry, transportation, agriculture, mining, and construction sectors) calculate exergetic yield, for years before to 2012, doing a interpolation and approximation between the energetic and exergetic yields. bibliographic search of the factor (phi), for each energy resource. calculate available exergy using the factor (phi) exergy balance and grassmann diagram for each resource and interest year bibliographic search of the exergetic yield, by each resource. (most information was found for the years between 2012 and 2016) figure 1: scheme of the proposed methodology 44 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources et al. [4]. thus, the values of the φ ratio can be calculated by using the eqs.(2–6) and the obtained results are comparable to those reported in the literature [24]. the φ for gaseous fuels with mass hydrogen to carbon ratio (h/c) and a number of carbons (nc) in the chemical composition: φdry =1.0334 + 0.0183(h/c) – 0.0694(1/nc) (2) for liquid fuels with hydrogen to carbon (h/c) and oxygen to carbon (o/c) ratios (mass basis): φdry =1.0374 + 0.0159(h/c) – 0.0567(o/c) (3) for solid fuels composed by dry organic substances with hydrogen to carbon (h/c), oxygen to carbon (o/c) and nitrogen to carbon (n/c) ratios (mass basis) in their chemical composition and subject to o/c < 0.5 (no applicable for wood): φdry =1.0437 + 0.0140(h/c) – 0.0968(o/c) + 0.0467(n/c) (4) for solid fuels composed by dry organic substances with hydrogen to carbon (h/c), oxygen to carbon (o/c) and nitrogen to carbon (n/c) ratios (mass basis) in their chemical composition and subject to 0.5 < o/c < 2 (applicable for wood): for other liquids such as petroleum derivatives, con taining sulfur: φdry =1.0401 + 0.1728(h/c) – 0.0432(o/c) + 0.2169(s/c)[1 – 2.0628(h/c)] (6) one exemption is clearly the electric power coefficient (φ 1), as it can be considered as a fully organized type of energy interaction. actually, in the ideal case, the electric power could be fully converted into other forms of energy, regardless of the restrictions imposed by the second law of the thermodynamics (clausius postulate) to the conversion of the chemical exergy of the complex substances and industrial fuels shown in table 1. the electricity consumed is con sidered as readily available to be used in the economic + − + + = − φdry h/c o/c h/c n/c o/c 1.044 0.0160( ) 0.3493( )[1 0.0531( )] 0.0493( ) 1 0.4124( ) (5) literature on the energy efficiency and consumption figures of those sectors (or similar suitable data) is performed, along with the adaptation of the energy performance of selected energy conversion processes to an exergy basis. this adaptation is possible thanks to the knowledge of the consumption of the energy resources consumed by sector and the thermodynamic properties of the substances and energy flow streams. meanwhile, as long as the required data become progressively scarcer and often inconsistent for older years, it has been assumed that the exergy efficiency of the more recent scenarios can be extrapolated back to the older years analyzed. in other words, the exergy performance of the economic sectors evolves at rates that, at least, reflect the same trend observed in the energy performance of the various energy sectors throughout the time frame considered. consequently, the exergy data is consistent with the energy figures reported and originally used in the olade methodology (energy-based only). finally, it is also important to notice that most of the exergy figures reported in the literature are normally expressed in terms of the equipment component, unit operations or plantwide levels, but rarely in terms of the more comprehensive national energy sectors. thus, in order to estimate the exergy efficiency of a given sector, the performance of representative energy technologies that dominate the operation of the respective economy sector have been considered. 2.1. calculation of the input exergy flows of the energy resources the calculation of input exergy flows is based on the data reported by the upme for the colombian energy mix. the exergy calculation of each energy input are determined by the ratio of the standard chemical exergy to the lower heating value (lhv), namely φ, which is a factor that proportionally relates the exergy and energy of an industrial fuel [11]: b = φ lhv mr (1) where b is the exergy flow [in tj], lhv is the lower heating value [mj/kg], and mr is the mass flow of the substance considered as material or fuel input resource. as for the lower heating value, the values reported in the colombian energy balance report have been assumed [23]. it is important to notice that the reference dead state used in the calculation of the chemical exergy of the resources consumed assumed as that proposed in szargut international journal of sustainable energy planning and management vol. 22 2019 45 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera version processes, if compared to the residential, transport and farming sectors. residential sector includes all the energy consumptions required to satisfy the requirements of the urban and rural households, such as cooking, illumination, refrigeration and so forth. agriculture and mining sectors encompass the energy consumption in the activities associated to the obtainment of the feedstock, livestock farming, and ore extraction. own consumption stands for the energy consumption along the production and transportation of the primary and secondary energy resources. in other words, it is the energy required to bring about the energy resource itself. sectors that are not classified into the previously mentioned ones, such as construction, infrastructure, among others, are classified into the category of other consumption. table 2 shows the energy yields calculated for 2012, in which n/a refers to the sectors in which the resources are not consumed. in average, the energy consumption in the residential and industrial sectors presents an efficiency of 60 and 76% [28][29], respectively, whereas the commercial sector is assumed to behave similarly to the residential one, setting its efficiency about 76% [30] [29]. transportation sector the end use efficiency of diesel, natural gas, gasoline and kerosene oscillates between 15 and 22% [31]. those figures show the important weight of the transportation sector on the overall efficiency of the countries, if compared to the reported values of usa, finland, canada, brazil, saudi arabia, turkey and norway, ranging sectors of the colombian energy mix. thus, the overall losses associated to its production already accounts for the inefficiencies of its generation and distribution to the different consumers, namely the various economic sectors. it is also important to bear in mind that, as long as exergy losses and unavoidable irreversibilities associated to the energy degradation are considered together as an irremediable loss, the opportunity of the economic systems to produce a useful effect is lost. in other words, losses and irreversibility are indistinctly considered, regardless loss is owed to the internal irreversibilities of the industrial systems or due to the release of wastes that otherwise could be further transformed into value-added products through more advanced energy conversion process that are not yet available in our specific energy mix. 2.2. selected exergy yields for each economic sector transportation sector encompasses the whole energy consumption in the transportation service, public or private; national or international; passenger or freight transport; in land, sea or air. industrial sector involves the energy demands of all the industrial activities and end-uses, except for the transportation of the merchandises, which is already included in the transportation sector. actually, the fastest development of the industrial sector of the growing colombian economy led to different increase rates of the efficiency of these energy contable 1. resources and factor used for the exergy calculation of the colombian energy mix input exergy flows identifier resource φ [reference] lhv (mj/kg) [23] specific chemical exergy (mj/kg) bs bagasse 1.07 [25] 19.2 20.5 co coal 1.03 [24] 32.7 33.7 ng natural gas 1.16 [24] 39.9 46.3 fw firewood 1.07 [24] [25] 19.0 20.3 ol oil 1 [24] 40.9 40.9 fc firewood coal 1.04 [24] 31.4 32.7 do diesel oil 0.99 [26] 43.0 42.6 ee electric power 1 [27] [26] – – fo fuel oil 0.99 [26] 43.8 43.3 bg blast furnace gas 1.06 [26][24] 46.4 49.1 lg liquefied petroleum gas 1.06 [26] [24] 45.8 48.5 pt petrol 0.99 [26] 43.9 43.5 rg refinery gas 1.06 [24] 39.9 42.3 kj kerosene and jet fuel 0.99 [26] 43.9 43.5 ef ethanol fuel 1.07 [25] 26.8 28.7 bd biodiesel 1.2 [25] 37.2 44.6 46 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources yield of 26% [23,26] is found for ng due to its fundamental usage in the chemical and cement production sectors. in the case of ee resource, an exergy yield of 7% is reported [26] for its use in lighting, heating, as well as for driving electric motors and electronic devices. finally, exergy yields of about 25% [26] and 13% [26] are adopted for the utilization of fo and bg resources due to their use mainly in machinery and in the iron and nonferrous steel industries, respectively. the exergy yields in the transportation sector are of 12% [26] for pt, 39% [22,27] for do, 25% [22,23] for ng, 54% [36] for kj, 35% [37] for ef, and 35% [21,27] for bd. these yields have been calculated based on the use of the resources for the operation of internal combustion engines in land, sea, and aviation transportation. lastly, for the agriculture and mining sectors, a yield of 8% is found [21,22], which was based on the use of bs in the cane sugar mills. finally, it is worthy to notice that, due to the lack of reliable data on exergetic efficiency for the years 1975, 1993 and 2012, the data obtained for 2016 have been used to perform a regression that allows the study of the previous years to be carried out in an approximate way. given the energy yields for the different resources consumption through all the various economic sectors and the conversion factor φ defined in eq.(1), the overall between 35 and 50% [28]. the exergy yields in each economic sector for each year allow calculating the exergy losses and estimate end use performance. for other years, the energy yields are preliminary assumed to increase linearly along the time. in table 2, unidentified sector accounts for all other energy conversion systems that are not related to the main economic activities (residential, commercial, transport, etc), as reported in the beco balance reported by the upme 2.2.1. literature review on exergetic yields the exergy yields in the residential sector are of 5.8% [32] for co, 5.50% [27] for ng, 5.80% [27] for fw, 5.80% [32] for fc, 12% [22,23] for ee, and 13% [26] for lg. these exergy yields have been determined by assuming that the use of those fuel resources was primarily intended for cooking, lighting, and handling electronic devices. meanwhile, for the commercial and public sectors, an exergy yield of 12% [26] is adopted for ee resource, mainly used for illumination and handling of electronic devices in these sectors. the industrial sector reportedly presents an exergy yield of 40% [21-23,25] for the use of bs as an energy agent in sugar cane mills. additionally, an exergy yield of 26% [22,23] is considered for the utilization of co in the cement and metallurgical sectors, whereas an exergy table 2. energy yield as a function of each resource and economic sector, calculated by means of the beco balance for year 2012 (in %) resource residential commercial industrial transportation farming construction unidentified overall bs n/a n/a 65,5 n/a n/a n/a 54,1 63,0 co n/a n/a 67,1 n/a n/a n/a n/a 67,1 ng 70,0 70,0 72,0 30,0 n/a n/a 65,8 64,7 fw 10,0 n/a 30,1 n/a n/a n/a n/a 10,1 ol n/a n/a 19,7 n/a n/a n/a n/a 19,7 fc n/a n/a 13,3 n/a n/a n/a n/a 13,3 do n/a n/a 61,4 18,2 n/a n/a 20,9 19,5 ee 80,0 80,0 82,0 81,8 55,0 54,9 75,1 78,4 fo n/a n/a 73,4 25,9 n/a n/a 72,0 72,5 bg n/a n/a n/a n/a n/a n/a n/a n/a lg 64,6 60,2 66,3 n/a n/a n/a 55,6 63,1 pt n/a n/a 14,9 14,5 n/a n/a 14,9 14,6 rg n/a n/a n/a n/a n/a n/a n/a n/a kj n/a n/a 14,7 18,2 n/a n/a 14,7 18,0 ef n/a n/a n/a 18,0 n/a n/a n/a 18,0 bd n/a 0,0 0,0 18,2 0,0 0,0 n/a 14,7 overall 52,8 76,1 70,3 17,5 46,4 48,6 33,1 42,1 international journal of sustainable energy planning and management vol. 22 2019 47 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera the amount of irreversibility produced along the energy conversion process. this is readily perceptible from the reduction of the width of the energy flows while going through certain energy industrial activity. thus, in the following sections, an analysis based on the exergy losses associated to the energy resources is initially performed. next, a second study is carried out in order to quantify the amount of exergy destroyed among the various economic sectors. finally, the gradual impact of the variation of the resources consumption profile on the energy efficiency, the current dominant energy resources and its effect on the economic and societal behaviors is briefly discussed. 3.1. grassmann diagrams: analysis from the perspective of the energy resource in figures 3-6, grassmann diagrams show the exergy losses associated with the use of the different fuels. in those diagrams, “unidentified” sector accounts for all other energy conversion systems that are not related to the main economic activities (residential, commercial, transport, etc.), as reported in the beco balance reported by the upme. as it can be seen from figure 3, back to 1975, firewood played the most important role as exergy resource (26%) in the domestic energy mix in colombia. this fact is explained by the higher percentage of rural population (41.5%) [38] and the higher costs of electricity [39]. other important resources in the colombian economy in the year 1975 were petrol, fuel oil, and coal, with contributions of about 20%, 9%, and 8%, respectively. other important observation for the year 1975 is that the productive sectors with the lion’s share in the colombian economy were those sectors that most efficiently used the consumed resources. additionally, it can be observed exergy efficiency of the nationwide economic activities can be calculated by using the eq.(7) and the control volume represented in the fig. 2: the system boundary encloses the existent economic activities responsible for the energy resources consumption in the colombian energy mix. therein, the inputs are the different resources consumed and the outputs are the different useful exergy flows, eventually used to drive the economic activities in the different economic sectors. therefore, the grassmann diagrams already correspond to the schematic representations of the exergy balances of the system. accordingly, the useful exergy stands for the exergy that is eventually used to drive the economic activities in the different economic sectors. they are defined in terms of the energy yields converted into exergy yields by using the thermochemical properties and composition of the energy resources considered for each sector. 3. results and discussion in this section, the exergy analyses based on the grassmann diagrams are performed. it is important to bear in mind that, in this diagram, the arrows are representations of the input, intermediate or output exergy flows throughout the entire domestic energy mix, such that the width of the arrow is proportional to the magnitude of the flow. furthermore, differently from the analogous sankey diagram, based on the first law of the thermodynamics (energy flow conservation), grassmann diagram incorporates the representation of = − = ∑ destroyed useful consumed r sector b b b lhv m 1 ( ) η φ (7) destroyed colombian energy mix energy sectors: – residential – industrial – commercial – transport – construction and farming products and services energy resources usefulb consumedb b figure 2: control volume used for the calculation of the exergy efficiency of the energy consumption in the colombian energy mix. 48 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources diesel, electricity, and motor gasoline were the resources with the largest participation in the colombian economy with 16%, 21%, 14%, and 14%, respectively. it is also observed the introduction of new energy resources, such as alcohol fuel (ef) and biodiesel (bd) in the economy, but still representing a small share of 0.6% and 1.7%, respectively. it is also observed from figure 5 that two resources are already missing from the exergy mix, namely the blast furnace gas (bg) and the refinery gas (rg). it can be also evidenced an sharply increased dependence on fossil fuels over time, largely due to the evolving domestic energy demand as colombia has gradually become a major fossil fuel producer, exporter and consumer. actually, since the major basin discoveries and the industrialization of the country, petroleum derivatives, natural gas as well as coal represent about 50% of the exported energy commodithat firewood and petrol also led to the main sources of exergy destruction due to the inefficient use of these resources. figure 4 shows the grassmann diagram for the year 1993, in which petrol, firewood, electric energy, diesel, and coal were the predominant fuels in colombia, with a respective participation in the domestic demand of about 25%, 15%, 12%, 11%, and 10% respectively. as it can be seen from this figure, there is a substitution of firewood by petrol, as well as an increase in the demand for other resources, such as diesel and electric power. this circumstance could be partially explained by the implementation of new policies related to the thermoelectric generation [40] and the increase in the vehicle fleet in colombia [41], obeying the increasing trend of the population growth. back to the year 2012 (see figure 5), natural gas, figure 3: use of exergy resources in the colombian economic system for the year 1975, a view from losses by resource. grassmann diagram in tj bs co ng fw ol fc do ee fo bg lg pt rg kj 37186 48661 14338 154530 4102 3895 39119 39260 46574 1708 11891 118488 31029 36776 587554 total available exergy total own consumption 508368 destroyed exergy unidenti�ed construction farming and mining transport industrial commercial and public residential total useful exergy 61771080 24797 6928 2432 51 94 5 42410 international journal of sustainable energy planning and management vol. 22 2019 49 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera 19%, 18%, and 17% in the energy mix, respectively, reinforcing the radical change of the resource consumption over the time. it can be explained by the fact that colombia has become not only a fossil fuel producer and but also an important consumer, aggravated by the incipient interest in renewable energy policies except for the hydroelectric power contribution and the electricity generation in sugar cane biorefineries. for instance lowash, low-sulphur bituminous coal colombian mine “el cerrejon” is one of the largest of its type, the largest in latin america and the tenth biggest in the world [43]. according to the aforementioned analysis of the evolution of colombian energy mix, a transformation of the country from a rural into an urban-centered economy can be clearly evidenced. actually, in the last decades, colombia rapidly increased the use of a more diversified set of energy resources as a response to its rapid ties, with the colombian petroleum company, eco petrol, corresponding to the largest colombian enterprise in terms of economic revenues and stock exchange trading, and the second largest petroleum company in latin america [42]. it must be said that the values of exergy for ol and fc are so small that their lines in figure 5 cannot be observed. in addition, the upme did not report the exergy values for bg and rg in the year 2016. on the other hand, the principal energy resources are fossil fuels, but other fuels like ethanol and biodiesel are gradually introduced with a share of 1% and 2% respectively in the energy mix, due to the implementation of the governmental programs that compel the utilization of blended fuels in the automotive sector. furthermore, figure 6 shows the important share of do, pt, and ng as the main energy resources with a participation of figure 4: use of exergy resources in the colombian economic system for the year 1993, a view from losses by resource. grassmann diagram in tj. ! co ng fw ol fc do ee fo bg lg pt rg kj bs total available exergy 891957 55528 total own consumption destroyed exergy unidenti�ed construction farming and mining transport industrial commercial and public residential total useful exergy 763461 35488 222487 25076 742 4770 106199 93750 14406 23492 134475 57284 88374 30215 22 35 13 9 3819 13823 32460 12628 7875 72978 50 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources the residential sector used to play a more important role with about 33% of the energy consumption share, followed by transportation sector (25%) and the industrial sector (24%). likewise, figure 7 shows that in the residential sector, the use of firewood was predominant, whereas in the transportation sector, petrol consumption represented the largest proportion. the industrial sector, on the other hand, was controlled by coal and fuel oil. in addition, in 1975 the residential sector presented the largest exergy losses, when compared to other economic sectors, due to the inefficiencies in the use of firewood in households and other rural activities. the grassmann diagram for 1993 is shown in figure 8. in this figure, the large participation of the transportation sector (33%), industry (24.5%), and residence (24.4%) economic development averaging 2-4% in the last decade, the increased population growth and more dynamic economic sectors. unfortunately, this economic growth has not been suitably planned from the beginning, always being subject to many other economic, geopolitical and social problems that finally led to more rigorous, but still not sufficient, energy and environmental regulations for the sustainable exploitation of its natural resources. 3.2. grassmann diagrams: analysis from the perspective of the economic sectors figure 7 shows the grassmann diagram for the year 1975. as it can be seen, firewood, petrol, and coal were the resources with the largest participation in the colombian economy mix. it can also be observed that bs co ng fw ol fc do ee fo bg lg pt rg kj ef bd total available exergy total own consumption total available exergy 1328280 113116 1065270 23356 8753 34984 188908 27727 1285 190674 280183 775 1157 72950 219400 98531 66481 108224756 93181 25592 567 8 14 38 8 residential commercial and public industrial transport farming and mining construction unidenti�ed total useful exergy 149313 figure 5: use of exergy resources in the colombian economic system for the year 2012, a view from losses by resource. grassmann diagram in tj international journal of sustainable energy planning and management vol. 22 2019 51 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera well as the partial substitution of natural gas in the industrial sector. similarly, in the transportation sector, diesel finally replaced petrol as the main fuel for the heavy duty and urban transportation fleet. this is simultaneously reflected in an increased performance of the end use of vehicle fuels, since the diesel combustion engines stand for higher conversion efficiencies, than that of petrol-based applications. notwithstanding, although less considered, a secondary, harmful environmental impact may be triggered by increasing the circulation of diesel-fueled heavy-duty trucks and a more polluting even though efficient bus fleet, compared to the natural gas-powered or electric battery-driven alternatives. in fact, the transportation sector increases its participation in the colombian economy up to 37%, sectors in the colombian economy can be observed. it can be also seen an increase in the participation of the transportation and industry sectors, and a decrease in the residential sector share. it is also observed the progressive replacement of some resources, with an increase in the consumption of electric energy and, consequently, a decrease in the firewood demand in the residential sector. on the other hand, figure 9 illustrates the grassmann diagram for the year 2012, in which the transportation (33%), industrial (23%), and residential sectors (15%) become the most significant sectors in the colombian economy in terms of energy demand. it can be also observed a partial replacement of firewood by natural gas and electricity in the residential productive sector, as figure 6. use of exergy resources in the colombian economic system for the year 2016, a view from losses by resource. grassmann diagram in tj ! bs co ng fw ol fc do ee fo lg pt kj et bd total available exergy total own consumption total available exergy 1468771 35140 1310381 26019 9113 48781 263353 35476 11385 219523 271660 202 351 123365 254092 86097 84216 residential commercial and public industrial transport farming and mining construction unidenti�ed 122615714 54875 28118 887 97 24 10 8 total useful exergy 126060 52 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources economy assumed its role as the third largest latin american market, the residential sector was replaced by the industrial sector as the most important economy sector, which, in turn, was superseded by the transportation sector in the recent decade. furthermore, since 1975 until now, firewood and petrol were progressively exchanged by the use of other resources like ng, do, ee, and pt. 3.3. overall exergy analysis of the performance of the colombian economic sectors the development of the representative colombian economic sectors (namely, residential, industrial, transportation and farming/mining sectors) over the time is compared in figure 11. according to figure 12, although the colombian population has largely increased since 1975, the residential sector shows a lower rate of growth of exergy which evidences the dominant importance of this sector in the country, followed by the industrial and residential sectors, with a participation of 24% and 19%, respectively. it is important to notice that, although farming and mining are also considered among the most important sectors in terms of exergy intensity, they present a reduced participation in the energy and economic system, representing with only 1% in the economic and exergy mixes. finally, by comparing figures 3-9 and figure 10, the latter one corresponding to the grassmann diagram for the year 2016, a gradual substitution of the resources in the economic sectors can be evidenced. in fact, in the year 1975, the residential sector was responsible for the predominant contribution to the domestic exergy consumption, since the colombian economy was going through the very early deployment of its industrial sector back then. however, at the same time that the colombian figure 7: use of exergy resources in the colombian economic system for the year 1975, a view from losses by economic sector. grassmann diagram in tj 14338 bs co ng fw ol fc do ee fo bg lg pt rg kj unidenti�ed construction farming and mining transport industrial commercial and public residential total available exergy total own consumption destroyed exergy per economic sector 37186 48661 154530 4102 3895 39119 39260 46574 1708 11891 118488 31029 36776 587554 945 51 2432 6928 24797 1080 6177 42410 total useful exergy 508368 international journal of sustainable energy planning and management vol. 22 2019 53 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera figure 8: use of exergy resources in the colombian economic system for the year 1993, a view from losses by economic sector. grassmann diagram in tj. bs co ng fw ol fc do ee fo bg lg pt rg kj unidenti ed construction farming and mining transport industrial commercial and public residential 57284 30215 88374 134475 23492 14406 93750 106199 4770 742 25076 222487 2235 139 3819 13823 32460 12628 7875 35488 55528891957 763461 72978 figure 9: use of exergy resources in the colombian economic system for the year 2012, a view from losses by economic sector. grassmann diagram in tj bs co ng fw ol fc do ee fo bg lg pt rg kj ef bd 66481 98531 219400 72950 1157 775 280183 190674 1285 27727 188908 34984 8753 23356 1131161328280 total available exergy destroyed exergy per economic sector unidenti�ed construction farming and mining transport industrial commercial and public residential 14388 8 567 25592 93181 4756 10822 149313 total useful exergy 1065270 total own consumption 54 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources dynamic and environmental impact that widens the development lag respect to other global economies. certainly, the current shift to a modern, industrialized country and the substitution of less efficient cooking and district heating practices, such as firewood combustion, has led the rural areas to an increased level of exergy performance. furthermore, in the late 90s, the massification of the access to natural gas for cooking instead of using electric heaters in showers, furnaces and stoves, led to a slight increase in the efficiency of those systems. it is also worthy to notice that, since most of the agriculture and residential residues do not have a comprehensive recuperation policy, ending up in landfills and even worse disposed into complex ecosystems, a huge thermodynamic potential coming from the upgrade of the industrial, residential and agriculture wastes is inevitably destroyed. additionally, it is interesting to analyse the evolution of the use of some important resources that reshaped the energy and economic figures of the colombian energy mix. figure 12 depicts the natural gas production, domestic demand, final consumption, useful exergy as well as the exergy losses over the time frame studied. it is important to notice that the useful exergy available remains almost steadily low over the time, regardless the consumption compared to the respective rates of industrial and transportation sectors. on the other hand, the farming and mining sectors remain almost invariable in terms of low exergy consumption along the analyzed years. another important point is that the industrial sector seemingly uses the energy resources consumed more efficiently than the remaining sectors, namely the residential, transportation, and farming sectors. despite this fact, the overall energy efficiency increase in the country is rather low, as it can be observed from the evolution of the exergy efficiency in the colombian exergy mix over the time shown in figure 12. this evolution is expectedly associated to the technological development that colombian sectors have gone through the last years, showing an improvement in the use of the thermodynamic potential of the energy resources, the most significant corresponding to the change between 1975 and 1993. according to figure 13, the absence of any coordinated technical, technological, political and societal revolution has hindered a significant reduction of the overall irreversibility of the overall economic system in the last four decades. in this way, more than 95% of the total exergy consumed in the colombian energy mix has been irremediably destroyed, generating thus a thermofigure 10. use of exergy resources in the colombian economic system for the year 2016, a view from losses by economic sector. grassmann diagram in tj bs co ng fw ol fc do ee fo lg pt kj ef bd 35140 84216 86097 254092 123365 351 202 271660 219523 11385 35476 263353 48781 9113 26019 unidenti�ed construction farming and mining transport industrial commercial and public residential 24108 97 887 28118 54875 5714 12261 1310381 126060 total useful exergy destroyed exergy per economic sector total own consumption total available exergy 1468771 international journal of sustainable energy planning and management vol. 22 2019 55 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera inefficiencies in the end use, this fact does not necessarily implies that the other resources presented in figures 13 domestic demand or the exergy losses, accompanied by a striking variation in the consumption rate of the domestic demand of this resource. analogously, figure 14 shows the production, domestic demand, final consumption, useful exergy and exergy losses of the colombian electricity over the time. again, the significantly low available useful exergy over the time is independent from the domestic demand or the exergy losses. meanwhile, a slight increase in the domestic demand is observed, which is in agreement with the constant population and industrial growth rates along the studied years. finally, figure 15 shows the firewood production, domestic demand, final consumption, useful exergy and exergy losses in the same interval. as it can be seen, there has been a marked decrease in the firewood production brought about by the substitution of this resource by other resources, such as electricity. although firewood is the resource that presents the largest figure 11. use of energy resources in colombia in the main economic sectors 1975350.000 300.000 250.000 200.000 150.000 100.000 50.000 0 1993 2012 2016 ex er g y [ t j ] final consumption losses usefull exergy usefull exergy final consumption losses industrialresidential 1975 600.000 500.000 400.000 300.000 200.000 100.000 0 1993 2012 2016 ex er g y [ t j ] final consumption losses usefull exergy usefull exergy final consumption losses farming and miningtransport figure 12. evolution of the overall exergy efficiency of the colombian energy mix over the time e xe rg y ef fic ie n cy 8.5% 9.0% 8.0% 7.5% 7.0% 6.5% 1975 1993 2012 2016 years 56 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy consumption in the colombian energy mix: an insight from its economic sectors and energy resources figure 13. evolution of the use of the natural gas exergy resource through 1975 – 2016 . e xe rg y [ t j ] 600.000 500.000 400.000 300.000 200.000 100.000 0 1975 1985 1995 2005 2015 colombian production domestic demand useful exergyfinal consumption losses years figure 14. evolution of the use of the electric power exergy resource through 19752016 250.000 200.000 150.000 100.000 50.000 years 0 1975 1983 1991 1999 2007 2015 ex er g y [ t j ] colombian production final consumption losses domestic demand useful exergy international journal of sustainable energy planning and management vol. 22 2019 57 hector i velasquez, carlos a orozco, juan c. maya, daniel florez-orrego and sergio lopera 1993, 2012, and 2016. as a conclusion, it is observed a progressive change of the utilization of the colombian energy resources, favoring the use of electricity and natural gas instead of firewood, in agreement with the development from a rural to an urban nation, where most of the population is densely concentrated in large cities (>1 million inhabitants). the role of the transportation sector as the dominant sector in the energy mix in the last decades also follows the growing dependence of the country on the fossil fuels, whereas other renewable resources remains unused in industrial and residential sectors. these results will help in the decision-making of the future projects of energy planning and government policies directed towards a better utilization of the available energy and economic resources via the integration of advanced energy conversion technologies, more stringent environmental policies and more conscious practices of exergy consumption. acknowledgments "the authors would like to thank the administrative department of science, technology and innovation of colombia–colciencias through the program “energy and economic growth in colombia: a and 14 outperform the former in terms of the utilization of their total thermodynamic potential, given by their exergy efficiency. as a final remark, it is important to notice that, as the second most biodiverse country in the world [44], and the most biodiverse by extension, after brazil, the energy planning and economic development of colombia is admittedly more difficult but also more relevant, and requires a more careful economic and thermodynamic analysis than other geographical regions. accordingly, the impact of the energy conversion systems must not only take into account aspects related to economic criteria in order to issue the future energy policies, but also look for increased exergy efficiencies that simultaneously attempts reducing the environmental impact generated by the human activities. 4. conclusions in this work, a study of the evolution of the consumption of the energy resources in the colombian energy mix is performed. the study is carried out by using the concept of exergy (combination of the first and second law of the thermodynamics) and takes into account the performance of four different time frames, namely 1975, figure 15. evolution of the use of the firewood exergy resource through 1975 -2016 200.000 180.000 160.000 120.000 140.000 100.000 80.000 60.000 40.000 20.000 0 1975 1985 1995 years 2005 2015 e xe rg y [ t j ] colombian production final consumption losses domestic demand useful exergy 58 international journal of sustainable energy planning and management vol. 22 2019 exergy analysis of the energy 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https://www.sciencedirect.com/science/article/pii/s0360544213008311 https://www.sciencedirect.com/science/article/pii/s0360544215003606 https://www.sciencedirect.com/science/article/pii/s0360544215003606 _goback _ref191642245 _hlk10182342 559-1413-6-le.qxd 1. introduction energy security, fossil fuel depletion, socio-economic impacts and environmental pressures are all motivating factors that have brought energy policy, energy planning and energy management onto the public agenda over the last decades. nearly 50% of proven oil reserves are located in the middle east [1] which has had a turbulent history in the 20th and 21st century from the suez crisis, the yum kippur war, over the iran-iraq war, the iraqi invasion of kuwait and the subsequent american-led invasion of iraq to the arab spring. combined with rising global oil demands, this has contributed to oil prices increasing more than 10-fold from 1970 to 2012 [1] which has had significant socio-economic impacts on oil-importing as well as oil exporting nations. for oil importing nations, the situation was particularly severe in the 1970s, coming from a situation of readily available low cost fuels to a situation of rapidly increasing costs. other fuel sources such as coal followed oil’s lead, however with less volatility – see figure 1. in fact, not only the price hikes of oil but also the periods of comparably low prices and thus the sheer volatility of the oil price has proven a challenge. any long-term investments in oil international journal of sustainable energy planning and management vol. 01 2014 1 exploitation have thus been – and are still – faced with financial uncertainty as are investments in alternative solutions including renewables and energy savings. while the urgency of a sudden impact is no longer preeminent, socio-economic impacts remain important as fuel costs form large balance of trade imbalances for net importers of energy. lastly, environmental concerns are not being adequately met. while earlier environmental issues of smog, dust, and acid rain could be solved by end-of-pipe solutions in the form of e.g. filters, scrubbers, and catalysts, climate change enhancing carbon dioxide emissions keep increasing as it is an inherent effect of the combustion of fossil fuels. progressive iterations of assessment reports from the intergovernmental panel on climate change have strengthened the scientific evidence behind anthropogenically enhanced greenhouse effects, as stated in 2013 “warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia. the atmosphere and ocean have warmed, the amounts of snow and ice have diminished, sea level has risen, and the concentrations of greenhouse gases have increased” [2]. from 1880 to 2012, the average land and ocean surface * corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 01 2014 1-6 towards sustainable energy planning and management �������� ��� � ��� �� ������ ���� ���� �������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� a b s t r a c t rising energy costs, anthropogenic climate change, and fossil fuel depletion calls for a concerted effort within energy planning to ensure a sustainable energy future. this article presents an overview of global energy trends focusing on energy costs, energy use and carbon dioxide emissions. secondly, a review of contemporary work is presented focusing on national energy pathways with cases from ireland, denmark and jordan, spatial issues within sustainable energy planning and policy means to advance a sustainable energy future. keywords: global energy trends; sustainable energy planning; national energy pathways; spatial analyses; energy policy; url: dx.doi.org/10.5278/ijsepm.2014.1.1 2 international journal of sustainable energy planning and management vol. 01 2014 towards sustainable energy planning and management temperature has increased by 0.85°c, from 1901 to 2011 sea level rose by 19 cm [2] due to thermal expansion of sea water combined with a net contribution from melting glaciers. carbon dioxide emissions from 1750 and forward have alone given a positive radiative forcing of 1.68 w/m2 [2] – and combined with other greenhouse gasses, the result is an approximately 1% larger uptake in energy from the sun than what is being reemitted from earth. in spite of this situation and the scientific evidence, from 1990 to 2012, energy related carbon dioxide emissions increased by 44.4% [3]. while kyoto protocol [4] signatories had a decrease of 12.4% [3] over the same period of years, climate change is thus still lacking general decisive action. looking ahead, a growing world population combined with a more prosperous global economy (see figure 2) are contributing factors to a steadily increasing energy demand and associated carbon 1950 1960 1970 0 50 100 c o a l p ri ce in d e x (1 9 7 0 = 1 0 0 ) 150 200 250 300 1980 year 1990 2000 2010 0 200 o il p ri ce in d e x (1 9 7 0 = 1 0 0 ) 400 600 800 1000 1200 crude oil price us coal price figure 1: crude oil and coal prices from 1950 until 2012. source: [1]. 1950 1960 1970 1980 year 1990 2000 global population primary energy supply co2 emission global gdp 2010 0 50 100in d e x (1 9 7 0 = 1 0 0 ) 150 200 250 300 figure 2: global indicators for energy, emissions, population and economy. note; gross domestic product (gdp) is in purchasing power parity (ppp). population and gdp are based on five-year interval datasets and interpolated in between. sources: population [15], energy and emissions [1], global gdp [16]. dioxide emissions, and there is nothing in the trends to indicate any short term change in this situation – however there is a need for this unsustainable praxis to change. this calls for a multi-faceted approach addressing supply, conversion and demand of energy as well as appropriate planning, policy and framework conditions. future energy systems need to be environmentally benign, systems need to be integrated across sectors [5–7], designed for optimal flexibility in exploiting fluctuating energy sources [8] and the organisation and framework conditions of the energy sector needs to be adapted to the changing situation [9–12]. specifically, in many countries and regions these changes will have to entail a stronger focus on the efficient utilisation of local, renewable energy resources, while balancing nations’ increasing need for security of supply with local challenges, such as economic development and employment. the development of such decentralised systems of energy supply, conversion and demand therefore requires careful planning in light of the increased impacts on local communities and an increasing number of stakeholders in the form of e.g. producers, consumers, owners, developers and planners of energy systems [13]. from a techno-economic perspective, these complex challenges call for detailed and integrated analyses of local energy systems, outlining e.g. various possible long-term choices for communities, cities and municipalities [14]. at the same time, detailed choice possibilities also need to be outlined at the national and trans-national levels in order to encourage optimal choices at the local level. from a socio-political perspective, a stronger involvement and active participation of communities in the planning and implementation of renewable energy systems is required, as well as a stronger support and better coordination from central levels of government for these local and regional energy planning activities [11]. the international journal of sustainable energy planning and management is a dedicated forum for research in sustainable energy systems. it brings together researchers working within energy systems analyses of local, regional and global levels, researchers working on feasibility studies and researchers working on public regulation to form an interdisciplinary platform for pertinent research on energy planning topics. this first issue of the journal presents a variety of analyses covering primarily national energy systems with the different options there are for minimising energy usage through systems’ optimisation. 2. national energy pathways towards sustainability in [17] connolly & mathiesen investigate one potential pathway towards a 100% renewable energy system with regards to technical and economic performance. they develop a seven step sequence to establish sustainable energy pathways for a country, taking ireland as an example. these sevens steps include establishing a reference, implementing district heating, implementing individual and district heating heat pumps, reducing grid stability restrictions, introducing flexible electricity demands as well as electric vehicles, implementing the production of synthetic fuels for transport, and using synthetic gas to replace any remaining fossil fuel usage. in their findings, connolly and mathiesen establish that the irish energy system may be converted using these steps without compromising on economic performance of the energy system. they stress that in the future, flexibility in the energy system should not come from the production side but rather from the demand side due to the significant fluctuating power contribution to the energy system. østergaard et at [18] take a more narrow approach than connolly and mathiesen in terms of the delimitation of the energy system, however since the case study deals with a hot, semi-arid region rather than a temperate and rainy country, other infrastructures are pertinent for inclusion. in the case of jordan, a main energy demand at present – and expected to increase even more in the future – is the desalination of water. the analysis goes to demonstrate that while synergies should be exploited in the best possible manner, conditions vary in different countries – and thus also the synergies to be exploited. investigating the future fresh water demand of jordan, the analysis compares the energy system impact of utilising either reverse-osmosis (ro) desalination or multiple-stage flash (msf) desalination. ro is electricity consuming while msf primarily uses heat which may be covered using the same technologies as in cogeneration of heat and power (chp) plants – and thus also the same modelling approach. at the current development stages, the energy system’s performance isn’t affected considerably by the choice of desalination technology though. international journal of sustainable energy planning and management vol. 01 2014 3 poul alberg østergaard and karl sperling 3. data availability and the spatial dimension in sustainable energy planning data availability is a recurring theme when simulating energy systems, making energy systems analyses, or developing energy scenarios. möller and nielsen [19] address the issue of geographical mapping of heat demands and heat supply options in order to establish data sets for energy systems analyses. based on a database of 2.5 million buildings in denmark and geographical information systems, heat atlases are created that may be used to assess heating options as well as potential heating savings at different savings’ costs. in addition, the work incorporates the spatial dimension often overlooked in single-node energy planning models. 4. energy policy and implementation meyer et al [20] also address the energy consumption of buildings – however from a policy point of view. thus where [19] addresses methods for assessing the technical potential for energy savings, [20] addresses the barriers for implementing energy savings as well as the possibilities for overcoming these barriers. potential solutions to increase energy efficiency in buildings include labelling, economic incentives to replace buildings deemed unfeasible to insulate – or even personal carbon allowances if stringent savings are to be realised. acknowledgements as editor-in-chief i would like to express my appreciation to the authors that have submitted work to this opening issue of the international journal of sustainable energy planning and management. moreover i would like to thank the reviewers for their many constructive comments to the articles. lastly on behalf of the entire editorial board i would like to thank the sponsors danfoss, planenergi, desmi and aalborg university without whose help this issue of the international journal of sustainable energy planning and management would not have seen the light of day. references [1] bp. bp statistical review of world energy june 2012. 2012; www.bp.com/statisticalreview [2] intergovernmental panel on climate change. climate change 2013 – the physical science basis – summary for policymakers. working group i contribution to the fifth assessment report of the intergovernmental panel on climate change. 2013; http://www.climatechange2013.org/ images/uploads/wgi_ar5_spm_brochure.pdf [3] iea. co2 emissions from fuel combustion – highlights – 2012 edition. 2012; http://www.iea.org/publications/ freepublications/publication/co2emissionfromfuelcombustio nhighlights.pdf [4] united nations. kyoto protocol to the united nations framework convencention on climate change. 1998. [5] lund h, andersen an, østergaard pa, mathiesen bv, connolly d. from electricity smart grids to smart energy systems – a market operation based approach and understanding. energy 42(1)(2012) pages 96–102. http://dx.doi.org/10.1016/j.energy.2012.04.003 [6] lund h. renewable energy systems : a smart energy systems approach to the choice and modeling of 100% renewable solutions. 2nd ed. burlington, usa: academic press, 2014. [7] mathiesen bv, dui_ n, stadler i, rizzo g, guzović z. the interaction between intermittent renewable energy and the electricity, heating and transport sectors. energy 48(1)(2012) pages 2-4. http://dx.doi.org/10.1016/j.energy.2012.10.001 [8] østergaard pa. reviewing optimisation criteria for energy systems analyses of renewable energy integration. energy 34(9)(2009) pages 1236–45. http://dx.doi.org/10.1016/ j.energy.2009.05.004 [9] hvelplund f, möller b, sperling k. local ownership, smart energy systems and better wind power economy. energy strategy reviews 1(3)(2013) pages 164–70. http://dx.doi.org/ 10.1016/j.esr.2013.02.001 [10] fawcett t, hvelplund f, meyer ni. making it personal: per capita carbon allowances. in: anonymous generating electricity in a carbon-constrained world, boston: academic press; 2010, p. 87–107. [11] sperling k, hvelplund f, mathiesen bv. centralisation and decentralisation in strategic municipal energy planning in denmark. energy policy 39(3)(2011) pages 1338–51. http://dx.doi.org/10.1016/j.enpol.2010.12.006 [12] möller b. changing wind-power landscapes: regional assessment of visual impact on land use and population in northern jutland, denmark. appl energy 83(5)(2006) pages 477–94. http://dx.doi.org/10.1016/j.apenergy.2005.04.004 [13] jank re, steidle t, schlenzig c, cuomo v, macchiato m, lavagno e et al. advanced local energy planning (alep) – a guidebook. iea energy conservation in building and community system programme. 2000. [14] lund h. choice awareness and renewable energy systems. [s.l.] [kbh.]: [henrik lund], 2009. 4 international journal of sustainable energy planning and management vol. 01 2014 towards sustainable energy planning and management [15] united nations. world population prospects: the 2012 revision.; http://esa.un.org/unpd/wpp/index.htm [16] delong jb. estimating world gdp, one million b.c. to present.; http://holtz.org/library/social%20science/ economics/estimating%20world%20gdp%20by%20delon g/estimating%20world%20gdp.htm [17] connolly d, mathiesen bv. a technical and economic analysis of one potential pathway to a 100% renewable energy system. ijsepm 1(2014). http://dx.doi.org/10.5278/ ijsepm.2014.1.2 [18] østergaard pa, mathiesen bv, lund h. energy systems impacts of desalination in jordan. ijsepm 1(2014). http://dx.doi.org/10.5278/ijsepm.2014.1.3 [19] möller b, nielsen s. high resolution heat atlases for demand and supply mapping. ijsepm (2014). http://dx.doi.org/ 10.5278/ijsepm.2014.1.4 [20] meyer ni, mathiesen bv, hvelplund f. policy means for renovation of buildings in renewable energy systems. ijsepm 1(2014). http://dx.doi.org/10.5278/ijsepm. 2014.1.5 international journal of sustainable energy planning and management vol. 01 2014 5 poul alberg østergaard and karl sperling << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true /dscreportinglevel 0 /emitdscwarnings false /endpage -1 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 25 2020 13 *corresponding author e-mail: steffenn@plan.aau.dk international journal of sustainable energy planning and management vol. 25 2020 13–32 abstract energy efficiency improvements of buildings is widely recognized as an important part of reaching future sustainable energy systems, as these both reduce the need for energy and improve the efficiency of the heat supply. finding the correct level of efficiency measures, depends on the type of measure, on the supply system typology as well as on the heat supply cost. as this information is often building-specific, most analyses related to energy efficiency in buildings are carried out in relation to specific renovation projects, while energy plans for larger areas make crude assumptions regarding levels of savings and costs. this article aims at improving the latter, by using a detailed heat atlas in combination with specific marginal energy renovation costs, in a study of aalborg municipality in denmark. in the analysis, all buildings in the municipality are mapped at building level and both the marginal energy efficiency measure costs and the marginal heat supply costs are identified. the buildings are then sorted by their supply type, and marginal costs curves on supply and savings are compared to determine the feasible level of efficiency measures in each building. the results show that both the building type and the supply costs have a large influence on the feasible measures. furthermore, the results show that a demand reduction of 30% in district heating areas, 35% for buildings with heat pumps and 37% for buildings with oil boilers, for the examined buildings, is socio economically feasible in a business as usual 2050 aalborg municipality scenario. 1. introduction in 2016, the european union made a strategy on heating and cooling [1], where energy efficiency measures like district heating and end-use heat savings are considered feasible measures. the main reason for considering district heating an efficiency measure is its ability to use excess heat from electricity production, industrial processes and waste incineration [2]. in the european union alone, 10.2 ej of excess heat are theoretically available from these three processes [3]. other benefits of district heating are the relatively inexpensive heat storages [4], providing flexibility in relation to fluctuating renewable energy production and the integration of renewable energy sources through heat pumps [5], solar thermal collectors [6] or geothermal energy [7]. district heating can therefore play a crucial role in the transition to 100% renewable energy systems [8]. a key issue, when considering district heating as an energy efficiency measure, is that the technology needs to move towards fourth generation of district heating [9,10] where temperature levels are reduced to improve the efficiency of the supply system and enabling the exploitation of low temperature heat sources while simultaneously reducing grid losses. furthermore, district heating is also an important technology in the smart energy system [11,12], where cross-sector integration is a central aspect. smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply steffen nielsen*, jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaard and henrik lund department of planning, aalborg university, rendsburggade 14, dk-9000 aalborg, denmark keywords: end-use; heat demand; heat planning; gis; energy system analysis; energyplan simulation; url: http://doi.org/10.5278/ijsepm.3398 mailto:steffenn@plan.aau.dk http://doi.org/10.5278/ijsepm.3398 14 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply a key issue, when considering district heating as an energy efficiency measure, is that the technology needs to move towards fourth generation of district heating [9,10] where temperature levels are reduced to improve the efficiency of the supply system and enabling the exploitation of low temperature heat sources while simultaneously reducing grid losses. furthermore, district heating is also an important technology in the smart energy system [11,12], where cross-sector integration is a central aspect. a central part of assessing the potential for district heating in an area is heat demand mapping, or the establishment of so-called heat atlases [13]. the main reason is that the economic feasibility of district heating is highly correlated to the density of the heat demand, where areas with a high density both reduce the network length and losses, when compared to less dense areas [2]. this also means that district heating will mostly be applicable within urban areas, while other heat supply solutions are needed in rural areas and areas with lower heat densities. the recent acknowledgement of district heating, as a technology that has a crucial role in the transition towards smart energy systems, has sparked an interest in mapping heat demands. heat demand mapping exists on different levels of detail, depending on the scope of the analysis, in which the mapping takes part. some mapping is used for assessing district heating potentials on a national or regional level. here, the heat roadmap europe project [14] is a good example, where heat demands are assessed on a hectare level. in local studies, the mapping includes the specific building level. such studies are typically used to examine district heating expansion potentials locally [15,16]. additionally, mapping of the energy demand in buildings is also used by many cities in order to be able to assess building energy efficiency [17] with a view to targeting efficiency measures. much recent research deals with various aspects of energy efficiency in buildings, which is illustrated by a recent review article that focuses on energy efficiency in multi-family buildings [18] and identifies 234 relevant references dealing with this topic. the review shows that 50% of the articles deal with environmental aspects, 30% with economic and 25% with social aspects related to energy renovation. many articles focus on efficiency measures from a technical perspective, by examining energy savings in relation to occupancy [19] or building characteristics [20]. a crucial part of assessing the feasibility of heat savings is the costs related to investing in the efficiency measures, compared to the savings in the heat supply. it is crucial to identify the right mix between renewable energy production and energy savings. previous studies have made such investigations on an overall national level, estimating the combination of heat production and heat savings in for instance a danish 2050 energy system [21], and in four european countries (czech republic, croatia, italy and romania) [22]. however, these studies do not consider the geographical aspects of how different building types are located throughout a country and how that compares with the available supply options. this link is necessary, as the individual building owners need to make decisions based on the available local heat supply options. furthermore, this article is a continuation of heating related topics already known to the journal. the editorial [23] from 2017, dealt with smart district heating and energy system analyses. heat saving strategies were presented in [21] where the costs of energy renovation are compared to energy system costs for different district heating shares. the development of detailed heat demand maps were the main subject of [24] and [25], and their accuracy was discussed in [26]. planning of heating systems using spatial methods and different scenario paths were investigated[27]. other work concerned the barriers and policy recommendations for heat savings in denmark [28] as well as building specific case studies on cost optimal level of heat savings [29]. 1.1. scope and structure of the article based on the problems presented in the introduction, the article aims to find the balance between end-use savings and supply costs within different areas. it seeks to combine geographical knowledge on energy supply systems and the location of specific buildings with an assessment of specific supply costs and heat demand reduction costs. this allows for a much more specific assessment of the coordination of heat savings and heat supply, which enables the discussion of the consequences for different buildings types and locations. this becomes relevant when assessing the difference in savings initiatives between buildings with access to district heating and buildings located outside district heating areas. as the geographical distribution of buildings is site specific, this is shown for the specific area of aalborg municipality in denmark. aalborg is denmark’s third largest municipality and encompasses a variety of heat supply areas, including a large central district heating grid, some detached smaller district heating systems, as international journal of sustainable energy planning and management vol. 25 2020 15 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund well as houses heated by individual solutions outside district heating areas. the analyses are done, with a focus specifically on end-use savings in existing buildings within the municipality. the energy demand for buildings where no renovation is implemented is included in the analysis. furthermore, the analysis is carried out in relation to an aalborg 2050 business as usual scenario for the municipality. the article focuses on the direct costs of the energy system including; investments, fuels and operation and maintenance, using costs from the ida energy vision 2050 [30]. in the analysis, aalborg municipality is used as an example on how to apply the method proposed in this article. the method can be applied anywhere where the same information is available, but the results of the analysis are strongly related to the aalborg example, as both the local heat supply systems and end-use demands are specific to aalborg municipality. the modelling of the overall energy system in aalborg municipality is based on the work in the aalborg energy vision [31]. 2. methodology the basic principle of this article is to compare the marginal supply costs of heat with the marginal costs of heat saving measures. the scope of the article determines that the marginal supply costs and the marginal costs of energy savings are both measured in €/kwh. the first step is to identify the location of each building using geographical information systems (gis) and the supply type for each building (district heating or individual solutions). to identify the marginal supply costs in district heating, the principal methodology applied is similar to [21]. the heat production cost in district heating is highly dependent on the production units used. as such, it is necessary to identify the marginal changes in heat production for different units at different levels of heat savings. for this purpose, an energy systems analysis tool is used to calculate the production of district heating, which in turn is used to identify the marginal heat production costs. in this article, energyplan [32,33] is used as the energy system analysis tool to identify the marginal costs of district heating supply. energyplan is well-suited since it simulates the entire energy system, and thus captures possible synergies across the heating, electricity and gas sectors (see section 2.3). as the aim is to identify the potential differences in heat saving potentials due to the geographical placement of each individual building and individual building characteristics, it also must consider the marginal production cost of heating for individual buildings. these costs differ due to building type and building age and that different locations enables different supply options. here, the study assumes that the marginal cost of individual heating is equal to the fuel costs including handling costs divided with the efficiency of the heating technology. to identify the heat savings potential for each building, geographic data of the current heat demand at the individual building level is combined with heat saving cost data on different building categories associated to different level of savings. this allows for the identification of marginal savings costs for each building. by comparing the marginal supply cost with the marginal savings costs, it is possible to identify the feasible level of saving in each supply area where the supply area is characterised by the specific heating infrastructure applied. this can be district heating, or an individual heating technology situated at the individual household. an overview of the approach is illustrated in figure 1, and each step is described more in detail in the following sections. 3. case study in this chapter the methodology from chapter 2 is applied to the case of aalborg municipality. first, the mapping of heat demands and supply areas is explained. this is followed by an explanation of the heat saving measures used, their implementation in the energy system as well as general cost assumptions of the aalborg energy system. 3.1. maps of case and description of end-use heat demands this section describes the geographic scope of the analysis, as well as the data used to assess end-use heat demands, heat supply costs as well as end-use heat saving potentials. 3.1.1. supply areas in aalborg aalborg municipality has 76,179 buildings with a total end-use heat demand of 2,027 gwh/year [34]. within the municipality the heat supply systems are divided into the central area of aalborg district heating, other district heating areas and buildings with individual heating, these are shown in figure 2 and the percentage distribution is shown in figure 3. 16 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply energy plan model of heat supply costs fixed heat supply costs heat saving costs for different building categories and levels of savings distric heating supply feasible levels of savings for: district heating, individual heat pumps and individual oil boilers cost curves saving costs end-use heat demand on building level supply costs individual heating supply figure 1: methodological framework for identifying feasible end-use heat saving costs in different heat supply areas aablorg district heating aablorg municipality other district heating roads bulidings figure 2: heat supply areas in aalborg municipality international journal of sustainable energy planning and management vol. 25 2020 17 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund 3.1.2. the danish heat atlas to find the end-use heat demand of the existing buildings in aalborg, the danish heat atlas is used. it was first published in [35] and has been updated in several versions since. the atlas has been used in various scientific publications [24,36–41]. the heat atlas provides an estimate of the annual enduse heat demand as well as other relevant information such as heat supply, construction year, building type and floor area. all this information is recorded in the danish building register [42], which is a national registry covering all danish buildings. building owners are obliged to update the information, when new buildings are built, or when major renovations are carried out. however, the danish building register does not provide information about the end-use heat demand in the buildings, so this must be estimated based on other sources. the current version of the danish heat atlas estimates the end-use heat demand based on another database named fie [43], which includes annual heat consumption from most danish district heating, natural gas and fuel oil providers on individual building level. the data extract from the fie data base covers the years 2010-2014, and has 5,578,433 registered heat demand measurements, however, it only covers half of the heated danish buildings, as some buildings are not supplied by district heating, natural gas or oil or due to lacking information from some of the heat providers. as the fie database does not cover all buildings, the end-use heat demand is estimated based on a statistical analysis of the fie data, where buildings are classified by age (9 construction periods) and type (24 buildings types) and for each combination an average demand (kwh/m2 of floor area) is found. these averages are multiplied with the total floor area of each building in the building register to create the danish heat atlas. a more elaborate explanation of the methodology can be found in the documentation of the heat atlas, where the uncertainties of the estimates are shown for each building category [34]. in this article, only buildings from aalborg municipality are used. figure 4 illustrates the level of detail, showing different building types in a part of the municipality. the example shows that the danish heat atlas operates at a building level, where each point represents a building, and that the main types of buildings are single-family, terrace and multi-storey. 3.2. heat saving costs the heat savings potentials for the study are based on wittchen, kragh and aggerholm [44], who assess them for the danish building mass. the study defines a number of renovation measures as steps of activities to be taken in each individual type of building. each level of saving is a marginal increase in energy savings with a marginal increase in costs associated to it. table 1, table 2 and table 3 show the level of savings, a qualitative description and examples of the actual measure implemented. 75% 5% 4% 3% 9% 1% 3% aalborg district heating other district heating natural gas biomass oil heat pump electricity figure 3: percentage share of end-use heat demand by heat supply type 18 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply each of the seven steps has a key focus in terms of renovation, meaning that some of the steps deal with outer wall insulation while other deals with more energy efficient windows. step 1 implements basic renovations, that brings the building up to current danish standards. this focus on more insulation and energy label b windows. step 2 is only cavity wall insulation in buildings without. step 3 goes from energy label b windows to energy label single-family building type terrace multistorey care centre hostel other roads figure 4: example of building types from the danish heat atlas table 1: energy savings measures and concrete initiatives in walls [45] level energy savings measure cavity walls massive walls light walls basement walls 0 point of departure nothing nothing nothing nothing 1 basic renovation (building code) nothing 25 mm if bad 75 mm nothing 2 cavity wall insulation filled 25 mm if bad 75 mm nothing 3 windows (a level) filled 25 mm if bad 75 mm nothing 4 insulation of ceiling and roofs filled 25 mm if bad 75 mm nothing 5 good practice for insulation filled 125 mm if bad 100 mm 100 mm 6 energy saving focus when insulating filled 125 mm if bad 100 mm 100 mm 7 level 6 fully implemented filled 125 mm if bad 100 mm 100 mm international journal of sustainable energy planning and management vol. 25 2020 19 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund a. step 4 increases insulation of ceilings and roofs. step 5 increases insulation across the entire building, with step 6 and step 7 implements the highest levels of insulation to all buildings. an important precondition to achieve cost-efficient energy savings is that the energy saving initiatives are performed at the same time as the general renovation of the building. this pre-condition is assumed for all costs in the study [45]. wittchen, kragh and aggerholm [45] assume that a certain level of savings can be achieved at a marginal cost of zero, since this will be the basic renovation house owners would do as part of the general refurbishment of their buildings. thus level 1 does not have a marginal cost, as shown in figure 5. overall, this means that the costs used in this study are based on the additional costs associated to the increased performance of each activity to achieve the energy saving. since wittchen, kragh and aggerholm [45] do not take into account potential savings in summer houses, and other minor building categories, not all building types are included in the analysis. however, the large majority of the demand is analysed. wittchen, kragh and aggerholm [45] use a discount rate of 4% for their initial calculations. as the aalborg energy vision’s results are based on a 3% discount rate, these had to be aligned. in this study, the marginal saving costs have been recalculated to be based on a 3% discount rate, to align cost assumptions between the two studies. based on the data from [45] it is possible to calculate the percentage reduction of heat demand associated with each level of savings. figure 5 shows a situation of diminishing returns where most of the heat savings are associated with the initial levels of savings, while the later steps do not save as much. figure 6 plots the level of heat savings with the costs, which furthermore shows that the first levels of savings have lower marginal costs than the later levels, in total giving a situation where the cost efficiency is highest in the first levels and lowest in the last levels. table 2: energy savings measures and concrete initiatives in roofs and windows (based on danish window labelling) [45] level energy savings measure ceiling flat roofs windows 0 point of departure nothing nothing nothing 1 basic renovation (building code) 75 mm 100 mm energy label b 2 cavity wall insulation 75 mm 100 mm energy label b 3 windows (a level) 75 mm 100 mm energy label a 4 insulation of ceiling and roofs 200 mm 150 mm energy label a 5 good practice for insulation 250 mm 200 mm energy label a 6 energy saving focus when insulating 350 mm partly 300 mm partly energy label a 7 level 6 fully implemented 350 mm fully 300 mm fully energy label a table 3: energy savings measures and concrete initiatives in floors [45] level energy savings measure ground deck crawl space basement floor ground deck w/ floor heating crawl space w/ floor heating 0 point of departure nothing nothing nothing nothing nothing 1 basic renovation (building code) 100 mm 75 mm 100 mm 100 mm 75 mm 2 cavity wall insulation 100 mm 75 mm 100 mm 100 mm 75 mm 3 windows (a level) 100 mm 75 mm 100 mm 100 mm 75 mm 4 insulation of ceiling and roofs 100 mm 75 mm 100 mm 100 mm 75 mm 5 good practice for insulation 200 mm 150 mm 200 mm 200 mm 150 mm 6 energy saving focus when insulating 300 mm partly 200 mm 300 mm partly 300 mm partly 200 mm 7 level 6 fully implemented 300 mm fully 200 mm 300 mm fully 300 mm fully 200 mm 20 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply 3.3. heat supply costs assessment using energyplan energyplan is an advanced energy system analysis tool capable of analysing the hourly operation of an entire energy system over a year [46]. energyplan is chosen to simulate the operation of the energy system to identify the marginal heating costs due to its capability of investigating the entire energy system. it includes industry, transport, electricity, heating and gas demands, and potential links between these sectors. it is therefore possible to include benefits of waste heat from industry in the district heating grid and combine this with the consequences of changes in heat demand. furthermore, due to energyplan being based on hourly operation it allows for detailed analysis of the operation of storages, including thermal storages. this again increases the details of the modelling, taking into account the flexibility of the energy system. figure 7 illustrates the overall elements of the sectors included in energyplan and highlights the links in the district heating system. energyplan have been used in similar studies, for assessing the link between energy savings and energy production [21,22,47], has previously been applied to model e.g. countries [30,48–53] and local areas [54–57] with district heating, and has been applied in more than 100 peer-reviewed journal articles [58]. energyplan is used for modelling the energy system of aalborg. the scenario used in this paper is a 2050 0% 10% 20% 30% 40% 50% 0 1 2 3 4 5 6 7 p er ce nt ag e he at s av in g renovation level farmhouse single-family multi-family multi-storey service sector institutions figure 5: total heat savings percentage by increasing the renovation level on an overall level [45] 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0 1 2 3 4 5 6 7 h ea t s av in g co st [€ /k w h] renovation level farmhouse single-family multi-family multi-storey service sector institutions figure 6: marginal heat saving costs by increasing the renovation level [45] international journal of sustainable energy planning and management vol. 25 2020 21 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund business as usual scenario (bau). the 2050 bau scenario is created by extrapolating current energy demands in aalborg based on a 2016 energy account of aalborg [51]. the increase in demands is based on the overall expectations for denmark and aalborg based on the danish society of engineer’s energy vision of denmark [59]. thus the assessment of savings is taken into account in a scenario for 2050 for aalborg municipality. 3.3.1. assumptions for the aalborg municipality energy system the aalborg 2050 bau is modelled as the entire energy system, and thus includes industrial, transport, electricity, heat and gas demands. the electricity demand is modelled as aalborg’s share of the entire danish electricity demand, identified in [59] before savings. a large coal-fired chp unit, as well as renewable energy, supplies this demand. all parts outside the heating system are unchanged in the analyses, but changes to the heating system affect the overall operation of the entire system. for instance, that changes in heat demand can affect the production of electricity in a combined heat and power plant. the overall system operation and layout is described in [60]. the heating demands are identified using the aforementioned gis data. the gis analysis also identifies supply methods for each demand, thus allocating the heat demands to different boilers, heat pumps or district heating areas. the inputs for heat demands are found in table 4. fuel electricity heat hydrogen steam co2 hydro water hydro storage electricity demand cooling demand pp process heat demand fuel res electricity hydro power plant import/export fixed and variable heat pump and electric boiler boiler geothermal and solar heat electricity storage system chp cooling device electrolyser heat demand gas storage impo/ export gasrt h2 storage absorption heat pump industry co2 vehicles cooling demand heat pump and electricelectric electric boiler boiler chp cooling devicedevicedevicedevice electrolyserrr heatheatheatheatheat demand h2 storage absorption p pp pheat pump heat storage transport demand hydrogenation transport water cooling desalination plant biomass conversion rockbed storage figure 7: energyplan structure [46]. within the red square the district heating sector can be found table 4: final energy for end-use heat demands by supply type [60] heat demand [twh] energy demand [twh] heat demand (central district heating) 1.80 2.28 heat demand (decentral district heating) 0.07 0.10 individual heat demand (oil) 0.11 0.14 individual heat demand (natural gas) 0.02 0.02 individual heat demand (biomass) 0.06 0.09 individual heat demand (electric boiler) 0.06 0.01 individual heat demand (heat pumps) 0.03 0.06 22 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply the associated costs for the system are based on the energyplan cost database [61] using 2050 prices. important for this study are the fuel costs and the costs for the units being changed with the re-design of the district heating system due to changes in demand. the costs do not include taxes as the analyses are conducted with socio-economic feasibility in mind rather than business economic feasibility. the fuel costs are found in table 7 and the investment costs and capacities for the heating system in table 5 and table 6. to investigate the marginal changes in heat production costs at lower heat demands in the district heating areas, three parameters were changed. 1) the actual heat demand was lowered to the new value as identified by implementing the levels of savings. 2) the hourly heat demand load profile was changed to reflect that the hot water consumption and grid loss remained constant, thus the heat savings only affect the space heating demand in line with [21]. 3) the capacity of the peak-load boilers in the district heating network is adjusted to reflect the heat savings and reduced demands. this reflects that with lowered heat demands due to better insulation, less peak capacity is needed. therefore, several potential energy systems are designed that can supply the reduced energy demands. the difference between these heating systems represent the marginal changes in production costs. the demands that the energy systems need to supply represents a percentage reduction of the initial heat demand in the district heating system in aalborg. table 8 shows the resulting changes to the district heating system, with a changed demand. based on these changes it is possible to calculate the marginal heat production costs with increased savings. these can be seen in figure 8. it should be noted that this calculation only is done to determine the marginal production costs with increased savings level. to identify the actual savings rate, the marginal production costs must be compared with the marginal savings costs. table 5: capacities and investment costs for district heating [60] capacity [mw] specific investment [m€/mw] fixed o&m [% of investment expenditures] lifetime [years] chp unit 323 el / 422 th 1.78 1.64 40 boiler unit 800 0.05 3.4 25 table 6: capacities and costs for individual heating [60] capacity [1000 units] specific investment [m€/1000 units] fixed o&m [% of investment expenditures] lifetime indv. fuel boiler 10 2.7 6.7 20 indv. electric heat 3 3.0 0.8 30 indv. heat pump 2 7.6 2.22 15 table 7: fuel prices [60] fuel type basic fuel price [€/kwh] coal 0.010 fuel oil 0.042 natural gas 0.029 biomass 0.022 table 8: changes to the district heating system as consequence of space heating savings in aalborg in a 2050 scenario savings rate in space heating heat supplied to the district heating grid [twh] resulting heat demand in buildings [twh] peak-load boiler capacity [mw] heat and electricity system cost [m€] 0% 2.28 1.80 800 668 15% 2.02 1.54 689 656 30% 1.76 1.28 578 646 45% 1.50 1.02 467 637 60% 1.23 0.75 357 631 75% 0.97 0.49 246 628 international journal of sustainable energy planning and management vol. 25 2020 23 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund to investigate the marginal heat production costs of changes in the individual heat supply, this study assumes that it is reflected in the fuel costs for individually heated buildings. the assumed fuel costs are found in table 9. figure 8 shows the marginal heat supply costs as the heat demand is reduced in aalborg municipality. 4. results based on the gis analyses and costs presented in the methodology, it is possible to identify marginal cost curves for both production of energy in the aalborg energy system and the energy saving in each individual building. the buildings and renovation levels are aggregated based on supply. figure 9 shows the marginal cost curves for supply and savings for the central district heating area, where figure 10 shows the curves for the individually heated buildings. from the intersection between the two curves in figure 9, the socio-economically feasible renovation level in each supply area is identified, associated to the specific buildings that need to be renovated and the extent of this renovation. the overall energy efficiency increase for each supply area can be seen in table 10. it is important to note that not all buildings in aalborg municipality are included in the analysis. table 10 therefore includes both the specific savings in the buildings included, and the influence on the total energy demand. one example is that the electric heating category contains many summer cabins that are not renovated, which means that even though the modelled buildings have to reduce the heat demand with 33%, it 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.1 00.511.52 m ar gi na l c os t [ e u r /k w h] energy carrier consumption [twh] district heating oil natural gas biomass heat pump resistance boiler figure 8: marginal heat production costs for reduction in heat production. the solid line is the district heating supply with different levels of demand, while dashed lines are marginal supply costs for individually heated buildings table 9: marginal costs for changing the heat demand in individual heating fuel type heat efficiency fuel price for indv. heating incl. handling costs [€/kwh] resulting heat price [€/kwh] oil 0.80 0.071 0.089 natural gas 0.85 0.044 0.052 biomass 0.69 0.037 0.054 electricity (boiler) 1.00 0.077 0.077 electricity (heat pump) 3.10 0.077 0.025 24 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply table 10: specific savings in modelled buildings and influence on total heat demand gwh savings savings in modelled buildings total heat demand reduction central district heating 450 30% 25% individual oil 27 37% 24% individual gas 4 36% 20% individual biomass 11 34% 18% individual heat pumps 6 35% 23% invidividual electric boiler 2 33% 3% 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.80.911.11.21.31.41.51.61.71.8 e u r /k w h heat demand in the aalborg district heating area [twh] figure 9: heat saving costs and heat supply costs in district heating -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 00.020.040.060.080.10.12 e u r /k w h twh oil ngas biomass hpump e. heating oil ngas biomass hpump e. heating figure 10: heat savings costs and heat cost for individual heating. the dashed lines indicate marginal heating costs and the bold lines the marginal saving costs international journal of sustainable energy planning and management vol. 25 2020 25 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund only affects the total heat demand for electric heating with a 3% reduction since most buildings with electric heating won’t be renovated. for the central district heating area, however, the 30% savings potential can reduce the overall heat demand by 25% due to the large share of houses connected to the central district heating system. it is now possible to identify results for each building type in all supply areas. for this analysis, the paper focuses on the district heating area, and the most and least expensive individual heating technology respectively, oil and heat pumps. figure 11 and figure 12 show the amount of energy reductions at each level, dependent on the construction year of the building. for district heating and heat pumps, savings up until level 4 are feasible, whereas for the most expensive heat source, oil, the buildings can be renovated up until level 5. the results show that level 1 savings can achieve savings in all buildings, just as well as installing energy label a windows (level 3). however, level 2, and level 4 and 5 primarily achieve a significant amount of energy reductions in buildings constructed before 1973, since these steps are already implemented in newer buildings in denmark. furthermore, the figures also illustrate that the building mass is newer in the district heating area, compared to the buildings with individual oil boilers and heat pumps. figure 11 shows that it is feasible to conduct savings in the newer building mass, but since most buildings already have better insulation standards there is less feasible savings to make. in both the oil and the heat pump-heated buildings, most of the savings can be achieved in buildings older than 1930. for oil-supplied buildings it also seems feasible to refurbish to level 4 or level 5, which is not relevant in the heat pump-heated houses. however, here it might be more feasible to change to a different supply technology. figure 13 and figure 14 show the achievable saving in each building type based on the level of renovation, figure 13 shows the results for district heating, while figure 14 shows for individual oil and heat pump heated buildings. first, it is clear from the comparison that the individually heated buildings are almost exclusively single-family houses and farmhouses. in the district heating area, the type of buildings is much more diverse. the potential for saving energy is largely split between apartment buildings and single-family houses, with some amount of savings achievable in schools, universities, offices and terrace houses. apartments and offices together account for almost 33% of the feasible potential for heat savings. it should also be noted that, even though the district heating is in denser urban areas with a more diverse building stock, 33% of the heat savings potential is still in single-family buildings. 0 50000 100000 150000 200000 250000 300000 level 1 level 2 level 3 level 4 level 5 level 6 level 7 s ai nv gs [m w h/ ye ar ] district heating <1850 1850-1930 1931-1950 1951-1960 1961-1972 1973-1978 1979-1998 1999-2006 2007< figure 11: heat savings by construction year for buildings using district heating 26 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply 0 50000 100000 150000 200000 250000 300000 level 1 level 2 level 3 level 4 level 5 level 6 level 7 s av in gs [m w h/ ye ar ] district heating other commerce other institution theatres, etc day cares care centres apartments hospitals hotels etc dorms offices single family houses terrace houses farmhouses transport teaching figure 13: heat savings by building type for district heating 0 2000 4000 6000 8000 10000 12000 14000 16000 level 1 level 2 level 3 level 4 level 5 level 6 level 7 s ai nv gs [m w h/ ye ar ] oil <1850 1850-1930 1931-1950 1951-1960 1961-1972 1973-1978 1979-1998 1999-2006 2007< 0 500 1000 1500 2000 2500 3000 3500 4000 level 1 level 2 level 3 level 4 level 5 level 6 level 7 s ai nv gs [m w h/ ye ar ] heat pumps <1850 1850-1930 1931-1950 1951-1960 1961-1972 1973-1978 1979-1998 1999-2006 2007< figure 12: heat savings by construction year for buildings using oil and heat pumps international journal of sustainable energy planning and management vol. 25 2020 27 steffen nielsen , jakob zinck thellufsen, peter sorknæs, søren roth djørup, karl sperling, poul alberg østergaarda and henrik lund 5. discussion usually, the detailed building level perspective is only used for specific buildings and not on a municipality scale. with this type of detailed analysis on a municipal scale, it is possible to provide insights into the costs difference of end-use heat savings in relation to both the type of buildings and the heat supply. another strength of the methodology is that it examines energy savings at an aggregated level for district heating, where the savings in individual buildings influence the production costs of the system, which again is valuable information from a planning perspective. in the analysis, the focus is on the feasibility of savings with the current heat supply, however, the analysis could also be expanded to look at future renewable energy systems. overall, with the suggested approach it becomes possible to identify feasible levels of heat savings in buildings on a concrete level, and considering the specific supply system. it is, however, possible to further the analysis, as some generalisations have been made. this is mainly due to the simplifications necessary when analysing the buildings of a whole municipality. one of these simplifications is that even though the data is presented at a building level, both the heat consumption and the renovation costs are based on averages for the building classifications. it would be more precise if the heat consumption and costs collected specifically for each building. however, this type of data is not available on the scale of this analysis. the data used for the current end use heat demands in the buildings are based on a statistical model of measured data from the supply companies. as such, this model is best in the building categories, where much data is available, which is also why the analysis only focuses on some building types. thus, the heat saving potential in the municipality could be higher if other buildings were included. similarly, the model used for the heat savings estimates only deals with specific types of savings, where other types of saving measures are not present e.g. mechanical ventilation or a+ windows. including more types of saving measures could potentially increase the feasible saving potential, while on the other hand these might be more expensive than the ones already included. thus, the results do depend on what energy savings are seen as part as the general refurbishment and what are extra initiatives. on the more technical side, some parts of the system are not adjusted when implementing the heat savings, e.g. introducing a higher co-efficiency of performance for heat pumps. the same could be said for the district heating systems, where lower building temperatures, potentially reduce network losses, increase supply efficiencies and enable lower temperature heat sources as part of the supply. 0 2000 4000 6000 8000 10000 12000 14000 16000 level 1 level 2 level 3 level 4 level 5 level 6 level 7 s ai nv gs [m w h/ ye ar ] oil other commerce other institution theatres, etc day cares care centres apartments hospitals hotels etc dorms offices single family houses terrace houses farmhouses transport teaching 0 500 1000 1500 2000 2500 3000 3500 4000 level 1 level 2 level 3 level 4 level 5 level 6 level 7 s ai nv gs [m w h/ ye ar ] heat pumps other commerce other institution theatres, etc day cares care centres apartments hospitals hotels etc dorms offices single family houses terrace houses farmhouses transport teaching figure 14: heat savings by building type for oil and heat pumps 28 international journal of sustainable energy planning and management vol. 25 2020 smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least-cost heat supply another important aspect in the analysis, is that all the costs used are socio-economic costs, where the current tax and tariff systems are neglected. in other words, the analysis does not look at the conditions for the individual building owner, and the saving measures that are feasible in this analysis are not necessarily feasible in a private economic context. also, the building owner gets additional benefits of improving the energy efficiency of the building, such as improved comfort, indoor climate and a higher property value, which has not been included in this analysis. this is a crucial aspect towards implementation, as both taxes, subsidies and tariff structure can have a significant impact on the feasibility for the individual building owner. another relevant topic related to the feasibility of heat savings, could be related to the ownership of the buildings [62], which is only indirectly touched upon, by looking at building types. typically, it is easier to implement heat savings in buildings with only a single owner, as this owner will get the full benefit of the heat saving measures. however, in other cases, e.g. in some social housing projects, it is actually a benefit that the owner can renovate larger building blocks with feasible loaning options available, as opposed to privately owned multi-storey buildings without the same options. this becomes relevant as a large part of the savings potential in the district heating area is found in apartments. 6. conclusion with the focus on the importance of energy efficiency in buildings in relation to the renewable energy transition, and the availability of more detailed data on both building demands and energy efficiency measures, this article focuses on developing a new method for analysing the heat demands in a regional context. the article uses the danish municipality of aalborg as a point of departure. the article uses the danish heat atlas, which includes building level information, to estimate the heat saving potentials as well as the cost for seven different heat saving levels, for the whole municipality. the levels of savings used are: 1. basic renovation (building code) 2. cavity wall insulation 3. windows (a level) 4. insulation of ceiling and roofs 5. good practice for insulation 6. energy saving focus when insulating 7. level 6 fully implemented the saving costs are further compared to the supply costs, which are modelled in the hourly energy system analysis tool energyplan. in the analysis, buildings with the same supply costs are aggregated together and the feasible point between energy efficiency measures and supply is found. the analysis only focuses on energy efficiency measures in six building types, but to find the supply costs of district heating, the energy demand from other building types are included in the analysis. the overall result shows that a demand reduction of 30% in district heating, 35% for heat pumps and 37% for oil, for the examined buildings, are feasible. furthermore, it shows that level 1 and 3 savings are feasible in almost all buildings, while level 2, 4 and 5 are mainly feasible in buildings older than 1973. buildings of this age and older are also the ones with the largest efficiency potential energy wise. for district heating it is feasible to go to level 4 energy savings, while for the buildings with oil-boilers, it is feasible to go to level 5 savings and for heat pumps it is only feasible to go to level 3. for buildings older than 1930, efficiency measures to level 5 is relevant, no matter if the supply is heat pump or oil, however, the buildings supplied by oil boilers would probably be better off changing supply. in addition, there is a difference between the building types of the district heating and the individual heating, where the district heating area has a substantial share of offices and apartments, the individual heating is mainly in single-family building and farm houses [42]. the article shows an example of aalborg municipality, but using the same methodology in other places would most likely show that it is very important to be able to distinguish different building and supply types, when assessing the level of heat savings that should be implemented as the renovation decisions have to be made on the individual household level and we need to support them with the correct information. it is important to note, that this article is based on socio-economic costs, and that it would be necessary to supplement it with private economic analysis, to determine if the savings measures are feasible in a given setting. 7. acknowledgements this article is prepared as part of the smart energy aalborg project funded by aalborg municipality and the thermos project, 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[62] hvelplund f, krog l, nielsen s, terkelsen e, madsen kb. policy paradigms for optimal residential heat savings in a transition to 100% renewable energy systems. energy policy 2019;134. http://dx.doi.org/10.1016/j.enpol.2019.110944. http://dx.doi.org/10.1016/j.energy.2018.08.020 http://dx.doi.org/10.1016/j.energy.2018.08.020 http://dx.doi.org/10.1016/j.apenergy.2014.05.022 http://dx.doi.org/10.1016/j.apenergy.2014.05.022 http://dx.doi.org/10.1016/j.apenergy.2015.05.086 http://dx.doi.org/10.1016/j.apenergy.2015.05.086 http://dx.doi.org/10.1016/j.energy.2012.11.030 http://dx.doi.org/10.1016/j.energy.2012.11.030 http://dx.doi.org/10.1016/j.enpol.2019.110944 _ref357586711 international journal of sustainable energy planning and management vol. 27 2020 5 *corresponding author e-mail: anna.volkova@taltech.ee international journal of sustainable energy planning and management vol. 27 2020 05–16 abstract it is quite evident that district heating (dh) networks will continue to be developed in order to complete their transition towards the 4th generation district heating by decreasing heat losses, increasing the share of renewable and waste heat sources, and integrating energy storage units and smart operating solutions. the significance of district heating in estonia is very high, and developing this sector is very important for achieving climate and energy targets set by estonia. consumers play important role in the transition process, and for the purpose of informing and educating consumers, a district heating promo app has been implemented at the national level. one of the app’s modules shows consumers the energy mix that will be required to supply heat via district heating in the future, with all of the planned changes and different district heating regions taken into account. measures and goals proposed in the estonian national development plan of the energy sector until 2030, as well as all available heating strategies from various district heating regions have also been considered. the algorithm of the methodology takes into account possible changes in heating demand caused by increased energy efficiency of the building sector, heat loss reduction due to renovation of existing dh networks and possible reduction of dh temperature, as well as increase in the share of renewable energy sources and its impact on primary energy consumption and co2 emissions in dh area. scenarios show which fuel/primary energy mix is expected to be used for heat generation in the future (the data is given for each district heating region), as well as the amount of co2 emissions. several typical case studies are also provided. 1. introduction the importance of district heating (dh) for the future decarbonisation of the energy sector is undeniable and has been widely discussed in various studies (e.g. [1,2]). this is due to various dh advantages, such as high energy efficiency of heat generation, ability to utilise renewable energy sources, and stable heat supply among others. in order to assess the level of decarbonisation of the energy sector that can be achieved through the implementation of dh, it is necessary to plan district heating systems (dhss) both at the national and local levels. it should be noted that dh planning is required not only for new but also for existing dh networks. one of the most detailed studies on dh planning is heat roadmap europe [3], which discussed the possible future of dh in europe. national heat roadmap scenarios have been developed for 14 countries. the results of these studies show that there is a potential for dh development both for countries with a higher share and a lower share of dh in terms of heating supply. the analysis determined that only in two of these countries (sweden and finland) the share of dh has reached recommended level required for the decarbonisation of the heating sector through the use of renewables, large heat pumps, excess heat, and cogeneration. but in countries such as belgium, italy, the uk, germany, and the netherlands, the potential planning of district heating regions in estonia anna volkova*, eduard latõšov, kertu lepiksaar, andres siirde department of energy technology, tallinn university of technology, ehitajate tee 5, tallinn, 19086, estonia keywords: 4gdh; energy planning; consumers; wood chips; heat loss; url: http://doi.org/10.5278/ijsepm.3490 mailto:anna.volkova@taltech.ee http://doi.org/10.5278/ijsepm.3490 6 international journal of sustainable energy planning and management vol. 27 2020 planning of district heating regions in estonia for implementation of new dh networks is very high due to its rare use of dh in the past [4]. dh planning is very important for countries and regions where this sector is not developed because it provides the potential for the implementation of modern infrastructure and transition from individual heating to dh. there is a variety of methods used in dh planning. spatial modelling was used to analyse dh development potential, and various parameters have been determined, such as heat demand and density, transmission pipeline costs, and potential of renewable energy sources use, etc. [4]. gis-based, deterministic mixed-integer linear programming superstructure model for the design of an entirely new dhs was presented and tested using the case of northern japan [5]. another example of a spatial dh planning tool was used for the uk regions. this tool is based on the multicriteria analysis, and it provides calculations of the three parameter groups: technical feasibility and economic viability, management, and potential for achieving social and environmental value [6]. the gis-based method together with a simple scenario-based formulation created in accordance with heat investment decisions can also be used to plan certain segments of the dhs [7]. dh planning for urban areas can be done by analysing heat demand data using fuzzy logic and spatial mapping [8]. dh development planning aided by the implementation of support mechanisms (e.g., taxes, fees for each kwh of heat consumed) for end users who decided to be connected to a dh networks, as well as a guarantee fund for dh utilities in the lombardy region (italy) has been covered in [9]. the following parameters for 20 fossil and biomass-based dh networks (existing and potential) in this region have been calculated: primary energy savings and prevented emissions over the course of 20 years. life cycle assessment methodology can be used to conduct a more detailed analysis on the environmental impact of renewing/modernising scenarios [10]. according to the results of the case study on dh created for a municipality in latvia, there is a significant improvement in the environmental performance of dh due to the modernisation of the boiler house and subsequent temperature reduction. dh supplies heat to more than 50% of residents in the following eu member states: denmark, estonia, finland, latvia, lithuania, poland, and sweden [11]. on the one hand, it means that the infrastructure and market is already there, and consumers have their dhss installed and connected to the dh network. on the other hand, it sometimes means that the heating installations in the houses are quite old or designed for operation with existing parameter of dh networks which are in opposition with 4th generation dh network. in this case those consumers are not ready to have their homes connected to a modern dh network and it leads to various obstacles for the transition of the existing dhs into the modern dh network. it is important to understand how the dh network can be changed at the regional and national levels. there are various studies on dh planning for countries/regions where dh is already widely used. spatial modelling of the marginal extension of an existing dh network is covered in [12]. a mixed integer linear programming approach was used to simulate and optimise future energy centre operation by selecting the best combination of technologies to get maximum cost savings and minimum greenhouse gas emissions [12]. another study was focused on demonstrating the possibilities of expanding dhss using gis software modelling for an in-depth analysis of a city’s heat demand [13]. in effective heat supply radius study, the maximum effective heat supply radius at minimum cost price on production and distribution heat in dhs is determined, taking into account requirements to reliability heat supply to consumers. this approach helps to plan and evaluate connection of new consumers to the dhs [14]. pakere et al., proposed the following steps for the dh planning process: 1. evaluate the overall dh system of the region/city; 2. identify the best transformation path; 3. select the appropriate district/area for the pilot case study which should be analysed in great detail [15]. stennikov and iakimets developed a methodology for dh planning, which consists of two stages, and validated this method using a case study of the dh system in irkutsk (russia). the first stage includes territorial zoning by heat supply type with designation of district and individual heating zones. and the second stage involves an assessment of the system’s centralisation degree and validation of the existing heat source zones [16]. as part of the study on dh flexibility in nordic countries, four types of dh plants were analysed (combined heat and power (chp), electric boiler, wood chip boiler, oil boiler, and their combinations for sustainable dh development in these countries). various scenarios and the impact of taxes, subsidies, and electricity and distribution (t&d) grid tariffs on dh development were simulated by applying hourly-based operation international journal of sustainable energy planning and management vol. 27 2020 7 anna volkova, eduard latõšov, kertu lepiksaar, andres siirde optimisation over a 20-year period using the energypro modelling software for dh systems in finland, sweden, norway, and denmark [2]. the goal of another research project was to examine how the existing system in helsinki responds to the introduction of renewable heat sources (solar heating and heat pumps). the simulations covered 4 milestone years, i.e., 2014, 2018, 2024, and 2030, and helped the dh operator in their future planning [17]. consumer awareness is crucial for dh development, which has been extensively discussed in previous study [18]. the key parameters that matter for consumers are the price of heat and heat production/transition impact on the environment. the dynamics of these parameters during the development process should be additionally evaluated. the following processes occur during the development and transition towards the 4th generation of dh systems: decrease in heat consumption, heat loss, and heat transition temperature. these processes lead to changes in heat generation. the following modifications are possible: – reducing heat production and reducing or eliminating heat production using peak fossil fuel boilers (if fossil fuels based peak boilers were used before); – increasing the share of heat produced by base load heating plants. base load heating plants often include biomass boilers, biomass chp or waste incineration plants(if renewable fuels related base load boilers were used before); – introducing low-temperature heat sources. additional positive changes in heat generation efficiency are also possible, due to replacement of existing equipment by more efficient or installation of new additional energy efficient equipment such as flue gas condensers. the introduction of chp and thermal energy storages will make heat production even more efficient [19,20]. another way to alter heat generation is partial or full fossil fuel replacement with renewable energy sources, such as solar heat [21], heat pumps [22,23], and waste heat [24]. to estimate the share of energy sources and the amount of co2 emissions for dh heat production in the future, current dhs parameters and all of the abovementioned transition processes should be taken into account. the main goal of this study was to develop an algorithm for the evaluation of parameters, such as the energy consumed by heat generation, consumption of fuels and the share of the fuels required for heat generation, and co2 emissions due to heat generation after possible transition to sustainable dh. these parameters should be calculated per consumed heat amount. the algorithm description is available in section 3. this algorithm was used in planning the development possibilities of 146 estonian dh regions covering about 85% of the total dhss in estonia. examples and results of the algorithm application can be found in section 4. 2. background dh is very common in estonia. in 2018, dh took up around 60%. one of the reasons of its continuous growth is the support from the estonian government. according to the 2016 amendments to the estonian district heating act, local authorities are able to create ‘district heating regions’ (dhr) within their respective administrative territories [31]. dhrs are areas where consumers receive heat through dh. when a dhr is established, all buildings within the dhr must ask for connection to the dh network as a primary heat supply source (with the exception of the ones that did not have dh prior to and during the time the dhr was being established), so the consumers cannot choose an alternative heating source (if connection to dh network is technically feasible and accepted by dh company). this is a form of government support extended to dh. the amendments were aimed at providing heat producers with guarantees and additional motivation to expand the use of renewable sources, while reducing the use of fossil fuels (shale oil or natural gas). in addition, according to this act, dh operators must strive to produce heat in the most efficient and costeffective way to offer consumers a competitive final price. it should be noted that estonia is not the only country with this type of support measure. for instance, france has a dh zoning rule (“procédure de classement des réseaux”). this rule, updated in 2012, allows local authorities to make connecting to the dh network mandatory for consumers under certain conditions and in a particular area, for any new or existing buildings undergoing major renovations and with a capacity of more than 30kw (heating, cooling, or domestic hot water), satisfying three conditions: the dh or dc grids get over 50% of their supply from renewable energy sources; appropriate energy metering devices are installed for each consumer; balanced business-model of the heating network [25]. 8 international journal of sustainable energy planning and management vol. 27 2020 planning of district heating regions in estonia according to estonian district heating act and the competition act, the dh market in estonia is regulated, and estonian competition authority approves the maximum prices that can be charged in various regions [26]. the environmental investment centre allocates funds provided by the european regional development fund to finance the dh development plan for various regions [27]. there are 239 specific regions, but not all of them have dh, as some of the only plan to be connected to dh. most of region authorities together with the experts in the field have already prepared heat supply development plans for their respective regions. usually, this type of plan includes a detailed analysis of the current situation regarding consumers, the dh network, and heat generation units. development scenarios were provided as part of the heat management development plan. scenario modelling methods are often unclear and/or based on local authority/expert opinion, and there is no general method used for all plans, so the results of these analyses cannot be compared among each other. the main development trends related to energy efficiency in estonia include the renovation of the building sector, pipe renovation, replacement of fuel boilers with biomass boilers, and installing chp where possible. this can be explained by both financial and political factors. the environmental investment centre of estonia supports the following actions related to dh: renovation of dh boilers and fuel replacement (74 projects); renovation of depreciated and inefficient piping (142 projects); preparation of the heat management development plans (120 projects). the amount of support received both from the european regional development fund and the eu cohesion fund in 2007–2018 is more than 90 million euros, but the combined total with company contributions/self-financing, the investments into the abovementioned actions exceeds 200 million euros during the 2007–2018 period [27]. it was important for the authors to collect and analyse data on the dhr and evaluate both current and future state if dh is admitted as sustainable in particular region and if the development of this region continues. this data was used as input data for the mobile app promoting dh at the national level. the authors have developed a userfriendly mobile app to inform, educate, and provide dh consumers with approximate calculated parameters based on the real dhs input data. in accordance with the revised renewable energy directive of the european union, dh operators must inform their consumers about the energy sources used to produce heat, as well as the efficiency of the system. the mobile app was created as an easy to use solution for the new rule. as was widely discussed in the previous research paper, the main idea of this app is to demonstrate to the apartment/building owner that their apartment/building is a part of the dhs, let them know how much fuel is used to produce heat for that particular apartment, compare their current heating solution with the other heating supply solutions available, as well as educate them on the possible changes the dhs sustainable development will bring, including future changes to primary energy and co2 emissions. the method used for calculating the parameters reflecting the current situation in dhrs was extensively covered in previous study [18], and the calculation of the future development parameters was briefly presented. however, the analysis was performed for the three dh regions, and the analysis of future development was conducted for each individual region based on the opinions of experts and dh operators. this approach can be used to analyse small amount of regions, but a more general approach is required for the analysis of a larger group. the purpose of this research project was to develop a general approach that can be used to analyse future developments and changes in the structure of primary energy, changes in quantities, as well as reduction in co2 emissions in various dhrs. the analysis began with data collection. the data was collected from heat management development plans, as well as directly from the dh operators. as a result, 146 dhrs were analysed. these regions cover about 85% by heat generation of all existing dh networks in estonia. the main characteristics of the analysed dhrs are given in table 1. table 1: characteristics of analysed dhrs characteristics number of regions length <1,000m 40 1,000m–10,000m 85 >10,000m 21 pre-insulated pipes <20% 36 20%–50% 27 50%–80% 35 >80% 48 share of renewable sources 0% 31 <80% 8 80%–95% 16 95%–99% 32 100% 59 international journal of sustainable energy planning and management vol. 27 2020 9 anna volkova, eduard latõšov, kertu lepiksaar, andres siirde 3. decision algorithm there are various options for dh system development, and for each system, many scenarios of future development can be simulated. it is intended that the mobile app will provide parameters for only one scenario. this scenario should reflect the best-practice option, taking into account the conditions that are specific to estonia. the following parameters will illustrate the current and future state of the dhr: fuels/primary energy used for heat production and transmission, heat consumption by a particular apartment/ building by type of energy and co2 emissions generated during current heat production. for these purposes, relative parameters must be determined, which means that fuel/ energy is used per 1 mwh of heat consumed. analysis includes changes’ evaluation in heat consumption, transition and generation sector and starts with consumer side. 3.1. changes in heat consumption the share of fuels used for heat generation may change. this is valid for conditions where dh production units will stay the same. lowered heat consumption will reduce the needs for peak load boilers (mainly use gas or fuel oil) and in some cases will allow avoiding use of peak boilers and vice versa. there are two main factors that can affect heat consumption in dhrs: a reduction in heat consumption through energy efficiency measures in the buildings, and an increase in heat consumption due to the addition of new consumers to the dh network. the amount of heat consumed by a building can be significantly reduced through energy efficiency measures [28]. the estonian government has announced the minimum energy efficiency requirements for buildings, and all new buildings must comply with these requirements. the type of building determines how much primary energy it can consume per year per 1m2 of heated area. there are also regulations concerning renovated houses, meaning that renovated houses must also meet energy efficiency requirements [29] due to the renovation of older buildings in some dhrs (where construction of new buildings is negligible) the demand for heat has decreased, as did heat demand density. this leads to the possibility that some dhns may stop being profitable due to low heat demand, unless new consumers are added to the network [30]. despite the fact that more energy-efficient houses that use low-temperature heating help reduce primary energy use and grid losses, it is still necessary to reach 55˚c in domestic hot water to prevent legionella growth and spread [31]. according to the assessment of the age of the building stock and current state of dh in estonia, and according to the estonian energy development plan, upgrading the building stock and increasing the efficiency of heat consumption can lead to a 30% reduction in dh sales by 2030, compared to 2010, as building heat consumption will decrease by 30% [26]. this is possible due to two trends: renovation of existing buildings to increase their energy efficiency and replacement of existing buildings with new energy-efficient ones. but, on the other hand, heat demand can be increased by adding new consumers to the network. first of all, new consumers are getting connected due to the district heating act, if their house is located in the dh. another factor is the renewal of the housing stock, which is estimated from 1% to 2% per year. it should be noted that the main investments in this sector are made in largest cities, as an example in tallinn and tartu. on the other hand, the share of historic buildings is significant in these cities, and in many cases the possibilities of implementing energy efficiency measures in historic buildings are limited because external wall insulation is not possible due to historic preservation or other restrictions [32,33]. the tempo of renovation is significantly depends on renovation grants. for the last years the budget to support renovation is significantly reduced and previously mentioned heat reduction tempos may not be achieved. to evaluate the reduction in heat consumption, both actual and potential heat consumers were taken into account. we conservatively assume that this parameter varies for different dh regions and on average is about 20%. 3.2. changes in heat distribution for the analysis of the current heat transmission system, the following data were collected for each dh region: annual relative heat losses, length and average diameter of the networks, the share of pre-insulated pipes, supply and return temperatures, and annual outside temperature duration curve for the region. as part of the heat distribution improvement, there are two measures that can reduce heat loss: piping renovation and decrease in dh network temperature level. these changes will lead to alterations to the amounts of fuels used, heat generated and structure of fuel mix in the heat generation process. for example, in a helsinki case study, it was determined that after reducing heat supply and return temperature, the share of renewable sources increases [17]. 10 international journal of sustainable energy planning and management vol. 27 2020 planning of district heating regions in estonia the first action is pipe renovation/replacement. as mentioned earlier, it is possible to apply for 50% co-financing by the environmental investment centre. many dh operators have already renovated their piping (see table 1), and many pipes will be renovated or replaced with pre-insulated pipes in the near future. for further calculations, it is important to determine relative heat loss in dh network in the future. a study by mašatin et al. examined how various factors affect heat losses in dh network [34]. according to this analysis, relative heat losses can be calculated by eq. (1): where k is effective average heat transfer coefficient of the network, w/m2k da is average diameter of pipes, m l is pipes length, m g is the difference between heat supply and heat return and is calculated by eq. (2), ˚c where ts is supply temperature, ˚c tr is return temperature, ˚c tamb is ambient temperature, ˚c based on the eq. (1), it can be seen that heat loss is affected by both the overall network heat transmission and the temperatures in the network, i.e. a decrease in temperature will lead to heat loss reduction due to the lower temperature gradient between the heat supply carrier and the environment where dh network is located. coefficients received in the previous research will be used for further calculations [34]. the high-quality technical reference conditions are defined as pre-insulated pipes class 2, buried in soil at 0.5 m depth using the calculation methodology according to european standart en13941. the low-quality technical reference conditions are defined as old channel layout pipes with 50 mm mineral wool insulation. based on calculation following coefficient has been determined for pipes before the renovation/replacement (see eq. (3)). where klow is effective average heat transfer coefficient of the low quality dh network, w/m2k and for pipes after renovation, the coefficient is calculated as eq. (4) where khigh is effective average heat transfer coefficient of the higher quality dh network, w/m2k. heat losses for high-quality pre-insulated pipes can be calculated by eq. (5). heat losses in the network, when share of pre-insulated pipes is spre can be calculated by eq. (6). where spre is share of pre-insulated pipes in the network, (0…1) after all pipes are renovated heat losses can be calculated by eq. (7) if not all pipes have already been replaced with pre insulated pipes, heat losses after replacing all pipes is calculated as a decrease of the network’s supply and return temperatures will result in an additional heat loss reduction, which can be attributed to the entire system. an equation showing how heat losses will be reduced due to the complete pipe replacement and decrease in temperature is as follows eq. (9): where ta is average temperature between supply temperature ts and return temperature tr before temperature lowering, ˚c ta,low temp is average temperature between supply temperature ts and return temperature tr after temperature lowering, ˚c as for the estonian regions, the average heating period temperature can vary from 46.5˚c to 66.5˚c it is (1)2hl aq k d l gπ= ⋅ ⋅ ⋅ ⋅ (2)( )1 8760 2 s r amb g t t t = + − ⋅    (3)0 3410 7676 .low ak . d −= ⋅ (4)0 6190 1088 .high ak . d −= ⋅ (5)0 2780 1417high .hl hl a hllowhigh low low k q q . d q k −= = ⋅ ⋅ (6) ( ) ( )0 278 1 0 1417 1 hl pre hl pre hlhigh lowcurrent . hl pre a prelow q s q s q q s . d s− = ⋅ + − ⋅ = ⋅ ⋅ + − (7) 0 2781 0 1417 .hl hl a hlfuture high lowq q . d q −= ⋅ = ⋅ ⋅ (8) 0 278 0 278 0 1417 0 1417 1 . a hl ,current hl .future pre a pre . d q q s . d s − − ⋅ = ⋅ ⋅ + − (9) ( ) ( ) 0 278 0 278 0 1417 0 1417 1 . alow temp amba hl ,current renov&low temp . pre a pre a amb t t. d q q s . d s t t − − −⋅ = ⋅ ⋅ + − − international journal of sustainable energy planning and management vol. 27 2020 11 anna volkova, eduard latõšov, kertu lepiksaar, andres siirde assumed that in the future the average temperature will be reduced by 7˚c. when analysing the dh system in estonia, it should be noted that there are various supply and return temperatures in dhrs. temperature level depends on heat capacity, consumers, length of pipes. usually in small dhn supply temperature of 70˚c and return temperature of 50–55 ˚c is applied. medium dh networks that are longer than 1,000 m but do not exceed 10,000 m usually have temperature of 80/60˚c. and large networks exceeding 10,000 m have supply and return temperatures are 95/65 ˚c up to 115/65 ˚c. to calculate heat loss reduction, two assumptions were made: 1. after the renovation, 100% of the pipes are replaced with high-quality pre-insulated pipes. 2. the average temperature will be reduced by 7˚c. it should be mentioned, that these assumptions can lead to inaccurate results, since some of the existing pipes, which are not pre-insulated, already have a sufficiently high quality and low heat losses, while existing pre-insulated pipes can be quite old and have a higher heat transfer coefficient. in addition, due to optimisation of existing pipes the size of the new pipes may be corrected (in majority of cases reduced due to decrease in energy consumption in the regions), and the average diameter after renovation may differ in comparison to existing pipes which need renovation. despite these shortcomings, this method can still provide an overall rough result, which can determine the ways the dhr can improve. 3.3. changes in heat generation as was mentioned above, changes in distribution and consumption will lead to changes in heat generation without any modification within energy production units. this will happen due to changes in consumption profile. to analyse those impacts a heat load duration curves were created for each dhr and for different options described below. the degree-day approach was used to plot the heat duration curve. six estonian regions with varying degree days diverse enough to represent the whole country were identified based on the research conducted by loigu and kõiv [35].to determine the heat duration curve it was assumed that when the average daily outdoor temperature is above 10˚c, there is no need for space heating in the building. primary energy consumption in dhr will be reduced by reducing the amount of heat that must be generated. another factor that can lead to primary energy reduction is an increase in generation efficiency due to the replacement of the existing equipment with a more efficient ones or transition to more environmental friendly or/and cheap fuels/energies. as for the fuel type used to generate heat, usually a decrease in heat production leads to an increase in the share of renewable energy sources. renewable fuels (biomass) are mainly used to figure 1: heat production duration curve changes 12 international journal of sustainable energy planning and management vol. 27 2020 planning of district heating regions in estonia cover base load and reduction in energy production will result an increase in the share of renewables. to illustrate that the following heat production duration curves (hlc) are constructed (figure 1): hlc1 – current situation. biomass boiler (6.5 mw) produces 83% of the all energy. hlc2 – heat consumption reduced by 20%. hlc3 – heat consumption reduced by 20%, relative heat losses in dh network reduced from 17% to 11% and dh network temperature is reduced by 7˚c. according to this analysis the share of renewable energy has increased from 83% till 91.7% after heat consumption reduction and till 92.4% after improvements in the networks. due to the fact that currently the main source of renewable energy used in heat production at the dh plants in estonia is biomass (mainly wood chips) and biomass is proposed as a main fuel to replace natural gas and shale oil in heat management development plans, the decision was made to focus on one, the most viable for sustainable dh development in estonia renewable energy source, i.e. wood chips. after the final required amount of generated heat is determined, possibilities to expand the share of renewable energy sources are analysed. general decision-making principles regarding the replacement of existing fossil fuels based generation plants with new plants used in mobile app is shown in table 2. it should be noted that the main peak/reserve fuel used in estonia is shale oil [36]. shale oil is extracted from local fossil fuel oil shale via the process of pyrolysis [37,38]. as can be seen in table 2, after a decrease in heat generation, if the share of renewable fuel exceeds 95%, and the share of fossil fuel is 5% or less, it is expected that significant share of biofuel is already reached and additional investment is not feasible (this boiler will work for some days per year only). it should also be mentioned that there are few exceptions from the main trend in biomass consumption for base load production. first of all, there are regions where peat is the main fuel used in heat production. peat is not considered renewable, but it is a local fuel, and it helps to keep some technical issues (positive impact of peat ash on lining of the boiler). as it is a local fuel, its price is more stable than that of imported fuel. in dhss that use peat as fuel, the price of heat is usually lower than the estonian average [26]. there are regions where dh operators are also involved in peat extraction and peat product manufacture, at the same time providing heat to nearby dh systems. in these regions, heat plants are modern and energy-efficient, and replacing peat boilers with wood chip boilers is simply not feasible. there are 7 regions that use peat in heat generation. in addition it should be noted, that there are in some places peat boilers suitable to work with biomass as well. in other group of dhrs, industrial waste heat is utilized. heat is generated as a by-product during production process [39]. oil shale gases are generated during the shale oil production process, which are then transferred to the waste gas boiler. the heat from those boilers is used in efficient way and for dh. another case has to do with two dhrs where biogas is the main fuel, and there are no plans to replace biogas boilers with wood chip boilers. in addition, there is one dhr where the source of heat is waste heat from a power plant [40]. another case has to do with two dhrs where biogas is the main fuel, and there are no plans to replace biogas boilers with wood chip boilers. in addition, there is one dhr where the source of heat is waste heat from a power plant [40]. 4. results there are five different type dhr examples are presented in figure 2. the key parameter for all scenarios is fuel consumption per unit of heat consumed (mwhf/mwhc). five scenarios are shown: acurrent state; bdecrease in consumption; cdecrease in consumption and heat loss; d decrease in consumption, and heat loss, and increase in efficiency (if applicable); e decrease in consumption and heat loss, increase in efficiency (if applicable), and fuel replacement, (if needed). 1st example illustrates the dhr, where the share of renewable energy is high. it can be seen, that a decrease in heat consumption led to an increase in the share of wood chips. for scenario с, fuel consumption is reduced. if it is possible to increase the efficiency of heat generation, fuel consumption is reduced even more. according to table 3, fossil fuel is not replaced with wood chips in this case. 2nd table 2: fossil fuel replacement strategy biomass boiler efficiency <85% replace with a boiler with an 87% efficiency >85% are as efficient share of renewable energy sources <95% non-renewable fuel is replaced with wood chips >95% no modifications expected international journal of sustainable energy planning and management vol. 27 2020 13 anna volkova, eduard latõšov, kertu lepiksaar, andres siirde example demonstrates calculation results for a type of dhr that is similar to the 1st example (peak load is covered by fossil fuels); the difference is that it is reasonable to replace fossil fuel with wood chips. 3rd example illustrates calculation results for a different type of dhr. the amount of fuel is reduced due to dhr improvements. because of the fact that this region is already res-based, there is no change in fuel mix. 4th example demonstrates the situation, when, due to the improvements in the consumption sector, there is no need for peak fossil fuel boilers. in the case when heat is produced only using fossil fuel, as in 5th example, improving the system leads to a decrease in fuel consumption. usually, these boilers are completely replaced with wood chip boilers. district heating in estonia is in the process of transitioning to the 4th generation district heating. many heating plants have already been replaced with efficient biomass-based boilers and chps. different types of dhs component modernisation and its impact on reducing co2 emissions were analysed. for a segment of estonia’s dhs, a significant reduction in co2 emissions is possible due to the decrease in heat loss achieved via pipe renovation. for another segment of the dhs, the most significant reduction in co2 emissions can be achieved by boiler modernisation and fuel replacement. in previous studies, the greatest positive effect was obtained through boiler modernisation [10,41], but it should be noted that these results largely depend on the current state of the boilers and networks of the analysed dhs. the figure 3 shows the case with estonian dhrs. as can be seen, at the moment, 34% of dhrs are already carbon-neutral. in case of planned consumption figure 2: scenarios for relative fuel consumption for heat generation in various dhrs figure 3: share of carbon-neutral dhr 14 international journal of sustainable energy planning and management vol. 27 2020 planning of district heating regions in estonia reduction the share will increase to 47%. a decrease in consumption along with loss reduction will result in half of the dhrs being carbon-neutral. if all of the above options are implemented, 72% of dhrs will be completely carbon-free. moreover, 11% are the regions where the annual share of renewable energy sources will exceed 95%. 5. conclusions when designing a dhr, an integrated approach is needed that takes into account possible changes and improvements in consumption, distribution, and generation sectors. this study was conducted to propose an algorithm to predict possible state of 146 estonian dhrs of different size, length, capacity, and primary energy structure after more probable transitions to sustainable dh state and provide trial calculations. it was assumed that in general, according to planning documents and targets in energy efficiency of the buildings heat consumption would be reduced due to renovation and implementation of energy efficiency measures in the building sector: in some cases the growth in energy consumption may take place due to possible new consumers. the evaluation of heat loss reduction was based on the assumption that in the near future all old pipes will be replaced with high-quality pre-insulated pipes, and it will be possible to reduce supply and return temperature in average by 7 ˚c. in some cases, a decrease in heat consumption in both building and network sectors can make the dh region carbon-neutral without any change on heat production side. if, after all these improvements, the share of non-renewable energy in heat generation is still high enough, fossil fuels can be replaced with renewable energy sources. there are exceptions included in this analysis. first of all, when the share of fossil fuels is very low, it was decided that these peak/reserve fossil fuels based boilers will not be replaced, because in such cases installing new renewable fuel-based boilers with a low energy production is simply not feasible. another exception is related to a current situation where waste heat from electricity production or shale oil production is utilized in dh. another example specific to estonia and which is still used in some places is usage of peat with biomass or purely peat consumption. in some cases the peat is used as additive to biomass to improve the lifetime of lining or due to lower price in comparison to biomass. wood firing was chosen as the priority option for sustainable dh in estonia. even before any improvements have been made, more than 1/3 of dhrs in estonia are already carbon-neutral. after all measures have been implemented, this share may increase up to 72%. based on the data collected for the mobile app, and the existing state, a generalised approach was developed to calculate the parameters necessary for the future scenario module of the mobile app promoting dh. 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http://doi.org/10.5278/ijsepm.3664 http://doi.org/10.5278/ijsepm.3664 international journal of sustainable energy planning and management vol. 24 2019 163 *corresponding author e-mail: paola.clerici@enea.it international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue introduction: why a virtual round table on innovation for smart and sustainable cities? by paola clerici maestosi innovation is, according to the definition given in innovation in firms: a microeconomic perspective, oecd, 2009, the “implementation of a new significantly improved product, good, service, or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations”. we know that innovation can be incremental – in terms of optimization of existing products, services or systems or radical such as innovations which dramatically change social and business practices, and create new markets. concerning the urban dimension, specifically sustainable urban development, it appears clear that incremental improvement, whilst potentially important, could not be sufficient to bring the required structural change. cities are indeed the best place to experiment innovation as its societal dimension is characterized by a combination of technology, infrastructure, production systems, policy, legislation, user practices and cultural meaning. moreover cities are interconnected social, technical and ecological systems made by people, infrastructures, buildings, flows, functions and services. cities are the principle engines of innovation and economic growth. however, urban activities consume a significant amount of resources, generate waste and pollution, and cause structural depreciation. due to our increasingly globalised production and consumption systems, negative environmental impacts are felt locally and globally. to achieve sustainable urban development, targeted growth in key technology sectors, is required to provide the infrastructure and solutions that support operations and behaviours which reduce the negative environmental impact caused by urban life and urban development. it is a shared opinion that sustainability challenges cities are facing cannot be approached and supported by traditional disciplinary modes of research, innovation and funding as the limitation due to working with the silos approach is misleading. this does not mean that there is only one pathway to support the transition to sustainable urban development. this virtual round table on innovation for smart and sustainable cities compares pathways experimented in three different country in europe: netherlands thanks to the point of view of han brezet, sweden thanks to jonas bylund, and las but not least italy thanks to the contribution of giovanni vetritto. added value is the foreword provided by peter berkowitz head of unit smart and sustainable growth, directorate general for regional and urban policy, european commission. i would like to thank all of them and express my sincere appreciation for their contribution. virtual round table on innovation for smart and sustainable cities paola clerici maestosi*, peter berkowitz, han brezet, jonas bylund and giovanni vetritto url: http://doi.org/10.5278/ijsepm.3502 http://doi.org/10.5278/ijsepm.3502 164 international journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue foreword by peter berkowitz head of unit smart and sustainable growth directorate general for regional and urban policy european commission the european union needs to reach net-zero greenhouse gas emissions by 2050 if it is to contribute to stabilising the climate this century, as reflected in recent ipcc reports. a communication from the european commission last november (european commission 2018) showed that this is challenging but feasible from a technological, economic, environmental and social perspective. as such, the un sustainable development goals (sdgs) provide a guiding framework to address both the environmental and social dimension of moving to net zero-carbon societies. however, there are many uncertainties regarding potential pathways towards the achievement of deep societal and economic transformations necessary to achieve this shift. indeed, given the diverse starting points and the magnitude of the changes for our economies and societies, this will affect unevenly citizens, regions and sectors across europe. for instance, many parts of europe need to diversify their economies as they move out of carbon-intensive or coal activities. fast growing regions face different types of challenges, such as increasing congestion, growing energy demand and population pressures. with increasing urbanisation, cities and urban areas will even play an increased role in this transition. at the same time, the involvement of rural areas will be essential, notably as regards the sustainable production of food and renewable energy sources. public, private and civil society actors at local level will deliver these changes on the ground. the european union will play an important role in supporting them to deliver a just and inclusive transition. this means a process of transition that is good for people, manageable at local level, benefits our businesses whilst at the same time leads to the necessary greenhouse gas emissions reductions and less pressure on the environment. deep transition requires new solutions in order to facilitate a process of deep transition, europe needs new policy approaches to promote emerging industries and new value chains, based on breakthrough technologies. businesses need access to technical knowledge and the expertise of other actors to develop innovative solutions and participate in new value-chains. further action is therefore needed to facilitate deeper strategic inter-regional collaboration along industrial value chains. by building on investment in areas identified as part of smart specialisation strategies, participants in the quadruple helix can identify new areas of potential collaboration. smart specialisation strategies within the eu’s cohesion policy ensures that industry, researchers, public sector and civil society work together to identifying business needs and local opportunities for investment in innovation. these strategies are a pre-condition for cohesion policy support – €41 billion for the 2014– 2020 period – to areas of innovation-led growth potential. energy has been one of the most common areas chosen in these national and regional smart specialisation strategies. this means that significant funding in the area will also be available and more importantly opportunities for cooperation. to support the cooperation and have real projects across the energy innovation chain, the commission is promoting the creation of partnerships between the interested regions. these partnerships aim at connecting regions with similar smart specialisation priorities and helping them realise innovative projects across the value chain. so far, five partnerships have launched in the area of energy – on marine renewable energy, on bioenergy, on sustainable construction, on smart grids, and on solar energy. in order to test new approaches to developing innovative solutions to transition, the commission has launched two pilots (european union 2018). one of the pilots is international journal of sustainable energy planning and management vol. 24 2019 165 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue aimed to help interregional innovation projects across value chains, including on energy (for sustainable construction and for marine renewable energy). the other pilot supports the industrial transition of regions that are experiencing specific structural challenges linked to technological change and the transition to a low-carbon economy. the results of these pilots will feed into the development of smart specialisation strategies post-2020. the role of cities needs to be further strengthened in managing the low carbon transition engaging stakeholders in regional and city planning and economic development processes increases the ownership and better embeds action in the local setting. many cities have organised public consultations and citizen involvement in projects with eu funds and the partnership principle is, for example, a cohesion policy requirement. however, more can be done to increase the role of cities and to engage citizens across europe. an example of such engagement is the urban agenda for the eu, which aims to strengthen the urban dimension in eu policies and to improve the involvement of urban authorities in their design and implementation. the agenda represents a new multi-level working method promoting cooperation between member states, cities, the european commission and other stakeholders through thematic partnerships. work on the fourteen partnerships is currently ongoing covering key urban and related low-carbon transition themes1. it shows that collaboration between different levels and broad engagement of stakeholders can give a multitude of solutions to concrete problems cities face that are tailored to the needs of these cities. eu funds to support deployment of new solutions the eu funds – although small compared to the investment needs – play an important role in stimulating the 1 e.g. energy transition, climate adaptation, jobs and skills in the local economy, mobility, urban poverty, housing, air quality. for more info: (european commission 2019), (european commission n.d. a) change on the ground. in particular, eu cohesion policy has a long experience in supporting industrial and environmental transition of europe’s regions. it provides financial support for investments in a wide range of areas that contribute to smart, sustainable and inclusive growth and jobs. more importantly, cohesion policy also represents a policy framework for integrated territorial development and is particularly well suited to address issues related to structural change, working in partnership with actors on the ground in a place-based and holistic approach. for example, in the current 2014–2020 funding period, eu cohesion policy provides substantial support for the realisation the energy union on the ground. this includes significant funding of eur 69 billion – or around eur 92 billion with national public and private co-financing – for investments in a variety of projects across the five energy union dimensions. implementation is progressing well, with 71% of the total funding allocated to projects by end 2018. importantly, this support goes beyond funding and cohesion policy provides member states, regions and cities with administrative capacity building and technical assistance and cross-border cooperation possibilities, so that investments actually contribute to a real and lasting transition. for the 2021–2027 period, cohesion policy will continue to put a strong emphasis on supporting a clean and fair energy transition, by supporting innovation and the deployment of new solutions. it will do so by supporting europe’s cities and regions to anticipate and manage the energy transition in a targeted and tailored manner. the regulatory proposals offer a shorter, modern menu of priorities to build smart, green, low-carbon and more social europe. urban and territorial aspects are given more prominence with a separate priority objective. finally, the commission has proposed a dedicated instrument to support the development of interregional value chains as well as reinforcing the commitment to the urban agenda with the european urban initiative. 166 international journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue concluding remarks europe must accelerate its transition towards a carbon-neutral economy. this can only be achieved by the full engagement of regions and cities in a process of deep transition. through cohesion policy, the european union will strengthen its support to this process, notably through support to smart specialisation, deployment of new solutions and development of value chains. however, success will depend on engaging all relevant actors at all levels. this will require new ways of working, the development of new models of public sector management and a deeper understanding of the policies that can facilitate system change at subnational level. international journal of sustainable energy planning and management vol. 24 2019 167 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue points of view a dialogue between paola clerici maestosi, han brezet (nl), jonas bylund (se) and giovanni vetritto (it) paola clerici maestosi: the shift from new public management to multilevel public governance lies on promoting innovation in public administration. has this process taken place in your country? han brezet: the developments of the last ca. 50 years in the netherlands cannot be well understood without the history model of braudel, distinguishing between three type of waves in societal development: the longer term, conjuncture waves and events (smith, 1992). in our case, without the “house of europe”, and its institutionalization including innovation aimed policies and instruments such as the different innovation related directorates and r&d programs, which could be seen as part of the longer-term wave, developments in the national innovation ecosystem cannot be well explained. however, ceteris paribus, here we will focus mainly on the conjunctural waves, with events mostly as their illustrations. we argue that in the netherlands within the conjuncture a ‘polder (wetland) paradox’ exists in which at the same time npm models survive and new forms of mpg pop up, living in co-existence (celik, 2018) in the netherlands this goes back to the creation of large parts of the country -the long-term waveof land reclamation, dike building and water works engineering and management. from its’ origin, this required on the one hand village level initiative, entrepreneurship, skills and local co-design and cooperation but on the other hand governance within the region and country, leading to the establishment of regional water board bodies, as multi-stakeholder entities, including representatives from the higher national levels. (mostert, 2017) this historically grown governance model -partly due to its geographical position below the sea-level and experienced flooding danger from both rivers and the seais still at the core of today’s approach of innovation in the country: while the water boards can be regarded as examples of semi-self-steering npm agencies, using a decentralized service delivery model, at the same time their daily program consists of co-developing and co-managing their waterworks related activities with a variety of actors, using a mpg-like multi-stakeholder approach: the dutch innovation governance paradox. therefore, both developments can be observed during the last decades. in areas such as health care, social care (elderly, youth), social building sector, energy sector and education definitely the private-style corporate governance model has been dominant. however, this has lead in various cases to lower quality of public goods’ services and personnel dissatisfaction in many ways and areas, due to too intensive competition on common good markets, where instead cooperation and joint planning would make sense, like in the care for the elderly. a npm-adapting movement can now be observed in the netherlands, building theoretically strongly on the model of mazzucato (mazzucato, 2018), which acknowledges a crucial guiding and facilitating role for governments in societal relevant innovation in stead of leaving this to business and privatized government agencies. such an approach has to bring back responsibilities close to governments or avoid market competition in common good areas. a less shock wise and more insidious, though very significant mpg-related trend in the netherlands’ innovation ecosystem stems from the design disciplines. starting 50 years ago at the delft university of technology as the new discipline ‘industrial form giving’, today design thinking and industrial design disciplines have reached all capillaries of society, not only in higher 168 international journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue education institutes, industries, but also in governments at all levels, within consultancies and other members of the quadruple helix. by joining forces with the art disciplines, a new and powerful business sector has emerged, the ‘creative industry’, which is now cooperating intensively with the more traditional r&d and technology oriented industry and innovation sectors. nearly all higher education institutes in the country have a department for design, or have design thinking in their missions and programs, leading to a significant change in innovation paradigm, where user involvement, multi-stakeholder engagement, out-of-the-box solutions, creativity tools and methods, and common good -united nations (un, 2017)goals orientation are becoming standard. top-down, government is stimulating this with both institutionalization and creative industry aimed programs. furthermore, this trend is supported by the philosophy of richard florida on the creative class (florida, 2012 ) and by dutch -mostly sustainability driveninnovation thinkers’ theories, conceptualized as transitions theory or sociotechnical transitions theory (geels, elzen & green, 2004. sovacool, 2017. ceschin & gaziulusoy, 2019). this philosophy, which is quite influential in the country, suggests that -radicalsocietal transitions can occur via interactions among three levels: the niche, the regime and the landscape. here, the dutch paradox is expressed quite clearly: a hybrid governance model, top-down oriented at creating new rules and entities at a distance -regimesfor -sustainableinnovation, with their semi-private mission and tasks, while at the same time design thinking=joint productand service development and management notions and practices infiltrate all levels of society, starting bottom-up in niches. jonas bylund: yes and no. there is an increasing awareness not just in planing and organisational studies but also in public sector and administration development circuits that the new public management (npm) approach perhaps did not lead to the anticipated – or promised – effects. the point of departure for npm in sweden was tied up in a push for devolution and increased local democracy in local democratic settings, i.e. municipalities. the effects were rather ‘headless chicken’ (barrett 2004) and that more and more issues and challenges in the everyday work of local urban governance falls between chairs. the need stems from a sense that current issues and concerns, particularly challenges around the un agenda 2030 and the sustainable development goals, escape the current sectoral and silo organisation of most public admininstrations. in a way, it is a kind of emergent public, although with a focus on public administrative persons and capacities rather than the typical civil society and other in the neo-pragmatic resurgence over the last decades (cf. marres 2010). hence, after a couple decades with npm reforms: ‘what we can see, then, is that an administration that was initially relatively independent has become even more “bottom heavy” since the 1980s…’ (hall 2013: 409); since ‘public-sector management in sweden used to be characterised by its relatively detailed, hands-on nature, while at the same time allowing a certain latitude: within their budgetary frameworks and outside areas that were regulated in detail, public authorities could, in principle, do what they liked…’ (hall 2013: 408) of course, swedish municipalities still retains their ‘planning monopoly’ on land-use (except areas of national interest in terms of e.g. military or biotope importance). this means that there is less to vertically integrate from a municipal local governance point of view. (on the swedish territorial admininistrative set up, see e.g bäck 2003). by npm and its role in european planing and policy, i rely mainly on the understanding conveyed by barrett’s (2004, pp. 257) more than a decade old synthesis on the field of policy implementation. here, the sense of npm is the transfer (and not really translation) of business and industry management principles and practices onto international journal of sustainable energy planning and management vol. 24 2019 169 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue public admininstrations, with accompanying new or re-mixes of centralisation/decentralisation balances as well as a discursive change around policy implementation and meaningfulness. in sweden, then, the sense at the moment is not that multi-level public governance simply succeeds npm. firstly, since npm is also an effect of the rise of governance (as a poltical science concept) in contrast to mid20th century understandings of government in the west. secondly, because multi-level public governance as a counter-movement to npm (if it can be characterised as such given the general governance charactersistics just mentioned) is probably better understood in sweden as new public governance (npg). although npg is not strictly a counter-movemen, there seems to be a non linear move from the one to the other, and in parallell by a rather more focus on what we might call new public services (npm) to stem and rectify the effects of npm – and which has been around simultaneously as npm proper. a contrast between npg and nps might be seen in the former’s focus on organisational capacity whereas the latter is more focused on the product and delivering the service, so to speak. the former, in terms of promoting innovation, works more in terms of public innovation governance, whereas the latter is more about public service innovation. however, it’s never that easy. the shift is not a clearcut one and it seems, when talking to colleagues out in ‘the system’ that all three occurr at the same time and are currently active ways of structuring everyday urban planning and management, in different degrees in various municipalities. there is, of course, a distinction to be made on innovating public services, on the one side, and innovation governance, on the other. the former has more to do with the products and services the swedish public sector is to provide in some or the other way and where e.g. schools, primary education, transport and mobility, public utilities and housing was privatised in different and varied degrees during npm reforms. the latter, public innovation governance, has more to do with the capacity to enable, support, and innovate in complex governance situations. (cf. oecd 2011; ec 2011) however, the multilevel governance aspects may be more appropriate to understand as npg? giovanni vetritto: the sunset of npm comes from a functional and theory point and not from a technological point; nevertheless, ict gave the main instruments to overcome its impasse world (osborne & gaebler, 1992; oecd, 2005). the prevalent address of npm from the late 1980s to the early 1990s (pollitt & bouckaert, 2004), led lately to a general disaffection with that approach, especially in the countries that experimented it in a deeper and pervasive way (like new zealand and great britain); then the new paradigm of mpg rose on totally different socioeconomic and organizational principles (vetritto, 2010). in the context of a strong revival of the free market neoclassical approach, npm inspired reforms that were reduced to the logic of microeconomic efficiency. the only admitted public value to be produced was the sum of separate single microeconomic efficient services. as a consequence, a number of quasi-markets for single administrative services or products were enabled. as a matter of fact, npm was not the adoption of managerial technicalities in the skills matrix of public managers; it was a comprehensive organizational and institutional rebuilding that gave start to the so-called process of agencification (christensen & laegreid, 2006; verhoest, 2017): the outsourcing of public single-product bodies with business goals and models. the most ambitious reform in this sense was realized in new zealand during the ‘90s, and since the early years of the new century saw dissatisfaction and changes of address, because, on the one hand, the fixing of medium and long term microeconomic performance goals in separate agencies precluded wider, integrated 170 international journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue and horizontal policies with more ambitious goals; on the other hand, the “business oriented” approach came to predominate in the electoral circuit (citizens – parliaments – governs) in the pursuit of more complex goals, other than the saving of resources, for example in the changing of socioeconomic conditions considered unequal or in any sense not approved by the majority of the electoral body (rennie, 2005). the most important criticism to the npm model, anyway, moved on a different level: it implied the inadequacy of the “quasi-market” logic on a conceptual and cognitive basis. npm was based on the wrong assumption of considering means and goals of the administrative (and political) action as known. that was barely possible in the small number of years that saw the prevalence of the neoclassic revenge, of the minimal state and of the self-regulation of rationale social actors disputed. until then the simple contractual or quasi-contractual logic was considered sufficient to solve the main collective problems and challenges. when this prevalence started to unravel, long before the major crisis of 2008, preferences and orientations of the majority of citizens started moving to the request of more demanding and integrated policies, which the contractual and business-oriented model couldn’t afford to give (guy peters & pierre, 1998). for a number of years, the world blindly believed only in the return to the logic of the invisible hand and of the pull of efficiency. the technological revolution that started at the end of the last century gave to the economic actors more and more room for efficiency gains and organizational rationalizations, leading to the overcoming of fordism. in more recent years, the same technologies have given the economic actors a new awareness about the chance to reconsider transactional, organizational and operational choices using the network model, the “coopetition” dynamics, and more interconnected relations between private and public sector: the referring is to the concept of milieu innovateur theorized in the nineties by manuel castells (2010). on a territorial level, there has been a rediscovery (hidalgo, klinger, barabàsi & hausmann, 2007) of the hirschmanian economic theory of agglomerations (hirschman, 1958, 1963, 1967), highlighting the basic value of social capital and distributed knowledge (dahrendorf, 1959, 2003). the revenge of the market versus the state left progressively room to a new awareness about the inextricable connection of the public and private sectors, especially by means of the new “connective” and “cooperative” ict technologies. what once, in the words of the most important italian political scientist of the last century, was the “great dichotomy” between “public” and “private” became a syncretism of both (bobbio, 1974). a number of cultural developments stemmed from this change of attitude in policy making: from the new success of the theory of capitalism of karl polanyi (2013), to the nobel prize of a thinker like elinor ostrom (2007), who dedicated her entire research life tearing down the enemy’s myths of the leviathan state and of the self-regulating invisible hand market. ten years ago important scholars already declared the npm overcome (dunleavy, margetts, bastow & tinkler, 2006); the reason for that is the more useful and elastic methodology offered by the mpg in shaping and conducting public policies in the era of new digital means; an era characterized exactly by being digital. paola clerici maestosi: which are the most innovative instruments and fields/domain of application? han brezet: the shift from an at first instance institutional and npm-oriented innovation policy is now more and more enriched with and based upon mpg-elements. good illustrations of modern mpg approaches can be for instance found in the higher education and sustainable innovation area. the dutch science agenda is now aligned with general public participation on urgent societal issues: via an intensive consultation of the general public’s opinion by means of questionnaires, interviews and group international journal of sustainable energy planning and management vol. 24 2019 171 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue meetings as well as modern digital media, during the period 2015–2018, 11.700 research questions have been gathered from the dutch population as relevant inputs for the national science agenda. via a joint design process of scientists, policy makers and government departments, knowledge users, industry sectors and civil society, these issues have been translated into 140 clustered problem areas and 25 ‘grand challenges’ knowledge routes, including structural funding of more than € 130 million per year. this national science agenda is shared with regional science programs from one or more provinces and with innovation strategy agenda’s of cities. (ministerie ocw, 2018.) in line with this development, new programs with enlarged bottom-up project options have been designed for polytechnics and smes as well as local innovation labs, design factories and incubators intensively promoted and facilitated. but a major role also can be distinguished here for the universities and other higher education institutes, who during the last decades very successfully, bottom up, are stimulating innovation via spin offs and new ventures at their campuses, both with a lowand high-tech character. from these and other examples, various lessons also can be learned with respect to orchestration and governance in digital platform ecosystems (mukhopadhyay & bouwman, 2019). jonas bylund: the applications or, rather, exploratory settings to develop public admnistrative innovation in sweden does not necessarily follow the multilevel public governance recipe, but rather starts to organise around innovation capacities and around ‘boundary spanners’ and supporting mechanisms such as the project studio in borås2 or issue-oriented approaches like trust based governance by task-forces in ängelholm.3 these counter measures are seen as a capacity building to regain and reinvent what has been lost during npm – which is still operational – and to shape 2 https://www.innovationsplattformboras.se/projekt/projektstudio 3 https://portal.research.lu.se/ws/files/48486503/sou_2018_38_final3.pdf organisations that are dynamically more robust in terms of organisational learning and tackling wicked issues in complex situations such as urban planning etc. this is in line with the ultimate objective to both increase skills and enable un agenda 2030 as well as safeguard basic public services provision. these boundary spanners are not sufficiently captured in any conventional vertical/ horisontal axis understanding. the shift or, rather, the approaches to tackle these issues in complex municipal development and systemic innovation has been flocking around (explicit, intentional) experimental approaches, many times by approaches similar to urban living labs. in this regard, particularly a growing interest in boundary spanners, congruent with the intermediaries seen as crucial for transformation capacity building (e.g. wolfram 2018) has been noticeable lately. giovanni vetritto: the most relevant projects that led to mpg frameworks came not from a direct central intervention nore from a pure local initiative. in 2006 a complex center-periphery program, named elisa, was launched and produced the best results using a simple but effective scheme: the center (a department of prime minister’s offices entitled about local government) addressed threats and goals, and a combination of regional and local authorities proposed the solutions, gaining the financial instruments to realize its plane, tool and platform (conti, vetritto, 2018). the elisa funding program (enti locali – innovazioni di sistema, local authorities – system innovation) was introduced in 2006 as an instrument to create a national fund for the investment and the innovation in the local authorities and in its decade of operation, it gave an important contribution to the organizational and technological modernization of the local authorities. this attempt can be considered as a precursor with respect to what would later be the prevailing attitude of those european policies which, in view of the challenges of the international economic crisis, responded favoring the local dimension of development. in practice, this has https://www.innovationsplattformboras.se/projekt/projektstudio https://portal.research.lu.se/ws/files/48486503/sou_2018_38_final3.pdf 172 international journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue resulted in financing fewer but major projects, investing in innovation and local authorities, where technological innovation has fully shown it can be the lever for streamlining and enhancing public functions. the three main fields that were innovated through this program were: info-mobility: integrated management of logistics and info-mobility in local public transport in the urban and suburban public and private mobility. this means new systems for monitoring and managing fleets, for traffic control and regulation of traffic light cycles, for air pollution detection, management of gates in the ztls (controlled traffic zone), for integrated ticketing, for the improvement of information available to users by exploiting the potential of the web and the mobile. quality of services: measuring systems based on ict technologies so as to assess the quality of the services provided by local authorities. the goal is to improve services for users and the efficiency of its internal processes throughout advanced systems of citizen rela tionship management (cirm), highly interactive web portals, implementations to support the annual and multiannual programming, solutions for measuring organizational and individual performances, integration and upgrading of labour information systems (at the beginning, even though the labour-related projects were in a stand-alone group, then, during the assessment of the projects, they were absorbed by the quality of services field.). taxation and cadastre: integrated digital management of local services concerning taxation and cadastre through cooperative application models. the aim is to increase the ability of overseeing and monitoring the territory, countering tax evasion and promoting tax equalization. tax, civil registry services, construction industries: all these fields of application are now the backbone of the organizations that adopted them. apart from the innovation communities born from the elisa program, there’s only another single mpg scheme that had a great success and that is worth citing, the commonweb platform for civic engagement, services deployment and intercommunal collaboration, enacted without any help or involvement from central authorities by a “consorzio” of all the local authorities of the trentino autonomous province. paola clerici maestosi: innovation communities and sustainable/innovative management models: what’s going on in your country? han brezet: nowadays, the mpg inspired approach in the netherlands is not restricted to areas, in which the country performs already good, in the top-3, like measured in the european desi-index (desi, 2019). these scores include areas like connectivity, human capital, use of internet services, integration of digital technology and digital public services, all in relation to the digital economy and society. also the poor sustainable development situation in the netherlands, with for instance low scoring european positions in the energy transition and nature protection fields, has undergone an mpg impulse in recent years. for instance, the energy transition area has adopted the new élan of co-design and co-makership in ‘national transition agenda’s’, in which climate tables of involved stakeholders from all quadruple helix backgrounds have co-formulated future missions and goals of energy efficiency in production and consumption as well as renewable energy contribution. specific roadmaps are envisaged and developed for each subsector, and the interim-results are promising so far (pbl, 2019a). a similar approach has been chosen for the national agenda for the circular economy (pbl, 2019b). again, these programs know their bottom-up international journal of sustainable energy planning and management vol. 24 2019 173 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue counterparts in cities and regions, and meet each other often at provincial -intermediarylevel. they still are -via the old npm-line of thinking side-supported with special, newly established institutes, such as the new energy coalition and the european energy academy in groningen, climate adaptation labs (in rotterdam and groningen) and the ebn (energie beheer nederland) entity, calling itself ‘an entrepreneur in dutch subsurface on behalf of the state’, at proper distance from the national government. (ebn, 2019). jonas bylund: what we see is less of a programme, but more of ‘swarm intelligence’ forming around what we might call the necessity of boundary spanners. similar to the notion of boundary objects, these are actors who works a lot ‘in between’, they are intermediaries that translate and connect between sectoral approaches, silos, between departments, public private and civil society, etc. this is also in-between the so-called vertical as well as so-called horizontal lines. since most of any innovation and the challenges in public administration and urban governance faces ‘falls between the chairs’ nowadays, this figure is identified as at times already working in practice. but also as a resource, capacity, that we arguably need much more of – without having to ‘destroy the silos’ as we hear a lot in policy circles. their work effects a kind of institutional thickness or density4 that is required to coordinate quite complex urban developments full of wicked issues. then, of course, in sweden, as in many other european settings, we still have a kind of ecological modernisation attitude lingering in these matters. a remnant of 1980s–1990s technocratic approaches to urban sustainability, the ecological modernization approach means that, at times, required systemic transitions are still understood as technological feats to be performed ‘under the hood’ rather than by co-creation with affected actors 4 a notion that, if not coined by him, is used by heiti ernits to describe the ecologies needed for public administrations to tackle complex issues. and that if anything threatens the comfort of the consumer, ‘acceptance’ has to be sought. this is of course in stark contrast to the approach in challenge-driven innovation to shape more robust solutions by early-on and transparent co-creation with mult-actor stakeholder groups, for example in urban living lab settings. giovanni vetritto: all the examples mentioned above give a very clear view on how much can be realized with an effective collaboration among different levels of government even in a country like italy, that is at the last positions in the european desi index (european commission, 2018). a report from the politecnico of milan university already showed some years ago that the small size of most local and regional authorities in italy is not sufficient as economy scale level; and that an effective collaboration is needed to reach the pervasive goal that the new ict models can assure in terms of administrative modernization (department for regional and local affairs & politecnico di milano school of management, 2014). what is still missing in italy is a systematic and comprehensive and conscious national strategy agreed among different levels of government, from the state down to the local authorities, in all the major fields of innovation. what is happening, instead, is that in a lot of situations there are different arrangements of local, provincial, regional and rarely ministerial authorities to produce single projects and limited efficiency and effectiveness gains (vetritto, 2017). paola clerici maestosi: which is the relationship, in your country, between local authorities and central administration? han brezet: historically speaking, the larger, strong cities (amsterdam, rotterdam, the hague, utrecht and eindhoven), together with the region oriented 174 international journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue provinces are the strong players in the intermediary innovation field. today, in most cities and provinces one will find creative councils and innovation boards who are (pro-) actively addressing local opportunities with local strengths, but also participating in the government innovation agenda setting while creating their own programs, with support from the national government. particularly, during the last ten years, a variety of new regional initiatives successfully have taken of, which align stakeholders from different perspectives and organizations, such as the rdm labs and facilities in the harbour area of rotterdam, the ‘de waag’ maker space in amsterdam, the ams (amsterdam metropolitan solutions institute. (ams, 2018)), a joint venture of mit boston, delft university of technology and wageningen research university, the high-tech campus with philips and others in eindhoven and the water campus and alliance in the province of fryslan. these local and regional lighthouses, including the wadden islands as testbeds for sustainable innovation have a relevant new role for the development of dutch innovations. (brezet, belmane and tijsma, 2019). jonas bylund: strained. with a tradition or cultivation of a rather weak regional (county) level for the last 500 years. although much of sustainability is, from a national government point of view, thought to happen by the regional catalyst, this territorial scale of administration is more of an outline than a substantial driving force in governance (apart from the management and delivery of specific services such as health care and police). this may account for a kind of constant question-mark and even mismatch in general in sweden towards the logic in the eu around structural funds and programmes aimed at supporting regional development. the municipalities, then, closely guards and covets their almost sovereign mandate to rule/manage land-use issues (again, barring issues of national interest/importance). so, for a country that politically and administratively during large parts of the 20th century has been managed by strongly consensus-oriented procedures, there is a kind of peculiar local governance individualism and fragmentation that the regional county level cannot always be very effective facilitating and coordinating towards functional regional sustainable development. giovanni vetritto: in italy there has been, especially from the late 90’s, a strong preference of political parties and governments for the empowerment of regions and not of local authorities; that preference came from political and tactical reasons and produced a number of limits in territorial polices in italy; the most important one is the absence of a clear and organic urban strategy (vetritto 2019). each region has a sort of limited but strong autonomy in leading reform projects for their local authorities; in a very small country with a high number of regions, in many cases very little, this is definitely a problem (caporossi 2019). when a strong attempt to reform the juridical basis of all the administrative system of local, provincial and regional authorities, with an important law of april 2014, it produced very limited results, due to a very faint implementation attempt (vetritto 2016). paola clerici maestosi: in which way european structural funds contribute to shift from new public management to multilevel public governance? han brezet: in the netherlands, the role of european structural funds has been particularly strong in the more remote regions, like in the north of the country. special organizations, overarching more provinces and smaller cities, have been set up, to deal with the esf in regions. for instance the snn (samenwerkende noord-nederlandse instellingen) program covers three provinces, a number of regional cities and representatives of the quadruple helix in its board. compared to a number of years ago, the esfprograms are modernized, following mpg insights. for instance, the operational program north (op noord) international journal of sustainable energy planning and management vol. 24 2019 175 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue promotes innovation and entrepreneurship in the context of societal -smart ris-specialisationchallenges like climate change, health, food security, water, energy. it stimulates participative innovation and living labs to establish the region as a test bed for innovation. compared to the traditional approach of taking winners and sectors as starting point, the north esf program starts with challenges, “willers” and is mission-oriented, following mazzucato (mazzucato, 2018). moreover, a programmatic approach is considered essential compared to the regular project-to project improvisation, building a systematic knowledge position and helping to strengthen the regional innovation eco-infrastructure. (brezet, belmane and tijsma, 2019.) jonas bylund: as just mentioned, in sweden, the role of european structural funds has been a question-mark and even mismatch in general towards transnational programmes aimed at supporting regional development for the first decades of joining the eu. however, the swedish regions and municipalities are learning how to handle them more and more. giovanni vetritto in italy the contribution of european structural funds to the reshaping of the different public administration territorial levels has been very weak. the effective and quick use, in strategically orientated way, of these funds has never been a reality. in the last two septennial periods of european programming italy has shifted to the last positions on every classification, becoming late on its own standards for the amount of resources spent, for the time of spending, for the effectiveness of results produced (barca 2011; barca 2018). in this context, the policies funded with the national operational program on governance were in line with this ineffective trend. acknowledgement this article is a part of the eera joint programme on smart cities’ special issue on tools, technologies and systems integration for the smart and sustainable cities to come (østergaard and maestosi 2019) references bäck, h. 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journal of sustainable energy planning and management vol. 24 2019 international journal of sustainable energy planning and management vol. 24 2019 163–178 dialogue jonas bylund programme manager, iq samällsbyggnad, (se) han brezet professor department design, engineering, section design for sustainability, tu delft (nl) giovanni vetritto head office for urban policies, institutional modernization and international activity, department for regional affairs, council of ministries presidency (it) paola clerici maestosi scientific board coordinator for the special issues serie eera joint programme on smart cities; coordinator for wp academy eera jpsc; vice-chair joint programming initiative urban europe; vice-chair set.plan action 3.2; senior researcher, enea, italian national agency for new technologies, energy and sustainable economic development; peter berkowitz head of unit smart and sustainable growth directorate general for regional and urban policy european commission about the authors http://set.plan _goback 567-1530-1-le.qxd 1. bringing together economics and engineering the 1st international congress on energy & environment organized by the school of economics and management, university of porto (fep), the economics and finance research centre, university of porto (cef.up) and the industrial and technological research centre, university of minho (cgit) took place at fep on 9–10 may 2013. the congress aimed to bring together leading academic scientists, researchers and scholars from the energy and environmental science community to exchange knowledge, to discuss and to disseminate new ideas towards a low carbon, sustainable future. the challenge was and is still significant, as both energy and environment transition issues require much more than the simple knowledge of techniques. revisiting the technology definition of müller [1], the concept of technology encompasses four components – technique, knowledge, information and product. hvelplund [2, 3] has later added the component “profit” and introduced the concept of radical technological change to indicate transitions where two international journal of sustainable energy planning and management vol. 02 2014 1 or more of the components need be changed as discussed in some of his work [4, 5]. a transition towards a low carbon sustainable future is such a case. hence putting it into the framework of this conference, it also involves processes of technology transfer where economics, social sciences and even politics play decisive roles. therefore, it became crucial to put together people from diverse scientific backgrounds and establish a coherent, structured, knowledge-based dialogue. during the two days of the congress, very intense discussions allowed for the creation of a multidisciplinary scientific platform which we hope to strengthen in the future. 2. the energy situation in portugal and brazil the sub-theme of this ijsepm issue – energy efficiency and renewable energy systems in portugal and brazil was most welcome by the congress organization. beyond the close cultural and scientific partnership between portugal and brazil, these two countries represent paradigmatic cases of the electricity systems. 1 corresponding author, e-mail: poul@plan.aau.dk. international journal of sustainable energy planning and management vol. 02 2014 1-6 energy efficiency and renewable energy systems in portugal and brazil �������� ��� � ��� ������ �� ����� � ����������� � �� ��������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� �������� �� ��� ������ � � ������ �� ������ ������ �������� ��������� � �� ��������� � � �������� � � ������ �� �� �� !�����"��� �������� a b s t r a c t this article presents a review of the energy situation in brazil and portugal; two countries which are both characterised by high utilisation of renewable energy sources though with differences between them. the article also introduces contemporary energy research conducted on the two countries and presented at the 1st international congress on energy & environment ranging from electricity end-use analyses, electricity production analyses to socio-economic assessment and large-scale energy scenarios. keywords: energy situation brazil; energy situation portugal; review of energy research brazil; review of energy research portugal url: dx.doi.org/10.5278/ijsepm.2014.2.1 2 international journal of sustainable energy planning and management vol. 02 2014 energy efficiency and renewable energy systems in portugal and brazil both rely heavily on renewable energy sources (res) but the economic and social characteristics of each country are quite different. energy systems need to be adapted to local circumstances to be optimal – if optimal energy systems exist that is [6] – hence economic and social differences between portugal and brazil impact the optimal energy system configurations. furthermore, energy policies and market organizations differ substantially between the two countries. from an international perspective, brazil has a total primary energy supply (tpes) well below the world average whereas portugal has a tpes above average – see figure 1. the energy intensity of brazil is at the world average level while the intensity of portugal is at half the level due to a less energy-intensive economy. on the other hand, the electrification level of the portuguese society is far higher than in brazil and the world on average. carbon dioxide emissions per tpes are lower than world average in the case of both portugal and brazil. this may only be attributed to higher than average res shares of the two countries. the resulting per capita carbon dioxide emissions for portugal end up at the world average despite higher than average per capita tpes and electricity demands per capita while emissions per capita in brazil only are around half the world average. in brazil, according to the national energy research company empresa de pesquisa energética (epe), for the period 2013–2023, electricity consumption is projected to grow, on average, 4.3% p.a. which will mean a sharp increase from 514 twh in 2013 to 782 twh in 2023 [9]. in the first half of the period between 2013 and 2018, the epe estimates an average yearly increase of 4.5% [9]. these projections may be compared to projections of brazil’s gross domestic product (gdp) which is expected to grow 4.1% p.a. until 2018 and then at 4.5% p.a. until 2023 [9]. this means that the future electricity demand increase will follow that of the gdp and even surpass this increase from 2013-1018. in 2012 res accounted for 42.4% of the brazilian energy supply and 84.5% of the electricity supply. hydroelectricity dominates the electricity matrix – see figure 2 representing 69.7% of the total installed capacity in brazil in 2012 [10] and approximately 74% of the supply in 2011. brazil’s commitment to other res started later than in portugal, and wind energy, for instance, supplies only 0.9%% of the total electricity production while biomass supplied a more significant share at 6.8% in 2012 [10]. the remainder of the brazilian electricity supply is based on fossil fuels or nuclear power. 0 tp es /c ap ita (t oe ) tp es /g dp (t oe /1 00 00 2 00 5 us $) el ec tri cit y/ ca pi ta (m w h) co 2/ tp es (t /to e) co 2/ ca pi ta (t ) 1 2 3 4 5 brazil portugal world figure 1: energy indicators for brazil, portugal and world average in 2011. tpes is total primary energy supply measured in tonnes of oil equivalent (toe). sources [7, 8]. import 6% nuclear 3% other 6% coal 2% oil 3% hydro 76% natural gas wind 4% 0% figure 2: electricity supply in brazil in 2011 [8]. a crucial issue in brazil is how to complement the hydro generation in the most efficient way. there is a strong public and private will to boost wind generation all the more so since the wind pattern is favourable, being more intense during dry seasons. according to epe [10] wind power reached 1894 mw at the beginning of 2013 which almost doubled wind share on the national electricity balance. outside the electricity sector, brazil is mainly dependent on fossil fuels, though a large bio energy use accounts for 17.4% of the final demand in transportation and 41.6% within industry in 2011 [8]. this situation occurs in spite of brazil being a net exporter of oil and oil-derivatives. brazil has also an interesting market organization and regulation in order to stimulate private and public companies to build and maintain the country’s electricity generation capacity and to ensure security of supply at low tariffs through competitive auctions. there are two parallel markets for electricity trading: • on the one hand, a regulated contract market for distribution utilities, operated through purchasing auctions; • on the other hand, a free market for transactions (purchase and sale) of producers, free consumers and traders. the market organisation also comprises the creation of an electricity reserve for all the electricity traded through contracts and it demands distribution utilities to buy all the energy needed to meet 100% of demand. in portugal, the main energy policy goals can be summarized as follows: ensuring the competitiveness of the economy and wellbeing of the citizens supported by energy at affordable costs, promoting energy efficiency of the country and the diversification of the primary energy sources and reduction of the dependency on energy imports [11, 12]. focusing on the last aim, in the years from 2000 to 2012, the portuguese energy dependency decreased from approximately 86% to less than 80%, due to the a national res electricity contribution [12]. the portuguese electricity system is characterized by an increasing reliance on a diversified portfolio of res and other technologies (see figure 3) and a declining trend of the growth rate of the electricity consumption. the renewable share of the electricity production increased significantly over the last years from 21.4% in 1999 to 56.2% in 2013 [13]. in the first quarter of 2013, res supplied 70% of the electricity demand due to favourable weather conditions increased wind and water flow as well as lower demand. support mechanisms largely contributed to this increase, and were justified by the need to reduce the external dependence of the country and greenhouse gas emissions. portugal benefits from favourable climatic and natural conditions, allowing for taking advantage of hydro, wind and solar potentials to produce electricity. the large wind-swept coastal area creates additional perspectives for obtaining off-shore energy. notwithstanding, the contribution of these technologies to electricity generation is expected to be limited in the next years, mainly because of the still required technological developments and large capital costs, although they are recognized in the national renewable energy action plan (nreap), published in april 2013, as important resources for exploration in the future. the res sector also benefits from a very favourable social environment with most of the population being very favourable to these investments even when projects are located in their municipality [14]. in terms of organisation, the portuguese electricity market is organized as a single market and the european union’s third energy package from 2009 has been fully adopted with the ownership unbundling of transmission. the market is characterised by: international journal of sustainable energy planning and management vol. 02 2014 3 poul alberg østergaard, isabel soares and paula ferreira import 5% nuclear 0% other 7% coal 18% oil 5% hydro 22% wind 16% natural gas 27% figure 3: electricity supply in portugal in 2011. source [7]. • generation and trading as well as management of organized markets are open to competition, subject to licenses and approval procedures. • transmission and distribution activities are regulated and subject to public concessions. both brazil and portugal are quite dependent on renewable generation, although there are serious social and environmental concerns of the impact of very large hydro plants in brazil and both countries are thus vulnerable towards hydrological patterns. while brazil has an increasing population and electricity consumption projections indicate a significant future growth rate, portugal has a decreasing population and a limited electricity demand growth. between 2012 and 2013 electricity demand grew only about 0.2% in portugal. in brazil, the renewal and expansion of the electricity grid is one of the most urgent tasks as service quality measured in terms of supply interruption is still low; this is not the case of portugal. portugal’s geographical position and the strong interconnections to spain (more than 2 gw) enables portugal to exchange with spain – however the interconnection capacity between the iberian peninsula and the rest of europe remains quite limited, standing at only 1400 mw. this is the most important challenge to development of res in portugal and spain – particularly if the 800 mw connection to morocco will be used as an import channel for europe. last but not least, brazil has not yet created a wind cluster while portugal is already exporting goods, engineering and know-how of hydro and wind generation. 3. electricity end use assessment planning the electricity infrastructure and curbing demand increases are both parts of sustainable development within the electricity sector, however planners and engineers often face the challenge of lack of information in particularly developing countries or economies in transition. projections are also important for economically more developed nations to ensure adequate and sustainable energy systems. silva et al [15] have addressed the issue of electricity end-use monitoring and savings in low-income families in brazil coming to the conclusion that electric showers account for between 33.5% and 40.3% of the electricity consumption. refrigerators come second with shares in the 27–33% range. these results are interesting as they suggest an uneven demand profile. where refrigerators are automatically controlled – though influenced by usage and has a demand relatively evenly distributed over the diurnal cycle, electric showers in brazil typically use up to 8 kw [15] with a use pattern much influenced by behaviour. with the significant power, the use is very relevant to address with peak shaving in mind. this applies to the individual dwellings and for the system at large as there is a certain degree of synchronisation of the demand. as silva et al also point out, public programmes in brazil encourage the replacement of electric showers by solar heaters which would entail both economic benefits for consumers as well as system benefits in terms of peak load shaving. gonçalves & domingos [16] bring the electricity demand discussion up to the level of urban systems with a view to investigating the electricity demand in cities as a function of city growth. based on a power function approach, they investigate a number of portuguese cities, finding however that the correlation between electricity demand and population growth rather follows a linear growth profile than a power function. within individual sectors however, there was a correlation that might be captured by scaling laws based on power functions. 4. feasibility of electricity production cogeneration of heat and power (chp) is one method of increasing the energy efficiency of the energy system though the exploitation of the cooling heat from power production. traditionally, chp has found its primary utility in cold or temperate countries like denmark and germany[17–21] or in industrial applications where heat demands have been covered by chp units rather than boilers thus bringing power generation to the site of heat demands. ferreira et al [22] present a non-linear optimisation model of chp applications in buildings in portugal. based on case studies of micro gas turbines, they conclude that there is a large potential for small-scale applications of chp in portugal to produce space heating and domestic hot water (dhw). profitability is sensitive to input parameters though, and of particular attention is the valuation of carbon dioxide emission reductions. internalization of external costs increase profitability considerably and in fact also result in system designs with higher electricity efficiencies and thus higher electricity outputs for the same in-house heat demand. 4 international journal of sustainable energy planning and management vol. 02 2014 energy efficiency and renewable energy systems in portugal and brazil cunha & ferreira [23] investigate another component in renewable energy systems – hydro power with a particular attention to small-scale hydro plants (shs) in portugal. based on an investment appraisal, they conduct sensitivity analyses in order to identify the most important factors affecting the feasibility of shp. investigating the shp under both fixed feed-in tariff system and under market conditions, they find that while the shp system is feasible under the former, it is not economically feasible under the latter under portuguese conditions. of other influential factors is the interest rate. 5. large-scale energy systems and socio-economic assessment electricity consumption is traditionally increasing at a more rapid pace than other energy demands, and this situation is likely to continue in the future. in high-res scenarios, demands are often expected being shifted to electricity – e.g. for heating and transportation [24–26] – due to lack of storable res and ample opportunities for producing electricity from wind power, solar cells, wave power etc. in the future. a transition towards increased use of res combined with improved end-use energy efficiency will also have socio-economic impacts since the investments will be channelled for local power and energy generation and energy efficiency rather than for international purchasing of fossil fuels. improved balance of trade for most present net-importers of energy will thus be an effect of such a transition. brito & sousa [27] investigate the global electricity system with a view to forecasting demand increases towards the year 2100. in the course, they develop two scenarios current energy mix scenario and electricity as main energy source scenario. the latter is developed taken into consideration that restechnologies often produce electricity directly as opposed to fuels. projections based on econometrics, historical data and energy/electricity intensities suggest that electricity demand will increase by a factor 3.5-5 compared to today with the current energy mix or up to 9–14 times the current level with electricity as the main energy source. oliveira et al [28] investigate the socio-economic impacts of energy efficiency programmes. specifically, they investigate the employment generation from insulating houses – roofs and walls – as well as from replacing window glazing or substituting window frames in portugal. based on an input-output matrix, they assess direct, indirect and induced job creation and job destruction. apart from the large generation of employment, it is interesting observing that direct job creation is a little minority compared to indirect and induced job creation. acknowledgements we would like to express our appreciation to all the presenters and authors as well as the organisers of the international conference on energy & environment: bringing together economics and engineering. moreover, we would like to thank all the reviewers for their many helpful comments. lastly we would like to thank the sponsors danfoss, planenergi, desmi and aalborg university without whose help this issue of the international journal of sustainable energy planning and management would not have seen the day of light. references [1] müller j, remmen a, christensen p. society’s technology technology’s 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 29 2020 57 *corresponding author e-mail: teoconsult@inbox.ru international journal of sustainable energy planning and management vol. 29 2020 57–68 abstract this study is dedicated to comparing the levelized operating costs of various types of power units and energy carriers for electric vehicles: battery systems, hydrogen-air fuel cells, and aluminumair electrochemical generators. the operating cost considers the power unit itself, energy carrier, and associated charging infrastructure. each electric vehicle type was calculated in two versions: a passenger electric car and a light duty commercial truck. it is shown that the most cost effective power unit is an aluminum-air generator. its levelized operating cost is 1.5–2 times lower toward a battery system and 3–4 times lower toward fuel cells. the advantage of aluminum as energy carrier is the low cost and simple design of the corresponding power unit and charging infrastructure compared to those for battery and hydrogen power units. aluminum recycling is key to its efficient use, this concept may become competitive in the aluminum-producing countries. 1. introduction the global trend to decrease the use of fossil fuels is caused by environmental, economic, and political reasons [1, 2]. this is true both for large stationary power plants and small mobile power units, particularly for city transportation. in this regard, large scale introduction of hybrid vehicles and bevs is very promising [3, 4]. in 2017, the global fleet of electric vehicles of all types exceeded 3 million units. by 2030–2050, some countries are planning to stop production of new passenger icecars and restrict the operation of existing ones [5]. currently, the most common type of autonomous electric transport are li-ion bevs. in the developed countries, bev technology receives strong support from governments and industry, with significant investment into research and development related to evs and charging stations [1, 6]. at present the following challenges are still limiting mass introduction of bevs: ○ higher cost and lower autonomy of bevs compared to ice cars ○ long charging time when using domestic electric grids ○ insufficiently developed fast-charging infrastructure [3] to date, the range of the most advanced bevs (tesla x, audi e-tron, jaguar i-pace, porsche taycan) is up to 500 km [7]. this is acceptable for daily city use, but not yet adequate for long-distance freight transport [8]. xfc terminals have been designed and are in service. a 400 kw xfc can charge ev batteries to 80% capacity in 10 minutes [9]. however, creating an extensive network of high capacity fast charging terminals, similar to comparative economic analysis for different types of electric vehicles evgeny buzoverov*, andrey zhuk department 9 of alternative energy, joint institute for high temperatures of russian academy of sciences (jiht ras), izhorskaya st. 13 bd.2, 125412 moscow, russian federation keywords: aluminum-air electrochemical generator; fuel cells; battery electric vehicle; cost efficiency; url:https://doi.org/10.5278/ijsepm.3831 mailto:teoconsult@inbox.ru https://doi.org/10.5278/ijsepm.3831 58 international journal of sustainable energy planning and management vol. 29 2020 comparative economic analysis for different types of electric vehicles the network of modern petrol refuelling stations, is a challenge [4]. it requires additional power plants, upgrades to the existing electric power lines and accelerated construction of stationary energy storage facilities and high power charging terminals [5]. for a large localized fleet of evs, v2g technology may be advantageous [9–11]. adaptation of power grids to the demands of a large fleet of bevs requires substantial investment and time. fcevs are manufactured on a substantially smaller scale [12]. examples include hyundai tucson (273 units in 2013–2015), toyota mirai (700 units in 2015), and honda fcx (2,455 units in the usa in 2017) [12–15]. the global fleet of fcevs in 2015 was approximately 11,300 units, with the expected growth up to 520,000 units by 2020. it is expected that by 2050 the annual sales of fcevs will reach 35 million units, or approximately 17% of the market [13, 16]. the advantages of hydrogen evs over bevs are shorter charging time, comparable to the charging time of ice cars, and higher specific energy. taking into account onboard hydrogen storage system, specific energy of fuel cell based power units is 2–3 times that of li-ion batteries [17], providing fcevs with a longer range. thus, toyota’s project portal hydrogen-powered truck has an estimated range of 320 km with a gross combined weight capacity of 36 tonnes [18]. for comparison, iveco daily electric bev with the cargo capacity of 1.1 tonnes has the range of 240 km [19]. furthermore, hydrogen evs do not require large scale upgrades to the electric grid, which is another significant advantage over bevs. the disadvantages of hydrogen transport include safety concerns [6, 20], complex and expensive charging infrastructure, and relatively high cost of fuel cells [12]. in the short to medium term bevs will be the preferred option for short-range operation, mostly in the cities, defined by the availability of developed electric distribution networks. fcevs will remain more suitable for long distance operations due to their higher travel range compared to an average li-ion battery vehicle and their charging infrastructure not tied to electric power hubs [12]. in contrast to bevs and hydrogen evs, the development of electric vehicles with metal-air power sources, in particular aa ecgs, has attracted considerably less attention, although some research and development in this field have occurred over the past thirty years [21–24]. aa ecgs are simpler, cheaper, and safer than both li-ion batteries and hydrogen fuel cells. the specific energy of aa ecgs is approaching that of hydrogen power units. unlike bevs, the charging infrastructure for aaevs does not require expensive upgrades to power grids and is simpler and safer than for fcevs. cost estimates and technical characteristics of existing aa ecgs indicate that their use in transportation may be feasible. crucially, the products of electrochemical oxidation of aluminum must be returned to the aluminum production cycle [22]. recycling of spent aluminum significantly reduces the cost of the energy carrier. the main technical challenges associated with development and deployment of evs have been already solved. the market share and applications for each type of evs will be determined by the associated costs and merits of each technology. therefore, a comparative economic analysis of various types of evs is needed. a number of studies provided economic assessment of electric transport, mainly for bev and fcev [25– 28]. the common conclusion is that in most cases the operation of battery vehicles is cheaper than of hydrogen vehicles. this is mainly due to lower cost of li-ion batteries compared to hydrogen fuel cells, 250–320 usd/ kwh vs. 2,500–5,000 usd/kw [29, 30]. the construction and operating costs of charging stations and related infrastructure networks greatly affect the cost of the provided energy carrier [2–6, 20, 31]. thus, the average cost of fast charging station is 286–360 thousand usd [31], raising the price of electricity for bevs from ~0.1 usd/kwh to 0.34–0.58 usd/kwh at the bev charging station [3, 31]. the cost of hydrogen charging stations may reach 2,406–2,920 thousand usd [6], raising the cost of hydrogen from ~0.09 usd/kwh [14] to 0.28–0.43 usd/kwh at the charging pump [6]. there have been much fewer reports on aa ecgs as mobile power units. typically they focus on technical problems rather than on economic factors [21, 22, 24]. the authors are not aware of any studies that compare abbreviations bev – battery electric vehicle ice – internal combustion engine ev – electric vehicle xfc – extra fast charge fcev – fuel cell electric vehicle aaev – aluminum-air electric vehicle aa ecg – aluminum-air electrochemical generator ey – electrolysis international journal of sustainable energy planning and management vol. 29 2020 59 evgeny buzoverov, andrey zhuk the economic efficiency of bevs, fcevs, and aaevs utilizing a single calculation algorithm and taking into account the cost of the associated charging infrastructure. the aim of the present study is to fill this gap and provide a direct comparison of the levelized costs of the power units of bevs, fcevs, and aaevs, including the costs of the power unit itself, the energy carrier, and the cost of the associated charging infrastructure. the calculations for each type of ev are done separately for two types of vehicles: i) a c+ class passenger car; and ii) a light duty commercial truck with the total weight of 3,500 kg. the proposed model assumes that the electric vehicles have otherwise identical configuration (body, transmission, controllers, inverters, and electric motors) irrespective of the type of the power source. and therefore, the total prices and operational expenses of different types of electric vehicles were taken equal and excluded from the comparative analysis. 2. calculation methods the equation for the levelized costs of electric vehicle ownership is split into several components, which are given with explanations along the section. 2.1 calculation of the cost of electric vehicle power unit the energy w (kwh), required to drive an ev over the range l (km) may be calculated as: where q is the specific energy consumption of the ev, kwh/100 km [32]. the cost c, usd, of the power unit for bev is determined by the cost of the battery assembly: where kb is the cost factor of the balancing device of the battery, % of battery cost; dod is the battery’s permissible depth of discharge, %; bat capc is the specific cost of the battery, usd/ kwh [33]. the cost of the power source for fcev is determined by the costs of the fuel cell, the li-ion buffer battery, and the hydrogen tank, usd: where wadd is the capacity of li-ion buffer battery, kwh; ccap fc is the specific cost of the fuel cell battery, usd/ kw [29, 30]; ccap tank is the specific cost of the fcev fuel tank, usd/kwh; nh is the power of the fuel cell, kw: where v is the average speed of ev, km/h. the cost of the aa ecg power unit is determined by the cost of aa ecg itself and the buffer battery, usd: where ccap alfc is the specific cost of aa ecg, usd/ kwh [22]. 2.2. calculation of the cost of energy carrier and charging infrastructure annual operating costs of a charging station of any type copex, usd/year, are: where cpower is the cost of the electric power delivered to the consumers, usd/year; ce is the cost of electricity required to operate the station, usd/year; cwage is the labor costs (wages and payroll taxes), usd/year; co&m is the equipment maintenance and repair cost, usd/year (assumed 3% of the capital costs); cother is the miscellaneous and contingencies costs, usd/year (assumed 10% of operating costs). xfc stations for bevs operate without permanent on-site personnel. the charging stations for fcevs and aa ecgs require 2 attendants per shift. the cost of electricity supplied from the xfc, usd/ kwh, comprises: where ce is the cost of the energy carrier, usd/kwh; prof is the network operator’s profit (assumed prof = 0.081copex, usd/year); (1)/ 100,w l q= ⋅ (2)( )100 % ,batb cap w c k c dod = + (3)tan1 , 100 % bat fc kb add cap h cap cap k c w c n c wc   = + + +    (4),h w v n l ⋅ = (5)1 ,100% bat alfcb add cap cap k c w c wc   = + +    (6)& ,opex power e wage o m otherc c c c c c= + + + + (7) pr , 365 opex cap t e ev of c c crf c c n w + + ⋅ = + ⋅ ⋅ 60 international journal of sustainable energy planning and management vol. 29 2020 comparative economic analysis for different types of electric vehicles ccap is the cost of ev charging station, usd; nev is a number of evs charged per day; crf is a capital return factor: where d is the cost of capital (dimensionless value) [34]; n is the charging station’s operational life span, years. 2.3. charging from electric grid taking into account the losses in the charger and on-board power unit, the cost of electricity for bev supplied from xfc, usd/kwh, is: where ep is a cost of medium voltage electricity, usd/kwh; ηel is the efficiency of the charger and bev battery, %. 2.4. hydrogen energy carrier three versions of hydrogen charging stations are considered. in versions 1 and 2, hydrogen is transported to the charging station by truck from a large scale production site in either compressed (1) or liquefied (2) state. in version 2, hydrogen is liquefied during the production phase and then transported to the charging station in cryogenic form. before use, liquid hydrogen is converted to the gaseous state. in version 3, hydrogen is produced at the charging station by means of water ey. in versions 1 and 2, hydrogen is produced via the methane steam reforming method, with the cost hprod. centr. in version 3 the cost of hydrogen production, hprod. decentr, usd/kg, is determined by the process-specific consumption of electricity and its cost: where e is a cost of low voltage electricity, usd/kwh; bh is a specific electricity consumption for ey hydrogen production, kwh/kg. in versions 1 and 3 hydrogen must be compressed to 700 bar. the cost of compression operation, hcompr, usd/kg, is determined by the process-specific consumption of electricity and its cost: where bcompr is a specific electricity consumption for hydrogen compression, kwh/kg. the cost of liquefying hydrogen, hliq, usd/kg, is determined by the consumption of electricity and its cost: where bliq is a specific electricity consumption for hydrogen liquefying, kwh/kg. the transportation costs of hydrogen from the production site to the charging station in compressed and liquefied states, htrans compr and htrans liq in versions 1 and 2, respectively, are available in ref. [6]. taking into account the fuel cell efficiency, the cost of hydrogen received from the charging station, usd/ kwh, is: where qh2 is hydrogen lower heating value, kwh/kg; ηh is the efficiency of the fuel cell, %. 2.5. aluminum energy carrier efficient use of aluminum energy carrier requires the infrastructure enabling manufacturing of anodes for aa ecg, delivery of the anodes to the charging stations, and return of the aluminum hydroxide collected from the aaevs to the aluminum plant for recycling. sedimentation of hydroxide from the spent electrolyte is a well-developed technology [35]. in the present model it is assumed that sedimentation is performed at the aa ecg charging station [21]. to provide the required efficiency of aluminum oxidation reaction, high-purity metal should be used – not lower than a995 grade. dedicated companies – operators of the aluminum energy carrier cycle – can be involved in the implementation of this concept. a plant for the aluminium production/ refining and aa ecg anodes manufacture should be managed by that company. it will also include stations for anodes and electrolyte replacement. the operator company will administrate a full aluminium energy carrier cycle, organize and settle logistic flows, anodes manufacture and replacement processes, receiving income from the acquisition of new anodes and electrolyte by the aaev owner. thus, the owner of aaev will own the ev itself and the aa ecg installed on it (capital expenditure). at each visit to charging station, he will pay for the anodes and electrolyte replacement in aa ecg ( operational expenditure) – similar to gasoline refueling of ice car. (8) ( ) , 1 1 n d crf d − = − + (9)100 % ,p e el e c η ⋅ = (10). ,prod decentr hh e b= ⋅ (11),compr comprh e b= ⋅ (12),liq liqh e b= ⋅ (13) ( ). / / / 2 100 % ,prod centr decentr compr liq trans compr liq h h h h h h c q η + + ⋅ = http://hprod.centr http://hprod.centr http://hprod.decentr http://hprod.decentr international journal of sustainable energy planning and management vol. 29 2020 61 evgeny buzoverov, andrey zhuk the cost of aluminum energy carrier consists of several components: i) the cost of manufacturing a95 technical grade aluminum from alumina [21, 36] (or the cost of refining aluminium to a995 grade, depending on process); ii) the cost of manufacturing aluminum anodes; iii) the cost of aluminum hydroxide (the product of the electrochemical oxidation of al); iv) the cost of transportation and logistics services for the delivery of the anodes and aluminum hydroxide for recycling between the aluminum plant and the aa ecg charging stations. the profit of the operator of the charging infrastructure and the cost of recycled aluminum, obtained from the returned hydroxide are also taken into account. the cost of aluminum anodes, cal, usd/kg, is: where krec is the fraction of the aluminum hydroxide recovered for recycling, %; calumina is the price of alumina, usd/kg; malumina is the specific consumption of alumina for aluminum production, kg/kg of aluminum; eal is the cost of electricity for the aluminum plant, usd/kwh; mel is the specific electricity consumption for production of aluminum, kwh/kg; cother is the miscellaneous and contingencies costs, usd/kg; kref is the cost factor of aluminum refining, % of the cost of primary technical-grade a95 aluminum; cprod is the cost of manufacturing anodes from refined aluminum, usd/kg; ctrans is the transportation costs, usd/kg. the cost of aluminum anodes per kwh of generated power is then: where qal is the specific energy of aluminum, kwh/kg; ηal is the efficiency of aa ecg power unit, %. regular replacement of aluminum anodes in normal aa ecg operation cycle should not be confused with the disposal of batteries and fuel cells at the end of their lifetime – it is a replacement of the exhausted energy carrier, which is essentially an equivalent to the recharge procedure. 2.6. calculation of the vehicle travel cost for a passenger electric car, the total costs of operating the ev’s power unit, per 100 km of travel, c100 km, usd/100 km, is: where ct is the cost of the energy carrier, usd/kwh; q is the ev specific energy consumption, kwh/100 km; lyear car is the annual travel range of a passenger ev. for a light duty commercial truck, the corresponding cost per tonne-kilometer, usd/tonne-km, is: where lyear van is the annual travel range of a light duty commercial electric truck, thousands km/year [8]; m is the load capacity of the electric truck, tonnes. for comparison with bev, the load capacities of fcev and aaev are adjusted according to the weight difference between the li-ion battery and the hydrogen-air fuel cell or aluminum-air electrochemical generator. 2.7. data sources for calculation table 1 contains the main data sources for the calculation of life cycle cost of bevs, fcevs and aaevs. 3. results in the following subsections the results of calculations are summarized in three figures and one table, the greenhouse gases emission rate compared between three ev concepts in focus and some forecasts are given concerning ev transport industry. 3.1. calculation results table 2 and figure 1 show the calculated energy carrier cost structure for evs, assuming the 20 year operating life span of the charging station. figure 2 shows the calculated levelized costs of the energy carrier and the power unit for passenger cars (usd/100 km) and figure 3 shows the same for light duty commercial trucks (usd/tonne-km) with different power sources. (14) ( ) ( ) min min1 100 % 1 , 100 % 100 % rec al alu a alu a al el other ref rec al el other prod trans k c c m e m c k k e m c c c   = − + + ×       + + + + +    (15) 100 % ,al e al al c c q η ⋅ = ⋅ (16)100 100 ,km t car year c crf c c q km l ⋅ = ⋅ + ⋅ (17)1,tonne km t van year c crf c c q m l − −   ⋅ = ⋅ +     62 international journal of sustainable energy planning and management vol. 29 2020 comparative economic analysis for different types of electric vehicles table 1: basic input values parameter unit value symbol reference specific energy consumption for the ev travel kwh/100 km 18 q [32] battery’s permissible depth of discharge % 80 dod [33] specific cost of the li-ion battery usd/kwh 197–300 ccap bat [33, 44] specific cost of the fuel cell usd/kw 50–4,000 ccap. fc [29, 30, 37] specific cost of fcev hydrogen tank usd/kwh 33 ccap tank [13] specific cost of the aa ecg usd/kwh 77 ccap alfc [22] life span of the charging stations years 20 n [6] number of serviced evs per day units/day 38 nev [3] efficiency of the charger and bev power unit % 80 ηel [29] cost of large-scale hydrogen production by steam methane reforming method usd/kg 3 hprod.centr [13, 38] cost of low voltage electricity usd/kwh 0.1 e [1] specific energy consumption for hydrogen production by electrolytic method kwh/kg 60 bh [6] specific electricity consumption for hydrogen compression kwh/kg 3 bcompr [39] specific electricity consumption for hydrogen liquefaction kwh/kg 7 bliq [39] efficiency of the fuel cell unit % 43 ηh [13] price of alumina usd/kg 0.3 calumina [36] specific consumption of alumina for aluminum production kg/kg of al 2 malumina [36] cost of electricity for the aluminum plant usd/kwh 0.034 eal [36] specific energy consumption for aluminum production kwh/kg 16 mel [36] efficiency of aa ecg power unit % 42 ηal [22] annual kilometrage of passenger ev thous. km/year 15 lyear car [5] annual kilometrage of a light duty commercial electric truck thous. km/year 100 lyear van [8] load capacity of a light duty commercial battery truck kg 950 me [19] power capacity of the bev’s battery kwh/kg 0.15 mbat [12] power efficiency of the fuel cell % 43 ηh [13] power capacity of the fcev power unit kwh/kg 0.4 mfc [40] power capacity of aa ecg power unit kwh/kg 0.3 malfc [22] table 2: energy carrier cost structure, usd/kwh parameter bev fcev aaev compressed hydrogen liquefied hydrogen ey hydrogen energy carrier production 0.024 0.210 0.210 0.420 0.497 hydrogen compressing/liquefying operation — 0.028 0.042 0.028 — energy carrier transportation 0.012 0.141 0.127 — 0.037 recharging operation 0.264 0.847 0.950 1.053 0.115 total: 0.299 1.226 1.329 1.502 0.650 http://ccap.fc http://hprod.centr international journal of sustainable energy planning and management vol. 29 2020 63 evgeny buzoverov, andrey zhuk the calculations assume the lifetime range of 300,000 km for passenger electric cars [41] and 500,000 km for electric trucks [42]. modern li-ion batteries can operate for at least 3–15 thousand cycles [33]. the operating time of fuel cells and aa ecgs should reach 10–15 thousand hours [43], thus ensuring the specified lifetime ev range without the power unit replacement. figure 1: cost structure of ev charging stations figure 2: levelized costs of ev energy carrier and the power unit ownership, passenger cars, usd/100 km 64 international journal of sustainable energy planning and management vol. 29 2020 comparative economic analysis for different types of electric vehicles figures 1 and 2 show that al-air electrochemical generator is the most cost-efficient power unit for evs. for passenger evs, the total operating cost of aa ecg is 2 times lower than for li-ion batteries and 3 times lower compared to fuel cells. the trends for commercial trucks are similar. it is also worth noting that aa ecgs have smaller weight per kwh than li-ion battery, thus increasing the actual load capacity of the vehicle and hence lowering the cost per tonne-km. 3.2. comparison of greenhouse gas emissions greenhouse gas emissions associated with the production, operation and disposal of bev are estimated at 30-140 g co2 eq./km [44, 45], while for fcev that would be 60-150 g co2 eq./km [46]. a smaller value corresponds to the use of renewable sources to generate electricity (for hydrogen production), a larger value involves the use of coal. greenhouse gas emissions in the cycle of aluminum production, attributed to the mass of output product, 10 t co2 eq./t al [47]. given the average anode consumption of 0.053 kg/km, greenhouse gas emissions will amount to 530 g co2 eq./km. in addition, it is necessary to take into account emissions associated with the production and disposal of electric vehicle itself – at least 40 g co2 eq./km [46], same value for every ev type. also, the operation of aaev requires sodium hydroxide as electrolyte, the specific emission for which in electromembrane production process is 1 t co2 eq./t naoh, operational consumption – 0.1 kg naoh/km, then greenhouse gas emissions attributed to the ev range would be 100 g co2 eq./km. thus, total emissions associated with aaev operation can be estimated at 670 g co2 eq./km, which is higher compared to bev or fcev. 3.3. future trends in fuel cell development, reducing the costs and replacing platinum in the catalysts, increased efficiency, weight reduction, and increase of the operating life span of fuel cells beyond 15,000 h [43] are anticipated. the global fleet of evs is already over 3 million in 2018 and on pace to reach 7 million by 2020 [48]. if the share of fcevs reaches 25% of the total fleet by the year 2050, the total carbon emissions from transportation may decrease by 10% [13]. the cost of bevs ownership has a potential for decreasing with the implementation of smart charging concepts, which propose to transfer from thoughtless charging upon depletion of the battery towards charging figure 3: levelized costs of ev energy carrier and. the power unit ownership, light duty commercial trucks, usd/tonne-km international journal of sustainable energy planning and management vol. 29 2020 65 evgeny buzoverov, andrey zhuk at certain moments when the electricity demand is lowered so the price is reduced [49]. the results of this study suggest that currently, aa ecg is the most cost effective power source technology for evs. however, in the long term, as major innovations in battery technology result in reduced battery cost, increased life span, and enhancement of charging infrastructure, bevs may replace aaev as the most cost-effective evs. 4. discussion today, battery electric vehicles are the most attractive type of private and urban commercial evs. this technology can compete with traditional ice cars. relatively low cost of electricity has a positive effect on the efficiency of battery-powered electric vehicles. the main disadvantages of bev are the long charging time from the conventional low power/low voltage grids, as well as the high cost of mass construction of extra fast charging stations and corresponding high power low/medium voltage grids. optimistic forecasts suggest that hydrogen-powered electric vehicles may occupy a sizable niche in environmentally friendly transportation segment. hydrogen fcevs have a large range, comparable with that of diesel cars, and high charging speed. so far, wide implementation of hydrogen fcevs is limited by high cost of hydrogen fuel cells and high cost of charging stations. a safety concern is another factor that hampers the widespread introduction of hydrogen fcevs. aaevs will require the development of their own unique charging infrastructure. electric vehicles with aa ecg have the advantage of a cheap power source with a simple and safe charging process. convenient and simple distribution and storage of the energy carrier is another important advantage. ev with aa ecg are most attractive for regions with low density of highpower distribution electric grids. this type of ev can be used both in the cities and for long distance transportation since their charging stations are simple and do not require high power electric supply. calculations confirm that aaevs can become the most economical electric transport, even though aluminum itself is the most expensive energy carrier (0.497 usd/kwh vs. 0.024 usd/kwh for electricity and 0.21-0.42 usd/kwh for hydrogen). the key aspects that make aaevs preferable is the low specific cost of aa ecg (table 1) and simple, inexpensive charging stations (table 2). the costly and highly sophisticated charging infrastructure required for hydrogen powered fcevs is their weakest point. the levelized cost of powering a passenger aaev over 150,000 km range is ~30 usd per 100 km, less than half of that of bev and over 3 times lower than that of fcev. over 300,000 km range, the levelized cost of powering a passenger aaev drops to 25 usd per 100 km. those of bev and fcev show a similar reduction. the 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sustainable energy planning and management vol. 30 2021 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 30 2021 01–04 abstract this editorial introduces the main findings from the 30th volume of the international journal of sustainable energy planning and management. this volume probes into analyses of the technical interactions between multi-energy carrier energy hubs and the role and feasibility of cogeneration of heat and power in a portuguese context. it moves on to analyse the framework for implementing photo voltaic technology and decision processes for implementing pv technology. lastly, it presents work on the role of renewable energy sources in meeting carbon dioxide emission reduction goals in iran. editorial international journal of sustainable energy planning and management vol 30 poul alberg østergaard* and rasmus magni johannsen department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords energy hubs; cogeneration of heat and power; implementation of photo voltaics; emission reductions; url: https://doi.org/10.5278/ijsepm.6506 1. technology transition in their work on multi hubs in the article planning of multi-hub energy system by considering competition issue [1], farshidian et al. investigate the interplay between series of connected multi-carrier energy systems. this is in line with kienberger’s work published in this journal [2]. in their work, farshidian and co-authors focus on the methodological development of an assessment framework based on karush–kuhn–tucker conditions. ferreira et al. investigate the prospects of cogeneration of heat and power (chp) in their work application of a cost-benefit model to evaluate the investment viability of the small-scale cogeneration systems in the portuguese context [3]. the authors follow up on an ijsepm focus area of iberian energy system transition [4–7] as well as on studies on district heating [8–10] and cogeneration of heat and power [11–13]. in this work, ferreira et al. analyse different types of chp in buildings, finding that economic viability requires subsidies for energy-efficient electricity production in the portuguese context. 2. systems for implementation based on a pestle (political, economic, social, technological, legal, and environmental factors) framework, schaefer & siluk assess the potential implementation of pv technology based on network analyses of the players in their article an algorithm-based approach to map the players’ network for photovoltaic energy businesses [14]. among other conclusions, schaefer & silluk find that there is a need to establish clear business models representing all technical aspects along with all interrelations between players, and establishing governance of the sector facilitating both coordination and standardization. miraj & berawi analyse pv investment decision processes in their work multi-criteria decision making for https://doi.org/10.5278/ijsepm.6506 2 international journal of sustainable energy planning and management vol. 30 2021 editorial international journal of sustainable energy planning and management vol 30 photovoltaic alternatives: a case study in hot climate country [15]. using an indonesian case-study and factoring in a range of criteria from the cost of energy, via co2 emissions to operation and maintenance established through a respondent survey, the authors continue to investigate optimal decisions. this follows up on previous work published in the ijsepm on decision-support systems [13,16,17]. 3. country scenarios godarzi and maleki analyse optimal electrical energy supply to meet emissions pledge under paris climate accord [18]. based on a non-linear model of the iranian energy system, the authors find that iran can meet its co2-emission reduction pledge through a 25 usd/t carbon tax, 10–20 % renewable energy and conversion of combined cycle power generation. this follows up on previous studies on iran [17,19,20] published in the ijsepm, focusing on photo voltaics/wind power, desalination and policy issues as well as other studies investigating strategies to meet paris agreement commitments [21–23]. 4. special section lastly, the this issue contains a contribution from the european conference on renewable energy systems held in istanbul, august 2020. in this contribution karipoğlu and coauthors investigates site selection methods and cases for wind power development in turkey [24]. references [1] farshidian b, rajabi-ghahnavieh a, haghi e. planning of multi-hub energy system by considering competition issue. int j sustain energy plan manag 2021;30. http://doi.org/10.5278/ ijsepm.6190 [2] kienberger t, traupman a, sejkora c, kriechbaum l, greiml m, böckl b. modelling, designing and operation of grid-based multi-energy systems. int j sustain energy plan manag 2020;29. http://doi.org/10.5278/ijsepm.3598 [3] ferreira ac, teixeira s, teixeira jcf, nebra sa. application of a cost-benefit model to evaluate the investment viability of the small-scale cogeneration systems in the portuguese context. int j sustain energy plan manag 2021;30. http://doi.org/10.5278/ ijsepm.5400 [4] østergaard pa, soares i, ferreira p. energy efficiency and renewable energy systems in portugal and brazil. int j sustain energy plan manag 2014;2. http://doi.org/10.5278/ ijsepm.2014.2.1 [5] da silva rr, dias mf, madaleno m. iberian electricity market spot and futures prices: comovement and lead-lag relationship analysis. int j sustain energy plan manag 2019;19. http://doi. org/http://dx.doi.org/10.5278/ijsepm.2019.19.6 [6] figueiredo nc, da silva pp. the price of wind power generation in iberia and the merit-order effect. int j sustain energy plan manag 2018;15. http://doi.org/10.5278/ijsepm.2018.15.4 [7] teixeira jcf, østergaard pa. development in efficiency, cost, optimization, simulation and environmental impact of energy systems. int j sustain energy plan manag 2019;22. http://doi. org/10.5278/ijsepm.3359 [8] margaritis n, rakopoulos d, mylona e, grammelis p. introduction of renewable energy sources in the district heating system of greece. int j sustain energy plan manag 2014;4:43– 55. http://doi.org/10.5278/ijsepm.2014.4.5 [9] zhang j, lucia l di. a transition perspective on alternatives to coal in chinese district heating. int j sustain energy plan manag 2015;6:49–69. http://doi.org/10.5278/ijsepm.2015.6.5 [10] büchele r, kranzl l, müller a, hummel m, hartner m, deng y, et al. comprehensive assessment of the potential for efficient district heating and cooling and for high-efficient cogeneration in austria. int j sustain energy plan manag 2016. http://doi.org/10.5278/ijsepm.2016.10.2 [11] ferreira ac, nunes ml, teixeira s, martins lb. technicaleconomic evaluation of a cogeneration technology considering carbon emission savings. int j sustain energy plan manag 2014;2:33–46. http://doi.org/10.5278/ijsepm.2014.2.4 [12] sorknæs p, lund h, andersen an, ritter p. small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve. int j sustain energy plan manag 2014;4. http://doi.org/10.5278/ ijsepm.2014.4.4 [13] zugno m, morales jm, madsen h. decision support tools for electricity retailers, wind power and chp plants using probabilistic forecasts. int j sustain energy plan manag 2015;7:19–36. http://doi.org/10.5278/ijsepm.2015.7.3 [14] schaefer jl, siluk jcm. an algorithm-based approach to map the players’ network for photovoltaic energy businesses. int j sustain energy plan manag 2021;30. http://doi. org/10.5278/ijsepm.5889 [15] miraj p, berawi ma. multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country. int j sustain energy plan manag 2021;30. http://doi. org/10.5278/ijsepm.5897 [16] brange l, sernhed k, thern m. decision-making process for addressing bottleneck problems in district heating networks. int j 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sustainable energy planning and management vol. 30 2021 3 poul alberg østergaard and rasmus magni johannsen [17] saleki s. introducing multi-stage qualification for microlevel decision-making (msqmldm) method in the energy sector – a case study of photovoltaic and wind power in tehran. int j sustain energy plan manag 2018;17. http://doi. org/10.5278/ijsepm.2018.17.6 [18] godarzi aa, maleki a. optimal electrical energy supply to meet emissions pledge under paris climate accord. int j sustain energy plan manag 2021;30. http://doi.org/10.5278/ ijsepm.5896 [19] caldera u, bogdanov d, fasihi m, aghahosseini a. securing future water supply for iran through 100% renewable energy powered desalination. int j sustain energy plan manag 2019;23. http://doi.org/10.5278/ijsepm.3305 [20] godarzi aa, maleki a. policy framework for iran to attain 20% share of non-fossil fuel power plants in iran’s electricity supply system by 2030. int j sustain energy plan manag 2020;29. http://doi.org/10.5278/ijsepm.5692 [21] osorio-aravena jc, aghahosseini a, bogdanov d, caldera u, muñoz-cerón e, breyer c. transition toward a fully renewable-based energy system in chile by 2050 across power, heat, transport and desalination sectors. int j sustain energy plan manag 2020;25. http://doi.org/10.5278/ijsepm.3385 [22] singh mk. a planning perspective on hydropower development in the indian himalayan region. int j sustain energy plan manag 2020;28. http://doi.org/10.5278/ijsepm. 4304 [23] momodu as. energy use: electricity system in west africa and climate change impact. int j sustain energy plan manag 2017;14. http://doi.org/10.5278/ijsepm.2017.14.3 [24] karipoğlu f, genç ms, koca k. determination of the most appropriate site selection of wind power plants based geographic information system and multi-criteria decisionmaking approach in develi, turkey. int j sustain energy plan manag 2021;30. http://doi.org/10.5278/ijsepm.6242 http://doi.org/10.5278/ijsepm.2018.17.6 http://doi.org/10.5278/ijsepm.2018.17.6 http://doi.org/10.5278/ijsepm.5896 http://doi.org/10.5278/ijsepm.5896 http://doi.org/10.5278/ijsepm.3305 http://doi.org/10.5278/ijsepm.5692 http://doi.org/10.5278/ijsepm.3385 http://doi.org/10.5278/ijsepm.4304 http://doi.org/10.5278/ijsepm.4304 http://doi.org/10.5278/ijsepm.2017.1.3 international journal of sustainable energy planning and management vol. 29 2020 79 *corresponding author e-mail: international journal of sustainable energy planning and management vol. 29 2020 79–90 abstract kazakhstan is committed to developing its renewable energy resources. in 2012, the government introduced a low-carbon energy strategy to reduce the production of air pollutants, including anthropogenic co2e, and to increase the share of clean energy up to 50% of total consumption by 2050. as a contribution to this strategy, the techno-economic performance of the fixed-slope on-grid photovoltaic (pv) power plants in kazakhstan and both the oneor two-axis solar tracking systems solar parks are compared. the aim is to determine to what extent the more effective but more expensive tracking systems might be a suitable standard in future pv power stations in the country. for this purpose, the existent fixed-slope 50 mwp burnoye-1 commercial solar power plant located in the jambyl region, kazakhstan, is used as a benchmark. as expected, solar panels with tracking systems produce more electricity year-round compared to those with fixed slopes; oneand two-axis tracking systems led almost to the same amount of electricity export to the grid. furthermore, pv power stations with oneand two-axis tracking technology could reduce co2 emissions by approximately 10 ktco2e per year. however, using one or twoaxis tracking systems lead to an increase in the ratio of extra-cost to extra-energy production of around 26% and 33%, respectively. moreover, that means that both tracking scenarios are not economically competitive compared to fixed panels. nevertheless, if a tracking system has to be considered, the results of this work demonstrate that one-axis tracking should be preferred as they reduce ghg emissions while having a higher electricity generation compared to the fixed system. impact of both oneand two-axis solar tracking on the technoeconomic viability of on-grid pv systems: case of the burnoye-1 power plant, kazakhstan nurgeldy praliyev, kassym zhunis, yeraly kalel, dinara dikhanbayeva, luis rojas-solórzano* department of mechanical and aerospace engineering, school of engineering and digital sciences, nazarbayev university, 53 kabanbay batyr ave., nur-sultan, kazakhstan keywords: retscreen; burnoye-1; solar tracking systems; photovoltaic; kazakhstan 2050; clean technologies; url:https://doi.org/10.5278/ijsepm.3665 1. introduction kazakhstan is the ninth largest country by size and the biggest in central asia, with more than 18 million inhabitants as of 2019. in 2013, first president nursultan nazarbayev signed the “concept for transition of the republic of kazakhstan to green economy,” where special mention was made to the importance of carbon emissions reduction [1]. moreover, one of the main reasons for the onset of the transition was that 75% of the total power generated in kazakhstan is coming from coal-fired plants, which lead to high co2e emissions [2]. after that, many incentives have been approved in current policies. nowadays, renewable energy has become an appealing option for investors, as they can invest in producing heat and power while reducing local air pollution and greenhouse gas emissions. moreover, one of the main renewable sources nowadays is solar energy. as researchers from mit university state, solar energy usage and production have increased 300x in the last 20 years [3]. that became possible https://doi.org/10.5278/ijsepm.3665 80 international journal of sustainable energy planning and management vol. 29 2020 impact of both oneand two-axis solar tracking on the techno-economic viability of on-grid pv systems because the cost of solar power decreased thanks to the development of new advanced technology and more efficient panels. furthermore, governmental regulations, together with adjusted policy standards and subsidies, played a significant role in both cost decrease and enhancement of solar energy production [3]. in addition, kazakhstan has an immense potential to develop solar power projects due to climate conditions. furthermore, kazakhstan’s annual irradiance reaches 1200–1700 kwh/m2, mainly in the south region of the country, where solar irradiance is abundant all-yearround [4]. photovoltaic (pv) systems are a very convenient and popular power source to consider in kazakhstan, given a large number of silicon resources and local production of pv panels [5]. additionally, current national green tariffs and subsidies favor renewable energy projects in the country [6]. in general, the kazakhstan electricity market includes a retail and wholesale type of market. additionally, it involves organizations that can purchase electricity from power generators. in this case, power generating organizations sell electricity at the wholesale market only if those organizations satisfy specific criteria. moreover, power generating organizations connect to the national power grid and regional electric network; however, in both cases, contracts with the main system operator need to be made. the system operator across kazakhstan is kegoc jsc, which is at the order of the ministry of energy. in addition, another option to buy electricity is consolidated auctions that resale power to the end-users. consumers, in their turn, purchase electricity at the decentralized regional markets with conditions stated in the civil code [7]. on-grid green power systems are favored with a high feed-in-tariff (fit), which is supported and indexed by the government for 15 years, in accordance with international practices. moreover, in kazakhstan, the feed in-tariff is around 34.61 kzt/kwh (0.103 usd/kwh) for solar power plants, while it is 8.65 kzt/kwh for coal-fueled power plants (0.026 usd/kwh) [5]. furthermore, the government, with the help of the european bank for reconstruction and development (ebrd), supports and provides debt financing to renewable energy projects on a competitive basis, and it launched kazakhstan’s renewable energy financing facility [5]. the burnoye, which is the location of the present case study, is situated in the southern region (jambyl) of kazakhstan and has an average monthly temperature of –13.7 during january and 22.9 during july [8]. in 2015, this location was chosen for the construction of the 50 mwp burnoye solar-1 solar pv power plant, based on fixed panels. as of today, burnoye-1 generates around 0.1% of the total electricity production in kazakhstan [5]. this investigation aims to determine whether the installation of oneand two-axis solar tracking systems provide higher electricity generation and reduce ghg emission compared to fixed pv panels with the same capacity, as well as determine if the not fixed panels are a more attractive long-run investment for the country. furthermore, this work compares the financial yield between oneand two-axis tracking mechanisms to determine which one would produce more considerable benefits for shareholders of this and future projects in the region. 2. literature review decreasing the carbon footprint and using renewable energies have arisen as a modern trend due to the obvious benefits of green technologies [35]. moreover, the united nations (un) has been a promoter of this trend, as one of its sustainable development goals (sdg) aims to increase the production of clean energies, as well as make them more affordable by 2030. for example, nigeria is collaborating toward this sdg and is improving solar power generation across the country, which currently relies over 50% on expensive and private self-generation of power based on petrol and diesel. the socio-economic growth of nigeria drives its increasing energy demand, while facing an unstable national power grid with no immediate option but increasing self-generation [35]. nevertheless, the popularity of pv panels has been increasing in nigeria as a result of decreased cost, technological innovations, positive public perception, promotional strategies, and subsidies provided by global and governmental entities [35]. solar pv arrays can be installed on the rooftop of a residential building, and it has been proved that pv panels could be installed in large areas with no additional features such as controlling and monitoring equipment, thus reducing significantly its cost of operation compared to conventional power sources [36]. two residential buildings in sweden with available rooftops were taken for that case study. installed solar pv generated eight times more energy compared with the total annual consumption of both buildings. however, sometimes those large-size pv installations caused overvoltages, and although the local grid connecting these two international journal of sustainable energy planning and management vol. 29 2020 81 nurgeldy praliyev, kassym zhunis, yeraly kalel, dinara dikhanbayeva, luis rojas-solórzano buildings could handle it, in the case of a single house installation, it could be an issue [36]. renewable energy sources (res) offer many benefits, and there are many alternative power systems nowadays, which may bring uncertainty to decision-makers since their primary aim is to reach the maximum possible potential of the system [37]. moreover, res-based electricity generation offers several advantages, such as low operational costs and being green and renewable energy sources, which positively decrease co2 emissions, as well as increase cost savings and have a low marginal cost of energy production. • some solutions for the integration of res with the utility grid are: • smart grid systems for res, which show advantages in better resiliency, quality and reliability of delivered power; • micro-grid, which can operate as a fully sustainable generation plant; • energy storage systems (ess), which provide better distribution in power peak demands; • advanced forecasting; • flexibility in power generation [37]. furthermore, tarabsheh and etier [9] investigated the possibility of using solar energy at hashemite university, located in jordan, by determining the optimum slope and angle of the solar panels on an hourly basis for the whole year period. their work proved the cost effectiveness of the tracking systems and showed that energy production increases to nearly 6% for the oneaxis tracking system, while in the case of the two-axis system, energy production increases about 31% when compared with fixed systems [9]. garni et al. [10] followed a similar aim but analyzing the best tracking system in terms of technical and financial feasibility for a pv system in makkah, saudi arabia. seven different tracking systems were studied, demonstrating that two-axis tracking systems might generate up to 34% more electricity in that particular location [10]. in addition, drury et al. [11] found that in the usa both the one-axis and two-axis tracking of photovoltaic panels may increase electricity generation by 12-25% and 30-45% compared to south-facing fixed pv systems, respectively. moreover, garni et al. also found that solar panels installed with tracking systems produced more electricity in arid regions such as the western and southwestern usa compared to regions with persistent snow or cloud cover [11]. moreover, the effectiveness of tracking systems varies significantly depending on climate and location, more specifically, according to solar horizontal irradiance and distance between the sun and the pv panels [12]. for example, tracking systems promote more significant pv electricity generation in arid areas than in humid regions [12]. furthermore, a study conducted at mugla university campus in turkey found that the implementation of twoaxis solar tracking systems in pv plants increased the electricity production in more than 30% compared to fixed pv panels, using similar modules and inverters in both cases [13]. likewise, filik et al. [12] found that the average total electricity generation increase with the tracking system is around 33% compared to fixed pv panels with the same capacity for their selected region in northern turkey. for colder places, such as berlin (germany), the amount of total electricity production by a pv system may increase by nearly 39% with solar trackers; however, in warmer cities such as aswan (egypt), the increase may reach only around 8%. furthermore, almarshoud [14] found that in saudi arabia, the difference in produced energy between the one-axis and two-axis tracking cases is only 3–4.5%, while between the fixed and one-axis cases, this value equals to 28–33%. additionally, it is important to notice that the tracking system might consume 5–10% of the generated electricity [15]. therefore, an accurate life cycle cost analysis must consider the amount of electricity used by tracking motors, as well as the initial cost of the tracking system. overall, in most of the discussed case studies, the locations have an analogous climate and regional similarity. furthermore, in most of the locations, the increase in electricity generation by implementing tracking-solar systems is significant. it is worth mentioning that the current case study of burnoye-1 has similar climate characteristics to eskisehir (turkey), where the summer is hot, and it also shares regional similarity with the southwest usa where most regions are arid [11,12]. consequently, it is expected that the burnoye-1 case study presents similar results regarding electricity generation. the technical benefits of sun trackers in terms of increasing power production are evident. however, pv systems using tracking systems carry on additional initial costs and extra operating and maintenance (o&m) expenses needed to guarantee the reliability of the system [11,16]. furthermore, it has been found that in 82 international journal of sustainable energy planning and management vol. 29 2020 impact of both oneand two-axis solar tracking on the techno-economic viability of on-grid pv systems some cases, when irradiance or financial parameters are not favorable, the added tracking system may make a project economically infeasible [17]. furthermore, this work explores current solar irradiance and financial conditions in kazakhstan to determine whether oneand two-axis tracking mechanisms are economically attractive add-ups. if proven favorable, tracking systems may turn as an opportunity to hasten the energy transition in the country through burnoye-1 and future projects in the region. 3. methodology the reliable and efficient way to analyze the viability of on-grid photovoltaic systems is the usage of the retscreen analysis software. it is an intelligent decision support tool that helps to evaluate the performance of renewable energy projects. the platform performs analysis in 5 steps [23], and that was used as a research methodology. in this particular study, the tool was used to thoroughly analyze the case in terms of sensitivity and greenhouse gas emission [18,19]. • energy model, which requires information regarding base and proposed cases, project location, type of energy used in the projects, and regional resources. based on the previous information, the following estimation was made: ◦ estimation of electricity production using the current fixed-slope pv system. ◦ selection of oneand two-axis sun-tracking technologies that can be available locally (nationally produced or imported) compatible with current pv panels on the site. after that, the estimation of the production of electricity with these two new configurations is assessed. ◦ estimation of the annual solar irradiance in burnoye-1 and climate conditions. • cost budgeting analysis, where periodic, annual, and initial costs need to be added by the user. also, it includes capital and running costs of solar pv technology and associated sun trackers suitable for burnoye-1. • life-cycle cost analysis (lcca) for three different scenarios exporting electricity to the grid. in this analysis, the following data need to be gathered: ◦ fit and subsidies, which are applicable to pv power plants in the country; ◦ applicable taxes (if any); ◦ inflation and fit escalation rates; ◦ loan conditions (i.e., debt ratio, rate and payment term); ◦ minimum return rate expected by investors in this sector (discount rate). the outcomes of the lcca were scrutinized among the three scenarios to determine the best financial option and include the net-present value (npv), internal rate of return (irr), equity payback, and benefit-cost ratio (b-c). • sensitivity analysis, which determines the most determinant factors in the financial outcome of the project. for this purpose, with an estimation of the uncertainty of each input parameter, a multivariable monte carlo analysis is performed to determine which are the most critical input parameters in determining the expected financial outcomes. monte carlo simulation takes into account not only input parameters but selects on a random basis 500 values. thus, it helps to identify the effect of those financial values on key indicators. • greenhouse gas emission analysis, which provides an estimation of the co2e emissions avoided by each of the three considered pv scenarios (fixed case scenario, and both oneand two-axis tracking systems case scenarios). this analysis complements the financial impact of each solution with its environmental benefits. 4. results and discussion 4.1. energy model table 1 presents the monthly average irradiance in the sector of burnoye-1, including air temperature, obtained from the nasa satellite information and ground station, respectively (as extracted from retscreen). the energy model for the base case (fixed arrays, 30-degree slope, and 0-deg azimuth) is built according to the information available on the site of the project (as extracted from retscreen), and the atlas of solar resources of kazakhstan was used to obtain the technical specifications of current burnoye-1 [34]. information about the pv systems like the power capacity, model, efficiency, and its manufacturer is shown in table 2. international journal of sustainable energy planning and management vol. 29 2020 83 nurgeldy praliyev, kassym zhunis, yeraly kalel, dinara dikhanbayeva, luis rojas-solórzano three solar power projects in kazakhstan were considered, which are kulan, gulshat, and burnoye-1. the clean technology fund (ctf) is one of the main investors of all three projects, which using pv panels provided by the local astana solar company [20]. the pv system specifications used in the burnoye-1 plant can be seen in table 2. additionally, the retscreen expert (re) platform was used, and since retscreen does not include astana solar manufacturer in its existing database, an equiva lent pv model is used (suntech, poly-si stp260 20/wem) which has similar characteristics as astana solar kz pv 230 m60 burno. burnoye-1 solar plant uses xc 680 inverters that were produced in thailand by schneider electric, with an alternating current (ac) power output of 680 kw and maximum efficiency of 99% [22]. it was assumed that the same inverter could be used for scenarios with oneand two-axis solar tracking. technical specifications of st40m2v3p one-axis and stm3v15p two-axis solar tracking systems are listed in table 3. according to table 2 and table 3, the solar panel dimension used in burnoye-1 exactly matches the dimensional accuracy of tracking systems. the re platform allows us setting the model to calculate the tilted-tracking beam and diffuse (i.e., total) solar irradiance on an hourly basis by implementing the following algorithm: (a) firstly, it calculates the hourly total irradiance on an horizontal surface per each hour on an average-day having same irradiance as corresponding monthly average; (b) then, the model calculates the hourly total irradiance in the plane of the pv array; and (c) the model sums all hourly tilted values of irradiance to complete the average daily irradiance in the plane of the pv array for a given day. the daily angular position (in degrees) of sun at solar noon, with respect to the plane of the equator, is given by: 284 23.45sin 2 365 n δ π +  =     table 1: solar irradiance and air temperature at buroye (jambyl region) (as extracted from retscreen expert) month air temperature [°c] source: ground station daily solar radiationhorizontal [kwh/m2/d] source: nasa january –3.0 1.66 february –1.6 2.33 march 4.1 3.23 april 11.6 4.34 may 17.3 5.51 june 23.0 6.52 july 25.3 6.64 august 23.7 6.19 september 17.8 4.96 october 10.5 3.21 november 3.7 1.94 december –1.4 1.40 table 2: pv system information for burnoye-1 [24] type poly-si power capacity 50 mwp manufacturer astana solar model kz pv 230 m60 panel dimensions 1.649 × 0.99 m number of units 192 192 efficiency 16% nominal operating cell temperature 45 °c temperature coefficient 0.4%/°c solar collector area 312 312 m2 miscellaneous losses 3% table 3: technical specifications of solar tracking systems [27] specifications st40m2v3p stm3v15p number of turning axis 1 2 holding panels 3 15 panel dimension 1.67 × 0.99 m 1.67 × 0.99 m motors 1 2 motor power supply 24 vdc 24 vdc type of hour-angle motor linear motor sm4s510m2 linear motor sm4s900m3 estimated motor operation 800–1000 hrs 800–1000 hrs dc motor replacement 8 yrs 8 yrs backup battery cr 2512 coin cr 2512 coin backup battery replacement 3–5 yrs 3–5 yrs turning time interval 1–15 min 1–15 min operating temp –25 °c to +70°c –25 °c to +70 °c standby consumption 20 ma ± 25% @ 24 vdc 60 ma ± 25% @ 24 vdc 84 international journal of sustainable energy planning and management vol. 29 2020 impact of both oneand two-axis solar tracking on the techno-economic viability of on-grid pv systems where n is the day of the year. the oneand two-axis trackers change their parameters so that the incidence angle is the same as the angular position of the sun, and in this case, the angular position for burnoye is used. moreover, the electricity exported to the grid can be calculated using the data from table 1, together with the incidence angles. this algorithm is explained in depth in the article published by the national resources canada organization [23]. the estimated production of electricity exported to the grid for the fixed-array, oneand twoaxis solar tracking systems is listed in table 4. as it can be noticed, electricity generated by oneand two-axis solar systems are significantly higher compared to the fixed system, with the two-axis solar tracking system increasing by 33% the electricity exported to the grid. another perceptible outcome is the similarity in energy production by oneand two-axis tracking systems, which opens the discussion on whether two-axis tracking implementation is feasible, as it has higher capital and o&m costs compared to the one-axis configuration. 4.2. cost budgeting the construction of the solar power plant burnoye-1 cost was around usd 123 000 000, including the feasibility analysis, development of the project, and engineering works [24]. currently, 25 technicians are running the operation and maintenance of the plant [7]. in detail, five dispatchers, four monitoring engineers, and 16 security guards are permanently assigned to the project. salary is estimated considering a standard of living in jambyl region [26]. periodic cost is established based on the replacement of inverters. the cost of xc 680 inverters is not listed in the public report, but it was estimated by its characteristics, using a suitable unit cost (including its transportation cost from japan). the replacement period of the inverter is ten years [22]. the periodic cost of the project base case includes only inverter refurbishment, assumed as 25% of its initial cost. table 5 lists cost numbers for fixed panel mode (base case). the effect of adding oneand two-axis sun trackers st40m2v3p and st44m3v15p, respectively, are considered in subsequent scenarios. each st40m2v3p tracker can hold three panels (each panel with 1.6335 m2), while each st44m3v15p can hold 15 panels (each panel: 1.6533 m2). it is worth mentioning that solar trackers used in this project have 1.626m2 (each), which makes the chosen solar trackers compliant with current space limitations [27]. the prices for st40m2v3p and st44m3v15p sets were taken from sat control, 2018 with the following total prices (for complete pv power plant): usd 36 270 820 and usd 55 675 526, respectively. moreover, based on our experience and perception, it was assumed that one worker could install a single solar panel in 0.5 hours, a single one-axis solar tracker in 2.5 hours, and a single two-axis solar tracker in 7 hours, while his/her salary is around usd 5.85 per hour (2 199 kzt/hour). the salary was calculated based on salary surveys recorded from employers and anonymous employees in kazakhstan. this value might increase by 10% each year [28]. on the other hand, solar tracker systems that required control motors have extra operational costs and associated emissions due to grid-electricity consumption. the grid-electricity used for the operation of these control motors was rated as usd 0.028 per kwh [16]. moreover, it is assumed that the solar tracker will work 10 hours per day on average in jambyl [28]. as a result, the yearly table 4: electricity exported to the grid for different tracking configurations tracking mode electricity exported to grid (mwh/year) electricity revenue (usd/year)* (*) year-0 value fixed mode (base case) 75 828 252 735 183 one-axis mode (proposed case) 97 751 325 805 460 two-axis mode (proposed case) 100 933 336 409 416 table 5: costs for fixed pv system configuration (base case) costs cost total initial cost (usd) feasibility study 3 900 000 124 679 722 development 7 800 000 engineering 9 450 000 power systems 92 810 892 inverters (74 xc680) 4 781 700 system balance 5 937 130 o&m costs (usd) dispatchers 25 200 111 600engineers 28 800 security guards 57 600 periodic cost (usd) inverters (per 10 years) 119 5425 1 195 425 international journal of sustainable energy planning and management vol. 29 2020 85 nurgeldy praliyev, kassym zhunis, yeraly kalel, dinara dikhanbayeva, luis rojas-solórzano operational cost would increase compared with initial cost of the base case scenario to usd 93 772 and usd 37 507 for the one-axis and two-axis solar tracking systems, respectively. the number of solar panels that are held by the single solar tracker can explain such a difference. moreover, the calculations include the fact that the two-axis tracking system operates with two linear motors: hour angle and elevation-angle motors [30]. an additional periodic cost is included in the analysis of the two scenarios with sun tracking, which correspond to the replacement of dc motors every 8 years. it also predicted that two workers could replace motors in 40 minutes for the single one-axis solar tracker and one hour for the single two-axis solar tracker. estimated operating and maintenance (o&m) costs for both tracking systems are presented in table 6. in summary, the installation of one-axis and two-axis tracking systems adds a high extra cost to the base case project with an estimated increase of 25% and 40%, respectively. in addition, the periodic cost is higher in the case of the two-axis tracking system since it operates with two linear motors. nevertheless, the o&m cost is slightly higher in the case of the one-axis tracking system compared to the two-axis tracking system because the first one has more panels that need maintenance. 4.3. life cycle cost analysis (lcca) this section presents the life-cycle cost analysis (lcca) of all three options (fixed case scenario and both one and two-axis tracking systems case scenarios) considering the impact of the feed-in-tariff. the lcca for the base case is determined according to the techno economic reports publicly available. two companies provided financial support for the existing bornoye-1 pv plant: the european bank for reconstruction and development (ebrd) and clean technology fund (ctf), a subsidiary of the world bank group. table 7 illustrates debt ratios from both entities and their financial details. the debts are shown in usd equivalent values, and the debt was consolidated in the model as major debt from ebrd to simplify the analysis. as a result, a debt of 62.02% is included in the project analysis. furthermore, table 8 presents data for the financial parameters needed in the analysis that were gathered from the national bank of kazakhstan [31]. a fundamental element in the analysis is the electricity export escalation rate, which is the rate that has to be applied to escalate the feed-in-tariff. on may 10, 2018, the government of the republic of kazakhstan adopted a resolution on amendments concerning the determination of fit [32]. after that, the fit must be indexed with the consumer price index (cpi) and exchange rates of kzt to usd of the previous 12 months to the indexed year following the formula: where, tt+1 – indexed flat tariff. tt – current flat tariff. cpit – consumer price index, cumulative for 12 months before october 1 of the indexation year. usdt+1 – current exchange rate of tenge to usd (the standard monetary unit of kazakhstan). usdt – average exchange rate of the tenge to usd, calculated 12 months before the indexation date. by applying the formula, the fit escalation rate was estimated at 8.3% per year. 1 1 100% 1 0,3 0, 7 100% 100% t t t t t cpi usd usd t t ++ − −  = + +    table 6: estimated extra capital and o&m costs for tracking systems tracking mode one-axis two-axis initial cost (usd) 163 033 074 183 090 088 o&m costs (usd) 205 372 149 107 periodic cost (usd) inverters (every 10 years) 1 195 425 1 195 425 motors (every 8 years) 14 516 689 17 921 800 table 7: debt details bank ebrd ctf (world bank) debt ratio 62.02% 12.3% debt (usd) ~77 300 000 ~15 000 000 debt interest rate 11.5% 1.25% debt term (yrs) 15 20 table 8: financial parameters [31] lifetime of project (yrs) 25 inflation rate 5.3% discount rate 9.25% reinvestment rate 1.2% effective income tax rate 20% 86 international journal of sustainable energy planning and management vol. 29 2020 impact of both oneand two-axis solar tracking on the techno-economic viability of on-grid pv systems the results of the lcca are summarized in table 9 for a 25-year lifetime. the analysis shows that oneand two-axis solar tracker projects have very similar npv despite the initial larger cost of the latter, more than usd 162 thousand and usd 150 thousand respectively. however, the fixed system has a larger b-c ratio, 4.1 to be exact, more significant irr on equity 23.3%, and a shorter payback period within all 3 cases with 5.9 years, which makes it the best option. cumulative cash flows for each scenario are presented in figure 1. 4.4. sensitivity and risk (s&r) analysis a risk analysis, based on monte carlo (mc) simulation, was performed to determine the sensitivity of financial indicators concerning the uncertainty of key input parameters. monte carlo simulation is a method to develop a s&r analysis which considers input parameters and randomly selected values within the uncertainty range indicated by the user (see table 10 for the three scenarios and seven input parameters considered in this study). the s&r also identifies the weights of each input parameter on the output indicators of interest. the monte carlo simulation consists of 2 steps: a) first, for each input parameter selected by the analyst, 500 random samples are generated using a gaussian distribution with a mean value 0 and a standard deviation of 0.33. once these values are generated, they remain fixed. b) second, for each input parameter, the corresponding random values from (a) are multiplied by the uncertainty indicated by the user (as a percentage) of variability around the nominal value of the given input parameter. as a result, a matrix of 500* number of input parameters will be created; therefore, 500 results will be produced and used for the outcomes of financial indicators. table 9: life-cycle cost analysis (lcca) outcome mode fixed one-axis two-axis after-tax irr equity (%) 23.3 21.7 19.6 npv (usd) 145 119 759 162 429 145 150 307 742 equity payback (yrs) 5.9 6.1 6.9 simple payback (yrs) 8.7 8.9 9.6 benefit-cost ratio 4.1 3.6 3.2 (b) one-axis tracking (c) two-axis tracking (a) fixed-array pv system (b) one-axis tracking pv system (c) two-axis tracking pv system figure 1: cumulative cash flows (as extracted from retscreen expert). (a) fixed-array; (b) one-axis tracking system; (c) two-axis tracking system international journal of sustainable energy planning and management vol. 29 2020 87 nurgeldy praliyev, kassym zhunis, yeraly kalel, dinara dikhanbayeva, luis rojas-solórzano uncertainties were estimated based on the perception in the local market. for example, variations of the debt ratio, debt interest, and debt term were very small (5%) because there is a low risk that these values change in the short-term in the country. both the electricity exported to the grid and electricity export rate are almost invariable, as the former is associated with proper o&m (considered as a fundamental part in the cost budgeting), while the latter is linked to the existing policy. thus, an energy purchase agreement is regularly expected to be signed before the approval of the project. therefore, 10% of uncertainty was set for both parameters in the mc analysis. however, the o&m cost of the project may change significantly due to unexpected labor costs increase and for the extra effort in maintaining tracking systems that can be expected due to harsh winters in the country. there is little uncertainty on pv panel costs (all materials are from local markets); nevertheless, cost varies significantly between different tracking systems purchased from foreign countries. consequently, the uncertainty of the initial cost for proposed scenarios with tracking systems was set to 20%, while for fixed-arrays (base case), it was only 10%. given that 100% of possible scenarios resulting from mc sampling conform an entire histogram of frequency, a risk level of 5% (or equivalently, a confidence of 95%; i.e., the output range is the resulting range in histogram of frequency that encloses 95% of probable scenarios around the median) leads to the expected range of output financial indicators (e.g., npv, irr, etc.). figure 2 presents the risk analysis using a tornado chart that predicts the relative impact of each selected individual parameter onto a selected output indicator, depicting which parameters are significant and may require special attention. the direction of the horizontal bar (positive or negative) provides an indication of the relationship between the input parameter and the financial indicator. there is a positive relationship between an input parameter and the financial indicator when an increase in the value of that parameter results in an increase in the value of the financial output indicator. the chart (fig. 2) includes the influence of varying parameters such as the amount of electricity exported to the grid, electricity export rate (i.e., fit), initial cost, and debt interest rate on the project’s net present value. table 10: uncertainty of input parameters for three scenarios fixed array one-axis two-axis initial costs range +/– (%) 10 20 20 o&m range +/– (%) 15 20 20 electricity exported to grid range +/– (%) 10 10 10 electricity exported rate +/– (%) 10 10 10 debt ratio rate +/– (%) 5 5 5 debt interest rate +/– (%) 5 5 5 debt term range +/– (%) 5 5 5 (a) fixed-array case. figure 2: normalized influence of input parameters on the npv of the pv power system (as extracted from retscreen expert): (a) fixed-array; (b) one-axis tracking; (c) two-axis tracking (b) one-axis tracking case. (c) two -axis tracking case. 88 international journal of sustainable energy planning and management vol. 29 2020 impact of both oneand two-axis solar tracking on the techno-economic viability of on-grid pv systems it can be clearly seen that the most significant impact on the project’s npv comes from varying electricity exported to the grid and, secondly, for the electricity export rate. the other strong effect on the viability of the project was caused by the initial cost with a negative correlation. the primary role of both fit and the amount of exported electricity is that both are the positive financial indicators of the project. capital cost is the third largest and significant parameter in the financial fate of all scenarios. 4.5. ghg emission analysis the fixed-array systems are the current systems in use in the burnoye-1 plant, and it reduces greenhouse gas (ghg) emissions by around 34 996 tco2 per compared to fossil fuel systems (according to calculations in retscreen expert). however, even if when adding the oneand two-axis tracking the solar collection increases, the control motors of trackers also consume electricity from the grid, and this reduces the ghg emission reduction effect. nevertheless, assuming a 10-hour operation per day and tracking time-stepping interval of 15 minutes, where oneand two-axis tracking system motors consume a maximum of 6 w and 36 w of power, respectively. solar-motors calculations demonstrate that it is expected that the one-axis tracking system will use 1.40 mwh, while the two-axis will use 1.68 mwh annually [33]. then, these values multiplied by kazakhstan’s ghg emission factor (0.495 tco2e/kwh), provided by the retscreen expert platform database, 2019, and subtracted from gross annual ghg reduction by panels, the net ghg emission reduction is found to be 44 137 tco2e and 45 464 tco2e for oneand two-axis cases, respectively. figure 3 shows the net annual ghg emission reduction in fixed, oneand two-axis technologies. nevertheless, it is evident that the difference in emission reduction for oneand two-axis technologies is comparatively small (only 1 327 tco2e). a techno-economic assessment of the impact of adding oneor two-axis solar tracking systems on the existing 50 mwp burnoye solar-1 on-grid power plant, located in southern kazakhstan, is presented in the current paper. as expected, the pv system with a sun tracking mechanism provides higher electricity generation compared to the same capacity of fixed pv panels. the installation of oneand two-axis solar trackers would increase the electricity export to the grid from 76 gwh (for the fixed case) to 98 and 101 gwh per year, respectively. however, the initial costs would increase by 25% and 33%, respectively. on the other hand, the limited holding capacity of one-axis trackers makes their total o&m cost larger than two-axis trackers. the life-cycle cost analysis of the three scenarios proved that all three are very feasible, but fixed arrays render better financial outcomes compared to the same system with added sun-tracking capability. a marginal difference in electricity generation and financial indicators were found among the two sun-tracking scenarios, with just a limited increased production and ghg emission reduction for the two-axis system compared to the less expensive and simpler one-axis sun-tracking configuration (ghg emissions, however, could be reduced in near 10 ktco2e compared to the fixed-slope system in burnoye-1). in conclusion, a fixed-slope array is well justified in burnoye-1, and only if an extra production of electricity or ghg emission reduction is considered with the same installed capacity, one-axis tracking configuration should be the new configuration. acknowledgements this paper belongs to an ijsepm special issue on sustainable development using renewable energy systems [38]. 0 10000 20000 30000 40000 50000 fixed one-axis two-axis g h g e m is si on re du ct io n ( 2e ) figure 3: net annual ghg 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http://ebrd.com https://www.ebrd.com/work-with-us/projects/psd/burnoye-solar-plant-extension.html https://www.ebrd.com/work-with-us/projects/psd/burnoye-solar-plant-extension.html https://www.ebrd.com/work-with-us/projects/psd/burnoye-solar-plant-extension.html https://informburo.kz/pikir/aisulu-moldabek/zhambyl-r-ortasha-ayly-zhalay-boyynsha-16-orynda-orday-atyysyna-leumettk-ekonomikaly-taldau.html https://informburo.kz/pikir/aisulu-moldabek/zhambyl-r-ortasha-ayly-zhalay-boyynsha-16-orynda-orday-atyysyna-leumettk-ekonomikaly-taldau.html https://informburo.kz/pikir/aisulu-moldabek/zhambyl-r-ortasha-ayly-zhalay-boyynsha-16-orynda-orday-atyysyna-leumettk-ekonomikaly-taldau.html http://www.solar-motors.com/ http://www.solar-motors.com/ https://www.salaryexpert.com/salary/job/mechanical-engineer/kazakhstan https://www.salaryexpert.com/salary/job/mechanical-engineer/kazakhstan http://kegoc.kz https://www.kegoc.kz/en/company/activity/tariffs https://www.kegoc.kz/en/company/activity/tariffs 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http://www.solar-motors.com/gb/solar-tracker-2-axis-st44m3v15p-w-backstr-for-15-pan-0153-st44m3v15p-without-concrete-block-i232.shtml http://www.solar-motors.com/gb/solar-tracker-2-axis-st44m3v15p-w-backstr-for-15-pan-0153-st44m3v15p-without-concrete-block-i232.shtml http://atlassolar.kz http://atlassolar.kz https://doi.org/10.5278/ijsepm.2019.21.3 http://dx.doi.org/10.5278/ijsepm.2018.17.2 https://journals.aau.dk/index.php/sepm/article/view/2035 https://journals.aau.dk/index.php/sepm/article/view/2035 http://doi.org/10.5278/ijsepm.2802 http://doi.org/10.5278/ijsepm.4302 http://doi.org/10.5278/ijsepm.4302 _hlk528169392 title _hlk528169090 _hlk528167333 _hlk43208833 related conclusions _ref528770822 _hlk44079264 mechanics _ref529385054 _hlk530767220 almarshoud 515-1452-1-le.qxd 1. introduction jordan is a nearly land-locked country of approximately 89000 km2 in the middle east with a population of approximately 6.5 million [1]. the country is nearly 100 per cent dependent on imported fossil fuels (cf section 4) affecting both security of supply, the balance of trade and contributing to the enhanced greenhouse effect. in terms of security of supply, the national energy strategy of jordan [2] point out some challenges associated with the supply of natural gas and oil from neighbouring iraq and egypt. in terms of water, the country may be characterised as being semi-arid desert, prone to drought and with fresh water resources being strained and with fresh water exploitation exceeding sustainable levels (cf section 5). water use is particularly high in the international journal of sustainable energy planning and management vol. 01 2014 29 agricultural sector, standing at 72 per cent of the water demand in 2005 [2]. as with many other countries with similar fresh water resource issues, jordan is contemplating desalination as a means for providing adequate fresh water resources in the future, however desalination is associated with significant energy demands and will thus have an impact on primary energy supply (pes). in general, there are two main categories of desalination plants; plants based on distillation processes and plants based on ro. the former is primarily dependent on heat while the latter is dependent on a pressure difference – typically applied using electricity. the heat may be supplied from different technologies including purpose built boilers but also excess heat from thermal power generation * corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 01 2014 29-40 energy system impacts of desalination in jordan �������� ��� � ��� ����� � ������������� ������������� � �������� � �� �� ������ � � � ��� � � ������� � � ������� �������� �� ���� a b s t r a c t climate change mitigation calls for energy systems minimising end-use demands, optimising the fuel efficiency of conversion systems, increasing the use of renewable energy sources and exploiting synergies wherever possible. in parallel, global fresh water resources are strained due to amongst others population and wealth increase and competitive water uses from agriculture and industry is causing many nations to turn to desalination technologies. this article investigates a jordanian energy scenario with two different desalination technologies; reverse osmosis (ro) driven by electricity and multi stage flash (msf) desalination driven by cogeneration of heat and power (chp). the two systems impact the energy systems in different ways due to the technologies’ particular characteristics. the systems are analyses in the energy systems analysis model energyplan to determine the impacts on energy system performance. results indicate that ro and msf are similar in fuel use. while there is no use of waste heat from condensing mode plants, efficiencies for chp and msf are not sufficiently good to results in lower fuel usage than ro. the jordanian energy system is somewhat inflexible giving cause to critical excess electricity production (ceep) even at relatively modest wind power penetrations. here ro assists the energy system in decreasing ceep – and even more if water storage is applied. keywords energy systems analysis, energyplan, desalination, jordan, wind power url: dx.doi.org/10.5278/ijsepm.2014.1.3 30 international journal of sustainable energy planning and management vol. 01 2014 energy systems impacts desalination in jordan (cogeneration of heat and power (chp) plants) and heat from solar collectors. from an energy systems perspective, these thus have different characteristics. electricity use for desalination is typically grid-based and thus affects the energy systems as other large scale electricity demands. in order to reduce the climate change impact of desalination, and to improve the balance of trade and security of supply, focus should be brought to energy efficient desalination which should optimally exploit locally available renewable energy sources. previous work has assessed potential renewable energy contributions in jordan. hrayshat found that “jordan has enormous underground energy resources” in the form of geothermal energy in the 20° to 65° range [3]. solar exploitation is limited in jordan according to hrayshat [4], though e.g. water pumping [5] and heating are areas with potentials. as al salaymeh et al also states, “it is [..] unlikely that any future energy scenario for jordan will not include a significant proportion of its energy to come from renewable sources such as solar energy” [6]. wind power has also been the centre of attention of a number of studies. mohsen & akash [7] investigated wind power for water pumping in different locations in jordan, though finding only one to be “favourable”. habali et al [8], investigated the regional distribution of wind resources and the match between resource and utilisation in 2004, while alsaad has made a more recent (2013) publication, locating and analysing four “promising locations” and finding a potential production of these sites of 18.9 twh [9]. abu-ashour et al [10] have investigated and biomass resources and assessing a limited potential of 6.6 pj including collection losses. common for these examples of work is that they mainly are from a single-resource perspective. in addition to a large body of literature on the technical aspects of desalination including reverse osmosis and thermal energy storage [11], solar desalination [12, 13] and combined power and desalination plants [14], and a substantial body of work specifically on desalination in jordan investigating reverse osmosis of brackish ground water [15–17], solar-driven membrane desalination [18, 19] and the more general role of desalination in jordan’s water supply [15–23] there is some work probing into the energy – water connection mainly from a unit perspective [23, 24] and limited work putting the water – energy connection into a larger energy systems perspective [25]. in the last mentioned work, novosel et al investigate the interesting prospects of a red sea – dead sea pipeline exploiting the height difference for power generation and the lower salt-contents of red sea water for desalination purposes. they find that such a system can provide fresh water while stopping the recession of the water level in the dead sea. this article explores the field of energy systems impact of the water-energy connection even further with a focus on different technologies’ effects on the energy system and the energy system dynamics. the scope is thus to establish the energy system impacts of two different types of desalination technologies; electricity-based ro and chp steambased thermal desalination in terms of pes on thermal power generation plants and the adaptability of the energy system to integrate wind power measure in terms of critical excess electricity generation. the article starts by describing the two mentioned desalination methods with a particular focus on their energy characteristics. secondly, the energyplan model is introduced – with a particular section on the modelling of desalination systems in energyplan. reference energy and water systems for jordan are established, and scenarios for alternative water supply schemes are established. these are subsequently modelled in the energyplan model. lastly, the three systems’ energy performance and ability to integrate wind power is analysed. 2. desalination methods this section briefly outlines the mode of operation of the investigated desalination methods with a focus on their energy requirements in terms of energy source (electricity, steam at a given temperature, other) as well as in terms of per unit energy use (kwh electricity, mj steam or other per cubic metre of desalinated water). 2.1. ro desalination desalination based on ro exploits the partial-pressure difference between a volume of fresh water and a volume of salt water. the partial pressure difference will inherently seek to equalize the salt concentration difference between the two bodies of water as long as the bodies of water are connected through a membrane permeable to water. hence, in such a system, the salt water body will lower its salt concentration by attracting water from the other reservoir through the process of osmoses. in ro, an externally applied pressure changes the partial pressure and thus reverses the flow direction of water through the membrane, thus producing fresh water. this process requires mechanical power and maybe be used in sizes ranging from hand-held emergency devices up to the israeli plant at ashkelon which is reported as being the world’s largest [26] at 330,000 m3/day [27] corresponding to approx. 120 m m3/year. the mechanical power is typically supplied as electricity, and the demand is potentially large. peñata & garcia-rodriguez report electricity consumptions for state-of-the art applications of seawater ro desalination plants down to 1.8–2.2 kwh/m3 [28] and more typical specific electricity demands in the range of 2.2–2.5 kwh/m3 for actual medium and large scale plants. the energy technology systems analysis program (etsap) under the international energy agency (iea) reports electricity demands from 3.5 to 5.0 kwh/m3 for large scale ro [29]. 2.2. msf desalination most desalination plants in the word are based on thermal processes utilising the circumstance that water vapours are free from minerals – including salt – so inducing evaporation and subsequent condensation of water vapours result in desalinated water. making the phase change is energy intensive, so different applications are applied to obtain the optimal performance. in msf a series of stages involving vaporization and condensation follow one another make use of the condensing heat in heating up feed water. semiat reports heat demands for msf of 55–80 kwh/m3 plus electricity demands “claimed to be around” 1.2–4.5 kwh/m3 [30] while reviewing and referencing work with a wider span from 25 to 120 kwh/m3 plus electricity demands ranging from 2 to 5 kwh/m3. as a review, the reporting does not detail systems boundaries or details of the quoted specific demands. for chp–based msf plants, electricity production drops due to the required temperature of the heat for the msf plant, causing an indirect electricity consumption of 4-7 kwh/m3 [30]. the etsap-iea reports electricity demands in the 2.5 to 3.5 kwh/m3 range for msf plants plus an additional heat demand of 80.6 kwh/m3 [29], which are both within the ranges reported by semiat. 3. the energyplan model the analyses of the energy system are carried out using the energyplan model, which is a model that has been used for regional, national and international energy systems analyses and energy scenario design, as well as for analyses of particular technologies within the energy systems. 3.1. energy systems analyses in the energyplan model the energyplan model is an analytically programmed, deterministic energy system’s analysis model able to model entire energy systems with electricity, heat, cooling, transportation, and industrial fuel demands. the model has specifically been created to enable hourly analyses of energy systems characterised by different energy demands, production units that are either dispatchable or non-dispatchable, and complex correlations between the different energy units and between different energy demands – e.g. heat and electricity. the energyplan is documented in [31] and compared to other models in [32]. energyplan has been applied to numerous analyses including analyses of particular focal points in energy systems such as heat pumps [33–35], wind power [36, 37], chp plants [38, 39], energy savings, transportation [40–42] as well as to more holistic work on scenario development for local areas [43–46], nations [47] or transnational regions. the model has also been applied to provide technology-specific production and consumption data for more detailed analyses of e.g. electric vehicle systems [48, 49] and transmission systems [39, 50–52] and has in a few instances been applied to systems with desalination [25, 53]. energyplan models one year in hourly steps based on a user-defined energy system composition with dispatchable production units characterised by efficiencies and installed capacities, non-dispatchable production units characterised by installed capacities, efficiencies (where relevant) and yearly distribution profiles with relative productions for each hour of a leap year; i.e. 8784 values. heat, electricity, and transportation demands are included as aggregate annual demands combined with hourly distribution profiles for an entire year to disaggregate demands to the hourly level. the model has an endogenous priority of productions, giving highest priority to use-it or lose it technologies whether this is renewable energy technologies following international journal of sustainable energy planning and management vol. 01 2014 31 poul alberg østergaard, henrik lund and brian vad mathiesen a climatically given production profile, industrial surplus generation of heat and power or related hereto, electricity and heat production from waste incineration plants. second follows chp units due to their high total efficiency and lastly follows condensing mode power generation, in the case of electricity, or boilers, in the case of heat demands that needs to be covered. a number of technologies add flexibility to the system. apart from the dispatchable production – and consumption – units, these include storage systems (including vehicle to grid technology), heat pumps, and electric heaters. the model has two general approaches to optimising the modelled system; two so-called regulation strategies. in the one, the system is optimising its performance against an external electricity market, i.e. increasing production of electricity with export in mind when deemed economically attractive and conversely, decreasing production when this is deemed favourable. the other general approach consists of a number of technical regulation strategies, where focus is on small chp units’ function in the system; whether they operate solely according to the heat demand, whether they operate according to a fixed electricity production schedule or whether they are actively dispatched to ensure the optimal balance for both heating and electricity systems. 3.2. desalination in the energyplan model the two forms of desalination technologies described in section 2 are to varying extents integrated into the energyplan model. thermal processes using chp plants to generate steam or super-heated water for desalination such as multi-stage flash is not modelled explicitly, however such systems may be modelled in the same manner as other chp applications and thus the chp – district heating combination that is integrated in the energyplan model. the system may both be modelled as a back pressure system or as an extraction system with the added system flexibility. for the back pressure system, the chp plant is modelled with electric and heat efficiencies, aggregate annual heat demands, hourly heat distribution data, and heat storage size. using this facility for desalination of water entails establishing the correct ratio between water demands and proxy heat demands. for extraction plants, the system may be perceived as a back pressure plant combined with a condensing mode plant, where hourly system balance requirements determine the exact operating mode. ro is explicitly implemented into the energyplan model. a fresh water demand is given as an annual aggregate, combined with hourly distribution and a fresh water reservoir. the modelling of ro is further refined through coexistence with a pumped hydro plant running on the brine from the desalination unit, although this facility is not employed in the analyses in this article. this facility is utilised by novosel and colleagues [25] but requires an aquaduct between aqaba and the dead sea – a distance of approx 180 km. please see [25] for further details on this type of analyses. 4. reference energy scenario for jordan the current energy system of jordan is characterised by a high reliance on oil products and natural gas supplemented by small shares of renewable energy sources, see figure 1. out of the total primary energy supply (pes), the electricity sector accounts for 46% including all natural gas use (based on [54]). international energy agency (iea) statistics do not list any energy uses or productions on chp units or heat plants in jordan, so there is not centralised heating in the country – and nor is the system characterised by dependencies between different energy carriers or the synergies that this might create. 4.1. generating equipment in the jordanian energy system electricity generation in the jordanian energy system is characterised by condensing mode power plants based on either natural gas or electricity with smaller fractions 32 international journal of sustainable energy planning and management vol. 01 2014 energy systems impacts desalination in jordan re 1% natural gas 88% oil 11% re 2% natural gas 41%oil 57% figure 1: primary energy supply (outer circle) and electricity generation (inner circle), jordan 2009. data source [54] of from hydro, wind power and biogas, see table 1. conversion efficiencies are relatively low, averaging a modest 35.6 per cent for all oil and natural-based production. jordan currently has minor wind farms with approximately 1.5 mw installed capacity, however the updated jordan master strategy of energy sector in jordan for the period (2007–2020) recommends a substantial increase by 600 mw before 2020, as well as expansion in the use of solar cells, and electricity generation from waste – however without actual quantitative targets for the latter [55]. in addition to renewable energy, the master strategy also recommends expanding thermal power generation based on oil shale and natural gas as well as commencing the erection of a nuclear power plant. different sizes are contemplated for oil, oil shale, natural gas and nuclear based power generation but for the reference scenario, 600 mw nuclear power is included. additional oil, oil-shale and natural gas-based power generation is not included in these analyses. 4.2. electricity demand of jordan and electricity distribution the 2009 electricity demand in jordan was 14.5 twh [54], but it is expected to grow by 7.4% annually in the next decade [55], giving a year 2020 demand of 31.8 twh. the hourly demand variation is as shown in figure 2 with lows in the night and peaks in the day. this variation is applied in the energy systems analyses, and it is thus assumed that the current profile also will be valid in a future situation with a higher electricity demand and i.e. that the increase in electricity demand is not due to the addition of particular technologies with unusual demand profiles. 4.2. distribution profile of wind power generation an hourly distribution profile of wind power is a prerequisite for energy systems analyses of energy systems with wind power production. this production profile is estimated using satellite-derived modern era retrospective-analysis for research and applications international journal of sustainable energy planning and management vol. 01 2014 33 poul alberg østergaard, henrik lund and brian vad mathiesen table 1: pes, electricity production and conversion efficiencies in jordanian power plants. data in columns 2 & 4 from [54]; columns 3 & 5 are calculated. fuel pes pes electricity conversion [iea units] [gwh lcv*] production [gwh] efficiency [%] gas oil/ diesel 15 kt 174.6 (included below) fuel oil 332 kt 3744.2 1633 41.7 natural gas 143542 tj gcv† 36018.9 12570 34.9 all oil and gas 39937.7 14203 35.6 hydro 59 tj 16.4 16.4 100.0 wind 3 tj 0.8 0.8 100.0 biogas 7 tj 1.9 n.a. n.a. * lower calorific value † gross calorific value 0 3000 2000 1000 0 24 48 72 96 120 144 168 192 216 240 264 288 312 336 360 hour of the year/day of the year e le ct ri ci ty d e m a n d ( m w ) hourly variation over 15 days daily average over an entire year figure 2: electricity demand variation for the first 15 days of the year and daily average over the entire year. based on data from [54] and [56]. (merra) data from nasa combined with a wind turbine production profile. merra data are available for a location near wadi araba, which is one of the sites anticipated for wind power expansion in jordan [55]. the merra data states wind speeds and directions at a height of 50 meters above ground level, well below the hub height of modern wind turbines. a shear factor of 0.2 has thus been applied to translocate the assessment to a hub height of 90 m and for the wind power assessment, a 3 mw vestas v90 wind turbine has been used. the entire assessment has been conducted using the wind energy project design and planning software package windpro [57]. the assessment results in the production profile shown in figure 3. 5. water supply in jordan jordan is in a semi-arid region with rainfall in the capital of amman of only approx. 273 mm/year [58] or less than half the rainfall of e.g. copenhagen. fresh water demand from the growing population is mainly covered by ground water or aquifers at 54% of the total annual demand, where extraction is approximately twice the sustainable replenishing rate [59]. another 37% is covered [59] [59] [60] [60] by surface waters and the remainder by treated waste water and by desalination [59]. irrigation is by far the largest fresh water consumer at 72%, industrial demands at 3% and domestic, commercial and tourist industry at 25% [59]. in addition to the unsustainable use of water, jordan is also facing a series of problems in water supply ranging from illegal wells and un-monitored extraction levels to pollution of aquifers. 5.1. water demand in jordan the jordanian ministry of water and irrigation projects that the annual demand will increase in the future from 1505 mm3 2007 level of up to 1635 mm3 in year 2022 putting emphasis on the need for sustainable water supply. one of the means that the jordanian authorities investigate is the use of desalination, where a present plant with an annual production of 10 mm3 should increase to 20 mm3 and new plants of 500 mm3 should be established based on brackish or on sea water. this would correspond to establishing four ashkelon size plants. 5.2. distribution of water demand in jordan in order to conduct energy systems analyses of the impact of desalination on energy system performance, it is required to have the hourly distribution of the fresh water demand over the year, however this data is not available, so a qualitative assessment has been made of the distribution of the three consumption categories; agriculture, municipal and industry for a 24 h cycle as well as for the yearly cycle; see figures 4 & 5. agriculture is considered having a flat rate over the 24 h of the day whereas municipal and industrial demands are more aligned with general human activity. on the yearly basis, however, industrial and municipal demands are assumed constant, whereas agriculture is assumed following a typical growing season with low demands during autumn and winter and high demands during spring and summer. figures 4 & 5 are assumed numbers. contacts to jordanian water authorities have unfortunately not proven fruitful. the general picture has however been deemed reasonable by jordanian researcher mohammad tarawneh from the hashemite university in zarqa, jordan. 34 international journal of sustainable energy planning and management vol. 01 2014 energy systems impacts desalination in jordan 70 60 50 40 30 20 10 0 0 24 48 72 96 120 144 168 192 216 240 264 288 312 336 hour of the year/day of the year w in d p ro d u ct io n ( m w ) hourly variation over 15 days daily average over an entire year figure 3: wind power production the first 15 days of the year and daily average over the entire year. these hourly and monthly distributions are applied to the actual demands of the three consumption sectors to generate the aggregated water demand profile. 6. energy systems modelling and desalination alternatives the jordanian year 2020 system is modelled in the energyplan model. for the analyses, it is assumed that the efficiency of condensing mode thermal plants will increase from the present level up to 40%, but with the same distribution of fuels as in the present situation. for chp units, as noted earlier, the electric efficiency may drop slightly due to the required steam data. caddet iea [60] lists an efficiency drop from 40% down to approximately 38% for modest steam data of 5 bar. this value is used in these analyses and with a total efficiency of 90% for the plant. the planned expansion of wind, solar and waste is not included – the two latter are not quantified in detail and the former is rather used as a factor to vary in the analyses. the existing hydro power capacity is modelled as a constant 1872 mw production – giving the required output listed in table 1. the hydro capacity is thus not dispatched actively to assist the integration of wind power in the analyses, which of course is an obvious option depending on the existence of reservoir capacity. for wind power, the existing 1.5 mw stock does not match the production in table 1 based on the hourly distribution curves. here an installed capacity of 0.8 mw matches the existing wind production – indicating the existing wind turbines are either having technical problems or are located under poor wind conditions. the 600 mw nuclear is modelled as having a constant output. for grid stability reasons, energyplan modellers typically apply a minimum production on condensing mode or on chp plants as well as a minimum production of 30% from grid supporting technologies [61]. in this case, nuclear will cover the minimum production. the latter restriction is of lesser importance as large-scale chp units, condensing mode plants as well as wind turbines are assumed grid supporting in the future. international journal of sustainable energy planning and management vol. 01 2014 35 poul alberg østergaard, henrik lund and brian vad mathiesen 2418126 0 5 10 15 20 25 0 hour of the day r e la tiv e w a te r d e m a n d agriculture municipal industry figure 4: hourly variation of fresh water demand in jordan. each curve is shown as index numbers 0 0 50 100 150 200 250 3 6 9 12 month r e la tiv e w a te r d e m a n d agriculture municipal industry figure 5: monthly variation in fresh water demand in jordan. each curve is shown as index numbers. the variation of the electricity demand is assumed having the same distribution profile as the present system – apart from the new demands introduced from desalination. for the analyses, an annual production of 520 mm3 fresh water is modelled. the existing small-scale desalination plant as well as the expansion of this plant is treated congruously with the new plants. in energyplan, a regulation strategy 2 is applied, in which the model seeks to ensure balance in both electricity and heat. the specific electricity demand for ro is modelled as 3.5 kwh/m3 and demands for msf of 80 kwh heat and 2.5 kwh electricity per m3 is applied. with the annual fresh water production, this gives an aggregated electricity demand of 1.82 twh for ro and 1.30 twh for msf together with 41.60 twh of heat. energyplan does not permit the modelling of desalination with both heat and electricity demands, so msf is modelled as a district heating demand of 31.60 twh and the electric efficiency of the chp units are reduced by 2.3% to accommodate for the electricity demand of 1.30 twh. 7. results of energy systems modelling with increasing wind in the energy systems modelling, wind power is increased from 0 to 6000 mw corresponding to approximately 20% of the jordanian electricity demand – excl. demands for desalination – standing at 31.8 twh in 2020 as indicated previously. results show how well the different systems are adapted to increasing levels of fluctuating power in terms of the electricity production that cannot be used within the system in the form of critical excess electricity production as well as the effects on primary energy supply (pes) for power generation – excluding res-based pes (see also [62]). results are included for msf and ro respectively and in both case without any fresh water storage as well as with fresh water storage corresponding to four weeks of water use pes for electricity generation decreases with higher penetration of wind power as wind power replaces fossil fuel-based power generation, as shown in figure 6. the two curves for msf and ro are very close with a slightly lower pes for the ro alternative. the performance in terms of ceep shows an increasing trend as a consequence of increasing wind power penetration as shown in figure 7. it is notable that from as low as 2500 mw – or approx 7.5% wind power penetration the systems starts to exhibit ceep. in the case of msf, the storage will be filled by shifting electricity production from condensing mode operation plants to desalination chp units and again be discharged by reducing desalination chp operation and running demands on storage contents. reducing chp operation is applied to limit critical excess electricity generation (ceep) and thus occurs only in hours with ceep. however, in these hours, chp production is already at a minimum in the modelled system, hence the storage cannot discharge – and hence, storage size is inconsequential to the operation of the energy system. in general, ceep is larger with msf than with ro due to the extra restriction imposed by the operation of chp plants that creates an additional electricity generation – as opposed to the ro case, where basically an extra electricity demand is included; an electricity demand which may be more or less flexible depending on the storage included. it should also be noted, that ceep in general is at a modest level – even at the maximum level of wind 36 international journal of sustainable energy planning and management vol. 01 2014 energy systems impacts desalination in jordan 100 90 80 70 60 50 p e s ( t w h /y e a r) 40 30 20 10 0 0 1000 2000 3000 wind capacity (mw) 4000 5000 6000 msf no storage ro no storage figure 6: pes for electricity generation – excluding renewable energy sources – as a function of increasing wind power penetration. 0.40 0.35 0.30 0.25 0.20 c e e p ( t w h /y e a r) 0.15 0.10 0.05 0.00 0 1000 2000 3000 wind capacity (mw) 4000 5000 6000 msf no storage ro no storage ro 4 weeks msf 4 week figure 7: ceep as a function of increasing wind power penetration. power penetration modelled. contributing factors include a fossil system with dispatchable units apart from wind, nuclear and chp desalination. furthermore, the electricity demand for desalination is relatively modest at 1.3 twh (msf) to 1.82 twh (ro) compared to a general electricity demand of 31.8 twh. the heat demand for msf is 41.6 twh – approximately 26% higher than the electricity demand incl. demand for msf. for comparison, the district heating demand in denmark was 17% higher than the domestic electricity demand in 2012 [63], so the modelled jordanian system has a higher heat-induced inflexibility than the danish system, but ceep in denmark was at a similar level at 20% wind power penetration – namely very limited [64]. 8. conclusion this article has analysed the effects of large scale desalination on the jordanian energy system with a particular focus on the energy systems impacts of the simultaneous large scale introduction of wind power into the energy system. the jordanian pes with msf as well as with ro are of a similar magnitude – particularly when considering the uncertainty in terms of efficiencies of the two technologies, where literature shows large variations in specific electricity and heat demands for desalination. in terms of the ability to integrate wind power into the power system, the two cases exhibit some difference though. in general, ceep starts between 2500 and 3000 mw wind power. a contributing fact to the ceep is the modelled 600 mw nuclear power plant, which is included with a constant production throughout the year. if this was replaced by dispatchable condensing mode power plants, ceep would be more than halved in the ro no storage case. water storage has some implication for the system’s ability to integrate wind power. for the msf case, there is no call for operating the storage, however in the ro case, ceep is reduced by approximately 15%. acknowledgements this paper has been prepared as a part of the joriew project (improving capacity of jordanian research in integrated renewable energy and water supply) funded by the european commission, 7th framework programme as well as a part of the strategic research centre for 4th generation district heating technologies and systems (4dh) supported by the danish council for strategic research. a preliminary version of the article was presented at the 8th conference on sustainable development of energy, water and environment systems, september 22–27 2013, dubrovnik, croatia. 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 26 2020 1 *corresponding author e-mail address: paulaf@dps.uminho.pt international journal of sustainable energy planning and management vol. 26 2020 01–04 abstract this special issue presents some of the latest energy planning-related research as presented at the 2019 international conference on energy & environment (icee), university of minho, portugal, 2019. in this issue, work is presented which investigates policy initiatives’ effects on electricity prices. other authors apply modern portfolio theory to analyse the energy and environmental policies of the european union member states. solar thermal systems are analysed based on a novel costing methodology and lastly carbon dioxide emissions from a portuguese energy system with further deployment of electric vehicles are assessed. 1. international conference on energy & environment the 2019 international conference on energy & environment (icee) organized by the algoritmi research centre, university of minho and fep – school of economics and management, university of porto (fep), and the economics and finance research centre, university of porto (cef.up), took place at university of minho, portugal on the 16th and 17th of may 2019. this was the fourth edition of the icee conference and this special issue follows two previous special issues also dedicated to selected and extended versions of papers presented at the 2017 and 2013 conferences. these conferences and the ensuing special issues covered topics related to sustainable energy systems from the perspectives of various disciplines. the sustainable development challenges call for a multidisciplinary approach to energy decision making and require an effective bridge-building between political, technical, economic and social aspects as reflected in these past special issues. the 2018 special issue [1] presented work from the 2017 icee, addressing energy markets, financing, and accounting and aimed to extend knowledge in the frontier of energy economics and engineering. the case of new financing models for renewable energy projects and its relation to business and credit risk was debated by de broeck [2], along with the new accounting requirements to foster low-carbon capital spending in europe and account for the environmental risks [3] and the need to redesign the electricity market to ensure that renewable energy benefits are effectivity transmitted to end-users [4]. the special issue thus had a focus on financial aspects and underlined the need to expand financing, accounting, and market mechanisms, to properly deal with the increasing investments on clean energy technologies as critical issues for the development of a sustainable economy. the 2014 special issue [5] presented work from the 2013 icee, introducing energy research conducted on portugal and brazil, and debated relevant issues for these countries. three papers addressed electricity policies for new energy challenges paula ferreiraa*, isabel soaresb, rasmus magni johannsenc, poul alberg østergaardc a algoritmi research center university of minho, campus azurém, 4800-058 guimarães, portugal b faculty of economics, university of porto and cef.up — economics and finance research center, university of porto, rua dr roberto frias, 4200 464 porto, portugal c department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords: energy policies; renewable energy sources; solar thermal; electric vehicles; url: http://doi.org/10.5278/ijsepm.3552 mailto:paulaf@dps.uminho.pt http://cef.up http://cef.up http://doi.org/10.5278/ijsepm.3552 2 international journal of sustainable energy planning and management vol. 26 2020 policies for new energy challenges demand, as was the case for silva et al. [6] focusing on low-income families in brazil, gonçalves & domingos [7] dealing with energy use in portuguese cities and brito & sousa [8] addressing the world electricity demand. two papers treated the feasibility of electricity production technologies including cogeneration of heat and power in buildings [9] and small-scale hydro plants [10]. finally, one paper analysed the socio-economic impacts of energy efficiency programmes [11]. this special issue brought to the discussion different aspects of the electricity value chain and called attention to the need for proper consideration of not only technical aspects of electricity production technologies but also consumer and demand perspectives along with socio economic impacts; in particular job creation. following this multidisciplinary approach that characterizes the icee conferences, this special issue aims to contribute to the debate on policies for some of the identified energy challenges. european energy and environmental policies are addressed under two perspectives, namely the impacts of these policies on household electricity prices [12] and their efficiency on different european member states [13]. the highly relevant issue of clean mobility is considered for the case of electric vehicle integration and its environmental impacts [14]. ferreira & silva [15] debate the financial and technical aspects of the solar thermal systems for residential buildings. the series of special issues and icee conferences include already several papers that although coping with different topics, are contributing to the european strategic vision to reduce greenhouse gas emissions and for the main strategic building blocks outlined in the european union [16]. moreover, by bringing to the debate different disciplines and authors with different backgrounds we expect to create synergies and merge social, economic, environmental and technical knowledge to support policies towards a sustainable energy transition. 2. european energy policies in this special issue, garcía-álvarez et al. [12] focus on the analysis of both supply-side and demand-side policies in the european union and its impacts on household electricity prices. the results suggest that measures on the demand side, namely energy taxes, may not be a suitable measure for lowering household electricity prices. on the other hand, evidence is found that renewable electricity support policies along with the liberalisation process seem to have resulted in higher household electricity prices. the authors conclude on the need to review both renewable energy support policy and the liberalisation model for achieving the goals of energy policy and ensure affordable household electricity prices. martínez fernández et al. [13], present an assessment of the efficiency of energy and environmental policies of each european union member state using the modern portfolio theory (mpt). the results show an optimistic evolution with all countries moving towards cost vs risk efficiency of the power assets, although with some countries showing higher consistency in the design and implementation of policies. the paper applies a traditionally financial perspective (mpt) for the design of real power generation assets portfolios and energy policy analysis, demonstrating the benefits of an approach merging finance, technology, and policymaking. 2. renewable energy for residential buildings ferreira & silva [15] propose a costing methodology able to estimate the capital cost of solar-thermal systems according to the system size and energy requirements of a specific residential building. the methodology is subsequently applied for a reference case in portugal and the paper concludes by investigating the economic and environmental interest of the technology for the residential sector, in particular when compared to electricity solutions for domestic hot water supply. the paper also opens routes for further research referring in particular to the need for the inclusion of thermal storage solutions in such analyses. 3. clean mobility carvalho et al. [14] analyse the electric vehicle (ev) co2 emissions resulting from the ev integration in the portuguese power system. the research put in evidence on the importance of developing a renewable energy system to ensure that ev integration will have an effective reduction of co2 emissions. the authors conclude that the ev specific emissions could range from 57 g co2/km, for high wind capacity and low ev penetration, to 129 g co2/km, for low wind capacity and low ev penetration. these results demonstrate the risk of making international journal of sustainable energy planning and management vol. 26 2020 3 paula ferreira, isabel soares, rasmus magni johannsen, poul alberg østergaard aprioristic assumptions about the better performance of evs over internal combustion vehicles. moreover, the study confirms the pertinence of scenario analysis to examine the range of possible energy futures, in this case combining both power and transportation pathways. references [1] soares i, ferreira p, østergaard pa. energy markets, financing and accounting — special issue from 2017 international conference on energy & environment. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ijsepm.2018.15.1 [2] de broeck w. crowdfunding platforms for renewable energy investments: an overview of best practices in the eu. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ ijsepm.2018.15.2. [3] rigot s, demaria s. potential impediments to long-term and low-carbon investment: the international accounting standards at stake. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ijsepm.2017.15.3. [4] figueiredo nc, da silva pp. the price of wind power generation in iberia and the merit-order effect. int j sustain energy plan manag 2018;15. http://dx.doi.org/10.5278/ijsepm. 2018.15.4. [5] østergaard pa, soares i, ferreira p. energy efficiency and renewable energy systems in portugal and brazil. int j sustain energy plan manag 2014;2. http://dx.doi.org/10.5278/ijsepm. 2014.2.1. [6] silva as, luiz f, mansur ac, vieira as, schaefer a, ghisi e. knowing electricity end-uses to successfully promote energy efficiency in buildings: a case study in low-income houses in southern brazil. int j sustain energy plan manag 2014; 4. http://dx.doi.org/10.5278/ijsepm.2014.2.2 [7] goncalves a, domingos t. scaling laws and electricity consumption in cities: a sectoral view. int j sustain energy plan manag 2014; 4. http://dx.doi.org/10.5278/ijsepm.2014.2.3 [8] brito m, sousa t. development of a “current energy mix scenario” and a “electricity as main energy source scenario” for electricity demand up to 2100. int j sustain energy plan manag 2014; 4. http://dx.doi.org/10.5278/ijsepm.2014.2.6 [9] ferreira ac, nunes ml, martins lb, fatima teixeira s. technicaleconomic evaluation of a cogeneration unit considering carbon emission savings. int j sustain energy plan manag 2014; 4. http://dx.doi.org/10.5278/ijsepm.2014.2.4 [10] cunha j, ferreira p. a risk analysis of small-hydro power (shp) plants investments. int j sustain energy plan manag 2014; 4. http://dx.doi.org/10.5278/ijsepm.2014.2.5 [11] oliveira c, coelho d, da silva pp. a prospective analysis of the employment impacts of energy efficiency retrofit investment in portugal by 2020. int j sustain energy plan manag 2014; 4. http://dx.doi.org/10.5278/ijsepm.2014.2.7 [12] garcía-álvarez, mt, cabeza-garcía, l, soares, i. an assessment of supply-side and demand-side policies in eu-28 household electricty prices. int j sustain energy plan manag 2020. http://dx.doi.org/10.5278/ijsepm.3417 [13] martínez fernández. p, de llano paz, f, calvo-silvosa, a, soares, i. an evaluation of the energy and environmental policy efficiency of the european union member states in the last 20 years from an mpt perspective. int j sustain energy plan manag 2020. http://dx.doi.org/10.5278/ ijsepm.3482 [14] carvalho e, sousa, j, lagarto, h. assessing electric vehicle co2 emissions in the portuguese power system using a marginal generation approach. int j sustain energy plan manag 2020. http://dx.doi.org/10.5278/ijsepm.3485 [15] ferreira ac, silva, a. application of a costing methodology to estimate capital costs of solar thermal systems in residential portuguese context. int j sustain energy plan manag 2020. http://dx.doi.org/10.5278/ijsepm.3483 [16] european commission. going climate-neutral by 2050. european union; 2019. http://dx.doi.org/10.2834/02074 http://dx.doi.org/10.5278/ijsepm.2018.15.1 http://dx.doi.org/10.5278/ijsepm.2018.15.2 http://dx.doi.org/10.5278/ijsepm.2018.15.2 http://dx.doi.org/10.5278/ijsepm.2017.15.3 http://dx.doi.org/10.5278/ijsepm.%202018.15.4 http://dx.doi.org/10.5278/ijsepm.2014.2.1 http://dx.doi.org/10.5278/ijsepm.2014.2.1 http://dx.doi.org/10.5278/ijsepm.2014 http://dx.doi.org/10.5278/ijsepm.2014.2.3 http://dx.doi.org/10.5278/ijsepm.2014.2.6 http://dx.doi.org/10.5278/ijsepm.2014.2.4 http://dx.doi.org/10.5278/ijsepm.2014.2.5 http://dx.doi.org/10.5278/ijsepm.2014.2.7 ttp://dx.doi.org/10.5278/ijsepm.3417 http://dx.doi.org/10.5278/ijsepm.3482 http://dx.doi.org/10.5278/ijsepm.3482 http://dx.doi.org/10.5278/ijsepm.3485 http://dx.doi.org/10.5278/ijsepm.3483 http://dx.doi.org/10.2834/02074 _goback international journal of sustainable energy planning and management vol. 25 2020 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 25 2020 01–02 abstract this editorial introduces the 25th volume of the international journal of sustainable energy planning and management. this volume presents research on low-temperature district heating in china, prospects for energy savings in aalborg, denmark, and impacts on heating systems, offshore wind power and electricity interconnection in the baltic sea, integration of electricity markets in the united states, and finally the modelling of renewable energy systems both on the remote island of bonaire and in chile. 1. heat supply and savings benefits of low-temperature district heating include increased efficiencies and improved synergy with renewable energy and waste heat; effects that are well documented in the 4th generation district heating framework [1–3] in this journal and elsewhere. in a study on low-temperature district heating in north china, bai [4] proposes a data-based temperature control method aimed at reducing the supply and return temperatures in district heating. the model is based on actual operation data for a district heating system in north china, and the results indicate that supply temperature reductions can be obtained while improving heating efficiency and safety. nielsen et al. [5] investigate the prospects of heat savings using aalborg municipality, denmark, as a case. while heat savings affect production of heat directly through sheer reduction, savings also impact the efficiency of the heat supply system. the feasible level of savings is dependent on the actual building and the heat technology employed. in aalborg, the results show that 30% heat savings are feasible for buildings connected to district heating, while potentials are larger for buildings with heat pumps (35%) and oil boilers (37%). this is based on a socioeconomic brake-even between supply and savings’ costs. 2. offshore wind and electricity grids in a study on transnational interconnection of large-scale offshore wind parks, bergaentzlé et al. [6] tackle the inherent regulatory challenges related to such complex meshed offshore grid infrastructures through an investigation of the present regulatory framework of countries surrounding the baltic sea. based on identified key regulatory barriers, an ideal regulatory framework is proposed alongside concrete policy recommendations, with the aim of supporting the continued development of meshed offshore grid structures. the authors argue that the current lack of coordination among european countries and varying country-specific regulation makes for an uneven playing field, hindering an increased deployment of meshed offshore grids. editorial international journal of sustainable energy planning and management volume 25 rasmus magni johannsena, poul alberg østergaarda* and neven duicb adepartment of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark bfaculty of mechanical engineering and naval architecture, university of zagreb, lučićeva 5, 10000 zagreb, croatia keywords: district heating; offshore wind energy; variable renewable energy; energy system modelling; market integration; url: http://doi.org/10.5278/ijsepm.3659 http://doi.org/10.5278/ijsepm.3659 2 international journal of sustainable energy planning and management vol. 25 2020 editorial international journal of sustainable energy planning and management volume 25 3. electricity trade and market integration dahlke [7] study the short-term impacts of increased integration of regional electricity markets in the western united states. looking into the state of california, the study presents estimations of how electricity imports correlate to electricity price changes and potential consumer savings, in addition to reduced emissions of co2, so2 and nox as a result of displaced natural gas. the results of the study underline the importance of integrated electricity markets due to the ensuing monetary and environmental savings related to increased regional trade. 4. renewable energy system modelling two articles of this volume apply energy system modelling in vastly different contexts to investigate the technical and economic feasibility of renewable energy systems, and in addition, one article focuses on requirements for a database on energy systems scenario data. using the energy system modelling software homer, tariq [8] addresses the challenges related to renewable energy supply on islands. in a case study of the island of bonaire, a renewable energy scenario is developed where the integration of electricity from wind and solar resources is facilitated through seasonal hydrogen storage and short-term battery storage. based on the energy system modelling and scenario analysis of the study, tariq concludes that transitioning to a renewable energy system can significantly reduce fossil fuel dependency while at the same time reducing the levelized cost of electricity. aravenaa et al. [9] conduct simulations of the chile energy system with the lut energy system transition model, investigating how the presently abundant renewable energy sources such as solar and wind resources can be used to reduce fossil fuel dependency. the authors argue that a 100% renewable energy system in chile is technically feasible and cost-efficient, however largescale electrification of energy demands is considered essential to the transition. reder et al. [10] present the results of a user-survey into what requirement energy systems scenario developers and modellers have for data bases to share scenario data. their survey showed a willingness in the modelling community to share data, and among the “two most important ranked criteria were ‘references for all datasets’ and ’quality check of uploaded data’.” these results arise from the project szenariendb that focus amongst others on tansparency and comparability of energy scenarios. references [1] lund h, østergaard pa, chang m, werner s, svendsen s, sorknæs p, et al. the status of 4th generation district heating: research and results. energy 2018. http://doi.org/10.1016/j. energy.2018.08.206. [2] østergaard pa, lund h, mathiesen bv. smart energy systems and 4th generation district heating. int j sustain energy plan manag 2016;10:1–2. http://doi.org/10.5278/ijsepm.2016.10.1. [3] østergaard pa, lund h, mathiesen bv. editorial smart energy systems and 4th generation district heating systems. int j sustain energy plan manag 2018;16:1–2. http://doi. org/10.5278/ijsepm.2018.16.1. [4] bai y, gong m, wang j, li b, zhang l. a temperature control strategy to achieve low-temperature district heating in north china. int j sustain energy plan manag 2020;25. http://doi. org/10.5278/ijsepm.3392. [5] nielsen s, thellufsen jz, sorknæs p, djørup sr, sperling k, østergaard pa, et al. smart energy aalborg: matching end-use heat saving measures and heat supply costs to achieve least cost heat supply. int j sustain energy plan manag 2020;25. http://doi.org/10.5278/ijsepm.3398. [6] bergaentzlé c-m, pade l-l, truels larsen l. investing in meshed offshore grids in the baltic sea: catching up with the regulatory gap. int j sustain energy plan manag 2020;25. http://doi.org/10.5278/ijsepm.3372. [7] dahlke s. integrating energy markets: implications of increasing electricity trade on prices and emissions in the western united states. int j sustain energy plan manag 2020;25. http://doi. org/10.5278/ijsepm.3416. [8] jahanzeb t. energy management using storage to facilitate high shares of variable renewable energy. int j sustain energy plan manag 2020;25. http://doi.org/10.5278/ijsepm.3453. [9] osorio-aravena jc, aghahosseini a, bogdanov d, caldera u, muñoz-cerón e, breyer c. transition toward a fully renewablebased energy system in chile by 2050 across power, heat, transport and desalination sectors. int j sustain energy plan manag 2020;25. http://doi.org/10.5278/ijsepm.3385. [10] reder k, stappel m, hofmann c, förster h, emele l, hülk l, et al. identification of user requirements for an energy scenario database. int j sustain energy plan manag 2020;25. http://doi. org/10.5278/ijsepm.3327. http://doi.org/10.1016/j.energy.2018.08.206 http://doi.org/10.1016/j.energy.2018.08.206 http://doi.org/10.5278/ijsepm.2016.10 http://doi.org/10.5278/ijsepm.2018.16 http://doi.org/10.5278/ijsepm.2018.16 http://doi.org/10.5278/ijsepm.3392 http://doi.org/10.5278/ijsepm.3392 http://doi.org/10.5278/ijsepm.3398 http://doi.org/10.5278/ijsepm.3372 http://doi.org/10.5278/ijsepm.3416 http://doi.org/10.5278/ijsepm.3416 http://doi.org/10.5278/ijsepm.3453 http://doi.org/10.5278/ijsepm.3385 http://doi.org/10.5278/ijsepm.3327 http://doi.org/10.5278/ijsepm.3327 _goback international journal of sustainable energy planning and management vol. 29 2020 41 *corresponding author e-mail: elena.deluca@enea.it international journal of sustainable energy planning and management vol. 29 2020 41–56 abstract this paper aims to give a footprint of the development potential of energy technologies in italy providing a synthetic and general view to support policy makers in energy planning. the approach focuses on the impact on climate, the potential in terms of r&d, the competitiveness of italian companies and their diffusion on the territory. a reference catalogue was realised in the framework of the ‘technical board on decarbonisation of the economy’, established by the italian presid ency of the council of ministers. 36 datasheets, containing quantitative and qualitative information on technology readiness level (trl), efficiency, environmental and economic impacts and policy aspects were filled by 70 experts for each technology. some data were extracted from the catalogue – trl, co2 emissions, developers, and centres of excellence – and further analysed and integrated with other information relating to the italian production and innovation system collected from the national enterprise registry (asia). companies and research centres are involved in development of technologies based on renewable energy sources (res) and energy storage (es) with different levels of trl and high potential for mitigating effects on climate. however, their distribution shows a rather inhomogeneous presence at territorial level. 1. introduction european union member states are facing a challenge of climate change mitigation which makes it necessary to develop strategies for the transition to a low-carbon economy. this is consistent with the political 2030 objectives outlined in the european green deal [1–2]. the establishment of common objectives at an international level can lead to controversies [3]. the development of clean technologies will reduce production costs and thereby positively affect the reduction in greenhouse gas emissions and the abatement costs [4–5]. specific features such as r&d, commercialization capabilities and product competitiveness could influence the market penetration of technologies as well as support schemes [6]. the sustainability of the energy system should be addressed by a multidisciplinary approach [7]. in this context, the energy planning is a branch of research oriented to draw a roadmap which takes into account technical, economic and societal issues. the terms of planning are determined by the ability to use mature a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system elena de luca*, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi italian national agency for new technologies, energy and sustainable economic development (enea), lungotevere thaon di revel 76, 00196 rome, italy keywords: technology evaluation; decarbonisation; technology readiness level (trl); energy planning; url: https://doi.org/10.5278/ijsepm.4433 https://doi.org/10.5278/ijsepm.4433 42 international journal of sustainable energy planning and management vol. 29 2020 a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system technologies (short-term) and to adopt new ones (medium/long – term) [8]. an accurate technology evaluation should be addressed to the three conditions posed by the so-called energy ‘trilemma’. the concept of energy ‘trilemma’, introduced in 2003 [9], brings out the complexity of balancing the three pillars of a sustainable energy system: decarbonisation, energy security and energy cost [10]. energy security represents the energy supply side, the reliability of energy infrastructure and the ability to meet current and future demand. energy cost is related to the accessibility and affordability of energy supply across the population. decarbonisation encompasses the increase of the energy efficiency and the development of renewable and other low-carbon energy supplies to address the environmental concerns reducing greenhouse gas emissions [11]. many studies seek to identify contrasts and possible trade-off between the different features of the ‘trilemma’ in order to facilitate the policy making process, the governance and the business decisions [12–13]. this approach could be applied to particular issues related to some technologies [14,15]. more precise information on the value of the different technologies could also allow an evaluation of their impact on employment, as already estimated for some single energy technologies [17]. in this framework the evaluation of energy technologies must be carried out in accordance with specific descriptors opportunely settled. ‘technology evaluation’ is an issue widely recognized both in the research and industrial sectors [18,19]. different models and indicators are currently proposed to this aim. in particular, input-output analysis, analytic hierarchy process, data driven approach and simulation models were proposed since the early seventies [20–24]. in depth energy planning could also contribute to design specific solutions to resolve the issues related to the excess of electricity produced by renewables in accordance with the decarbonisation goals [25]. moreover, specific indicators tailored for developing countries are investigated to address energy planning supporting policy makers and energy experts [26]. this paper represents a feature of italian analysis on the energy sector oriented to energy planning. it can be helpful for engaging stakeholders and facilitating the energy transition goals by providing an interpretation of data coming from the industrial and research system. italy is making a great effort in energy planning which is leading to appreciable results in terms of the effectiveness of the policies. it has now become clear a general improvement by 1990 in particular in comparison with other european countries [27]. at national level, in addition to political decision makers, different stakeholders play a fundamental role in the energy transition with particularly regard to the italian operators that can influence the development of such energy technologies [28]. in order to draw up the national energy strategy plan, the italian presidency of the council of ministers set up the “technical board on the decarbonisation of the economy”. the goal is to analyse the energy system from various stakeholders point of view and to evaluate the italian policies in the energy-environmental field within the framework of eu regulation. four working groups (wgs) have been established to achieve synergistic and complementary objectives (annex a). in this framework the “catalogue of energy technologies” [29] was realised to draw the status of the technologies and their potential penetration in the energy market by the view of the energy transition. some relevant data contained in the catalogue were analysed and elaborated using a statistical approach. an analysis was carried out on technology readiness level (trl), co2 avoided emissions and italian companies and centres of excellence involved in production and/or r&d. the trl, in particular, is a parameter to measure the state of a technology often used in the context of evaluating funding research projects. international literature adopt trl with particular reference to the res [30,31]. moreover, trl values were used in technology maturity assessment models designed to evaluate the implementation of manufacturing technologies [32]. figure 1 shows the methodological scheme adopted by identifying four steps: data sources, parameters, analysis and evaluation. the dataset was enlarged with information collected by the national enterprise registry (asia) characterizing the companies active in the development of these technologies, assessing the territorial diffusion, the size class and turnover. this study highlights peculiarities and issues related to the italian energy sector suggesting strategies to support research and/or the domestic production chain. italian companies and centres of excellence are involved in the development of technologies with different degrees of technological level with potential for mitigating effects on climate. however, the mapping of companies and centres of excellence shows a distribution which is not always international journal of sustainable energy planning and management vol. 29 2020 43 elena de luca, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi overlapping with a rather inhomogeneous presence at a territorial level. this result could indicate the need of tailored policies and tools for a suitable spatial planning indicating possible synergies between different stakeholders [33]. the proposed methodology provides a description of the sector and useful elements to elaborate policy measures for the diffusion of energy technologies and could be repeated in other territorial context. in perspective, the technology evaluation could be integrated by the assessment of social indicators [34], with a special focus on the impact on job market and employment. the social aspects have been particularly considered to the extent that the job opportunities have been introduced as a pillar of the proposed energy quadrilemma [35]. 2. methods 2.1. technology evaluation datasheet the catalogue is a result of a dialogue among 70 experts – from research institutions, private sector and representatives of public sector – who have built up a standard datasheet for technology evaluation. the data and information reported in the datasheet are updated by 2017. each technology is described by potential of decarbonisation and trl value. trl range starts from the emerging technologies, characterised by low trl (trl = 2), to those available in the market (trl = 9) (table 1). the standard datasheet has been designed to be easily exported in a database to facilitate the data updating, through pre-set and length limited fields. in addition to technical information, such as the thermal/electrical efficiency of a conversion system and the average plant life, qualitative information such as technology development, sectoral impact, export and organizations involved in r&d and implementation has been collected (annex b). 2.2. statistical analysis in order to illustrate the potential development of the energy technologies in italy, some quantitative analyses have been carried out. the data matrices of trl, figure 1: methodological scheme followed by identifying four steps: data sources (brown), parameters selection (blue), type of analysis (orange) and evaluation (green) 44 international journal of sustainable energy planning and management vol. 29 2020 a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system co2/mwh avoided emissions, the italian companies involved in development of technology and research excellence units (table 2) have been elaborated by statistical tools. cluster analysis (https://www.r-project.org/, accessed by december 2019) was performed to make a classification based on trl values and the number companies involved in each energy technologies. the relation between trl (medium value and range) and co2 avoided emissions has been displayed by a scatter plot diagram. network analysis was performed to highlight the existing interconnections between research excellences and the technologies sorted by scatterplot with high potential of development in relation with co2 avoided emissions. the network graph has been produced by means of vosviewer software (vosviewer, centre for science and technology studies, leiden university, the netherlands, accessed by may 2019). through the information related to the ‘developers’ a reference database has been created with the local units of the companies, by elaborating the info available in asia – council regulation (eec) no 2186/93 which is a common framework for setting up statistical business registers. then a regional geographical distribution of local units of italian companies involved in development of technology and research excellence has been produced through the free open source software qgis (https://www.qgis.org/it/site/ accessed by may 2019). data related to the turnover and the number of employees of companies have been also collected and elaborated. finally, some geo-statistical tools have been used to explore the hypothesis of geographical concentration of the research excellence in the urban areas. to this aim, a map has been created by overlapping two different geographical layers. the first layer describes the degree of local urbanization through the urban clusters data (geodata-eurostat), that is, groups of 1 km2 contiguous cells, with a population density equal or higher 300 inhabitants/ km2 and a total population of 5000 inhabitants, at least. the second layer represents the exact localization of the research excellence. moreover, the statistical function linhom ripley l [36], has been used to test the hypothesis of concentration of the research excellence and to estimate the extent of an optimal value of their reciprocal spatial distance analyse. table 1: technology readiness level (trl). the values varying from 1 to 9 describe in ascending order the technology state trl description 1 compliance with the main principles 2 technology concept 3 experimental test of concept 4 technology validation in laboratory 5 technology validation in industrial meaningful conditions 6 technology demonstration in industrial meaningful conditions 7 prototype system demonstrated in operative conditions 8 system completed and qualified 9 real system tested in operative conditions (competitive production, product marketing) table 2: description of the parameters taken from the catalogue and used as data source for the analysis parameter description trl data taken from the catalogue related with the technology (or part of the process) readiness level, as resulting from the experts, on the basis of international review kgco2/mwh avoided emissions the potential mitigation, in terms of climate change emissions avoided (kgco2/mwh), with respect to the corresponding technology/process based on fossil fuels, is considered developers actors (companies, technology districts, joint enterprises, test laboratories, etc.) also in cooperation with research institutes, directly involved in the development (designing, implementation and maintenance) of technology or part of it (components) or in the technology industry. the actors may have their headquarters in italy or they are branches of foreign companies, located on the italian territory. research excellence public research institutes (national research centres, universities and laboratories) or private entities (consortia, enterprises, consulting companies) conducting high level research, in the technology sector. such centres strengthen the national scientific base and support the creation of science-industry partnerships and the development of organizational strategies for national and international cooperation. https://www.r-project.org https://www.qgis.org/it/site international journal of sustainable energy planning and management vol. 29 2020 45 elena de luca, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi 3. results and discussion level of technology readiness and involvement of the italian industry the range between the minimum and maximum values of trl detected recorded for each technology (figure 2). such information should be considered as a proxy of the potential development of technologies [37]. in the case of a narrow range between 8 and 9 – as in ‘direct combustion of waste’ or ‘caes technology’ – further innovation will be very limited. instead, in the case of a wide range of trl (2 to 9) – for different res and energy storage systems, even if some products are already available on the market, the technologies involved have a substantial margin of innovation, especially in component development, which may lead to increase efficiency and/or economic/environmental sustainability. in the case of low trl, with a very narrow range – flywheels, solar fuels, etc. – the involved technologies need additional efforts in research in order to enter the market. the sectors characterised by a wide range are affected by uncertainty and potential risk for investment due to the product technology configuration on the market. in fact, among the different technology solutions the spread of the trl range indicates that the standard is not yet achieved by the industry, therefore, the evolution of the industry structure and the competitiveness of the sector cannot be forecasted. the cases of “solar thermody namic” and the “low carbon fuels” (trl range 2-9) are typical examples. although the products are already on the market for these technologies, a predominant standard does not exist yet and the margins for further developments and/or changes are still open. instead, in the case of narrow ranges and high average trl values (i.e. between 8 and 9), the sector is characterized by an improved definition of the technology; and the chance of substantial changes, both in technology and in the industry structure, will be relatively lower. the “direct combustion of wastes” and the “caes technology” are related examples. in case of low average trl value and quite narrow range, as for “flywheels” and “solar fuels”, the technology is still at prototype level, quite distant to the market, and under development by public research institutes. companies will be involved only after the phase of technical-commercial validation. in order to support a possible classification a cluster analysis has been applied on trl data – both range and average value – and the number of developers (figure 3). three groups are identified: • group a includes technologies with specialization content • group b includes technologies with high potential of innovation; • group c includes innovative technologies with high degree of diffusion. group a includes technologies mainly characterized by a high trl average value, narrow range and a limited number of companies involved, with the exceptions of “illumination” and “transparent thermal insulation,” which include more than ten companies. technologies based upon traditional sources, some storage systems, some res (among which “energy from marine currents”, “thermochemical conversion of biomass” – and “illumination”) and “transparent thermal insulation”and energy efficiency technologies are included in this group. the technologies in group a are basically standardized, and characterized by few companies. the structure and the international competitiveness of these companies should be deeply analysed in the frame of the national production system. group b includes 13 technologies characterized by a wide trl range, and with the average value basically lower than the two other groups. probably, the trade of these technologies is not yet consolidated, although some products are already available on the market. a deeper analysis would be needed to explore the variability in the number of the companies involved in several technologies. finally, group c includes technologies that are mainly characterized by a high number of developers involved and basically have a medium-high level of readiness. among these technologies, the “solar thermal” is the only one characterized by the trl value variation remaining high, since a number of development programs for new systems and advanced high efficiency components are in progress. more than 200 companies was recorded in the catalogue, among these the medium-large size are involved in the development of more than one technology. more than a quarter of the total number of the companies examined, employ more than 250 workers and the total number of workers is more than 80,000. more than 30 % of the companies examined have sales revenues higher than 50 million €/year. table 3 synthetizes the information related to the size of the companies examined – in terms of total workers, class of workers, class of turnover and numerousness of 46 international journal of sustainable energy planning and management vol. 29 2020 a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system figure 2: trl range: minimum and maximum values detected for each technology international journal of sustainable energy planning and management vol. 29 2020 47 elena de luca, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi actors – ordered in groups of technologies, as illustrated in figure 2. in general, it is pointed out that the average size of the examined companies, in terms of number of workers, is higher than the average value in the manufacturing sector, as a whole, where the micro-small size companies (less than 50 workers) are the 97% of the total, versus the 0,3 % of large size companies. the companies involved in the res technologies are the most numerous and are characterized by an average size, in terms of workers and turnover, that is lower with respect the companies involved in the traditional sources generation and in end user energy efficient technologies. in fact, more than 80 % of the companies involved in the res technologies are characterized by micro, small or medium sizes (less than 250 workers). basically, similar data, in terms of size, are registered by storage and co-generation systems, although the number of companies is lower. on the contrary, the most traditional sectors are characterized by large size companies, the most of them with a turnover higher than 50m €/year. the share of women employed, with respect the total number of workers, is an additional data examined, related with the impact on occupation (table 6). this share is clearly quite low. it is figure 3: technologies classification. three groups are identified (a in green, b in red and c in blue) depending on the level of maturity table 3: size characteristics of the companies examined, ordered by group of energy technologies group of technologies companies with more than 50 workers companies with sales revenue higher than 50m€/year number of companies total number of workers share of women employed renewable energy technologies 18,7% 24,5% 139 36.817 18,9% energy storage systems 26,7% 33,3% 15 4.771 23,5% co-generation systems 33,3% 37,5% 24 15.541 17,5% generation technologies with fossil sources 57,1% 57,1% 7 18.645 26,2% energy efficient technologies 55,9% 70,6% 34 21.334 22,2% 48 international journal of sustainable energy planning and management vol. 29 2020 a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system widely recognized that the increase in the number of women employed in the energy sector could provide momentum to the transition process toward the low carbon economy, and several initiatives, in this direction, are put in place, also at international level [38]. 3.2. greenhouses emissions potential of mitigation in order to assess the potential of innovation as a function of technology readiness and reduction of greenhouse emissions, the data on trl and the quantity of avoided co2 (kg/mwh) (when available) are compared. in the scatter plot of figure 4, technologies are grouped into four categories. the width of the points corresponds to the range of trl identified in the figure 2. quadrant i groups technologies with high average trl value and high co2 reduction potential, in particular ‘hydroelectric’, ‘oxyfuel plant of coal with ccs’ and ‘igcc carbon capture’. the ‘geothermal’ and ‘anaerobic digestion of biomass’ technologies, with the average trl value of 6.5 are close to quadrant i but have margins of further technological development because they are characterized by wide trl range. in order to facilitate the penetration of these technologies into the market, industry policies as well as actions at national and eu level, are needed to facilitate production and the use of low carbon technologies, without undermining the competitiveness of the national production system. possible trade-offs in energy policy are well known and explored at theoretical level [39], as well as, the possible vulnerability of a “critical energy system” [40]. quadrant ii contains the technologies of interest from the point of view of the co2 emission reduction potential with a lower average degree of trl than quadrant i. such technologies are characterized by a wide range of the trl values indicating a high potential of further development. res technologies are mainly located in this quadrant. in particular, the technology “thermodynamic solar”, seems to be the technology with the highest potential until now, in terms of co2 emissions avoided, although it still needs a further technological development. in the frame of the solar energy, also the “traditional” technology “photovoltaic” and the “concentrating photovoltaic” are located in this quadrant. the quadrant iii includes the technologies currently characterized by a lower potential of co2 emission reduction and the average trl level still low. the storage and co-generation systems are represented in this quadrant together with a res technology such as ‘wave power’. a further increase in the degree of technological readiness might have significant effects, in terms of efficiency with positive effects on mitigation of the greenhouse gases emissions. finally, the technologies included in quadrant iv, are mainly characterized by a high average trl level with figure 4: scatter plot of energy technologies vs co2 emissions avoided (vertical axis) and trl average value (horizontal axis). four quadrants (i – iv) are identified placing the technologies in four categories according their degree of trl and potential of mitigation of climate change effects. the bullet sizes correspond to the width of the range of trl, identified in the figure 2 international journal of sustainable energy planning and management vol. 29 2020 49 elena de luca, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi the narrow range of the rtl values except for “solar thermal”. the related markets are potentially mature, with a competitive structure basically defined. these technologies can be divided in two groups, according their potential of emission reduction: medium-high for “solar thermal”, “wind on shore”, “carbon capture, utilization and storage (ccus)” and “energy from marine currents,” with limited for the others. for the first group the same indication for policies of quadrant 1 could be valid. 3.3. r&d potential in italy the profile of specialization for the centres of excellence seems to be influenced by the private/public character (table 4). even if, the private companies are active in all the technology classes, there are significantly involved in technologies based upon fossil sources (69%), while for what concerns the technologies related to the final users energy efficient, mostly the same share public/private is observed. these technologies are characterized by the highest average trl value, as reported in figure 2. the different relative distribution of private and public actors, involved in the several technologies, can be related to several factors and should be further investigated, since, useful elements could emerge concerning the strengthens and weakness aspects of the national innovation system. in order to consider the development of any single production chain, information on the industry structure, in time and at international level, are needed. the higher level of specialization for mature technologies of the private research excellence is not surprising because these technologies are supported by the managing approach, more “interpretative” rather than “analytical” [41]. from this point of view, the integration between private and public actors seems to be one of the keys to successful strategy. the network analysis has been applied in order to stress the linkage between technologies with high potential of development in terms of environmental sustainability ad wide range of trl (quadrant ii and iii of figure 4) and both public and private centres of excellence (figure 5). this analysis allowed to identify the areas of research in which the research institutions are mostly involved and the legal status of institutions (public labelled in blue, private labelled in red). each node is characterized by the position and width. a greater centrality in the graph and amplitude of the node indicate a greater number of connections (number of links to other actors and technologies) [42,43]. the nodes with similar ties can be grouped into different clusters. the proximity among nodes is not necessarily related to the existence of direct relation, (since such information is not inferable, exhaustively, from the catalogue), but rather, it indicates a similarity in the technology interests. in this case, the dimension of the node and its position stands for the weight of the institution in the italian research system. it is possible to deduce a public centres domain of expertise in thermoelectric technologies (blue text prevalence) and a private centres one in fuel cells technologies (red text prevalence). on these grounds it can be useful to divide the network into internally homogeneous groups, characterized by similar technological specialization. in such terms, any group may represent a synthetic picture of the segmentation of expertise and includes competitors and co-operative actors. about the 42% of the excellences, highlighted in the catalogue, are represented in the graph, for a total of 114 ties. in the present analysis, four clusters of technology-actor relationship have been identified and represented by different colours (figure 5). the group including the technologies “thermal storage”, “usc coal combustion, “thermodynamic solar”, “electroche mical storage”, “concentrator photovoltaic” and “stirling engines”, “geothermal” and “photovoltaic”, is, the most extended (marked in yellow). the research centres cnr, enea, rse and the university of rome “la sapienza”, the polytechnic of milan, the university and the polytechnic of turin are tendentially positioned in the middle of this group having multiple areas of investigation. the other three groups appear to be less extended, likely, as an indication of the lower synergy existing among the technologies involved and the greater specialization of the actors, at least at the current status. in these groups, the “anaerobic digestion of biomass” (marked in red), with a strong share of private actors, the “thermoelectric technologies” (marked in blue), with table 4: profile of specialization for the centres of excellence by group of technology public private renewable energy technologies 73% 27% co-generation systems 62% 38% energy storage systems 61% 39% energy efficient technologies 50% 50% generation technologies with fossil sources 31% 69% 50 international journal of sustainable energy planning and management vol. 29 2020 a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system the exclusive presence of public institutes, the connected “fuel cells” and “low carbon fuels” (in yellow), are predominant, but more diversified in their interactions with the excellences. 3.4. territorial development potential the maps of the local units of italian companies (figure 6a) and the research excellence (figure 6b) involved in development of technologies show a figure 5: network analysis performed on data of technologies with high potential of development (quadrant ii and iii of figure 4) and with both public and private centres of excellence (public entities are labelled in blue, private in red). a greater centrality and amplitude of the node indicate a greater number of connections. four clusters of technology-actor relationship have been identified and represented by different colours figure 6: regional mapping of the number of local units of italian companies involved in development of technology (a) and research excellence (b) international journal of sustainable energy planning and management vol. 29 2020 51 elena de luca, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi territorial distribution that is not completely homogeneous. both the companies and the research excellence are mainly concentrated in the central-northern regions of the country, although the research excellence are more widespread. the regions with the highest number of local units of companies involved in development of technology are piedmont, lombardy, veneto, and emilia romagna, typically the most industrialized regions of italy (63– 204 units). instead, tuscany, latium, apulia and sicily show medium-high number of units (41–62) and liguria, marche, abruzzo and campania have a medium number of units (21–40). friuli venezia giulia, trentino alto adige, sardinia and calabria have medium-low number of units (16-20), while val d’aosta, umbria, molise and basilicata have the lowest number of units (2–15). latium, campania, sardinia, umbria and basilicata show a class of distribution of research excellence units higher than for local units of companies, which could be due to scarce technology transfer at the local level as well as structural factors related to industrial and in market systems. this heterogeneity is based on economic dynamics that have been established since the earliest times of the country’s industrial and technological development. moreover, the research excellence localization is clearly related to the urban areas. in figure 7, the overlapping of two geographical layers is shown: the first layer, marked in blue, describes the degree of local urbanization, the second layer reports the localization of the research excellence, marked with red circles. figure 7: mapping of the degree of urbanization at high resolution (blue areas) and localization of the research excellence (red circles) 52 international journal of sustainable energy planning and management vol. 29 2020 a technology evaluation method for assessing the potential contribution of energy technologies to decarbonisation of the italian production system this map suggests that the research excellence are mainly localized in mostly urbanized areas. this result is consistent with what is widely reported, in literature, about the factors driving the localization of the private enterprises and the innovation activities, in the field of the high technology [44,45,46]. in figure 7, two different spatial distributions of the research excellence are observed: the distribution is “like wildfire” in the most urbanized areas and “patchy” on the rest of the territory. four clusters stand out among all: milano, roma, torino, napoli. secondly, trieste, trento, bolzano, the emilia provinces and venezia, vicenza, padova, treviso are clusters characterized by lower extension with high density. pisa-livorno and firenze are lower density clusters too. in the southern regions some research excellence can be found, but they are concentrated in the messinareggio calabria and bari provinces. in order to investigate the possible tendency of the research excellence to be spatially aggregated the ripley’s l function has been used. the centres (red circles in figure 7) are not randomly distributed but they tend to be relatively close each other’s. furthermore this analysis show a peak value for the interval about 15–40 km. this seems the optimal value extent for localization. therefore, it can be deduced that the research excellence may receive substantial advantages if they are aggregated in highly urbanized contexts. such results seem to be explicable in the light of the “milieu innovateur” theory [47]. such theory claims the context innovation in which common cognitive models work and the “unspoken knowledge” is transferred [48]. that is not simply matter of aggregation economies, but also the development of a common identity, in which the actors exchange information and reduce the risk of opportunism and uncertainty, so generating a collective learning process, in other words, using the “unspoken knowledge”. 4. conclusions the ‘catalogue of the energy technologies’ is a starting point for the assessment of technologies contributing to the process of energy transition. the catalogue gives a snapshot at year 2017 and provides important information on technologies with high decarbonisation potential, although still in the development phase, not only in terms of climate mitigation but also in industrial development. such important initial effort should be followed by a continuous updating, through a validation process of the collected information. this study, starting from data and information extracted from the catalogue suggests a methodological approach to identify instruments suitable for facilitating the spread of the energy technologies. the analysis has been carried out to assess the different levels of the potential of the energy technologies, in particular: – technological readiness and involvement of the italian industry, – impact on climate, – r&d activities, – distribution on the national territory. the attempt to correlate the trl with the potential of reduction of greenhouse gases emission, as well as, the relationship with the research excellence, private companies and the presence on the territory represents the novelty of the proposed approach. the analysis of the data collected shows that res and energy storage systems have a high potential of development in italy. research has facilitated the market penetration of some specific technologies, involving several sectors of the italian industry, like sme. the network analysis highlighted the central role played by research institutions and universities in the development of energy technologies as well as the numerous connections between centres of excellence and the most promising technologies, in some cases belonging to more specialized sectors with few entities involved. a steady dialogue between research institutions and industry, supported by conditions to re-launch both sectors, is necessary to achieve decarbonisation targets and economic growth. the spatial distribution of companies involved in r&d activities and centres of excellences confirms this need. probably, greater support to technology transfer will enhance local industrial development. such support could be achieved through specific financed calls for proposals for consortia of public and private subjects aimed to increase the trl of technologies tested in research institutes by local companies and/or new start-ups. the implementation of a system of data collection on the enterprises involved in the development of energy technologies can fill the information lack on current and historical databases. patents an investments in r&d energy technologies are additional data sources useful to international journal of sustainable energy planning and management vol. 29 2020 53 elena de luca, alessandro zini, oscar amerighi, gaetano coletta, maria grazia oteri, laura gaetana giuffrida, giorgio graditi estimate the degree of innovation in the national economy system, also in comparison with the international trend. moreover, the update of the catalogue should be planned to include the emerging technologies such as “liquid air energy storage (laes)” and “power to gas”. this study could have the following policy implication particularly addressed for the italian concerns: • it contributes to adopt industrial policies to encourage a new entrepreneurship in the energy sector; • it helps to identify and train new professional skills who are not currently present on the market; • it can be useful to set up actions to enhance the national supply chains increasing the dialogue between different developed regions (calabria, campania, puglia, sicilia and basilicata) eligible for funding under the commission implementing decision (eu) 2016/1941; • it can support the public policy makers in identifying the territorial policies to contribute to the achievement of the objectives set by the italian integrated national energy and climate plan (pniec); • it could favour an organic management of research in the energy sector improving the effectiveness financial resources allocation. 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https://doi.org/10.1016/j.enpol.2014.09.005 https://doi.org/10.1093/scipol/scy003 http://httpsdoi.org/10.1007/s10639-017-9612-3 https://doi.org/10.1177/ 016001769601900202 https://doi.org/10.1177/ 016001769601900202 https://doi.org/10.1016/s1574-0080(04)80006-3 https://doi.org/10.1016/s1574-0080(04)80006-3 https://doi.org/10.1177/0969776409350795 https://doi.org/10.1007/978-3-319-57807-1_4 https://doi.org/10.1007/978-3-319-57807-1_4 https://doi.org/10.1007/978-3-319-57807-1_4 http://doi.org/10.5278/ijsepm.4302 http://doi.org/10.5278/ijsepm.4302 _hlk36476800 bau010 international journal of sustainable energy planning and management vol. 28 2020 3 *corresponding author e-mail: katharina.reindl@iiiee.lu.se international journal of sustainable energy planning and management vol. 28 2020 03–16 abstract the building sector in europe is a major energy consumer. professionals such as architects and different building engineers play a crucial role in the technology adoption process. this study aims to contribute to the understanding of how and why energy efficiency measures are implemented by professionals in building renovations. three renovation projects of a municipality-owned housing company in a middle-sized town in sweden were followed. methods applied for this case study are semi-structured interviews, participant observations and document analysis. an analytical framework is developed, by combining a middle-out perspective with social practice theory (spt) to enhance the understanding of how and why energy efficiency measures are adopted during the studied renovation meetings. the middle professionals meet during a renovation and form a temporary constellation. the meeting practice endures because it is repeatedly enacted. one conclusion from the studied processes is e.g. that the aggregated know-how of the professionals are seldom discussed, with the consequence that tacit knowledge is not challenge or re-evaluated. by changing a meeting practice hinders to energy efficiency can be removed. 1. introduction the building sector is a major energy consumer, accounting for almost 40% of the total energy use in the eu, including in sweden. various international and national agreements and targets exist for climate change mitigation [1, 2]. in the eu as well as in sweden, energy efficiency is a central objective. the eu member states agreed on the eu’s 2030 climate and energy framework, as for instance increasing energy efficiency by 27% (compared to 2007) [3]. the objective in sweden is to reach a total energy consumption reduction per heated area in homes and other premises by 20% by 2020 and by 50% by 2050 relative to 1995 levels [4]. trends show that sweden will not manage the 2020 energy efficiency targets [5] and in order to reach the 2050 targets extensive building renovations are needed [6]. a focus on existing buildings is crucial also because the new construction rate of buildings is relatively small with about 0.5 to 2% growth of the housing stock per year [7]. it is thus well understood that there is a need to take action to reduce both energy demand and co2 emissions in existing buildings [4, 8–10]. for the highly fragmented building sector, optimizing available technical and social strategies for buildings is challenging [4, 9, 11, 12]. janda and killip [13] claim that the structure of professional practices will need to change in order to achieve energy efficiency in the building sector: a combined middle-out and practice theory approach katharina reindl*, jenny palm international institute for industrial environmental economics (iiiee), lund university tegnérsplatsen 4, 221 00 lund, sweden keywords: professionals; renovation; meeting practice; url: https://doi.org/10.5278/ijsepm.3426 mailto:katharina.reindl@iiiee.lu.se https://doi.org/10.5278/ijsepm.3426 4 international journal of sustainable energy planning and management vol. 28 2020 energy efficiency in the building sector: a combined middle-out and practice theory approach a real transformation of the sector. professionals such as architects, heating, ventilation, and air conditioning (hvac) engineers and electricians are often seen as intermediaries in the technology adoption. in relation to the growing literature on intermediaries janda and parag [14, 15] introduced a middle-out perspective (mop). the mop focuses on middle actors for improving energy performance in buildings. the authors argued that change opportunities are actively driven (or impeded) by middle actors. the middle is however frequently overlooked in energy transition studies and the middle is often seen simply as rule followers or fillers [15]. the middle operates in a system where change is commonly seen as flowing from the top-down (e.g., government policy, energy utilities) or from the bottom-up (e.g., from consumer demand, end-users). studies on intermediaries in the building sector emphasize that intermediaries play an important role regarding spreading innovations or facilitating energy efficiency [16]. the middle is defined as having a mediating role between end-users and technological systems, for example when architects having an intermediating role for the dissemination of passive houses [17]. the mop perspectives and other intermediary perspectives have overlaps. the perspectives share the view that the ‘middle’ is more than just a filler. even though middle actors and intermediaries might operate in the same space, there is a difference in the conception of their influence and abilities. the mop highlights the unique qualities, functions, strategies for action, and their own characteristics of middle actors for energy transitions. earlier research has shown that social relations and discussions, negotiations and agreements between the involved professionals are playing an important role when it comes to renovation projects [21, 22]. karvonen [23] has argued that a social practice perspective can be useful for gaining an understanding of the complexity of energy-efficient retrofitting or construction. to capture the influence of the middle professional level, and of those situated negotiations and priority setting that take place within the middle level, it is here argued for a combination of the two perspectives into a framework that combines ideas from research on the middle level and social practice perspective (spt). the aim of this article is thus to develop an analytical framework combing these two perspectives, the middle out perspective and social practice theory, to arrive at a deeper understanding of how and why energy measures are or are not included by professionals in a renovation project. the combined middle-social practice framework is then used to study the uptake of energy measures in renovations of multi-family dwellings in sweden. renovation projects of multi-family dwellings involve many different professionals with various skills and backgrounds. these building professionals must work together and coordinate their efforts during the planning of a renovation project. in the planning and design phase meetings of a renovation project, energy measures are negotiated and decisions are made on how a building will be renovated and what energy measures shall be included. this phase is crucial to understand why energy efficiency measures are included or not [24–28]. thus, this article focuses on the planning and design meetings of renovations. the remainder of the article is structured in the following way: first, an overview of the framework is presented. thereafter, these perspectives, the middle-level intermediaries and social practice theory, are applied in relation to three renovation projects in sweden. finally, it is discussed how a combination of the two theoretical approaches into the middle-practice framework can contribute to the understanding of energy efficiency in building or renovation projects. 2. overview of earlier research of the professionals in the middle and spt this section gives first an overview of earlier research on the middle level and spt and then it is discussed how to integrate them into one framework. 2.1. the middle professionals in earlier research the middle becomes important when it comes to greening the housing sector and promoting energy-efficient solutions [18–20, 29, 30]. examples of middle actors could be small and medium-sized enterprises, general builders, specialist subcontractors (e.g., roofing contractors), plumbers, heating engineers, electricians, architects, design engineers, project managers, building control inspectors and others. there is also a growing literature on middle actors. examples of studies focusing on middle actors are an application of the mop for providers of housing refurbishment [18, 20] heating engineers [30] and facilities managers [19]. international journal of sustainable energy planning and management vol. 28 2020 5 katharina reindl, jenny palm the middle has influence in different directions, upwards to the top, downwards to the bottom and sideways to other middle actors janda and parag [14, 15] and janda et al. [18] have defined different modes of influence the middle has. according to the mop, the middle actors exert influence by enabling (disabling), mediating or aggregating. in our framework, we will use these four modes to analyse the influence of the middle in their meeting practice. the analytical concepts of enabling, disabling mediating and aggregating, defined by janda and parag [14, 15], contribute with highlighting different way the professionals can influence the adoption of energy measures. however, the way these concepts have been used in the mop framework, reindl [20] argued that they lacked explanatory power and therefore social practice theory can be used to further explore these modes of influence of the professionals. before going further into spt, the use of enabling, disabling, mediating and aggregating within the mop perspective will be discussed. enabling (with its opposite disabling) is related to technology adoption. enabling means that a technology or strategy is allowed to be taken up and used in a project. the professionals adopt a strategy that can work with minor changes in the environment where it is to be implemented. the technology or strategy as such does not have to change in order to fit in the context. to illustrate enabling, janda & parag [14] give the example of professionals who install cavity wall insulation to the level required by building regulations. disabling is just the opposite of enabling and means that a technology or strategy is not admitted to a project. further janda and parag[14, 15] define mediating as being about participation, change and alteration. a professional who has adopted a technology, strategy or process changes it to some extent in order to adapt it to better suit a given situation or project. professionals, for example, mediate a strategy on how to relate the specific situation to existing regulations. mediation can be seen as a participatory mode, a process of iterative discussion. an example of this are professionals who adjust an energy efficiency measure to a specific situation, by installing wall insulation to a higher performance level than required by law, for instance. over time, building professionals collect and accumulate expertise and experience after having worked on a large number of buildings, which results in their aggregating knowledge. professionals involved in many projects (concurrently or sequentially) then use what they learn from one project in the next. professionals’ ability to recognize and act upon patterns across the building stock is thus based on their work experience. a professional who, based on his previous experience, can see that a building is in need of a combination of strategies, or who knows what type of insulation fits which building in order to meet the required level of thermal insulation can illustrate this [14, 20]. the concepts of enabling, disabling, mediating and aggregating are interrelated and relatively similar in nature. a way to add explanatory knowledge to these concepts could be to add spt to the framework, which will be tried out in this paper. next comes an overview of spt. 2.2. social practice theory practice theory is not a unified theory, but a fragmented body of theories with different scholarly traditions, albeit with historical and conceptual similarities [31–34]. there is no agreed upon practice theory; rather, practice is a dynamic concept [34]. in a practice, structures and agents are considered and dependent on each other, constituting a duality in a practice context [35]. gram-hanssen [36] explains practices as follows: ‘practices are coordinated entities of sayings and doings that are held together by different elements and that are also what make practices collectively shared across time and space’ (p. 64). a practice is an enduring entity and a set of doings and sayings. further, practices are social, and when a practice is performed, the actor connects not only with those s/he interacts with, but also with everyone else performing the practice. practices are performed by people in ways that make sense for them. a practice can involve the use of different kinds of materials and technologies, even though people might not be aware of all the resources that are involved [37]. in an organization, different practices, for example, a customer service practice, an advising practice and a meeting practice, are integrated. according to schatzki [38], a practice memory means that a structure persists from the past to the present. different practice memories build up an organization’s memory, which directs the professionals’ performance of actions. a practice memory does not always have to exist the way it does; it can change, either intentionally or unintentionally [38, 39]. researchers have different opinions on what elements hold a practice together (for an illustrative overview, see [33]). schatzki [40] suggested understandings, rules 6 international journal of sustainable energy planning and management vol. 28 2020 energy efficiency in the building sector: a combined middle-out and practice theory approach and teleo-affective structures. later, he added general understandings as a fourth element e.g. [38, 39]. warde [41] uses the four elements of understandings, procedures, engagements and items of consumption. shove and pantzar [42] refer to the three elements of competences, meanings, and material (things, products, technology). in this paper a slightly revised version of gram-hanssen’s [32, 33, 36] four elements is used to analyse meeting practice during the studied renovation projects. gram-hanssen’s elements are the following: (1) engagement and meaning (which refers here to reasons to construct or renovate a building or the meaning energy questions have in this (re-) construction project). (2) technology (which refers here to the physical features of the house, its materials and the available measures and technologies used in a building project). (3) explicit rules (which refers here to different policies, rules and regulations or goals, such as building standards or explicit energy reduction goals). and finally (4) know-how and habit (which refers here to different kinds of skills and know-how attained by building professionals and to routines that are taken for granted–things people do without thinking about them that influence the selection of energy measures). 2.3. the combined analytical framework as a way to deepen the understanding of how and why energy measures are enabled, disabled, mediated or aggregated during renovations of building an spt approach has been added to the concepts. the way the modes and the elements are combined is shown in table 1. this combination of theoretical approaches can been seen as a development of the mop, with the purpose to add more explanation power for how the professionals influence energy efficiency in the building sector. 3. method and material the analysis is based on material collected from three renovation projects in a municipality owned housing company. their stated goal was improved energy efficiency in all three projects. the material is based on a larger study on the implementation of energy efficiency and saving measures in building renovations [20] the study was conducted as a case study [43]. the case was selected because of the focus on energy efficiency, besides that it was supposed to be a typical renovation project. the early phase, the planning and design phase was chosen to be studied because decisions on what energy efficiency measures to include is negotiated and decided upon in this phase. analytical generalisation can be obtained from a case study [43]. different data sources are used and those are triangulated to increase the validity of the study [44]. additionally, the researchers were involved in the renovation processes over a long period of time, from when they were initiated to when they were finished [45]. for this case study the internal employees of the housing company and external consultants (architects, building engineers, hvac and electricity consultants) have been defined as the middle. they are in charge of planning the renovation. on the top in this case is the investment group of the housing company and the tenants of the buildings to be renovated are considered as the bottom. in this article the focus lies on the middle. participant observations, a document analysis and semi-structured interviews were conducted. in total 18 planning and design phase meetings and six tenant meetings were observed. social interactions, measures and actions agreed upon as well as underlying processes influencing decisions on the implementation of energy efficiency and saving measures were studied during the observations [46]. site-visits for each to be renovated building took place too. during all the different meetings, notes were taken and written up immediately after the observation. 28 semi-structured interviews were conducted with all the actors of the planning and design phase (two project leaders were interviewed twice), which is the actual project group (internal employees and external consultants). additionally, 5 interviews with the table 1: analytical framework combining mode of influence (mop) and elements of social practice modes of influence spt–elements technology explicit rules engagement, meanings habits and know-how enable disable mediate aggregate international journal of sustainable energy planning and management vol. 28 2020 7 katharina reindl, jenny palm investment group of the housing company, one interview with the swedish union of tenants and 39 semi structured phone interviews with the tenants were conducted. the interviews were recorded, transcribed and analysed computer-aided with atlas.ti. the analysed documents comprised different building descriptions, drawings and sketches and photos of the buildings, protocols of the meetings as well as the tender documents for the renovation. additionally, the protocols of a previous conducted renovation project were analysed. the characteristics of the three renovated buildings are presented in table 2. 4. results: negotiating energy measures in building professionals’ meeting practices during the planning and design of the renovation projects measures were enabled (i.e. adopted), disabled (i.e. not adopted), mediated (i.e. adopted but in a modified version) or aggregated (i.e. a measure used before was implemented without further reflection). there are also measures that can be understood in more or less all four modes of influence. wall insulation is an example, where a measure was mediated and aggregated, as from experience the middle actors knew that wall insulation works to get a lower energy consumption in the end and the depth of wall insulation was usually estimated and mediated to fit the conditions of a specific building. wall insulation can also be understood as enabled. this example shows that in practice there is a strong connection between the concepts aggregating and mediating. the explanatory power of the concepts do however increase if the elements of practices is added, which contribute with a context to the four modes of influence. in table 3, the measures discussed during the renovation projects are categorized in relation to the developed framework. some boxes are left empty, which just reflects that there are no good examples of this in our studied projects; a different study would most likely have other examples with other empty boxes. the idea with this matrix is to develop a framework that can increase our understanding of why certain measures are enabled, disabled, mediated or aggregated in practice. below, the examples from table 3 are discussed in more detail. the different modes of influence, enabling, disabling, mediate and aggregate are discussed in relation to the different element holding a practice together, namely technology, explicit rules, engagement and meaning and finally know-how and habits. 4.1. enable 4.1.1. technology in all cases, the enabled measures were a-labelled appliances, triple-glazed windows, new doors, updated ventilation (e.g. hrv ventilation), added insulation and some updates in the heating system. most of the interviewees indicated that usually a common set of ‘standard’ energy measures were chosen. the interviewees described this as follows: table 2: characteristics of the three renovated buildings renovation project 1 renovation project 2 renovation project 3 (two buildings) building built in 1961 early 1950s 1961 (partly renovated 1985) number of apartments 12 33 32, 4 building construction concrete frame lightweight concrete construction lightweight concrete construction type of windows 3-pane windows 2-pane windows 3-pane windows type of ventilation exhaust air with inlets under the windows by the radiators natural ventilation supply and exhaust ventilation with heat exchanger energy consumption before renovation (heat and water) 153 kwh/m2*year 141 kwh/m2*year 154 kwh/m2*year (not known to us from the second building) identified problems in the building poor external façade and roof construction, poor performance of windows, water damage in bathrooms, problems with balconies poor plumbing, inadequate ventilation, outdated wiring, inadequate fire insulation, and limited accessibility problems with indoor environment, low and varying indoor temperature, stuffy air and odours http://atlas.ti 8 international journal of sustainable energy planning and management vol. 28 2020 energy efficiency in the building sector: a combined middle-out and practice theory approach ‘the most common things that we do are to install an hrv system, add insulation, replace windows,… but it is nothing directly revolutionary.’ (interview, ic-1) these ‘standard’ energy measures were enabled based on aggregated knowledge and mediated according to the specific characteristics of a building. for these measures there was no need of lengthy discussions during the meetings and more or less routinely implemented. 4.1.2. explicit rules building codes, regulations or standards were barely part of the discussions at the meetings. the interviews showed, however, that they played a key role and it was understood that the swedish bbr requirements (90 kwh/m2/a) had to be met (bbr = boverkets byggregler, bbr. english: the national board of housing, building and planning’s building rules, bbr). everyone knew about it and followed them, apparently implicitly, as a kind of tacit knowledge. these regulations also had a framing effect on all renovation projects, according to the interviewees. ‘the process is the same as usual, as in all projects. we have the building codes to rely on. that is, we need to meet the requirements for kwh/m2 – that is what we always do and follow. then, the [energy] requirements of the contractor can be tougher, but that is not so common, but it can happen.’ (interview, ec-5) additionally, the renovation projects started out with the goals of improving energy efficiency and reducing energy use. the housing company had also decided on a table 3: examples from the studied renovation projects related to the modes of influence and spt’s elements modes of influence (mop) spt – elements technology explicit rules engagement, meanings habits and know-how enable enabling aggregated and mediated ‘standard energy measures’ led lamps new heating system a-labelled appliances triple-glazed windows new doors heat recovery ventilation (hrv) building norms; regulations and standards initial goal to focus on energy efficiency and saving in the renovation projects energy efficiency goal to save 25% by 2025 energy group energy consultant new energy goals use of estimations and rules of thumb disable new solutions, not tried out before (e.g. new type of insulation) keeping location of shafts as disabling factor not more energy-efficient appliances than standard heat pump solar panels automated lighting control no awareness of the 25–25 goal not existing measurement of the building’s energy use not obviously used energy calculations innovation and risk-taking were discouraged existence of multiple goals on energy efficiency financial limitations households’ electricity consumption not important quite closed network, the same consultants had participated over the years lack of discussions of energy measures: using measures they are familiar with predefined agenda hindering brainstorming lack of know-how and habit: pay-off rules mediate ‘standard’ energy measures adapted insulation relining of heating system improved energy efficiency within standardized budget fear of rent increase and long pay-off time aggregate reuse of technology that has worked in earlier projects (no new measures) district heating ‘standard’ energy measures encouraged to use solutions that have worked in other projects trust in tacit knowledge and experience international journal of sustainable energy planning and management vol. 28 2020 9 katharina reindl, jenny palm goal of reducing energy use by 25% by 2025 in their entire housing stock, the so-called 25–25 energy goal. almost all interviewees said that energy efficiency and saving had become a more important topic and was included more in these processes than previously. 4.1.3. engagement and meaning the housing company had started something called the energy group with the purpose of emphasizing and promoting energy efficiency and saving within the housing company. the existence of the newly created energy group started also to enable more engagement in energy efficiency and saving issues. the group became a symbol of the housing company’s commitment to this issue. however, the energy group had not yet brought about any noticeable concrete results. they did not actively promote different energy measures at the meetings. their own explanation for this was that they were new and had not had any time to establish themselves and become a natural part of different practices. they thought that they first needed to establish themselves within the company before they could start to make a real difference and also enable more radical energy measures. ‘we have not established all roles and tasks. that is how it is. it will most likely take one or two years and then we will know, but we are working and it is obvious that things go in different directions and …, but we do things and we save energy, we find energy projects. [...] forming this [energy] group is of course a way to get a proper focus both internally and externally.’ (interview, ic-9) in addition to the energy group, in one project an energy consultant provided energy calculations. even though he was present at the meetings, his participation was not very active because there was rarely any time to discuss energy questions and a concrete discussion of the energy calculations never took place. however, he served as a reminder that energy should be looked at as well. the project leader could often end the meetings by saying that energy is important and that it should be discussed more at the upcoming meeting. 4.1.4. know-how and habit as mentioned above, the middle professionals were very familiar with the different buildings and knew what measures would work to achieve building standards. at the meetings it become clear that the different selected energy measures were aggregated and enabled through tacit knowledge and rules of thumb. the middle professionals trusted the knowledge they had by having worked with buildings for many years. when it comes to know-how and habit enabling and aggregation becomes fluid and it is hard to clearly separate these. 4.2. disable 4.2.1. technology hvac and electricity issues played a central role in all renovation projects. these were often prioritized over other issues during the meetings. energy questions often had to be kept short or were among the issues put off until the next time. lengthy discussions on the shafts left no time to discuss energy questions in detail. this could be observed during the meetings but was also mentioned during the interviews with the professionals. one of the architects said, for example: ‘yes, we also have some influence, but in certain phases of the process they [i.e. the hvac and electrical consultants] can have too much influence. this is because they have so many issues and so many things to sort out. so, just looking at the time aspect, they take a lot of time during the planning and design meetings.’ (interview, ec-8) a-labelled appliances were chosen, but not the most energy efficient ones. when heat pumps came up as a suggestion, this was rejected with the argument that district heating is already in the buildings. heat pumps could be an option for newly built houses but not for renovations according to the housing company. photovoltaics (pv) were another technology disabled during the processes. pv was rather quickly dismissed as too expensive, without any calculations made. moreover, most of the middle professionals were sceptical about new solutions or any kind of innovation. their attitude towards any new energy measure or innovation was to ‘let others make the mistake of using it’. 4.2.2. explicit rules even though there was the 25–25 energy goal formulated (25% purchased energy reduction until 2025) to encourage energy measures, it was hard to see how it was translated into the practice of the renovation projects. probably this is because there was a knowledge gap in that not all involved professionals knew about the 25–25 energy goal. during the interviews, when it was asked whether the interviewees knew about or had heard 10 international journal of sustainable energy planning and management vol. 28 2020 energy efficiency in the building sector: a combined middle-out and practice theory approach about the goal, it became clear that the external consultants were unfamiliar with it. ‘i have not a clue what it is, if it’s about, say, 25 years to reduce energy demand by 25% or whatever it is, whatever goals they have.’ (interview, ec-4) however, the internal employees usually assumed that all the external consultants were familiar with the 25–25 goal and were working actively with it. it was observed, the energy goal was never properly communicated at the meetings. it was merely stated that the energy use for the building should be reduced as much as possible within economic limits, but the 25–25 energy goal was not presented. the followed renovation projects were stated to be an important part of the 25–25 energy goal fulfilment by the internal employees. the researchers expected that all buildings would be measured regarding their energy use and that each building would get defined reduction goals. during the participant observation, however, the researchers realized that there were no measurements of how much energy a building actually used before the renovation. energy calculations had been done for all projects to give an estimate of how much energy a building used. however, these calculations were never presented or used in the planning and design meetings. furthermore, no specific energy reduction goal was set for any of the studied projects, e.g. in relation to the overall 25% reduction goal. instead, the goal was simply to ‘achieve as much energy reduction as possible’. ‘the goal of the project is that the energy savings will be “as good as possible”. the housing company has no explicit demands or requirements for how much energy efficiency should be achieved.’ (meeting minutes, 2013-01-18) 4.2.3. engagement and meaning the general attitude was that it is preferable to avoid risk-taking and thus to reject new and innovative solutions. the tendency towards risk aversion also disabled energy efficiency or saving measures. many of the involved professionals discouraged a stronger focus on innovation, new solutions or risk-taking. a typical statement was: ‘let the others make the mistake, we do not need to.’ (interview, ec-1) there existed a plurality of contradicting goals, which disabled a clear message and focus on energy – there was the 25–25 energy goal that many did not know, the financial goals as well as the bbr demand. the consultants also did what they usually did and the meaning and engagement stayed the same as usual. if the housing company does not introduce or communicate this goal, then a new meaning will not develop, and the engagement will not change either. it will remain a businessas-usual project. the choice of measurements was also guided by financial considerations. any (energy) measures could be selected as long as the pay-off time was less than six years. in general, the economic restrictions came mainly from the investment group; however, thinking in terms of economic limitations was also part of the middle’s work. in addition, the middle actors did not focus on households’/tenants’ electricity consumption. first, it was seen as too little to count for anything major in the big picture of the whole building’s energy consumption. second, water and heat are included in the rent for the tenants, but tenants pay for electricity themselves, which might be a reason why it is not prioritized, as the housing company does not pay for it. 4.2.4 know-how and habit the building sector in a medium-sized swedish town such as the one studied here is not particularly large, so the same professionals worked together in different projects. the network was quite small and it seemed like the professionals knew everyone who was working in the building sector in the region. the professionals were familiar with each other, and the meetings took place in a relaxed and friendly atmosphere. the participants were joking with each other, had inside jokes, remembered stories and told funny anecdotes from previous projects. most of them also had nicknames for each other. ‘i know them, yes it is as i say […] you know most of them.’ (interview, ec-1) ‘we have a few old hands who have always been involved and know the housing company’s requirements pretty well, so they probably do quite a lot on routine, for better or worse.’ (interview, ic-6) because the professionals knew each other well, they also knew what to expect from each other. they had often worked together before, reinforcing and carrying on the practice of the planning and design phase. longer international journal of sustainable energy planning and management vol. 28 2020 11 katharina reindl, jenny palm discussions on energy efficiency issues were not in the middle professionals’ routine, and this was hard to change by simply introducing a company-level energy goal and an energy group. routines governed the meetings, and they were organized according to a predefined agenda that had been used in previous renovation projects. on the agenda, the topic of energy was added in the followed renovation projects. however, energy was usually discussed only briefly at the end of the meetings, or sometimes it was postponed until the next meeting. the predefined agenda and the know-how on how to conduct such meetings disabled the discussion of energy questions. these existing routines might be broken up by recruiting new people. the studied renovation projects included two new architects from other towns. in the interviews they revealed that they had a hard time understanding the meeting practices; they had no introduction to the project nor to the other involved actors. they also found it difficult to learn and understand the existing routines, habits and meanings of the meeting. the meetings usually followed a predefined agenda, which allowed little time and space for brainstorming or the discussion of new solutions. furthermore, the investment group said that the way they calculated pay-off time for energy efficiency or saving measures was more pessimistic compared to how other housing companies calculated. however, they also emphasized that it was new for them to consider implementing more energy measures and that a good way to calculate pay-off times had not yet been established. in this case the lack of know-how and habit disabled the uptake of energy measures. 4.2. mediate 4.3.1. technology the ‘standard’ energy measures were mediated and adopted in each of the studied renovation projects. the enabled ‘standard’ energy measures were mediated based on aggregated knowledge ‘it is easy to take the solution you have used before. you know it was good then and when you get a bit in a hurry and … and … [the job has to get done] so, as a quick solution, you implement it in the next one again, with some adjustments’. (interview, ec-9) additional insulation was mediated in all projects. it was used and adapted for each building by rule of thumb. in two of the buildings, the old pipes were exchanged, whereas in one building it was not economically feasible to do so. in this case, relining was chosen instead as a mediation for the pipe exchange. due to pay-off time and fear of rent increases, measures were changed or adapted. if the pay-off time became too long or if the rent was to be raised due to implementation of an energy-efficient measure, the plans were changed. ‘you need to realize that someone will need to pay. we can renovate, we can remove concrete tiles and install new ones, we can paint the façade, and we can paint the windows … but someone needs to pay for it, otherwise we erode our real estate value.’ (interview, ic-2) additionally, chosen measures were adopted and mediated according to budget restrictions. 4.3. aggregate 4.4.1. technology technology that was used in the past, like for instance the ‘standard’ energy measures were used again as the middle actors know with a rule of thumb how to apply them for different kinds of buildings both the housing company studied here and the energy company, which has the district heating system are owned by the municipality. this connection by ownership was one reason that district heating was chosen. another reason was that it was reliable and comfortable. furthermore, it was chosen over other heating systems as it was already in place. 4.4.2. engagement and meaning measures were chosen that the middle actors knew from before and had experience with. during the observations, it was also noticed that it was encouraged to use measures everyone was familiar with as a way to avoid costly mistakes. thus, for all chosen solutions, the middle professionals fell back on their aggregated knowledge base and rules of thumb. ‘we have done some before, so you have learned a lot of lessons and bring them with you.’ (interview, ec-10) 12 international journal of sustainable energy planning and management vol. 28 2020 energy efficiency in the building sector: a combined middle-out and practice theory approach 4.4.3. know-how and habit the middle professionals had routinized their selection of energy efficiency or energy saving measures and they trusted in their tacit knowledge and relied on experience and rules of thumb. 5. discussion and conclusions the modes of influence highlight how the middle professionals can enable, disable, mediate or aggregate energy measures. these can sometimes be the same or similar to each other. furthermore, why, energy measures where enabled, disabled, aggregated or mediated was however identified as a research gap. prior literature has discussed the need to recognise the influence of the middle professionals, but there are few empirical assessments of how and why energy measures are included or excluded in the planning of an energy renovation. addressing this gap allows us to identify where adoption of energy efficiency measures in buildings falls shorts and whether these shortcomings can be addressed in future planning and management of renovations. in order to increase the explanatory power of the concepts of mode of influence of the mop, a social practice theory approach was added. combining theories, the mop and the modes of influence with the elements from spt makes it possible to analyse how and why the professionals can enable, disable, aggregate or mediate certain energy measures from a new perspective by focusing the elements. studying meeting practices through the perspective of elements of practices makes it possible to pinpoint the difficulties of enabling energy measures and why they are disabled, how certain measures are mediated or why they are aggregated. it gives the modes of influence a context that was lacked before. by combining these theoretical perspectives, it is possible to arrive at a deeper understanding of what needs to be changed to achieve a highly energy-efficient renovation. in figure 1, the framework is visualized. the middle professionals in the project group here studied, form a temporary constellation conducting the meetings. however, these professionals meet regularly in this as well as similar constellations for other projects. thus, the meeting practice endures because it is repeatedly enacted. the middle professionals build relations to each other and establish a professionals’ practice during their meetings in the renovation project. these meetings are moments of sayings and doings where different elements of a practice come together and the professionals are carriers of a renovation practice. they each bring their own work practice as well as different opinions, knowledge and expertise on how to handle energy questions. studying the building professionals planning and design meetings as practice helps to understand how and why they enable energy measures or what might hinder the uptake of energy measures in relation to different elements (table 2 above summarises the results from that analysis). this in turn helps to understand what might have to be changed in the renovation process. even though there is an organisation memory it does not mean that a practice cannot be changed. schatzki [38, 39] argues that changes in a practice are commonly fragmentary and gradual. however, there is also the possibility to change practices top renovation meetings middle professionals enable (disable), mediate, aggrerate-energy efficiency measures engagement, meanings esplicit rules habits, know-how technology bottom side side figure 1: the middle-social practice framework including the modes of influence and elements of practices international journal of sustainable energy planning and management vol. 28 2020 13 katharina reindl, jenny palm if conscious interventions are made. in the empirical example described here the housing company could try to actively change the meeting practice in different ways. clarifying energy targets is one step, but they also need to change the meaning of the renovation to change the practice. the dominating view of avoiding taking risks by introducing new technology or new system solutions needs to be changed in favour of having energy efficiency as an overruling target in all decisions. there is also a need to verbalise the aggregated know-how of the professionals, to be able to re-evaluate tacit knowledge and discuss what consequences this embedded knowledge has for the possibilities to achieve a real transformation with real ambitious energy achievements. a change of practices requires interruption and changes in the included elements, but in this case it was a lack of such interruptive processes and the practice remained. studying the building professionals’ meetings as practice helps us to better understand the mode of influence of middle actors. it gives the decisions a context that has been lacking in the mop. this in turn helps us understand what might have to be transformed, to have meeting practices supporting a more sustainable built environment in the future. however, there are also issues with using the elements of a practice combined with the mode of influence as there are certain overlaps as for instance in itself know-how and habit (spt) and aggregated knowledge (mop) convey a similar content. still, the developed framework give an additional understanding of why energy efficient renovation takes place or not. in future research it might be possible to develop the framework further, if applied on other cases in other contexts. acknowledgement this work was supported by formas and iqs samhällsbyggnad under grant number 2012-246 and by the swedish energy agency under grant number p46357-1. references [1] mangold m, österbring m, overland c, johansson t, wallbaum h. building ownership, renovation investments, and energy performance–a study of multi-family dwellings in gothenburg. sustainability 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[46] pettigrew am. the character and significance of strategy process research. strategic management journal. 1992;13(s2): 5-16. https://www.jstor.org/stable/2486363 http://doi.org/10.1177/1469540505053090 http://doi.org/10.1177/1469540505053090 http://doi.org/10.1177/1469540505049846 http://doi.org/10.1177/1469540505049846 https://www.jstor.org/stable/2486363 international journal of sustainable energy planning and management vol. 29 2020 109 *corresponding author e-mail: priyanka_manit@yahoo.com international journal of sustainable energy planning and management vol. 29 2020 109–126 abstract isolated hybrid power systems have emerged as a practical substitute to grid extension for electrification of remote areas. increased penetration of renewable energy sources (res) such as solar and wind can commendably cut down system operating costs but can create reliability issues owing to their unpredictable nature. thus, an effective storage integration is needed in order to ensure reliability standards. this paper presents reliability and cost-based sizing of solar-windbattery storage system for an isolated hybrid power system (ihps). in order to analyze system reliability, dual reliability indices, probability of risk and probability of health have been used in this work. these reliability indices provide a better assessment of system reliability when res are being used. the objective function for optimal planning is based on minimization of total life cycle cost (tlcc). considering variable nature of solar and wind sources, modelling of solar irradiance and wind speed has been done using beta and weibull probability density functions (pdf) respectively. the hardware availability modelling of generators has been done based on their respective forced outage rates. monte-carlo simulation (mcs) has been used for conducting reliability evaluation. for solving optimal sizing problem, a nature inspired algorithm called as particle swarm optimization (pso) has been employed. sensitivity analyses are performed by studying the effect of addition/removal of res-based generators and storage units on system reliability. in order to assess the additional investment required to improve reliability standards, a new index termed as incremental cost of reliability has been used in this paper. a case study has been carried out for an ihps located in jaisalmer, india. the results have been suitably analyzed to facilitate a deeper insight into system planning. reliability constrained planning and sensitivity analysis for solar-windbattery based isolated power system priyanka paliwal* department of electrical engineering maulana azad national institute of technology, bhopal, india, 462003 keywords: isolated power system; reliability; renewable energy sources; particle swarm optimization; monte-carlo simulation; url: https://doi.org/10.5278/ijsepm.4599 introduction in spite of several policy initiatives taken by countries across the world, approximately 13% of world’s population still has no grid availability [1]. this hampers socio-economic development in these areas. the power to rural areas can be supplied in three ways [2]: • by providing an extension of central grid. • using fossil fuel-based generators. • using a hybrid power system with renewable energy sources. in geographically inaccessible areas, the cost of laying down grid could be excessively high. isolated power systems are seen as a workable substitute to grid extension for providing electricity access in these areas. for isolated applications, hybrid power system employing res-based distributed generators (dgs) can prove to be an attractive option in comparison with fossil fuelbased generators. a hybrid power system comprises of various kinds of energy sources which have specific features in terms of costs and reliability. a careful analysis is thus required to have an optimal and reliable mailto:paulaf@dps.uminho.pt https://doi.org/10.5278/ijsepm.4599 110 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system system planning. there are two major issues associated with ihps based on res: i. intermittent nature of res ii. high capital cost the first issue can be counteracted with the integration of storage units in right combination [3]. as far as the second issue is concerned, the res have high capital cost but yield the advantage of very low operating costs. due to this reason, economic analysis with res is carried out not on the basis of initial capital cost but tlcc. this requires extensive planning so that optimum combination of units which fetches minimum cost without compromising on system reliability is obtained. the focus of work presented in this paper is the incorporation of these two criteria viz. reliability and economics. the two criteria are conflicting in nature and call for a judicious compromise for optimal system planning. different reliability indices have been used in system planning studies. loss of power supply probability (lpsp) is the most commonly employed reliability index and has been widely used [4–6]. loss of load probability (lolp) has also been used for reliability analysis [7–9]. expected energy not served (eens) [10–12] is another important reliability assessment parameter and has been used by khalili et al. in a further analysis, a sensitivity analysis has been performed to show the application of demand response program in reducing unused energy [13]. though probabilistic indices have been widely used by researchers, they are unable to reflect information about capacity reserve condition. hence, probabilistic techniques are found to be inadequate for reliability assessment of isolated power systems. system well-being criteria comprising of healthy, risk and marginal system states offers a better approach for system planning [14]. paliwal et al. have used dual reliability indices for reliability evaluation with res integration [15-16]. the authors have further added a dimension in reliability assessment by introducing separate indices for grid-connected and islanded operation [17]. cost analysis is an integral part of optimal sizing problem of ihps. katsigiannis et al. [18] have used lcoe as deciding economic criteria for optimal planning of ihps. lcoe has also been used by tariq [19]. wang and singh [20] have used annualized capital cost (acc) for economic evaluation of hybrid generation system comprising of wind turbine generator (wtg) units, photovoltaic arrays (pva) and storage batteries. annual costs have also been used as economic parameter by meschede et al. [21]. techno-economic evaluation has been performed by candia et al. [22] considering the variability of renewable generation. tlcc [23] is also considered as important financial tools to compare alternative projects. lamyae et. al. [24] have worked on finding the most optimum sizing configuration on the basis of cost of energy from each constituent generation technology. yu et al. [25] have proposed a fuzzification of multiple objective functions to come up with an optimal solution. lozano et al. [26] have used cost of energy as the basis for selecting optimum hybrid system configuration. asserting on the importance of storage units for counteracting the intermittency of renewable sources in standalone hybrid systems, xia et al. [27] have performed a cost benefit analysis with storage. storage planning has also been considered in [5, 28]. sensitivity analysis is indispensable for optimal power system planning. it is imperative to understand the impact of variation of different parameters on system performance and cost. nomenclature dg distributed generator icr incremental cost of reliability pdf probability density function pva photovoltaic array res renewable energy sources rse risk state expectation tlcc total life cycle cost wtg wind turbine generator p(risk)max upper limit for risk state probability (percent) p(health)min lower limit for healthy state probability (percent) socmin and socmax lower and upper limit for soc respectively ob_dis_max upper limit for power which can be obtained from battery during discharging, kw ob_ch_max upper limit for power which can be supplied to battery during charging, kw ib_dis_max and ib_dis_max maximum permissible value of charging and discharging current respectively, a international journal of sustainable energy planning and management vol. 29 2020 111 priyanka paliwal aziz et al. [29] have performed a sensitivity analysis by varying the parameters such as pv degradation, fuel pricing and load growth. 1.1. research gaps based on literature survey following conclusions can be drawn: i. majority of papers reported on optimal sizing are based on economic evaluation parameters. however, not much literature is available on conduction of sensitivity analyses. ii. there are few literatures which report sensitivity analysis. however, they are focused merely on economic considerations and do not take system reliability into consideration. reliability is a very important parameter when res are being considered owing to their variable nature. it has been asserted that reliability and cost considerations are conflicting in nature. thus, it is essential to know the impact of addition/ removal of res and storage units on system reliability and cost. iii. for reliability assessment, the parameters such as lolp, lole and eens have been frequently used. however, with res, it is not sufficient to assess merely the present reliability state. it is essential to have the knowledge of redundancy in system. iv. many papers have asserted on importance of energy storage in rendering dispatchability to res. however, the integration of storage incurs additional cost. thus a careful economic evaluation in order to justify the economic viability of res integration and storage considering different scenarios is required. this aspect is missing in majority of papers. v. there is a strong need to have a single parameter which can embody reliability and cost evaluation in one framework. this will facilitate system planners to have a quick assessment of additional investment needed to increase system reliability. 1.2. contributions and organization this paper presents reliability and cost-based sizing of solar-wind-battery storage for an isolated power system. the prime objective of optimal sizing problem is to determine configuration of hybrid system comprising of solar-wind-battery storage with minimum tlcc ensuring defined standards of reliability. the major contributions of work reported in this paper can be summarized as follows: i. in this paper, in addition to optimal sizing problem, sensitivity analyses are being conducted. these analyses can serve to provide an insight into optimal sizing results with greater clarity. the sensitivity analyses have been conducted considering two different cases: – case: i effect of replacement of smaller units with larger units of same capacity on system reliability. – case: ii effect of variation of component sizes around optimal values the sensitivity analyses serve following purpose: – provides an in depth understanding of effect of variation of component size on technical (dual reliability indices) and economic parameters. thus an optimum hybrid system configuration which has requisite reliability standards and is economically justifiable can be achieved. – provides due justification to why a specific component size has been chosen. ii. in order to have an understanding of redundancy in system, dual reliability indices are being used in this paper. the indices used are p(risk) and p(health) which provide an enhanced quantitative assessment of system well-being. iii. in order to establish a suitable correlation between reliability and economics, a new index called as incremental cost of reliability has been introduced in this paper. the stochastic behavior of res has been accounted for by modelling solar irradiance through beta and wind speed through weibull probability density function respectively. the reliability evaluation has been performed using mcs. the system status is investigated for all time slots and reliability indices are calculated. optimal sizing of isolated hybrid power system has been carried out using particle swarm optimization. a schematic depicting planning framework is presented in figure 1. the organization of paper is as follows: section 2 deals with the modelling of system components i.e. res and battery storage. section 3 explains reliability evaluation using mcs. section 4 elaborates formulation of objective function. the optimization technique i.e. pso is also explained here. section 5 describes case study wherein optimal sizing and sensitivity analyses are 112 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system carried out for an isolated solar-wind-battery storage-based hybrid power system located in jaisalmer, rajasthan, india. in section 6, pertinent conclusions have been presented. 2. system modelling the generation of power from solar and wind is hugely correlated to meteorological conditions such as wind speed and solar irradiance. in this paper, modelling of wind speed and solar irradiance is carried out using weibull and beta distributions respectively [4, 14]. battery model for determining state of charge (soc) characteristics and lifetime is based on charge/discharge operations through battery. battery charging efficiency has been determined using a fuzzy logic-based model [30]. 2.1. pv system model the pv system model is composed of two parts viz. solar irradiance model and power model which are explained as follows. 2.1.1. solar irradiance model solar irradiance is regarded as random variable and follows beta probability distribution function [4, 14] which is expressed as: where, s = solar irradiance in kw/m2, fb(s) = beta distribution function for s, α,β = parameters of beta distribution function, γ = gamma function. (1) ( ) ( ) ( ) ( ) 1( 1)( ) 1 0 1, 0, 0 0, bf s s s for s otherwise βαα β α β α β −−  γ +  = − ≤ ≤ ≥ ≥  γ γ   = 2.1.2 pv array power model the characteristic of a pv cell can be obtained for different irradiance levels and temperatures using following relations [15, 31]: (2) (3) (4) where, tc= cell temperature, °c, ta = ambient temperature, °c, not = nominal operating temperature of cell, °c, i = pv module short circuit current at conditions other than standard test condition (stc), a, ki = short circuit current temperature coefficient, a/°c, v = open circuit voltage at conditions other than stc, v, kv = open circuit voltage temperature coefficient, v/°c. the maximum power from a pv array comprising of n modules can be calculated as [15, 31]: (5) where, ff = fill factor of pv module 2.2 wind turbine model the model of wind turbine comprises of two parts viz. wind speed model and power model which are explained in following subsections. 2.2.1 wind speed model the two parameter weibull distribution is most widely used for modelling wind speed and is given by [4, 14]: 20 0.8 o t c a n t t s. − = + ( )25sc i ci s i k t= + −   v = voc kʋtc opv(s) = n ff.v.i figure 1: schematic of planning framework international journal of sustainable energy planning and management vol. 29 2020 113 priyanka paliwal (6) where, v =wind speed in m/s, fw(ν) = weibull probability density function for wind speed ν, k = shape parameter of weibull distribution, c = scale parameter of weibull distribution. 2.2.2 wind turbine power model the electrical power generated from a wtg is a function of wind speed and design parameters of wtg unit. the output power from wtg units for wind speed can be calculated as [4, 14]: (7) 2.3 battery storage model the battery models used in this paper are described as follows. 2.3.1 state of charge model battery storage will undergo charging/discharging operation based on power availability from generators and loading conditions. thus, energy availability in battery and consequently battery soc of the following time slot has to be calculated based on charging/discharging operation occurring in preceding time slot. in present work, battery soc model proposed in [32] has been adopted. the battery soc for succeeding time slot is evaluated as: (8) where, soct+1 = soc of battery for (t+1)th time slot, soct = soc of battery for tth time slot, otb = charging/ ( ) 1 0 1 0 kk vc w k ƒ ( ) e for ,c and k c c − ν ν = ν > > >    0 0 0 (í ) cut _ in m cut _ in rated wt rated rated cut _ off cut _ off for v a b for v v o = p for v v for v ν ν ν ν ν ≤ ≤    + ≤ ≤    ≤ ≤   ≥  discharging power during tth time slot, kw, ղb = efficiency of battery charging and discharging in charging and discharging mode respectively,σ = self discharge rate of battery, %/day, cb = rated battery capacity, kwh, l(t) = length of tth time slot, hours. 2.3.2. lifetime model battery storage forms a crucial component of hybrid systems comprising of only res-based generators. the replacement costs associated with battery storage constitutes a substantial portion of total life cycle costs of a hybrid system configuration. the lifespan of battery is described in terms of cycle life and float life. batteries in hybrid power systems that include stochastic sources such as wind and solar undergo a very asymmetrical pattern of charge and discharge operations. thus useful life of battery is constrained with two independent limitations of cycle life and float life. the procedure used in this work to evaluate battery life is explained as follows: i. calculate number of cycles of battery operation for period under study at specified depth of discharge. ii. calculate number of years to end of battery cycle life. iii. number of years to end of battery life after which battery needs replacement is chosen as the minimum of battery cycle life and battery float life. 2.3.3 fuzzy model for charging efficiency battery charging efficiency with respect to a particular soc has been calculated using a fuzzy logic-based model [16, 30]. a fuzzy system can be efficiently used for approximating charging efficiency. the block diagram for determination of battery charging efficiency using fuzzy logic controller is presenting in figure 2. the implementation has been explained in detail in [30]. 1 1 24 t t t b b b o l(t) soc soc c + ησ = − +   fuzzifier rule processor defuzzifier battery soc battery charging efficiency knowledge database figure 2: implementation of fuzzy logic for determination of battery charging efficiency [30] 114 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system the input variable in fuzzy logic controller is battery soc. based on the value of soc, fuzzy logic controller provides a probable value of charging efficiency. four membership functions are formulated for soc viz. low, medium, high and very high. four membership functions are formulated for charging efficiency viz. very low, low, medium and high. the formulation of membership functions is based on experimentation conducted on lead acid battery [33]. figure 3 and figure 4 represent membership function plots for input and output variable respectively. in present work, centroid method has been used owing to its capability to produce a result which is sensitive to all the rules executed. the inference rules used in the model are presented in table 1. 3. reliability assessment using monte carlo simulation the reliability assessment using mcs [5, 34-35] can be summarized as follows: i. the period under study is divided into number of time slots. ii. for each time slot under study, generating units, res and load are modelled as follows: • hardware availability modelling of generating units depending on its forced outage rate(for), the probabilities of a generating unit residing in up/down states are identified as availability and unavailability respectively [36]. the operating profile which comprises of hardware availability status based on for can be generated using suitable probability distribution function. in present work, up and down states have been simulated using exponential distributions. • modelling of wind speed and solar irradiance as explained in section 2.1.1 and 2.2.1, solar irradiance and wind speed data is 30 40 50 60 70 80 90 100 0 0.2 0.4 0.6 0.8 1 battery soc d eg re e of m em be rs hi p figure 3: membership function plot for battery soc [30] 0.4 0.45 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9 0 0.2 0.4 0.6 0.8 1 efficiency d eg re e of m em be rs hi p figure 4: membership function plot for battery charging efficiency [30] table 1: inference rules for fuzzy model battery soc battery efficiency very high very low high low medium medium low high international journal of sustainable energy planning and management vol. 29 2020 115 priyanka paliwal synthetically generated from beta and weibull pdfs respectively. • load modelling the mcs requires sequential load data which is obtained in the similar way as for res modelling i.e. by using suitable pdfs or by employing time series method [37]. however, in present work, it is assumed that load remains constant for a particular time slot and step change is assumed from one-time slot to another. iii. for each time slot, the output from generating units is determined based on their hardware availability status and wind speed/solar irradiance. iv. the power output from generating units as calculated in previous step is compared with the load of respective time slot. v. the power flow through battery is evaluated. if output power from generating units is surplus, the battery enters charging mode. based on the present soc of battery, the battery charging efficiency is determined based on fuzzy logic based model explained in section 2.3.3. however, in case of any deficiency from generating units, battery goes into discharging mode. the charge/ discharge operation of battery is restricted by limits of battery soc and charging/discharging current flowing through the battery. depending upon charge/discharge operation of battery in considered time slot, the energy availability status of battery for successive time slot is evaluated. vi. the system state is then examined with respect to dual reliability indices i.e. probability of risk state, p(risk)and probability of health state, p(health). the calculation of these indices had been explained in [16]. vii. steps iii-vi are repeated chronologically for all time slots. viii. the simulation is repeated for n years based on defined accuracy standards. the steps involved in mcs are illustrated in figure 5. 4. optimal sizing problem formulation the optimal sizing of hybrid system components is performed based on objective function and constraints as explained in subsequent subsections. 4.1 objective function the objective is to minimize tlcc which are the costs incurred through ownership of a project over project’s lifespan. the objective function is expressed as follows: (9) wherein, tlcc = present worth of total costs of incurred during project lifespan, $. the expression for tlcc can be written as: (10) where, cc= capital cost in $, om, rc, ocu, sv = present worth of o&m cost, replacement cost, utility outage cost and salvage value respectively in $. the different cost components associated in determination of tlcc along with the assumptions made are computed as explained in [16]. 4.2 constraints the various constraints used in optimal sizing problem are as follows: 4.2.1 dual reliability constraint in this paper, system well-being criterion has been applied using dual reliability constraints [16]. the probabilistic indices such as lolp, lole are unable to reflect information about capacity reserve condition. system well-being criterion provides information regarding reserve margin available in the system [14]. hence it serves as a more appropriate method of assessing system reliability particularly for system comprising of res based-dgs. assessment of system well-being is incorporated by imposing dual reliability constraint as follows [16]: (11) (12) the reliability indices are evaluated using mcs as explained in section 3. 4.2.2 system components sizing constraint the number of pv, wtg and battery units is subjected to following constraints: (13) minimize tlcc tlcc=cc+om+rc+ocu−sv p(risk)≤ p(risk)max p(health)≥ p(health)min npvmin ≤ npv ≤ npvmax 116 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system (14) (15) where, npvmin and npvmax = lower and upper bounds of pv array units respectively, nwtgmin and nwtgmax = lower and upper limits of wtg units respectively, nbmin and nbmax = lower and upper limits of battery storage units respectively. 4.2.3 constraint on battery parameters soc of battery is to be restricted within minimum and maximum values as specified by the manufacturer. (16) (17) (18) nwtmin ≤ nwt ≤ nwtmax nbmin ≤ nb ≤ nbmax socmin ≤ soc ≤ socmax ob _dis_max ≤ ob ≤ ob _ ch_max ib _dis_max ≤ ib ≤ ib _ ch_max where, socmin and socmax = lower and upper limit for soc respectively, ob _dis_max = upper limit for power which can be obtained from battery during discharging, kw, ob _ch_max =upper limit for power which can be supplied to battery during charging, kw, ib _dis_max a n d ib _ch_max =maximum permissible value of charging and discharging current respectively, a. 4.3 optimization technique the optimal sizing of hybrid system is carried out using particle swarm optimization. pso offers a variety of advantages over other techniques [31, 38–40]. in order to improve computational efficiency of pso, it has been suitably modified by author in their previous work [16] and has been used in this paper. readers are encouraged to refer to [16] for a more detailed discussion on implementation of modified pso. the flowchart for implementation of pso is presented in figure 6. implementation of pso algorithm can be explained in following steps: historical data generation of sequential solar irradiance data using beta pdf hardware availability model of pv arrays hardware availability model of wtg units output power from pv arrays output power from wtg units load energy storage examine system state calculate reliability indices based on system state of all time segments do for all time segments do for n simulations calculate mean value of reliability indices generation of sequential wind speed data using weibull pdf store the value of reliability indices for simulation for of pv arrays for of wtg units thi do for simulationthi figure 5: monte carlo simulation for reliability evaluation international journal of sustainable energy planning and management vol. 29 2020 117 priyanka paliwal step 1: evaluate the fitness of each particle based on objective function i.e. tlcc (explained in section 4.1). the decision variables are npv, nwtg and nb. step 2: update pbest value for each particle and gbest value of whole swarm. step 3: based on step 2, update the velocity and position of each particle is. the updation of particle’s velocity and position are carried out using adaptive pso model [16] as follows: (19) (20) (21) (22) where, νid, ᵡid, pbestid and gbestd represent velocity, position, personal best and global best respectively of dth dimension of ith particle, φ1 and φ2 are uniformly distributed random numbers in the interval [0, 1], ꭓ is the constriction factor, c1 and c2 are acceleration coefficients. 1 1 2 2 ( 1) [ ( ) . .( ( ) ( )) . .( ( ) ( ))] id id id id d id v t x v t c pbest t x t c gbest t x t ϕ ϕ + = + − + − xid(t+1) = xid(t) + νid (t+1) 2 2 4 4 x ϕ ϕ ϕ = − − − ø=c1+c2 5. results and discussion for optimal sizing study, ihps located in jaisalmer, rajasthan, india has been considered. the peak load has been considered to be 70 kw and the category of consumers is residential. the chronological load data has been obtained from [41]. the data for solar irradiance and ambient temperature for site has been taken from [42] and wind speed data has been obtained from [43]. all the technical and economic parameters considered in the analysis have been obtained from [16]. the study period is one year. the optimal sizing problem is solved using particle swarm optimization. the component sizes are determined with respect to following reliability standards: p(risk)max=0.2%, p(health)min=95% a system is assumed to reside in healthy state if the battery has enough capacity to supply the peak load for 5 continuous hours. the results of optimal sizing problem for hybrid pv-wind-storage system are given in table 2. figure 7 presents the convergence characteristics of pso. initialize particles with random velocity and position fitness function evaluation for particle’ s position(p): objective function: evaluation of tlcc[ eq.(10)] subjected to constraints [eq. (11)-eq.(18)] if fitness(p) better than fitness(pbest) then pbest=p set best of pbest as gbest update velocity and position [eq. (19)-eq.(22)] optimal solution=gbest do for all particles is termination criteria reached? yes no evaluation of system reliability through mcs (fig.4) figure 6: implementation of pso 118 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system table 3 shows dual reliability indices calculated through mcs (3000 simulations each with 5 different seeds) for optimal component sizes presented in table 2. it is evident from table 3 that dual reliability indices comply with the specified values of p(risk)max and p(health)min. figure 8 shows average solar power output obtained through mcs for considered hybrid system configuration over a span of 24 hours for the first day of january. similarly, figure 9 and figure 10 show average output power from wtg units and load profile respectively for the same time slot. the solar radiation and wind speed data have been generated synthetically from beta, given by eq. (1), and weibull, given by eq. (6), density functions, respectively. as it is apparent from figure 8, solar power output is available only for a fraction of a day. figure 9 suggests that although wind power output is available generation number 1 5 10 15 20 25 30 35 40 900 1000 1100 1200 1300 1400 1500 fi tn es s f un ct io n tl cc (k $) figure 7: convergence characteristics of pso table 2: optimal system configuration component number of units size/unit npv 3 30 kw nwtg 12 20 kw nb 17 26.4 kwh table 3: reliability indices for optimal system configuration reliability index value p(risk) (%) 0.17 p(health) (%) 99.64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 20 40 60 80 hours so la r po w er o ut pu t (k w ) figure 8: average solar power output over 24 hours for first day of january international journal of sustainable energy planning and management vol. 29 2020 119 priyanka paliwal 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 50 100 150 hours w in d po w er o ut pu t (k w ) figure 9: average wind power output over 24 hours for first day of january 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 30 35 40 45 50 55 hours lo ad (k w ) figure 10: load profile over 24 hours for first day of january 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 5 10 15 20 hours egarots yrettab morf deilppus re wop (k w ) figure 11: power supplied by battery storage units 120 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system throughout the period of 24 hours, the availability is highly intermittent. thus, in order to maintain supply reliability, integration of storage is essential. this is further reflected in figure 11 which shows the output power supplied by battery storage units. for emphasizing the importance of storage system, the sharing of power between pv array, wtg units and battery storage for a day is shown in figure 12. figure 12 clearly suggests the positive impact of storage system on system reliability. during the non availability of sun, storage system share the load along with wtg units. this smoothens out the effects of intermittency of wind sources. on the other hand, when the sunshine is available, storage systems charge themselves to facilitate system reliability. table 4 shows the contribution of pv, wtg and storage system in meeting the load demand over the entire year. it is apparent from table 4 that system reliability will deteriorate significantly in the absence of battery storage. the system planning incorporating res is complicated due to unpredictable nature of these sources. thus sensitivity analyses must be carried out in order to assist system planners in coming up with an optimum system planning. thus, in the present work, two types of sensitivity studies have been carried out: case:i effect of replacement of smaller units with larger units of same capacity on system reliability. the effect of considering pv and wtg units of larger ratings but same total capacity on system adequacy is given in table 5. the twelve 20 kw wtg units are replaced by two 120 kw wtg units and three 30 kw pv arrays are replaced by one 90 kw pv array. replacement of multiple small units with fewer large units of equivalent capacity should have had a considerable impact on system reliability since the outage of a single large unit can lead to significant loss of generating capacity resulting in huge energy deficit. however the results as reported in table 5 suggest that replacing small units by equivalent large capacity unit leads to only marginal deterioration in reliability. this is attributed to the reason that stochastic nature of res overpower the effect of forced outage rate. the effect would have been more pronounced with conventional generating units. case:ii effect of variation of component sizes around optimal values (presented in table 2) on system reliability. with the aim of studying the impact of addition/ removal of res and storage on system reliability with respect to optimal system configuration presented in table 2, following different scenarios have been studied: scenario1: wtg and storage capacity is assumed constant at the base level and pv capacity is varied.table 4: contribution of energy sources source percentage of energy supplied pv 37.8057 wtg 47.8238 battery storage 14.2993 percentage of unserved energy = 0.0711 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 10 20 30 40 50 60 hours d ist rib ut io n of p ow er fe d to lo ad (k w ) wtg pv storage load figure 12: contribution of sources for supplying load over 24 hours for first day of january table 5: reliability indices considering units of large rating reliability index value p(risk) (%) 0.19 p(health) (%) 97.31 international journal of sustainable energy planning and management vol. 29 2020 121 priyanka paliwal scenario 2: pv and storage capacity is assumed constant at the base level and wtg capacity is varied. scenario 3: pv and wtg capacity is assumed constant at the base level and storage capacity is varied. figure 13(a)-figure 13(c) show the impact of capacity variation of different sources on reliability of ihps. risk state expectation (rse) indicates the total number of hours during the study period for which the generation is inadequate to supply the load indicating the ‘risk state’ [36]. so for every time segment (each time segment has length of one hour), rse is evaluated by determining whether total available power from all the sources and storage (if present) is adequate to supply the (a) r se (h ou rs ) pv capacity additionpv capacity removal (c) -60 -40 -20 0 20 40 60 0 20 40 60 80 r se (h ou rs ) wtg capacity removal wtg capacity addition -3 -2 -1 0 1 2 3 0 10 20 30 40 50 r se (h ou rs ) storage units removal storage units addition (b) figure 13(a)-(c): impact of unit addition/removal on system reliability load. all those hours for which the source adequacy is not met are summed up to get rse during the study period. as specified earlier, the study period is one year. as can be seen from figure 13, the incremental benefits obtained in system reliability by capacity addition through different res and storage systems are not of the same degree. this is quite unlike the conventional diesel generator units where capacity addition results in proportional increase in reliability. from figure 13(c), it can be seen that addition or removal of storage units results in almost linear variation in system reliability. however, same is not the case with pv arrays and wtg units. the capacity addition of pv arrays or wtg units 122 international journal of sustainable energy planning and management vol. 29 2020 reliability constrained planning and sensitivity analysis for solar-wind-battery based isolated power system improves the system reliability only up to a certain level. beyond that, further capacity addition does not yield a significant improvement in reliability suggesting the saturation to capacity addition. this can be a very important consideration in system planning indicating that a suitable mix of res along with storage system has to be determined in order to achieve appreciable improvement in reliability. figure 14 shows a comparison of impact of different sources on rse. it can be observed from figure 14 that reduction in pv capacity affects the system reliability considerably, followed by wtg and storage. this can be chiefly attributed to the fact that solar power although available only during sunshine hours is more reliable and predictable in comparison with highly intermittent and unpredictable wind power. this can also be observed from average solar and wind output profile over 24 hours presented in figure 8 and figure 9 respectively. storage capacity reduction does affect system reliability, however at a lesser degree in comparison with the generators. this is due to the reason that storage is merely a buffer and can aid system reliability only in presence of adequate generation. if generation is insufficient, it is not only incapable of meeting the load demand but also there is not enough power to charge the battery storage. thus, storage units might not get adequately charged to provide required backup when desired. thus, storage capacity has to be adequately planned in conjunction with generating units in order to ensure optimum reliability standards. in order to give an insight into economic viability of capacity addition from the perspective of reliability, incremental cost of reliability has been calculated for different sources. incremental cost of reliability is the cost required to be paid in order to improve reliability by a certain degree. in the present work, incremental cost of reliability(icr) has been calculated as: (23) table 6 presents incremental cost of reliability for considered sources for different capacity additions. the analysis has been done by providing capacity additions above the optimal values(presented in table 1). it can be observed that there is a substantial difference between icr of different sources. the capcity addition of pv arrays has highest icr owing to its highly capital intensive structure. wtg units can offer a cost effective solution by providing lower icr. storage units provide lowest icr. however, they have to be judiciously planned in combination with capacity of generators as discussed earlier. a peculiar feature which can be observed from table 6 is that icr increases with capacity addition of pv arrays and wtg units. this is due to the fact that as the generator capacity increases, the improvement in reliability is not of the same degree. this is a characteristic very typical to res-based sources. if solar irradiance/ wind is not available, the load demand cannot be met no matter how large the generating capacity is. thus, with capacity addition, although the cost increases linearly, there is not a proportionate increase in reliability. this leads to high icr. the icr with storage unit addition shows an irregular pattern. as evident from table 6, it increases with capacity addition up to two units and shows a decrement thereafter. this can be explained as follows: additional investment required over project lifespan icr reduction in rse over project lifespan = -2 -1 0 1 2 3 0 50 100 r se (h ou rs ) pv wtg battery storage unit additionunit removal figure 14: comparison of impact of different sources on rse table 6: incremental cost of reliability($/sec) unit addition source i unit ii unit iii unit pv 7.841 16.324 41.55 wtg 2.112 4.247 4.35 battery storage 1.312 2.32 1.08 international journal of sustainable energy planning and management vol. 29 2020 123 priyanka paliwal while calculating icr, tlcc has been used. tlcc incorporates the replacement costs of battery units during project lifespan. with increase in storage capacity, the number of charge/discharge operations of battery storage decreases. this leads to increase in battery life thereby minimizing the replacement costs. the decrease in replacements costs leads to reduction in tlcc and hence icr reduces. 6. conclusion this paper presents planning formulation for isolated hybrid system incorporating res-based dgs and storage. dual reliability indices, p(risk) and p(health) have been used to ensure optimum system planning with requisite reliability standards. a case study has been carried out for a site located in india. a realistic analysis is being provided by considering meteorological parameters of site under consideration. the reliability constrained optimization problem based on minimization of tlcc has been solved using pso. the main focus of this work is to conduct sensitivity analyses to enable a thorough understanding of planning. two types of analyses have been conducted: (i) analysis when smaller units are being replaced by larger units of same capacity (ii) analysis with component sizes varied around their optimal values. the first analysis provides a very useful insight which is particularly of importance when instead of conventional generators, res-based generators are being used. the results indicate that contrary to belief, when units of lesser capacity of res are being replaced by fewer large units, there is no significant degradation in system reliability. this is accredited to variable nature of res. this information can facilitate better economic planning as deployment of fewer larger units can prove to be a more economical option. the second analysis can be utilized to have an understanding of impact of addition/removal of pv, wind and battery units. in the present case study, it can be seen that pv unit has maximum impact on system reliability, followed by wind and battery storage units. further, in this paper a new index termed as incremental cost of reliability has been introduced. the results suggest that 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[44] østergaard, p.a.; johannsen, r.m.; duic, n. sustainable development using renewable energy systems. int. j. sustain. energy plan. manag. 2020, 29, http://doi.org/10.5278/ ijsepm.4302. https://doi.org/10.1016/j.renene.2018.02.010 https://doi.org/10.1016/j.renene.2018.02.010 https://doi.org/10.1109/tpwrs.2015.2404533 https://doi.org/10.1016/j.renene.2019.02.004 https://doi.org/10.1016/j.renene.2019.02.004 https://doi.org/10.1016/j.renene.2014.12.051 https://doi.org/10.1016/j.renene.2014.12.051 https://doi.org/10.1016/j.enpol.2007.06.020 https://doi.org/10.1016/j.enpol.2007.06.020 https://doi.org/10.1109/pvsc.1996.564417 https://doi.org/10.1016/j.renene.2018.01.120 https://doi.org/10.1016/j.renene.2016.12.018 https://doi.org/10.1016/j.renene.2016.12.018 https://doi.org/10.1109/tec.1986.4765774 https://doi.org/10.1109/tec.1986.4765774 https://doi.org/10.1016/j.rser.2014.07.200 https://doi.org/10.1016/j.rser.2014.07.200 https://doi.org/10.1109/secon.2012.6196992 https://doi.org/10.1109/access.2019.2962153 https://doi.org/10.1109/access.2019.2962153 http://doi.org/10.5278/ijsepm.4302. http://doi.org/10.5278/ijsepm.4302. international journal of sustainable energy planning and management vol. 29 2020 25 *corresponding author e-mail: paulaf@dps.uminho.pt international journal of sustainable energy planning and management vol. 29 2020 25–40 abstract ensuring the supply of affordable energy, improving energy efficiency and reducing greenhouse gas emissions are some of the priorities of the governments of several countries. the pursuit of these energy goals has triggered interest in the exploration and usage of renewable energy sources (res), which can be particularly appropriate for island systems as is the case of cape verde. this work proposes a generation expansion planning model for cape verde considering a 20 years’ period. different scenarios were analysed, each one representing a possible res contribution for electricity production, reaching a 100% res share. the results demonstrate that the increase of the res in the system will lead to an increase in the total system cost. however, a significant decrease in both co2 emissions and external energy dependency of the country is projected. the seasonality of the res resources, and in particular of wind power is shown to be one of the most important challenges for the effective uptake of such a renewable power system. a least-cost solution might be possibly achieved if storage technologies would be considered within the modelling approach (e.g. battery and power-to-gas technologies) which would also contribute to accommodate the critical excess of electricity production (ceep). while the proposed model allowed already to present some useful scenarios, it becomes also evident the need to expand the analysis by using hourly data and taking into account the sector’s integration (e.g. power, heat and transport). 1. introduction access to energy is a prerequisite for economic and social development since any productive activity needs energy as a means of promoting competitiveness. this quest for a sustainable energy system is particularly relevant for developing countries, as is the case of cape verde. cape verde does not have any known fossil fuel resources, which makes the country totally dependent on imports of petroleum products. despite the excellent renewable conditions in the country, in 2018 only 20.8% of the electricity produced came from renewable energy sources (res) [1,2]. on the other hand, cape verde still faces the problem of the lack of permanent surface water, since there are scarce rain resources in the country. this natural condition severely limits the possibility of using both hydroelectric electricity and hydro storage. this also leads to additional energy requirements as the country is dependent on water desalination plants. thus, the high production of electricity from non-renewable sources and the mandatory use of desalination are important challenges faced by cape verde electricity sector. all these difficulties result in high electricity and water tariffs which are among the most expensive ones at a global level [3]. planning for a 100% renewable energy system for the santiago island, cape verde paula ferreiraa1, angela lopesb, géremi gilson drankaa,c & jorge cunhaa a algoritmi research centre, university of minho, campus azurém, 4800-058 guimarães, portugal b university of minho, school of engineering, campus azurém, 4800-058 guimarães, portugal c department of electrical engineering, federal university of technology, parana, via do conhecimento, 85503-390 pato branco, brazil keywords: electricity planning; renewable energies; cape verde; scenario analysis; url: https://doi.org/10.5278/ijsepm.3603 mailto:paulaf@dps.uminho.pt https://doi.org/10.5278/ijsepm.3603 26 international journal of sustainable energy planning and management vol. 29 2020 planning for a 100% renewable energy system for the santiago island, cape verde despite the optimistic prospects regarding the grid integration of renewable energy sources, a series of barriers have been pointed out that may restrict their implementation in the electricity generation process. for many african countries, while the renewable potential is high, its effective integration is often limited due to cost barriers, financing difficulties, the existing policy and regulatory framework, technical issues related to the grid structure but also because of the variable and not fully predictable nature of some res resources [4,5]. the operationalization of these sources depends mainly on the natural conditions, which often do not follow a pattern close and positively correlated to demand, making the generation of electricity variable, on opposite to traditional sources that provide a controllable and constant energy flow [6]. painuly [7] and nasirov et al. [8] argue that, especially for developing countries, the initial costs are the most important barrier to the introduction of these features into the power system. in addition to the high initial investment costs, the lack of regulatory and political frameworks is also highlighted in [9] as a potential barrier, especially for islanded systems. however, the benefits might be higher if there is a good use of res for electricity generation, and this can be reached at a local level, by improving the social and economic conditions of the regions concerned, and at a global level through of the resulting environmental benefits. a review of the main challenges associated with res integration to grid has been recently addressed in ref. [10]. the impact of using probabilistic weather data to model 100% res systems is addressed for the la gomera island in ref. [11]. the vulnerability to climate conditions of high res systems was highlighted in ref. [12] which also underlined the importance of using different res technologies in order to take advantage from the complementarity between renewable resources. this paper addresses the case of cape verde electricity system and analyses different electricity generation scenarios for the largest island of the archipelago – santiago. recent research has addressed the design of a fully decarbonized electricity system for west africa countries, by also including the case of cape verde [13]. however, although several studies have already addressed the renewable energy planning for the country (see for example [13–15]), to the best of the authors’ knowledge, the use of a cost optimization approach to design scenarios combining different technologies to reach a 100% res system and acknowledging the seasonality of these resources, has not yet been fully explored for the specific case of the santiago’s island. a generation expansion planning model was developed and the specific conditions of the region were analysed, namely the present structure of the power system, renewables potential and intra-yearly variability of demand and natural resources. the challenges related to a possible 100% res system are debated and future directions for planning and modelling are also pointed out. the remainder of the paper is organized as follows. section 2 briefly presents a description of cape verde energy system. section 3 discusses the challenges that emerge in the case of electricity planning for island systems. section 4 presents the electricity planning model used for cape verde. the results are shown in section 5 and section 6 draws the main conclusions of the paper. 2. cape verde energy system cape verde’s energy sector is characterized by the use of fossil fuels (petroleum products), biomass (firewood) and small expressive use of other renewable energies, namely solar and wind energy [1]. according to the electricity and water operator of the country [2], the total electricity produced at the end of 2018, reached 429.6 gwh, representing an increase of 4.8 gwh (1.1%) compared to the same period on the year before. the total penetration of renewable energy sources in 2018 was 20.8%, an increase of 2.3% compared to the value in 2017 (18.5%). this observed increase was mainly driven by solar power production and to a lesser extent to the increase in wind power energy. cape verde is highly dependent on fuel imports, since it does not have its own energy resources of fossil origin [14]. in 2018, close to 80% of the electricity generated in the country came from fossil fuel thermal power plants [2] which demonstrates the high dependence and vulnerability of the country to oil prices fluctuations [9] with a direct impact on the frequent changes on the price of electricity [16]. if we look at electricity production in recent years, we find that there is an average growth rate of more than 7% per year between 2009 and 2013 [1]. according to the cape verde renewable energy plan (percv), it was estimated that electricity consumption can double by 2020 compared to 2011 [3]. the intermediate scenario predicts that total electricity demand for the nine islands could reach 670 gwh by 2020, representing a growth rate of around 8% per year over the period 2013–2020 [3]. although this increase has been moderated in the more recent years, reaching a yearly average value lower than 4.5%, the increasing trend is well evident [2,17–19] driven by the population growth and increasing economic activiinternational journal of sustainable energy planning and management vol. 29 2020 27 paula ferreira, angela lopes, géremi gilson dranka & jorge cunha ties such as the growth of the tourism in the islands. recent studies, such as [20] also assumed that the yearly growth rates for electricity consumption in santiago island could reach a value between 3.4 and 6.8% until 2040. the integration of renewable resources in electricity generation focuses mainly on wind and solar energy in the country, given the scarce rainwater resources that enable the creation of traditional on-stream hydropower. only an off-stream pumped storage hydropower plant is being considered to increase renewable energy penetration and dispatching in santiago’s island [21]. it should not be forgotten that cape verde has a strong dependence on water desalination plants, which is a process that requires a significant amount of electricity. in 2018, more than 8% of the electricity generated was used for water desalination related activities as 99.5% of the water supplied to the population came from desalination plants [2]. the particular potential of a hybrid renewable energy system configuration for the better use of desalination plants was concluded in [22]. the real possibility of powering seawater reverse osmosis (swro) desalination plants solely with renewable energy has been also highlighted in [23]. cape verde is composed of a group of ten islands, nine of are inhabited. figure 1 illustrates the topographic map of cape verde. for the sake of simplicity and as islands are not grid-connected, this study was restricted to the island of santiago, which is the most populous one and where the capital city is located. the island of santiago stands out not only for its size but also for being the one with the highest energy consumption, representing in 2018 about 55% of all generation and consumption in the country [2]. cape verde faces several challenges in what concerns the energy sector which should be taken into account on the future design of energy policies ([2] and [25]): – weak institutional capacity: institutional capacity and skills within the sector are highly limited, especially with respect to policy formulation and implementation and regulation. figure 1: topographic map of cape verde [24] 28 international journal of sustainable energy planning and management vol. 29 2020 planning for a 100% renewable energy system for the santiago island, cape verde – weak planning and investment capacity in the electricity subsector: the dependence of a single operator on electricity production given the weak capacity to manage and respond to the increasing demand for electricity. – the insularity of the national territory: the geography of cape verde poses enormous challenges for the sector. inter-island imports and distribution of small quantities of fuel are highly costly. – the inadequacy of storage capacity and logistic means: storage capacity of fuels, as well as logistics, are inadequately distributed between islands. – poor electricity production and distribution system: the production capacity and distribution network of electricity and water are inadequate with regard to demand due to the lack of investments and the non-integration of the distribution networks. this situation leads to enormous deficiencies in the energy and water sector, with considerable losses for the population and the economy. the total losses of the electricity sector reached more than 25% of the production in 2018 [2] and represent a barrier to meeting the energy goals for the country [26]. – a weak system of efficiency incentives: the weak institutional capacity facing the energy sector is not conducive to policy development and innovation, resulting in almost no incentives to improve the energy system. – a weak penetration of alternative energies: cape verde has excellent conditions for wind and solar energy. however, despite the favourable conditions, the cost factor has been one of the main barriers to its widespread adoption. large initial investments give rise to significant financial costs, resulting in higher production costs than fossil fuel alternatives. combining the resources to achieving a 100% renewable electricity goal in a manageable and costeffective way remains a challenge in cape verde [27]. – increasing water demand: forecasts for water demand show a steep increase in the upcoming years [28], in part, due to the pressure from tourism and agriculture but also due to the basic population needs. providing an answer to these needs is a major challenge for the energy sector given the desalination requirements. – lack of awareness on the role of the education system and the media: the need to save energy and reduce dependence on fossil fuels is poorly debated in cape verde. the reformulation of school programs and the introduction of awareness-raising activities in the media should be a priority. oliveira [26] called attention to the leading role on the media to transmit information about energy efficiency and res in cape verde, but also demonstrate that is necessary to carry the message to people in their communities, especially the rural ones. in fact, the high renewable potential has already motivated studies on the exploitation of these resources for different islands. these studies clearly demonstrated that res is a promising alternative for sustainable energy supply (see for example [29] for wind power, [30] for wave power, or [31] for rural electrification projects). a fully decarbonized electricity system would also be the most job-rich option among other alternatives [13]. furthermore, the efficient integration of these technologies would enable cape verde to solve the problem of water scarcity with a source of energy that is both environmentally friendly and economically viable. from the point of view of security of supply, for a country like cape verde that does not have fossil resources or known reserves, the role of renewable sources is thus essential. 3. electricity planning for island systems traditional energy resources in islands are usually limited and highly dependent on natural surroundings, including conditions affecting possible renewables utilization. these characteristics might be partially explained by their isolation and small size characteristics [32]. in fact, for most of the world’s islands and remote areas, imported fuel remains as the main source of primary energy [9,33,34]. therefore, the use of renewable energy may be of great assistance especially for these island power systems [9,35]. for many small islands developing states, fuel import bills account for about 20% of annual imports and between 5% to 20% of gdp [36]. this finding is also corroborated by [34] claiming that some islands spend international journal of sustainable energy planning and management vol. 29 2020 29 paula ferreira, angela lopes, géremi gilson dranka & jorge cunha more than 30% of gdp on fuel imports. the cost of electricity in the islands is usually significantly higher compared to the continental regions [37] due to the inherent difficulties in supplying these localities. oil shortages occur frequently in the islands, as transportations are strongly affected by weather conditions [38]. the potential of upgrading autonomous diesel-based by solar-battery-diesel-based electricity systems has been globally investigated by [35] by also concluding that the average lcoe would be reduced from 0.35 ct/kwh to 0.12 ct/ kwh for the specific case of the cape verde power system. island countries have structural disadvantages linked to insularity, the persistence of which seriously undermines their economic and social development [39]. it should be noted, however, that these regions produce only a small fraction of the global ghg emissions. however, they are among the most vulnerable regions in the world to the effects of climate change, such as rising sea levels and extreme weather conditions [38]. the high costs of submarine transmission cables constitute the main barrier in the connection between the islands and the mainland, as well as between the adjacent islands such as supported by [34,40]. therefore, the supply of electricity on the islands is generally unstable [40]. in addition, most rural areas are not covered by electricity supply grids and distributed diesel generators are often used for a few hours at night. since the fuels are usually scarce in these places, the supply of electricity is often affected and even disrupted. the use of renewable sources in the generation of electricity can be particularly appropriate for islands and remote areas. amaral [41] reported that the integration of res in small islands energy systems has several advantages, notably at an economic level since its high investment cost is offset by the small size of the system and the reduction in the import of expensive fuel. accordingly, segurado et al. [15] argue that the integration of renewable sources into the energy system on small islands has both economic and environmental advantages since fossil fuels can cause serious damage to the ecosystem and natural habitats. in fact, there has been an increasing number of publications on the possibility of reaching 100% renewable islands in several regions. a few recent examples based on long-term modelling and scenario analysis include the case of the reunion [42], ometepe [43] and the mediterranean islands [44].a set of options for achieving a 100% res for mauritius island (2050) has been also explored by [45]. examples of recent research which also focus on achieving a 100% res using the energyplan model includes the case of canaria (2030) [1], åland (2030) [2] and wang-an islands [46]. the remix model has been also applied for the case of canary islands (2050) [47]. the hybrid optimization model for electric renewables (homer) has been also considered for the assessment of fully decarbonized pathways in islands such as for the case of agios efstratios [48], st. martin [49] and prince edward islands [50]. overall, the studies showed the relevance of this res pathways to reach a low carbon system but also highlighted the need to integrate other sectors and solutions to reach the best solutions well fitted to local conditions [32]. on the other hand, for developing countries or isolated areas/islands, the production of res-based energy imposes some cost barriers. in fact, the use of renewable energy for the generation of electricity does not only have to deal with difficulties stemming mainly from the irregular nature of most existing renewable sources but also from the investment required for renewable energy technologies. according to [51], the consumers tend to prefer a lower initial cost than a lower long term operating cost. however, [52] argued that for renewable penetrations up to the optimal points in the range of 40–75% there is an evident cost reduction which is only compromised for larger res shares, in some cases, given the requirement for storage becoming more significant. the increasing importance of batteries application has been also highlighted by [35] especially when the share of solar pv is higher than 45% of the overall power system’s capacity. 4. planning model for cape verde the proposed planning model was coded in gams (general algebraic modelling system), a programming language that allows to define and solve an optimization problem through integrated commercial solvers. the model resulted in an integer linear problem and the cplex solver was selected to obtain the numerical results. the original model of [53] had to be adapted for santiago’s island, as it was initially designed to the portuguese case. in the newly formulated model, only three energy sources were considered to be added to the electricity system of santiago, namely biomass from urban solid waste, and wind and solar power which were 30 international journal of sustainable energy planning and management vol. 29 2020 planning for a 100% renewable energy system for the santiago island, cape verde included according to the island’s potential. the selection of these three resources is justified by the country priorities and strategic plans which have already identified these options and the priority areas for development of these power plants in the island [2]. equation 1 shows the objective function whereas figure 2 provides a more comprehensive overview of the proposed planning model, including the objective function, main restrictions and main outputs. in equation (1), t is the planning period (years), n represents the new units to be included, m are the months of the year, i denotes all plants included in the model, icn (€/mw) is the investment cost for each of the n new plant, j is the discount rate (%), cfom (€/mw) are the fixed o&m costs of the n plants, ipn (mw) is the installed power of a new plant (n) in year t, cvom (€/mwh) are the variable o&m costs for each i plant, fi (€/mwh) are the fuel costs for each i plant, ec (€/ton) is the emission allowance cost for the co2 emissions, co2i (ton/mwh) is the emission factor for each i plant, pi,m,t (mw) is the monthly production of each i plant during the planning period and ∆m is the number of hours of each month. the parameters used in the optimization problem include the expected monthly demand for the next 20 years, availability of energy sources, the estimated cost of co2 emissions licenses, lifetime, fuel cost, the investment and o&m’s fixed and variable costs for all technologies. these values were obtained from international literature and reports for the country [3]. the input data used for the existing [54–56] and new generating units [3,55,57–60] are presented in table 1 and table 2 respectively. the direct co2 emissions (i.e. the emissions at the point of production) are considered only for the existing diesel units (0.24 t/mwh) and the average price of co2 allowance is set to 25 €/t based on [61]. the capital costs1 for solar power were estimated , i i 2i , , (1 ) (1 ) (1 ) 1 ( ) (1 ) n n i it t n n n tit t tn n t i m t m t tm m i j j ic cfom ip j j cvom f ec co p j ε ε ε ε ε − −   + + +   + −     + + + × ∆ +  ∑ ∑ ∑ ∑∑ (1) figure 2: overview of the proposed planning model table 1: input data for the existing generating units source fuel cost (€/mwh) [2,62] variable costs (€/mwh) [55,57] existing installed power capacity (mw) diesel 120 3 69.96 wind 0 5 9.35 solar pv 0 0 5 1 one euro (€) is equivalent to 1.11 united states (us$) dollar (june 03, 2020) international journal of sustainable energy planning and management vol. 29 2020 31 paula ferreira, angela lopes, géremi gilson dranka & jorge cunha based on ref. [60] by taking into account a cost level around 1200 us$/kw for large-scale pv and 2000 us$/kw for smaller scale rooftop systems assuming that 2/3 would be from large-scale and 1/3 for smaller roof top systems (by volume) which would lead to an average cost level of about 1467 us$/kw. the average capital cost is also considered for wind power and biomass based on ref. [57] and [58] respectively. the fuel costs for diesel was estimated based on the average fuel consumption in g/kwh [2] and on the average fuel cost in €/kg [62]. the average monthly electricity production from photovoltaic plants (kwh) was obtained through the photovoltaic geographical information system (pvgis), a site that allows access to solar radiation and temperature data and photovoltaic performance evaluation tools to any place in europe and africa, as well as for a large part of asia [63,64]. on the other hand, the monthly wind speed of each of the identified renewable energy development zones [3] was obtained from the site of nasa langley research center through the surface meteorological and solar energy (sse) data [65]. the power curve of the vestas turbine-v52, was used to estimate the expected wind power output. table 3 summarizes the monthly availability of res on the island of santiago as implemented in the model. table 3 puts in evidence the high seasonality of the res resources, which essentially has to do with the natural conditions of the island. this variability is most evident for the wind since the values vary between 6% during the summer period and more than 40% for the winter period. the biomass power output is assumed to be stable since it does not depend on the weather conditions. the variability of res is undoubtedly the main difficulty of integrating them into the grid to ensure the security of supply. as the island is a closed system, a reserve margin of 10% was considered [66]. based on all the data presented, we simulated and optimized three different scenarios: – business-as-usual (bau), corresponding to the base scenario departing from 2015 values and assuming no res restrictions; – renewable scenario (100res), corresponding to a 100% res. – renewable scenario (div_res), corresponding to a 100% res system with diversified sources. 5. results the expected average cost, average co2 emissions for the entire planning period and res share on the last year of the planning period (year 20), for the three scenarios, assuming a discount rate of 5% per year are illustrated in table 4. the new installed power capacity over the entire planning period and the capital, fixed o&m and variable o&m costs for each power source are illustrated in table 5 and table 6, respectively. it can be seen from the data in table 4 the increasing trend for the average system’s cost, mainly due to the increased installed capacity for the res scenarios table 2: input data for the new generating units source expected lifetime (years) [3,57] fuel cost (€/mwh) [55] capital costs (million €/mw) [58–60] fixed o&m costs (€/(mw.year)) [57,59] variable o&m costs (€/mwh) [57,59] biomass 25 7 4.34 114,984 4.2 wind 25 0 1.75 43,750 5 solar pv 25 0 1.32 33,000 0 table 3: monthly availability of res power in santiago month biomass wind solar jan 70% 43% 14% feb 70% 31% 18% mar 70% 26% 22% apr 70% 27% 22% may 70% 26% 23% jun 70% 20% 21% jul 70% 6.9% 19% aug 70% 5.9% 18% sep 70% 9.8% 18% oct 70% 18% 18% nov 70% 23% 16% dec 70% 30% 15% http://mw.year 32 international journal of sustainable energy planning and management vol. 29 2020 planning for a 100% renewable energy system for the santiago island, cape verde (see table 5 and table 6). on the other hand, co2 emissions would be reduced to zero in the case of a 100% res share could be reached. a simulation for a discount rate of 10% per year was also conducted which showed that the results were robust and the optimal scenarios and generation mix remained close to these results. table 6 illustrates the higher expected decrease in the variable o&m cost share for 100% res scenarios compared to scenario bau. for scenario bau, solar power would represent 81% of the total electricity production in the last year of the planning period, followed by diesel (11%), biomass (5%) and wind (2%). as for the 100res scenario, wind power would represent only 2% of the total electricity production and biomass would reach 5% in the last year of the planning period. solar power would represent 93% of the total electricity production. this result comes from the cost minimization approach for the 100res, which favours solar power given the high availability of the resource on the island. these results seem to be consistent with other research which highlighted that solar pv is found to have a huge future potential and it might provide up to 85% of the overall electricity supply by 2050 in west africa’s future power system [13]. in fact, as the model assumed monthly time steps the intra-daily variability of the resources and demand have not been considered. in order to partially overcome this limitation, an additional scenario was tested, now imposing a diversified structure for the renewable power system. the div_res scenario will result in a higher cost but ensures that wind power will have a significant role in the power generation mix. for the last year of the planning period, 50% of the total electricity production would come from solar power, followed by wind power (47%) and biomass (3%) for div_res scenario. figure 3 compares demand and monthly production by technology for the last planning year (year 20), according to scenario bau. since there are no major temperature variations in cape verde, demand for electricity is relatively stable throughout the year, with a small increase during summer which may be justified by the touristic activities. however, figure 3 illustrates the variability of some energy sources, as a consequence of seasonality. the low production of electricity from wind energy is evident in the months of july, august and september due to its weak potential in these periods. on the other hand, production from solar energy and biomass is practically stable, with only a small variation. a 100% res system would be possible to be reached between february to june, but for the remaining months the system would resource to diesel. during these months a situation of excess production could in fact be expected. figure 4 shows the results of the 100res scenario. the total electricity production is considerably higher than for bau with excess production in several months of the year. the lower reliance on wind power is mainly justified by its low electricity generation potential during the summer months. solar power would then supply most of the electricity needs, but the practical implementation of such a scenario would bump into technical problems related to the night period and the need to complement the system with storage technologies. as those are not considered in the model, a table 4: results from the planning model for the average cost, average co2 emissions and res share scenario cost (€/mwh) co2 (t/mwh) res share (year 20) bau 45.8 0.027 89% 100res 48.7 0 100% div_res 78.4 0 100% table 6: results from the planning model for the capital, fixed o&m and variable o&m costs capital (%) fixed o&m (%) variable o&m (%) bau 59.5% 21.1% 19.4% 100res 72.7% 25.7% 1.6% div_res 71.1% 25.1% 3.7% table 5: results from the planning model for the new installed power capacity for the entire planning period scenario diesel (mw) biomass (mw) wind (mw) solar pv (mw) total (mw) bau 0 (0%) 6.7 (2%) 0 (0%) 360.5 (98%) 367.2 (100%) 100res 0 (0%) 6.7 (1%) 0 (0%) 479.5 (99%) 486.2 (100%) div_res 0 (0%) 6.7 (1%) 288.8 (43%) 372.3 (56%) 667.8 (100%) international journal of sustainable energy planning and management vol. 29 2020 33 paula ferreira, angela lopes, géremi gilson dranka & jorge cunha diversified scenario such as the one presented in figure 5 is more realistic and still theoretically sound. although recognizing the limitations brought by this assumption, as the system stability for all hours of the year cannot be shown, the use of this monthly model can be useful to obtain a limited set of possible optimal solutions constrained by political or legal requirements or policies. these limited set of solutions may then be more easily refined using hourly optimization or simulation tools to compute accurate cost, emissions and operational parameters (see for example [50] and [70]). figure 5 shows the results of the div_res scenario and puts in evidence again the seasonality problem. to avoid power deficit, the system would require a high value for res installed power capacity leading not only to higher costs but also to excess production in almost all months of the year and this would result in curtailment of renewables to avoid frequency stability problems (see [67] for more figure 3: monthly electricity production for santiago’s island in the bau scenario in year 20 figure 4: monthly electricity production for santiago’s island in the 100res scenario in year 20 34 international journal of sustainable energy planning and management vol. 29 2020 planning for a 100% renewable energy system for the santiago island, cape verde details). in fact, the system would be dimensioned by the worst month (august) which present a situation of low wind availability with higher demand requirements. moreover, the existence of critical excess of electricity production (ceep) is much higher than for the 100res for most of the months which in our case would be translated in curtailment since no storage is considered. these findings might be partially associated with the wind seasonality as solar resource tends to be much more stable throughout the year. however, a least-cost solution might be possibly achieved if storage technologies would be considered within the modelling approach (e.g. battery and power-to-gas technologies) which would also contribute to accommodate the ceep. the ceep for all scenarios is illustrated in figure 6 for each month of the last year of the planning period. the integration of storage systems, power to heat, power to gas and power to mobility has been recently addressed by [68] with a particular focus on the future competition on excess electricity production from res. in [69], the role of wind, solar and storages technologies is addressed across power, heat, transport and desalination sectors for chile. the use of figure 5: monthly electricity production for santiago’s island in the div_res scenario in year 20 figure 6: monthly critical excess of electricity production for santiago’s island in all scenarios in year 20 international journal of sustainable energy planning and management vol. 29 2020 35 paula ferreira, angela lopes, géremi gilson dranka & jorge cunha storage technologies for the island of bonaire is investigated by [70] with a particular focus on supporting high shares of variable renewable energy. previous research has found that the grid dispatch flexibility might increase using curtailment with [71] and without [72] storage. the authors of [73,74] also found that the use of curtailment would reduce the required storage system's capacity. the curtailment-storage-penetration nexus concept has been recently addressed by the authors of [75] which provided empirical-based evidence that power systems which are designed with curtailment are likely to cost less than the ones which are designed without curtailment. at this point, it is worth mentioning our current model limitations. our approach does not take into account the use of hourly data and storage technologies, for example, which is precisely a further step to be addressed in future research to provide a holistic assessment for achieving a fully decarbonized energy system in santiago’s island power system. previous research revealed, for example, that the use of both hourly modelling together with storage technologies would result in lower levels of curtailment [76]. the authors of [76] addressed a 100% res for the åland energy system using the energyplan modelling tool using hourly data and concluded that curtailment of wind and solar power would be around 3.5% of total electricity production. a comparative analysis of the analysed scenarios clearly shows that different res resources can complement each other: solar power tends to be more stable during the year, but show a high intra-daily variation; wind power does not suffer from the day-night problem as solar, but the difference between summer and winter months is remarkable; biomass allows for the storage of the resources and can be used then to balance production and contribute to base load capacity [77]. the possibility of using storage technologies and/or demand-side management strategies would be of great benefit for such a system and should be considered on future studies for the country as proposed in the next section. 6. conclusions this study intended to contribute to the debate on the possible increase of the integration of renewable energies to promote progress towards a just energy transition in cape verde power system. in this context, a model of electricity planning was presented to support the longterm strategic decision, taking into account the need to reconcile objectives of minimization of costs with the constraints of the system. the intention was to formulate, in particular, an analysis of the integration of renewable energies, taking into account the potential of cape verde, the seasonal availability of these resources, costs and electricity consumption prospects based on the annual forecasts for a period of 20 years. the analysis allowed to compare the demand with the monthly electricity production, which highlighted one of the major challenges to reach a renewable electricity system, namely the high seasonality of the res resources. the seasonality of wind is particularly remarkable which compromises electricity production and the capacity to respond to demand during summer. additionally, in the winter months, critical excess of electricity production is evidently making it essential to analyse possible ways of minimizing this unused electricity. while the proposed model allowed already to present some useful scenarios, it becomes also evident the need to integrate short-term issues related to intra-daily demand or availability of resources on the generation expansion model. the results are significant as they indicate that a 100% res scenario would be possible even with already existing technologies but demonstrate also the challenges and limitations which should not be overlooked. as such, while the proposed energy transition is possible from a technological standpoint, economically, is still limited given cost and even organizational restrictions. these first results show that a high res system is theoretically possible, but the high cost of the technologies and their variability can result in a prohibitive cost increase for a country which is one of the poorest and smallest island developing countries in the world. however, these costs should be looked with cautions as modelling improvements and the inclusion of additional technologies (e.g. storage) can help to design less cost intensive strategies for a 100% res system. this calls for new modelling approaches and opens avenues for further research for the case of cape verde. in particular, it is worth to highlight some pathways for the design of energy scenarios, strategies and policies for the country: – the expansion of the planning model or coupling with an hourly approach to better account for both seasonality and intraday variability, as debated in [78] for the portuguese case. – the sector’s integration (e.g. power, heating/ cooling and transport) would be also further 36 international journal of sustainable energy planning and management vol. 29 2020 planning for a 100% renewable energy system for the santiago island, cape verde explored. a theoretical potential to reduce curtailment might be achieved by this sector’s integration [76]. the authors of [79] identified a great potential of sector’s integration in reducing the storage size. the use of homer energy or energyplan modelling tools would be employed for this task to model santiago’s power system. the inclusion of storage technologies in future versions of the planning model, taking into account the specifications of the system in question characterized by insularity, high res resources seasonality and increasing electricity demand. these could include electric and thermal storage systems but also power-to-gas technologies. the work of [29] already called attention to the need to invest on energy storage systems for mitigating the wind intermittency and minimizing curtailment of wind for higher levels of wind penetration in santiago island, cape verde. the importance of storage for solar pv systems has been also highlighted by [80] for finland. the role of storage with a focus on power-to-gas and long-term storage technologies has been reviewed by [79] which concluded that as more power options may be considered to support the intermittent characteristics of sources, the lower would be the required storage. – the possibility of increasing the level of adoption of emerging energy technologies, such as wave energy resources given the considerable potential of the resource [30] and its integration on the cost optimization model may be also addressed in further research. however, costs of renewable technologies still remain uncertain for the future [81] and the projecting future cost developments may require different approaches able to deal with risk and uncertainty in energy modelling [82]. – the possibility of focusing on distributed electricity generation technologies in the form of renewable-based microgrids was debated in [27] and should be considered in the planning model, along with off-grid electrification projects [31], demand-side options, and technologies requiring the involvement of the consumer (e.g. electric vehicle). although this may imply significant investments and shift on the energy policy status quo, it will expedite the transition process and will contribute to reducing the amount of losses in the system. – the use of future demand-side management strategies may also contribute to the operation of a fully decarbonized electricity system, especially during low renewable resources availability times. the shutdown of desalination plants could be implemented by using a direct load control, for example [83]. however, the authors of [84] investigated the role of desalination plants in a 100% renewable energy context for saudi arabia and highlighted a relatively low flexibility potential of desalination plants compared to the combination of solar pv and battery storage systems, for example. – the inclusion of a sustainability perspective on the planning approach, which would go beyond carbon emissions but would also recognize the need to include social externalities that may come from the res development are particularly relevant on such a still developing country towards a just energy transition. acknowledgments this paper belongs to an ijsepm special issue on sustainable development using renewable energy 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http://doi.org/10.1016/j.rser.2017.08.077 http://doi.org/10.1016/j.rser.2017.08.077 http://doi.org/10.1016/j.energy.2016.03.080 http://doi.org/10.1016/j.energy.2016.03.080 https://doi.org/10.1016/j.enconman.2018.03.061 https://doi.org/10.1016/j.enconman.2018.03.061 https://doi.org/10.1016/j.est.2018.03.009 http://doi.org/10.5278/ijsepm.4302 _hlk38983302 _hlk39158424 _hlk38987770 _hlk39158623 _hlk38992244 _hlk39158523 _hlk38993210 _hlk38997578 _hlk39158826 _hlk39158411 _hlk38986748 _hlk39163643 _hlk39158503 international journal of sustainable energy planning and management vol. 28 2020 53 *corresponding author e-mail: mate.zavarko@uni-corvinus.hu international journal of sustainable energy planning and management vol. 28 2020 53–70 abstract power-to-gas (p2g) technology is an emerging disruptive solution for renewable electricity integration and energy storage. two significant challenges of its commercialization are the perceived risks associated to its scalability and the cost-benefit ratio of p2g versus other innovative energy storage technologies. its emerging regulatory and business environment significantly limit the accuracy of the financial models, as well. the authors have examined how strategic and innovation management could contribute to the commercialization of the technology despite the above-mentioned challenges. the authors performed action research between 2016–2019 at hungarian technology developer startup power-to-gas hungary kft. research results show that dyad-level open innovation led to a significant opportunity to make new steps towards the commercialization of the disruptive technology. because of the exploitative characteristics of the market environment and emerging regulatory framework, significant needs for complementary resources were identified that would drive successful commercialization. inter-organizational p2g innovation networks and their role in shaping further innovation and the establishment of regulatory sandbox models might be essential to overcome barriers of commercialization of this disruptive technology. 1. introduction one of main trends of the transforming energy sector is the increasing use of renewable energy technologies [1]. renewable energy technologies research [2, 3, 4] is significantly focusing on research areas, such as energy supplies and cost-efficiency [5, 6], regional level integration and coordination [7, 8], or system modelling and data analysis [9, 10]. this paper contributes to several research areas that drive the transformation of the energy industry: challenges related to the integration of renewables into the power system [11], technology investments and implementation [12], theories and tools to overcome these challenges [13, 14], with a special focus on organizational [15] and innovation management [16] perspective. the authors analyse the development and implementation of an innovative energy storage technology, power-to-gas (p2g) with biological methanation. an inter-organizational model of the core technological innovation is elaborated to overcome the challenges of the renewables integration in hungary. nowadays, p2g technologies get increased attention from industry representatives, academia and public sector not only on national level, but on global level, as well. for the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies: the case of power-to-gas zoltán csedőa b, máté zavarkó*a b a department of management and organization, corvinus university of budapest, fővám tér 8., 1093 budapest, hungary b power-to-gas hungary kft, baross u. 36., 5000 szolnok, hungary keywords: power-to-gas; technology development; inter-organizational network; innovation management; action research; url: https://doi.org/10.5278/ijsepm.3388 http://mate.zavarko http://uni-corvinus.hu https://doi.org/10.5278/ijsepm.3388 54 international journal of sustainable energy planning and management vol. 28 2020 the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies example, the store&go project, which is funded by the european union’s horizon 2020 research and innovation programme, is focusing on three variations of powerto-gas implementation in three different countries – but still on demo sites. since 2016, 27 european partners are collaborating in the project [17]. this fact justifies the critical role of inter-organizational innovation networks in case of power-to-gas technology development. the scientific literature of energy storage elaborates the opportunities of p2g technologies for the transforming energy industry [18, 19, 20, 21] and its different technological r&d aspects [22, 23, 24, 25]. based on the overview of blanco and faaij [26], p2g research focuses on levelized cost of energy, process design, time series, business models, technology review, cost optimization, life-cycle assessment and projects surveys, but does not focus on the managerial challenges of the technology development and commercialization. the p2g technology has not been widely commercialized, yet [27]. the authors believe that research focusing on innovation management aspects of p2g technology development would add significant value to the commercialization of this technology on a wider scale, as well as could serve as a benchmark to other disruptive technologies for successful commercialization. although this research has been undertaken in hungary, focusing on local inter-organizational innovation networks, the research concept can be extrapolated internationally to countries and institutions collaborating to develop a disruptive technology and reaping similar benefits. consequently, the findings of this research show how organizations could collaborate to exploit a disruptive technology and help decision-makers in supporting technology development according to the complementary resources on organizational, national or regional level. quantitative research in this field highlight important operative (e.g. efficient reactor structure) or system level (e.g. impact on the energy sector) cause and effect relationships between key variables. in contrast, this research enables a deep insight into the p2g technology development in a given context (hungary) and highlights factors (opportunities, barriers, interests, perceived benefits) that lead to the formation of an inter-organizational p2g innovation network. a continuous iteration between the empirical research and management theory in this study is crucial because through this methodology the findings a) emphasize the importance of inter-organizational networks in developing disruptive technologies b) add “soft” management aspects to the p2g discourse c) show that action research of new energy technologies is possible, and most importantly, not only possible but important and effective to generate social change. figure 1 shows the most important characteristics of this research. the combination of these managerial aspects in the power-to-gas research field is a significant research gap, and combining these methods could lead to answer the research question from the empirical research environment and lead to social change. in the following chapters, the background, methodology, and key results of a three years long action research will be presented, as follows: opportunities for deployment of p2g technology in hungary barriers of scaling-up and commercializing this disruptive technology solution: formation of an inter-organizational innovation network. in line with the fundamentals of action research and grounded theory, the authors are going to discuss the findings and draw conclusions iterated with related literature. 2. background in this section, the authors highlight those important characteristics of power-to-gas technology, the concrete research background, theoretical considerations and previous empirical results which had an impact on formulating the research question and framed the research. methodology: action research supported by grounded theory research topic: power-to-gas this research theoretical background: management, networks, innovation figure 1: characteristics of the research: research topic, theoretical background and methodology international journal of sustainable energy planning and management vol. 28 2020 55 zoltán csedő, máté zavarkó 2.1. introduction of the power-to-gas technology energy storage is crucial to reach an increasing renewable energy supply [28]. the p2g technology is an emerging disruptive solution for renewable integration and energy storage by converting surplus electricity to biomethane which can be injected into the gas grid to store and transport it efficiently [26]. p2g also decreases the operating risks of tsos by providing flexible balancing services. it contributes significantly to decarbonization efforts by using carbon dioxide in the methanation process [29]. according to blanco and faaij, p2g technology means “power conversion to hydrogen through electrolysis with the possibility of further combining it with co2 to produce methane” [26, p. 1049]. there are other definitions in the literature [29, 30, 31, 27], as well, however, this approach is best suited for this research, because it differentiates the two main market segments of the p2g industry: power-to-hydrogen (p2h) and power-tomethane (p2m). this approach also fits the areas of use of produced hydrogen [31]: direct utilization (e.g. as fuel), injection into the gas grid by its safety limits [32, 33], combining with carbon dioxide to produce methane. this research focuses on the p2m segment, that is characterized by two dominant approaches: the catalytic (or sabatier) and the biological methanation technologies [30]. the sabatier process utilizes nickeland ruthenium based catalysts [31], while the biological methanation happens by methanogen microorganisms as biocatalysts [30]. the efficiency of biological methanation is higher (more than 95%) than in the case of the sabatier process (70–85%) [26]. the product gas with high methane content can be directly injected into the gas grid, can be used for heating, fuelling or industrial processes [27]. based on baleira et al. [29], catalytic methanation has been known since the 1970s [30] and more projects have been running with catalytic methanation, than with biological methanation. considering the higher efficiency of biological methanation, as well, one could argue that its innovativeness (which can be associated with newness, development, change, learning, improvement, value creation [34, 35, 36] ) is higher than the innovativeness of catalytic methanation. 2.2. research background the authors conducted action research with the involvement of p2g technology developer power-to-gas hungary kft. the company plans to build industrial-scale p2g facilities with biological methanation (up to 10 mw). power-to-gas hungary kft. has been founded in 2016 and developed an innovative lab scale p2g prototype in cooperation with electrochaea gmbh, the developer of the largest p2g facility in the world with biomethanation, located in avedøre, denmark (1 mw) [37]. in both cases, the p2g reactor contains a proprietary biocatalyst, which is an optimized strain of archaea (methano thermobacter thermautotrophicus). the robust, highly selective and efficient strain was developed at the university of chicago [38, 39]. the conversion is carried out by basic reactions and mediated by the biocatalyst employing a unique set of enzymes [40, 41]: power-to-hydrogen: 4h2o→4h2+2o2+heat (electrolyzer) hydrogen-to-methane: co2+4h2→ch4+2h2o (biocatalyst) the stoichiometry of the second reaction requires four moles of hydrogen and one mole of carbon dioxide to yield one mole of methane. using its innovative lab-scale prototype, powerto-gas hungary kft conducted r&d activities from april 2018 to july 2019. based on the values of the product gas of almost 10 000 measurements within this period, powerto-gas hungary kft demonstrated the applicability of the technology in hungary, collected and analysed empirical data for further development. 2.3. research question both academics and industry experts agree that p2g technologies could play crucial role in the future of the energy sector. there are, however, two significant challenges of commercialization of p2g technologies: perceived risks associated to its scalability and the cost-benefit ratio of p2g versus other innovative energy storage technologies [30, 31, 27, 29]. the authors would like to contribute to addressing these challenges with this research. on the other hand, the research is built on an inter organizational network perspective, since several scholars argue that collaborations and networks among industry representatives could significantly increase innovation performance through combining complementary capabilities [42, 43, 44]. by following action research supported by grounded theory, not only the theory and the data were iterated and continuously forming, but the research question as well. while the initial question was rather a holistic strategic management question (“how to develop and commercialize p2g technology in hungary?”), the final, narrowed research question was: 56 international journal of sustainable energy planning and management vol. 28 2020 the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies how could inter-organizational networks and innovation management contribute to commercial development ambitions and scale-up of an innovative p2g technology, as well as to increase its efficiency? based on action research, the authors aimed to build a bridge between technological, commercial and managerial aspects, as well as between theory and practice of p2g technology development and commercialization. 2.4. research framework there are significant changes in several energy market segments driven by global trends [45], especially sustainability efforts [1], decentralized and smart solutions [46, 47], energy efficiency and energy security [48]. sustainability even appeared at many organizations as an additional goal besides profit-maximizing and growth [49]. significant infrastructural challenges have also emerged in case of tsos and dsos, as decentralized energy production and consumption are not fully compatible with current physical and it systems [50, 46]. meeting these challenges are limited by general management related factors and by industry-specific factors. from managerial aspect, realizing strategic ambidexterity is difficult because exploitation (efficient operation on current business areas) and exploration (searching for new opportunities, innovation) are competing for the same resources and are contradictory from several aspects [51]. organizations tend to follow their exploitative routines because of their path dependency [50, 51]. from the industrial aspect, nisar et al [52] found that the strict regulation and the rigid institutional background in the national energy markets result in less open, less collaborative, less innovative structures at large energy companies. costa-campi et al [48] argued that large company size means slow, and long decision procedures related to r&d&i activities. this problem is widely spread in the energy sector, where market concentration and company size is usually high. moreover, several studies concluded that the dominance of current technologies obstructs the development and implementation of new, renewable energy technologies [53, 54, 55]. consequently, the development and implementation of new technologies (e.g. p2g technologies) could be limited by exploitative routines and path dependency of large energy companies. according to management literature, collaboration with external partners [56] could add, however, significant value in such cases. complementary resources can be essential for profiting from technological innovations, which can be ensured by collaboration partners, as well [42]. as a consequence, a network-based innovation approach could significantly contribute to competitiveness and efficiency [57]. change aspects also emerge concerning innovation [58, 59, 60], as the dynamic reconfiguration of organizational capabilities could result in strategic actions and innovations which could shape the business environment [61, 62, 63]. internal organizational capabilities can be combined with the capabilities of external partners, that could result in even disruptive innovations that are able to generate change in the industry [64]. figure 2 summarizes the theoretical framework of the research: 1. the changing environment (here: higher share of renewables in the energy sector) means an adaptation challenge [65, 66, 67, 42] for energy companies. 2. energy companies should facilitate exploration for renewal [68, 69], for example searching for new opportunities and technologies (here: p2g). facilitating exploration and innovation generate internal (organizational) change [60], which is needed because of path dependency and exploitative routines [51, 51, 56]. 3. energy companies need to build interorganizational collaborations (e.g. with start-ups or research centres) and to combine complementary resources [42] (e.g. core power-to-gas technology, scientific knowledge and extended energy infrastructure) [56, 44], and they should perform innovation management practices [70] (e.g. technology development) together. 4. combining capabilities can shape the business environment [61, 62, 63], and disruptive innovation can be achieved which highly impacts the environment [64] (e.g. efficient, implemented, grid-scale p2g technologies contribute to the higher integration of renewables because of the long-term energy storage function). in sum, inter-organizational networks contribute to the environmental adaptation of organizations, and they have the potential to generate change within the competitive environment. the two main elements of this framework are the strategic approach (the resource-based view) and the innovation approach (network-based, or open innovation). the alternative model of the applied strategic approach could be porter’s framework, according to which the strategy international journal of sustainable energy planning and management vol. 28 2020 57 zoltán csedő, máté zavarkó should be formulated based on the industry structure and the competitive positioning in the industry. in this case, the organization should focus on low-costs or differentiation [71]. in contrast, the resource-based view is based on the consideration that the pace of the change in the external environment is so high that sustainable competitive advantage can be only built on the organizational resources and capabilities [62]. in this case, the strategy should focus on developing and utilizing unique, rare, valuable and embedded capabilities [61]. the resourcebased view is more appropriate in this research than porter’s framework which is more about positioning and competing than developing and utilizing something unique. in the researched case, the core p2g technology is given, it cannot be discarded, and at the time of the research, no competitors have been identified in hungary in the p2g segment. moreover, scholars have demonstrated in different technology-related cases that focusing on the development of capabilities can facilitate adaptation and innovation [72, 73]. regarding the innovation approach, the alternative model of the open innovation is the closed innovation, where companies perform their innovation activities strictly inside, without involving external actors. chesbrough [44] pointed out that innovation processes could result, however, in higher innovation performance (especially in case of technology development) if they would not stop at organizational or even industry boundaries, involving other organizations or groups such as suppliers or customers [44]. open innovation paradigm is not only a trending practice but a viewpoint of analysis, as well. the authors take vanhaverbeke’s [74] categorisation as a starting point, which identifies dyad-level open innovation and inter-organizational networks as levels of analysis of open innovation. 3. research methodology the authors performed action research between 2016– 2019 at power-to-gas hungary kft. action research is a useful tool in management and organization research [75, 76, 77, 78] and has been used in the energy industry, as well [79, 80, 81]. action research is a participatory and empirical process, meaning a constant iteration between social actions and the research of the actions undertaken, connecting theory and practice, and acquiring new knowledge to solve complex problems by generating change [82, 83, 84]. the conducted action research is close to the collaborative inquiry concept [85], as authors of this paper have external change innovation strategy internal change changing environment facilatiting exploration building openness and inter-organizational collaborations networked innovation, combining complementary resources (disruptive) innovation with impact on the environment adaptation challenge and strategic decisions figure 2: network-based innovation as internal and external change driver (theoretical framework) 58 international journal of sustainable energy planning and management vol. 28 2020 the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies been fully involved in the process as co-researchers aiming to improve their propositional knowledge ( introduced in the second chapter) through practice and experience. following mcniff’s [84] guidelines, the authors must define that (1: what we do?) they develop and implement the p2g technology on grid-scale in hungary (2: how we do this?) by analysing the role of inter-organizational networks and pro-actively engaging in inter-organizational networks in relation with p2g technology development and commercialization (3: why we do this?) to contribute to the sustainability and energy security efforts on the national and global level. as the research approach to this topic is managerial and involves change aspects, as well, the authors built the three years research process on the three phases model of lüsher and lewis applied in their similar managerial research topic [75]: 1. in the groundwork phase, building on findings of a literature review about innovation management challenges in the global energy sector, the authors aimed to create an overall understanding of the changing energy sector in hungary. 15 semistructured interviews were conducted in this first phase with local industry experts. as secondary data, corporate documents were analysed, as well. 2. in the interventions phase, three main milestones were undertaken, as follows: ◦ an innovative p2g prototype has been developed in hungary in collaboration with electrochaea gmbh and started intense r&d activity; ◦ new partnerships, inter-organizational networks have been built with potential stakeholders of the large-scale implementation of p2g technology; ◦ an own digital, p2g r&d platform has been developed facilitating open innovation. these activities can be considered as social actions through the lens of action research. all these actions were continuously combined ◦ with semi-structured interviews of the potential partners and stakeholders (more than 30 interviews in this second phase); ◦ with the analysis of publicly reachable and confidential documents (more than 500 pages), as the triangulation of the primary interview-data; ◦ iteration between the data and the theoretical framework. the authors followed qualitative methodology and iterated the empirical experiences in line with grounded theory fundamentals (e.g. making theoretical memos besides field notes, reaching theoretical saturation) [86, 87] to prepare the third phase. 3. in the theory-building phase, the authors synthesized the empirical findings with previous theories. to improve validity, the findings were presented to other scholars from different disciplines (engineering, biotechnology, management, legal) and industry partners (as potential collaboration partners in innovation). according to their feedback, findings and conclusions were finalized. in-line with qualitative research methodology, in order to improve validity, the authors explored the research area deeply – that is why the research lasted three years and it was enough to reach the theoretical saturation reliability, the authors fine-tuned the conclusions after consulting with other scholars and stakeholders generalizability, the authors iterated the data with theory to create a substantive theory which is only valid in a given context and might be applied in similar cases. 4. results in line with the iteration between action and research, empirics and literature, the authors are going to summarise the findings while highlighting the relations and contributions to the current literature. the following results show what happened (happens) on the field (in hungary with power-to-gas) and/or how it appears in the literature, while conclusions will connect these results with the theoretical framework to create a substantive theory. 4.1. the opportunity: importance of p2g technologies in hungary the development of p2g technologies are in line with local industry trends and existing infrastructure. according to the new national energy strategy 2030, the international journal of sustainable energy planning and management vol. 28 2020 59 zoltán csedő, máté zavarkó installed capacity of electricity generating units from photovoltaic sources will exceed 6 000 mw by 2030 from ~1 000 mw of 2018 [88, 89]. considering the volatility of the dominant ratio of the photovoltaic panels in this 6 000 mw (around 85%), and the planned increase of nuclear capacities, the development of large-scale energy storage technologies is a high priority [88, 89]. even if the storage capacity of the accumulators could reach 100 mw [90], it is an extremely small volume compared to the 6,33 billion m3 storage capacity of the hungarian national gas grid [88, 89]. in terms of co2 sources, the theoretical p2g potential in hungary is around 1 gwel, based on the co2 output of anaerobic digestion plants (co2 in raw biogas) and bioethanol plants (co2 as a by-product) [91]. if one takes into account that “hungary imports 80% of its natural gas” [89, p. 16], p2g technologies might have great importance in hungary for large scale energy storage, and also for reducing the dependence on natural gas import. 4.2. barriers of scaling-up and commercializing this disruptive technology the authors found industry-specific and technology specific barriers in hungary which hampers the scaling-up and commercialization of the p2g technology. 4.2.1. industry-specific barriers of innovation despite the opportunity created by an innovative techno logy for large-scale energy storage, there are several factors which limit further technology development. in line with teece [42], innovative developers would need complementary resources (such as capital, infrastructure, knowledge and experience related to the grid operations) to scale-up the technology. even though these resources could be granted by other industry partners (e.g. traditional large energy companies), which could also profit from accessing new technologies [92], there are industryspecific factors associated with systems, culture and knowledge, both inside and outside energy companies, which impede the development of any disruptive technology. table 1 shows those impeding factors which were identified by the 15 semi-structured interviews with industry experts who are/were working for power or gas companies (e.g. dsos, tsos) and are/were participating in innovation-focused initiatives. “industry” in this case covers only the gas and the power industry segments (and does not cover the oil companies). these two segments are the most relevant from the aspect of the p2g, as these technologies can connect the power and the gas systems. the listed elements in table 1 are common impeding factors in the power and the gas industry segments. based on the interviews, many of these impeding factors derive from the rigid institutional background of the industry. in a market environment with such a high need for stability on short-term, large industry players are not incited to invest their resources for exploration and disruptive innovations. 4.2.2. p2g technologies-specific barriers of further development synthesizing the literature with empirical data, not only industry-level challenges limit the development of p2g technologies, but p2g technologies-specific factors as well: a) despite the biomethanation technologies are highly efficient (the rate of carbon dioxide conversion can be above 99% under optimal circumstances based on the data of the prototype), there are two efficiency challenges in different levels. 1) on sector-level, the problem with efficiency is the higher electricity input upstream, higher pace of res deployment (on top of what is already needed for electricity demand growth) and possibly reaching the maximum potential in some areas. high pace of res deployment table 1: impeding factors of innovation in the power and gas industry segments external factors internal factors (in case of traditional energy companies) systems rigid institutional background and strict regulations strong hierarchy and control incentives for stability and good short-term performance culture low motivations for entrepreneurship risk aversion low willingness to collaborate knowledge decreased access to innovative ideas on expert level missing knowledge about managing highly innovative projects 60 international journal of sustainable energy planning and management vol. 28 2020 the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies also increases maintenance costs of tsos, which could be solved by deliberate sizing and location of more p2g facilities. 2) on technology-level, the efficiency of overall energy conversion could be increased. for example, the utilization of waste heat for power generation could be another source for biomethane production. the produced waste heat at 70 co, however, is currently too low for efficient electricity production which indicates the development of new technology solutions [93]. moreover, there are other uncovered research areas in case of new biomethanation solutions: other types of reactors, stirring or nutrition of biocatalysts could also affect the overall efficiency of energy conversion. b) regarding scalability, also two key points should be discussed: 1) financing: assuring a reasonable return of investment is an important challenge because of the high costs of new technologies involved. the return of investment (mainly because of the high prices of electrolysers [94]), can be realized only over 10 years. industrial-scale p2g facilities need low cost electricity [94], the electricity costs being the highest amount (43%) of the full production costs/kg methane. this meant 0,83 €/kg methane for electricity [94]. 2) co2 availability: finding ideal sites for p2g facilities might also be challenging because of large volumes of carbon dioxide are needed: for example, a 2 mw p2g facility would need ca. 105 nm3 carbon dioxide per hour. the access for proper carbon dioxide sources (gathered, efficiently useable, without harmful contaminants for biocatalysts) might be also difficult. this amount could be sourced only at larger wastewater treatment plants, agricultural biogas plants or bioethanol plants since current costs of carbon capture and storage technologies are rather high. further more, a p2g facility would need a nearby connection for the natural gas grid for efficient storage and transport. if there is no connection for the natural gas grid on the site, compressing the biomethane to cng fuel would require new investments, meaning higher operation costs, as well. [30, 26] c) p2g technology could contribute to reaching national and regional energy policy objectives and could solve significant challenges of grid balancing [31]. there are, however, significant legal and regulatory barriers. 1) hydrogen production, storage and injection into the natural gas grid are challenged by safety and administrative requirements in some countries (e.g. spain), but there are also incentives for production or usage in other countries (e.g. belgium) [95]. regarding the biomethane production, feed-in tariffs were introduced in many eu member states as incentive (e.g. france, germany). there are several legal and regulatory details which should be answered to support p2g technologies: e.g. clarification of the aim of the technology (energy storage and/or gas production), harmonisation of quality standards, shaping a system for network tariffs for energy storage [96]. 2) the regulation of the mentioned feed-in tariffs and energy storage tariffs as revenue streams could be critical because of price disparity between the electricity and the biomethane. this could lead to very small incentives for such energy conversion. financial sustainability also depends on the price of the sourced co2 as well [97], regarding which a favourable trend could help the spread of the p2g technology. if “carbon tax” [95] and similar additional costs of co2 emissions increase, large co2 producers will be interested to find alternative solutions which increases the bargaining power of the p2g operators on the co2 price. based on the iteration of the perceptions, experiences of the stakeholders in the power-to-gas segment of hungary and the power-to-gas literature, table 2 summarizes the complex challenges and the required actions, which should be realized to exploit the potential of the technology. 4.3. solution: overcoming barriers of innovation with an inter-organizational innovation network according to power-to-gas hungary kft’s business model, the primary value propositions [98] are providing innovative energy storage solutions and producing biomethane, as the environment-friendly international journal of sustainable energy planning and management vol. 28 2020 61 zoltán csedő, máté zavarkó alternative of natural gas. the key resources of value creation are knowledge capital that is achieved from r&d and prototype operations, as well as financial and technical resources for plant establishments. as power-to-gas hungary kft. is a technology start-up founded in 2016 focusing on its core business (technology development and related project management), these resources could all be assured with the involvement of key partners. the need for key partners is not unique in the p2g industry. according to the analysis of baleira et al [29] of more than 40 p2g projects, 3–4 partners have collaborated on average. considering the newer and more efficient biomethanation technology [26] the need for partners might be even higher. for example, electrochaea, strategic partner of power-to-gas hungary kft., or microbenergy, subsidiary of viessmann group established their biomethanation facilities with the participation of seven other organizations: strategic and financial investors, professional service providers, state administration institutions, traditional energy companies, research centres [29]. to make a step forward in the research of p2g, the authors identified those motives and conditions that frame the collaboration of potential partners. a) p2g technology developer companies do not own all financial and infrastructural resources to scale up the technology but have disruptive core solutions, based on that profitable business models could be built. if complementary resources (broad industry-specific knowledge, infrastructural equipment, and related investment) are granted by strategic and financial investors, innovation and business opportunities could be realized: a. profits for p2g developer companies; b. synergies with core business for strategic investors; c. high returns for financial investors; d. high impact on local energy system manage ment and sustainability targets. b) there are many uncovered, or not fully covered topics related to the technology for further research and development (e.g. utilization of by-products, nutrition of biocatalyst, modified reactor structures), which could increase the efficiency of the technology. these areas cannot be individually researched by a start-up with limited resources and clear strategic focus, but research centres, other start-ups or consulting companies could participate in developing further such improvements of the technology. the local energy sector is strongly regulated, the rigid institutional background and stability-focused short-term incentives do not support the utilization of disruptive innovations. that is why governments are always key stakeholders regarding the commercialization of p2g technology in grid-scale. it is found that two actions could lead to favourable changes of the legal environment: a) collaboration partners need to demonstrate the viability of local business models and future development opportunities of p2g technology with the involvement of local research and development, and local commercialization of the technology in small-scale. table 2: p2g technology-specific challenges in hungary and required actions level of challenges topics examples of subtopics required actions micro-level technology: the efficiency of overall energy conversion reuse of waste heat reactor structure nutrition of biocatalyst further r&d meso-level efficiency on sector-level high pace of res-deployment maximum potential scenario analyses, deliberate location and sizing scalability financing: investment volume raising capital co2 availability: sourcing carbon dioxide finding distribution channel involving experts from other energy market segments macro-level legal and regulatory environment clear definitions and regulations financial incentives for renewable energy storage financial incentives to produce green gas change of legal environment 62 international journal of sustainable energy planning and management vol. 28 2020 the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies b) a regulatory sandbox model would be a great first step to test the viability of local business models in a real business environment. a regulatory sandbox model means a unique legal framework for disruptive technologies in which certain laws and obligations could be applied in a modified version for the test period of the technology. the concept originates from the uk where fintech solutions needed special conditions to prove their value. in 2019, there were more than 50 operating or planned regulatory sandboxes in different sectors, such as telecommunication, data or environment protection, globally [99]. there are examples in the energy sector as well: the energy market authority in singapore has introduced a regulatory sandbox for new energy products and services to leverage new technologies [100, 101]; the netherlands also created a local experimental environment for innovative energy services [102]. even though the regulatory sandbox model is relatively new, the volume of available data is limited, so measuring its impacts is difficult, it is expected that open and active dialogue between regulators and innovators can result in better regulatory assessment for innovations, and can decrease uncertainty for investors [99]. although the current hungarian legal and regulatory environment does not contain incentives for the development and operations of innovative energy storage technologies yet, the new national energy strategy 2030 of hungary (introduced in january 2020) aims to develop a regulatory environment which supports the commercialization and utilization of the p2g technology. furthermore, other actions are assigned which can be financially supported as well: a) installing a pilot p2g facility which is capable to inject biomethane into the natural gas grid b) building a 2,5 mwel p2g facility c) developing a mandatory national purchasing system for biomethane to incite biomethane production [89]. the appearance of the p2g technology in the new national energy strategy can be considered as a significant achievement and recognition of the work of the hungarian p2g technology-oriented inter-organizational networks. 5. discussion: understanding the role of interorganizational innovation networks in the p2g technology development taking a step back, one could see that the research and development results achieved with a special archea strain created economic and environmental opportunity [103]. this opportunity led to a dyad-level open innovation, developing a p2g prototype with a proprietary biocatalyst and demonstrating the viability of the business model. the exploitation of p2g technology innovations, however, requires more than that: an inter-organizational innovation network. its commercialization requires significant complementary resources, further development of the technology on related fields, and changes in the local legal environment. results imply that dyadic collaborations and inter-organizational innovation networks can have different characteristics of open innovation. dyadic collaboration is rather temporary to solve a clear problem or create a new solution, while inter-organizational innovation networks could mean a long-term commitment or continuous collaboration for further incremental development on complex areas related to the previously created core solutions, driving the commercialization of the technology, and might also be able to have significant impact on legal and institutional environmental changes. table 3 illustrates the characteristics of open innovation based on p2g technologies development and commercialization, the needed inputs from partners for a scaled-up and efficient p2g technologies, and potential outputs which would add value to them. the table is built on empirical data from the interviews, it does not contain every possible combination of actors or inputs/ outputs, but it highlights the clear need for collaboration. it means that this is not a prescriptive but a descriptive table, as it shows that what was needed to have an impact on the institutional environment. table 3 shows that exploiting the technological innovation requires complementary resources which can be granted by several stakeholders. if one or more stakeholder is missing from the network, it can (1) increase investment costs (e.g. if there is no strategic investor who is interested to share its infrastructure expecting future synergies), (2) lead to lost opportunity (e.g. if there is no scientific research, which could increase efficiency), (3) make the project impossible (e.g. there is no core technology, financial resources or supporting legal and regulatory environment). http://environment.table international journal of sustainable energy planning and management vol. 28 2020 63 zoltán csedő, máté zavarkó t ab le 3 : c ol la b or at io n s le ad in g to s ca le d -u p a n d e ff ic ie n t p ow er -t oga s te ch n ol og ie s in h u n ga ry d ya d ic c ol la b or at io n in te ror ga n iz at io n al i n n ov at io n n et w or k theoretical aspects n u m b er o f co ll ab or at or s 2 m or e th an 2 t em p or al it y t em po ra ry /s ho rt -t er m c on ti nu ou s/ l on gte rm d ev el op m en t p ro b le m s to so lv e c le ar , fo cu se d u nc le ar , di ff us ed n u m b er o f d ev el op m en t p ro b le m s to so lv e f ew m an y g oa l of d ev el op m en t in g en er al t o cr ea te s om et hi ng n ew , di sr up ti ve s ol ut io n t o ut il iz e an d de ve lo p a di sr up ti ve s ol ut io n in cr em en ta ll y empirical data l oc at io n o ut si de h un ga ry in si de h un ga ry c ol la b or at or s u ni ve rs it y/ r es ea rc h ce nt re b io te ch no lo gy — p 2g de ve lo pe r co m pa ny p 2g t ec hn ol og y de ve lo pe r co m pa ny s tr at eg ic i nv es to r (e .g . t s o o r d s o ) f in an ci al in ve st or u ni ve rs it y/ r es ea rc h ce nt re o th er s ta rt -u ps , m an ag em en t co ns ul ti ng co m pa ni es g ov er nm en t, s ta te ad m in is tr at io n g oa l of d ev el op m en t in t h e ca se o f p 2g te ch n ol og y d ev el op m en t 1) d is co ve ry o f th e pr op ri et ar y bi oc at al ys t 2) d ev el op m en t of a pr ot ot yp e 3) s ca li ng -u p an d co m m er ci al iz at io n of t he t ec hn ol og y in cr ea si ng t he e ff ic ie nc y of t he t ec hn ol og y a ch ie vi ng f av ou ra bl e le ga l an d in st it ut io na l en vi ro nm en ta l ch an ge s in p u t r & d k no w le dg e an d ca pa ci ti es c or e te ch no lo gy l oc al e xp er t kn ow le dg e, bu si ne ss de ve lo pm en t in no va ti ve te ch no lo gy an d pr oj ec t m an ag em en t e xt en si ve in fr as tr uc tu ra l re so ur ce s, s ec to rsp ec if ic k no w le dg e f in an ci al re so ur ce s r & d kn ow le dg e an d ca pa ci ti es e xp er t kn ow le dg e, in no va ti ve se rv ic es , so ci al ca pi ta l s up po rt in g le ga l en vi ro nm en t o u tp u t of t h e si n gl e or ga n iz at io n p ub li sh ab le re se ar ch re su lt s, p at en t m ar ke tab le pa te nt in te rna ti on al bu si ne ss in no va ti ve te ch no lo gy in no va ti on an d pr of it s yn er gi es w it h co re bu si ne ss p ro fi t (e xi t) p ub li sh ab le re se ar ch re su lt s n ew p ro je ct s an d bu si ne ss op po rt un it ie s r ea ch ed en er gy p ol ic y ob je ct iv es o u tp u t in b ro ad er s en se e co no m ic a nd e nv ir on m en ta l op po rt un it y e xp lo it ed t ec hn ol og ic al i nn ov at io n (e xp lo it ed o pp or tu ni ty ) w it h im pa ct o n th e en er gy s ec to r 64 international journal of sustainable energy planning and management vol. 28 2020 the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies 6. conclusion and contribution this paper analysed the role of inter-organizational networks and innovation management related to p2g technology development and commercialization. based on a three years long action research, two dyadic collaborations led to the development of an innovative p2g prototype, representing a significant opportunity for industry-scale local energy storage, grid-balancing and higher integration of renewables. it has been shown that industry-specific and p2g technology-specific challenges might limit the exploitation of the innovation potential of this disruptive technology. to overcome innovation barriers, the dyad-level open innovation seems not enough. the research results demonstrated that interorganizational innovation networks might be essential to achieve breakthrough results in increasing the efficiency of p2g technologies, scaling them up and prove their value for local decision-makers in small-scale. these actions are also needed to initiate legal environmental changes locally. the rigid regulatory environment and incentives for shortterm performance are the most significant limiting factors of further innovation and commercialization. figure 3 summarizes these findings. in case of these networks, a rather cyclic than linear model could be drawn. the appearance of the p2g technology in the national energy strategy could be interpreted as a new opportunity. this means that the inter-organizational innovation network had an impact external change innovation involvement of research centres and start-ups — dyad-level open innovation (p2g technologies) strategy internal change changing environment higher integration of renewables p2g in grid-scale government support (legal environment change supporting p2g) inter-organizational innovation networks (increasing efficiency and scaling-up p2g) need for transformation in th energy sector (disruptive) innovation with impact on the environment adaptation challenge and strategic decisions networked innovation, combining complementary resources facilatiting exploration and explorative learning opportunities related to innovative p2g technologies strict hierarchy, closed culture, missing knowledge limiting innovation inside (in large power and gas companies) rigid institutional background limiting innovation outside (in the power and gas industry segments) building openness and inter-organizational collaborations figure 3: innovation and change opportunities in the energy sector through p2g technology development and commercialization (empirical findings aligned with the theoretical framework of the research) international journal of sustainable energy planning and management vol. 28 2020 65 zoltán csedő, máté zavarkó on the institutional environment, and the new environment will mean new opportunities for the actors of the energy sector (and maybe challenges to others). these findings emphasize the importance of inter organizational innovation networks in facilitating the development of a more favourable socio-economic environment that would incite p2g technology development and commercialization. this study shows that action research, iterating theory and practice is important to generate social change in the energy sector. for example, the micro social actions which have been undertaken (e.g. prototype development, business development, it development, searching for partners, forming alliances) assured a solid local basis for the hungarian p2g know-how and competencies, and had an impact on the institutional environment. 7. limitations and future research building on the theory of action research, as well as grounded theory, the conclusions can be considered as a substantive theory [86], which is valid in a given research context. nonetheless, there are many other complementary areas which could be researched with different methodologies or in different research contexts. the findings of this paper could serve as opportunities for further research in other countries about the role of inter-organizational networks in the improvement and exploitation of p2g or other innovative technologies. the research was based on general management theories and iteration of empirical data with international sector-specific literature. the country-specific factors (e.g. current energy policies, infrastructural resources) could modify, however, the role and the structure of inter-organizational innovation networks in the development of p2g technology. the authors focused only on the innovation management side of p2g technology, but its effect on the future of the local energy sector could also be researched with quantitative methods. there are limits and future research opportunities which derive from the followed methodology. this qualitative study gave an insight to key factors that lead to the formation of an inter-organizational p2g innovation network. a future quantitative analysis could be applied to examine the power-to-methane segment for example with the technological innovation system (tis) model [104]. similarly, as action research was focusing on generating new research results and social change parallelly, some interesting points have not been covered, such as evaluating the performance of the network and its impact on the environment [105], identifying its critical success factors with statistical methods [106] or exploring how inter-organizational governance could or should work in this segment [107]. finally, the ‘ideal’ framework of a local regulatory sandbox model could also be analysed much deeper, which would certainly require a detailed overview of the local regulatory environment. despite these issues for further exploration, the authors believe that their findings would contribute to the commercial implementation of p2g technologies by the establishment and pro-active management of well focused inter-organizational networks. acknowledgements the 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������� ��� ���� �� ����!� ��� ���� a b s t r a c t the european energy policies about climate and energy package, known as the “20-20-20” targets define ambitious, but achievable, national energy objectives. as regards the directives closely related to the 2020 targets, the eu energy performance of buildings directive (epbd recastdir 2010/31/eu) is the main european legislative instrument for improving the energy performance of buildings, taking into account outdoor climatic and local conditions, as well as indoor climate requirements and cost-effectiveness. the epbd recast now requests that member states shall ensure that minimum energy performance requirements for buildings are set “with a view to achieving cost-optimal levels”. the cost optimum level shall be calculated in accordance with a comparative methodology framework, leaving the member states to determine which of these calculations is to become the national benchmark against which national minimum energy performance requirements will be assessed. the european standards (ensumbrella document v7 (prcen/tr 15615) are intended to support the epbd by providing the calculation methods and associated material to obtain the overall energy performance of a building. for italy the energy performance of building simulations epbs must be calculated with standard units 11300. the energy building behaviour is referred to standard and not to real use, nor climate or dynamic energy evaluation. since retrofitting of existing buildings offers significant opportunities for reducing energy consumption and greenhouse gas emissions, a case study of retrofitting is described and the costoptimal level eu procedure in an italian context is analysed. following this procedure, it is shown not only that the energy cost depends on several conditions and most of them are not indexed at national level but also that the cost of improvement depends on local variables and contract tender. the case study highlights the difficulties to apply eu rules, and allows verifying whether this methodology could be used as thermo-economic analysis for investment decisions in energy efficiency improvements and refurbishment in italy or similar regions. in the case study here analysed, the choice of the best energy efficiency measures derived from the cost optimal level methodology underlined the importance of the building typology, the reference market and also the building location in applying this methodology. keywords: energy efficiency in buildings economic evaluation cost-optimal level energy-building-performance evaluation url: dx.doi.org/10.5278/ijsepm.2014.3.5 https://dx.doi.org/10.5278/ijsepm.2014.3.5 50 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy 1. introduction the buildings are responsible for approximately 40% of global energy consumption of european union and about 36% of the european union’s carbon dioxide (co2) emissions, as highlighted in directive 2001/91/ec [1] and directive 2010/31/eu (recast) [2], followed by transport (32%), and industry (25%). this means that the residential sector has a great energy saving potential with respect to the others and that all the subjects involved in the sector (owner, lessor, builder, designer, architect, engineer, thermo-technical engineer, real estate agency, energy trader, etc.) should be formed and coordinated in order to promote energy saving. the directive 2010/31/eu requires member states to establish and apply minimum energy performance requirements for new and existing buildings, ensure the certification of building energy performance and require the regular inspection of boilers and air conditioning systems in buildings. about energy minimum requirements, the directive introduces a further requirement: from 2020 all new buildings must be a nearly zero energy building (nzeb). the recast of the epbd includes a provision that national energy performance requirements should be set with the view to achieving cost optimum levels by applying a harmonised calculation methodology defined in annex iii of the directive and also detailed in delegate regulation (eu) n. 244/2012 of 16 january 2012 [3] it prescribes the calculation of cost-optimal levels from both macroeconomic and financial viewpoints (annex i of the present paper). the aim of cost-optimal-level is to set up a comparative methodology to compare minimum energy performance requirements between eu member states. the new requirement must be ambitious and economical achievable. in order to compare energy requirements all eu member states are requested to define a “reference buildings” (rb), which could be individuated accordingly to european intelligent energy efficiency (iee) programs tabula [4] and asiepi [5], whereas the international rb database and benchmarking is the department of energy (doe) of united states. the balance between cost and benefit is a key-factor of cost optimal level, which could be evaluated by several methodologies, in order to conform each member state legislation and real estate industry. the cost-optimal-level approach should be therefore used throughout the design of new buildings or energy retrofits, in order to compare several options and solutions. in that case, all costs are included: building, energy and maintenance costs. the comparative methodology framework described in delegate regulation 244/2012 could be used by member state not only to report to the european commission but also by designers and builders to evaluate energy efficiency scenarios and increase real estate values. several studies from building performance institute of europe report examples of adoption of the cost optimal level procedure [6, 7] for italy and estonia. moreover, the energy efficiency measures for building may be considered as an increase of real estate value in relation to the energy classification improvement, for example from energy class d to energy class a, as described in [9, 10], or also in building and energy efficiency measure in national policies [11]. in this paper, we adopt the delegate regulation (eu) n.244/2012 procedure and do not consider real estate value. the aim of this paper is presenting a case study for the energy retrofit of a residential building applying the cost optimal level methodology and verifying if this methodology could be applied as thermoeconomic analysis in order to decide whether or not to invest in energy efficiency improvements and refurbishment. in particular, the following section 2 describes the framework methodology to identify cost optimal level of energy performance summarizing the provisions or the epbd recast dir regarding calculating and achieving cost-optimal requirements. in the section 3 a reference case study of energy retrofit for a bi-familiar villa is presented evaluating the energy performance index (epi) for each intervention following the italian standard units 11300. therefore the cost optimal level procedure has been applied. the section 4 presents the results of the cost optimal level methodology considering both the macroeconomic/financial viewpoint and the global ep. the final section 5 highlights the main recommendations and further research directions. 2. comparative metodology framework for calculating cost optimal levels the aim of directive 2010/31/eu is to improve the energy performance of building in the eu, with new requirements for ‘building elements’, ‘technical building system’ and nearly zero energy building (only for new buildings). all these requirements must consider the related cost-effectiveness. in annex iii a general methodological framework to evaluate cost and benefit is defined, and requires member state to provide: (1) definition of buildings reference for existing and new buildings, both dwellings and not dwellings, based on geographic and climate zone; (2) definition of energy efficient improvement scenarios; (3) evaluation of energy primary of all reference buildings, for all the scenarios; (4) calculation of cost for each scenario expressed with net present value (npv) during the life economic cycle (or lifespan); (5) evaluation of effectiveness minimum energy requirements and determination of cost-optimallevel. the energy minimum requirement, defined by methodology framework of annex iii, is upgraded every 5 year, in order to follow the evolution of building construction. the “delegate regulation (eu) 244/2012” and the “guideline for calculation cost-optimal levels c 1152012” [12] represent two frameworks that define costoptimal levels for each eu member state. the delegate regulation (eu) 244/2012 describes both method and procedure, whereas the “guideline c 115–2012” reports some delegate regulation enlightenment and examples of calculation. 2.1. the reference building and energy efficiency scenarios in order to report the energy efficiency action plans at eu commission, eu member states are requested to relate the minimum energy performance requirement with “reference building”. the “reference building” is a tool to compare all the european legislation as requested by eu commission. they are defined in annex iii as “(…) representative of their functionality and geographic location, including indoor and outdoor climate conditions. the reference building shall cover residential and non-residential buildings, both new and existing ones”. the reference building shall be defined for the following categories of buildings: (1) single-family buildings, (2) apartment blocks and multifamily buildings, (3) office buildings, and (4) other optional buildings: schools, hotels, restaurants, sport buildings, shopping centers or other buildings with relevant energy consumption. the definition of reference building for italy has been adopted by italian ministry of economic development [13] and enea (italian national agency for new technologies energy and sustainable economic expansion) in order to define an italian reference building [14]. the energy efficiency solutions are defined as “all input parameters for the calculation that have a direct or indirect impact on the energy performance of the building, including for alternative high-efficiency systems such as district energy supply systems” (reg 244/2012, annex i, point 2). each single measure (or scenario) should define the energy efficiency measures. for example, a new window constitutes a new scenario as well as a new package or new refurbishment of wall and roof, or the substitution of boiler. the “guideline c 115-2012” at point 4.2 reports: “the number calculated and applied to each reference building should certainly not be lower than 10 packages/variants plus the reference case.” and also: “various techniques can be used to limit the number of calculations. one is to design the database of energy efficiency measures as a matrix of measures which rules out mutually exclusive technologies so that the number of calculations is minimized”. it is clear that the more are the scenarios, the more cost-optimal levels are feasible. moreover, the regulation provides the “reporting template” that member states may use for reporting to the commission data on calculation of cost-optimal levels and new building (annex iii). the reference tables are: table 1 “reference building for existing buildings (major refurbishment)”; table 2 “reference building for new buildings”; table 3 “example of a basic reporting table for energy performance relevant data”; table 4 “illustrative table for listing selected variants/measures”, where are reported all ordinary and innovative energy efficient measure, for the same comfort level; table 5 “energy demand calculation output table”, with in attachment a calculation international journal of sustainable energy planning and management vol. 03 2014 51 lamberto tronchin, kristian fabbri & maria cristina tommasino report and standard references used to evaluate energy performance of buildings; table 6 “output data and global cost calculations”; table 7 “comparison table for both new and existing buildings”. the first table (reference building for existing buildings) is here reported. the case study described in this paper (simulated by means of specific spreadsheets), consists of the refurbishment of an existing building, and all the scenarios have been calculated for it. 2.2. energy-building-performance evaluation once every package/measure for each scenario is defined, the further step consists on the energybuilding-performance evaluation, in order to calculate the energy primary index, expressed in kwh/m2year, for each scenario. the directive 2010/31/eu includes all energy services of buildings: heating, cooling, domestic hot water, ventilation and lighting. in italy the energy-performance methodologies follow iso 13790 [16] with steady-state balance, based on monthly methodology. actually the italian standards units 11300 part 1 [17], part 2 [18] and part 4 [19] consider only heating and domestic hot water evaluation and renewable energy sources. other energy consumptions for cooling, ventilation and lighting or electricity use, are now being considered. for these reasons, in italy, the energy consumption is related only to the thermal use and not to the electric use. this differs from the procedure (and example) reported in delegate regulation (eu) 244/2012, and it is not possible to evaluate the electric consumption and all the photovoltaic or window-shield benefits during cooling consumption. these limitations influence the energy performance evaluation, the energy class, and nearly zero energy building defined, as described for italian and english cases in [20, 21]. 2.3. the cost-optimal-level the cost-optimal-level means “the energy performance level which leads to the lowest cost during the estimated economic lifecycle” (dir 2010/31 art.2). moreover, “the cost-optimal level shall lie within the range of performance levels where the cost benefit analysis 52 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy t ab le 1 : “r ef er en ce b u il d in g fo r ex is ti n g b u il d in gs ( m aj or r ef u rb is h m en t) ”. b u il d in g h ea ti n g p la n t sy st em r en ew ab le en er gy so u rc es r oo f w al l b as em en t r ad ia n t so la r m = n at u ra l th er m al in su la ti on fl oo r w in d ow s h ea ti n g c on d en si n g h ea t p u m p co ll ec to r an d ga s in su la ti on in su la ti on re p la ce m en t (p an el h ea ti n g) b oi le r b oi le r (a ir /w at er ) p h ot ov ol ta ic e = e le cr ic it y s ce n a ri o 0 la w re q u ir em en ts x x x x m s ce n a ri o 1 x x x x x x m s ce n a ri o 2 x x x x x m s ce n a ri o 1 + 2 x x x x x x x m s ce n a ri o 3 x x x x e s ce n a ri o 1 + 2 + 3 x x x x x x x e calculated over the estimated economic lifecycle is positive”. therefore, the cost-optimal-level identifies the technological solution, measure, package or scenario with shorter global cost cg(τ) (as reported in annex 1 of this article). the regulation (eu) 244/2012 identifies five steps that are necessary to evaluate the cost-optimal-level: (1) to define the start year and to evaluate an economic lifespan for buildings or ‘building elements’ or ‘technical building system’ following en 15459 [15] ; (2) to establish the “discount rate” for comparison the value of money at different times, and for both evaluation methodologies; (3) to define the “energy carrier” or other energy cost (with and without tax), and other maintenance and operative cost; (4) to evaluate the “energy-cost trend” for energy carrier (natural gas, electricity, etc.) relate to the national contest; (5) to define the “primary energy factor”. the cost-optimal-level for the reference building could be evaluated following two economic viewpoints: 1. financial viewpoint; it consists of evaluating the energy-efficiency-measure-cost, expressed in cost and benefits, at the investment year. in this case, it shall be considered all the real cost at the present, including tax and incentive or other financial support. 2. macroeconomic viewpoint; it consists of evaluating the investment cost, including all environmental effects of energy efficiency measures. in this case, also the reduction of co2 in the atmosphere and the connected economic benefit shall be considered. the optimum solutions are neither the scenario with the lowest energy-performance-index, ep, because in that case the starting cost has more relevant incidence than those of energy-cost reduction, nor the scenario with lowest starting investment cost, because in that case the energy annual cost are relevant. the cost-optimal level is a “balance point” (figure 1 and 2) between starting investment cost, sic, and annual energy-cost, aec, during all the period of evaluation. the evaluation of cost-optimal level does not depend on a single parameter, for example wall transmittance or energy-performance index. it is a tool that allows defining a “cost-optimal level zone” (figure 1). 3. the case study the aforementioned method has been applied in a case study related to an energy-retrofit building. for this building and for each scenario measurement, the energyperformance index (epi) has been evaluated following italian standard units 11300. the evaluation period, here considered, is 30 years; the discount rate r is 1%, following the italian ban-value, and the energy cost and tariff for natural gas and electricity, are based on the italian regulatory authority for electricity and gas (autorità per l’energia elettrica e per il gas, aeeg) [23] value for 2012 (second quarter year). the buildingmaterial and the technical plant-cost, and also all relative costs about the designer and construction site, have been calculated considering the official price list by cna of ravenna, where the building is located [24]. in italy, the building-material prices are normally evaluated for each province and for each year, because of their variability among the country. in order to define a national methodology, it might be possible to individuate a regional (or also a macro-regional) value. in this case study the national incentives about energy efficiency improvements are not considered. 3.1. the building the case study is a bi-familiar villa on 3 levels, but the energy retrofit, here considered, is related only to half of the building. the structure is made of reinforced concrete and internal walls are made in bricks without thermal insulation; also the floors are made of reinforced concrete and bricks without any thermal insulation. the windows frames are made of wood, having single glass layer. the heat generator is a traditional international journal of sustainable energy planning and management vol. 03 2014 53 lamberto tronchin, kristian fabbri & maria cristina tommasino 1 2 3 4 5 6 cost optimal level zone kwh/m2 year €/m2 c o st o p tim a l l e ve l z o n e figure 1: cost optimal level zone. 54 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy 1.10 1 .0 0 1 .0 0 1 0 5 .7 1 2 .4 0 .8 0 2 .1 0 0 .8 0 0 .8 0 o th e r a p a rt m e n t o th e r a p a rt m e n t d is . 0.80 2 .1 0 2 .1 0 0 .9 0 5 .1 2 2 .4 0 2 .2 0 1 .1 0 0 .9 0 0 .8 0 2 .7 4 2 .5 0 3 .0 6 m q 2.100.80 2.10 3.44 2.94 0 .9 0 1 .9 0 storage 14.35 m2 living room 17.16 m2 k3.20 2.20 2.10 1.84 0.90 0.70 0.90 2.17 4.11 3.29 mq 2.80 mq rip. w.c 4.94 m2 storage 8.25 m2 garage 17.61 m2 1.20 1 .4 9 4.11 3.20 1.30 0.80 1.60 0 .8 0 2.10 2.10 0.70 1.50 1 .9 1 0.80 2.10 0.80 2.10 0.95 1. 15 1 .2 4 1 .9 4 1 .5 0 1 .5 0 1 .1 0 3.42 2.94 1 .5 0 0.8 6 1 .5 0 3 .7 3 1 .3 05 .1 2 2 .1 0 3 .3 9 1 .3 0 bedroom 14.35 m2 dis. 3.26 mq wardrobe 2.41 m2 dis. 5.31 mq w.c 7.08 m2 bedroom 10.31 m2 bedroom 10.97 m2 bedroom 14.51 m2 1 .5 0 1 .5 0 figure 2: the case study–groundfloor (left) andfirst floor (right). table 2: case study – technologies for each scenario. start pitched roof (stratigraphy): roofing tile | 5 cm lightweight concrete | 6 cm hollow gauged brick | 14 cm air existing building cavity | 6 cm hollow gauged brick | u = 1.274 w/m2k plan roof (stratigraphy): tile | 5 cm concrete | 5 cm structural lightweight concrete (isocal) | 18 floor in concrete and brick | 1.5 cm plaster | u = 1.128 w/m2k wall type 1 (stratigraphy): 1.5 cm plaster | 28 cm common brick | 2 cm plaster | u = 1.412 w/m2k wall type 2 (stratigraphy): 1.5 cm plaster | 12 cm common brick | 1.5 cm plaster | u = 2.483 w/m2k basement floor (stratigraphy): tile | 5 cm concrete | 12 cm structural lightweight concrete (isocal) | u = 0.643 w/m2k windows wood frame | single glass 4 mm | uglas 5.685. uframe 2.541. uwindow 4.434 (w/m2k) heating plant: traditional boiler (natural gas) | radiator domestic hot water (dhw): produced by same boiler (natural gas) integrated energy carrier: natural gas scneario 0 – pitched roof (stratigraphy): roofing tile |10 cm polystyrene expanse | 5 cm lightweight concrete | 6 cm law requirements hollow gauged brick | 14 cm air cavity | 6 cm hollow gauged brick | u = 0.296 (minimum requirement 0.30 w/m2k) plan roof (stratigraphy): tile | 5 cm concrete | 5 cm structural lightweight concrete (isocal) | 18 floor in concrete and brick | 1.5 cm plaster | 10 cm glass wool | 1.5 gypsum plasterboard | u = 0.299 w/m2k (minimum requirement 0.30 w/m2k) wall type 1 (stratigraphy): 1.5 cm plaster | 28 cm common brick | 10 cm glass wool |1 cm plaster | u = 0.303 w/m2k (minimum requirement 0.34 w/m2k) wall type 2 (stratigraphy): 1.5 cm plaster | 12 cm common brick | 8 cm glass wool | 12 cm alveolater brick | 1.5 cm plaster | u = 0.328 w/m2k (minimum requirement 0.34 w/m2k) basement floor (stratigraphy): tile | 5 cm concrete | 10 cm radiant heating with thermal and acustic insulation | u = 0.318 w/m2k (minimum requirement 0.32 w/m2k) windows pvc frame | low emission glass 6-20-4 with argon | uglas 1.495. uframe 1.800. uwindow 1.874 (w/m 2k) heating plant: condensing boiler (natural gas) | radiators international journal of sustainable energy planning and management vol. 03 2014 55 lamberto tronchin, kristian fabbri & maria cristina tommasino table 2: case study – technologies for each scenario (continued). domestic hot water (dhw): produced by same condensing boiler (natural gas) integrated with solar collector renewable energy sources: 2.50 m2 solar collector (1727.78 kwh/year) energy carrier: natural gas scenario 1 pitched roof (stratigraphy): roofing tile |12 cm polystyrene expanse | 5 cm lightweight concrete | 6 cm hollow gauged brick | 14 cm air cavity | 6 cm hollow gauged brick | u = 0.215 (minimum requirement 0.30 w/m2k) plan roof (stratigraphy): tile | 5 cm concrete | 5 cm structural lightweight concrete (isocal) | 18 floor in concrete and brick | 1.5 cm plaster |12 cm polystyrene expanse | 1.5 gypsum plasterboard | u = 0.206 w/m2k (minimum requirement 0.30 w/m2k) wall type 1 (stratigraphy): 1.5 cm plaster | 28 cm common brick |12 cm polystyrene expanse | 1 cm plaster | u = 0.206 w/m2k (minimum requirement 0.34 w/m2k) wall type 2 (stratigraphy): 2.0 cm plaster | 12 cm common brick |12 cm polystyrene expanse | 12 cm alveolater brick | 1.5 cm plaster | u = 0.208 w/m2k (minimum requirement 0.34 w/m2k) basement floor (stratigraphy): same scenario 0 – law requirement windows same scenario 0 – law requirement heating plant: same scenario 0 – law requirement domestic hot water (dhw): same scenario 0 – law requirement renewable energy sources: same scenario 0 – law requirement energy carrier: natural gas scenario 2 pitched roof (stratigraphy): same scenario 0 – law requirement plan roof (stratigraphy): same scenario 0 – law requirement wall type 1 (stratigraphy): same scenario 0 – law requirement wall type 2 (stratigraphy): same scenario 0 – law requirement basement floor (stratigraphy): same scenario 0 – law requirement windows pvc frame | low emission triple glass 4-12-4-12-4 | uglas 0.60 uframe 1.00. uwindow 1.10 (w/m 2k) heating plant: same scenario 0 – law requirement domestic hot water (dhw): same scenario 0 – law requirement renewable energy sources: same scenario 0 – law requirement energy carrier: natural gas scenario 1+2 pitched roof (stratigraphy): same scenario 1 plan roof (stratigraphy): same scenario 1 wall type 1 (stratigraphy): same scenario 1 wall type 2 (stratigraphy): same scenario 1 basement floor (stratigraphy): same scenario 0 – law requirement windows same scenario 2 heating plant: same scenario 0 – law requirement domestic hot water (dhw): same scenario 0 – law requirement renewable energy sources: same scenario 0 – law requirement energy carrier: natural gas scenario .3 pitched roof (stratigraphy): same scenario 0 – law requirement plan roof (stratigraphy): same scenario 0 – law requirement wall type 1 (stratigraphy): same scenario 0 – law requirement wall type 2 (stratigraphy): same scenario 0 – law requirement basement floor (stratigraphy): same scenario 0 – law requirement windows same scenario 0 – law requirement heating plant: same scenario 0 – law requirement domestic hot water (dhw): same scenario 0 – law requirement renewable energy sources: 2.50 m2 solar collector (1727.78 kwh/year) | 3 kwp photovoltaic (1300.20 kwh/year) energy carrier: natural gas renewable energy sources: 2.50 m2 solar collector (1727.78 kwh/year) | 3 kwp photovoltaic (1300.20 kwh/year) 56 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy table 3: case study – energy performance evaluation: results. start point scenario 0 existing law variable building requirements scenario 1 scenario 2 scenario 1+2 scenario 3 scenario 1+2+3 building energy heating 22335 8768 7751 8088 7499 8679 7499 need (kwh/year) cooling 1380 1513 1596 1669 1331 1533 1331 domestic hot 1272 1272 1272 1272 1272 1272 1272 water energy primary heating 139 55 48 50 47 54 47 (kwh/m2year) cooling 9 9 10 10 8 10 8 domestic hot 8 8 8 8 8 8 8 water energy carrier electricity 985 1007 1007 1007 1007 1007 1007 (kwh/year) natural gas 32813 8792 7767 8098 7519 8792 7519 energy performance index ep (kwh/m2year) 68 61 63 59 64 57 percentage of ep reduction (kwh/m2year) 148 156 154 158 153 160 / 68.46% 72.02% 71.05% 72.75% 70.47% 73.79% table 4: case study – cost evaluation (value in euro €). period of evaluation 30 year scenario 0 scenario 1 scenario 2 scenario 1+2 scenario 3 scenario 1+2+3 investment roof insulation 6775 / 6775 / 6775 / cost roof insulation replacement / 7661 / 7661 / 7661 (high performance) wall insulation 14866 / 14866 / 14866 / wall insulation replacement / 16615 / 16615 / 16615 (high performance) condensing boiler 3438 3438 3438 3438 3438 3438 radiant heating (panel heating) 6782 6782 6782 6782 6782 6782 solar collector 4800 4800 4800 4800 4800 4800 windows 7577 7577 / / 7577 / windows replacement (high performance) / / 9139 9139 / 9139 photovoltaic / / / / 1342 1342 total starting cost. € 44238 46872 45800 48434 45580 50447 total starting cost + vat. € 53527 56715 55418 58605 55152 61041 energy energy performance index ep cost (kwh/m2year) 68 61 63 59 64 57 floor surface (m2) 160 160 160 160 160 160 energy consumption (kwh/year) 10956 9719 10057 9466 10258 9104 energy carrier rate (€/kwh) 0 0 0 0 0 0 energy cost (€/year) 1004 891 922 868 940 834 energy cost + vat (€/year) 1215 1078 1115 1050 1138 9104 energy cost (€/year) macroeconomic viewpoint 25917 22991 23790 22392 24264 21535 financial viewpoint 31359 27819 28786 27094 29360 26057 extra-ordinary roof insulation 169 192 169 192 169 192 maintenance wall insulation 372 415 372 415 372 415 (15th year) windows 189 189 228 228 189 228 photovoltaic inverter / / / / 38 38 periodic maintenance cost (€) 730 796 769 835 768 835 periodic maintenance cost + vat (€) 884 964 931 1011 929 1056 boiler (not condensing) for heating and domestic hot water combined production, with radiators. the floor surface is 160.25 m2. the graphics in figure 3 and 4 show an anomaly in cost-optimal level, because the global cost of the scenario 0, with minimum energy-requirement international journal of sustainable energy planning and management vol. 03 2014 57 lamberto tronchin, kristian fabbri & maria cristina tommasino table 5: case study – graphics label: energy index and global cost – macroeconomic viewpoint. scenario epi kwh/m2year global cost €/m2 � scenario 1 + 2 + 3 40.83 € 434.82 � scenario 3 49.03 € 428.25 � scenario 1+ 2 51.16 € 423.55 x scenario 1 54.74 € 422.69 � scenario 2 58.41 € 426.34 � scenario 0 61.84 € 425.09 table 6: case study – graphics label: energy index and global cost – financial viewpoint. scenario epi kwh/m2year global cost €/m2 � scenario 1+2+3 40.83 € 512.54 � scenario 3 49.03 € 501.43 � scenario 1+2 51.16 € 495.67 x scenario 1 54.74 € 493.34 � scenario 2 58.41 € 496.02 � scenario 0 61.84 € 493.58 table 4: case study – cost evaluation (value in euro €) (continued). period of evaluation 30 year scenario 0 scenario 1 scenario 2 scenario 1+2 scenario 3 scenario 1+2+3 extra ordinary cost (€/year) macroeconomic viewpoint 629 686 663 720 661 752 financial viewpoint 921 1004 970 1053 968 1101 annual boiler (€/year) 80 80 80 80 80 80 maintenance solar collector (€/year) 50 50 50 50 50 50 annual maintenance cost (€/year) 130 130 130 130 130 130 annual maintenance cost +vat (€/year) 157 157 157 157 157 157 annual cost (€/year) macroeconomic viewpoint 3355 3355 3355 3355 3355 3355 financial viewpoint 4060 4060 4060 4060 4060 4060 emission energy consumption (kwh/year) 10956 9719 10057 9466 10258 9104 co2 cost factor co2 conversion (natural gas or electricity) 0.277 0.277 0.277 0.277 0.277 0.277 co2 emssione (tco2eq/year) 3.03 2.69 2.79 2.62 2.84 2.52 co2 emission cost (€) 3141 2786 2883 2714 2941 2610 macroeconomic viewpoint life economic cost (estimed) 77280 77280 76690 76491 77614 76801 global macroconomic cost (€/m2) 482 482 479 477 484 479 finantial viewpoint life economic cost (estimed) 89868 89868 89598 89234 90812 89539 global finantial cost (€/m2) 561 561 559 557 567 559 adjustment, is the lowest scenario. this result could depend on the initial costs, because the costs to realize the minimum energy-requirement adjustment do not have the extra-cost to improve energy performance, as in other energyefficiency scenarios. if we do not consider the “zero scenario”, the performance index ep, (which correspond the lowest global cost), is 54.74 kwh/m2year. this could be considered the costoptimal level. in the following tables, the energy evaluation and the calculation of the costs are reported, considering 3 different scenarios. these three scenarios are proposed for this particular building and, if applied to a different typology of buildings, they could provide different results. however, this solution might be considered representative for a large number of existing buildings, especially if they are located in the centre or north part of italy, where the climatic conditions are homogeneus, as well as in similar other areas in center europe. considering the data reported in table 2-6, the costoptimal-level zone is located between the index ep 51.16 kwh/m2year and 58.41 kwh/m2year. 4. discussion in this case study, the cost-optima-level (which considered both the macroeconomic/financial viewpoint and the global ep) was obtained considering the scenario 1 + 2, described in the following table 7. this scenario 1 + 2 has resulted the best energy-efficiencyretrofit measure in terms of cost-efficiency for the building here considered. however, it is important to underline that these results have been obtained in a bi-familiar villa located in the province of ravenna (italy), where the climate conditions differ considerably from the centersouthern part of italy. for example, in southern italy the windows frame would not be necessarily composed by triple glasses as in the aforementioned 58 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy table 7: cost optimal level applied to the case study. pitched roof (stratigraphy): roofing tile |12 cm polystyrene expanse | 5 cm lightweight concrete | 6 cm hollow gauged brick | 14 cm air cavity | 6 cm hollow gauged brick | u = 0.215 (minimum requirement 0.30 w/m2k) tile | 5 cm concrete | 5 cm structural lightweight concrete (isocal) | 18 floor in concrete and brick | plan roof (stratigraphy): 1.5 cm plaster |12 cm polystyrene expanse | 1.5 gypsum plasterboard | u = 0.206 w/m2k (minimum requirement 0.30 w/m2k) wall type 1 (stratigraphy): 1.5 cm plaster | 28 cm common brick |12 cm polystyrene expanse | 1 cm plaster | u = 0.206 w/m2k (minimum requirement 0.34 w/m2k) wall type 2 (stratigraphy): 2.0 cm plaster | 12 cm common brick |12 cm polystyrene expanse | 12 cm alveolater brick | 1.5 cm plaster | u = 0.208 w/m2k (minimum requirement 0.34 w/m2k) basement floor (stratigraphy): tile | 5 cm concrete | 10 cm radiant heating with thermal and acustic insulation | u = 0.318 w/m2k (minimum requirement 0.32 w/m2k) windows pvc frame | low emission triple glass 4-12-4-12-4 | uglas 0.60 uframe 1.00. uwindow 1.10 (w/m2k) heating plant: condensing boiler (natural gas) | radiators domestic hot water (dhw): produced by same condensing boiler (natural gas) integrated with solar collector renewable energy sources: 2.50 m2 solar collector (1727.78 kwh/year) energy carrier: natural gas € 436 € 434 € 432 € 430 € 428 € 426 € 424 € 422 € 420 € 418 € 416 40.83 g lo b a l c o st 49.03 51.16 54.74 58.41 cost optimal level energy performance index ep (kwh/m2 year) figure 3: the case study–macroeconomic viewpoint. cost optimal level 40.83 g lo b a l c o st € 515 € 510 € 505 € 500 € 495 € 490 € 485 € 480 49.03 51.16 54.74 58.41 energy performance index ep (kwh/m2 year) figure 4: the case study–financial viewpoint. solution. the solar radiation could compensate a large part of the energy requirements also in the winter seasons, since the average outside temperature in southern italy is about 10–12 degrees higher than that in the northern italy. moreover, changing the building type, these results again could vary considerably. as an example, typically a condominium could benefit of a more suitable external shape which reduces the global surface in contact with the external (cold) air, rather than a low emission glass as in the villa. also the energy carrier (central unit) could enhance the global efficiency of the entire building. therefore, the results, reported in the present article, could be considered as an application of the calculation of the cost-optimal level in a single, bifamiliar villa, located in northern italy, and therefore compared with other similar buildings in other countries (especially in central europe), where the technical solutions which would be necessary to optimise the “cost-optimal level” could be different from those here obtained in this evaluation. 5. conclusions the cost-optimal-level is an important tool which is useful to compare several scenarios for the same building, and the methodology framework could be applied for real buildings and not only for the reference building. the methodology framework could have some difficulties, as in the case study here presented. in existing buildings the relation between energyefficiency improvement and energy cost is not linear. the cost of some technologies (for example thermal plant or renewable technologies), and also the energy carrier and tariffs might not be related to the results of their application. the same consideration could be adopted for walls or roof insulation. in the case study, described above, the insulation technologies were more expensive than plant technologies. this was caused by the starting costs, that did not have any extra-cost to improve energy performance, as well as in other energyefficiency scenarios. for not standardized buildings, some aspect must be investigated. as an example, it might be useful to: – identify the national or regional standard costs for energy-retrofit-technology solutions. they depend on the construction sector and not on the related energy saving, therefore they do not include material or accessory costs; – define standard criteria for “energy tariff”, for example following aeeg, because each energy carrier differs considerably for annual energy costs and variable; – include the increase of real estate values in the framework, one of the most important effect of energy improvement as described in [25, 26], with same criteria adopted for greenhouse emission costs. finally, the results here obtained and presented, might be compared with similar buildings located in different european countries, where different solutions from this italian case study could give optimal levels. nevertheless, by changing the building type, technical solutions could be different. moreover, even if considering the same building typology and located in the same country, differences in the energy efficiency refurbishment measures may result by changing the location of the same building (e.g. from northern to southern italy). 6. acknowledgement the authors wish to thank valentina bonoli for her help during the calculation of energy performances in the buildings. annex 1 global cost calculation the global cost (gc) is defined as “the sum of the present value of the starting investment costs, sum of running costs, and replacement costs (referred to the starting year), as well as disposal costs if applicable. for the calculation at the macroeconomic level, an additional category cost of greenhouse gas emissions, is introduced”. the global costs are based on the “net present value” (npv) of all costs during the reference period of each scenario, which is fixed in 30 year. the categories for evaluation of cost-optimal-level could be divided into macroeconomic viewpoint or financial viewpoint. the macroeconomic viewpoint considers primary energy costs; besides, financial viewpoint could be based on energy primary or energy used (or energy carrier: natural gas, electricity etc.). the global cost, expressed in npv, is obtained summing these costs: international journal of sustainable energy planning and management vol. 03 2014 59 lamberto tronchin, kristian fabbri & maria cristina tommasino • starting investment cost (ci); it means the summa of all the investment costs, that include for example the insulation cost, the design cost and all taxes, for each scenario; • annual cost (ca); it means the summa of annual energy cost (ce) and maintenance cost (cm); • energy cost (ce) (i.e. the most important variable). it means the scheduled annual energy costs and peak charges for energy, including national taxes; • replacement cost (cr); it means a substitute investment for a building element; • cost of greenhouse gas emission (cc); it means the monetary value of environmental damage caused by co2 emission related to energy consumption in buildings. the energy costs (ce) are calculated for each year and for all the period; they are actualized with npv at the starting year. the evaluation of npv considers the discount factor rd that is calculated for a generic year i, and a discount rate r, with the formula: (1) the calculation period is scheduled in 30 year for residential and public buildings, and in 20 year for commercial and not residential buildings. the lifespan and life economic cycle for each building element and for all building are based o en 15459 standard. therefore, to evaluate global cost, the following steps are required: (1) definition of each scenario measure or package; (2) evaluation of the starting investment cost (ci); (3) evaluation of the annual energy cost (ce)j for each energy carrier; (4) evaluation of the maintenance (cm)j and functional annual cost (cf)j (5) evaluation of the substitution (cs)j and disposal cost (cd)j for relative year; (6) calculation of the npv for starting year (7) evaluation of the co2 emission and relative emission cost for greenhouse emission (only for macroeconomic viewpoint); (8) summa of all the npv costs; (9) calculation of global cost (cg). the formula to evaluate the global cost for financial viewpoint [€/period] is the following: r i r d i ( ) ( / ) %= + ⎛ ⎝⎜ ⎞ ⎠⎟ [ ]1 1 100 (2) and for macroeconomic viewpoint is [€/period] : (3) where: vf,τ(j) means the residual value of a measure or a set of measures j at the end of the calculation period (discounted to the starting year τ 0 ); rd (i) means discount rate for j-year; ca,i(j) is the annual cost during year i for measure or set of measures j calculated with [4]: [€/year] (4) ce(i) means energy annual cost for each energy carrier including tax for j-year; cm (i) means maintenance cost; cf (i) means operational cost; cso (i) means substitution cost; cc,i (i) means greenhouse gas emissions cost; ci means starting cost for each scenario. the global cost discounted to the starting year (cg,τ), shall be related to floor units surface (us) (m2): (5) annual energy cost (ce)j the annual energy costs represent the main value of annual cost. they directly depend on energy primary building performance, energy carrier and also energy market (or energy fee and tax). the formula is: ce(i) = qp·t [€/year] (6) where qp means energy performance of building expressed in primary energy (kwh/year), and t means energy fee or tariff included tax and/or vat for each energy carrier expressed in €/kwh with kwh of primary energy. c c us sg g= ∈⎡⎣ ⎤ ⎦ ( ) / τ m2 c c c c ca i e i m i i so i( ) ( ) ( ) ƒ( ) ( )= + + + c c c j r i c j v g i j i a i d c i( ) ( ) ( ) ( ), , ƒ, τ τ = + ∑ × +( ) − ∑ =1 ττ ( )j ⎡ ⎣ ⎢ ⎢ ⎢ ⎤ ⎦ ⎥ ⎥ ⎥ c c c j r i v jg i j i j a i d( ) ( ) ( ) ( ), ƒ,τ τ τ= + ∑ ×( ) −⎡ ⎣ ⎢ ⎤ ∑ = ⎦⎦ ⎥ 60 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy the operational cost includes all cost for assurance, rules upgrade or improvement, energy cost, tax and fee. the maintenance cost includes all cost for inspection, ordinary or extra ordinary repair and safety cost. the operational cost is calculated for each year. the maintenance cost could be divided into annual or periodic cost, for extra ordinary repair. the periodic maintenance operation could be related to inverter substitution for photovoltaic, boiler-component substitution, etc. all these costs shall be anticipated and bringing up-to-date with the formula [7]: cm(i) maintenance cost·rd(i) [€/year] (7) in case of macroeconomic viewpoint, it is necessary to evaluate the environmental impact of greenhouse-gasemissions and its monetization, for each year. the co2 emissions are calculated from energy building performance in relation with energy carrier and co2 factor values described in en 15603 [22] annex e or in national value. the monetization of co2 emission are scheduled for 2050 scenario in 20 €/tco2 until 2025, 35 €/tco2 until 2030 and 50 €/tco2 after 2030. for example, considering the starting year 2012, the monetization, for residential building is: (8) references [1] directive 2002/91/ec of the european parliament and of the council of 16 december 2002 “on the energy performance of buildings”. [2] directive 2010/31/eu of the european parliament and of the council of 19 may 2010 “on the energy performance of buildings (recast)”. [3] (non legislative act) commission delegated regulation (eu) no 244/2012 of 16 january 2012 “supplementing directive 2010/31/eu of the european parliament and of the council on the energy performance of buildings by establishing a comparative methodology c tc i j co eq a i j i , ( ) , , ( ) · = ⋅( ) + = ∑ 2 1 20 13 35 τ € €year ⋅⋅( ) + ⋅( ) ⎡ ⎣ ⎢ ⎢ ⎤ ⎦ ⎥ ⎥ ⎡⎣ ⎤⎦ 5 50 12 year year year € € / framework for calculating cost-optimal levels of minimum energy performance requirements for buildings and building elements”. 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[isbn 978-0-64656510–1 [8] kurnitski j., saari a., kalamees t., vuolle m., niemela j., tark t.: cost optimal and nearly zero (nzeb) energy performance calculations for residential buildings with rehva definition for nzeb national implementation. energy build 2011;43(11):3279–88. [9] popescu, d., bienert, s., schutzenhofer, c., boazu, r.: “impact of energy efficiency measures on the economic value of buildings” applied energy 89 (2012) 454–463. [10] 8th edition of the international valuation standards – ivs 2007. london: international valuation standards committee; 2007, [11] hamza n, greenwood d.: energy conservation regulations: impacts on design and procurement of low energy buildings. build environ 2009;44:929–36. [12] guidelines accompanying commission delegated regulation (eu) no 244/2012 of 16 january 2012 supplementing directive 2010/31/eu of the european parliament and of the council on the energy performance of buildings by establishing a comparative methodology framework for calculating cost-optimal levels of minimum energy performance requirements for buildings and building elements (2012/c 115/01). 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[17] uni ts 11300 part 1 “energy performance of buildingspart 1 calculation of energy use for space heating and cooling”. [18] uni ts 11300 parte 2 “energy performance of buildingspart 2 calculation of energy primary and energy performance for heating plant and domestic hot water production”. [19] energy performance of buildings part 4 “renewable energy and other generation systems for space heating and domestic hot water production”. [20] magrini, a., magnani, l., pernetti, r.: the effort to bring existing buildings towards the a class: a discussion on the application of calculation methodologies, applied energy, volume 97, september 2012, pages 438–450. [21] kurnitski, j., saari, a., kalamees, t., vuolle, m., niemela, j., tark, t.: cost optimal and nearly zero (nzeb) energy performance calculations for residential buildings with rehva definition for nzeb national implementation, energy and buildings 43 (2011) 3279–3288. [22] en 15603 “energy performance of buildings overall energy use and definition of energy ratings”. [23] aeeg autorità per l’energia elettrica e per il gas regulatory authority for electricity and gas www.autorita.energia.it/ [24] cna confederazione nazionale dell’artigianato e della piccola impresa – national organization for craftmanship and small & medium enterprise – www.ra.cna.it. [25] fabbri, k., tronchin, l., tarabusi, v.: real estate market, energy rating and cost. reflections about an italian case study, procedia engineering 21 (2011) 303 – 310. [26] tronchin, l., fabbri, k.: energy performance certificate of building and confidence interval in assessment: an italian case study, energy policy, 48 (2012) 176–184. 62 international journal of sustainable energy planning and management vol. 03 2014 on the cost-optimal levels of energy-performance requirements for buildings: a case study with economic evaluation in italy << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 31 2021 109 *corresponding author e-mail: markus.groissboeck@student.uibk.ac.at international journal of sustainable energy planning and management vol. 31 2021 109–120 abstract: multi-model energy systems are gaining importance in a world where different types of energy, such as electricity, natural gas, hydrogen, and hot water, are used to create more complex but also more economic energy systems to support defossilization. while the research community is using open source for a long-time collaborative work on open-source tools is not yet the norm within the research community. to increase the open and sharing efforts between research organizations governments are driving publicly funded projects to share their outcomes. today no open-source modelling framework exists able to assess different optimization tools. the proposed open-source framework is based on the principle of maximizing the reuse of existing data, software snippets and packages, and add individual code only as necessary. an intensive software package screening identified six suitable open-source tools (and their contributors) to be partly incorporated into the proposed open-source framework. the best tools of individual contributors has been combined and further improved by adding supplementary features such as a scenery model to incorporate shadowing and elevation effects on conventional and renewable power generation technologies are included. going forward, this approach allows to expand research into urban air assessment in which traffic and energy emissions can be assessed jointly. energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks markus groissböck* institute for construction and materials science, university of innsbruck, innrain 52, 6020 innsbruck, austria keywords open source; energy hub; energy system modeling; city multi modal energy systems; http://doi.org/10.5278/ijsepm.6243 1. introduction the european green deal is one of the six priorities of the european commission between 2019 and 2024 [1]. this green deal aims to lead the european union (eu) into a sustainable and net-zero greenhouse gas emission society by latest 2050. figure 1 shows how the green deal aims to change the european energy system from a linear and non-sustainable into a sustainable and fully integrated circular ecosystem. the most important principles are to electrify all end-use sectors as much as they can and to use clean biofuels for the sectors that cannot be electrified in an economic manner (such as heavy industry and long-distance transportation). the vision of the eu and its member states could and should be an aspiration for municipalities, districts, and industrial parks. all energy system design tool assessments known to the author are covering high-level details, such as numbers of regions, types of technology, or types of energy being able to be modeled in their analysis [2]. their study is another piece of work focusing on abstract details, such as the categorization of conducted studies, as well as on considered features, or energy coverage of the model. it then defines which of the assessed details are seen as mandatory, complementary, or facultative. it does cover a lot of details of modeling, such as spatial resolution, time horizon, path dependencies, energy independence, and social acceptance of individual solutions. however, it does not assess in detail how the 110 international journal of sustainable energy planning and management vol. 31 2021 energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks individual aspects are implemented (mathematically formulated) in the optimization model. this kind of model assessment is very common and has been done for over a decade now [3]. to the best knowledge of the author, the first comprehensive attempt analyzing which constraints are incorporated in individual optimization tools was done by the author himself [4]. he analyzed 31 energy models (mainly open-source) and, thereby, assessed 81 modeling details, such as power flow (pf), optimal pf (opf), security-constrained opf, or unit commitment (uc) versus security-constrained uc. this level of analysis still does not allow assessing the whole potential of the individual modeling tools. merely a few months later, a publication from priesmann et al. was assessing 160 combinations of modeling details to answer the question if complex models are more accurate than simple ones [5]. therefore, to avoid being bias for one or another reason during the model pre-selection and assessment, this work aims to provide a framework definition to allow a detailed assessment of open-source tools. with the two exceptions mentioned above, today’s energy tool assessment covers only high-level details. the work from priesmann et al. can be seen as a groundwork complementary to the overall aim of this work. while their focus was on how adding or removing a modeling detail impacts the solution time and accuracy of the solution, they have not assessed the results of several energy modeling tools. the aim of this work is to create an open-source framework that offers the possibility of an unbiased energy system tool comparison. the structure of the remaining paper is as follows: chapter ii contains an introduction into the concept and idea of energy hubs and a brief overview demonstrating the importance of open source and where it stands today. chapter iii shows the detailed methodology of this project and highlights some of the encountered problems. chapter iv discusses the preliminary results. chapter v summarizes the findings, draws a conclusion, and presents proposed next steps within this research work. 2. literature review the first part of the literature review provides an introduction of the energy hub concept combined with a brief history around energy system design. the second part of this chapter will show the origins of open-source research in energy system modelling and the status-quo. 2.1. energy hub the term energy hub was coined by geidl et al. [6]. in their concept, the exchange of energy between energy hubs was possible within one physical pipe combining electricity, thermal energy, and chemical energy (as shown in figure 2). especially for urban areas and industrial parks, this concept was seen as a perfect fit to cover heat and electricity demand through, e.g., combined heat and power applications at the same time. figure 3 shows a generalized example of an energy hub containing the typical elements “electrical transformer, gas turbine, heat exchanger, battery storage, hot water storage, and absorption chiller” as well as a wood figure 1: aim of the european green deal [1] international journal of sustainable energy planning and management vol. 31 2021 111 markus groissböck chip furnace [6]. this energy hub was a key element in the “vision of future energy networks” project. energy hubs could be extended through considering additional input streams (e.g., water, hydrogen, and carbon dioxide) as well as additional output streams representing ‘power-to-x’ options (e.g., green/blue/grey hydrogen, synthetic methane, methanol, ammonia, and carbon dioxide). from a mathematical modeling perspective, energy hubs are units (locations) where multiple forms of energy can be either converted (e.g., wood chips to heat), conditioned (e.g., electricity use in appliances), or stored (e.g., battery storage) for later use. all this transformation and processing comes with conversion and storage losses. it creates a place where all available and possible future energy carriers can have interactions to minimize the overall system cost. while an energy hub has some inputs (such as electricity, natural gas, and district heating), it has to fulfill the energy demand within the energy hub (such as power demand, heating or cooling loads, or compressed air demand). it can be used to forward any or all of the energy carriers to other energy hubs through transportation (such as power lines, and natural gas or district heating pipelines). within the energy hub, energy conditioning can happen through, e.g., combined heat and power technologies, compressors, or heat exchangers. energy hubs can represent industrial facilities, larger buildings, but also rural and urban districts or isolated systems. in 1997, bruckner focused on overall energy efficiency improvements through the optimal configuration of available energy technologies [7]. in 2004, biberacher concentrated on the implementation of geographical information systems (gis) into the optimization model to optimize the long-term energy fulfillment on a national scale [8]. both did not include a detailed energy model assessment in their work. in 2007, geidl focused purely on the modeling aspect of energy hubs as his losses electricity gaseous hydrogen heat figure 2: possible layout of an energy interconnector [6] work was the first of its kind considering multiple forms of energy jointly within one expansion planning and operation application [9]. connolly et al. listed 68 tools and investigated 37 out of them with the aim to validate if they can be used for renewable energy integration assessments [10]. while there were no typical applications identified a screening for the use of the individual tools was examined. the ‘ideal’ tool depends on the final use case: e.g., building or energy system analysis, energy-sectors to consider, technologies to consider, and time parameters the tool is able to deal with. nevertheless, the paper claims to provide ‘the information necessary to direct the decision-maker towards a suitable energy tool for an analysis that must be completed’. in 2011, mendes et al. focused on energy modeling assessments with a special interest in communities and districts [3]. the analysis was based on a survey of available bottom-up energy models for optimal planning of integrated community energy systems (including homer, der-cam, eam, markal/times, retscreen, and r2res). after describing and examining these tools, a swot (strengths, weaknesses, opportunities, and threats) analysis was conducted. a detailed overview of approaches on how to optimize problems in energy distribution networks (such as simulated annealing, genetic algorithms, tabu search, and particle swarm optimization) was also presented. the overall finding was that der-cam is an appropriate energy model for optimized energy provisioning for communities. in 2014, mancarella provided a detailed overview of existing concepts and evaluation models within the multi-energy system (mes) community [11]. based on this work, mes aims to increase the final energy conversion, optimizes the split into centralized and decentralized energy conversion technologies, and increases the energy system flexibility. mes is characterized by its spatial, multi-service, multi-energy, and network figure 3: exemplary energy hub [6] 112 international journal of sustainable energy planning and management vol. 31 2021 energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks perspective and an ideal concept for integrating different energy sectors (nowadays known as ‘sector coupling’ or ‘integrated energy systems’) which traditionally have been treated in isolation. a brief discussion about the features of mes tools also considered the tools retscreen, energyplan, der-cam, and etransport. the study aimed to show the state-of-the-art of mes concepts and models but did not conduct a detailed assessment. in 2017, dorfner provided a very brief overview of optimization tools based on an assessment conducted keirstead et al. [12]. the only tools discussed are markal, times, and message as the study’s objective was to provide open-source tools (via the source code sharing platform github.com) to support the idea of maintainability of models, reproducibility of case studies, and co-optimization of heat and electricity carriers. their work reviewed 219 papers and identified five key areas of practice: “technology design, building design, urban climate, systems design, and policy assessment” [13]. a great future for urban energy system modelling is seen if challenges such as model complexity and data uncertainty can be resolved. in 2017, thiem looked briefly into existing tools such as balmorel, der-cam, energyplan, energypro, homer, markal&times, mgeos, retscreen, top-energy, trnsys, and urbs [14]. after a brief discussion of these tools, the focus of the remaining literature review focused on six groups of applications (see table 1). the groups have been created based on existing energy model reviews and the scope of optimization tools (such as spatial dimension, covered model details, and type of optimization problem) but no. the focus of his research lies within group 5 with the aim to design multi-modal energy systems under consideration of partload efficiencies. in 2020, ridha et al. assessed surveys collected during the modex (model experiments) project in which the research center projektträger jülich asked modelers to provide their views on a questionnaire [15]. the survey data was analyzed based on the criteria of mathematical complexity (e.g., lp, milp, minlp, stochastic), temporal complexity (e.g., temporal resolution and horizon of planning), spatial complexity (e.g., geographical resolution and horizon), and system complexity (e.g., modeled scope). the focus of their work was to assess how complexity can be reduced through clustering, through use of less techno-economic details such as ramp rates, or through use of less information about the individual sectors to consider. therefore, the common practice is that energy system modeling tools set their focus on their area of interest and ignore other aspects to decrease the complexity of the overall problem to a level on which available optimization solvers are able to deliver results in a reasonable time. also, in 2020, prina et al. provided a novel classification schemes for bottom-up energy system modelling tools [16]. they identified two main categories and challenges: resolution and transparency. hereby, resolution is further divided into time resolution, space resolution, techno-economic detail, and details around sector coupling. their valuation with low, medium, and high shows that there is no tool which has been benchmarked with ‘high’ in all categories. the closest to reach this is the open-source optimization tool pypsa followed by the commercial tool plexos. the only category where pypsa has received a rating of ‘medium’ is within the category ‘sector coupling’. it is not transparent why optimization tools such as oemof, calliope, and ficus have been rated with ‘high’ in this category as to the best knowledge of the author the tools have very similar or almost the same capabilities in this regard. another top ranked tool is the lut model which unfortunately is not available for the public. energyplan, a simulation tools, is also mentioned in this paper. it is freeware but not open source. therefore, only freely available and open-source models such as pypsa, oemof, calliope, and ficus have been considered in this work going forward. table 1: classification of previous research [14] group description type of optimization problem 1 large-scale grid studies relying on simplified models lp2 simple tools for quick assessments of small-scale energy systems 3 buildings & city district energy system design studies with simplified models milp 4 on-site energy system studies with additional features 5 mixed-integer linear programming with part-load efficiencies 6 mixed-integer nonlinear programming with complex models international journal of sustainable energy planning and management vol. 31 2021 113 markus groissböck 1.2. open source open source has a long history within information technology where several leading software packages have been made available to the public (e.g., apache web server, netscape browser, mysql database, linux operating system) [17]. unfortunately, in research and development (r&d) as well as in some companies, there are serious ethical, security, and commercial concerns that open source is more threat than an organization can benefit from [18]. the fear relates to unwanted exposure from, e.g., flawed source code, data, or analysis. another assumption is that time-consuming activities (such as programming, verifying results, or writing documentation) are competitive advantages. perhaps it is only natural that sometimes the institutional and personal inertia stops organizations and people from following opensource principles. but what are some of these open-source principles? first, adding transparency to the source code and allowing peer review increases the quality of the software package, which then can also be used by other organizations instead of writing the same piece of functionality again. a peer review process can also lead to increased collaboration. with a focus on r&d, this also means that sharing data, models, and results increases productivity through burden-sharing. as a result, the focus can be set on doing something new and helpful for society instead of repeating necessary, important, but sometimes monotonic tasks. of importance within the r&d community is that only results, which are seen and challenged from other parts of the community, are useful to r&d and the overall society. everything else can be considered self-adulation. an ethical argument is that if r&d is funded by public money, the results should be publicly available as well. open access to data, source code, energy system models, and results is crucial for a balanced social and political debate. on top of this, r&d needs to support the public and scientific discourse to model for insights and thereby increasing transparency about possible opportunities and risks [19]. fostering open source to get more transparency and repeatability of analysis was written by decarolis et al. [20]. one of the main findings was that a thorough review of results and conclusions is currently impossible. a multi-national research team (howells et al.), in which decarolis was part of, developed the first opensource energy modeling tools: osemosys (open source energy modeling system) [21]. one of the key features of osemosys’s implementation is the mathematical formulation in ‘plain english’ meaning that the mathematical formulation is basically the documentation as well. the formulation has less than five pages of documentation and an easily accessible code. this slim formulation of course comes with the downside of having a simple optimization tool covering only the most necessary techno-economic details. decarolis et al. started the development of another open-source energy modeling tool: temoa (tools for energy model optimization and analysis) [22]. the design of this tool aims for more tractable uncertainty analysis and utilization of multi-core high-performance computing to perform rigorous uncertainty investigation. pfenninger et al. highlighted that energy models and data are an important part of energy policy assessments [23]. they also found that open up r&d, including models and data, would show immense benefits for all participating parties inside and outside of r&d. hülk et al. represent one of the latest open-source energy modeling approaches: oemof (open energy modeling framework a modular open-source framework to model energy supply systems) [24]. this initiative aims to provide flexible and generic components to model cross-sectoral (e.g., heat, power, mobility) and multi-regional open, modular, and transparent models allowing everyone to contribute (community-driven). publications stemming from this imitative became the steppingstone for an overall open r&d community, in which raw data, model formulation, energy model choice, raw results, interpretation, and dissemination is shared transparently with interested people. its recommended to read papers such as prina et al. for more detailed discussions about strengths and weaknesses of different energy system models [16]. figure 4 shows how an overall open-source energy system modeling project might be divided into several distinct process steps in which individual r&d communities and projects contribute to one or several of these process steps. an often-ignored step is the numerical solver, as the r&d community assumes access to commercial solvers; some of them are free or very affordable for academics. table 2 shows some of the exemplary open-source related initiatives, which have been launched several years ago and in which process steps they are active in. the table shows five of numerous evolving initiatives and platforms and compares them with the overall aim of this work. the grey cells indicate an area in which the 114 international journal of sustainable energy planning and management vol. 31 2021 energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks individual initiative and platform is active. while some of them cover a wide range of the process, others are focused on one of the required process steps. the suggested framework aims to support the entire process with limited efforts by developers using existing software and data. of course, open and transparent r&d has to be incentivized. closer cooperation between national and international r&d bodies is necessary to reduce parallel efforts and duplication of work. therefore, a very important step for implementation of open r&d has been initiated in july 2019: the open data directive (eu) 2019/1024 of the european parliament and of the council of 20 june 2019 on open data and the re-use of public sector information [30]. this directive has to be implemented in all member states until july 2021. a final remark related to open source is that licensing plays a part that must not be underestimated as it defines what the user can do with the shared source code, data, or models. morrison provides a very detailed overview of available licenses used in the space of open source and open data [31]. using one of the licenses from the gpl family results in the highest copyleft while isc, mit, bsd, and apache-based licenses are very permissive granting the user a wide range of activities, including the use of the code and/or data in their commercial products. 3. methodology the initial step of this research was to assess existing open-source software tools and to better understand their strengths and weaknesses [4]. a thorough screening of 31 energy modeling tools was based on characterizing them into 12 applications and 81 functions. the applications cover the geographical scope (or use) of the tool (house, industry, district, city, region or country), types of covered energy (electricity, heat, natural gas), being an open-source tool, and is it an optimization or a simulation tool. the functions screening cover aspects such as hourly or variable time steps, altermatic or direct current modeling of power transmission, (security constrained) unit commitment details and (security constrained) economic dispatch. the conclusion from this initial work was that open-source energy system modeling tools are ready for serious use compared to figure 4: distinct steps within the open-source discussion (based on [25]) table 2: examples of open-source initiatives examples r aw d at a d at a p ro ce ss in g m od el f or m u la ti on n u m er ic al s ol ve r m od el o u tp u t o u tp u t v is u al iz at io n o u tp u t d is se m in at io n open energy modeling initiative [25] energy modeling platform europe [26] open power system data [27] computational infrastructure for operations research [28] open street map [29] this work – link to existing work api python pyomo neos oa journals, arxiv, … international journal of sustainable energy planning and management vol. 31 2021 115 markus groissböck commercially available tools. possible enhancements could be considering the impact of ambient air conditions, part-load behavior, and redundancy aspects. the top scoring tools (switch model 2.0 [32], temoa [20], osemosys [21], and pypsa [33]) and about 50% of the assessed tools were based on the programming language python. as a result, further assessments represented in this work focuses on python-based tools solely. the second step of the research involved the assessment of additional tools, software packages, and software snippets to identify what the open-source community has done already and what can be used as a basis for this work. a summary of the assessed python packages and snipes is available online at zenodo [34]. as usually for engineering tasks, the difficulty lies in the details: the number of python-based packages are almost countless. by the end of september 2020, more than 260,000 packages have been registered at pypi.org [35], neglecting thousands of additional software snippets and tools shared via github.com [36], gitlab.com [37], or other code sharing platforms with millions of registered repositories and active developers. this shows one of the biggest downsides of open-source package writing: there is no or very limited coordination between the countless number of packages. duplicate work also happens in the open-source community. it’s very hard to keep track with all the frequent changes as well as new developments. also, relying on some of these packages means that if there is a (major) redesign of the package once has to adjust accordingly. the here proposed open-source framework divides the required process steps between having no data at the top of the process (see the left box in figure 5) and having all data, results, and visualization in eleven steps (indicated by small numbers within the workflow). the right box in figure 5 shows a selection of assessed tools and data, which have been found useful in the proposed framework. the text in bold marked with a times sign (*) shows where enhancement by the author is considered or have been incorporated already. the author’s sophisticated research revealed that there was no tool considering the z-coordinate within a detailed gis representation shared within the open-source community. this means that none of the assessed tools considers a proper scenery model in which elevation details are included. another insufficiently addressed aspect within the tools is profile clustering. most of them are not able to adequately deal with multiple time-series at once (e.g., multiple energy demands and price time-series). 4. preliminary results the preliminary assessment highlights six open-source oriented r&d contributors where parts of their tools might be incorporated into the here suggested framework (see table 3). the identified contributors developed several individual tools such as gis-related data collection, building stock-related load curves, or optimization tool. all of this individual tools usually have been made available by the framework contributors with the figure 5: proposed methodology & selection of considered open-source data and tools 116 international journal of sustainable energy planning and management vol. 31 2021 energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks aim to support city or national energy system design. the cells shown in dark blue indicate areas where the individual tools have no or very little contribution to the predefined eleven process steps. light blue cells indicate a partial contribution. typical for such assessments, it always depends on the conducted analysis by the author and, therefore, might not reflect the opinion of the opensource framework owners and maintainers. regarding the previously mentioned disregard of the gis z-coordinate, the city energy analyst (cea) tool shown in the last column on the right considers this detail for line and pipeline calculations but not for elevation adjustments of, e.g., efficiency of conventional power generation technologies. as known, individual tools set different focuses. for example, pypsa’s focus is spatial nature, therefore spatial clustering is considered accordingly. other frameworks, such as the one from fzj-iek3-vsa, are focused on time-series aggregation and clustering. within the proposed framework, both options shall be available to assess the importance of the individual clustering option. obviously only european r&d organizations are listed ibased on the conducted analysis, the proposed framework aims to incorporate particular features from table 3: selective contributors and their tools * spatial focus: ≥ state ≤ city ≥ state ≥ state ≤ city ≤ city link to contributor page on github: fzj-iek3-vsa rwth-ebc oemof pypsa tum-ens architecturebuildingsystems 1 streets, buildings, land use, district heating, power, gas, oil, biomass n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a bdw/gridkit n/a n/a pygreta n/a n/a n/a cea cea cea cea n/a 2 z-coordinate n/a n/a n/a n/a n/a cea 3 building stock tsib (for eu) teaser (for eu) tabular (for eu) n/a n/a cea (for ch) 4 historical ambient conditions tsib (try, tmy, iso 12831) pycity (try, tmy) feedinlib.era5 n/a n/a e+ weather files (epw) 5 energy demand tsib, tsorb:occupation pycity:occupancy, teaser, aixlib, ibpsa demandlib n/a n/a cea 6 renewable profile reskit, windtools pycity feedinlib atlite pygreta cea 7 demand clustering tsam pycity solph pypsa pyclara n/a 8 cost & prices, … n/a n/a n/a collection (e.g., dea, diw, iea) n/a cea 10 optimization fine pycity solph pypsa pyprima cea solvers abstraction any local (pyomo) tbd any local (pyomo) any local (pyomo) any local (pyomo) gurobi, ga 11 visualization n/a n/a oedb n/a n/a n/a design for addition n/a n/a yes yes n/a n/a additional features n/a n/a visio oemof.db nomopyomo (cbc, gurobi) n/a gui contributors: fzj ebc rli, fhf kit, fias tum ethz * spatial focus: household, district, city, state, region, country, continent, world abbreviations: fzj: forschungszentrum jülich, ebc: rwth aachen, e.on ebc, rli: reiner lemoine institute, fhf: fh-flensburg, kit: karlsruhe institute of technology, fias: frankfurt institute for advanced studies, tum: technical university of munich, ethz: eidgenössische technische hochschule zürich https://github.com/fzj-iek3-vsa https://github.com/rwth-ebc https://github.com/oemof https://github.com/pypsa/ https://github.com/tum-ens https://github.com/architecture-building-systems https://github.com/architecture-building-systems https://github.com/architecture-building-systems international journal of sustainable energy planning and management vol. 31 2021 117 markus groissböck the assessed contributors into a new open-source framework (see table 4). the table specifies which process step has been taken from which contributor and the according tool to use. for example, step1, the street and building data can be initialized by using the osmnx package. step 3, as another example, will use the packages tsib, teaser, and tabular. while a lot of it has been already implemented, severe actions are still required to finish the framework in a first shareable and stable release. once available in a shareable and stable release, it will be made available via zenodo [34]. as indicated during the introduction, the ultimate goal is to have a single framework in which several energy optimization tools can be assessed against each other to verify the resulting quality of the individual tools as well as support the decision-making on which one to use for which purpose. 5. conclusion & future work as a result of increasing interactions between historically isolated energy systems (e.g., electricity, natural gas, hydrogen, and hot water) multi-model energy systems are gaining importance to create more economic and decarbonized energy systems. the term energy hub can be seen as a synonym for a multi-model energy system. opensource software has a long history. also, the research community is using open source for a long time. public companies have realized that cooperation saves costs and increases the speed for go-to-market with new offerings and solutions. unfortunately, the research community has not fully accepted that collaborative work on open-source tools is more beneficial than working isolated. more and more governments are convinced that publicly funded projects should end in publicly available data and tools. hundred thousand of repositories are available on code sharing platforms, and the number is growing daily. the proposed open-source framework in this work is based on the principle of maximizing the reuse of existing data, software snippets, and packages and adding individual code only as much as ultimately necessary. after careful screening of additional software packages, six favorite open-source frameworks have been identified were the best parts of each of these frameworks are combined into a single open-source framework (see table 3). table 4: examples of open-source initiatives framework process step f z jie k 3v s a r w t h -e b c oe m of p yp s a tu m -e n s ar ch it ec tu re b u il d in gsy st em s n ew f ea tu re s 1 – streets, buildings, land use osmnx 2 – z-coordinate pycraf, tkrajina/srtm. py 3 – building stock tsib teaser tabular 4 – ambient conditions opsd/ weather_data 5 – energy demand pycity:occupancy, teaser cea 6 – renewable profile feedinlib pvlib, windlib, solar3dcity 7 – demand clustering tsam 8 – cost & prices, technologies, … technologydata economy of scale 9 – options sensitivity analysis 10 – optimization pyprima solver: neos* 11 – visualization oedb additional features pypsa: market, reserve margin * neos: free internet-based service for solving numerical optimization problems (http://www.neos-server.org/neos/) http://www.neos-server.org/neos/ 118 international journal of sustainable energy planning and management vol. 31 2021 energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks table 3 might give the impression that there exist already six complete frameworks. this is not the case. the listed 6 contributors do have some individual tools which they use in their daily work, but a comprehensive framework does not exist yet. at least non which does fulfil the proposed eleven steps (from having no data towards having all data, results, and visualization, see figure 5). to further improve the energy system framework for the purpose of this research, some more features were added (see table 4). those features include a scenery model to incorporate shadowing and elevation effects on conventional power generation technologies. by doing so the utilization of limited resources such as human resources could be improved significantly. going forward, this approach allows for further research, for example, with a focus on city air assessment in which traffic and energy emissions can be assessed jointly with urban climate effects (e.g., heat islands or cold stream through rivers) [38]. the framework test and verification process are still ongoing and will be applied in a demonstration village to ensure proper quality and stability. the aim of the framework test is to ensure the quality of the new framework. afterward, the framework will be made accessible on zenodo [37]. other framework enhancements and evaluations are still ongoing. within the next weeks, additional energy system models, such as flexigis [39], might be analyzed whether it provides a useful option for consideration. another aspect to consider is a standardized database schema for saving gis-related information. therefore, the current 3d city db schema might be assessed for its potential fit. a completely different topic for future work could be to assess why open-source r&d is string in europe but not outside of europe. it is good to see that more and more tools within the energy system modelling area are shared and made available for interested r&d community. unfortunately, cooperation between different r&d organization still is limited to some exceptions. it would be appreciated to see more multi-national r&d efforts working on opensource energy system modelling tools such as the spine project does [40]. in this project organizations from finland, ireland, belgium, and sweden cooperate with one from the us. acknowledgments this work has been presented at the 6th international conference on smart energy systems held at aalborg university (denmark) on october 6-7, 2020. the author gratefully acknowledges the invitation for submission by the editorial board for a special issue of international journal of sustainable energy planning and management (ijsepm) [41]. the author gratefully acknowledges valuable comments and input from various anonymous reviewers during the 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[41] østergaard pa, johannsen rm, lund h, mathiesen bv. latest developments in 4th generation district heating and smart energy systems. international journal of sustainable energy planning and management, 2021;x. http://doi.org/10.5278/ ijsepm.6432. https://doi.org/10.1016/j.softx.2019.100251 https://doi.org/10.1016/j.softx.2019.100251 http://doi.org/10.5334/jors.188 https://doi.org/10.5281/zenodo.4459140 https://doi.org/10.5281/zenodo.4459140 https://pypi.org/ https://github.com https://about.gitlab.com/ http://dx.doi.org/10.1016/j.uclim.2017.05.004 https://doi.org/10.1016/j.egypro.2018.09.097 https://doi.org/10.1016/j.egypro.2018.09.097 http://www.spine-model.org/index.htm http://www.spine-model.org/index.htm http://doi.org/10.5278/ijsepm.6432 http://doi.org/10.5278/ijsepm.6432 569-1491-2-le.qxd 1. introduction in the years 1973–2009, global production of natural gas has grown by 267% [1]. increasing demand has led to subsequent regional increases in import prices over the years, with the average eu import price for lng nearly doubling from $3.42/gj in 2003 to $6.49/gj in 2010, after experiencing a peak average of $8.70/gj in 2008. it is worth noting that import prices vary significantly across different regions. during the same period, the cost of lng in the united states rose from $4.45/gj in 2003 to $9.33/gj in 2008 and then decreased to $4.54/gj in 2010 [2]. prices in the united states have decreased due to increased production of unconventional gas, which reduced demand for imports [3]. furthermore, demand growth rates are different in each region. in the new policies scenario of the international energy agency (iea), between 2010 and 2035 natural gas demand is projected to grow annually international journal of sustainable energy planning and management vol. 03 2014 5 by 0.5% and 0.6% in the us and eu respectively, while at the same time growth rates will reach 4.2% in india and 6.6% in china [4]. despite increasing gas demand and the vast availability of gas reserves worldwide, construction of infrastructure for production and transportation is both complex and demanding in terms of funds and time, thus limiting the exploitation rate of recoverable gas resources [3]. with the global demand for energy increasing, as further discoveries of fossil fuel reserves are made, strategies will be required to ensure an efficient and economically optimum use of these resources. in this paper the authors address the case of two eastern mediterranean countries, israel and cyprus, which appear to have, relative to their size, significant offshore natural gas reserves available for exploitation. despite ongoing natural gas extraction, israel’s energy sector imports significant volumes of gas and coal, while * corresponding author, e-mail: taliotis@kth.se international journal of sustainable energy planning and management vol. 03 2014 5-20 energy security prospects in cyprus and israel: a focus on natural gas ������������ �������� � ���� ��������� ������ ���������� ����������� ��������� ��� ������ ������� ������� ��� ��������������� ���� ������������������ ������� �� ���!!����"���#���$��"%�&� �� ��� ��� ��� ������������'((���&�" ���$��' � ����)��'"'*��"����+(� �,�����-���. /� 0�����'����� a b s t r a c t the global production of natural gas has increased from 1226 bcm in 1973 to 3282 bcm in 2010 and is projected to continue rising by an annual growth rate of 1.6% between 2010 to 2035. cyprus and israel have recently made major offshore discoveries of natural gas, which can supply to a great extent the two countries’ current domestic energy needs for the next few decades and still export a substantial volume. message, a global optimization model was used to explore the possible interactions between the two countries’ energy systems. scenarios are presented that assess the export potential for electricity (generated by gas-fired power plants), liquefied natural gas (lng) or gas-to-liquid products (gtl). the results are compared to a scenario without any available reserves to illustrate the financial benefits that will arise from the exploitation of the gas resources in the two countries. keywords: natural gas markets; power generation; liquefied natural gas; gas-to-liquids url: dx.doi.org/10.5278/ijsepm.2014.3.2 https://dx.doi.org/10.5278/ijsepm.2014.3.2 6 international journal of sustainable energy planning and management vol. 03 2014 energy security prospects in cyprus and israel: a focus on natural gas cyprus relies almost entirely on imports; thus these two countries are interesting case studies. at the same time, the proximity of these reserves to continental europe and the fact that they are quite extensive can have an effect on the energy security of the european union, which seeks to exploit indigenous resources and promote diversification of supply. in existing literature the israeli gas finds have been presented from a political perspective [5], but despite the estimated volume of gas discovered, there is a knowledge gap in regards to the quantitative assessment of the future development potential of these resources; the same applies for the case of cyprus. this paper aims to conduct such a quantitative analysis in terms of power generation and gas export capabilities of the two countries under a range of scenarios. in light of the financial crisis that has recently hit hard the island of cyprus, we present results of analysis of how these reserves may affect the power generation system of both countries over the coming decades and whether there is any grave prospect for exports. the first section of this paper provides an introduction to the present energy sector of israel and cyprus and elaborates on the significance of this study. in section 2 the methodology followed in this work and the software used are briefly described, while the scenarios formulated for analysis of the power generation systems and export potential of the two countries are defined. the main results from this analytical work are presented and discussed upon in section 3. the paper concludes with a recollection of the main findings in section 4. 1.1. current energy status in this section a brief overview of the current status of the energy sector in israel and cyprus is given, in an effort to indicate how significant these reserves will be to the two countries. even though israel had made small onshore discoveries of oil and natural gas in the 1950s, the most significant discoveries started in 1999, when natural gas reserves were discovered offshore. natural gas production started in 2004, with most of it being used by a portion of the country’s power plants, which were adjusted to use gas instead of oil as feedstock. since then, a few major discoveries have been made offshore, with the most important ones being the tamar field, which holds about 240 billion m3, and the leviathan field, with an estimated reserve of 450 billion m3 of gas [6]. the natural gas extracted in israel is primarily consumed by domestic power plants. of the approximately 205 pj of natural gas consumed in 2010, 5.5 pj were used as fuel in oil refineries, 3 pj in industry and the rest was used for power generation [7]. due to the fact that the extraction of the domestic reserves is still at an early stage, until 2010 it was not yet sufficient to cover the nation’s natural gas needs. in 2010 the share of fuels for electricity generation was 61% for coal, 36.6% for natural gas, 1.5% for diesel oil and 0.9% for fuel oil. with the exception of natural gas, israel primarily relies on imports for its energy requirements. in 2010 56% of the natural gas used by the israel electric corporation (iec) was domestic, while the rest was imported from egypt via a marine pipeline. coal is imported from africa, south america, asia and australia [8]. in contrast to israel, cyprus has made very few steps so far regarding natural gas exploitation. the first exploratory well started in autumn of 2011 in one of the 13 blocks (no. 12 named aphrodite) available for exploration [9]. the reserve in this area is estimated to hold about 140 to 225 billion m3 of gas [10]. during the second licensing round for exploration, cyprus has decided to start negotiations for gas licenses of four other offshore blocks with italian company eni, russian novatek, french total and south korean kogas [11]. it should be clarified that natural gas is not used as fuel in any of the sectors of the cypriot economy [12]. in regards to power generation, cyprus at present meets its demand almost entirely through imported oil. currently, there are no grid connections going to and from the island, so it cannot trade electricity with surrounding countries. it was estimated that during the years 2011–2012, renewable energy sources would correspond to 4% of the electricity generation of cyprus [13]. the rest of the electricity would be generated from fossil-fuelled power plants, the vast majority of which burn heavy fuel oil and to a lesser extent diesel [14]. all of the fossil fuels used on the island are being imported. the cooperation of israel and cyprus along with greece in the field of energy has been illustrated by the announcement of the future deployment of an undersea electricity cable. this will have a capacity of 2 gw and an estimated investment cost of approximately $2 billion. this linkage will connect israel to cyprus and then greece [15], so as to allow sales of excess electricity from israeli and cypriot gas-fired plants to continental europe. moreover, there are thoughts of jointly developing an lng terminal in the south coast of cyprus, where natural gas from both countries could be processed before being shipped for export [16]. the energy systems of the two countries are presently independent of each other and were selected for analysis as they both have been, at least until recently, relying almost entirely on imports in order to meet their demand, while now they have a chance to transform into energy providers. it was hypothesized that these systems would largely transform when natural gas was introduced, taking into consideration that gas will be domestically produced in immense volumes. nonetheless, exploitation of this gas would necessitate high-level political decisions, market accessibility, investments in infrastructure and technical expertise [3]; not only to supply the internal market, but also to export a substantial amount of the extracted resources. in view of the fact that israel and cyprus have been heavily dependent on energy imports, analysis of scenarios in which these two countries have access to domestic resources becomes intriguing from a geopolitical viewpoint. as discussed above, experience in gas markets is low for cyprus and to a certain extent for israel, thus an assessment of possible development pathways is required to allow informed decisionmaking. depending on the extent of available reserves, these two countries could emerge as important suppliers of natural gas and to a certain extent compete with major producers, such as russia and the neighboring middle eastern nations. therefore, it is vital to adequately assess the potential volume of exports that will become available, taking into consideration the domestic energy needs. the following section of this paper describes the approach followed to achieve this. 2. material and methods quantitative analysis of the power generation systems of cyprus and israel was conducted through the construction of the existing power systems and formulation of scenarios to project and assess alternative pathways to energy system development. the modeling work was carried out using message (model for energy supply strategy alternatives and their general environmental impacts), which was initially designed by the international institute for applied systems analysis (iiasa) and subsequently further enhanced jointly with the international atomic energy agency [17]. national and regional energy systems can be modeled and optimized in message. it does this by selecting the most economical solution out of a variety of alternatives provided by the analyst. technologies and energy sources can be linked along ‘energy chains’, thus enabling the user to construct a model from resource extraction to final energy demand. a set of constraints is added to investigate different scenarios or to simulate ‘real life’ attributes of the modeled system. these constraints may include limitations on new investment, environmental regulations, fuel availability and trade [17]. a reference energy system was developed for the two countries (annex a) and was then modeled in message. detailed technology input data and assumptions used in the model are shown in annex b. 2.1. scenarios in order to investigate how the two countries’ systems will respond under different conditions, a variety of scenarios was selected for assessment. in the baseline scenario, the conditions that currently apply for both countries, as well as the most likely courses of actions, were modeled. based on the last year with a comprehensive data-set, 2010 was used as the initial year of model simulations. the natural gas reserves discovered so far were added to the model, corresponding to approximately 7 trillion cubic feet for cyprus [10] and 28 trillion cubic feet for israel [6]. major development projects, such as the construction of the electricity cable for sales to europe and a liquefaction plant for sales of lng were added, and projections were made to 2050. the model was allowed to invest in an lng terminal in both countries, even though in reality a joint plant may be built in one of the countries. it should be noted that the projections of final electricity demand of the two countries were made either based on trends in the past decade for israel [18] or based on projections for the following decade for cyprus [19]. current average prices of gas and electricity were used to set export prices in the analysis; $9/gj for lng, assuming sales to europe, and 120$/mwh for electricity, assuming sales to greece [2]. the formulation of scenarios aimed at assisting potential decisions that would be required by policymakers in the two countries. it was clear that the dilemma between using the available natural gas for the sale of electricity, lng or gtl products should be focused on. therefore, the chosen scenarios were the following: international journal of sustainable energy planning and management vol. 03 2014 7 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch 1. the prospect of an additional cable to sell electricity to europe. 2. increasing exported lng prices compared to stable electricity prices. 3. increasing exported electricity prices compared to stable lng prices. 4. the potential of converting natural gas to petrochemical products for export purposes. scenarios 1–3 investigate the conditions under which it is economically preferable to export lng rather than electricity and vice versa, whereas scenario 4 examines the viability of gtl production when the price of oil is considerably higher than that of natural gas. in order to assess the selected scenarios, the appropriate variables, which would be changed in each case, were identified. these variables along with the fluctuating values are shown in table 1. 3. results and discussion in this section, the most representative results were chosen to help reach constructive conclusions. it should be highlighted that all the results are based on the approximate volumes of gas that have already been found in the two countries and does not include reserves that are not yet proven. 3.1. baseline scenario 3.1.1. local production power generation in cyprus changes drastically with the incorporation of natural gas as an energy source. gas is allowed to enter the fuel mix in 2015 and over a short amount of time it completely replaces oil as the primary fuel for electricity generation. as shown in figure 1, most of the electricity generation after 2015 relies on natural gas. the stepwise development of new gas-fired power plants, observed in the first few years, is due to limitations added on the rate of introduction of new technologies, so as to simulate real world conditions. the big increase of electricity generation observed in the period 2022–2044 can be attributed to electricity sales to europe. immediately after extraction commences, which in our model is assumed to be in 2015, a portion of the gas is sold as lng while the remainder is used to meet electricity demand in the island (figure 2). the assumption is, however, that – if economic a liquefaction plant could be built in the years prior to 2015, so it can be utilized as soon as natural gas becomes available; this is the case for israel as well. the situation in israel seems to be different from cyprus, in that coal is not completely substituted by natural gas. as can be seen in figure 1, during the first two decades there is an increase in the share of natural gas, but as the reserves diminish, coal returns as the dominant energy source. in 2043, the last of proven reserves run out, so there is dependency on imports of natural gas once again. perhaps one of the most interesting results from israel is the fact that even though there is plentiful supply of natural gas to cover domestic needs, it seems preferable to export lng and use cheap coal to cover the internal power demand. however, unlike cyprus, israel completely runs out of natural gas in 2043 and switches back to the cheap alternative of coal for power generation. it should be mentioned that a gas import limitation of about 44 000 gwh was placed on israel, which is approximately double the amount imported in 2010 [6]; this is an attempt to limit to a certain extent import dependency. 8 international journal of sustainable energy planning and management vol. 03 2014 energy security prospects in cyprus and israel: a focus on natural gas table 1: adjustments to model variables for scenario evaluation. aspect or variable changed relative related scenario description to baseline scenario 1 second electricity cable to europe additional cable of 2000 mw to be built in 2020 2 higher lng prices stable electricity prices price of lng ($/kwyr) 9 a +25% +50% +100% +150% (355) (426) (568) (710) 3 higher electricity prices stable lng prices price of exported electricity ($/kwyr) 120 b +25% +50% +100% +150% (1319) (1583) (2110) (2638) 4 petrochemical production gas-to-liquids production for export purposes a used eu average for lng import prices into europe in usd/gj for summer 2011 [2]. b used greece end-use electricity prices for industry in usd/mwh for 2q2011 [2]. 3.1.2. exports the discovery of natural gas in the eastern mediterranean in a time of economic crisis was well received by the implicated governments. this optimism stems from the prospect of acquiring revenue via exports of lng and, to a lesser extent, electricity. figure 3 shows the possible extent of these exports in the baseline scenario, which indicates that based on current prices, it is more profitable to sell lng rather than electricity. the results suggest that, in relation to the total exported natural gas, both countries will sell a relatively small portion of electricity to europe. at the beginning of the projection period, israel makes nearly full use of the cable’s capacity to export electricity, but then cyprus also partially contributes, up to a point where israel stops and cyprus makes use of about 35–40% of the cable’s capacity. 3.1.3. cost comparison an economic comparison was done between the baseline scenario and a scenario in which no gas reserves are available to either of the two countries. figure 4 shows the annual cost of the energy systems in each country for these two scenarios, calculated based on the following equation: cost = infrastructure investment costs (power plants, transmission system, lng terminal, gtl plant) + operation & maintenance costs + fuel costs + import costs – export revenue. in essence, this estimates the total system cost, taking into account potential revenue from exports, excluding however any revenue from sales of electricity domestically. in figure 4a, the higher the line is on the graph, the costlier the system is, so it can be concluded at a first glance that the system is less costly to run when international journal of sustainable energy planning and management vol. 03 2014 9 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch 2 0 1 4 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 2 0 3 8 2 0 4 1 2 0 4 4 2 0 4 7 t w h 20 18 16 14 12 10 8 6 4 2 0 2 0 1 1 biogas csp pv wind gas oil 2 0 1 4 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 2 0 3 8 2 0 4 1 2 0 4 4 2 0 4 7 t w h 140 120 100 80 60 40 20 0 2 0 1 1 biogas gas coal figure 1: projected electricity generation in cyprus (left) and israel (right) over the modeled period. 2 0 1 4 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 2 0 3 8 2 0 4 1 2 0 4 4 2 0 4 7 t w h 100 90 80 70 60 50 40 30 20 10 0 2 0 1 1 2 0 1 4 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 2 0 3 8 2 0 4 1 2 0 4 4 2 0 4 7 2 0 1 1 400 350 300 250 200 150 t w h 100 50 0 gas for liquefaction gas for power generation figure 2: fate of natural gas reserves from cyprus (left) and israel (right). gas reserves are available. the peaks observed are large investments, such as the construction of the lng terminal in 2015. during the entire projection period, the discounted cost savings of both systems amounts to 24 billion usd (figure 4b). it is worth noting that from these results, it appears that israel is profiting significantly more than cyprus. of course, this can be attributed to the fact that in the model used, israel’s natural gas reserves are four times larger than of cyprus and consequently is able to export 10 international journal of sustainable energy planning and management vol. 03 2014 energy security prospects in cyprus and israel: a focus on natural gas 300 250 200 150 t w h 100 50 0 2 0 1 3 2 0 1 5 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 2 0 3 1 2 0 3 3 2 0 3 5 2 0 3 7 2 0 3 9 2 0 4 1 2 0 4 3 2 0 4 5 2 0 4 7 2 0 4 9 2 0 1 1 israel electricity cyprus electricity cyprus lng israel lng figure 3: exports of electricity and lng from cyprus and israel. b ill io n u s d (a) (b) 35 30 25 20 15 10 5 0 −5 2 0 1 3 2 0 1 5 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 2 0 3 1 2 0 3 3 2 0 3 5 2 0 3 7 2 0 3 9 2 0 4 1 2 0 4 3 2 0 4 5 2 0 4 7 2 0 4 9 2 0 1 1 b ill io n u s d 0 −30 −20 −10 10 20 −40 −50 2 0 1 3 2 0 1 5 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 2 0 3 1 2 0 3 3 2 0 3 5 2 0 3 7 2 0 3 9 2 0 4 1 2 0 4 3 2 0 4 5 2 0 4 7 2 0 4 9 2 0 1 1 cyprus israel cyprus (no gas) israel (no gas) cyprus israel total figure 4: (a) costs of the energy system of the two countries over the projected period in the baseline scenario and the “no gas reserves” scenario, and (b) cost savings achieved when exploiting gas reserves in the baseline scenario, in billion usd. more gas; the proven reserves are expected to increase for both countries in the future. however, since the liquefaction facilities are likely to be built in cyprus [15], in reality it remains to be seen what kind of agreement will be reached by the two countries. it is possible that cyprus may be able to raise its profits based on revenue sharing agreements and through the use of transport tariffs. 3.2. assessment of selected scenarios 3.2.1. the choice between exported electricity and lng in this sub-section, the results from scenarios 1–3 (table 1) are evaluated to identify the circumstances under which electricity as an export product becomes more attractive than lng and vice versa. detailed results regarding exports and fate of extracted natural gas are provided in annex c. as discussed, based on the current commodity prices, it seems more profitable for the two countries to sell lng rather than electricity, as the cable’s capacity is not used to its full extent for the majority of the period. when the capacity of the cable is allowed to double in the first assessment scenario, the amount of electricity sold to europe from cyprus doubles as well. however, the corresponding amount from israel shows an increase of 38%. this means that the cable’s capacity is not fully utilized, which is an indication that on balance lng is more profitable at the assumed prices. in scenario 2, it is interesting to see that as the price of lng is increased, even by 25%, cyprus completely shuts down its electricity exports and diverts that amount of natural gas, as well as some natural gas previously used for its own power generation, into lng sales. additionally, cyprus chooses to import minor amounts of electricity from israel as the price of lng increases. this suggests that it seems preferable for the cyprus system to sell its natural gas as lng and cover those minute needs by imports. evidently, as the price of lng is increased further, israel is more reluctant to sell electricity and also prefers to export lng. due to the fact that lng prices vary significantly per region [2], it could be argued that it may be preferable for the two countries to sell lng to asian countries rather than europe, as the prices there are higher. on the other hand, once the price of electricity is increased in scenario 3, the outlook of exports changes to a considerable extent. even with the smallest increase of 25%, cyprus decreases lng exports by 33% and more than doubles its electricity exports, when compared to the baseline scenario. the israeli system in this case behaves very differently. it reduces both its lng and electricity exports, but increases electricity generated from natural gas for internal purposes, thus reducing combustion of coal. this can be explained by the fact that since it is now more profitable to sell electricity, the cyprus system likes to do exactly that, thus taking over the majority of the cable’s capacity between the years 2022–2043 (figure 5). since the transmission losses from cyprus to europe are lower than those from israel-to-cyprus-to-europe, message recognizes that it is preferable for the system as a whole to sell electricity from cyprus rather than israel. nevertheless, as the price of electricity increases, the amount of electricity exported by israel also increases and reaches higher amounts than the baseline scenario, once the price is doubled. it can be concluded from the international journal of sustainable energy planning and management vol. 03 2014 11 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch 250 200 100 150 50 0 t w h 2 0 1 3 2 0 1 5 2 0 1 7 2 0 1 9 2 0 2 1 2 0 2 3 2 0 2 5 2 0 2 7 2 0 2 9 2 0 3 1 2 0 3 3 2 0 3 5 2 0 3 7 2 0 3 9 2 0 4 1 2 0 4 3 2 0 4 5 2 0 4 7 2 0 4 9 2 0 1 1 israel electricity cyprus electricity israel lng cyprus lng figure 5: exports in the scenario of higher electricity prices by 25%. results of scenario 3 that if the price of lng is reduced or if the price of electricity is increased, the two countries may have to compete for the right to sell their electricity to europe via a common electricity link. 3.2.2. the prospect of petrochemical production the following sub-section addresses the findings of scenario 4. as a result of the price difference between natural gas and oil products in the global market [20] and the discovery of gas reserves in areas away from demand, the possibility of converting natural gas into more transferable and competitive products has been gaining substantial attention [21]. gas-to-liquids (gtl) plants have been in operation for several decades and under the right conditions have proven their commercial viability [22, 23]. the largest plant currently in operation was constructed in qatar by shell, and produces 140 thousand barrels of gtl products per day, among which are 120 thousand barrels of oil of natural gas liquids and ethane [24]. the interest in gtl production has been increasing in various areas of the world [25, 26]. in this scenario, the option of developing gtl plants in cyprus and israel was investigated. a plant with a small capacity of 17 thousand bbl/day was added to the system for each of the countries, an export price of $107.25/bbl was set and the model was run. further assumptions regarding the specifications of the gtl plants can be found in appendix b. model results of this scenario indicate that gtl production can be viable. in figure 6, the fate of extracted natural gas in each of the countries can be seen. it has to be highlighted that in both cases the amount of natural gas converted to petrochemical products is equal to the maximum allowed quantity set in the model for the entire time of operation; 22 years in cyprus and 20 years in israel, which is shorter than the defined lifetime of the petrochemical plants set at 30 years. in this scenario, the total discounted system cost savings amount to 29 billion usd; 5 more than in the baseline scenario. this is an indication, based on the price assumptions adopted, that petrochemical production is more profitable. as indicated by figure 6, even though in this scenario gtl products are being exported, the majority of exports from the two countries is still lng, due to the limitation placed on petrochemical production. however, there are a few important aspects that need careful consideration before deciding to invest in liquefaction or gtl plants. first of all, space could be an issue, especially in the case of cyprus, a small island whose economy currently relies to a great extent on tourism. the construction of projects of such magnitude will most likely occur along the coast due to shipping. since there are already questions about the location of the proposed lng plant in cyprus [27], finding a location for an additional gtl plant might offer some difficulty. secondly, security is another important issue and since the eastern mediterranean and the greater middle east is a politically volatile region, costs for guarding facilities of huge significance could be quite high and 12 international journal of sustainable energy planning and management vol. 03 2014 energy security prospects in cyprus and israel: a focus on natural gas 100 90 80 70 60 50 40 30 20 10 0 t w h 400 350 300 250 200 150 100 50 0 t w h 2 0 1 1 2 0 1 4 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 2 0 3 8 2 0 4 1 2 0 4 4 2 0 4 7 2 0 1 1 2 0 1 4 2 0 1 7 2 0 2 0 2 0 2 3 2 0 2 6 2 0 2 9 2 0 3 2 2 0 3 5 2 0 3 8 2 0 4 1 2 0 4 4 2 0 4 7 gas for gtl production gas for gtl liquefaction gas for power generation figure 6: fate of natural gas (gwh) for each year in cyprus (left) and israel (right). having to protect two such locations undeniably raises overall expenses. lastly, but perhaps most importantly, price fluctuations of oil and natural gas could affect gtl economic viability in the future. when the price gap between the two commodities is larger, the incentives for investment in gtl projects increase [20], which is the case with current prices. however, if prices for natural gas start to increase at a much faster pace than for oil, it will make more sense to invest in liquefaction plants and simply export lng. hence, the risk is rather high, thus the responsible authorities of the two countries should carefully assess the possible alternatives and make the appropriate decisions. 4. conclusions it is clear from the results above that the discovery of natural gas reserves in cyprus and israel can lead to major changes in the power generation of the two countries. significant infrastructure investments will be required for the transformation and export of natural gas products. these gas discoveries will bring about major economic benefits for the two countries. it is estimated that the undiscounted total savings achieved by the two countries during the whole projection period add up to about 182 billion usd; the corresponding figure with a discount rate of 10%1 reaches 24 billion usd. these figures do not include the revenue for utilities from sales of electricity within the local systems at a considerably lower cost nor any other socioeconomic aspects, such as the creation of jobs or the development of associated industry. based on the assumed commodity prices, our results suggest that it is more profitable to export lng rather than electricity, despite the high investment and operation costs of liquefaction plants. similarly, the current price difference between oil and natural gas supports the prospect of petrochemical production. the proven reserves of natural gas seem to be able to support the infrastructure required for exports of electricity, lng or gtl products. huge investments will be required in the two countries for extraction, installation of the electricity cable to mainland europe, construction of pipelines, lng terminal or gtl plant. one could expect that with the probable discovery of further natural gas reserves, the viability of such major projects, as well as the revenue from exports, will undeniably increase. in a time of economic crisis, this can act as an incentive for prompt decisions on a political level. in this paper we only addressed the internal demand for power for the two countries. however, there is the prospect that a substantial volume of the gas could go into meeting demand for heat or transport. for instance, in 2010 the residential sector in cyprus consumed 84 ktonnes of oil [7], mainly for heating purposes, so arguably there is potential for natural gas to replace this fuel. furthermore, in the middle east and north africa consumption of gas has doubled from 1999 to 2010 and its use in energy-intensive industries is expected to continue to grow [28]. the possibility that a similar situation will happen in cyprus and israel should not be overlooked. a proper assessment of external markets will be needed as well. for instance, gas can be sold at a higher price in south korea and japan than in europe [2], but the distances are obviously greater. furthermore, according to the european union’s energy security and solidarity action plan, making full use of the union’s indigenous energy sources and improving external relations with fuel suppliers are two key aspects in securing the eu’s energy future [29]. therefore, it could be argued that the eu itself could benefit from exploitation of these gas reserves and should encourage, if not actively participate in, the construction of the necessary infastructure. israel and cyprus may not have the reserves to develop into global competitors in the gas market, but they can have an influence on the european market, primarily in terms of diversification of supply [30]. it should be noted that the model used has some weaknesses. for instance, the option of importing natural gas was not given to cyprus. of course, cyprus could import natural gas from israel for the time being, until cyprus extracts its own natural gas, since they will most likely cooperate in the exploitation of their reserves. another weakness of the model is the exclusion of detailed transportation costing. nonetheless, this relatively small cost would not make very big changes to the model results. to sum up, a key objective of this paper was to evaluate infrastructure development trends under certain scenarios and how the natural gas reserves of the two international journal of sustainable energy planning and management vol. 03 2014 13 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch 1 a discount rate of 10% was selected to simulate a more competitive investment environment, in which there is relatively increased uncertainty regarding future cash flows; this conservative approach was employed to assess the viability 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[online] available at: http://www.sarienergy.org/pagefiles/what_we_do/activities/gemtp/cee_ natural_gas_value_chain.pdf [accessed on 15th march 2012]. [32] us eia, 2011. voluntary reporting of greenhouse gases program fuel emission coefficients [online]. available at: http://205.254.135.7/oiaf/1605/coefficients.html [accessed on 29th may 2012] [33] iea, 2010. projected costs of generating electricity 2010 edition. [online] available at: http://www.iea.org/publications/ free_new_desc.asp?pubs_id=2207 doi :10.1787/20798393 [accessed 22nd march 2012] [34] irena, 2012. prospects for the african power sector. [online] available at: http://www.irena.org/documentdownloads/ publications/prospects_for_the_african_powersector.pdf [accessed 2nd april 2012] [35] halstead, k., 2006. oryx gtl a case study. [online] available at: http://www.fwc.com/publications/tech_papers/ files/oryx781fosterwheeler.pdf [accessed on 16th july 2012]. international journal of sustainable energy planning and management vol. 03 2014 15 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch annex a reference energy system istocytrans isgas_res emgas_liqcy eugas eutrans cytoeutrans cygas_res transmission 2 emgas_liqis istoeuviacytrans isdummyisdummy isoil_imp isdies_imp distributiontransmission primary tertiarysecondary final isgas_extr iscoa_imp isgas_imp cydummy cydummy cycsp cydummy cygas cygas_extr cyoil_imp cydies_imp cywindex cyccgtdes cygtdesex cysuoilex cypvex cybioex distribution transmission ispv isbio iswind iscsp isdummy isprdesex isjgtdesex issuoilex isigtgasex issucoaex issugasex isccgtgasex http://www.shell.com/home/content/aboutshell/our_strategy/major_projects_2/pearl/overview/ http://www.shell.com/home/content/aboutshell/our_strategy/major_projects_2/pearl/overview/ http://www.erpic.eu/index.php?option=com_content&view=article&id=275&itemid=90 http://www.erpic.eu/index.php?option=com_content&view=article&id=275&itemid=90 http://www.oxfordenergy.org/wpcms/wp-content/uploads/2011/09/mep_2.pdf http://www.oxfordenergy.org/wpcms/wp-content/uploads/2011/09/mep_2.pdf http://ec.europa.eu/energy/strategies/2008/doc/2008_11_ser2/strategic_energy_review_memo.pdf http://ec.europa.eu/energy/strategies/2008/doc/2008_11_ser2/strategic_energy_review_memo.pdf http://www.oxfordenergy.org/wpcms/wp-content/uploads/2012/12/ng-71.pdf http://www.oxfordenergy.org/wpcms/wp-content/uploads/2012/12/ng-71.pdf http://www.sari-energy.org/pagefiles/what_we_do/activities/gemtp/cee_natural_gas_value_chain.pdf http://www.sari-energy.org/pagefiles/what_we_do/activities/gemtp/cee_natural_gas_value_chain.pdf http://www.sari-energy.org/pagefiles/what_we_do/activities/gemtp/cee_natural_gas_value_chain.pdf http://www.iea.org/publications/free_new_desc.asp?pubs_id=2207 http://www.iea.org/publications/free_new_desc.asp?pubs_id=2207 http://www.irena.org/documentdownloads/publications/prospects_for_the_african_powersector.pdf http://www.irena.org/documentdownloads/publications/prospects_for_the_african_powersector.pdf http://www.fwc.com/publications/tech_papers/files/oryx781fosterwheeler.pdf http://www.fwc.com/publications/tech_papers/files/oryx781fosterwheeler.pdf 16 international journal of sustainable energy planning and management vol. 03 2014 energy security prospects in cyprus and israel: a focus on natural gas table b1: transmission, distribution, regional, fuel import and fuel extraction technologies. message variable investment ktonnes co2/ technology model code efficiency cost ($/mwh) [2] cost ($/kw) mwyr [32] first year cyprus diesel import cydies_imp 1 167.2 a 2.186 gas extraction for electricity cygas_extr 1 3.42 b 1.581 2015 heavy fuel oil import cyoil_imp 1 62.3 c 2.186 transmission etrans 0.9825 [14] transmission (bought electricity) etrans2 0.9825 [14] 120.4 d distribution edist 0.95 liquefaction emgas_liqcy 0.95 [27] 6.84 b (includes extraction) 928.9 [27] 2015 israel diesel import isdies_imp 1 140.3 e 2.186 coal import iscoa_imp 1 15.5 f 3.099 gas import isgas_imp 1 23.2 g 1.581 heavy fuel oil import isoil_imp 1 82.1 h 2.186 gas extraction for electricity isgas_extr 1 3.42 b 1.581 transmission etransis 0.98 [18] distribution edistis 0.977 [18] liquefaction emgas_liqis 0.95 [27] 6.84 b (includes extraction) 928.9 [27] 2015 regional israel to cyprus transmission istocytrans 0.95 375 [15] 2015 israel to europe istoeuviacytrans 0.95 375 [15] 2015 cyprus to europe transmission cytoeutrans 0.95 375 [15] 2015 europe transmission eutrans 1 -120.4 d europe gas uptake eugas 1 -32.4 i a used oecd europe automotive diesel oil prices for commercial use in usd/toe for 2q2011. b assumption based on [31]. c used germany heavy fuel oil prices for electricity generation in usd/toe for 2q2011, assuming similarities. d used greece end-use electricity prices for industry in usd/toe for 2q2011. e used total oecd automotive diesel oil prices for commercial use in usd/toe for 2q2011. f used oecd import cost of steam coal for 2q2011. g used israel natural gas prices for electricity generation in usd/toe for 2q2011. h used israel heavy fuel oil prices for electricity generation in usd/toe for 2q2011. i used eu average for lng import prices into europe in usd/mbtu for summer 2011. annex b technology input data international journal of sustainable energy planning and management vol. 03 2014 17 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch table b3: power plant installations in israel. load/ message variable cost plant life first investment historical capacity technology model code efficiency* ($/mwh)[33] (yrs) [33] year cost ($/kw) capacity [8]** factor existing oil steam units issuoilex 0.3061 20 40 1980-428 0.144[8] existing gas steam units issugasex 0.3061 5.38 35 1990-1344 0.461[8] existing diesel jet gas turbines isjgtdesex 0.22 24.25 40 1970-27 0.144[8] 1980-417 1990-60 existing coal steam units issucoaex 0.3061 8.5 40 1990-1950 0.808[8] 2000-2340 2001-550 existing gas industrial gas turbines isigtgasex 0.22 5.38 30 1990-420 0.461[8] 2000-1374 2007-234 2010-777 existing diesel private producers isprdesex 0.22 24.25 40 2000-26 0.144[8] 2009-134 2010-58 table b2: power plant installations in cyprus. historical load/ technology message variable cost plant life first investment capacity * capacity model code efficiency [14] ($/mwh) [33] (yrs) [36] year cost ($/kw) (year-mw) [14] factor existing oil steam units cysuoilex 0.3061 20 50 1966-60 0.85 [33] 1976-120 1982-60 1993-300 2000-390 existing wind farms cywindex 1 25 25 2010-82 2011-51.5 0.2 [33,34] existing biogas cybioex 1 2.65 30 2007-8 0.85 [33] existing diesel gas turbines cygtdesex 0.2121 24.25 50 1993-75 1995-75 1999-38 0.85 [34] existing photovoltaics cypvex 1 50 25 2006-9.3 0.2 [33,34] existing diesel combined cycle gas turbines cyccgtdesex 0.4689 24.25 40 2010-440 0.2 [33] potential concentrated solar power cycsp 1 27.5 25 2015 5500 [33,34] 0.3 [33,34] potential gas units cygas 0.4689 5 30 2015 1300 [33] 0.55 [33] potential biogas cybio 1 2.65 30 2550 [33,34] 0.85 [33] potential photovoltaics cypv 1 50 25 5500 [33,34] 0.2 [33,34] potential oil units cyoil 0.3604 20 40 1817 [33] 0.85 [33] potential diesel combined cycle gas turbines cyccgtdes 0.4689 24.25 40 461 [33] 0.85 [33] potential wind farms cywind 1 25 25 2000 [33,34] 0.2 [33,34] dummy plants cydummy 1 11415 2 99999 * the values are approximate and correspond to the addition of capacity on the given year. 18 international journal of sustainable energy planning and management vol. 03 2014 energy security prospects in cyprus and israel: a focus on natural gas table b3: power plant installations in israel (continued). load/ message variable cost plant life first investment historical capacity technology model code efficiency* ($/mwh)[33] (yrs) [33] year cost ($/kw) capacity [8]** factor existing gas combined cycle gas turbine isccgtgasex 0.4689 5 30 2000-337 0.461[8] 2002-343 2003-315 2006-488 2007-142 2008-709 2009-465 potential photovoltaics ispv 1 50 25 5500[33,34] 0.2[33,34] potential biogas isbio 1 2.65 30 2550[33,34] 0.85[33] potential concentrated solar power iscsp 1 27.5 25 2015 5500[33,34] 0.3[33,34] potential wind farms iswind 1 25 25 2000[33,34] 0.2[33,34] potential oil units isoil 0.3604 20 40 1817[33] 0.144[8] potential diesel units isdes 0.3 24.25 40 461[33] 0.144[8] potential coal units iscoa 0.3604 8.5 40 3000[33] 0.808[8] potential gas units isgas 0.4689 5 30 1300[33] 0.461[8] dummy plants isdummy 1 11415 2 99999 * assumed same thermal efficiencies as the corresponding plants in cyprus [14]. ** the values are approximate and correspond to the addition of capacity on the given year. annex c selected scenario results table c1: total exports from cyprus and israel in each scenario, throughout the projection period (2011–2050). cyprus israel scenario lng (gwh) electricity (gwh) lng (gwh) electricity (gwh) baseline scenario 1 124 072 150 434 4 386 202 202 004 additional cable 748 741 326 511 4 050 381 278 427 higher lng prices (+25%) 1 476 402 0 4 653 234 157 060 higher lng prices (+50%) 1 525 107 0 4 979 299 123 254 higher lng prices (+100%) 1 580 604 0 5 511 715 100 736 higher lng prices (+150%) 1 621 999 0 5 658 294 100 736 higher electricity prices (+25%) 757 091 327 609 3 270 094 144 065 higher electricity prices (+50%) 722 678 344 245 3 232 870 146 230 higher electricity prices (+100%) 688 264 362 878 3 232 870 242 439 higher electricity prices (+150%) 688 264 369 010 3 232 870 244 191 table b4: gtl plant specifications. capacity maximum investment operating export (bbl/d) production (gwh) efficiency[24] cost ($/kw)[20] cost ($/mwh)[35] plant life (yrs) price ($/mwh)* 17 000 10 548 0.424 1694.4 4 30 63.1 * used average price for crude oil during january-september of 2011 for iea countries [2]. international journal of sustainable energy planning and management vol. 03 2014 19 constantinos taliotis, mark howells, morgan bazilian, hans-holger rogner and manuel welsch table c2: fate of extracted natural gas in each scenario, throughout the projection period (2011–2050). cyprus israel scenario liquefaction power generation liquefaction power (gwh) (gwh) (gwh) generation (gwh) baseline scenario 1 183 234 923 739 4 617 055 3 810 847 additional cable 788 148 1 318 825 4 263 559 4 164 342 higher lng prices (+25%) 1 554 107 552 866 4 898 141 3 529 759 higher lng prices (+50%) 1 605 376 501 597 5 241 367 3 186 533 higher lng prices (+100%) 1 663 793 443 179 5 801 805 2 626 094 higher lng prices (+150%) 1 707 367 399 606 5 956 099 2 471 800 higher electricity prices (+25%) 796 938 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 30 2021 5 *corresponding author e-mail: rajabi@sharif.edu international journal of sustainable energy planning and management vol. 30 2021 05–20 abstract energy hub concept has been emerged as a suitable tool to analyze multi-carrier energy systems. deregulation and increasing competition in the energy industry have provided a suitable platform for developing the multi-agent energy systems. planning of energy hubs considering the competition between the hubs has not been sufficiently addressed, yet. a model has been proposed in this study for planning of a multi-hub energy system considering the competition between the hubs. the hubs are interconnected via an electric transmission system. a linear model has been developed to determine the optimal planning/operation strategy for energy hubs in a multi-period planning horizon to meet the heat and electricity demand for the defined load zone. the problem has been formulated and solved using karush–kuhn–tucker (kkt) conditions. the proposed model has been applied to 3-hub and 5-hub energy systems. the effect of renewable generation and storage system has also been evaluatedit has also been observed that inclusion of renewable generation or storage technologies can reduce the conventional electricity generation capacity by 63 percent in hub2. planning of multi-hub energy system by considering competition issue behzad farshidiana, abbas rajabi-ghahnavieha*, ehsan haghib a department of energy engineering, sharif university of technology, azadi avenue, p.o. box 11155-8639, tehran, iran b department of chemical engineering, university of waterloo, 200 university avenue w, waterloo, on, canada, n2l 3g keywords energy hub; energy market; multi-agent planning; competitive model; url: https://doi.org/10.5278/ijsepm.6190 1. introduction deregulation and liberalization of energy markets is a strategy taken by many policymakers around the world. encouraging competition to introduce new technologies and increasing efficiency are the motivation for the liberalization of energy markets in recent years [1, 2]. the restructuring of the power market has increased the competition between different generators. this procedure leads to eliminate expensive technologies of the systems that will reduce the energy cost for the consumers [3]. it should be noted that the operation and planning of energy systems in a centralized system are different from the deregulated system. in a centralized system, an operator plans the system to minimize the total cost. in a deregulated market, however, the energy producers and energy consumers try to maximize their benefits [2]. this procedure has given rise to the emergence of researches in the strategic biding and generation planning areas [2]. multi-carrier energy system allow for a better integration of volatile renewables and provide the opportunity for an enhanced primary energy efficiency, compared to current energy systems with decoupled energy carriers [4]. greiml et al. [4] presented general aspects on modelling, designing and operating of mes, coupling the grid bound energy carrier electricity, gas, and heat. lazzeroni et al. [5] studying optimization of a polygeneration system that supplying an existing dhc network in the north of italy. different possible configurations of technology proposed and optimization https://doi.org/10.5278/ijsepm.6190 6 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue model is based on a mixed integer linear programming (milp) formulation. kuriyan et al. [6] present a model for planning district energy systems. the model is formulated as a mixed integer linear program (milp) and selects the optimal mix of technology types, sizes and fuels for local energy generation, combined with energy imports and exports. the concept of energy hub has been widely used to study, evaluate, and optimize multi-carrier energy systems. buildings, urban areas, and industrial plants are among the cases that consume both heat and electricity, and they are considered as suitable subjects to study energy hub. nomenclature parameter: tlred electricity demand for hub (r) at year (t) and load zone (l) (mwh). tlrhd heat demand for hub (r) at year (t) and load zone (l) (mwh). rjll transmission line loading limit for the line that connects hub (r) to hub (j) (mw). rp input energy price of hub (r) (usd/m 3). rtucτ the unit cost of technology τ for hub (r) (usd /mw). ,elec rτη electrical efficiency of technology for hub (r). ,heat rh τ thermal efficiency of technology τ for hub (r). ll∆ load zone duration for load zone (l) (hr). number of technology ne number of energy carrier. number of years. nz number of load zones. variable rgcc cost of gas consumption cost for hub (r) (usd). electricity transmission from region (r) to region (j) at year (t) and load zone (l). total energy consumption for hub (r) at year (t) and load zone (l) (mwh). tl rf τ energy consumption for technology (τ ) at year (t) and load zone (l) in hub (r) (mwh). nt ny tlrje tlrf geidl and andersson [7–9] introduced the concept of “energy hub” in their work as a modeling method that covers different types of energy flows and enables actual systems analysis. energy flows in one energy hub includes electricity, thermal flow, and chemical flows [10]. an energy hub receives different energy flows and uses conversion and storage technologies to provide energy demand as its output [11]. evins et al. [10], for instance, developed an updated model to evaluate the performance of energy hub. the tlrg total electricity generation for hub (r) at year (t) and load zone (l). tl rg τ electricity generation technology (τ ) for hub (r) at year (t) and load zone (l). tlrh total heat generation for hub (r) at year (t) and load zone (l). tl rh τ heat generation technology (τ ) for hub (r) at year (t) and load zone (l). rpic power import cost for hub (r). rper power export revenue for hub (r) t rtc τ capacity added for technology (τ ) and hub (r) at year (t). rtic technology investment cost for hub (r). rttcτ total technology capacity for technology (τ ) and hub (r). rz objective function for hub (r). λ lagrange multiplier for hub (r). tlrπ regional market price for region (r) at year (t) and load zone (l). superscripts and indices: l load zone index. r,j hub or region index. t year of planning horizon index. τ type of technology index. international journal of sustainable energy planning and management vol. 30 2021 7 behzad farshidian, abbas rajabi-ghahnavieha, ehsan haghi model developed in [10] limits the number of state changes (startups or shutdowns) and uses stepwise approximations of efficiency curves to model part-load behavior accurately. brahman et al. [12] developed a residential energy hub model with electricity, natural gas, and solar radiation as the inputs that are supposed to supply electrical, heating, and cooling demands. similarly, zidan and gabbar [13] presented an energy hub model for optimizing the cost and co2 emissions. the energy hub used natural gas, electricity, and renewable energy to supply electricity and heat demands. ma et al. [14] proposed an energy hub model to optimize the hub operation to minimize daily operational costs. the authors in [14] used a day-ahead dynamic optimal operational model considering the demand response to develop the optimization problems. renewable energy, combined cooling-heating, and power and energy storage devices were among the considered technologies in the energy hub in [14]. vahidpakdel et al. [15] developed a model to find the optimal operation of an energy hub with wind farms, storage systems, and district heating networks. authors in [15] have used stochastic programming or modeling demands, market prices, and wind speed. el-zonkoly et al. [16] developed a multi-objective optimization model for optimizing the operation of an energy hub. the objectives of optimization problems were minimizing the capital and operational cost of the energy hub, reducing greenhouse gas (ghg) emissions, and also maximizing the revenue gained from power exporting. majidi et al. [17] used the weighted sum approach to solve a multi-objective optimization model of the economic operation of an energy hub. the objective function components were operating costs of the hub energy system and greenhouse emissions generated in the energy hub system. moghaddam et al. [18] developed a model to find the optimal operation of an energy hub that uses electricity and natural gas as inputs while supplying the electricity, heating, and cooling demand of a residential building. dolatabadi et al. [19] proposed a model to find the optimal size and configuration of energy conversion technologies to supply thermal and electrical demands. the authors in [19] invented different scenarios based on wind power generation, load forecasting, and random outages of components. najafi et al. [20] developed a bi-level approach for hub and customer management. the hub problem is considered as the upper-level problem, while the customers’ problem forms the lower-level ones. the karush–kuhn–tucker (kkt) condition has been used to solve the problem according to a strong optimality condition. while the reviewed literature has been focused on developing models for a single hub, studying the role of each agents is a lacking area in the modeling and design of energy systems. [21]; however, including all decisionmakers in an energy system, is vital for accurate modeling of such systems [22]. as a result, many researchers have analyzed systems, where multi-energy hubs are available, and the energy hubs interact with each other. huo et al. [23], for instance, developed an optimization model to find the optimal flow between two energy hubs. heat pump, solar power, and boiler technologies were considered in the hubs, and they were capable of exchanging power and heat. the objective function was developed for the whole system. zhang et al. [24] proposed an optimization problem for the expansion planning of an interconnected multinode energy hub system for over ten years. the objective function of the model was minimizing the total net present value of the system. the analyzed case study in [24] is an energy system with six interconnected hubs. zhang et al. [25] developed a multi-agent bargaining learning-model for economic dispatch of energy hubs. although the authors in this model have considered each hub as an agent, the objectives of their optimization problem were total energy cost and total energy loss. yang et al. [26] developed a model for the optimal dispatch of interconnected energy hubs. the case study is a 15-node regional multi-energy prosumer whose energy demands are supplied by the hubs that used cchp, distributed renewable energy generators, and energy storage technologies. the objectives in the model optimization were the prosumer’s cost of purchasing electricity, natural gas, and ghg emissions. sheikhi et al. [27] stated a game theory approach for modeling the interaction of different energy hubs. the aim of each hub was to reduce the energy bill. the nash equilibrium concept was used as the sub-gradient optimization method to solve the game theory problem. the proposed model was shown to effectively reduce the peak-to average ratio in the electricity grid. wang et al. [28], presented an energy market framework to analyze microgrid participation in energy 8 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue trading. in the model developed by wang et al., microgrid first bid in a distribution electricity market. the electricity could be sold and bought between the distribution electricity market and a day-ahead wholesale market. the distribution electricity market, day-ahead wholesale market, and an additional gas market are then presented in the form of a stochastic equilibrium model. badri et al. [29], analyzed the market behavior of electricity generation companies practicing in a market with transmission constraints and when the market power of the participants is taken into account. the model is solved using a bi-level optimization framework with generation companies in one level and independent operator in the other level. in their work [30], wang et al, compared the nash equilibrium and competition equilibrium in the electric power market. the results their comparison showed that nash equilibrium should be used to achieve mathematical optimization while the economic optimization is achieved by the competition equilibrium. in that sense, competition equilibrium maximizes market efficiency and fairness for market benefit. kasaei [31] presented a model to optimize energy management of a power plant. the model developed by kasaei was based on imperialist competitive algorithm and is used to minimize the operating cost of a virtual power plant consisting of aggregated distributed energy resources, energy storage devices, and controllable loads. a system with renewable energy technologies and battery storage is used as a case study. gebremedhin and moshfegh [32] developed a heat market model with seven different participants. the results of the modeling done by gebremedhin and moshfegh shows that an integrated system in which players are able to participate in market leads to cost reduction for the system. investigation of the effectiveness of bid performance by power producer is done by fatemi ardestani et al. [33]. the authors used two different methods to investigate the effectiveness of bid performance by power producer. in the first method, power producers submit a first step bid on the meeting point of the bidder’s actual bid and the market demand curve. in the second method, the power producers bid based on realized residual demand. coffey and kutrowski [34] presented a dispatch strategy for a cogeneration system considering the effect of monthly charges and hourly prices. the authors used three office buildings with different cogeneration size and efficiency characteristics and showed that their proposed model leads to payback periods of 5–10 years for an investment in a cogeneration system. while multi-hub energy systems have been studied in [24–34], the planning problem of multi hub system has been addressed in [25] and [26] only. on the other hand, the competition among the hubs must be considered in determining optimal planning/operation of each hubs (agents) in deregulated energy system. however, to the authors’ best knowledge, no research work is available on planning of multi-hub energy system considering the competition between the hubs. a model has been proposed in this study for planning/ operation of a multi-hub energy system considering the competition between the hubs. each hub has its own objective function and seeks to minimize the cost of supplying demand. therefore, each hub picks its optimized strategy regarding demand, market prices and specifications of available technologies. the hubs are interconnected via an electric transmission system. while the heat demand for each hub must be supplied by deploying associated technologies, the electricity demand can be fulfilled by investing in technologies or exchanging through the transmission system considering the market price and line loading limits. therefore, the decision variables for each hub are built capacity and gas consumption of each technology as well as the amount of electricity exchanged with the market. a linear model has been developed to determine the optimal planning/operation of heat and electricity generation technologies for energy hubs in a multi-period planning horizon to meet the heat and electricity demand for the defined load zone. the problem has been formulated and solved using karush–kuhn–tucker (kkt) conditions. solving the model will result in annual built capacity in different technologies for the hubs. other outputs include electricity exchanges between the hubs, and also gas consumption by technologies for each load zones of the planning horizon for each hub. market price is obtained from market clearing conditions in the equilibrium problems. the contributions of the presented work are: i. considering the competition in the multi-period planning of a multi-hub energy system, ii. proposing a linear model for the problem of optimal planning of competing energy hub, iii. using multi-period planning with multi load zone demand profiles, iv. using kkt conditions to find the optimal solution for the problem. international journal of sustainable energy planning and management vol. 30 2021 9 behzad farshidian, abbas rajabi-ghahnavieha, ehsan haghi the proposed model can be considered as a general model for finding the optimal planning of energy systems where the competition between the agents (hub, generation plants, virtual power plant, etc.) must be considered. in particular, the proposed model can be used for optimal planning of an independent set of energy systems. large-scale energy systems, interconnected energy systems or even an isolated set of micro grids are among the cases which could be studied by the proposed model. 2. methodology as already mentioned, this study aims at developing a model for optimal planning of independent interconnected energy hubs considering the competition between the hubs. 2.1. proposed model figure 1 shows a multi-hub energy system. as can be seen in figure 1, each energy hub (one through nh) can buy natural gas from a gas source (that is shown by gsi) at the price of pi. each hub utilizes conversion technologies to convert natural gas into heat and power. the associated heat demand (hd) with the hub should be supplied by the heat generation technologies. the hub can supply the electric demand (ed) using power generation technologies or power imports from the regional market. the hubs are interconnected via electric transmission lines (shown by dashed lines in figure 1). based on the electricity demand and supply in the hub market, electricity price varies in each load zone. the market is cleared by balancing supply and demand. it is assumed that the price of the imported power is equal to the market price of the importing hub. exporting hubs only offer the amount of power that they are willing to export, and they do not offer the price. exporting hubs receive destination hub market price for the power they export. the planning problem for each hub is to determine the optimal size for the technologies in each year (t) of the planning horizon, and optimal operation for each load zone (l) considering the capital cost and efficiency. these elements are associated with the technologies as well as the total energy supply costs during the planning horizon. the energy supply cost includes gas consumption costs and the imported power costs from the importing hub’s market. each hub may make revenue by selling power to other hubs’ market. each year is divided into nl load zones (such as peak, off-peak, … load zones). gas consumption and electricity exchange, as well as the electricity market price, are then determined for each load zone of the planning years. for each hub (r), the objective function is to minimize the total cost (zr), including technology investment cost (ticr), gas consumption cost (gccr) as well as the power import cost (picr) minus the power export revenue (perr) as expressed in eq. (1). for all hubs, the maintenance cost is assumed to be zero. also, only the fuel cost is accounted as the operation cost. in eq. (1), technology investment cost for hub r (ticr) is calculated according to eq. (2). where tctτr represents added capacity for technology τ in hub r at the beginning of year t in kw, and tucτr is the unit cost of technology τ for hub r in usd/kw. in eq. (1), gas consumption cost for hub r (gccr) is calculated according to eq. (3). in eq. (3), ftlr denotes gas consumption for hub r at year t, load zone l in kwh, and pr gas price in hub (r) in usd/ (1) objective function min( ) -r r r r rz tic gcc pic per= = + + (2) 1 1 ny nt r t r r t tic tc tucτ τ τ= = = ×∑∑ (3) 1 1 ny nz r r tlr t l gcc p f = = = ∑∑ figure 1: independent interconnected energy hub 10 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue kwh, as shown in eq. (3). power import cost for hub r (picr) in eq. (1) is calculated according to eq. (4). where etlr is the imported power for hub r at year t, load zone l in kwh, and πtlr is the market price for hub r at the year t, load zone l in usd /kwh. finally, power export revenue for hub r (perr), is calculated according to eq. (5). where etlrj represented the exported power from hub r to market of hub jat year t, load zone l in kwh, πtlr and market price for hub j at year t, load zone l in usd /kwh (πtlr). in eq. (2)-(5), nh represents the total number of the hubs, ny indicates the number of planning horizon years and nz is the number of load zones in each year. in this work, energy hub operators can invest in two different types for power plants (pp), two types of boilers (b), and two types of combined heat and power (chp) technologies to fulfill heat and electricity demand, as shown in figure 2. in figure 2, ftlτr is the natural gas input of technology τ at year t and load zone l in hub r in terms of kwh, gtlτr is generated electricity by technology r at year t and load zone l in hub r in terms of kwh, and htlτr is heat generated by technology τ at year t, and load zone l in hub r in terms of kwh. according to figure 2, ftli, gtlr, and htlr represent the total natural gas consumption, total electricity generated and the total heat generated in year t and load zone l in hub r in terms of kwh, respectively. these quantities are calculated as stated in eq. (6), eq. (7), and eq. (8). where gtlτr and htlτr are calculated as the productions of natural gas inputs to the technology and efficiency of the technology shown in eq. (9) and eq. (10). capacity constraints shown in eq. (11) and eq. (12). where tctτr represents the capacity of technology τ in hub r at year t. l∆ in eq. (11) and (12) is the load zone duration. as mentioned before, each energy hub is supposed to supply its own heat and electricity demand. figure 3 shows the heat and electricity balance at each hub. the electricity demand of hub r at year t and load zone l (4) 1 1 ny nz r tlr tlr t l pic eiπ = = = ∑∑ (5) 1 1 1, ny nz nh r tlj tlrj t l j j i per eπ = = = ≠ = ∑∑ ∑ (6) 1 nt tli tl rf f τ τ = = ∑ (7) 1 nt tlr tl rg g τ τ = = ∑ (8) 1 nt tlr tl rh h τ τ = = ∑ (9),tl r elec r tl rg fτ τ τη= × (10)heat,tl r r tl rh fτ τ τη= × (11) 1 t tl r t r t g tc l τ τ = ≥ ∆ ∑ (12) 1 t tl r t r t h tc l τ τ = ≥ ∆ ∑ figure 2: available technologies for energy hubs figure 3: heat and electricity balance for an energy hub international journal of sustainable energy planning and management vol. 30 2021 11 behzad farshidian, abbas rajabi-ghahnavieha, ehsan haghi (edtlr) should be supplied either by the generated electricity in the hub (gtlr) or by imported power from the market (etlr). besides, each energy hub has an option of exporting power, which is depicted as etlrj in figure 3. heat demand (hdtlr), however, is merely supplied by the generated heat in the hub (htlr). as expressed in eq. (13), the sum of the generated power in the energy hub and the imported power minus the amount of the exported power should be equal to or greater than the electricity demand, based on the introduced constraints in figure 3. in eq. (13), etlr indicates the electricity energy received by the importing hub from the market. the heat generated by the energy hub r at year t and load zone l should be able to supply the heat demand in hub rat year t and load zone l, as shown in eq. (14). electricity received by an importing hub r at year t and load zone l (etlr) equals to the product of electricity imported by hub r at year t and load zone l (eitlr) and the transformer efficiency of the hub r (ղtrans,r ) as expressed in eq. (15). the sent electricity to the transmission line by hub r at year t and load zone l (eotlr) equals the product of electricity exported by hub r at year t and load zone l (extlr) and the transformer efficiency of hub r as stated in eq. (16). the total sent power to the transmission line from hub r at year t and load zone l (eotlr) equals the sum of sent power from hub r to other hubs j, (etlrj) as shown in eq. (18). pxr in figure 3, shows the electricity market at hub r. the market-clearing condition for each hub should also be considered: the total imported power by hub r at year t and load zone l (eitlr), equals the sum of received power by hub r from other hubs j, (etljr) as expressed in eq. (19). the transmission line between the hubs has a limited capacity. in other words, according to eq. (20), the transmitted power between any two hubs over a particular load zone cannot exceed a specific value. where llrj is a line capacity limit for transmitting power from hub r to hub j in kw. the objective function in eq. (1) and the set of constraints shown in eq. (2) to (2) 0 form the optimization problem associated with hub r. according to eq. (21), for each hub r, the optimization problem can be rearranged: where x represents the decision vector for hub r, fr(x) indicates the objective function, and fr(x) is the set of constraints. it should be noted that the decision vector for each hub includes: i. yearly added technology capacity ii. power exchange for all load zones in each year iii. gas consumption of technologies for all load zones in each year since hubs are independent, each hub tries to make a suitable decision by solving eq. (21) to minimize its own cost. however, the power market price at each hub depends on the decisions of all hubs. as a result, the market-clearing condition is a condition that expresses the interaction among the hubs. oligopolistic competition is a competitive condition in which there are only a few producers (in this paper 3 hubs). each hub has a high percentage of the market and cannot afford to ignore the actions of the other hubs. the set of optimization problems are expressed in eq. (21) for all hubs. besides, the market-clearing condition in (13)tlr tlr tlr tlrg e ex ed+ − ≥ (14)tlr tlrh hd≥ (15),rtlr trans tlre eiη= × (16),rtlr tlr transeo ex η= × (18)nh tlr tlrj j r eo e ≠ = ∑ (19) nh tlr tljr j r ei e ≠ = ∑ (20)tlrj rj e ll l ≤ ∆ (21) ( ) ( ) . . r r r r min z f x s t g x rhs =    ≥ 12 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue eq. (19) makes an equilibrium problem that represents a cournot competition model for oligopoly games. the nash equilibria is determined by solving the equilibrium problem. the karush–kuhn–tucker (kkt) conditions for the equilibrium problems should be determined and solved simultaneously in order to find the nash equilibria. kkt condition for the equilibrium problem is associated with the hubs that can be obtained by eq. (22)–(26) [35]: in kkt condition equations, λ indicates the dual variable associated with the inequality constraint in eq. (21). as the hub problem in eq. (21) is a convex and linear optimization problem, the kkt conditions in eq. (22)– (26) are both necessary and sufficient to obtain the optimal solution for eq. (21). once the kkt condition is determined for the problem of all hubs, the set of resulting equations along with the market clearing condition represented in eq. (22)–(26) for all hubs can be solved to find optimal hub planning considering the competition among the hubs. 3. results the result section has been arranged as follows: section 3.1 presents the result of applying proposed model to a 3-hub system. investigation and verification of nash equilibrium have been discussed in section 3.2. impact of renewable and energy storage have been summarized in section 3.3. 3.1. appling proposed model to a 3-hub system the proposed model has been applied to a 3-hub test system, namely hub1, hub2, and hub3. table 1 summarizes the cost and efficiency of technologies. power plant technologies only possess electricity efficiency, while boiler technologies only have heating efficiencies. chp technologies inherit both heating and electricity efficiency, as depicted in table 1. a 5-year planning horizon has been considered with two load zones, i.e. peak and off-peak load zones. table 2 presents the forecasted heat and electricity demand for the hubs for the load zone of the planning horizon. the maximum heat demand for hub1 and hub2 is illustrated with bolded numbers, and the heat demand for these hubs is decreased after the third year. the gas price in hub1, hub2, and hub3 is 52.7, 47.4, and 55.3 cents per cubic meter, respectively. therefore, the most expensive gas source is available in hub3, while the cheapest gas source is available for hub2. the loading limit associated with the transmission line that connects hub2 to hub3 is assumed to be 60 mw. for the lines that connect hub1 to hub2 and (22)( ) ( ) ( ) ( ) ( ) ( ) 0 0 0 0 0 , 0 t x x t x x t f x g x f x g x x g x rhs g x rhs x λ λ λ λ ∇ − ∇ ≥  ∇ − ∇ ⋅ =  − ≥ − =   ≥ ≥ (23) (24) (25) (26) table 1: cost and efficiency of energy conversion technologies pp1 (τ = 1) pp2 (τ = 2) chp1 (τ = 3) chp2 (τ = 4) b1 (τ = 5) b2 (τ = 6) hub1 electrical efficiency 0.3 0.4 0.3 0.2 na* na heating efficiency na na 0.5 0.5 0.75 0.6 investment cost (usd /kw) 700 840 1400 980 504 336 hub2 electrical efficiency 0.35 0.45 0.3 0.25 na na heating efficiency na na 0.4 0.5 0.8 0.65 investment cost (usd /kw) 840 980 1260 1120 560 392 hub3 electrical efficiency 0.25 0.5 0.3 0.2 na na heating efficiency na na 0.5 0.4 0.75 0.5 investment cost (usd /kw) 560 1120 1400 840 504 280 * not applicable international journal of sustainable energy planning and management vol. 30 2021 13 behzad farshidian, abbas rajabi-ghahnavieha, ehsan haghi hub3, the loading limit is assumed 120 mw and 100 mw, respectively. the mathematical model has been solved using the general algebraic modeling system (gams) platform for the mcp problem on a pentium n3700 computer with 4 gb of ram. the problem has been solved and the optimal hub planning, electricity purchase from market and electricity export to another hub, gas consumption by each technology, and the market price for the load zones of the planning horizon have been obtained. table 3 demonstrates the objective function and its associated components for the energy hubs. according to table 3, z represents the objective function of each hub, which is the sum of technology investment cost (tic), gas consumption cost (gcc), power import cost (pic) minus the power export revenue for hub (per) (as shown in eq. (1) to eq. (5) respectively). as depicted in table 3, technology investment cost forms a major share of the objective function associated with each hub. table 3 also shows that hub1 has 28 and 4.4 times power import costs higher than hub2 and hub3, respectively. hub2 has the highest revenue from selling power, as shown in table 3. the reason behind the cost difference in power import between the hubs is the low gas price in hub2 and also high gas prices in hub1. the aggregated (5 years) capacity development for all hubs and technologies is summarized in table 4. zero capacity technologies are not depicted in table 4. in all three hubs, power plant technologies with high efficiency (pp2) are selected by the model. all hubs invest in co-generation technologies in order to supply their heating demand. as a result, no boiler capacity is developed except in the 5th year and in hub2. hub2 faces an increase in heating demands in the last years. since heat demand increase is not simultaneous with electricity demand increment, hub2 invests in boiler technology to supply the heating demand. table 2: heat and electricity load (mwh) for different hubs at each year and each load zone year load zone hub1 hub2 hub3 ed hd ed hd ed hd 1 peak 800 100 600 60 240 400 off-peak 500 400 240 300 200 440 2 peak 840 110 660 70 300 500 off-peak 530 430 260 400 260 520 3 peak 890 110 700 70 320 520 off-peak 550 450 270 440 300 560 4 peak 920 100 760 80 400 480 off-peak 590 360 280 500 340 500 5 peak 950 110 800 90 600 360 off-peak 630 380 290 700 520 400 table 3: objective function and its associated components for the energy hubs z (1000 usd) tic (1000 usd ) gcc (1000 usd) pic (1000 usd) per (1000 usd) hub1 1151.9 158.2 755 249.1 10.4 hub2 820 168.3 835.6 9 193 hub3 653.3 120.2 587.9 56 110.7 table 4: aggregated capacity development in different hubs and for different technologies (mw) hub1 hub2 hub3 pp2 606.2 710.9 195.92 chp1 258 224.1 312 chp2 8 45 20 b2 0 191.8 0 14 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue figure 4 depicts each modeling year’s share in pp2 capacity development. hub1 invests in pp2 technology in years 1-3. however, investing in pp2 technology with a higher capital cost becomes less feasible as we move to the last planning year. when new pp2 technology is not developed, developed chp technology is used to supply the electricity demand. initially, hub2 invests in tur2 technology to supply the electricity demand. in the following years, due to the higher heat demand increase rate compared to the electricity demand increase rate, hub2 has invested in chp1 technology. hub3 has the lowest pp2 technology capacity due to high chp capacity in hub3. figure 5 shows co-generation capacity development in all planning years. hub1 and hub3 invest in chp1 technology (with higher electric efficiency) in years 1 and 2. surplus capacity in year three is supplied by chp2 technology. hub2 had the lowest gas price. as a result, hub2 exports electricity by investing in pp2 technology while using it as a supplier of its own demands. although hub2 has surplus electricity generation in off-peak hours, hub2 invests in chp1 technology (lower electric efficiency, higher heating efficiency) and uses pp2 to supply the electricity demand at off-peak hours. table 5 demonstrates the market price for all hubs in different years and load zones. in this work, the model is used for planning and operation modeling. to reduce the number of decision variables, load zone based modeling has been used instead of using hourly modeling. therefore, the results of the proposed model can be used in the time-of-use electricity pricing system. hub1 has the highest market price. compared to hub2, hub1 has a higher gas price and lower efficiency that leads to a higher cost for hub1. compared to hub3, hub1 has a lower gas price and lower-cost power plant technology. however, electricity generation cost in hub1 is higher than hub3 due to the higher pp2 technology efficiency in hub3. additionally, as shown in figure 5, most of the generated electricity in hub3 is produced by using chp technology. the utilization of co-generation technology for generating electricity lowers electricity generation costs in hub3. table 6 shows the imported electricity to hub1 from hub2 and hub3 in different years and load zones. considering kkt conditions, the price difference between the regions with different exchanged power should equal to zero. according to table 5, similar prices are bolded. when the prices of hub1 load zones are higher than hub2 and hub3, all the electricity transmission capacities can be used. when the price difference between hub1 load zones and hub2 and hub3 is zero, transmitted electricity may take any value between zero and the line capacity. the value of the figure 4: each modeling year’s share in pp2 capacity development figure 5: co-generation capacity development in all planning years international journal of sustainable energy planning and management vol. 30 2021 15 behzad farshidian, abbas rajabi-ghahnavieha, ehsan haghi transmitted electricity is determined by using the system equilibrium in this case. figure 6 depicts the electricity exchange between the hubs for the peak-load zone in years 4 and 5. according to figure 6 (in the 4th year of the planning), the exported power by hub3 to hub1 is higher than the power hub2 exports to hub1. hub3 has a high heating demand, and it uses chp to supply the heating demand. as a result, it has an extra capacity to produce electricity besides pp2 technology. in the on-peak load zone, hub3 faces an increase in electricity demand in year 5. available technology capacities in hub3 are unable to supply the electricity demand. as a result, hub3 has to buy electricity from other hubs as shown in figure 6.b. due to the constraints in electricity transmission lines between hub2 and hub3, it can be inferred that hub1 exports some of the purchasing power from hbu2 to hub3, taking advantage of the transmission capacity between hub1 and hub3. 3.2. investigation and verification of nash equilibrium: nash equilibrium is an equilibrium, in which no agents can increase their profit by changing their strategy after knowing all agents’ strategies. therefore, once the strategies of all agents have been determined, no individual agent is interested in violating or changing its own strategy. in order to investigate and verify the nash equilibrium, the calculated regional prices are applied to the table 5: electricity market price for all hubs year t = 1 t = 2 t = 3 t = 4 t = 5 load zone l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 market price at hub1 (cent/kwh) 12.49 12.49 12.49 12.5 13.5 12.5 16.7 12.5 22.3 12.5 market price at hub2 (cent/kwh) 10.5 10 10.5 10 11.68 10.5 16.7 10.5 18.15 10 market price at hub3 (cent/kwh) 10.5 10 10.5 10 11.68 10.5 16.7 10.5 22.3 12.5 table 6: electricity import for hub1 in different years and load zones year (t) t = 1 t = 2 t = 3 t = 4 t = 5 load zone (l) l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 import from hub2 (mwh) 120 120 120 120 120 120 6 120 120 120 import from hub3 (mwh) 100 100 100 100 100 100 84 100 0 0 figure 6: electricity exchange between hubs for peak-load zone in year 4 and 5 16 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue hub2 model as specified input parameters. the planning model for hub2 with the new data is solved independently using the simplex method, and the optimized strategy has resulted as the output. table 7 demonstrates hub2 capacity development in both the proposed model and single-hub model. although the capacity development is different in the proposed model and single-hub model, the value of the objective function is the same in both of them. hence, hub2 has no interest in changing its selected strategy in the proposed model. 3.3. impact of renewable and energy storage this section is devoted to studying the impact of renewable and storage technologies on the planning of multihub system. as demonstrated in figure 7, a 5-hub energy system is assumed. the system is modified version of ieee 5-bus test system [36]. hub1 and hub3 have the same structures as hub1 and hub3 in the system depicted in figure 2. hub2 contains electricity storage(lithium-ion-battery) as well as the other 6 technologies that have been mentioned before. as depicted in figure 8, it is assumed that hub4 is capable of using a solar panel as well as the gas turbine for electricity generation. besides, this hub can manage the produced electric energy by building capacity on lithium-ion storage. it is presumed that hub5 possesses wind turbine and solar panel. therefore, all produced power in hub5 has a renewable sources. hydro storage has been utilized in this hub. the amount of the produced energy in the wind turbine and the solar panel is obtained by using the capacity factor. according to [37], the capacity factor for the wind turbine and solar panel are assumed as 0.34 and 0.18, respectively. the regional prices for the five hubs, which are summarized in table 8, can be obtained by calculating the equilibrium problem. as renewable energies have negligible operation costs (that has been assumed 0 in this study), it is observed that the electricity price is decreased to zero in the offpeak hours, in which the electricity demand is reduced. renewable energies are unmanageable, and their penetration rate in the energy system has been increased. hence, in off-peak hours, when the power supply overtakes the power demand in the network, it is probable to observe negative prices to stimulate the consumers to consume moreto prevent the network instability. table 7: capacity development for hub2 in proposed and single-hub model (mw) proposed model single-hub model pp2 710.9 708.5 chp1 224.1 226.8 chp2 45 34.7 b2 191.8 200 figure 7: 5-hub energy system figure 8: internal structure of hub4 international journal of sustainable energy planning and management vol. 30 2021 17 behzad farshidian, abbas rajabi-ghahnavieha, ehsan haghi energy storage equations shown in eq. (27) and eq. (28). it is assumed that during off-peak load zone, electricity is stored in the storage while during peak load zone, electricity is taken from the storage. the amount of capacity development is summarized in table 9. due to the presence of renewable energy and the accessibility of hub2 to the produced electricity by renewable energy resources, which have smaller costs, hub2 uses the cheap electricity of hub4 and hub5 by decreasing the capacity-building in turbine technology. in addition, as hub1 and hub3 have access to the cheap produced electricity (that has been produced by renewable energy resources), the demand for buying the produced electricity by hub2 is decreased, and the need for capacity-building in turbine technology have also been reduced. in the first two years, it is expected that the price of the produced electricity by hub3 be zero in off-peak hours. therefore, chp technology electricity generation using natural gas will no longer be justifiable. so, it can be observed that investment in chp technology is reduced in hub3. storage capacity-building has only happened in hub2. as hub4 and hub5 use their total transmission capacities in the peak and off-peak load zones, no additional capacity for transmitting the stored energy is accessible for them. hence, there have been no investments for storage technology in these two hubs. 4. conclusion the proposed model in this paper aims at determining the optimal planning/operation of the competing hub in a multi-hub energy systems. the problem has formulated as an oligopoly cournot game. solving the model will result in annual built capacity in different technologies for the hubs. other outputs include electricity exchanges between the hubs, and also gas consumption by technologies for each load zones of the planning horizon for each hub. market price is obtained from market clearing conditions in the equilibrium problems. the proposed model has been applied to 3-hub and 5-hub energy systems. the effect of renewable generation and storage system have also been evaluated. the results have been presented and discussed to evaluate the validity of the results as well as the capabilities of the proposed model. by increasing the load zones, better modeling of demand profile and photovoltaic power generation, which is a function of the solar irradiation, can be achieved. besides, the accuracy of the modeling can be improved. the gas market, together with the electricity market, can be studied in this model to obtain the market price of gas in various load zones. the impact of the applied policy on (27) 1 1 0 nl nl tlr tlr l l si so = = − ≥∑ ∑ (28) 1 1 nl nl tlr tlr t r l l si so tc τ = = − ≤∑ ∑ table 8: electricity market price for all hubs (5-hub system) year t = 1 t = 2 t = 3 t = 4 t = 5 load zone l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 l = 1 l = 2 market price at hub1 (cent/kwh) 12.4 12.4 13.4 12.4 16.5 12.4 16.5 12.4 18 12.4 market price at hub2 (cent/kwh) 10.1 10 10.1 10 11.3 11.3 13.3 12.3 17.9 10.6 market price at hub3 (cent/kwh) 5.8 0 6.4 0 10.4 4.8 10.4 10.4 29.9 10.6 market price at hub4 (cent/kwh) 10 9.9 10 10 11.3 11.2 13.2 12.1 17.9 10.6 market price at hub5 (cent/kwh) 5.8 0 6.4 0 10.4 4.8 10.4 10.4 17.9 10.6 table 9: aggregated capacity development in different hubs and for different technologies (mw) hub1 hub2 hub3 pp2 556.2 264.1 212.9 chp1 240 321.2 288.1 chp2 20 43.2 0.0 b1 0 0.0 79.9 18 international journal of sustainable energy planning and management vol. 30 2021 planning of multi-hub energy system by considering competition issue energy market can be investigated by studying the proposed model. however, bi-level modeling is needed for finding the optimized policy for the policymaker. in this type of modeling, the objective function of the policymaker is the upper level of the model, and the selected policy of the policymaker is prior to the chosen strategy of the agents. therefore, market agents can optimize their strategy after determining the 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https://www.researchgate.net/publication/282271461_optimal_power_flow_including_unified_power_flow_controller_in_a_deregulated_environment https://www.researchgate.net/publication/282271461_optimal_power_flow_including_unified_power_flow_controller_in_a_deregulated_environment https://www.researchgate.net/publication/282271461_optimal_power_flow_including_unified_power_flow_controller_in_a_deregulated_environment http://2019.https https://www.irena.org/publications/2020/jun/renewable-power-costs-in-2019 https://www.irena.org/publications/2020/jun/renewable-power-costs-in-2019 _goback _hlk43208865 bau1 baut0005 bau005 international journal of sustainable energy planning and management vol. 31 2021 211 *corresponding author e-mail: revins@uvic.ca international journal of sustainable energy planning and management vol. 31 2021 211–000 abstract in this paper, we use the ‘energy hub’ optimization model to perform a multi-objective analysis on a high-density mixed-use development (termed the ‘mothership’) under different scenarios and compare these results to appropriate base cases. these scenarios explore how the optimal energy system changes under different assumptions, including a high carbon tax, net metering, net-zero emissions and negative emissions, as well as two different electrical grid carbon intensities. we also include ‘carbon negative’ technologies involving biochar production, to explore the role that such processes can play in reducing the net emissions of energy systems, the annualized cost and total emissions of the mothership with a simple energy system are 4 and 8.7 times lower respectively than a base case using single detached homes housing the same population, due to the more efficient form and hence lower energy demand. of the scenarios examined, it is notable that the case with the lowest annualized cost was one with a net-zero carbon emissions restriction. this gave an annualized cost of cad 2.98m, which 36% lower than the base case annualized cost of cad 4.66m. this relied upon the carbon negative production and sale of biochar. all scenarios examined had lower annualized costs than the base cases with many of the cases having negative operating costs (generating profit) due to the sale of renewable energy or carbon credits. this illustrates that the integration of renewable energy technologies is not only beneficial for reducing emissions but can also provide an income stream. these results give hope that suitably optimized urban developments may be able to implement low cost solutions that have zero net emissions. energy system optimization including carbon-negative technologies for a high-density mixed-use development wesley bowley, ralph evins* energy in cities group, department of civil engineering, university of victoria, po box 1700 stn csc, victoria, bc, canada keywords optimization; carbon negative; renewable energy http://doi.org/10.5278/ijsepm.5843 1. introduction 1.1. background urban populations around the world are growing, so cities must expand or densify [1]. in north america, much of this growth is in the form of urban sprawl. urban sprawl is characterized by single use type developments, typically single detached homes, where transportation is dominated by personal vehicle use [2]. single detached homes are less energy efficient than other denser forms of housing, due to higher surface area to volume ratio, meaning more area for heat transfer, as well as the greater overall floor area, number of appliances etc. single dwellings also use more resources to build than higher density residential buildings to house the same number of residents. in bowley et al. [3] we propose a potential solution: a high-density mixed-use building that we term a mothership, designed to contain all amenities of a typical suburb for 10,000 residents in one large building. advantages of this style of building includes reduced surface area for heat transfer, more practical use of high-performance building envelope. there are also many advantages in terms of reduced emissions from 212 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development transportation: co-location of amenities eliminates many trips, and a public transportation hub and an electric vehicle car share fleet reduce the use of personal vehicles. the emissions sources of an urban area are largely from building operation, the emissions embodied in the materials of the buildings, and transportation emissions. there are numerous ways to reduce the emissions from these sources. high performance building envelopes can reduce heating and cooling loads, which could then be met with renewable energy and heat pumps. the embodied emissions in buildings can be reduced through minimizing the use of cement, either through reducing concrete use, or using supplementary cementitious materials such as fly-ash instead of cement. transportation emissions could be lowered through numerous ways including public transportation measures, eliminating vehicle trips by creating walkable neighbourhoods, or using electric vehicles powered with clean energy. it is rare however, to reduce these energy demands to zero, especially in colder climates with high heating demand. therefore, it is important that these remaining minimized loads be satisfied in the most efficient, cleanest, and cost-effective manner. there are many potential technologies to choose from, each with advantages and disadvantages, from simple gas boilers and heat pumps, to more complex combined heat and power systems. there is potential to implement promising emerging technologies, and even negative emissions technologies that sequester more carbon than they emit. nomenclature p energy input, kw p price, cad /kwh j converters, n/a t timestep, hours k storage capacity, kwh aec annual equivalent cost, cad f emissions factor, kgco2e/kwh l load to be met, kw θ converter efficiency, % q– discharge (flow rate), kw q+ charge (flow rate), kw ε– discharge efficiency, % ε+ charge efficiency, % i time series representing the availability of an energy source e total energy stored in a storage technology, kwh η decay loss of energy in a storage technology, kw suf storage utilization factor one such technology is char optimized pyrolysis, which can be used for boilers or combined heat and power plants. using biomass as a feedstock, it heats it up in the absence of oxygen, which thermally decomposes the volatile organic compounds, leaving behind the structure of almost pure carbon or char. depending on the conditions of the pyrolysis, about 50% of the carbon of the feedstock is converted to char[4]. this can be used in agriculture [5] [6] , water filtration, and other applications. the carbon in this char form is recalcitrant, meaning it is stable and will stay in that form for potentially hundreds to thousands of years depending on conditions [7]. as a result, biochar (so called when char is applied to soils) producing systems is considered a negative emissions technology by the ipcc if the carbon is sequestered and not subsequently burnt [8] [9]. the other 50% of the carbon is released as pyrolysis oils and gases that can be combusted for energy and to provide the process heat to perpetuate the pyrolysis. there is also the potential to integrate renewable energy generation technologies and storage systems with the building. there is a significant amount of roof area for solar collectors, either solar photovoltaic or solar thermal collectors. different storage technologies such as hot water thermal energy storage, traditional lead acid and lithium ion batteries, compressed air, and hydrogen. some technologies like hydrogen, do have a higher cost, but have the additional advantage that you can also sell the hydrogen as well as store it, providing an additional income stream. 1.2. literature review multi-objective optimization applied to energy-related aspects of building design is becoming more common as a process to lower costs, energy use and emissions [10]. this can be used to vary many properties of the buildings themselves, for example envelope properties, massing and glazing areas. however, often such decisions are taken for aesthetic or practical reasons, which are hard to incorporate into a computational analysis. complex buildings with a mix of uses, complex energy systems or finite renewable sources of energy require an optimization process that can balance demands and supplies of energy at each moment. one method for doing this is the ‘energy hub’ model originally proposed by [11]. this uses mixed integer linear programming (milp) to find combinations of technologies (renewable generation, storage, energy converters, etc.) that best international journal of sustainable energy planning and management vol. 31 2021 213 wesley bowley, ralph evins meet a specified design goal defined by the objective function. more recent formulations [12] have extended the model formulation. energy hubs, or similar models have been used many times before. krause et al [13] discuss how energy hubs can be used to optimize energy systems in a variety of scenarios with multiple energy carriers. they also discuss some of the benefits of using this model’s framework. brahman et al [14] apply an energy hub to a residential building, integrating electric vehicle charging and other types of demands. best et al [15] models and optimizes the energy systems for an urban area using a similar model to the energy hub. orehounig et al [16] use the energy hub model to decentralized energy system at neighbourhood scale. zhang et al. [17] use milp to determine optimal integrated energy system configurations and simulate operation in a swedish building. niu et al. [18] use milp to optimize the use of thermal and electrical energy storage and how it interacts with the energy grid. setlhaolo et al. [19] model the interaction between co-generation, solar pv, and energy storage interact with the electricity grid using an energy hub framework to lower co2 emissions for residential building. raza et al. [20] use an energy hub model to assess costs and operation of a biogas supported energy system using particle swarm optimization. farshidian et al. [21] models a multi-hub configuration considering the competition between hubs and the planning implications thereof. this work focuses on applying an energy hub model to a large mixed-use building which combines load patterns from residential, retail, and office spaces together. it also introduces a material flow, rather than only energy flows, to the model, which has not been done before to the best of the authors knowledge. additionally, the breadth of technologies considered in this analysis is significantly larger than is usually considered in the above papers. potential combinations of these technologies are evaluated for different economical and environmental constraints, optimized for lowest cost, and emissions. 1.3. contributions and structure of this paper in this paper, we explore the benefits of high-density mixed-use development related to the energy systems that provide power and heat, with the mothership serving as an example of any form of high-density mixeduse development. the size of the loads and the range of different demand profiles present can enable district-scale energy systems that aid renewable energy integration, without the expense and complexity of traditional district heating networks. because one energy system can serve the development, combinations of multiple technologies can be used, whereas for individual smaller buildings this would be impractical. this makes it more challenging to find the correct combination and sizes of technologies that provide a balance between the most cost-effective option and the option with the lowest carbon emissions. this cannot be determined in advance without examining the hour-byhour requirements and availability of many different energy streams. the ‘energy hub’ model formulation is used to achieve this, by optimizing a proposed energy system for the predicted loads of the mothership. this is conducted as a multi-objective optimisation that can explore the balance between the lowest overall cost and low carbon emissions for a variety of options. in addition to finding the optimal energy system design for a general scenario, additional scenarios will be explored to see how this optimum changes in response to these additional constraints. these scenarios will be created to answer the following research questions: • what is the most cost-effective energy system to meet the required loads? • what is the optimal capacity of solar pv or solar thermal? is the rooftop area sufficient or would more space be desirable? • does seasonal storage at this scale make sense? would the storage size be too large to be practical? • what is the impact of hydrogen production and storage? is it used for storage or for export? • do biochar technologies get used? what is the impact of carbon negative power and heat production? • what is the impact of a strict carbon budget, such as being net-zero carbon? what if a negative carbon budget was enforced, meaning that carbon is sequestered each year? • what is the effect of carbon credits and carbon taxes? what is the threshold for fossil fuels to be avoided? the core argument of this paper is that the energy system of a high-density mixed-use development can be much more efficient, cheaper and have fewer emissions than the base case of single detached homes housing the same population. this paper presents a comprehensive analysis of the energy systems options available for a 214 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development large high-density mixed-use development, and propose new developments to the energy hub model formulation to facilitate this. the new developments are the formulation of a storage utilization factor, to describe how much a storage technology is used in the system, and the use of materials streams alongside energy streams, to capture the benefit of carbon-negative technologies. these are detailed in the methodology section. next, we first establish a reference case based on a standard expansive single-dwelling development, then compare this to various high-density cases using the mothership concept as an example. we examine the impact of many different exogenous factors such as carbon taxes and technology availability that affect the optimal system configuration, assessing the differences in cost and emissions. finally, conclusions are drawn regarding the performance of different energy systems options for a high-density mixed-use development. 2. methods this analysis uses an energy hub model to explore the design goals of low costs but also low carbon emissions. the analysis process is outlined in figure 1. first, heating, cooling, appliance, lighting, and hot water loads for proposed designs are calculated using the building energy simulation tool called the urban modeling interface (umi) [22]. this calculates loads based on building geometry created using grasshopper [23], a parametric extension of the rhinoceros 5 [24] computer aided design software. these hourly-resolution annual time series (summarized in table 1) are then used as loads that need to be satisfied in energy hub models. the buildings modelled are sized to house 10,000 residents at 40 m2 floor area per resident, as well as 50,000 m2 each of office and commercial space. data for the technologies was gathered from a variety of sources including papers cited in the literature review, manufacturer websites, and discussions with industry professionals. the breadth of scenarios explored as part of the analysis was used to understand the sensitivity of the model to different parameters and inputs. 2.1. energy hub models this paper uses the energy hub model formulation of evins et al [12], a summary of which is given in this section. for more information, readers are referred to the paper. the general summary of the model is that there are energy demands that need to be met at each time step. there are energy sources such as grid electricity, natural gas, solar radiation, etc. in between there are technologies which convert one type of energy stream into one or more other streams. there are also storage technologies which can store certain energy streams for later use. the model then creates a system of linear equations made up of constraints which it attempts to solve. the key equations and constraints are outlined below (with slightly updated nomenclature). cost � � � � � � � � � � � � t j j j j j j capacity k k k capacity p p t aec c p c e , ( ) (1a) table 1: the annual sum and peak loads for the different load types for the base case buildings and the mothership. heating cooling hot water lighting equipment individual single detached sum [kwh] 13,609 8,186 8,099 2,708 3,278 peak [kw] 8 37 4 1 1 retail sum [kwh] 249,245 1,412,942 287,988 3,442,240 1,290,840 peak [kw] 975 1,767 82 800 300 office sum [kwh] 1,290,247 8,817 762,187 1,945,200 1,348,800 peak [kw] 923 786 285 600 400 all single detached with retail and office sum [kwh] 58,154,750 35,476,825 34,741,709 16,651,056 16,277,784 peak [kw] 34,804 153,616 18,678 5,319 3,628 mothership sum [kwh] 4,315,693 1,295,663 17,493,837 10,943,972 9,321,953 peak [kw] 4,161 5,201 9,223 2,940 1,927 international journal of sustainable energy planning and management vol. 31 2021 215 wesley bowley, ralph evins emissions �� t j j jf p t , ( ) (1b) l t p t q t q ti i j j k k k k( ) ( ) ( ) ( ),� � � � � � �� � (2) p t p i tj j capacity j max( ) ( )≤ (3) e t e t q t q tk k k k k( ) ( ) ( ) ( ) ( )� � � � � � � 1 1 � (4) 0 ≤ ≤p t pj j capacity ( ) (5) 0 ≤ ≤e t ek k capacity ( ) (6) 0� �� �q t qk k max ( ) (7) 0� �� �q t qk k max ( ) (8) 0 ≤ ≤p pj capacity j capacity limit� (9) equations 1a and 1b define the two possible objective functions of the optimization problem, to minimize costs (in canadian dollars) and carbon emissions respectively. in 1a the operating cost is the energy input p times price p, summed over all converters j in the system and all time steps t, plus annual equivalent cost (aec) of the capital costs, which multiply capacities by costs c for all converters j and storages k. in 1b the total carbon emissions are calculated from the energy inputs and the emissions factor f associated with that energy stream. equation 2 is the core energy balance, stating that the load l to be met must equal the output from each converter (input energy p times the efficiency θ), energy from storage (discharge q– times discharge efficiency ε–) minus the energy used to charge the storage (charge q+ times charging efficiency ε+). the availability of energy is sometimes limited, for example irradiation to pv panels, which is defined as a time series i in equation 3. equation 4 enforces the storage continuity: the state of the storage e is equal to the state at the last time step (minus the decay loss η) plus any charge minus any discharge. equations 5 and 6 ensure that converters and storages operate below their capacities, and equations 7 and 8 do the same for storage charging and discharging rates. finally, equation 9 turns the capacities of converters into optimization variables themselves, which can be varied up to a fixed capacity limit. minimum loads were not included, as the model formulation required for this increases the model runtime dramatically (see [12]). fixed capital costs and maintenance costs were also not included, though could be easily incorporated in equation 1a. storage capacities are fixed rather than optimized. ideally, the capacity of the storage technologies would be optimized along with the converter capacities. however, the computational time of the model goes up dramatically with the addition of more storage technologies. this is because the storage equations mean that the energy flows at each time step are dependent on storage state at the previous and next steps, so the model takes a very long time assessing figure 1: analysis flow chart, inputs on the left of central figure, and outputs on the right. 216 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development whether it is better to store the energy for later use or not. giving wide capacity ranges for multiple storages with different efficiencies and costs makes this problem much more convoluted. the run time for the hard-coded storage capacity models are many orders of magnitude shorter. the cost of the unused portion of each storage technology is subtracted from the total cost after the optimization is completed. this is not a true replacement for an optimization in which the storage capacity is a variable to be optimized, but it is a reasonable approximation that retains a reasonable run time. the energy hub models in this paper are implemented in pyehub1. pyehub is an energy hub modelling library written in python that forms part of the building energy simulation, and optimization and surrogate (besos) modeling platform2. pyehub performs milp optimization using ibm cplex via intermediate python libraries (pylp and pulp). 2.2. storage utilization factor in order to evaluate the utility of storage technologies in the energy system, including how much they were used, we define a ‘storage utilization factor’ (suf) as the sum of the discharge from the storage (kwh) for each hour of the year, divided by the capacity of the storage technology (kwh). this is shown in equation 11. suf q ei t i max i� � � (11) this factor, which is analogous to the capacity factor used for renewable generation technologies, gives an indication of how much the storage is used. for example, suf=100 means that overall the storage discharges fully 100 times per year, or cycles from full to 50% and back 200 times per year. larger values indicate that the storage is being utilized more, however it does not indicate the manner in which it is used (lots of short charging and discharging cycles vs. fewer larger ones), nor the effectiveness of this utilization at reducing costs. 2.3. materials streams this paper extends the energy balancing and conversion performed in the energy hub model to include a material stream for a carbon-negative material called char. carbonization uses the same underlying pyrolysis 1 see https://gitlab.com/energyincities/python-ehub/. 2 see https://besos.uvic.ca. process as gasification, but is optimized for different purposes, with gasification producing mostly gas and carbonization producing a charcoal-like product called char. the advantage of gasification is that nearly all the biomass is consumed in the process and converted to energy, meaning solid waste is low and energy per unit feedstock is relatively high. however, there are still carbon emissions associated with this process, even though many would consider it carbon neutral. carbonization, depending on the feedstock and the process parameters, converts about 50% of the carbon from the biomass into the char; the other half is eventually converted into carbon dioxide. as a result, the energy produced per unit of feedstock is lower, but the carbon in the char is recalcitrant, meaning it is stable and won’t be released into the atmosphere over time. this provides interesting opportunities to get carbon credits as part of the revenue stream as well as selling the char itself. carbonization does have the downside that it requires more feedstock than gasification to produce the same amount of energy because it doesn’t utilize feedstock entirely for energy. both gasification and carbonization systems are included in the potential technologies. char can be sold as an expert for money and carbon credits in the model. 3. analysis cases in this paper, we compare a standard low-rise expansive development without advanced energy systems with the energy systems options available for a high-density mixed-use case, using the mothership as an example of the latter. both cases consist of residential space for 10,000 people, plus 50,000m2 each of retail and office space. each of these building types will have individual energy hub models, and in the single detached case, the results will be scaled based on the number of homes that are required. for the mothership case, there will be one model for the combined residential, retail and office spaces, since they are all in the same building. the retail and office floor area in the base case and the mothership are the same. the residential floor area is not, because the floor area per resident ratio for single detached homes is much higher than that for apartment style residential spaces. https://gitlab.com/energyincities/python-ehub/ https://besos.uvic.ca international journal of sustainable energy planning and management vol. 31 2021 217 wesley bowley, ralph evins the configuration of the energy system to be optimized for the mothership is shown in figure 2, giving all possible converters (orange) and storage technologies (green) along with the energy and material streams that connect them. this configuration is defined by the inputs to the energy hub model that govern the input and output streams of each converter and storage, which are discussed in more detail in the following sections. 3.1. converters converters are technologies that change energy (or in this case also materials) from one form to another. table 2 gives the properties of the converters included in the model. many typical technologies are provided, including heat pumps, gas boilers, gas-powered combined heat and power (chp) systems, photovoltaic (pv) panels and solar thermal collectors. these are relatively common and mature technologies. other technologies that are less mature include biomass gasification (for a boiler or chp) and hydrogen electrolyzer and fuel cell components. finally, the highly novel carbonization technologies are included to generate heat for a boiler or chp system as well as making carbon-negative char as an output. table 2 shows the capital cost per kw capacity of each technology (c in equation 1a), the efficiency (θ in equation 2), the lifetime used to calculate the annual equivalent cost, the input energy stream, the output energy stream(s), and the maximum capacity (pcapacitylimit in equation 9). if more than one output stream is produced by the converter, the ratio is given in brackets, for example the chp produces 1.73 units of heat for every unit of electricity. max capacity for technologies is unlimited, except for pv and solar thermal capacity which is limited by roof area depending the scenario. it may be noted that small scale wind generation is not included as a potential generating technology. this is because small scale wind turbines are not as cost effective as large scale wind, or other renewable technologies. this is especially true in urban environments where building/turbine height is limited, and wind is often blocked by surrounding buildings and trees. figure 2: the configuration of the overall system to be optimized using the energy hub model, showing all possible storage and conversion technologies, as well as the different energy and material streams and how they are connected. blue boxes on the left of the figure indicate input energy streams that are converted (orange boxes) and stored (green boxes), eventually to supply the demands in the tan coloured boxes on the right side of the figure. the purple boxes indicate exports that can be sold to provide income and carbon credits. the lines indicate energy or material flows. the technologies shown are all those that are available for the model to choose from and aren’t necessarily used in the optimal solutions. 218 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development 3.2. storage technologies the storage technologies that could be used in the model are shown in table 3. the five options used standard lead-acid and lithium-ion batteries, a hot water tank, and more novel options like compressed air storage and a hydrogen storage tank. the table gives the stream that the technology can store, capital cost per kwh capacity of each technology (c in equation 1a), the lifetime used to calculate the annual equivalent cost, the efficiencies (ε+, εand η in equations 2 and 4), and the maximum charge and discharge rates (q– max and q+ max in equations 7 and 8). as discussed in the previous section, costs are updated after the optimization to remove the cost of any unused storage capacity. 3.3. energy and material streams the streams that are used in this analysis are show in table 4. streams are flows of energy or materials that are converted or stored by one of the converters or storages respectively. they can also be imported or exported, as indicated by the presence of purchase price / carbon factor values and export price / carbon credit values respectively. table 2: converter technology properties. if more than one output stream is produced by the converter, the ratio is given in brackets, for example the chp produces 1.73 units of heat for every unit of electricity. capital cost (cad/kw) efficiency lifetime (years) input output(s) (output ratio in brackets) grid connection 0.1 1 1000 grid purchase elec air-source heat pump 1400 3.2 20 elec heat chiller 1500 3.2 20 elec cooling gas boiler 500 0.94 30 gas heat microchp 3400 0.7 20 gas heat (1), elec (0.16) pv panels 2000 11 20 irradiation green elec solar thermal panels 2000 1.5 35 irradiation heat chp 2275 0.3 20 gas elec (1), heat (1.73) ground-source heat pump 2777 6 50 elec heat biomass chp 6227 0.3 20 biomass (gasification) green elec (1), heat (1.2) biomass boiler 4567 0.85 30 biomass (gasification) heat biochar boiler 5023 0.75 30 biomass (pyrolysis) heat (1), char (0.07) biochar chp 6850 0.29 20 biomass (pyrolysis) green elec (1), heat (2.3), char (0.2) electrolyser 5902 0.92 15 elec hydrogen hydrogen fuel cell 4719 0.4 15 hydrogen elec 1 = 1.038 kwpeak/m 2 * 0.20 panel efficiency*0.9 system efficiency*5.56 m2/kwh installed capacity table 3: storage technology properties. lead-acid battery li-ion battery hot water compressed air hydrogen energy stream elec elec heat elec hydrogen capacity (mwh) 10 10 26900 10 10 capital cost (cad/kwh) 390 272 1.33 78 20 lifetime (years) 20 10 20 30 20 charging efficiency 0.99 0.8 0.99 0.8 0.75 discharging efficiency 0.99 1 0.99 1 1 decay efficiency 0.001 0.001 0.001 0.001 0 max charging rate 0.3 0.3 0.3 0.5 1 max discharging rate 0.3 0.3 0.3 0.5 1 international journal of sustainable energy planning and management vol. 31 2021 219 wesley bowley, ralph evins the grid carbon factor for the simulations was the canadian average, which is still relatively low at 0.14 kg co2/kwh. electricity produced by pv panels, biomass chp or biochar chp is denoted ‘green elec’, meaning that if it is exported it receives a carbon credit. hydrogen can also be exported for hydrogen powered vehicles and receives a carbon credit equal to the carbon intensity of natural gas. units are calculated in kwh, so all streams are assessed in terms of energy content rather than for example by weight. 3.4. scenarios base cases there are three base cases to provide a baseline to compare the other mothership cases to. base case a and b are modelled with single detached home models and are meant to be the base cases that the motherships are compared to, as busines as usual cases. this shows the benefits on the different urban form as well as the energy systems. base case c uses the mothership building loads, but uses the same energy systems as base case a. this case is meant to isolate the effect of urban form and energy systems, ignoring the effect of building form. the details of each case are as follows: a. this case takes the peak and total heat, electrical, and cooling loads and sizes a gas boiler, grid, and cooling heat pump to those loads and calculates the costs and emissions. the loads for a single house are scaled by 4160 to get the loads for all the houses, and this is added to the loads for the retail and office base case buildings. there is no pv or storages installed, the canadian grid factor is used, and there is no carbon tax or credits. b. this case uses the same loads as case a, however it runs separate optimization models for each of the single detached, office and retail buildings. like case a, the single detached loads are scaled and added to the retail and office loads. storages are installed with sizes of 1000kwh for each, and pv is also allowed. c. this case does the same scenario as case a, but uses the mothership’s loads, satisfying them with gas boilers, grid electricity and cooling heat pump. no pv or storages are installed. mothership cases below we outline the main scenarios to be explored in addition to the base case, in order to address the questions posed in the introduction: 1. small storages: 1,000 kwh each; roof area pv capacity of 16,000 kw. pv capacity determined by dividing roof area of 50,000 m2 by area of each panel (1.6m2/panel), multiplied by the wattage of the panel (300w). 2. big storages: same as case 1, but with the storage capacities listed in table 1. 3. net-zero: same as case 2 with maximum emissions of 0 kgco2/a, i.e. net-zero in operational emissions. 4. carbon negative: same as case 2 with maximum emissions of -10,000,000 kgco2/a, i.e. sequestering or offsetting one ton of co2 per resident per year. 5. carbon neutral, net metering: same as case 3, but with the constraint that yearly electricity exports must be equal to or less than grid imports. 6. carbon tax: same as case 2 but with a carbon tax of cad 200/t co2. 7. bc grid factor: same as case 2, with a grid carbon factor of 0.009 8. bc grid factor, carbon tax: same as case 7 but with a cad 200/t co2 carbon tax. table 4: purchase price, export price, carbon factor and carbon credit of each energy and material stream.. name g ri d p u rc h as e g as g re en e le c b io m as s (g as if ic at io n ) b io m as s (p yr ol ys is ) c h ar h yd ro ge n purchase price (cad/kwh) 0.14 0.038 0.04 0.04 export price (cad/kwh) 0.14 1.266 0.469 carbon factor (kg co2/kwh) 0.14 0.21 0 0 carbon credit (kg co2/kwh) 0.14 2.6 0.14 220 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development 9. bc grid factor, hydrogen export: same as case 7, but with hydrogen exportable at cad0.2/kwh 10. bc grid factor, net metering: same as case 7, but with the constraint that exported electricity can’t be higher than grid imports. 11. bc grid factor, carbon neutral: same as case 7, but with maximum emissions of 0 kgco2/a. 12. unlimited pv: same as case 2, but unlimited pv capacity (capped at 999,999,999 kw due to model limits). 4. results table 5 shows the results of the energy system optimization giving the metrics of cost and emissions and the optimal converter capacities, as well as the important input parameters that change between each case. the colours show a red to green gradient in each column separately to visually show differences in the results and variable inputs for each of the scenarios. the colours generally show more red being negative in impact, such table 5: shows the results of the energy system optimization giving the metrics of cost and emissions and the optimal converter capacities, as well as the important input parameters that change between each case. the retail, office and single detached cases are the optimization results for individual building loads. base cases a, b, and c and cases 1 through 11 are the results for scenarios described previously. the results for case 12 are not shown due to the unlimited solar capacity giving very unreasonable values. international journal of sustainable energy planning and management vol. 31 2021 221 wesley bowley, ralph evins as higher cost or co2 emissions, whereas green shows lower cost or emissions. each row shows a model run scenario, and each column shows an output or input parameter. the input parameters that remain static throughout all simulations are given in the analysis cases and scenario descriptions in the previous section. the total cost values account for the cost for unused storage capacity, since these had to be set manually for each run, and the full capacity may not have been used. the results for case 12 are not shown, due to the unlimited solar capacity giving unreasonable values. the base case of single detached homes and separate retail and office buildings are given individually and in combination to give a basis for comparison for the mothership scenarios. the combined loads of the base case buildings are much higher than the mothership: 13.4, 1.6, and 27 times higher for heating, electrical and cooling loads respectively. therefore, the investment costs and the emissions are much higher. for base case b, the one advantage that the base case has over the mothership is the greater total roof surface area available, permitting a total solar pv capacity of 78,000 kw as opposed to 16,000 kw for the mothership, resulting in much more power sold to the grid and reduced operating costs. the total cost of the energy systems in single detached homes scaled to 10,000 residents (4,160 homes) is almost cad 21 million (of which almost cad 15.8 million is for pv), which is much higher than any of the mothership cases. however, this case has negative carbon emissions, due to the large amount of green electricity from solar pv that is sold to the grid and the associated carbon credits received. the retail and office base cases also made good use of solar pv, however they did not achieve negative emissions, due to their heavy use of natural gas. it should be noted that it may be impractical to install very large pv systems in urban areas in british columbia, where the utility restricts the export of solar electricity in order to maintain the integrity of the electricity grid. this makes it more difficult to build a system for a building that produces more power than it uses in a typical year. for the same reason, results are not presented for the mothership case in which the pv capacity was unlimited, as this model attempts to install an infinite capacity of pv to generate a profit even though there is not the roof space to do so. the impact of specific pv limits is investigated in the net-metering case (scenario 10). in the simple cases of base case a and c, comparing the mothership to the single detached homes case, the mothership has much lower costs, simply due to the smaller magnitude of its energy demands and economy of scale in it’s systems. case a costs over four times as much and emits 3.5 times as much carbon dioxide as case c. in the following sections we discuss the answers to the research questions posed in the introduction. • what is the most cost-effective energy system to meet the required loads? the most cost effective option, other than the unlimited solar pv case which is unrealistic, is case 11, which is a net zero carbon emissions case, with a total annual equivalent cost of just under 3 million. one reason for this is the use of the biochar chp and the sale of the char and pv electricity. the most expensive scenario is unsurprisingly the case with the high carbon tax at cad4.2 million. it is interesting to note however, that the yearly operating cost is negative for most of the cases that do not restrict the selling of green electricity and char. so although the investment costs are high, the building can make a profit from the sale of energy and carbon sequestration. case 10 with net metering has relatively low total costs, likely due to the limited allowable solar capacity installed, reducing capital costs. however it also doesn’t benefit from the lase of the electricity and has positive operating costs. base case c, the simple mothership energy system that doesn’t allow pv or storage, has a higher cost and higher emissions compared to the other mothrship cases. additionally it has no form of income, so its operational costs are much higher. this illustrates that integrating renewable energy technologies is not only helpful for reducing emissions, but can have significant financial advantages. • what is the optimal capacity of solar pv or solar thermal? is the rooftop area sufficient or would more space be desirable? the model never selects solar thermal in any of the runs. this is potentially due to solar pv being more versatile, in that the system can use the electricity to create heat or cooling through heat pumps, use it directly, or sell it and potentially earn export income and carbon credits. the model uses the maximum pv capacity permitted in all simulations except for cases 10 and 5 due to net metering, and case 6 with the carbon tax. when size is limited to that of the mothership roof area, the maximum permitted capacity is installed. in case 10 with net 222 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development metering, the optimal pv capacity is found to be 2,582 kw, due to the restrictions on how much power can be sold to the grid. interestingly the model decided to not install pv in case 5 or 6, possibly due to the already high costs of the biochar tech needed for reducing emissions. as noted above, results are not shown for case 12, where pv size was not limited, since this attempts to install an infinite capacity. • does seasonal storage at this scale make sense? would the storage size be too large to be practical? the models showed that certain types of storage are useful, namely the batteries and the hot water storage. battery storage was typically used for short term storage to provide load shifting and peak shaving. hot water was also used to store heat and has the potential to store large quantities for use during the winter, however the storage size needed is very large. the maximum permitted hot water tank in the model forms a disk with the diameter of the mothership (214m), and a height of three meters giving a potential storage of 26.9 million kwh, which is more than enough for the annual heating demand. the volume of the tank would be over one third of the building volume (due to the hollow ring shape of the building) and would cost an estimated $35m. the hot water suf for this large storage was between 0.4 and 0.47, meaning in a year it fills and empties about half way, implying that a tank of approximately half this size would be optimal. it is notable that for a much smaller storage size of 1000kwh, the suf is 865, meaning it fills and empties more than twice a day on average. compressed air is also used; however, this technology is only applicable at large scales which can only be implemented in certain areas. the model uses it minimally with a suf of around 20 for the larger storage sizes, but quite a lot for the smaller storage size (suf of 211). hydrogen storage was also included as an option but is not used by the model. • what is the impact of hydrogen production and storage? is it used for storage or for export? hydrogen production and storage was included in the model so that it would be used as longer term/seasonal electricity storage, with the additional versatility of being sold to local consumers such as hydrogen fuel cell vehicles and public transit. the results show that when the sale of hydrogen is allowed, it isn’t used until a certain threshold in export price is reached, whereby the model maximizes production and uses all available energy (solar pv, biochar and gas chp and grid) to produce and sell as much as possible. when the export price is lowered to cad 0.2 per kwh, the model does not make any hydrogen. while this shows that it could be cost effective to do so, it may not be practical or desirable to co-locate a hydrogen production facility with a residential development. an interesting question for future research is whether there is a viable local market for hydrogen in large volumes, which may be unlikely without a power to gas operation where the hydrogen is pumped into the natural gas grid. • do the biochar technologies get used? what is the impact of carbon negative power and heat production? the usage of the biochar technologies was not as prevalent as expected. the model did not choose to build biochar boilers at all, and only built biochar chp when there were carbon limits imposed on the model in cases 4, 5, and 7. in these cases, it was mainly used to offset the carbon released by the natural gas chp or boiler that was also implemented. having both a natural gas and biochar chp plant is impractical and complex, and likely would not happen if the building were built. the low cost of natural gas makes it difficult for other technologies to compete. even when carbon credits are implemented, only case 6 where the tax is cad 200/ton does it stop using natural gas and chooses biochar chp and heat pumps instead. there is some promise with biochar systems in the sequestration aspect and receiving carbon credits for producing the char, as well as then having a marketable product that can then be sold or used on site for its numerous benefits to agriculture. biochar and its benefits are not widely known, nor is there a widespread carbon marketplace where the carbon credits can be sold. once these factors change in the future then the situation could change dramatically. • what is the impact of a strict carbon budget, such as being net-zero carbon? what if a negative carbon budget was enforced, meaning that carbon is sequestered each year? there are several effects that occur with the implementation of emissions restrictions. the main one is that biochar technology, typically the chp plant type, is installed so that it’s sequestration can counteract the emissions from using the grid, or natural gas. troublingly it seems that when the negative emissions requirement is implemented, instead of cutting sources of emissions, it builds more capacity of biochar chp to produce more char to counter the emissions. instead of international journal of sustainable energy planning and management vol. 31 2021 223 wesley bowley, ralph evins cutting gas use, building heat pumps and biochar chp along with maximum solar pv installed, the model continues to use gas chp in addition to the biochar. it is unlikely however that such a practice would occur in reality, as it is more likely that a larger system consisting of just one of the technologies would be built, to reduce complexity and redundancy. these constraints should be added to the model in future. the only case to eliminate natural gas use was cases 6 and 8, both of which have carbon taxes. the sale of biochar does provide a good source of income for the building and could have numerous indirect benefits in the community depending on how the char gets used, as discussed in the material stream section above. • what is the effect of carbon credits and carbon taxes? what is the threshold for fossil fuels to be avoided? the implementation of a carbon tax had numerous effects. the total cost generally increased compared with similar cases without the tax. emissions were also reduced for both cases. interestingly, the utilization of storage was also reduced slightly. however, this could potentially be accounted for by the higher use of grid imports to power heat pumps, and therefor less need for storing intermittent renewable energy. 5. discussion the analysis performed in this paper optimizes the energy system of a mixed-use high-density development under different scenarios and compares this to base cases consisting of single detached homes and office and retail buildings scaled to house the equivalent number of people. the different scenarios modeled are designed to explore the changes to the systems under different conditions such as more or less storage, a carbon tax of cad 200/tco2, a net metering scheme, and hydrogen export. additionally, the effect of imposing a net-zero emissions constraint and negative (1-ton co2 per resident) emissions requirement was explored. when a carbon tax was implemented, less natural gas was used, instead using more grid power and heat pumps to meet the heating demand. natural gas use was only eliminated when the carbon tax was implemented. carbon sequestration was provided by a biochar producing combined heat and power plant which under the right conditions can produce carbon negative heat and power. the mothership cases consistently had better performance than the base cases in terms of total cost. base case b had the advantage of much greater roof surface area, so energy produced was sold to the grid to offset costs. base case a had much higher costs and emissions relative to the mothership under the same conditions due to the magnitude of its loads being 13.4 and 1.6 times higher for heating and electricity respectively. base case c which used mothership loads but no renewable energy or storage technologies performed relatively poorly compared to the other mothership cases, with higher costs, more emissions, and no income (and higher operating costs) than most of the other mothership cases. this indicates that it is advantageous to implement renewable energy technologies not just because they reduce emissions, but because they offer significant financial rewards for doing so. the most cost-effective case in terms of total cost was a carbon neutral requirement. this shows that it may be possible to have a cost-effective energy system, while also achieving net zero emissions. 6. conclusions some limitations with this analysis include the requirement of the milp algorithm to maintain linearity in the system of equations. this can somewhat limit the parameters that can be analysed since it could cause the system to become nonlinear. additionally, some variables, such as storage, could not be optimized for as it exponentially increases computation time, and as a result, had to be manually iterated and the excess storage capacity cost accounted for. this paper illustrates how the energy hub model can be used to optimize energy systems for buildings, choosing from numerous technology options that would be impractical to determine manually, all operating in multiple costing scenarios imposing taxes and emissions restrictions. results indicate that implementing renewable energy systems such as solar pv and hydrogen production and storage, as well as emerging carbon sequestration technologies such as biochar chp can not only be carbon negative, but can be more cost effective than using fossil fuels. this is due to primarily to creating material streams that can be sold for profit, such as hydrogen, carbon negative electricity, and carbon credits. the tool can be easily adjusted to a specific scenario where a potential building will be built in order to help determine the best energy system mix for the project. future study opportunities include expanding the analysis with additional technologies and scenarios. 224 international journal of sustainable energy planning and management vol. 31 2021 energy system optimization including carbon-negative technologies for a high-density mixed-use development including more detailed costing information would also be of benefit. additionally, being able to have the carbon tax be a variable to solve for would be interesting to see at what level it needs to be to remove fossil fuels from the energy mix. acknowledgements this work is part of the ijsepm special issue “latest developments in 4th generation district heating and smart energy systems” 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[25] østergaard pa, johannsen rm, lund h, mathiesen bv. latest developments in 4th generation district heating and smart energy systems. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ijsepm.6432 https://doi.org/10.1016/j.apenergy.2017.09.099 https://doi.org/10.1063/1.4996271 https://doi.org/10.1063/1.4996271 https://doi.org/10.5278/ijsepm.6190 http://www.ibpsa.org/proceedings/bs2013/p_1404.pdf http://www.ibpsa.org/proceedings/bs2013/p_1404.pdf https://www.grasshopper3d.com/ https://www.grasshopper3d.com/ https://www.rhino3d.com/ international journal of sustainable energy planning and management vol. 31 2021 95 *corresponding author e-mail: francesco.mezzera@polimi.it international journal of sustainable energy planning and management vol. 31 2021 95–108 abstract the target of the full decarbonisation by 2050 requires high penetration of renewables, with the development of overgeneration situations in the energy system. hydrogen and electro-fuels could play a key role in hard-to-abate sectors and in grid balancing. by means of the developed nemesi model we study the italian future energy mix, including several power-to-x (p2x) options to accommodate high res introduction. the model is set to solve a linear optimization problem, by optimizing the use of resources through the minimization of the supply costs. the use of excess power from renewables is evaluated in solutions such as hydrogen production and electro-fuels synthesis, coupled to power-to-heat and storage systems. the model studies the italian case in a decarbonised scenario and provides an estimation of potential waste-heat recovery from the p2x processes, differentiating from low to high temperature waste-heat. waste-heat can be used for district heating purposes or for power generation via organic rankine cycle. both high and low temperature heat recovery show a potential in the order of tens of twh, with a preference for power generation use. waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy francesco mezzera*, fabrizio fattori, alice dénarié, mario motta department of energy, politecnico di milano, via lambruschini, 4a 20156 milan, italy keywords waste-heat recovery; power-to-x; power-to-hydrogen; oemof; district heating http://doi.org/10.5278/ijsepm.6292 1. introduction during the last decades, a growing interest has spread about the need to revolutionize the energy system, following a net-zero emission target. within the european union, national energy and climate plans (necps) [1] have been adopted by member states to set the mid-term goals (2030) in a long-term pathway towards decarbonisation. italy has committed to achieve a reduction of at least 40% of ghg emissions by that year, coupled with an increased share of renewable energy sources (res) (55% in power sector, 33.9% in the heating sector and at least 22% in the transport sector) [2]. this implies a potentially high level of unbalances in the power grid, that can be managed through storage and demand-side management. from a longer-term perspective, in 2050 a full decarbonization would be required, imposing a much higher res presence in the energy system. the need not to waste excess energy produced in peak periods requires decoupling of production periods and demand profiles. pumped-hydro and battery storage will likely not be enough. alternatives like hydrogen and synthetic fuels will play a key role, also because will enable the decarbonization in sectors not suitable for electrification. these processes also produce waste-heat as by-product which could be recovered for district heating purposes or for power production. while waste-heat potential from industrial sector is widely investigated (e.g. [3–5]), increasing attention is being paid to the study of waste-heat recovery from p2x processes. analyzing the behavior of waste-heat production from such processes in a decarbonized energy 96 international journal of sustainable energy planning and management vol. 31 2021 waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy system and estimating the recovery potential can be relevant for planning decarbonization pathways. 1.1. p2x and waste-heat in this paper, p2x (power-to-x) means the use and transformation of electricity into other energy carriers, namely: power-to-heat (p2h), the production of heat from electricity, power-to-gas (p2g), with the synthesis of hydrogen or methane, power-to-liquid (p2l), the production of electro-fuels, and lastly power-to-x-topower, the production of an energy carrier and its reconversion back to electricity. besides p2h, the interest for these possible sector coupling options is relatively recent. a review for p2x processes is here presented, also providing a picture of related waste-heat. starting from p2g, water electrolysis (i.e. the production of hydrogen and oxygen through electricity) is a well-known reaction, especially with alkaline electrolyzer cells, considered the most mature and commercialized solution [6,8–10], although many other technologies have been recently investigated. summarized global reports provided by iea [9], dea [10], snam [11], shell [6] help to frame the state of art of ideas around hydrogen in the energy sector. increasing attention concerns the proton exchange membrane, or polymer electrolyte membrane (pem) electrolysis. it provides higher flexibility and better coupling with dynamic power system and produces highly compressed hydrogen. other solutions are still at r&d level. in particular, the high temperature solid oxide solution (soec) is suitable for coupling with systems that produce waste-heat [6,7]. in power-to-gas sector another possible solution concerns the methane synthesis, which could get cost savings coming from the already existing infrastructure (e.g. transmission line, storage tanks). synthetic methane can be produced from a chemical reaction which involves carbon mono/dioxide and hydrogen. two processes exist: the catalytic thermochemical methanation and the biological one. the former is currently the main application, operating at a temperature range of 200-550 °c. catalytic methanation is a highly exothermic process, being suitable for some waste-heat recovery [7,12–14]. biological methanation uses methanogenic microorganisms in the process, with a lower operating temperature (20-70°c) [6,14–16]. power-to-liquid can be relevant in hard-to-abate sectors (e.g. transport), where ghg emission reduction through electrification might be hard to achieve. green hydrogen obtained from renewable power can be further transformed into so called electro-fuels. through the combination with carbon, it is possible to obtain fuels such as jet-fuel, methanol, dimethyl ether (dme) and ammonia. several processes are currently under investigation, presenting potential for waste-heat recovery. it is the case of the fischer-tropsch (ft) process, a consolidated exothermic process in coal and gas sector to obtain fuels such as jet-fuel for aviation. ft could use renewable hydrogen and captured carbon molecule as feedstocks [17–19]. methanol, whose synthesis is a highly exothermic process, would be useful for the maritime sector or as intermediate product for more complex fuels “(e.g. dme or jet-fuel) [20–24]. dimethyl ether shows peculiar characteristics which make it a suitable solution in internal combustion engines for transportation. it has properties similar to conventional fossil gasoline, although it is produced from biogas or methanol through a two-steps (or direct) reaction [17], with commercial application already present in california [25–28]. aviation fuel can be obtained also from methanol [13,15]. in parallel to the power-to-liquid pathway, similar synthetic fuels can be obtained from biomass feedstock: this option is named biomass-to-liquid, which presents some peculiarities in the intermediate transformation steps, with the main difference to use a bio-based feedstock [10]. abbreviations dh: district heating dhw: domestic hot water dme: dimethyl ether ev: electric vehicles ft: fischer-tropsch process ghg: green-house gases ht: high temperature lt: low temperature necp: national energy and climate plan ng: natural gas orc: organic rankine cycle p2g: power-to-gas p2h: power-to-heat p2l: power-to-liquid p2x: power-to-x pem: polymer electrolyte membrane res: renewable energy sources international journal of sustainable energy planning and management vol. 31 2021 97 francesco mezzera, fabrizio fattori, alice dénarié, mario motta another energy carrier derived from hydrogen can be ammonia, which can be stored and transported in an easier way compared to pure hydrogen. it is obtained via industrial haber-bosch process and its applications cover naval transportation [21] or power generation via fuel cells (fc) [29–32]. there is also the possibility to use the synthetic products obtained from p2g and p2l to generate electricity back (power-to-x-to-power). as for the electrolyzers, several technologies currently exist, from the most consolidated alkaline technology (afc), the low temperature polymer electrolyte membrane fuel cell (pemfc), to the high temperature class represented by molten carbonate (mcfc) or the solid oxide ones (sofc) [3,6]. they typically use pure hydrogen as reactant, but applications on the use of different energy carriers (e.g. ammonia) are conducted [30]. 1.2. aim of the paper and outline from such a context, it emerges that in a hydrogen based decarbonized energy system the potential sources of waste-heat could be relevant. the aim of this paper is to explore the potential use of such heat in different applications, from the power generation via organic rankine cycle (orc) to a direct use for district heating (dh) purposes. a decarbonized scenario for the italian energy system is built and analysed through an energy system model developed by the authors. in the remainder of the paper, the structure of the tool used for the analysis is presented (section 2), followed by the input data and the analyzed case study (section 3). in section 4 the main results of the simulation are reported, while main outcomes and further developments are summarized in the conclusion (section 5). 2. method in order to analyze the role of waste-heat from p2x in a future decarbonized italian economy, a model of the italian energy system was developed, based on the opensource oemof modelling framework [33] and its behavior was then analyzed in a exogenously defined scenario. in this section the structure of the developed model, called nemesi, (national energy model for a sustainable italy) is presented. nemesi is a publicly available model developed by the authors (code and input dataset of the version used in 1 two version of nemesi exist: one for 2030 [42] and one for 2050. the paper refers to the 2050 configuration. this paper can be found at [34])1, based on the oemof framework, an open-source flexible model generator, written in python [33]. the model is based on a linear programming problem. the objective function represents the overall supply cost for primary fuels. this includes costs for fossil fuels (e.g. natural gas) and for bio-based ones. in table 1 the commodity costs included in the model are presented. table 1: cost for primary fuels considered by the model for the decarbonized scenario (2050 horizon). primary fuel 2050 commodity cost [€/mwh]* ref. natural gas 41.10 [35]** oil*** 68.53 [35]** biomass 90.00 [36] biogas 16.00 [36] * costs include all the steps of the supply-chain of the commodity (eg. extraction, import, production, purchase) ** some elaborations were made by the authors to keep track on the trend observed in the last years *** the cost of oil is reported although the resource is not considered in the case study by minimizing the use of primary resources, it is possible, as indirect effect, to minimize the production of carbon dioxide obtained in combustion processes too. the minimization of this emissions allows to study the energy system in a decarbonized configuration, by limiting the need of carbon capture and sequestration technology (ccs) coupled with conventional power generation systems. oemof framework allows to solve the optimization problem considering both capital and operating costs: by considering the former, it returns the optimized installed capacity of the studied technology. however, the model generator does not allow to consider the entire period of transition (e.g. 2020-2050) before the simulated year. investment costs for new technologies (e.g. p2x ones) are particularly difficult to be estimated: geopolitical factors and economies of scale might determine considerable under or overestimations. furthermore, the rationale of the presented study is to analyze the potential of waste-heat recovery from p2x processes in a decarbonised scenario, where conventional fossil sources should be minimized. for these reasons, no capital expenditures were considered in the model and only commodity costs were considered for operating expenditures. 98 international journal of sustainable energy planning and management vol. 31 2021 waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy the objective function is expressed as follow: obi c q t c q t i i it shortage i i function supply� �� � � � � � � ��min ( ) ( ) , , �� � � � where the subscript i represents the commodity and t the considered time-step in the simulation. its goal is to minimize the cost of meeting a given demand of energy services, with a trade-off between the supply cost of the required energy carriers and the cost of mismatching the energy balance (e.g. shortages). the first term of the minimization represents the commodity cost, defined as the product between the specific cost per unit of required primary fuel (see table 1) and the consumed quantity of this commodity in each timestep of the simulation. the second one instead represents the penalty cost for time-steps in which the availability of a fuel is not sufficient to cover its demand in the system, multiplied by the missing quantity of that commodity. by considering this penalty cost, the model is allowed to conclude the optimization process even if there is an equilibrium mismatch in a single time-step. this enables to observe the presence of resources’ scarcity and the system’s condition in which they might occur. the resulting cost is then summed for each commodity and for each time-step of the simulation. the problem is set in order that, for each time-step of the simulated period, the balance between production and demand is met for each commodity or energy carrier. these energy carriers are transformed through different processes, from the resources to the final commodities. the decision variables of the optimization problem represent all the activities of the processes in the energy system. in order to better simulate the feasibility of a system, both technical constraints of the technologies (e.g. installed capacity, flexibility, efficiency) and physical limits of the system (e.g. resources’ availability, storage capacity) are provided. finally, demands are described through overall quantities and profiles. the oemof structure is based on different logical components that are used to describe the reference energy system and build the optimization problem: (i) buses represent energy carriers or commodities; (ii) transformers represent technologies or processes consuming and/or producing one or more commodities (e.g. gt power plant where input natural gas returns output electricity); source and sink components are particular transformers used to represent respectively the introduction of commodities in the system (e.g. import of natural gas ng), and the demands of commodities (e.g. electrical load); finally, storage components enable to decouple demand and supply of a specific commodity, by storing the energy carrier for some time. in nemesi these components are used to characterize the italian energy system in 2050. buses are used to represent energy carriers such as natural gas, hydrogen, electro-fuels, biomass, biogas, captured carbon dioxide, or energy carriers for final demands like heat and electricity. beside conventional power plants and cogeneration units, transformer class is used to describe electrolysis, catalytic and biological methanation, and the synthesis of electro-fuels. except for biological methanation, all the listed p2x technologies present a potential for waste-heat recovery. the class of waste-heat recovery also includes methanol synthesis and power production via fuel cell (fc) technology. the organic rankine cycle (orc) power generation technology, the direct air capture systems for carbon dioxide sequestration and the blending process for methane and hydrogen (with a maximum hydrogen content up to 20%vol), complete the list of transformers used in p2x section in nemesi. source component is used to describe feedstock extraction/production (e.g. biomass, biogas, water for electrolysis) or for the overall supply (fossil natural gas). import for hydrogen and electro-fuels is implemented with this class too, although in the tested scenario is not considered. sources are used to describe the res supply (e.g. wind, pv, solar thermal, etc.). sink class is implemented for each synthetic fuel in addition to conventional electrical load and heating/ cooling demands. finally, in addition to thermal storage options, electrochemical and pumped-hydro storage, the storage component is implemented for representing the storage of hydrogen and other p2x products. in figure 1 a simplified version of the reference energy system is depicted, with a focus on the powerto-x part. a complete explanatory scheme can be found in the attached material on the online version. 3. case study and input data in this section the main assumptions and input data of the model are presented, with a description of the tested scenario. international journal of sustainable energy planning and management vol. 31 2021 99 francesco mezzera, fabrizio fattori, alice dénarié, mario motta the italian energy system is modeled in a decarbonized scenario, with a single-node spatial resolution (the model does not consider inter-connections between bidding zones). regional characteristics are not explicitly present in the model, although parameters from different zones are considered to obtain the aggregated dataset (e.g. for heating and cooling demands). regional characterization of the system could represent future developments. the tested scenario chronologically simulates a single year, with an hourly time-step. the rationale behind the scenario construction is based on reducing as much as possible the energy service demands in all end-use sectors (e.g. lower space heating demand in buildings through better thermal insulation) and preferring electrification and hydrogen-based solutions in order to meet the decarbonization target. conventional power plants and fossil fuels utilization are limited to grid stability only, by coupling them with carbon capture and sequestration systems. the presence of the latter is necessary to allow the system to use conventional fossil fuels for heat and power generation when strictly necessary (i.e. with a lack of res or unavailability of energy from storages). the configuration of the energy system promotes the use of renewable sources, with a grid stability role for conventional power plants. penalties for carbon dioxide emissions or other societal costs (e.g. the cost for unpredictability of renewable energy) are not considered in the tested scenario. this because the aim is to investigate the configuration with optimal resources’ allocation and to evaluate the self sufficiency feasibility of the energy system. the introduction of these system costs could represent a valid future development to strengthen the analysis. in order to pursue the rationale presented, in-depth evaluations were made through external analyses (e.g. simulation of an average yearly renovation rate in buildings), as well as through external policy indications (e.g. plans to achieve a shift from road to rail, and from the private to the public transport). all these assessments are out of the scope of this paper. the scenario defines a decarbonized energy system which is mostly self-sufficient, except for electricity exchanged with border countries (higher electrification and res penetration will likely strengthen the need of cross-border exchanges for a more efficient grid balancing) that is in lines with 2030 projections. the only available fossil fuel is assumed to be natural gas, coupled with carbon capture and sequestration systems. its availability was calculated from historical data [37]. for biogas availability, being the resource strictly limited by the amount of biomass that can be gasified, it is assumed to maintain the 2030 level [38]. a distinction has to be made between dispatchable and non-dispatchable res. the installed capacity of hydroelectric and geothermal plants is the same defined for 2030 in the necp [2]. strong variations were assumed instead for wind and photovoltaics (pv) installed capacity, due to their expansion potential. generation capacity for wind is assumed to be 47 gw, while pv installed capacity is in the order of 300 gw. the latter is a really high value (roughly 15 times the current pv installed capacity), however these amounts consider the high energy amount required for p2x, the figure 1: simplified scheme of the italian energy system (commodities and processes are aggregated for sake of representation) represented through buses (vertical lines), sources (grey boxes), transformers (light-blue boxes), storages (light-green boxes) and sinks (pink boxes). 100 international journal of sustainable energy planning and management vol. 31 2021 waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy condition of almost total self-sufficiency of the energy system and are compatible with the results of previous research activities carried out within the authors’ research group [39]. the possibility to import some synthetic fuel would determine a reduction of the e-fuels’ demand covered by internal production, translating into lower electricity required by p2x processes. this could be translated in lower pv installed capacity, by far the highest value in the power generation mix. the condition of deeper interconnection of the italian energy system with border countries, which can be reasonable to expect in future, is not treated in the paper (except for electricity) but could be investigated in future analyses. for conventional power generation and cogeneration plants, current installed capacities, reported by the italian electricity tso terna [40] and by the annual report of the national italian district heating association airu [41], were rescaled. starting from the 24 gw of current combined cycle and gas turbine installed capacity and the 22 gw of cogeneration plants, values were rescaled, keeping the proportions defined in the 2030 version of the presented model [42], in order to meet the projected demands in the decarbonized scenario for the 2050. the resulting values are considerably reduced, due to the limited use of natural gas with ccs and the wider res penetration in the energy system. 4.5 gw for conventional power generation and roughly 19 gw for cogeneration plants are obtained. innovative technologies for power-to-x were selected according to their technology readiness level (trl) or based on the interest the current market is showing. being the p2x technologies structured as simple boxes (i.e. transformers) in the model, with input and output flows and defined parameters (e.g. efficiency, load flexibility), no modeling differences emerge between technologies that represent the same process. the transformer implemented for the specific process might have different consumptions or load flexibility depending on the chosen technology. for example, to date, several electrolyzers and fuel cell options are under development but, for system modeling complexity issue, only one technology (low temperature pem) was implemented in the model. the same logic has been used for the option of power generation from waste-heat recovery via organic rankine cycle. to date, several working fluids, with different properties and operation ranges, are studied. in this study two classes of waste-heat suitable for recovery are considered. assuming to use only high temperature heat for power generation via orc, from [43,44] a compromise solution for the technology (i.e. working fluid and cycle properties) was selected. the implementation of this technology, which is not the most efficient way to generate electricity, in the system, is justified by the willingness to investigate all possible uses of waste-heat from p2x processes. the orc solution again is represented as a single technology for system’s modeling complexity issue in the case study. installed capacities for all p2x options were set in order to be able to cover final hydrogen and synthetic fuels demands (they were estimated after a first attempt simulation set, by considering load duration curves). focusing on p2x processes, in table 2 the potentially recoverable waste-heat, divided by temperature range, are presented. a literature review was conducted to define the output heat from each process. however, for some p2l technology the literature does not provide sufficient information, due to the current low trls. it is the case of electro-jet-fuel synthesis. the same wasteheat recovery value of jet-fuel synthesis from biomass process was assumed, given the strong similarity in the production steps. two classes of heat sources are considered: high temperature (ht) waste-heat sources and low temperature (lt) ones. the former represents all the p2x technologies where heat is produced with temperature above 150°c, while the latter includes temperature ranges between 50-90 °c. electrochemical storage and pumped-hydro storage, as well as thermal storage, were estimated as follow. starting from the values defined in 2030 necp projections, storage capacities were rescaled by considering the same proportion with respect to the res installed capacity defined for the 2030 horizon. for example, given the generation capacity for wind and pv in the decarbonized scenario, 2050 horizon storage capacities are obtained for electrochemical batteries and pumped-hydro storage. for hydrogen and other electro-fuels, storage capacities were estimated in order to ensure the possibility of seasonal shifts. reasonable assumptions regarding energy demand values have been made taking advantages of the international journal of sustainable energy planning and management vol. 31 2021 101 francesco mezzera, fabrizio fattori, alice dénarié, mario motta knowledge from previous works of the research group [39,46–48] . for final demand profiles, starting from historical data, hourly trends are extrapolated for 2050 (i.e. by considering the evolution of power demand, the integration of intelligent heating systems etc.). for the charging profile of electric vehicles (ev), an intelligent behavior is assumed, referring to [49]. for a more complete definition of the case study see the appendix 1 to integrate with the provided input dataset [34]. we stress once again that both demand and supply side are aggregated at national level, translating it into the possibility to have full flexibility for p2x plants: the limit on the load variation of a single installation is not seen when considering the aggregation of plants. 4. results and discussion in this section the main results on the behavior of the system are presented, with a focus on the recovered waste-heat from power-to-x processes. the assumption of very high res penetration and the condition of domestic production of electro-fuels within national border translate into a very important amount of electricity (~340 twh) spent on power-to-x processes, largely provided by pv and wind mainly during overgeneration periods. figure 2 represents the annual profile for daily power generation and electricity demand. in the case study, conventional power generation and dispatchable res ensure the minimum grid stability necessary to manage the wide fluctuations of non-dispatchable res (namely photovoltaic and wind generation). however, these dispatchable power plants are able to cover only a part of the system’s electrical load. this is reasonable to expect, being assumed very high values for installed capacity of pv and wind power. the latter, with the help of electrochemical and pumped hydro storage, cover the remaining electricity demand and the power destined for synthetic fuels production. power-to-x is not supplied with excess electricity only, but it is evident from the graph that a consistent part of p2x is reasonably fueled via overgeneration. as depicted in figure 2, the overgeneration periods concentrate in the majority during the central period of the year (and of the day), thanks to a wider pv availability. this electricity is mainly used for power-to-gas (roughly 85%), where hydrogen and synthetic methane are produced. a minor part (~7%) of the electricity is used in power-to-liquid. the biomass-to-liquid alternative is preferred, especially in jet-fuel synthesis, minimizing the need of electro-fuels and thus electricity. the model also considers the power-to-x-to-power solution (7%), by enabling power generation via fuel cell, while the remaining electricity for p2x is used for power-to-heat in dh networks. focusing on waste-heat, figure 3 shows the high temperature waste-heat generation during the simulated year by p2x technology. only technologies that are effectively used are plotted in the graph as result of the optimization process. an illustrative example can be found in jet-fuel synthesis. in the model three possibilities to produce jet-fuel are implemented, each of which generates table 2: potential waste-heat recovery for p2x processes, divided by temperature range. power-to-x sector technology generated waste-heat [mwh/mwh of product] waste-heat temperature ref. power-to-gas lt pem electrolysis 0.135 low [6,7] thermochemical catalytic methanation 0.245* high [12] power-to-liquid methanol synthesis 0.560 high [10,20] fischer-tropsch jet-fuel synthesis 0.266** high jet-fuel synthesis from methanol 0.266** high biomass-to-liquid jet-fuel synthesis from biomass 0.266 high [10] power-to-x-to-power lt pem fuel cell 0.330 low [3,6] ammonia fuel cell 0.672 high [45] * the value does not include the heat required to self-sustain the process, which has already been subtracted ** due to lack of information, the authors assumed the value to coincide with potential waste-heat recovery of jet-fuel synthesis from biomass, being the production steps very similar 102 international journal of sustainable energy planning and management vol. 31 2021 waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy figure 2: annual profile for daily power generation and electricity demand; the former is represented by cumulative areas, the latter by cumulative lines; “dispatchable res generation” includes hydroelectric, geothermal and bioenergy; “conventional power generation” includes gas power plants and cogeneration units; “electricity from storages, fc, orc” includes electrochemical and pumped-hydro storages, fuel cell systems and organic rankine cycles; “electricity to storage” represents the part of generated power that is stored in pumped-hydro or electrochemical systems; “electrical load” includes all final power consumptions for base load, ev charge, non-intelligent heating & cooling in civil sector; “electricity overgeneration destined to p2x” represents the excess electricity from power generation that is transformed into different energy carriers (e.g. hydrogen, electro-fuels). figure 3: annual profile for daily high temperature waste-heat production, divided by p2x technology. international journal of sustainable energy planning and management vol. 31 2021 103 francesco mezzera, fabrizio fattori, alice dénarié, mario motta ht waste-heat as by-product. however, the model gives preference to biomass-to-liquid pathway, due to feedstock availability and to overall higher energy efficiency. in figure 3 a roughly constant profile is reported for ht waste-heat generation from biomass to jet-fuel technology. this however represents only a minor part of the overall high temperature waste-heat generation, with two other processes with a dominant role. methanol (meoh) synthesis and thermochemical catalytic methanation represent almost the 92% of the ht waste-heat generated. methanol synthesis shows a rough periodical behavior during the year, thanks to the presence of high storage capacity, which enables seasonal fluctuations: meoh production uses a major part of produced hydrogen in the period of the year where its availability is limited by low res presence, as in the winter season. in spring and summer, higher pv and wind availability boosts hydrogen production, which is both stored and used as feedstock in other p2x processes. this can be observed in figure 4, where hydrogen production and the different contribution of methane supply are presented. thermochemical catalytic methanation takes a central role during the summer period, enabling the production and storage of synthetic methane and limiting the use of fossil origin’s one, generating a high amount of recoverable ht waste-heat. the analysis returned a seasonal behavior for methane storage, which is used for those periods where res availability is limited and conventional power generation plants are run as back-up. the overall high temperature waste-heat recovery shows a potential of about 32 twh during the simulated year. in figure 5 the annual profile of the three ht heat uses is depicted. from the presented graph seasonal behaviors can be identified. between may and june, the model prefers not to use ht waste-heat since, with small exceptions due to unfavorable climatic conditions, no heating is required in civil sector in that period. furthermore, those months are characterized by higher solar irradiation, with very high pv generation. the generation via organic rankine cycle is then limited to night hours. during summer, there is a much higher ht waste-heat use in orc power generation. this is due to a higher number of daily operating hours compared to the rest of the year. figure 4: annual profile for daily methane supply to the gas grid and daily mean level of stored methane (left axis) and daily hydrogen production (right axis); the level of stored methane represents the mean in-stock quantity over 24 hours per each day. 104 international journal of sustainable energy planning and management vol. 31 2021 waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy in autumn and winter, there is a preference for district heating purposes, while power generation via orc is limited to night hours again. it has to be stressed that the option of power generation from waste-heat recovery may result to be additionally promoted with respect to other conventional power plants (e.g. gas cycles). as presented in section 2, the model setup optimizes the primary resources’ allocation, by considering the supply cost for primary fuels as the only cost in the system. for this reason, waste-heat, that represents a by-product from p2x processes, can be considered as an additional free energy source and preferred with respect to other conventional solutions. in analyses that would consider also other type of costs, for example operational ones, the use of wasteheat in power generation solution via orc might result too much expensive and be less favored with respect to other destination. in this scenario almost the 20% of high temperature waste-heat (roughly 6 twh) is recovered and used in dh networks. this heat source covers more than the half (52%) of the heating for space heating and domestic hot water (dhw) provided by dh. however, its use in dh networks significatively varies during cold season. in figure 6, a comparison between the coldest week of the year and one week in autumn is depicted. the two graphs show the hourly profile of the heat supply in district heating networks divided into two categories: heat from conventional dh plants (e.g. cogeneration plants, industrial excess heat, urban waste incinerators) and waste-heat recovered from p2x. during the coldest period of the year, the recovered waste-heat mainly comes from methanol synthesis, but it covers just a minor part of the heating demand in dh systems, provided instead for the majority by conventional units. the situation is different during the mid-season, when both the higher res availability and the higher wasteheat recovery from p2x processes allow to supply most of the required heat in dh networks (figure 4, right side) instead of conventional units, except for night hours, when ht waste-heat is used for power generation via orc. no uses are modeled for low temperature waste-heat generated. the model however returns some indications about the related potential recovery. in figure 7 cumulative daily values for lt waste-heat generation processes are reported, showing a high potential for low temperature class, with a dominant role of hydrogen production. this second type of waste-heat could find application in such systems where the heat source’s temperature is too low for a direct use and it would require a regenerative system (e.g. in dh units with upgrading systems). the implementation of this solution could be a possible improvement of the presented study. table 2 summarizes the waste-heat generation and utilization potentials, divided by temperature. figure 5: annual profile for daily high temperature waste-heat uses. international journal of sustainable energy planning and management vol. 31 2021 105 francesco mezzera, fabrizio fattori, alice dénarié, mario motta figure 6: comparison of supply heat profiles in district heating networks; in the left side a week of the coldest period of the simulated year is illustrated. in the right side, a weekly profile in autumn is presented. figure 7: annual profile for daily low temperature waste-heat production, divided by p2x technology. table 3: high temperature waste-heat production divided by p2x process and its utilization, plus low temperature waste-heat production. ht waste-heat source [twh] ht waste-heat destination [twh] thermochemical catalytic methanation 23 power generation via organic rankine cycle (orc) 22.9 methanol synthesis 6.1 direct use in dh networks 6.7 fischer-tropsch fuel synthesis 0 unused 2.1 jet-fuel synthesis from methanol 0 jet-fuel synthesis from biomass 2.6 ammonia fuel cell 0 total ht waste-heat [twh] 31.7 lt waste-heat source [twh] lt pem fuel cell 4.4 lt pem electrolysis 33.3 total lt waste-heat potential [twh] 37.7 106 international journal of sustainable energy planning and management vol. 31 2021 waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy 5. conclusions the aim of the paper was to evaluate the potential of waste-heat recovery from power-to-x processes in a decarbonized scenario. the presented case study described the italian energy system in a long-term time horizon (e.g. 2050), with a single-node spatial resolution, pursuing a net-zero ghg emission target. for this purpose, a literature review for understanding the waste-heat associated to the main p2x technologies was conducted and an energy system model was developed by the authors, able to simulate the different flows within the energy system. the analysis showed the generation of more than 30 twh of waste-heat for both high temperature (31.7 twh), and low temperature (37.7 twh), the sum of which corresponds roughly to a quarter of the total heat demand in civil sector for space heating and domestic hot water. the modeling of recovery focused however only on ht, for which three possibilities are considered: a direct use in district heating networks, a use in power generation via organic rankine cycle or its simple dissipation in the environment. the use in power generation was preferred in periods of the year with low res availability (night hours in cold seasons), or during summer, with higher number of daily operating hours compared to the rest of the year. the direct use in dh networks is then preferred during winter season. ht waste-heat recovery covers a significant part (52%) of the total heat demand provided by district heating, although in the coldest period a strong integration with conventional units would result necessary. seasonal behavior in hydrogen and methane synthesis can be observed, with production peaks in summer period, thanks to higher res availability. pv and wind, as well as other res, are assumed to have a deep penetration in the energy system and this translates into power grid unbalances and concentration of some p2x processes in specific periods (e.g. catalytic methanation during summer). although the analysis focused on high temperature waste-heat recovery, the model showed an important potential for lt waste-heat recovery too. further developments might include its use for district heating purposes, considering the different recovery solutions (low temperature heat must likely be upgraded, depending on the network temperature). possible improvements of this work include improving a more detailed spatial resolution (i.e. multi-node configuration), with better characterization of regional differences within the country. this would allow a better distribution of power generation installed capacity, the possibility to differentiate final demands taking into account local climatic conditions or bottlenecks in the transmission (e.g. power grid). the limit on plants’ flexibility and seasonal storage option for district heating, as for as the evaluation of different cost types (e.g. investments, emission penalties etc) in the optimization, should be further investigated. this research was a preliminary work aimed at exploring a possible future option of sector coupling which, to the knowledge of the authors, is poorly investigated in literature. the resulting high potential suggests future more in-depth analyses on the topic. acknowledgements the authors would like to thank laura tagliabue for her precious contribution and continuous effort in the development of the model and analysis of this work. this paper belongs to an ijsepm special issue on latest developments in 4th generation district heating and smart energy systems [50]. appendix 1: description of input dataset in the present appendix, additional information for the dataset used to build the case study are provided. for a complete characterization of the profiles see the documentation provided in [34]. final demand and power generation profiles were estimated starting from 2013 historical data. the normalized profile of electrical base load is assumed to coincide with the series estimated for 2030. the latter is calculated starting from historical actual load data, from which consumption series for electric heating and cooling are subtracted, based on assumptions of the authors. the obtained series is then projected to the overall consumption expected in 2030 and in 2050. electric consumption profile for cooling in civil sector is obtained as an elaboration from 2013 air temperature and relative humidity of three italian cities, as for the heat demand for space heating and domestic hot 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[50] p. a. østergaard, r. m. johannsen, h. lund, and b. v. mathiesen, “latest developments in 4th generation district heating and smart energy systems,” int. j. sustain. energy plan. manag., vol. x, 2021, http://doi.org/10.5278/ijsepm.6432. https://www.snam.it/export/sites/snam-rp/repository-srg/file/it/business-servizi/processi_online/allacciamenti/informazioni/piano-decennale/pd_2020_2029/doc_descrizione_scenari_dds_2019_1015_1300.pdf https://www.snam.it/export/sites/snam-rp/repository-srg/file/it/business-servizi/processi_online/allacciamenti/informazioni/piano-decennale/pd_2020_2029/doc_descrizione_scenari_dds_2019_1015_1300.pdf https://www.snam.it/export/sites/snam-rp/repository-srg/file/it/business-servizi/processi_online/allacciamenti/informazioni/piano-decennale/pd_2020_2029/doc_descrizione_scenari_dds_2019_1015_1300.pdf https://www.snam.it/export/sites/snam-rp/repository-srg/file/it/business-servizi/processi_online/allacciamenti/informazioni/piano-decennale/pd_2020_2029/doc_descrizione_scenari_dds_2019_1015_1300.pdf http://doi.org/10.5278/ijsepm.6432 international journal of sustainable energy planning and management vol. 32 2021 111 *corresponding author email: janti_g@mb.its.ac.id international journal of sustainable energy planning and management vol. 32 2021 111–124 abstract indonesia, like many countries, has committed to reducing its greenhouse gas (ghg) emissions. to do this, the country needs to move from its current high reliance on non-renewable energy sources to renewable sources of energy. the issue is significant for indonesia as the country is the 4th largest contributor to global co2 emissions. the country has abundant sources for energy and one of these sources is the potential for solar energy. therefore, the country has set ambitious renewable energy targets based on the potential supply of solar energy. with domestic residential consuming up to 43% of total electricity consumption, the government has targeted homeowners to install solar rooftop and become residential solar pv prosumers. however, a recent energy evaluation report indicates that the country’s progress is very slow and it is highly likely that renewable energy goals will not be achieved. this study conducted an online survey of a small sample of regular electricity subscribers and residents who have installed solar rooftop in the hope of gaining a better understanding of various issues and factors which could be impeding the growth of residential solar. some of areas the study explored included the level of knowledge and awareness of solar energy, initiatives for homeowners, policy on net-metering and feed-in tariff, and areas of concern related to economic, environmental, and technological factors. while many countries are struggling to shift to greener energy generation and consumption, in indonesia’s case, the country has its own unique set of challenges being the energy generation and distribution is centralised, state-owned, with an inflexible energy pricing system. hence, energy management in indonesia could benefit from becoming more market focused and transparent, while increasing technology adoption with hybrid community partnerships, including a mix of private and government ownership. a discussion on policy implications and suggestions for improvements can be found at the end of this paper. achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia janti gunawana*, thasya alifiaa, kym fraserb,c,d a department of business management, institut teknologi sepuluh nopember, sukolilo, surabaya 60111, indonesia b unisa business, university of south australia, 61-68 north terrace, 5000, adelaide, sa, australia c kurdistan business school, university of kurdistan hewler, 30 meter avenue, erbil, kurdistan region, iraq d centre for logistics, aalborg university, fibigerstraede 16, 9220, aalborg, denmark keywords renewable energy targets; residential solar pv; prosumer; indonesia; community participation; http://doi.org/10.5278/ijsepm.6314 1. introduction indonesia is a country that has abundant sources for energy, both renewable and non-renewable sources [1–4]. the country is the largest energy consumer in the asean region and it’s energy consumption rate has grown rapidly in the past decade [5,6]. in 2014, indonesia launched the country’s national energy policy, as reflected in regulation number 79/2014, which states a commitment to decrease non-renewable sources, and increase energy generation sources from the current 14% renewable energy, to 23% in 2025 and further to 31% by 2050 [2,4]. to meet these targets, solar energy provides indonesia the highest potential source of renewable energy, as indicated in the national energy mailto:janti_g@mb.its.ac.id http://doi.org/10.5278/ijsepm.6314 112 international journal of sustainable energy planning and management vol. 32 2021 achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia social non-acceptance of the renewable energy program at the introduction phase, but on the same hand, social acceptance is an essential factor in the successful promotion of renewable energy [15,16], along with political support [17] and technological advancements [18]. over the last decade, research in renewable energy has significantly increased. studies are investigating the various dimensions of renewable energy development, e.g. policy [7,19,20], economic [21], political-economy [22], socio-legal [19], technology and policy [23] and socio-technical dimensions [24]. recent studies confirm the necessity to include multi-dimensional aspects in promoting renewable energy, as countries differ in terms of policy and social context [25]. mimicking other countries renewable energy policy without considering the socio-political-technology readiness of the country can lead to failure, as was the case by hamdi et al. [26] in their review of indonesia’s solar energy development. focusing on solar energy, studies have attempted to understand the solar energy market via the integration of consumers and producers, referred to as prosumers [22,27], along with regulatory frameworks, motives, and the investigation of potential investment packages [22,28]. some studies cover multi-aspects, such as policy incentives, investment drivers, product preferences, including comparisons of countries, using a range of quantitaitve and qualitatitve methods [22], while some studies narrow the focus to factors impacting residential solar pv adoption by homeowners [29]. these studies argue that solar energy development and acceptance may vary from country to country due to different policy development or incentive packages. to further advance the development, adoption and implementation of residential solar pv prosumers and domestic rooftop solar, more studies are needed, especially in the context of developing countries [29]. this study aims to extend our understanding from a developing country perspective with indonesia being the country understudy. with respect to renewable energy, the study of this issue in indonesia is timely because the country is struggling to meet its own renewable energy targets, along with being the world’s 4th biggest co2 polluter [6]. with residential electricity accounting for 43% of pln’s total electicity sales in 2019 [30] and predictions that by 2050, about 30% of the country’s energy will be needed for households, the potential of increasing residential solar pv prosumers in indonesia is likely to significantly impact policy and presented in table 1 above. table 1 indicates that solar energy has the potential to provide 47% of indonesia’s renewable energy target by 2025, and this potential is expected to increase to 68% by 2050 [2,4]. amongst southeast asian countries, the focus towards renewable energy started about the same time (e.g. indonesia introduced a feed-in tariff (fit) policy in 2011, followed by the philippines in 2012). however, indonesia’s renewable energy progress has not advanced as expected [7], and is lagging behind other countries in the region [8], resulting in indonesia being the 4th largest contributor to world co2 emissions [9]. the government of indonesia (goi) has introduced several policy initiatives to tackle the renewables issue, including sector-based (e.g. solar, hydro, wind, biomass, biogas and geothermal) and demand-based policies (e.g for industry, transport, and residential) [10]. these policies attempt to link how the different renewable energy generation, transmission, and distribution can be integrated and implemented in indonesia. the goi also propose incentives for industry, transport, and residents to invest in renewable energy initiatives [11]. however, the achievements have been far lower than what was targeted. up until 2019, only 9.5 gw of the 441.7 gw potentially available has been exploited or only 2.15% of the potentially identified renewable energy [12]. it is worth noting, that from the potential sources of renewable energy identified, more than 70% is owned/controlled by perusahaan listrik negara (pln) [7], an indonesian government-owned corporation which has a monopoly on electricity distribution in indonesia and generates the majority of the country’s electrical power. it was ranked 477 and 480 in in the fortune global 500 lists of 2014 and 2015 respectively [13,14]. some studies argue that the failure of renewable energy to gain impact is critically associated with the table 1: indonesians renewable energy source potentials [2] source of renewable energy potential supply (gw) solar energy 207.8 gw (47%) hydro 94.3 gw (21%) wind 60.6 gw (14%) biomass 32.6 gw (7%) geothermal 28.5 gw (7%) wave 17.9 gw (4%) total 441.7 gw (100%) international journal of sustainable energy planning and management vol. 32 2021 113 janti gunawan, thasya alifia, kym fraser the country’s energy targets and climate change mitigation [31]. the paper is organised in the following order. section 2 reviews the literature on renewable energy acceptance, including a discussion on the development of residential solar energy in indonesia. section 3 presents the methodology used to answer the four hypotheses. section 4 presents the findings including sub-sections with discussion and policy implications. lastly, section 5 provides a conclusion to the study. 2. renewable energy and indonesia section 2 discusses renewable energy in the context of indonesia. the literature on the indonesian energy market and related policy is highlighted, along with renewable energy acceptance and community involvement. from the various discussion points, four hypotheses are developed for testing in this study. 2.1. indonesia’s energy market and policy uncertainty in 2017, indonesia signed a commitment to implement the paris agreement to reduce greenhouse gasses by 29% (or 398 million tons of co2), as this target was within the country’s own target of reaching a national renewable energy supply of 23% by 2025 [2,4]. since then, numerous renewable energy projects have been introduced, including geothermal, biodiesel, wind power, hydropower and solar power. although solar energy has been identified as offering the highest potential for renewable energy (see table 1), progress up to 2019 has been dissapointing, with less than 0.15% of the target being exploited [32]. the indonesian energy policy is complex and fluxing. the electrification of the country is a major challenge for the national government due to geographical issues. indonesia is the largest archipelago in the world with 270 million people spread over more than 6,000 inhabitable islands, covering a geographical distance from london to new york [11]. as previously noted, pln is the state-owned monopoly that generates, transmit and supplies energy to customers, but under the energy policy of 2014, private enterprises are invited to become contract suppliers of the generation of energy, but the transmission and distribution is still solely managed by pln. the policy was an attempt by the government to stimulate private interest and investment in areas and regions which are outside of the national supply grid. to help promote the policy, the ministry of energy and mineral resources (memr) would provide community funding through government grants for solar energy projects. the policy has been successful in respect to improving electrification and promoting solar energy awareness, with more than 350,000 grants for rooftop solar being provided to those who can’t access the national grid [12], along with 600 mini solar power plant installed [26]. while the indonesian solar energy policy has recorded some successes, the policy has fell well short of significantly impacting on the country’s 23% renewable energy target by 2025, and its paris agreement obligations. the major contributing factor for a lack of significant progress is the fluxing policy changes which have occurred since 2014 by the two major policy developers, memr and pln. regulation changers have occurred regularly with regards to energy pricing, feed-in tariff, price capping for pln, local content, project location, local electricity supply costs, net-metering, minimum charge hours for grid connection, installation standards and differences between business and individual producers. due to this situation, the institute of energy economics and financial analysis [26] has criticised the fluxing nature of indonesia’s solar energy policy and the fact the policy has had little impact on promoting the growth of renewable energy. they argue that it removes the trust of investors with regards to government intentions, and is not fair for renewable producer, as the price is determined by pln, based on their large-scale cheap coal powered operations. in 2018, pln’s power plants were mainly generating electricity by coal (56%), gas (20%) and diesel fuel (6%) [2]. the above criticism mirrors that by yuliani [20], who argued that the adoption of a feed-in tariff model used in developed countries, would likely be detrimental in the indonesian context, due to the fact that operational policy and infrastructure is unsettled, along with related communities and bureaucrats not being well informed on how to introduce and implement the new technology. while indonesia may be a developing country, it is interesting to compare with another country in a similar situation. the philippines have made much greatly progress on its renewable energy commitment due to the development of a comprehensive policy including policy consistency, long-term focus, economically viable for investors through financial incentives to complement the tariff, and absorbtion of costs by end-users rather 114 international journal of sustainable energy planning and management vol. 32 2021 achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia than generators [7]. in indonesia, the short-term policy development with complex governance, including price setting scheme based on the ratio of local content, and the local average production price of energy, makes the process of investing and transacting in renewables complicated, uncertain and risky [10]. in october 2020, the indonesia legislative introduced the omnibus law, a law that is designed to streamline indonesian regulations. while the goverment claims that the omnibus law will help to accelerate economic growth [33], envrionmental specialist argue that the new law may slow green growth promotion [34,35]. the argument is that indonesia needs sound, stable, longterm policies with community engagement to promote acceptance of renewable energy [5,20,36]. 2.2. renewable energy acceptance renewable energy acceptance is a complex issue and multi-dimensional in nature [37]. wustenhagen et al. [16] state that social acceptance is a critical factor in the success of renewable energy being accepted by societies, and the acceptance process consists of three inter-related dimensions: socio-political acceptance, community acceptance and market acceptance. as renewable energy will involve the introduction of technology, the socio-political acceptance dimension relates to how a society gains knowledge of the concept, the technology used, how it works and how it can benefit individuals and the society. the impact of the socio-political dimension is enhanced when countries have developed institutional frameworks and supporting government policies [27]. community acceptance refers not only to the need to build broad support from the general population but this support must also be obtained from the local communities and local areas. market acceptance relates to the openness and willingness of the community, either as investors to support and provide the new technology, or as customers to accept and adopt the new technology. the social acceptance model is a mix of community, market and socio-political dimensions combining to support the concept of renewable energy [15,38]. another key point in the acceptance of the introduction of renewable energy technology is the need for a dramatic shift in the mindset of energy providers from the traditional centralised focus to a more decentralised structure regarding decision making and the control of energy generation, distribution and supply. with the advent of new technology such as residential solar pv, homeowners and real estate investors become part of the generation, distribution and supply of energy, therefore interacting in the governance of renewable energy. under such conditions, gohari and larssaether [39] propose that where there are developed institutions, the renewable energy sector should consider the implementation of multi-actor governance, to balance the power amongst stakeholders, as it mostly involves conflict of interest. for example, utility providers are looking to maximise profits, while the customers are seeking cost savings [21]. a multi-actor governance system for renewable energy may include both formal and informal arrangements, for profit and not-for-profit, and public-private organisations to maintain the focus for sustainable development in the sector. for a large centralised state-owned organisation such as pln, which has enjoyed a monopoly on the generation, distribution and supply of electricity in indonesia, the reaction and impact of decentralisation and the interaction of control and governance is still very much unknown. adding to the uncertainty is the constant changing of renewable energy policy and this inevitably raises questions about the country’s commitment to renewable energy targets [26]. furthermore, from a benefits/risk perspective of the technology acceptance model, technology adoption is positively associated with its perceived usefulness, and negatively associated with the risk of adoption [40]. therefore, the decision to install rooftop solar is backed by the residents’ knowledge, and hypothesis h1 is proposed. h1: solar rooftop residents have adequate knowledge about renewable energy to enhance acceptance. 2.3. community involvement studies have found that the traditional centralised energy distribution model has failed to deliver a fair system of energy production and consumption [41]. on the other hand, a distributed energy resources approach, where consumers have the right to choose whether they will consume or sell their produced energy to the grid, is being promoted as a fairer system [42,43]. therefore, the decentralisation of energy will change the rules of the energy market, offer a more democratic process and the actions of stakeholders’ can directly be linked to carbon reduction [44]. consumers are no longer viewed as only a consumer but also as active energy producers, which is called a ‘prosumer’ [27]. a prosumer is an effective model for integrating consumers and producers, which can contribute to better energy policy as both international journal of sustainable energy planning and management vol. 32 2021 115 janti gunawan, thasya alifia, kym fraser sides of the equation are involved in the energy transaction [45]. to facilitate the move to decentralise the energy market, a platform such as smart grids is needed, which will allow prosumer to actively engage with the production, storage, selling and retrieving of energy from the grid. the smart grid technology boost innovation in metering, energy display, smart appliances, and allows prosumers to actively monitor and manage their energy production and consumption [27]. in indonesia the energy market and its management is still centralised and controlled by pln and memr, with policy transparancy still problematic and implementation being impacted by policy uncertainty. for example, the introduciton of the net-metering policy, is not being driven by the need for better transparency for consumer, but an attempt to reduce public pressure on the centralised management of energy. adding to the issues is the tenuous relationship between pln and memr which impacts at both the national and local levels, the varying quality of infrastructure and grid throughout the country, and the fact that in many locations, the grid may not be design/capable of importing energy. up to the end of 2018, there were only 1435 solar rooftop residentials registered with pln [46], which is a very small number considering indonesia has more than 270 million people [47]. the empirical indications are that community involvement is limited due to a lack of awareness of the solar rooftop program, and therefore the following hypothesis is proposed. h2a: there is a lack of awareness about the net-metering policy from pln to both regular subscribers and solar rooftop resident subscribers. while policy uncertainty and knowledge about renewable energy is problematic, for residents who have already installed solar rooftop, they face their own unique decisions, with respect to indonesia’s energy trilemma, security, affordability, and sustainability [12]. energy security refers to the ability of pln to supply the country’s energy demands on a reliable basis. affordability reflects consumer’s buying power in all parts of the country, where the geographical challenges creates various levels of poverty, uneven population density and underdeveloped infrastructure. furthermore, independent power producers may fine a mismatch between selling and buying prices defined by the government. lastly, sustainability refers to pln ability to management a balance between non-renewable and renewable sources. we argue that energy security is a key energy factor, as it directly impacts subscribers dayto-day lives, including business operations and quality of life. it is likely that solar rooftop residents undertake the additional investment to better control the reliability of their power supply. therefore, we argue that solar rooftop residents, concerned about the security of their energy supply, may choose not to be linked to the national energy grid. to measure concerns surrounding indonesia’s energy trilemma, three areas will be evaluated: economic, environmental, and technological, and therefore the following hypothesis is proposed. h2b: concerns, such as economic, environmental and technological, will impact solar rooftop residents decisions to sell energy to pln through the net-metering program. with respect to energy affordability, residential energy subscribers can choose from a number of supply allocation levels, ranging from 1,300 va to 6,600 va, as stated in the ministry of energy and mineral policy number 28, 2016 [48]. these supply levels are grouped into three different tariff rates, with the lowest va also having the lowest tariff rate, as pln subsidizes tariffs to assist efforts in poverty alleviation. it is therefore logical to assume that residents who can afford to invest in solar rooftop are more likely to subscribe to higher supply allocation levels than residents subscribing to the lower supply allocation levels. h2c: installed rooftop solar will predominately be on houses with higher supply allocation than on houses with lower supply allocation subscription. 3. methodology this study aims to understand the socio-economic-political impact and technology acceptance of indonesia’s solar rooftop program. while exploratory in nature, the study adopts a selection of measures and questions from two similar studies conducted in the european union in 2017 [22] and the usa in 2020 [29]. with respect to questions on the topic of prosumers, the study by espe et. al. [27] was used as a guide. the online survey was undertaken in june-july 2020, during the covid-19 pandemic, with the target sample being pln subscribers. the sample included both pln subscriber groups, regular subscriber (who have not install rooftop solar) and solar rooftop residents, to allow examination of subsribers awareness of indonesia’s solar rooftop policy. 116 international journal of sustainable energy planning and management vol. 32 2021 achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia a purposive sampling method is adopted, as this method suits the requirements for comparative research and mixed methods [49]. in order to reach the desired target groups, the questionnaire was distributed through several community and association groups, which included the solar energy producers associaton (asosiasi energi surya indonesia or aesi), community of one million solar rooftop (gerakan nasional sejuta surya atap or gnssa), community of solar rooftop residents (perkumpulan pengguna listrik surya atap or pplsa), and the renewable energy community (masyarakat energi terbarukan indonesia or meti). for regular pln subscribers the questionnaire was publicly available. the study received 125 useable questionnaires, which was split between 75 regular pln subscribers and 50 rooftop residents pln subscribers. in section 2.1 it is highlighted that indonesia has a very large population, therefore bringing into question issues related to sample size and representation. clearly, the number of responses do not meet the required sample standards to test the categorical data collected, and therefore, this limitation should be considered when analysing the findings of this study. in order to control the large geographical spread of indonesia, which presents large gaps in economic development between java and other regions, respondents were asked a number of demographics questions, which included identifying of type of energy supply, location, education and occupation. while this study utilised the survey design and questions from other similar studies, due to the indonesian context, country specific questions were still required. as an example, respondents were asked about their knowledge of the governments solar rooftop policy via memr policy number 49, 2018, including the government’s promotion and advertising of this policy and its solar rooftop program. other areas of difference included the need to measure respondent’s knowledge about solar energy from the perspective of two different energy subscribers. for solar rooftop residents, specific solar energy knowledge was sort regarding the efficiency of solar panels, ‘day-time only’ generation, effectiveness of solar generation in cloudy/ rainy conditions, panels require significant roof space, and issues about roof positioning and cleaning. in terms of economic acceptability, existing solar rooftop residents were asked if solar rooftop would improve the value of their homes, if homes would be easier to sell with solar rooftop, was solar rooftop reducing electricity expenses, and whether homeowners were interested to sell extra energy created to the pln grid. with respect to the environment, participants were asked their views on the environmental impact of solar energy technology and whether renewable energy would help climate change, including indonesia’s commitment to reduce reliance on non-renewable energy. for regular energy subscribers (non-solar rooftop residents) their solar energy knowledge was also sort but more in general terms. regular pln subscribers were asked their opinion about installing solar rooftop but were also provided a table presenting investment costs and energy savings across a range of rooftop sizes and capacity. finally, respondents were asked whether they would be interested to be more involved in the demand and supply of energy by becoming prosumer, or happy to maintain a consumer status. 4. findings the findings section firstly presents the results of the four hypotheses developed from section 2. following the results of the study, a discussion of the findings is undertaken, and the section is concluded by assessing the policy implications of the study. 4.1. results of study the study received 125 useable survey’s from pln power customers, of which 50 were solar rooftop residents and 75 regular power subscribers. from these subscribers, 69% were male, 31% female, with 92% living in urban areas/cities and 87% owning their house. with respect to occupation, 34% had their business, 25% worked for private firms, and 13% worked in government organisations, with 31% being in senior management and/or business owners, 32% being middle managers, and 13% being regular employees. although the study was available to all pln customers throughout indonesia, 91% of the respondents come from the most populous island of java (with 32% from dki jakarta province, 28% from east java province, 20% from west java province and 11% from banten province). of the 50 solar rooftop subscribers, the vast majority (94%) have had their solar panels installed of at least 4 years. to test the first hypothesis, h1: solar rooftop residents have adequate knowledge about renewable energy to enhance acceptance, an independent t-test was conducted to compare the knowledge of regular pln subscriber versus solar rooftop resident customers (see table 2). international journal of sustainable energy planning and management vol. 32 2021 117 janti gunawan, thasya alifia, kym fraser the study found that regular pln subscriber have much lower knowledge about solar energy, with the mean being 1.6 out of a maximum value of 5, while for the solar rooftop residents, the mean for knowledge about solar energy is 3.92 out of 5. the independent sample t-test found that this difference between the two pln customer groups was highly significant. therefore, hypothesis h1, that solar rooftop residents have adequate knowledge about renewable (solar) energy to enhance acceptance, is accepted. while hypothesis h1 tested the level of renewable energy knowledge of those who had installed solar rooftop energy systems on their homes, the second hypothesis, h2a: there is a lack of awareness about the net-metering policy from pln to both regular subscribers and solar rooftop resident subscribers, is designed to narrow the focus to determine the level of awareness of pln’s current policy on solar rooftop for both customer groups. the key issue regarding pln’s current policy is it provides customers the ability to become prosumers in the energy market, therefore not only consuming electricity but also generating/supplying electricity to the grid via the net-metering process. table 3 provides a crosstab analysis of the two types of pln customers, those who are regular pln subsribers and those who are already solar rooftop residents, comparing each groups awareness of pln’s policy regarding solar rooftop energy and net-metering. the results show that around half of the participants from both pln subscriber groups are not aware of plns solar rooftop policy regarding net-metering, and therefore the opportunity to become prosumers in the energy market. with the number of pln subscribers who are not aware of the policy (50.4%) being marginally higher than the number of subscribers who are aware (49.6%), chi-square testing of the two groups was undertaken and there was no significant difference found between the groups. therefore, hypothesis h2a, that there is a lack of awareness about the net-metering policy from pln to both groups of customers, regular subscribers and solar rooftop residents, is accepted. in an attempt to better understand the concerns current solar rooftop residents may have to becoming prosumers in the energy market, the study analysed three areas likely to impact joining the electricity grid: economic, environmental and technological. from the 50 residents who had installed a solar rooftop system, only 8 had become prosumers, linking their solar system to the electricity grid via pln’s net-metering program. with respect to economic impacts, participants via likert scale, were asked to rate the following statements: installing solar energy adds value to your house; the house will be easier to sell with a solar system installed; a solar system reduces the monthly energy costs; having a solar system provides the opportunity to sell energy to pln; and over the long run using solar energy is more economical. with respect to environmental impacts, participants were asked to response to the following statements: using solar energy i am making a positive contribution to the environment; and using solar energy table 3: crosstab of pln’s customer groups and solar rooftop policy awareness pln customer groups total regular pln customer solar rooftop resident awareness of pln’s policy on solar rooftop and netmetering. no count expected count % of total 39 37.8 31.2% 24 25.2 19.2% 63 63.0 50.4% yes count expected count % of total 36 37.2 28.8% 26 24.8 20.8% 62 62.0 49.6% total count expected count % of total 75 75.0 60.0% 50 50.0 40.0% 125 125.0 100% table 2: comparing solar energy knowledge of pln’s two customer groups pln customer groups n (mean) knowledge about solar energy regular pln subscriber 75 (1.60) solar rooftop residents 50 (3.92) independent sample t-test equal variance assumed f = 34.758 sig = 0.000*** 118 international journal of sustainable energy planning and management vol. 32 2021 achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia table 4: areas impacting existing solar rooftop residents from becoming prosumers levene’s tests for equality of variances t-test for equality of means f sig t df sig. (2-tailed) mean difference std. error difference economic concerns equal variance assumed 8.099 0.006 –0.197 48 0.844 –0.038 0.193 equal variance not assumed –0.134 7.855 0.896 –0.038 0.283 environmental concerns equal variance assumed 2.159 0.148 0.030 48 0.976 0.006 0.200 equal variance not assumed 0.022 8.093 0.983 0.006 0.272 technological concerns equal variance assumed 3.282 0.076 –1.757 48 0.085 –0.331 0.188 equal variance not assumed –1.290 8.100 0.233 –0.331 0.256 helps lower the demand for non-renewal energy. from the technological side, participants were asked to respond to the following statements: they have knowledge about how to maintain a solar rooftop system; the availability of technicians to conduct solar rooftop maintenance is not a concern; and the time to realise a return on the solar rooftop investment is not a concern. to test the third hypothesis, h2b: concerns, such as economic, environmental and technological, will impact solar rooftop residents decisions to sell energy to pln through the net-metering program, an independent samples t-test was conducted (see table 4). with respect to the consumers who had installed solar to their rooftops, the study found that only 8 (16%) had subscribed as prosumers. of the reminding 42 (84%), it was found that 29 (69%) were not prosumer due to a lack of knowledge about net-metering, feed-in tariff, and the export-import energy policy in general. the reasons for the remaining 13 (31%) not to sell their energy to pln is unknown. when examining reasons why residents who install solar rooftop systems but don’t become prosumer, the results show that economic and technological concerns both play a significant role (see table 4). the results indicate that while those who install solar rooftop, the majority are not convinced of the economic benefit of connecting their solar system to the national electricity grid via pln’s net-metering program. while some residents may not be aware of the net-metering program, it would seem that residents are either happy to directly control their own solar generated energy or reluctant trust pln’s net-metering program. the other significant concern is linked to the technological understanding of solar rooftop and the net-metering program. the issue here relates to the fact that linking to the national grid and/or pln’s program, adds further technological concerns to a technology (solar rooftop) that is not well understood by consumers and the community in general. when regular pln subscribers were asked about their interest in becoming prosumers, 35% indicated that they would be interested in such a program, 48% indicating they would maintain their current consumer status, and the remaining 17% saying they were not interested in solar energy and were happy for pln to deal with energy matters. with respect to costs, 70% of regular pln subscribers indicated that the cost of investing in solar pv is too high. finally, when regular pln customers, those who have not install solar pv, were asked whether they had received information/offer from pln to install solar energy, 67% answered ‘never’ while 33% indicated that they had received information. for the fourth and final hypothesis, h2c: installed rooftop solar will predominately be on houses with higher supply allocation than on houses with lower supply allocation subscription, was found to be true. as is shown in table 5, those with solar rooftop tended to choose higher va supply allocation. eighty percent (80%) of solar rooftop residents chose supply levels of 3500 va and above. when compared to regular pln subscribers, the percentage drops to 36% for supply levels of 3500 va and above. therefore, hypothesis h2c international journal of sustainable energy planning and management vol. 32 2021 119 janti gunawan, thasya alifia, kym fraser table 5: supply allocation choice of pln’s two customer groups tariff r1 1300 va tariff r2 2200 va tariff r2 3500-5500 va tariff r3 > 6600 va total solar rooftop residents 3 (6%) 7 (14%) 19 (38%) 21 (42%) 50 regular pln subscribers 25 (33%) 23 (31%) 22 (29%) 5 (7%) 75 28 30 41 26 125 is accepted, indicating that the installation of solar rooftop energy was strongly correlated with households which had higher supply allocation subscription, therefore implying that these properties were either using or needing higher levels of electricity consumption. further exploring the reasons why solar rooftop residents have invested in renewable energy, the study found that the five main reasons to install solar energy were: 1) the information at the exhibition was very intriguing (44%), 2) our cost of energy is high (38%), 3) i love technology (30%), 4) my work is related to energy (10%), 5) influenced by a friend or neighbour (10%). with respect to the promotion of renewable energy, 90% of current solar rooftop residents suggested that pln should offer customers solar rooftop installation packages, with 88% wanting the return-on-investment to be 5 years or less, and awareness about renewable energy, such as solar, should be introduced in schools (41%). participants also indicated that memr and pln should both play a significant role in promoting net-metering, simplfying the net-metering application process, provide incentives to investors (such as offering affordable investment packages to install solar energy), making the policy and process more transparent, and providing a feed-in tariff which is more attractive, e.g. 90% of the government’s set price instead of the current 65%. 4.2. discussion it should be noted that the findings are bias towards, not only the most populous, but also the most economically advanced island in indonesia, being java. the study shows that pln subscribers who have installed solar rooftop have greater knowledge about solar energy than regular pln subscribers, which is an expected outcome. the interesting issue is that the majority of respondents tended to be working professionals who owned their own home, therefore the knowledge gap between the two subscriber groups may be due to a lack of available knowledge, especially from pln. it would seem that those who have installed solar rooftop may have individually sought information about solar energy and programmes, rather than having received information from pln, as the wider evidence of the study is confirming. pushing the issue of knowledge about pln policies further, a majority of the combined subscriber groups, albeit a slight majority, indicated they had no awareness of pln’s policy on solar rooftop and net-metering. interestingly, around half of those who had installed solar rooftop to their homes indicated they had no awareness of pln’s policy on solar rooftop and net-metering. the evidence of awareness of pln’s policies is further enhanced when only the solar rooftop resident subscribers are analysed. from this group, only 16% have taken the decision to connect to the net-metering programme and become prosumers. for the remaining 84% who have solar rooftop installed but have not connected to pln’s net-metering programme, the major majority (69%) highlighted that the main reasons behind not joining the programme was a lack of understanding of net-metering, the feed-in tariff and the export-import energy policy. due to this lack of understanding, it would seem that many don’t trust the economic benefits of being linked to pln’s net-metering, and secondly, many don’t trust the net-metering technology and/or don’t understand the technology well enough to build trust in the programme. for both these issues, it would seem that pln, the state-owned monopoly electricity provider, has fallen short of integrating the government’s policy on renewable energy. further to the points be discussed above, while 65% of regular pln subscribers were happy with the status quo, 35% indicated that they would be interested to explore the opportunity to become prosumers. this point may be linked to the fact that 36% of regular subscribers had higher supply allocation (3500 va and above), which was popular for solar rooftop subscribers. finally, a key point highlighted by regular pln subscribers was the fact that 70% indicated that the cost of installing solar rooftop was still too expensive. 120 international journal of sustainable energy planning and management vol. 32 2021 achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia 4.3. policy implications if the ultimate outcome is for indonesia to achieve the renewable energy targets it has set, then this study has highlighted a number of policy implications which need consideration. the study highlights a conflict of interest between the state-owned pln, which has a monopoly on electricity generation and distribution in the country, and the need to reduce the country’s co2 emissions. while the government may have legislation to support renewable energy targets, there seems to be little incentive for pln to change its current business model of utilising its abundant coal reserves. firstly, it would seem that the indonesian national energy council and pln operate independently of each other, preferring to recognise each other’s role while not wanting to antagonise the other. under the current monopoly, expecting pln to take moral responsibly for the country’s carbon emissions won’t happen until there are major incentives to do so. secondly, without incentives, why would pln promote solar energy and feed-in tariffs if it is likely to harm the company’s revenues and profit. mittal et al. [50] argue that utility companies see pv rooftop installation as a threat to reducing company income. while the situation appears like a two-edged sword, the government must move the conversation away from revenues and profit to one that analyses the future cost and mix of electricity generation, either heavy investment in new power plants or incentives for renewables such as solar. an area of consideration for pln would be to invest in solar energy as corporate social responsibility (csr) projects. by indonesian law, state-owned enterprises are required to invest 2% of their revenue on csr projects. pln could develop solar energy projects using csr as an initiative for lower income communities. [51] proposed such an initiative under the banner of community solar. funkhouser et al. argues that low income comminities are economically less attractive for business as the individual energy consumption is often low. with the collective power of a community, the utility company can invest in rooftop solar and manage the low distribution cost for less profitable area. hence, energy providers such as pln can impact both low income communities and the environment (renewable energy targets) creating a win-win situation. the study highlights that higher use and/or small business owner residents are willing to undertake the investment of installing solar rooftop without incentives or taking advantage of the net-metering (feed-in tariff) provided by pln. it would seem that many of these people undertake this investment to stabilise supply and/or guarantee the supply of electricity. with a growing middle class, the government could well tap into the increasing social sentiment towards renewables, and this outcome would be further boosted by incentives, as has been the case in a number of developed countries. one such scheme would be low-interest rate loans for investment in solar rooftop. it has been argued [6] that the slow progress towards solar in indonesia is due to a lack of financing incentives to support renewable projects, either at the business or residential levels. providing such loans can have a multiplier impact on the economy due to the flow-on effect to solar panel manufacturers, importers, sellers, distribution, installers, electricians etc. having said that, it should be noted that pln have expressed concerns that the current distribution system may not be capable to support the export and import of energy, and the system requires further investment to meet technological requirements. another consideration for the government with regards to the promotion of renewable energy is the community participation model as proposed by [6,41]. such a model requires the active involvement of the various social stakeholders from project planning to the implementation of renewable enrgy, including the opportunity to become solar pv installers. for pln, the model opens the opportunity for partnership in the project planning, implementation, monitoring and control, but such initiatives need investment in education and skill development [52]. the benefit for the government and pln if implementation is successful is the impact of shared knowledge, renewable energy awareness, community ownership, and the environment. most developing countries face the challenge of shifting to greener energy generation and consumption. in indonesia’s case, the country has its own unique challenges such as the energy generation and distribution is centralised, state-owned, with inflexible pricing. hence, energy management in indonesia could benefit from becoming more democratic, transparent, increasing technology adoption with hybrid community partnerships and a mix of private and government ownership. indonesia needs to adopt a more comprehensive policy and be open for social inclusion in the business of energy. international journal of sustainable energy planning and management vol. 32 2021 121 janti gunawan, thasya alifia, kym fraser 5. conclusion in an effort to reduce the impact of climate change by lowering greenhouse gas (ghg) emissions, indonesia, like many countries around the world, has developed its own renewable energy targets, aligned with international treaties and agendas such as the kyoto protocol, paris agreement and sustainable development goals (sdgs). while these targets are easy to legislate, achieving renewable energy targets is becoming notoriously difficult for many countries, with developing countries finding it especially difficult. indonesia now finds itself in a situation which it has struggled to progress on its commitments and is highly unlikely to meet the targets it set for 2025. while indonesia is the 4th most populated country and the 4th largest contributor to global co2 emissions, the country finds itself in both an unenviable situation and one of potential opportunity. the country has its population spread over 6,000 islands and 8,000 kms, creating a logistics and supply chain nightmare, but on the other hand, the country has access to an enormous array of potential renewable energy sources, with solar energy being the leading source, an ideal source for the world’s largest archipelago. while this paper has identified many shortcomings in the country’s efforts to introduce and promote solar energy, the paper also provides a number of policy implications, which need consideration if indonesia is to reduce its co2 emissions footprint, and take advantage of a major potential renewable in the form of solar energy. in summary this study found: 1. both solar rooftop residents and regular pln subscribers indicate that the promotion and awareness of solar energy is lacking, creating a low level of knowledge and understanding about solar energy in the society. 2. the policy of net-metering and feed-in tariff is not well publicised, even for existing solar rooftop residents. 3. economic and technological concerns were hindering existing solar rooftop residents from becoming prosumers. suggestions for improvement: 1. government and pln must improve the awareness of renewable energy, especially solar energy, within the society via community engagement and education programs. providing basic energy management information on energy bills, as suggested by [53], would start to create interest and understanding. 2. pln should take advantage of the growing middle class to install solar rooftop to their homes via low-interest rate loans. 3. pln should utilise its corporate social responsibility (crs) obligations to develop community solar energy partnership, especially in lower income communities. 4. the government and memr should facilitate independent research centers to conduct 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european trend towards further development of community energy projects. increased local energy production will move energy plants closer to where people live, placing aspects related to social acceptance at the center stage. until recently, small hydro power (shp) projects in norway have been owned by local farmers and others with property rights to rivers. as the profitability of these projects has decreased, international investors have taken interest in shp projects as part of their long-term investment strategy. in this paper, we study what influences social acceptance of shp projects in norway based on interviews and qualitative data from several shp projects in norway. we find that community energy projects often are attributed positive qualities when ownership is local. we argue that there is a need to consider more thoroughly how to organize ownership of small-scale renewables in the future, if it is to uphold its position as a popular and viable solution to meet future energy needs. is local always best? social acceptance of small hydropower projects in norway bente johnsen rygg*a, marianne ryghaugb and gunnar yttric a western norway university of applied sciences, department of environmental sciences, postbox 133, 6851 sogndal, norway b norwegian university of science and technology, department of interdisciplinary studies of culture, 7491 trondheim, norway c western norway university of applied sciences, department of social science, postbox 133, 6851 sogndal, norway keywords renewable energy; community energy projects; local energy production; sustainable energy transitions; social acceptance; ownership http://doi.org/10.5278/ijsepm.6444 1 introduction in recent years, smaller hydropower plant projects and so called ‘community energy projects’ have gained increased attention in the research and grey literature, most importantly, because such projects have been highlighted as a way to achieve the transition towards a low-carbon energy system [1, 4]. community energy projects are not necessarily small, but tend to be smaller than many projects developed by commercial actors [5, 6]. europe has a high potential for, and long tradition of shp projects [7, 8]. the shift from a few large energy plants to numerous smaller ones is an increasing trend all over europe [9, 10]. developing these projects has been emphasized as an important strategy in terms of producing green energy and helping to develop rural areas [11, 12]. in norway, most hydro power plants have traditionally been developed for large-scale production. it was mainly after the turn of the millennium and the introduction of the green certificate scheme that shp projects increased rapidly in number. today, norway has installed 257 hydropower plants with a capacity ranging from 10-100 mw, and 715 shp projects between 1-10 mw. license has been given to an additional 7.5 twh of 162 international journal of sustainable energy planning and management vol. 31 2021 is local always best? social acceptance of small hydropower projects in norway hydropower production, which is either under development or in the planning stage [9]. the majority of these are shp projects located in rural areas where, due to effects on nature, landscape and infrastructure, they are often perceived as increasing the strain on the local community. the term ‘community energy’ is a somewhat diffuse term often used to denote projects with some degree of local involvement. two characteristics have been used to identify community energy projects [14]. a process dimension, which refers to who manages the project and who has influence over the process. an outcome dimension, which is concerned with how the outcome of the project is distributed an who benefits from it both in economic and social terms [14]. different ‘community renewables’ projects can be categorized according to where they fall on these two dimensions. generally, it is seen as favorable when the community has some degree of involvement in the project, and the outcome of the project is distributed among the entire community. in addition, it has been demonstrated that having a high degree of local ownership and local control in such projects makes them more adaptable within the local context [15, 16]. studying social acceptance is crucial to understand what influences decisions concerning local implementation of shp projects, and the municipalities’ role in this process. one of the major drivers for social acceptance is the perceived positive impacts on the local level [17], for instance related to employment rates, local industry, environment and the distribution of local benefits [18]. relatively little research on social acceptance of renewable energy projects have focused on social acceptance of hydropower plants, compared to, for instance, wind power [19, 20]. in this paper, we address this gap focusing on the social acceptance of shp projects, based on empirical research of shp development in norway. while most research on renewable energy and social acceptance thus far have zoomed in on inhabitants and the attitudes of people living in proximity to such projects [21], we adopt a broader focus as we also include other actors significant for the social acceptance of shps, such as municipalities, environmental organizations, and energy companies. we study projects that has been developed at different periods of time, a factor that has often been overlooked in earlier studies. our study brings to light considerations of social acceptance that are highly relevant for the development of shp projects in an international context, in a time characterized by large changes, also with respect to ownership structures which makes this study object particularly pertinent. the paper starts by presenting relevant theories of social acceptance and moves on to discuss the status and history of hydropower in norway. then we present the cases and the methods used in this paper, before discussing findings and concluding. 2. theories of social acceptance and renewable energy ‘social acceptance’ has traditionally been used as a barometer to measure public opinions concerning different energy technologies. social acceptance is often found to be high among the general public, but locating projects closer to home calls for more active standpoints concerning location, aesthetics, and local involvement [2]. this is particularly relevant for shp projects, which often is located close to habitation contrary to former, large hydro power projects. thus, the trend towards an increasing number of renewable energy plants all over europe highlights the importance of studying social acceptance in relation to such developments [22, 23]. to this end, the not-in-my-backyard (nimby) concept was launched to capture the way in which people tend to feel positively about renewable energy developments in general, but more negative once a project was established close by or in their ‘backyard’ [24, 25]. later, this model has proven to be too simplistic, and more nuanced understandings of the relationship between renewable energy projects and public acceptance have since been developed [2, 26]. prior scholarship aiming to better understand the complexity of local opposition to renewable energy projects, that is, how local acceptance differs from general acceptance, has resulted in a proposition to regard social acceptance as consisting of three dimensions, according to wüstenhagen, wolsink and bürer [2]: 1) socio political acceptance, which is the most general form of acceptance in society 2) community acceptance, which refers to the acceptance of specific projects by local stakeholders, inhabitants and local authorities and 3) market acceptance, which relates to technology and the extent to which the market adopts new technologies. expanding wüstenhagen, wolsink and bürers’ [2] three dimensions, sovacool and ratan [27] suggest that acceptance depends on the prevalence of nine different factors as presented in table 1. if these nine factors are present, sovacool and ratan [27] argue that a market international journal of sustainable energy planning and management vol. 31 2021 163 bente johnsen rygg, marianne ryghaug and gunnar yttri will be created in which different renewable energy technologies are accepted. in this paper, we build on the work of sovacool and ratan [27] to operationalize the original dimensions of wüstenhagen, wolsink and bürer [2] into nine criteria, three corresponding to each of the dimensions and translating them into a norwegian context, as demonstrated in table 1. the ‘criteria’ and ‘explanation’ columns are developed by sovacool and ratan, the ‘translation’ and ‘relevance’ columns by us. to do so, we have investigated the criteria descriptions and tried to translate and develop these criteria into equivalent meaningful criteria in the norwegian context. for example, with the criteria ‘access to financing’ in the market dimension, we have translated this into a more detailed description regarding the possibility for local landowners and inhabitants to finance shp projects. the socio-political dimension is divided into (i) strong institutional capacity, (ii) political commitment, and lastly, (iii) favorable legal and regulatory frameworks. the market dimension is divided into (iv) competitive installation/production costs, (v) mechanisms for information and feedback, (vi) access to financing. thus, this operationalization is using the dimensions of wüstenhagen, wolsink and bürer [2], but in greater detail. where the dimensions of wüstenhagen, wolsink and bürer are focusing on the willingness to invest in new technologies, salm, hille and wüstenhagen [28] found that for investors, the local embedding of projects made table 1. description and translation of theoretical perspectives into norwegian context. criteria explanation translation relevance s oc ia l p ol it ic al d im en si on strong instrumental capacity countries exhibit institutional support at the national level through ministries or department of energy with specific programs or subsectors dedicated to renewable energy, or have governmentsponsored institutes conducting research on renewable energy to what degree is there an institutional system that supports the development of shp in place? the institutional system for developing hydropower and shp is well established political commitment political leaders promote renewable energy and make it a highly visible topic to what degree have politicians encouraged the development of shp? developing shp has been part of a national strategy, in particular related to farming favorable legal and regulatory framework laws and regulations facilitate easy entry into the renewable market, independent renewable energy producers are granted access to the electricity grid, national interconnection standards exist, and regulatory changes occur in a predictable and transparent manner are there laws and regulations facilitating renewable energy production? legislation and regulations are well established due to a longstanding hydropower tradition. m ar k et d im en si on competitive installation/ production costs renewable energy technology can produce electricity at a competitive rate compared to other sources of supply, driven by government incentives, a large resource endowment, and/ or a strong local manufacturing base are there well founded and implemented support schemes and financial arrangements for renewable energy producers? depending on the time of development, this has changed. this dimension does not intercept the time dimension mechanisms for information and feedback investors and users/producers have access to reliable information about renewable energy policies, prices and opportunities is there sufficient information available for all actors? partially, as this information is provided from different actors representing a variety of interests access to financing producers, manufacturers, and users have access to domestic sources of low-cost financing and/or can benefit from specific government financing schemes how easy is it to finance shp for local landowners or other locals? how strict are requirements for capital? the cases in our study have been developed in different periods of time: access to financing has changed substantially in the cases studied. 164 international journal of sustainable energy planning and management vol. 31 2021 is local always best? social acceptance of small hydropower projects in norway c om m u n it y d im en si on s prolific community/ individual ownership and use renewable energy systems tend to be installed, owned and/or used locally how easy is it for locals or communities to own projects? the term ‘community’ does not fit as it is complex and unclear who this encompasses. ownership is underestimated. participatory project siting people and communities are involved in the decision to site or permit renewable energy facilities near them to what extent is locals given the opportunity to influence the license process and including siting of projects? this relates to the licensing process, but the influence seems to be minimal in practice recognition of externalities or positive public image community members are generally aware of the environmental impact of conventional energy and the benefits of renewables, cultivation of a strong public image are locals given any information about the positive and negative impacts of the project? seems to be influenced by different actors in a way that is not described very well in this dimension. it is a more complex process. them more interesting for investment. finally, a community dimension divided into (vii) prolific community/ownership and use, (viii) participatory project siting and (ix) recognition of externalities or positive public image which includes the possibility of community members to be informed of the environmental impact of conventional energy as well as the benefits of renewable energy [3]. for many communities, the promise of increased activity and income can have a significant positive impact on local attitudes towards the projects [3]. greater participation of local communities in hydropower projects may also actually serve to increase social acceptance [19, 30]. in the model of sovacool and ratan [27], ownership only influence the community dimension. focusing on a norwegian context, we would, however, analyze how ownership influence social acceptance in general. sovacool and ratan [27] does not seem to be clear about the multiple meanings of ‘community’ which is not very well defined. in a norwegian context, ‘community’ could mean the municipality or the inhabitants. for the purpose of this article, we chose to understand ‘community’ in a wider sense, including both the municipality and its inhabitants. 3. hydro power in norway the importance of hydropower for the development of modern society is significant [31, 32]. hydropower has provided substantial income and secured the foundation for the development of the welfare state in the immediate post-war period. during the 1980s, the last large hydropower plants were developed, albeit with a high degree of controversy, and the remaining large river systems were preserved through political resolution [34]. with this background, the process of application for license to develop and operate a shp in norway is rather extensive and focus on broad involvement where all parties affected by a given project are entitled to have their say. in concrete terms, time is allotted for the consideration of statements concerning the project, submitted by individuals or groups. in addition, those directly affected by the project have the right to appeal the decision after a license has been granted or repealed [30]. shp increased considerably at the end of the 1990s through the turn of the millennium for several reasons. most importantly, norway was the first country to deregulate energy legislation, allowing for anyone to produce and sell electricity on the national grid. of equal importance was the agreement concerning electricity certificates in 2011, giving those with plans to develop shp projects incentives of having operative plants before the deadline of 2021 [35]. many of these projects were developed and owned by local farmers. there has been an overall positive attitude towards such projects as they have been seen as serving to maintain decentralized habitation and provide valuable income to many small and less profitable farms. however, as the number of shps has increased substantially over the last decade, so have the controversies related to the environmental and biological consequences [36] making social acceptance a key issue to explore in relation to shp projects. however before delving into the way social acceptance plays out in relation to shp projects in norway, we will give an overview of the data and research methods. international journal of sustainable energy planning and management vol. 31 2021 165 bente johnsen rygg, marianne ryghaug and gunnar yttri 4. description of cases and research methods in this paper, we study what influences social acceptance of shp projects in norway. the research question of this paper is addressed through case studies of three municipalities in the region of vestland, located in the western part of norway. our methodology is a combination of different qualitative methods, mainly document analysis and semi-structured interviews. the county of vestland was chosen for several reasons. first, the region has the highest density of and largest potential for shp projects in norway at the lowest development cost [35, 37 p. 25]. the nve (the norwegian water and energy resource directorate) database shows that there are currently 79 licensed projects in the region of vestland which have not yet been developed. if and when constructed, these projects would provide 677 gwh of renewable energy [38], but also have a major impact on wildlife and natural landscape, and in turn, community acceptance. if the burdens on the local community increase, without any increased local revenue, this could have a negative impact on social acceptance of shp. the numerous shp projects under construction have led to substantial interest in small hydropower projects. third, the county has a long-standing agricultural tradition in which farming and local landowners stand at the fore, thus upholding agriculture is deemed important for local as well as regional politics. the familiarity with hydropower and shp in particular, also provides a favorable environment for studying social acceptance of shp with easy access to people, municipalities, organizations and companies with relevant experience. interviews, document studies and media studies have been the main sources of analysis in this paper. in the three municipalities in vestland, eight interviews were done with municipal administration, case handlers, local landowners, developers, and owners of shp projects. in addition, we have interviewed two of the large, regional energy companies as they were involved in some of the first shp developments in the region. we also interviewed one employee from the county administration and the regional travelling association who has been engaged in hearings of most regional shp projects. in total, we conducted 12 interviews with key stakeholders and representatives of different groups of people. interviews are covering private as well as public voices, and a variety of actors. as the purpose of the paper is to study social acceptance of shp projects in norway, we consider the interviews to cover a broad specter of actors, which is of particular interest in this research. a detailed list of interviews is found in the appendix. the interviews were carried out over a period of one year, from 2016 to 2017. we met the interviewees in their home or at their workplace. the purpose of the interviews was to understand how the different actors considered social acceptance of shp projects, and if ownership of shp projects affected social acceptance. we were also interested in the recent development of large funds investing in renewable energy projects in norway, and how such investments subsequently affected social acceptance. could this influence how projects were to be handled by the municipalities and other public and private actors in the future? all interviews were transcribed in verbatim. the quotes used in the paper have been translated by the authors. to study the formation of social acceptance in these contexts, we also analyzed interviews, municipal hearings, newspaper articles, debates and letters in local newspapers to bring out ways in which local communities have responded to shp projects. when analyzing data, we have identified official statements, political goals, and developers’ accounts of obtaining the necessary financial backing. we have also been interested in how different actors have considered ownership and to what extent they have been involved in the project. we were interested in the attitudes of case handlers and politicians, and others that might influence the outcome of the license procedure. it was important to investigate how they consider ownership, as the attitudes of these vital actors have proven to be important in order to develop local, renewable energy projects [3, 30]. we were interested in statements related to social acceptance, and the nine criteria of sovacool and ratan [27] concerning the anticipated implications of ownership, participation in the project process, and the expected outcome in terms of positive and negative implications for the local community. we have summarized the nine criteria and translated them into a norwegian context, as presented in table 1. in the result section, an overall assessment of the relevance of the criteria based on wüstenhagen, wolsink and bürer and sovacool and ratan, and how it is related to the empirical data is included. 5. what influences social acceptance of small hydropower projects in norway? we divided the empirical results obtained in this paper based on the nine criteria of sovacool and ratan [27] to operationalize the three dimensions and to link the 166 international journal of sustainable energy planning and management vol. 31 2021 is local always best? social acceptance of small hydropower projects in norway criteria more closely to our interview and document analyses. the focus of our analysis is to investigate what influences social acceptance of shp projects in norway, as operationalized in table 1. 5.1. the socio-political dimension the focus of the socio-political dimension is directed towards overall acceptance, national laws and regulations concerning shp projects. even if shp is relatively new, largeand small-scale hydropower share most of the legislations, a well-established and thoroughly institutionalized area. with instrumental capacity, political commitment, legal and regulatory frameworks under scrutiny, we find that the long-standing tradition of hydropower in norway has produced a well-established legal framework as well as political commitment. shp was not seen as profitable for most of the large energy companies for many years due to lack of water magazines, but nonetheless, some actors did take an interest. this was mainly private investors in the energy sector, looking for a new business potential. a regional energy company also tried to enter the market of shp but found the competition to be hard, as this quote by an employee in a regional energy company illustrates: we considered it interesting, so we tried to get long-term property rights to the river as well, but after a while we saw that considering the development... prices rapidly increased. after a while, several so-called ‘white-collars’ entered the market, this was national actors looking for business potential [..] they secured long-term contracts, and in the worst cases, they got provision based on number of contracts and values. for us,as a regional actor, this had a bad flavor, so we backed out. we must be able to see people in their eyes when we meet them at the grocery store. this was a new situation for many of the local farmers as well. suddenly, there was an increased interest in securing property rights, even to relatively small rivers, and the contracts they were offered in return was by many seen as a tempting additional income. in this period, the regional trekking association attempted to raise awareness around the environmental consequences of shp. the head of the association considered local farmers as occupying a prominent position as landowners with property rights to rivers, which, again, influenced how the association considered projects developed by local farmers: in the early phase, local landowners developed the [shp] projects, and we thought we had to consider them as well. i grew up on a farm so i’m familiar with that side of things. we also found out that if we were going to be heard, we had to be balanced. if we said “ok” to some developments, nve took it more seriously when we strongly opposed others, because we seemed more balanced. after a while, nve probably noticed this. i think it made it easier to be heard in the important cases. the regional trekking association cooperated with other organizations to formulate responses to various statements as part of the license process, attempting to exert a stronger influence over the outcome of different projects. when it came to priorities for the association, the generation of local income and profit ranked high, as illustrated in this quote: i think in cases where local landowners have developed a project, we have been a bit more ‘kind’ than in cases with larger developers, ... but we have tried, first and foremost, to keep a just and fair process when flagging our objections. in some cases, we have strongly opposed projects developed by local landowners. the strong position of farmers within the trekking association might be one reason for this. overall, the regional trekking association seemed to be one of very few voices attempting to moderate the numbers of shp projects. the trekking association were critical to some of the large, national developers, and the change in ownership that happened recently: we have been a bit more critical towards some of the large developers, and we see now that småkraft as and other developers have been sold to german interest. we don’t like that, to be honest. småkraft as was owned by the norwegian government, or statkraft and other publicly owned energy companies, so it’s the government that have sold a very large part of the norwegian small hydro power plants to german interests in particular, and foreign owners in general. overall, the change in ownership highlights the difficulties of småkraft’s own position. småkraft, initially had several public owners. due to changes in ownership, the company suddenly got a different position (see e.g yttri [35]). international journal of sustainable energy planning and management vol. 31 2021 167 bente johnsen rygg, marianne ryghaug and gunnar yttri in the following section, we will turn to the market dimension of social acceptance, and how it seems to have influenced social acceptance of shp in the region. 5.2. the market dimension the profitability of shp projects has changed over the last 20 years [39, 40]. the most profitable and accessible projects were developed first (some as early as in the 90s) while the projects that have been developed more recently are less profitable and with competition from other types of renewables, such as wind power. access to financing has obviously been a crucial part of the development process of many shp projects. when banks increased the requirements for capital, some of the smaller projects needed external investors. the difficulty of obtaining a loan is mentioned as one of the motivations behind local actors selling to external investors. larger investors did not have the same difficulties obtaining a loan, as they had more capital and financial security. however, at the beginning of the shp development era, a large part tended to be financed by local landowners. energy prices were higher and access to financing was easier. a landowner could easily develop his shp project in cooperation with a couple of other farmers. the project would be profitable almost from start, as illustrated here by one of the local landowners: we were lucky to get some good years after we started production where electricity production was much higher than expected. when we started planning the project, we did not expect to make any profit the first years. in the following years, after some time with high electricity prices, the focus on development of shp increased: later, a professional developer tried to make agreements with local farmers to develop small hydro power projects. their philosophy, well, i liked the initial idea, even if it did not turn out like that the developers would get a small income and the rest would go to local farmers […] i thought the idea was good, but later the company dissolved. in a way it is operative, but the company was sold, leaving the local farmers with nothing and the developer with a substantial income. this landowner was critical of the role nve played in this, claiming that nve were pushing local farmers to develop larger projects and hence, taking on a substantially larger economic risk than they felt comfortable with. if i were to advise these farmers, i would suggest a more careful development, like we did. but nve is pushing developers to take advantage of the water and increasing the size of the projects to make the societal benefit of the project as large as possible. a project that began operation in 2011 illustrates the rather laborious process of starting up a plant in the initial phase, years before even receiving a license. despite some challenges with respect to financing, the project moved forward. at several of the small hydropower association [småkraftforeningen] meetings, one farmer was able to make meaningful contact with a representative from a leading local bank, a regular attendee at such meetings arranged by the small hydropower association. for this project, finding this one reliable and knowledgeable point of contact was crucial. for many of the local landowners starting up shp projects, this networking activity and securing of financial resources was something new and very different from traditional farming. given the interest of professional investors looking for projects to invest in, it was difficult to get reliable information and build trust in the process. we had a bit of luck there as well, because i had been at some of these small hydro power meetings, and i noticed a lady from one bank that attended all the meetings. the other banks did not participate, she was really into things. this bank was leading in the area, they really understood it. the other banks came later. having local support in terms of financial resources and knowledge was crucial for this developer. as mentioned, many of the developers were local landowners with little experience in the shp area, having access to local financing was vital in order to develop the project without external investors. 5.3. the community dimension norwegian society has traditionally placed high value on rural areas, emphasizing use of the nature and preserving the cultural landscape. these values are perhaps particularly strong in the county of vestland, as it has a high degree of rural habitation and farming. thus, the community dimension is thought to be of crucial importance. in norway thus far, there has not been a strong tradition 168 international journal of sustainable energy planning and management vol. 31 2021 is local always best? social acceptance of small hydropower projects in norway of community ownership, that is, of local inhabitants establishing energy projects together. to the same degree as we have seen in several other european countries. the ownership structure of many shp projects, none the less, have some resemblance with community energy ownership, as the projects often are owned by a group of local landowners based on property rights to the river. as part of every licensing process, nve arranges a public meeting open to all, providing information about the project. in theory, these meetings could also be used as an arena for the community to take part in participatory project siting and discussion concerning the design of projects. surprisingly, we found no signs of such processes during these meetings. according to the municipal administration, the meetings have typically been dominated by several developers. judging by the scale of the projects presented, the administration had expected more local citizens at these meetings, considering the overall public engagement regarding shp projects. the municipal case handler interpreted the lack of engagement in the nve facilitated public meetings as evidence of the public’s tacit acceptance of the project. when asked if they thought some of the local inhabitants might find it difficult to state their honest opinion in a meeting where developers might be neighbors and other locals, the municipal case handler confirmed that this could also be the case: i think there are people present that are not tough enough to handle the strain that voicing opposition may be, because as i have said before, the attitude has overall been positive. some have already had their projects developed, and do not want to make difficulties for others. one employee in a large, national energy company claimed that the municipality treated large developers less favorable than local developers. when raising this point, he referred to a specific case where two similar projects were applied for: one by local landowners and the other by a large energy company. the employee describes what happened: when [the company] tries to do the same a little further south in the same area, there are substantial local protest. opposition almost everywhere you turn. it shows that technically it’s the same intervention, but when [the company] applies, it’s received in a completely different way than when a local landowner is applying for exactly the same. my experience is that this is how it works. and there’s nothing strange about it, really. one sees resources still being local, and the income going to the local landowner, and not a large company with headquarters in oslo. the energy company employee believed the same for environmental organizations, as they, on the one hand, were concerned about preserving nature, but also seemed to scrutinize where the resources were placed. according to the energy company employee, his impression was that environmental organizations tended to be less critical towards the impact on nature and landscape if a local landowner was the developer, and on the other hand, being more critical towards national and international owners. objectively, the projects might be similar in terms of environmental impact, but when it comes to the way in which municipalities and local stakeholders consider shp project ownership, it seems influence the outcome. important actors with interests in a project might try to moderate the negative side of a projects as a strategy to ensure local support. thus, recognition of externalities or a positive public image is relevant, but in some cases dominated by important, local actors. in one of the municipalities with a high share of farming, the general acceptance of shp projects was high, as stated by the municipal city manager: we could start by saying that politically, the basic attitude was positive. the consequences will have to be quite severe before the politicians says no. that’s my general experience. in the county administration we have been more reserved and tried to consider the aspects we were supposed to consider, but overall, we have been run over. when mentioning ‘the different aspects we were supposed to consider’ the city manager refers to a list of 6-7 bullet points approved by the municipal politicians as criteria to judge shp by. this list was only applicable to this municipality and only when handling shp projects. one of the criteria was ‘ownership of the project’, which was given substantial emphasis by municipal politicians. in practice, the environmental impacts of a project were given less emphasis when the owner of the project was local. the reason behind the focus on ownership, by politicians, is somewhat unclear but seems to be related to the distribution of resources. according to the administration international journal of sustainable energy planning and management vol. 31 2021 169 bente johnsen rygg, marianne ryghaug and gunnar yttri in this municipality, politicians expected more local benefits from locally owned projects. this might also relate to many of them being farmers, and that shp development might also be seen as contributing to creating stability and securing the longevity of some farms. the expectations related to shp is expressed in a statement concerning one of the projects in the municipality where it is emphasized that the project is assumed to strengthen local trade and contributing to sustain habitation and local activity. local owners seem to be preferred by various actors. this is no surprise given the emphasis on the advantages of local ownership. in the longer run, it is however difficult to predict how this preference will affect the local communities hosting these projects. 5.4. summary of findings we have observed some sort of ‘race’ in the field of shp, particularly in the years after the turn of the millennium. some of the large, national energy companies influenced the development by selling out their own projects [35]. when banks became more restrictive in the financing of projects, it was indeed challenging for some of the local landowners to develop their own project, opening the door for international investors that were looking for secure, long-term investments. one of the municipalities, a rural community with high degree of agriculture and rural development as well as good hydropower resources incorporated ‘ownership’ in their criteria of how to consider hydropower projects. this seems to be rooted in arguments that local ownership is important to keep values in the local community, and that it will give an important contribution to farming. overall, we have seen that the general and socio-political acceptance of shp projects and other renewables tends to be high, relating to the dimensions of wüstenhagen, wolsink and bürer [2], sovacool and ratan [27]. still, in relation to specific projects, different opinions are expressed, revealing a more complex picture. how different voices and interests are included in the planning process seems to depend on the importance of specific actors, like farmers, in each local community. for instance, the strong position of farming in some municipalities seems to indirectly have affected how shp projects are treated and considered both by the municipality and the public. this tendency is evident in political considerations when the political body is primarily populated with farmers. additionally, the ways in which the perceived benefits and disadvantages of projects have been distributed is also influencing the social acceptance of projects [2]. this is particularly interesting in relation to shp projects and ownership, where we see that what is expected of a project seems to closely relate to ownership. in other words, when a project has local owners, the expectation and assumption is that it will benefit the local community more than in the case of international owners. our analysis shows that the overall socio-political acceptance for small hydropower in norway is substantial. both regulations, legislation and support schemes are well established. when it comes to market and community acceptance, the picture is a more complicated. in terms of market acceptance and financing in particular, the profitability forecast of the shp sector is not as good as it was some years ago. the most profitable projects were developed first, leaving later projects with more stringent financial requirements. when considering community acceptance, we see that the operationalization by sovacool and ratan [27] is only partially relevant to the shp projects studied here. the term ‘community’ in this respect remains somewhat unclear and the model by sovacool and ratan [27] does not seem to fit the norwegian system very well on this point. sovacool and ratan describes ‘community acceptance’ as to what degree projects are invested or undertaken by local stakeholders, in addition to how costs and benefits are shared. for this term to have greater relevance in a norwegian context, a more detailed understanding is needed. thus, the complex and multifaceted community structure of actors and interest does not fit very well with the community dimension presented in table 1, and warrants further scrutiny in order to establish if this is a phenomenon particular to small rural municipalities, like those typical for shp developments, or whether this could also be a challenge elsewhere. 6. conclusion and policy implications this paper investigates what factors influence social acceptance of shp projects in norway, building upon nine dimensions of social acceptance as developed by sovacool and ratan [27]. we have studied the role of ownership in social acceptance of shp projects, and the ways in which municipalities and other actors voice their opinions and considerations concerning shp projects. the analysis shows that there was little debate and contestation in the public meetings arranged by nve as 170 international journal of sustainable energy planning and management vol. 31 2021 is local always best? social acceptance of small hydropower projects in norway part of the licensing process, and overall little public participation apart from those directly involved in the project. one could assume that these hearings would be deliberative arenas for debate and protest. our analysis shows, on the contrary, that these meetings were dominated by project developers, mostly local farmers, and that they left little room for the open expression of opinions, giving a somewhat biased impression of general high acceptance in the local community where those who disagree might choose not to participate in the meeting or somewhat feel slight social pressure to support such developments. looking further into the community dimension, we see that considering the major changes taking place in the area of shp developments, especially the influx of foreign capital and investments, one might have reason to be concerned about the social acceptance of shp in the future. the growing investment of external actors in shp in norway is likely to influence the future acceptance of such plants, as municipalities seem to attribute certain qualities to shp based on ownership. the valuation of local ownership seems to be linked to the level of income and activity in the local community, so that local owners are regarded as offering more value in terms of income and activity back to the local community. however, in the longer run, municipalities may have to take the shifting ownership of shp projects into consideration, including how this will subsequently influence returns for the local community and the consequences. so far, there is little practical experience with this. on the basis of our analysis it becomes evident that the question of who makes up the community, is not something clearly discerned from the model of sovacool and ratan [27]. our analysis reveals that ‘community’ in the context of this study, has different meanings, ranging from administration, politicians, inhabitants and/or the village itself. a greater level of detail would bring the community’s multiple identities into better focus. the temporal dimension is also not very well articulated in the sovacool and ratan model. our analysis, however, show the importance of studying development of renewable energy projects, such as shp, as they change character over time, raise new concerns and issues important to the social acceptance dynamics. we have seen that the conditions for projects developed at different periods of time have differed substantially, as changes in energy prices, financial opportunities and the overall discussion concerning shp have changed over time. the temporal dimension has gained increasing importance lately, as more focus has been directed towards shp projects being sold to international investors, because of low income and high expenses. a third shortcoming of the model is the underestimation of the role of ownership for social acceptance. our research shows ownership to be of utmost importance in assessing shp projects and for the role and support they will get in future energy systems. thus, we would like to stress the importance of not thinking about social acceptance as something that is created at specific point in time, but as something that must be continuously constituted and seen as an ongoing process [21]. this implies that social acceptance is under constant change, varying as a function of the project process itself. consequently, it should not be studied as a static process where local communities and local inhabitants are seen as being ‘affected’, and the developers and policy makers as those ‘affecting’ [18, 41]. it is also pertinent to notice that the identity of the developer is not neutral, but also potentially influencing the way communities and inhabitants may be given room to actively take part in the process (see, also batel [42]) as result of how such processes are being ‘orchestrated’ and shaped by local actors and issues [43]. in this article we have argued that local ownership of small hydropower projects is valued highly among the municipality actors. this is also relevant in an international context, with an increasingly number of renewable community projects being developed. we have also found the model of sovacool and ratan [27] to be useful in studying the development of shp projects in norway, but with some shortcomings concerning the ability to capture the different conditions for projects developed at different periods of time and the importance of ownership in shp projects. thus, the importance of ownership in relation to transitions to low carbon solutions should be given further attention in future research on social acceptability, participation and public engagement with renewable energy. acknowledgments the work presented in this paper is a result of research supported by ntrans norwegian centre 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planning and management vol. 31 2021 143 *corresponding author e-mail: k.dalessandro@uq.edu.au international journal of sustainable energy planning and management vol. 31 2021 143–160 abstract this research analyses changes to electricity generation and demand in japan following both the global financial crisis and disasters of march 2011. monthly electricity data for all regions of japan from april 2005 to march 2016 were reviewed to identify differences in disruptionresponse between categories of electricity users. we apply inferential statistics to identify underlying trends, which are dominated by differences in user scale response. higher capacity users reduced demand in response to the global financial crisis, whereas smaller domestic scale users reduced electricity demand after the disaster. analysis reveals that regions within the 50hz grid that were directly impacted by the fukushima event and resulting load restrictions showed a statistically significant sustained reduction in monthly electricity demand post-disaster. however, kansai and shikoku, regions that are both outside the area directly impacted by the fukushima event, also showed the same sorts of sustained significant reductions. by considering two disruptions to the same sociotechnical system, we can draw conclusions that add to the discourse of electricity use behaviors, which informs both disaster response planning and policy for the broader issues of electricity demand reduction for climate stabilisation. disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 kelly maree d’alessandroa*; andrew chapmanb and paul darguscha a school of earth and environmental sciences, university of queensland, st lucia qld 4072, brisbane, australia b international institute for carbon-neutral energy research, kyushu university, 744 motooka nishi-ku, fukuoka 819-0395, japan keywords energy transition; electricity market disruption; energy austerity; demand-side electricity management http://doi.org/10.5278/ijsepm.6327 1. introduction a dominant factor in anthropogenic climate change is unsustainable energy usage. the theme of a ‘fundamental shift to our energy paradigm’ is often repeated in both energy and climate literature to validate research or reinforce policy initiatives. this narrative implies that not only are the fragmented approaches of gradual advances which dominant modern policy initiatives entirely inadequate, but the scale of change required is unfamiliar to our existing systems. historically, shifts of comparable novelty and scale have been defined as ‘transition events’. system disruption is one pathway to transition, and it has been argued that shortfalls have been more effective in producing efficiency gains than traditional conservation programs, even providing “insights into the upper bounds of what may be achievable” [1 p. 448]. however, to date, sudden disruptions to energy systems have been relegated to a simple supply and demand problem, with emphasis on bolstering and rapid recovery of the supply side, with little consideration given to fostering ongoing behavioral change. this emphasis is highlighted by statements such as: “savings need only be temporary, that is, electricity use can return to traditional levels at the end of the shortfall” [2]. 144 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 the japanese scenario is unique in that electrical shortfalls form part of a wider and more complex experience, and are neither small-scale nor within a minor geographical range, making scaling and relevance to a wider international audience applicable. in addition, the disaster occurred in the period subsequent to the global financial crisis (gfc), meaning lower economic resilience may have complicated decision-making; and also occurred in the midst of a liberalization program to modernize a traditionally vertically integrated and geographically monopolized structure. this series of events provides an opportunity to better understand the interaction of disruptions on an established sociotechnical system and provides potential insights into management of energy conservation initiatives to achieve demand-side mitigation. the aim of this study is to quantify the impacts of those interactions on electricity demand, with a view to identify common factors and variables that may therefore influence changes to consumer energy-use behavior. this study is singular in that it addresses all regions, user-scales and electricity tariffs in japan over an extended timeframe. further, this study goes beyond a single event, undertaking a statistical consideration of both the gfc and the fukushima disaster as potential disruption triggers for multiple cohorts of energy consumers. this approach allows for an expanded investigation and discussion of the outcomes from each event. the application of these findings are pertinent to a wide-range of policy and management scenarios. better understanding of energy behavior decision making and motivations can inform targeting and customization of interventions to promote behavioral-change, to system preparation and resilience-building, to direction and focus of further research projects. we document that electricity savings need not only be ‘temporary’ in the case of shortfall, but if well managed and directed, can in fact provide valuable and long-lasting system transformation. the paper is structured as follows. section 2 presents the case study, along with a summary of existing related scholarship. section 3 provides the methodology for the data collection and analysis phases of the work, with the results making up section 4. section 5 reviews and discusses the results and the implications of the findings. a brief conclusion is offered in section 6. supporting information including definitions, calculation syntax and detailed statistical results are included in the appendix. 2. background and literature review the great tohoku earthquake (11 march 2011) was a magnitude 9.0 event centered off the northeast coast of japan’s main island. the resulting tsunami was observed at over 9m, causing significant impact to both fukushima and miyagi prefecture (tohoku region) [3]. the tsunami triggered automatic shutdowns of 10 nuclear powered reactors across three different plants. of these, fukushima daini and onagawa were contained, however the immediate damage to the fukushima daiichi plant resulted in loss of emergency cooling systems which resulted in uncontrolled release of radioactive material [4]. between march 2011 and may 2012, japan gradually shut down each of its 50 remaining nuclear reactors, largely in response to safety concerns resulting from the incident at the fukushima daiichi reactor. in total, approximately 30% of japan’s electricity generation capacity, or over 44,300 mw, was rendered unavailable. this resulted in marked changes to both the make-up, and total generation output in japan. this disruption was managed through a combination of demand-side controls for peak loading and augmenting generation with under-utilized capacity [5]. the nuclear decommissioning following the disaster occurred over a 14-month period, with the resultant electricity supply shortages encompassing the whole country [6]. the make-up and generation output for japan between april 2005 and march 2016 is shown in figure 1. the combination of a lack of generation capacity, and to a much greater degree, the inability to transfer power between western and eastern (japanese) grid systems was the cause of power supply interruptions post-disaster. this ‘bottleneck’ of supply, coupled with an inability to retrieve and analyze real-time data to better target load-shedding activities, limited the capacity of the administration to minimise the impacts of energy system changes [9]. several policy measures were employed to manage the supply-demand ‘gap’; forecast at between 15-20% for summer peak-loading, as summarized in table 1 [10]. in the summer following the disaster, energy austerity measures resulted in 12% lower energy consumption, and an 18% reduction in peak-load compared to 2010 for large users in the tokyo (kanto) and tohoku regions [11, 12]. existing thermal power stations increased output by over 20% to cover the nuclear shortfall [8]. international journal of sustainable energy planning and management vol. 31 2021 145 kelly maree d’alessandro; andrew chapman and paul dargusch generation data sourced from the japanese ministry of economy, trade and industry (meti) shows gradual re-commissioning of japan’s nuclear reactors commenced in august 2015. even so, nuclear power contributed less than 4% of japan’s total generation compared to 30% pre-disaster [7]. the march 2011 tragedy is not the only disruptive event to impact the japanese electricity industry. the impact of the gfc must also be considered as a potential driver of change through both direct economic pressure (reducing electricity consumption for cost savings) and productivity impacts (e.g., reduced operational requirements with lower output or sales). the latter is likely to be a major impact given the industrial ‘collapse’ in japan from late 2008 to early 2009, attributed to the dominance of ‘income-elastic’ components and durable equipment (capital goods) for export markets [13]. running parallel to these disruptions was the planned liberalization of the japanese electricity market. compartmentalizing of system management along historically fostered regional boundaries resulted in a monopoly of nine (and later 10 with the addition of okinawa) vertically integrated generation, transmission, distribution and retail corporations [14]. the northern part of the country operates on the european standard of 50hz, and the southern on the american, 60hz; meaning that frequency converter facilities were critical as the network matured to connect the eastern and western japan networks. however, the capacity of these interconnectors (1.2 gw) was insufficient to allow full exploitation of excess generation capacity across the zones or ‘buffering’ of high demand events. deregulation of the japanese electricity system began in 1995 with allowed entry of independent power producers (ipps), and specified utilities (private generation, transmission and distribution services covering only retail customers in their specified areas). figure 1 electricity generation in japan by source between april 2005 and march 2016 with corresponding national greenhouse gas emissions for the same period. electricity data from [7], emission intensity values from [8]. 146 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 extra-high voltage customers (such as office towers, large factories, and department stores) drawing over 2mw at 20,000 volts or higher have been contestable since march 2000. in april 2004 this contestability was expanded to include high-voltage customers drawing 500kw or more and expanded again the following year for the balance of high-voltage customers (≥50kw). this coincided with the first electricity trading services through the new japan electric power exchange (jpex). no further actions were planned to enable retail competition at the domestic low-voltage scale. additional reform was only pursued when the disaster highlighted systematic failures in the development and management of the nation’s electricity systems. in 2015, cross-regional coordination of transmission services and an independent regulator were established allowing for improved balance of supply across the transmission barrier and scheduling of load to maintain stability. full retail contestability was introduced for domestic-scale customers at the beginning of the 2016 japanese financial year, along with a mechanism for trading beginning one hour ahead of demand. legal separation of retail, transmission, distribution and retail responsibilities, hedging, a full-service spot market and market rate liberalization are in place or imminent [15, 16]. analysis of quantitative changes in electricity consumption in japan in light of the disaster are limited. the most complete review of electricity consumption regarding the impacts of the fukushima event (in english) was undertaken by wakiyama, zusman [17]. they collate monthly demand data from january 2008 to december 2012 for both small (>50kw) and large (>500kw) users, with specific attention given to the kanto and kansai regions. econometric analysis of temporal, spatial and scale-based electricity demand using autoregressive moving average models were investigated along with policy and environmental (temperature) influences. the authors found a statistically significant national reduction which was “significant, sudden, and sustained” [17, p. 655]. it was documented that proximity to the earthquake resulted in greater reductions, but the sustainability of that reduction was varied. large users generally had larger reductions, but these rebounded in time. similar ongoing reduction in summer (but not winter) peaks were identified by murakoshi, nakagami [18], who found a correlation between peak electricity usage and temperature before, but not after the disaster. in depth analysis was also undertaken by daggy, wakiyama [19], who provide electricity analysis for 18 japanese cities from 2007 to 2012 as part of a larger transition narrative. the researchers state a clear, traceable hypothesis relating to the influencing factors and test individually using a random effects panel time series model [19, p. 150]. they identify higher reductions for households adopting energy saving reforms and link those reductions to the presence of non-profit organizations. hayashi and hughes [20] provide an analysis and discussion of policy responses and potential future actions following the disaster. in support of this, a disruption narrative, including regional installed capacity, customer numbers and generation are presented, but no in-depth quantitative analysis is offered. additional time series information for 2009-2011 generation and fuel inputs (in mtoe) and price are provided to illustrate post-disaster outcomes, with the conclusion that a radical shift away from nuclear remains unlikely due to energy security, cost and environmental drivers. a larger group of authors offer limited high-level outlines of post-disaster outcomes as part of preambles or baseline investigations for future policy or scenario exploration (rather than quantitative examination). for example, portugal-pereira and esteban [9] present historical (1989 to 2012) supply and demand data as part of a wider set of indicators of future energy security. high level generation data is also provided by komiyama and fujii [6] from 2008 to 2014, showing step change in energy mix, and an increased use of lng and coal (to make up for the nuclear short fall) as a preamble to complex modelling of future fuel mix scenarios. a group of researchers also examined the quantification of energy-use behavioral change during and following the disaster. investigation of actions taken post-disaster by fujimi and chang [1]; fujimi, kajitani [21]; kimura and nishio [22]; murakoshi, nakagami [18]; tanaka and ida [23] had largely consistent results, with limitation of air conditioning usage (both length of time and temperature), and refrigeration (lowering temperature) dominating results. other findings include replacement of lighting with energy efficient versions and turning off devices in stand-by mode. while not based on consumption data, abe [24] reviewed editorial articles of the major national newspapers in japan after the event and finds differing views regarding de-nuclearization along a ‘nationalistic’ vs ‘democratic’ social value divide. the author draws linkages between the nuclear power debate and a wider international journal of sustainable energy planning and management vol. 31 2021 147 kelly maree d’alessandro; andrew chapman and paul dargusch discussion of social direction and highlight that power saving and public distrust were among the major themes identified across articles. energy system disruptions have also been studied overseas. a combination of drought and transmission limitations in brazil caused electricity shortages in 2001-02 in the north and south-east. the restriction of hydroelectric plants in this region (making up over 80% of installed capacity), and inability to utilize power from the unaffected southern region led to anticipated shortfalls of around 20%. like japan, this shortfall was persistent and widespread, leading to a range of government interventions covering conservation requests, personalized reduction quotas, economic instruments (fines and rewards, tax reductions and increases on relevant goods depending on their ability to reduce or increase electricity consumption), and even disconnection threats for ongoing non-compliance. gerard [25] examines 15 years of utility reporting and monthly billing data from three million households in brazil to study demand response trends using a variety of statistical methods. reductions (from an already small baseline) of around 34% in affected systems, and interestingly, 9% in the unaffected south far in excess of what can be attributed to the established incentives. the author therefore attributes a 25% reduction to the conservation requests alone. this result shows a surprisingly high demand elasticity for the study area, supported by ongoing reductions of around 12% post-crisis. domestic consumption in alaska following the destruction of a critical transmission line was studied by leighty and meier [26]. the alaskan example is unique as supply was replaced with back up diesel generation, so while baseline demand would have been met, sudden price shock (a five-fold increase) and potential environmental concerns, were key to triggering behavioral changes. residents reduced consumption by a quarter, and again, a persistent 8% reduction over baseline continued after resolution. a repeat of the event within 12 months observed only a 12% reduction over baseline, but an increase in residual savings of 10%. in summary, previous research has documented regional or city-specific changes to electricity usage reduction behaviors (and the actions taken to produce those reductions) and addressed the immediate tactical and policy response to each disaster, appropriate to their timing and focus. this paper is distinct and novel in its inclusion of all regions, user-scales and tariffs associated with electricity demand in japan over an extended timespan. this paper advances evaluation of impact variables beyond a single event, undertaking a statistical consideration of both the gfc and fukushima disaster as potential disruption triggers for multiple cohorts. this approach allows for an expanded analysis and discussion of the findings from each event, which may be relevant to both disaster management and wider energy policy scenarios. 3. method monthly reporting of both generation (by source) and demand (by customer type and region) was extracted (aggregated by japanese financial year) provided by the japanese ministry of economy, trade and industry (meti)’s agency for natural resources and energy [7]. following extraction, this data was flattened into pivot style for compatibility with power-bi analysis. data prior to march 2005 and post march 2016 was excluded due to inconsistencies in the scope and reporting (specifically with changes to division of demand between categories coinciding with policy or legislative changes, making analysis unreliable between user groups). this allowed for the largest consistent data set to provide the widest scope of assessment available. a description of the available input data and summary of the applied functions has been provided as tables 4 and 5 [10]. a number of culturally specific and technical definitions were sourced from formal translations of relevant legislation and industry contracts and have been provided in the supplementary information. each individual data division (array) was assessed for normality using descriptive statistics, skew and kurtosis (limit of +/2). a statistical f-test was performed for equality of variances between the arrays. following this, a single tailed t-test (for either equal or unequal variances as determined previously) was performed for four separate data pairs. test one included comparison of data before and after march 2011 (preand post-disaster). test two compared data before and after january 2009 (preand post-gfc). test three compared pre-gfc data to post-gfc up until march 2011, and test four compared post-gfc up until march 2011 with post-disaster data. these iterations were designed to clarify changes to average monthly electricity generation and/or demand between the two event drivers. a sustained gfc triggered reduction would show a statistically significant 148 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 reduction in both tests two and three (and potentially test one), but not test four. a sustained disaster-catalyst reduction would show a statistically significant reduction in both tests one and four (and possibly test two) but not test three. a 95% confidence interval was selected for all applicable tests. while generally preferred for independent population samples, t-test comparison of means have been applied in this scenario as no trend analysis or predictive modelling was completed, and the high number of observations allows for averaging of seasonal variations over time. the limitations of this approach need to be acknowledged. this study explores the quantitative relationships between changes in electricity generation and demand associated with the gfc and fukushima disaster in japan. while some conclusions can be inferred from the commonalities identified, it cannot in isolation confirm the supporting mechanisms behind the identified changes. the exclusion of other quantitative system variables, such as ambient temperature or pricing structures, also constrains the analysis. statistical significance with a 95% confidence interval has been used in the analysis to indicate a difference in electricity generation or demand between the tested groups. this approach allows a 95% confidence that the averages observed are not part of normal variation of the data sets. there is therefore a 5% change remaining that this was not the case. the core data set itself has been retrieved from a reliable source, and therefore is assumed to be without meaningful errors. the timeline used has been intentionally selected for consistent data categorization. notwithstanding, some minor discrepancies were managed on a case-by-case basis. while minimal, these remain limitations to a definitive analysis, and center on the use of wholesale, privately-contracted and self-consumption electricity (by both private companies and utilities). these loads cannot be reliably assigned regionally or to a specific user-scale, and have been largely excluded. the total contribution of this additional load is approximately 2% of the large user category. 4. results the results are divided into generation, demand and user scale, while the discussion section focusses on policy implications drawn from these results. detailed statistical results are provided in tables 8 through 27 [10]. 4.1. generation total generation is typically expected to be in the region of 10% higher than demand to allow for network (transmission and distribution) losses, fluctuating with load and ambient temperature. when compared to reported generation, demand data showed a reporting lag, with a growing trend (post april 2010) for reported demand outstripping reported generation. this discrepancy is likely due to changes in the reporting scope related to the expiry of transitional supplier-approvals in march 2010, and definition of these participants as wholesale supply companies thereafter. an ongoing reduction in total generation can therefore be at least partially attributed to changes in data scoping and is consequently not as reliable as demand-based metrics. biomass and waste generation are similarly limited by scoping, as they are recorded separately from march 2010 only, and cannot be examined for gfc-centric testing. overall, as nuclear generation reduced, thermal generation, wind and solar increased to compensate. there was also an ongoing reduction in geothermal generation which could not be linked to a single catalytic event. it is also notable that the iea calculated emissions intensity [8] for this period shows an increase following the disaster. when this data is used along with monthly generation totals, a sharp departure from the total generation trend is observed following the earthquake, reinforcing the transformative nature of the overall change in energy mix. general utilities (the sum of the geographically aligned retailers) experienced a reduction statistically related to the disaster, while the wholesale bodies experienced more variable results complicated by changes in reporting structures and scoping implemented in april 2010. the japan atomic power company provided nuclear power to commercial scale clients from two facilities which ceased generation following the nuclear shutdowns, while j-power shows post-earthquake growth from its coal and hydroelectric facilities, likely due to increasing thermal output to compensate for lost nuclear capacity. specific scale (out of geographic range) generation showed consistent growth, while private contracts and special arrangements showed inconsistent responses to the tested disruptions. 4.2. total demand analysis of the aggregated electricity demand data (figure 2) shows an initial increasing trend, followed by international journal of sustainable energy planning and management vol. 31 2021 149 kelly maree d’alessandro; andrew chapman and paul dargusch figure 2 total monthly electricity demand in japan april 2005 to march 2016. data from [7]. a clear drop in monthly electricity usage during the gfc. partial recovery of this decline can be seen starting in late 2009, interrupted by the disaster, with a subsequent and sustained reduction to march 2016. while post-2011 energy use was statistically lower than pre-event numbers, this was also true for the gfc meaning that results may be linked to economic factors. by identifying that there was no statistically significant difference between the pre and post gfc cohorts but a statistically significant difference between post gfc and post-disaster arrays, it is suggested that the 2011 event triggered a decline in monthly mwh demand across japan. 4.3. demand by electrical frequency the primary impact of the earthquake, tsunami and resultant nuclear disaster was concentrated in the north of country, within the 50hz region. while the 50/60hz distinction isn’t precisely aligned along regional boundaries, it sits generally between tokyo and chubu; and between tohoku and hokuriku. there was a significant reduction in monthly electricity demand in the 50hz region for tests one, two and four, indicating the reduction was due to the disaster (these results hold true for total usage, and specifically for months april through july and october to december). the 60hz cohort showed statistically significant reductions for both the disaster and gfc tests, meaning a single triggering event could not be isolated (in total, and for months june through october; only november showed causality with the disaster). these outcomes hold with analysis of the monthly data (figure 3), where a clear decline for all months can be seen in 2009 for both groups, however the 50hz region also shows a noticeable dip in 2011 with a general reduction trend thereafter. for the 60hz region this pattern is also identifiable, but less distinct. 4.4. demand by geographical region a summary of the electricity demand results for the geographic distribution regions of japan is provided as table 6 [10]. causality of demand reduction based on the disaster can be inferred for hokkaido, kansai, kyushu, shikoku, tohoku and tokyo. chubu alone shows a statistically significant reduction based on the impacts of the gfc. a statistically significant reduction in chugoku could 150 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 not be attributed to a single catalyst, and no impact could be identified in hokuriku. the non-geographical cohorts (contestable demand and private contracts) are subject to additional influences, leading to no conclusions being drawn. for example, growth of contestable demand could be related to recategorization or sideways movement of consumption, rather than net decline. the outcome of all location-based monthly electricity demand testing is provided in figure 4. 4.5. scale-based demand in addition to geographically based demand, electricity consumption data can also be classified according to the scale or category of the users (the amount of electricity used in total or instantaneously, as well at the tariff). this broadly categorizes users as being either small (<50kw demand) or large (>50kw) scale. tariffs further allow grouping of users as domestic or other, with further clarification on specific usage type within these sets. demand reductions considered at the user scale show the dominance of small users following the disaster, at a rate high enough to produce an overall statistically significant reduction nationally. this is contrasted against an inconclusive or gfc triggered reduction at the large-user scale, both are summarized in figure 5. 4.6. large users approximately 60% of electricity demand in japan over the analyzed period was potentially contestable or ‘specified scale’; meaning that users have the option to contract supply from outside their geographic area. uptake of liberalized contracts however remains low at under 10% of sales; meaning that regional assessment of this demand is still possible with caution. this load is drawn by users contracted at 2,000kw (defined in the source data as special high-voltage) and 50kw or more (defined as high-voltage) [27]. meti provides an additional level of ‘large user’ demand; being those consumers who draw 500kw or more. manipulation of this data can therefore provide three separate categories of large-scale users as detailed in figure 6. analysis of the data shows a clear ‘dip’ in the over 2mw and 500kw user network-demand in 2009, coinfigure 3 pre and post event average monthly electricity demand in 50hz and 60hz frequency areas. data from [7]. international journal of sustainable energy planning and management vol. 31 2021 151 kelly maree d’alessandro; andrew chapman and paul dargusch figure 4 – summary of changes to monthly electricity demand in japan 2005-2016 by location ciding with the impacts of the gfc (meaning reductions may be linked to general economic conditions). in contrast little immediate impact is evident following the disaster. a statistically significant decrease was found for all users, with the exclusion of 499-50kw draw, which saw an increase after the gfc. the largest users (over 2 mwh draw) show a demand reduction aligned with the gfc. a decrease in demand for all other cohorts was seen in each scenario between arrays; so, while monthly large user electricity use has declined, this cannot be stated to be a result of the disaster alone. a future review of production intensity would provide additional clarity on this issue. it should be noted that while no ongoing reduction in network demand was identified in the study, data from the japan institute of energy economics documents a reduction in peak power demand of almost 30% for the sector, with only 300 of 19,000 large customers not meeting the mandated targets [28, p.6]. 4.7. small users the remainder of japanese electricity is consumed by users with a draw of under 50kw, typically domestic users. the balance of this small-scale demand is lighting and power for building sites, temporary constructions, agriculture, street lighting, other businesses (using specific tariffs) and small commercial operations. smaller scale tariffs (as summarized in table 2 [25]) are not necessarily mutually exclusive of connection point (meaning a user could have multiple tariffs for the same location) and these can include a range of time-ofuse variation [29, 30]. optional agreements or selection agreements are used where standard retail contracts do not suite the end user and are often limited by time of use (tou) or season, such as for snow melting, peak shift lighting or night only operations. similarly, low voltage or low-pressure contracts for users needing under 50kw based on nameplate rating of equipment or switchgear. these users are difficult to assign 152 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 figure 5 summary of changes to monthly electricity demand in japan 2005-2016 by user scale and type. tariffs are detailed in table 2 [10]. a category to due to the variety of optional agreement tariff contracts available; and likely fall within the agriculture / commercial / industrial categories (and have therefore been binned as a single user group for this analysis). while domestic users showed a general ongoing decline in demand, non-domestic users increased their usage over the assessed period. it is possible that some non-domestic growth is lateral movement of customers downsizing from higher demand tariffs (through either productivity reduction or energy efficiency), or reductions in network demand with micro-generation (solar pv for example). however, statistical testing showed greater variability in this cohort, suggesting influences are not uniform. reductions can be attributed to the disaster for tariffs a, b and c, along with aggregated domestic demand. the non-discretionary (connection based) flat-rate light tariff had variable outcomes, with a post-gfc reduction followed by an increase after the disaster. street lighting showed a statistically significant decline in mwh demand following the disaster in all regions except hokuriku. other small users (excepting international journal of sustainable energy planning and management vol. 31 2021 153 kelly maree d’alessandro; andrew chapman and paul dargusch okinawa) showed a gfc triggered increase in demand, with a paired decrease in special arrangement consumption. these mismatched results may be linked to impacted businesses moving off higher use tariffs due to productivity reductions or efficiency or may be a reflection of the diversity of small business types (corner stores, restaurants, small farms) leading to a certain resilience for the cohort overall. in total, this user scale showed a statistically significant reduction for the post-gfc period compared to post-disaster. supplementary information addressing tariff, scale and geographic location has been provided as table 7 [25] for greater granularity and trend identification. 5. discussion this section will review the core research findings, and consider these results within the context of previous relevant scholarship. 5.1. summary prior to the disaster, japan held nuclear generation at the center of its energy policy [5], with nuclear technology development and implementation dominating over 60% of research and development budgets [8]. while japan certainly did not de-carbonize as a result of the disaster, it unquestionably did trigger a complete re-evaluation of its electricity systems to integrate a new risk paradigm incorporating both the direct potential threat of nuclear energy, and the loss of domestic energy security and independence. the data analysis confirms a statistically significant reduction in consumer demand, and changes in generation profiles, following disruption of the electricity system due to the march 2011 disaster. while not uniform, these reductions were also not necessarily dependent on direct exposure to the disaster and varied with user scale and category. overall, statistically significant reductions were found pre vs. post disaster in the regions serviced by the tokyo (kanto), hokkaido, tohoku, kansai and shikoku supply areas, with a borderline result in kyushu. while all regions were encouraged to reduce electricity demand for 2012 summer peaks, more targeted requests (both binding and non-binding) were issued for these specific regions. while binding requests applied to peak loading only, the impact of these communications on total demand appears significant. figure 6 large user monthly mwh demand japan april 2005 to march 2016. data from [7]. 154 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 interestingly, demand at the smaller scale (consumers on domestic tariffs) showed a statistically significant reduction outside of these areas, for all regions except for okinawa. these results suggest that structurally, in additional to national trends, the changes in electricity demand may also be considered as individual regional transition events. localized (geographically bounded, sub-national) transition events have been recognised as being dependent on elements relevant to the case study, such as participant ownership, multi-advantageous solutions and situative governance [31]. mid-range users (50 to 1,999kw draw) showed reductions in hokkaido and kyushu, with highest tier users (over 2mw) having no identifiable geographically linked reductions following the disaster. the gfc was identified as the triggering event for demand reduction for mid-range users in hokuriku, and highest tier users in chugoku, hokuriku and shikoku (as well as for sector total). a number of other regions showed an unassignable but ongoing reduction pattern, especially for mid-range users (in chugoku, kansai, tohoku, tokyo and for sector total). highest tier users in tohoku and tokyo followed a similar pattern. this may indicate that both the gfc and disaster prompted separate electricity reduction measures, that the disaster interrupted financially driven savings already underway, or that a third, untested catalyst is responsible. while it is possible that a portion of reductions in these higher demand groupings was sideways movement (for example, from geographically linked to liberalized contracts), or between mid and high-range tariffs with business growth or shrinkage, the total reductions seen for groupings would suggest this is not a dominant factor, with a move away from network demand through either self-generation, efficiency measures or even production decreases more likely. a complementary review of relevant economic factors may offer some clarification in this regard. the data indicates that agricultural customers were not impacted by either of the events tested, meaning that this sector may be buffered from the analyzed events. street lighting showed an across-the-board decrease following the disaster event, which indicates government leadership in demand-side energy saving initiatives, and prioritization and acceleration of existing policy goals in this area. 5.2. policy and institutional response the history and analysis of the political climate surrounding japanese energy policy has been documented thoroughly from both historical [32], and modern perspectives [33, 34]. here we focus on the impact of these policies on the results identified. the japanese “strategic energy plan” was first released in 2007 and focused on the delivery of a stable and secure energy supply, environmental adaptation and economic efficiency (often referred to as the ‘3e’ goals) [35]. a review in 2010 (i.e. post-gfc) added economic growth and structural (energy) industry reform to these goals [35]. these changes may be reflective of the challenges faced by energy users preceding the review, suggesting a strong economic element to the decrease in demand observed for large users. under the strategic energy plan, a number of more specific strategies and projects designed to fulfil the plan’s policy objectives exist. a suite of energy efficiency and demand-side programs including reporting and performance obligations form part of a wider policy implementation environment, including provision of innovation support and energy services (esco) [36]. however, the impact and effectiveness of these early programs is unclear. efficiency improvements for domestic goods (such as tv’s, refrigerators and air conditioning) resulting from the ‘top-runner program’ while predating this policy, also contributed to its outcomes [36]. an additional review of the strategic plan was triggered by the disasters of march 2011. the review focused on a decrease in nuclear dependence, and increased safety considerations, engendering the ‘3e+s’ (i.e. safety) goals. a national discourse and agreement on energy mix was emphasised, with the goal of further utilising distributed generation (typically smaller electricity generation facilities that connect directly to the distribution system rather than the higher capacity transmission system) without causing an increase in costs or triggering generation shortfalls [37]. a greater engagement of smaller energy users as a result of the policy review process may reflect the dominance of small energy users in our results. a focus on distributed energy increases the resilience of the grid as a whole and lowers the impact of future transmission bottlenecks. however, our results also suggest that the monopolisation of vertically integrated generation, distribution and retail corporations may have previously hindered innovation in this regard, reflected in the finding of a lack of longer-term response post-disaster for large energy users. the ‘sunshine project’ (1979-2005) supported solar innovation and made japan a world leader in pv international journal of sustainable energy planning and management vol. 31 2021 155 kelly maree d’alessandro; andrew chapman and paul dargusch manufacturing [33]. subsidies for residential pv and fuel cell systems are also notable [36]. however, it may be argued that feed in tariff (fit) programs enacted in november 2011 (the “special law to promote renewable energy”), along with distributed energy relaxation policies were more successful in allowing small energy users to take greater control of their energy management, resulting in a decrease in small user network demand [33]. similar impacts could not be identified for larger scale users, for whom average monthly self-generated electricity increased post-gfc, but counterintuitively decreased in the years following the earthquake. it is also possible that the disaster provided additional motivation for action under this existing program framework. for the streetlight example noted previously, the 2010 strategic energy plan had a goal to use leds exclusively for new lighting by 2020, with all existing stock to be upgraded by 2030 [35]. however, detailed economic modelling and technical considerations for leds (including the high intensity discharge required by streetlights) was only pursued following the disaster [38]. the influence of local governments in electricity demand response is also notable. kameyama [34] documents the leadership of the tokyo metropolitan government (tmg) in facilitating decreases in energy consumption from 2001 onwards. a culture of environmental awareness and sustainability leadership is also notable in fukui (chubu region), kitakyushu (kyushu), kyoto (kansai) and yokohama (tokyo / kanto region) [34]. this could explain some of the ‘outliers’ presented in our results, as well as the ongoing reductions identified in the 50hz-region. as system operators, the electricity utilities also participate in (direct and indirect) policy implementation. tepco public reporting highlights the promotion of efficient infrastructure for commercial and industrial customers, suggesting that existing lines of communication and partnerships occurred at the time of both the gfc and the disaster [39, 40]. following the disaster, these relationships may have been key in reducing peak demand loading across industries. cognisant of the increased generation-based emission intensity post disaster, the fepc extolled the emission reduction benefits of collaboration and consultation with customers in their 2013 environmental action plan [41]. 5.3. behavior change pathways the role of small consumers in reducing electricity demand in japan is noteworthy, and the pathways and mechanics of these changes, if identified, could inform energy and environmental policy in other locations. work by frederiks, stenner [42] outlines the largely ‘irrational choice model’ of decision making by households concerning energy consumption and conservation from a behavioral economics and psychological perspective. these barriers include things like inertia / status quo bias, risk aversion, temporal discounting, lack of incentive, social norm performance and bare minimum (good enough) patterns as obstacles to sustainable energy decision making. analysis of the monthly electricity consumption in japan both before and after the disaster suggests there is the potential for a disaster to short-circuit this model and allow for more sustainable energy choices to become embedded. importantly, evidence shows proximity to the disaster may not be critical for behavioral change (such as was the case for kansai), nor specific targeting of government conservation requests (such as with chubu and chugoku). the exclusion of okinawa from both cohorts provides an additional opportunity for comparison of behavior change motivation moving forward. the research findings are also relevant to transition planning and visioning as positioned by verbruggen et al., [43]. the japan case study highlights the validity of a socio-political model of transition as an alternative to the traditional engineering-economics approach. this example illustrates that adaptation and alteration of core electricity supply and demand paradigms is possible under select circumstances. studies of specific actions taken by households to save electricity have been previously published by fujimi and chang [1], fujimi, kajitani [19], kimura and nishio [20], murakoshi, nakagami [16] and tanaka and ida [21] with largely consistent results. specific actions taken by users in reducing electricity consumption centered around limitation of air conditioner usage (both length of time and temperature), and refrigeration (lowering temperature), with replacement of lighting with more efficient versions and some stand-by load reduction. consistent finding are documented in overseas examples, like those presented for brazil by gerard [23] and in alaska by leighty and meier [24], who also found the dominance of lighting, temperature control and refrigeration in domestic energy conservation actions. research into the underlying motivations for these actions remains very limited. 156 international journal of sustainable energy planning and management vol. 31 2021 disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016 our analysis suggests that successful motivators and electricity saving techniques for domestic-scale clients were not effective for larger users, especially those at industrial scales. for these customers it seems the gfc was an equally or more impactful event, but again this was scale dependent, and possibly elastic. understanding these dynamics better may help shape more user-specific and targeted energy conservation policy and as an extension, inform energy transition management. for larger electricity users, self-reported actions were centered around behavioral adaptations such as lighting and air-conditioner usage and settings were more common than hardware, scheduling or load shifting initiatives [1, 44]. this builds on commercial insights by kimura and nishio [20] who surveyed commercial energy users in summer 2011 to find lighting and air-conditioning limitation were the most popular demand reduction techniques. this was complemented by an increase in self-generation and adjustment of operation hours, which would lower peak grid demand, but does not provide net energy savings. while these actions aren’t clearly reflected in our analysis, they are not inconsistent with the analytical findings. while the commercial and industrial scale data did not show a statistically significant reduction following the disaster, this was likely impacted by a lower post-gfc baseline, and a focus on peak reductions rather than aggregated savings. work by fujimi and chang [1] suggests that economic considerations were dominant for this group, in that minimal (or no) evidence was found for changes that affected the businesses financially, such as a reduction of production or business hours, decreases in output or capital investment were not voluntarily pursued (with the exception of led lighting). this supports the finding that the impact of the gfc was of greater significance or importance to these organizations. as investigated by guerra-mota et al, [45], the gfc manifested changes in environmental, social and financial business performance in european electricity utilities. it is probable that similar pressures may have impacted the japanese experience from a top-down perspective. the reasons for the differences between cohorts are not well understood. surveys by kimura and nishio [44] of tokyo and kansai based participants from 2011 to 2014, (including domestic, commercial and industrial users) show that domestic reductions were driven by a mixture of normative, informational and economic incentives. commercial and industrial scale energy savings were reported to be initially motivated by corporate responsibility and a desire to reduce regional supply shortages, however this reduced over time to be a cost-saving activity. a further survey of industrial energy users in hyogo by liu et al., [46] found reduction actions were largely independent, siloed decisions; with additional opportunities associated with connection of industries and policy integration not available to users, suggesting a potential informational or network-based difference between user groups may have influenced decision making. the scale of the user has also been found to influence the perception of ‘adverse’ impacts of energy saving. very large industrial clients found conservation activities more burdensome than large commercial or domestic participants, and while normative drivers increased willingness to accept this inconvenience in the short term, this impact was not persistent. learning about energy conservation was also found to provide greater long-term engagement of survey participants [44]. internationally, this is echoed by work in the us showing framing of energy conservation requests influenced response rates, with greater persistence of savings with inclusion of health and environmental messaging over pure economic benefits [47]. the investigation of the role of narrative and scale-applicable education between user groups may also therefore play a role in explaining the different outcomes between user scales. 6. conclusions this paper details a review of electricity demand and generation data from japan covering the period of 2005 to 2016, and how the gfc and fukushima disaster altered those patterns depending on the location, scale and application of energy. it was identified that overwhelmingly, domestic energy users produced demand reductions following the disaster, with higher-draw commercial and industrial customers tending to be impacted to a greater degree by the gfc. further, these post-disaster reductions where predominantly (but not exclusively) in the directly impacted 50hz grid system, with kansai and shikoku being notable outliers. the existing sustainability positioning and influence of local governments in supporting energy users in reducing demand may have contributed to these results. international journal of sustainable energy planning and management vol. 31 2021 157 kelly maree d’alessandro; andrew chapman and paul dargusch the regional specific reductions were found to coincide with the specific 10-15% conservation request areas, suggesting that compliance with authoritative communication was essential for public action. it is also noteworthy that smaller users of energy were shown to have a longer-term altruistic response (whether deliberate or passive), when compared to larger scale energy users. for this later cohort, electricity demand trends indicate these behaviors are reactive to financial or other market queues only. this suggests that a combination of both economic incentivization and philanthropical messaging may be positively leveraged in sustaining and enhancing the response of all users to the need for energy use reduction in times of disaster, and for engendering low-carbon energy transitions. however, ultimately additional research is required to better develop the understanding of the decision-making mechanisms to properly apply incentives and advocate for net-reduction electricity saving behaviors. acknowledgements this research was supported by an australian government research training program (rtp) scholarship. the authors wish to acknowledge the two anonymous reviewers who offered valuable feedback to improve the manuscript. this article is part of a special issue on smart energy systems[48]. references 1. fujimi, t. and s.e. chang, adaptation to electricity crisis: businesses in the 2011 great east japan triple disaster. energy policy, 2014. 68: p. 447-457. https://doi.org/10.1016/j. enpol.2013.12.019 2. international energy agency, saving electricity in a hurry. 2 0 0 5 . h t t p s : / / w w w. o e c d i l i b r a r y. o r g / c o n t e n t / publication/9789264109469-en 3. japan meterorological agency. information on the 2011 great east japan earthquake. 2012 [cited 2018 15 november]; available from: https://www.jma.go.jp/jma/en/2011_ earthquake/information_on_2011_earthquake.html. 4. world health organization, the great east japan earthquake. 2012. 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int j sustain energy plan manag 2021;x. http://doi.org/10.5278/ijsepm.6432 https://www.jstor.org/stable/26189398?seq=1 https://www.jstor.org/stable/26189398?seq=1 https://doi.org/10.5278/ijsepm.2018.18.4 https://doi.org/10.5278/ijsepm.2018.18.4 http://doi.org/10.5278/ijsepm.6432 international journal of sustainable energy planning and management vol. 32 2021 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 32 2021 1–4 abstract this issue presents some of the latest findings within energy planning research and form a special issue for the 2021 5th annual conference of the portuguese association of energy economics as well as for the 2020 sustainable development of energy, water and environmental systems conference series. the work presented probes into the effects of the european emissions’ trading system on innovation, and the development of the chinese wind power industry. notable is also an analysis of people at portuguese universities revealing lesser knowledge of renewable energy technologies but a more positive attitude towards this among women – and vice versa among men. energyplan-based energy systems analyses with cases from iran and serbia are presented, and different indicators for energy systems analyses are deliberated in a mexican context. marine energy developments in columbia, the united kingdom, canada and denmark are discussed with a focus on siting and barriers. also, barriers against solar energy exploitation in indonesia are explored as are barriers against energy savings in nigeria. energy transition and sustainability júlia seixasa, poul alberg østergaardb*, rasmus magni johannsenb and neven duicc a center for environmental and sustainability research (cense), nova university of lisbon, campus de caparica, 2829-516 caparica, portugal b department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark c department of energy, power engineering and environment, faculty of mechanical engineering and naval architecture, university of zagreb, zagreb, croatia keywords policy planning energy systems analyses resources barriers http://doi.org/10.5278/ijsepm.6850 1. special apeen issue on energy transition and sustainability this special issue presents research on energy transition and sustainability, as presented at the 5th annual conference of the portuguese association of energy economics (apeen), which was organized by the center for environmental and sustainability research (cense) at nova school of science and technology in 2021 [1]. climate change and sustainability are challenging energy systems to new levels of innovation, in terms of technology, regulation and social values. the decarbonization of energy systems may have implications for the sustainability of the planet, as several examples already show, as land use change due to mega pv farms and expansion of mineral extraction areas with ecosystems losses to supply energy technologies. moreover, pathways to achieve carbon neutral systems have to consider social aspects to avoid and revert social inequalities. public policies and regulation are crucial to tackle energy transition towards carbon neutrality while preserving, and even restoring, the planet’s sustainability. public policies and instruments have been fundamental to accelerate the energy transition and to tackle sustainability issues, although its effectiveness and impacts need to be assessed. silva et al. [2] assess the impact of the european union emission trading system (eu-ets) on the companies’ eco-innovation, by using the community innovation survey data and a stringency indicator for the period 2012-2014 for 13 european countries. the results show the eu-ets has had limited and some controversial effects, and discusses other 2 international journal of sustainable energy planning and management vol. 32 2021 energy transition and sustainability renewable energy transitions. in their analyses of the city of qazvin, iran, they investigate the technical, environmental and economic feasibility of switching heating demands from natural gas to renewable energy. if the alternative is to export the saved natural gas, then the pay-back time of the investment according to the authors would be as low as three years. gamst et al. [14] address energy systems modelling using a more generic approach based on linear programming. as opposed to the analytical programming forming the basis of energyplan, this opens up for potentially time-consuming heuristics. thus, in their analyses they seek ways to decrease the complexity of the issue through a time aggregation technique. through these techniques, they reduce the time consumption by 75-90%. lastly, in this section on energy system analyses, hernandez-hurtado & martin-del-campo [15] analyse different sustainability indicators for the transition of the mexican power system. they introduce indicators for average capacity diversification, natural gas importation, new clean power plants, total cost, generationconsumption regional balance, average emission factor, and intended nationally determined contributions goals met. these are related to previous overviews in e.g. [16], though e.g. the share of clean coal-fired power plants is novel here in the context of renewable energy 4. energy savings and resources indonesia is the fourth largest contributor of carbon dioxide emissions to the atmosphere despite good prospects for renewable energy exploitation. an ambitious pv implementation policy is targeting homeowners, however, the uptake is below expectations. gunawan et al. [17] take this as a starting point for exploring why this is the case finding explanations in knowledge and awareness but also in economic conditions including feed-in-tariffs and net-metering structures. energy conservation should be the first step in the transition towards renewable energy systems. nigeria is a country with good prospects for energy conservation – however there is a lack of focus on this essential element. umoh & bande [18] investigate the reasons for this situation, finding a lack of attention to best practice and that e.g. the government should work harder on phasing our inefficient lighting technologies. eco-innovation enhancing instruments, as technology related policies. the role of public policies in energy transition is also taken by brusiło [3] regarding the wind power industry in china, supported by the so-called revealed comparative advantage (rca) index, for the period 2000-2019. although the continuous support of the chinese state authorities to the international competitiveness and innovativeness of the national wind power industry, the author found a comparative disadvantage in wind power products, despite the significant increase in export volumes and installed capacity. alongside public policies, energy literacy is a powerful tool to boost sustainability. martins et al. [4] used the heteroskedastic ordered probit over data from portuguese university members to explore the differences between men and women regarding the level of engagement in the transition to a more sustainable future. results show that women tend to have lower levels of knowledge about energy, but a more positive and sustainable attitude and behaviour. 2. special sdewes issue on energy transition and sustainability the sdewes (sustainable development of energy, water and environmental systems) conference series has proven an import venue for the discussion and dissemination of results on studies of the transition towards a renewable energy-based society. in this issue, bijelic and rajakovic [5] use the widely applied energyplan energy systems analyses tool [6,7] to analyse feasible options for serbia to transition its energy system. their starting point is a lack of attention to the renewable energy transition the western balkan. in their work, the authors focus on scenarios based on increased penetrations of wind power and photo voltaics. as noted by the authors, high penetrations – here up towards 80% are only realistic “with the sector coupling approach”. western balkan has previous been used as a testing ground for what in other places is denoted smart energy systems approach [8] with notable contributions from bačeković [9,10] and dominković [11,12]. 3. energy systems analyses noorollahi et al. [13] also apply the energyplan tool to study a geographical area with too little focus on international journal of sustainable energy planning and management vol. 32 2021 3 júlia seixas, poul alberg østergaard, rasmus magni johannsen and neven duic 5. marine and offshore energy bastidas-salamanca & rueda-bayona [19] investigate offshore windpower in columbia with a focus on developing an approach for site-selection based on techno-environmental characteristics. one thing in particular, for instance, is that the authors consider the proximity of ports a postive thing where others according to the authors list this as a negative thing which may exclude otherwise potentially interesting sites. the work follows up on previous work from the journal focusing on offshore wind power however from a danish german perspective where the market is more mature, and where focus is on e.g. the development of off-shore grids [20]. it is also in line with a focus point the sdewes conferences on offshore wind and wave energy siting and resource assessment [21–25]. lastly, proimakis et al. 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http://doi.org/10.1016/j.enpol.2017.05.009 http://doi.org/10.1016/j.enpol.2016.06.031 http://doi.org/10.1016/j.enpol.2016.06.031 international journal of sustainable energy planning and management vol. 32 2021 125 *corresponding author email: edwinumoh@yahoo.com international journal of sustainable energy planning and management vol. 32 2021 125–138 abstract energy conservation is an all-encompassing principle that embodies building economics, behaviours, technology and education, and whose cumulative effects can facilitate energy access, availability and sufficiency, quality of life, a positive impact on climate change and a reduction in the carbon footprint of a country. several studies have revealed factors such as energy literacy, inadequate finances, consumer-electricity utility relationships, and prevalence of energyinefficient lighting technologies as constraints to energy conservation practices in developing countries. however, in-depth and explicit studies on promoting energy conservation in nigeria’s household is scarce. to fill this research gap, this paper uses a systematic literature review to examine different perspectives on energy conservation and contextualise them under the nigerian scenario, unearth factors that have constrained energy conservation practices (precursors) and unravel crucial factors (enablers) capable of entrenching the practices in nigeria’s residential sector. the study revealed how the neglect of best practices has complicated energy conservation practices and proffers the way forward for entrenching the culture in the residential sector. policy prescriptions include the need to reinvigorate the campaign to phase out energy-inefficient lighting technologies, boost a climate of positive consumer-electricity utility relationships that instils mutual confidence that will entrench an energy-saving culture, and accelerate the pace of transition to green lighting through rejigging of government’s policies on energy efficiency and renewable energy. a template for promoting energy conservation in nigeria’s residential sector edwin a. umoha*, yahaya m. bandeb a department of electrical and electronic engineering technology, federal polytechnic, kaura namoda 882231, nigeria. b department of mechanical engineering technology, federal polytechnic, kaura namoda 882231, nigeria. keywords energy conservation; household sector; energy literacy; energy technologies; nigeria; http://doi.org/10.5278/ijsepm.6524 1. introduction the concept of energy conservation has been defined from various perspectives, due to its multidimensional attributes and contexts. in [1], different perspectives on energy conservation were given from behavioural, technological and choice. in general, energy conservation is the effort made to reduce the amount of energy use by using energy more efficiently or by optimising the number of services used simultaneously or concurrently. this implies a reduction in energy consumption by reducing losses and wastage by employing energyefficient means of generation and utilisation of energy [2]. like energy efficiency, energy conservation can complement renewable energy in ensuring energy security, access, reduction in consumption of fossil fuels, mitigation of climate change and promoting a green environment [3]. a household by definition consists of one or more individuals who share the same living space with integrated amenities. household dynamics provide an effective tool for studying and evolving policies for promoting energy conservation, due to the flexibility and adaptability of household energy components concerning consumer behaviour, building and integrated services. methods of energy conservation in households include 126 international journal of sustainable energy planning and management vol. 32 2021 a template for promoting energy conservation in nigeria’s residential sector analysis of smart lighting and conventional lighting technologies to save energy was analysed in [26]. the effects of thermal adaptation of buildings for energy saving in extreme weathers was presented in [27] and the possibility of net-zero energy settlements to cut down energy consumption [28]. similarly, some studies have focused on energy literacy [29], awareness of energy-saving paradigms [30], public perception [31] and environmental knowledge [32], in the context of consumer behaviour. little attention has been focused by researchers in recent years on providing in-depth knowledge of the dynamics that have constrained paradigm shifts from unsustainable energy-wasting behaviours to energy conservation practices in the household sector of nigeria. some researchers have generalised, rather than provide specific details of the peculiarities of the nigerian households that have tended to portray energy conservation as a complex practice. therefore, in this paper, we discussed the idiosyncrasies of nigeria’s household consumers, the preconditions (precursors) of energy conservation practices in nigeria’s residential sector and also pinpoints the factors which will sustain energy conservation practices, and their consequences on the energy sector of nigeria. 2. methodology the study is a systematic review that literature search, appraise them in the light of the subject matter and synthesise them accordingly [33]. thus, different literature evidence on energy conservation practices in different countries was aggregated and applied to segregate the factors that have constrained energy conservation practices in nigeria, under three broad themes, namely energy consumption behaviours (energy literacy, finance, preference, and consumer-electricity utility relationships), building economics (amenities and electrical installations and housing models and designs) and energy technologies (lightings, appliances, renewables, self-generating sets and grids). this evidence is subsequently discussed in the light of past findings in academic publications on energy conservation in nigeria. in delineating the themes, the paper partly adopted the method applied to critically review literature in [34]. the three broad themes under which the study is reviewed are energy consumption behaviours, building economics and energy technologies. to fully understand the use of energy-efficient lights and appliances, optimising the use of technologies like washing machines, refrigerators, electric cookers, computers, television sets, air conditioners and microwave ovens and energyefficient modelling and design of buildings. consumer behaviour has an overarching influence on energy consumption pattern and conservation in households, with consequences for policymakers, estate developers, manufacturers of household technologies and marketers. accordingly, a great deal of research which have focused on the factors that influence and promote energy conservation in households has appeared in the literature. as factors that are integral to human consumption behaviour and needs, several researchers have contributed immensely to this theme from different perspectives. a common thread in most of these results is the realisation that the quest for energy conservation is universal and shares common characteristics across countries of the developed and developing worlds. thus, household energy consumption behaviour has been studied in several countries including kenya [4], south africa [5], egypt [6], ghana [7], zambia [8], australia [9], netherlands [10], uk [11], germany [12] and sweden [13] among others. most of these studies affirmed the impact of consumer behaviour, while a few others are dichotomous in convergence based on their contexts of reasoning [14]. several studies have examined the influence of energy consumption behaviour using different moderating factors and perspectives including sociological theory [13], political science[15], space heating [16], the role of policies [17], monthly electricity use [18], framing interventions [19] and environmental beliefs [20] some authors focused on the impact of technology in use on energy conservation behaviour. technology in use relates to the types of appliances, lighting technologies, renewable energy sources, self-generating technologies and grids. from this perspective, factors that determine the purchase of energy-saving household products [21] and the antecedents of consumers’ intentions to purchase some specific energy-saving appliances were also examined [22]. the effects of electrical appliance modelling on energy-saving were investigated in [23]. the usage patterns for electricity end-uses like electric shower, refrigerator, television and lighting in low-income houses in southern brazil were investigated in [24]. under a similar context, barriers to the adoption of photovoltaic systems in urban nigeria was investigated in [25]. comparative international journal of sustainable energy planning and management vol. 32 2021 127 edwin a. umoh, yahaya m. bande table 1: some research studies used for theme analysis. s/no theme number of published works on the theme percentage contribution to the study (%) 1 energy consumption behaviour 26 51 2 building economics 8 16 3 energy technologies 17 33 total 51 100 the perspective of the study, the study posed the following questions: a) what are the challenges of energy conservation in nigeria? b) what are the peculiarities of the nigerian scenario that tend to complexify a shift of paradigm from energy wastage to energy conservation? c) can best practices engender a paradigm shift to an energy conservation culture? to adequately attend to these questions, studies published in academic journals were reviewed and grouped under the broad themes, by adapting the approach used in [35]. table 1 gives the number of published works used for the theme analysis. 3. current energy situation in nigeria perhaps, no sector of nigeria’s economy has been a subject of a prolonged discourse like the energy sector. the energy crisis in nigeria has been a subject of intense discourse among policymakers, researchers and the global energy community due to the peculiar nature and dynamics which have tended to defy constructive solution models [36]. the burgeoning literature on strategic planning, policies, situational reports, and several other propositions on the way forward for the sector should have been sufficient to engender a holistic change in performance and service delivery of the sector during the last three decades. unfortunately, this has not been so, as the sector continues in a cycle of endless hydraheaded crises, that has contributed to slow down national growth. energy is indispensable and pivotal to nigeria’s quest for economic development [37] and the achievement of sustainable development goals (sdgs) [38]. consequently, during the last decade, nigeria has sunk humongous funds into the power sector, to generate sufficient electricity to sustain economic and technological growth, and also meet the energy needs of her ever growing population, which is currently estimated at 200 million and spread across thirty-six federating states and a federal capital territory. however, contrary to expectations and projections, there had not been commensurate dividends by way of sustainability, reliability and service delivery [39]. electricity access currently remains low, at 56.5% of the population in 2019 [40] and household grid-based electricity connections have been achieved for only an estimated 20 million of the population (10% of national population) [39]. the major effort of the government concerning energy conservation was the enactment of the national renewable energy and energy efficiency policy (nreeep) [41], which spelt out the ambitious projection of nigeria’s energy efficiency outlook for the next two decades since its formulation. key action plans enunciated to drive energy efficiency particularly in the lighting sector are recapped as follows: i. the nation shall promote the adoption of energysaving appliances and devices through a nationwide energy campaign and training sessions. ii. the nation shall provide incentives for retailers and importers of energy-efficient products and promote local manufacturing of such products. iii. the federal government shall take the lead in implementing the replacement of inefficient devices with energy-efficient ones and promote the same at the state and local levels. iv. the nation shall monitor progress being made in the adoption of energy efficiency. unfortunately, efforts made to materialise this policy has been constrained by the lack of political will by the government and regulatory bodies established to enforce it. one of the critical factors that the government rested her confidence in was the improvement in electricity generation and distribution during the intervening period. unfortunately, this projection has become a mirage due to the slow pace of progress on the concurrent maintenance of old generating stations and construction of new ones, caused by pervading corruption 128 international journal of sustainable energy planning and management vol. 32 2021 a template for promoting energy conservation in nigeria’s residential sector table 2: sample power generation data in nigeria. date power generated and transmitted on the national grid (mw) february 7, 2019 5,375 source: [48],[49] june 2, 2020 zero (system collapse) august 1, 2020 5,377.80 august 18th, 2020 5,420.30 august 20, 2020 3,356 and insecurity [42], retrogressive politics [43], and uncontrolled anthropogenic activities [44] that exacerbates disaster risks to critical national infrastructure [45]. in addition, there is lack of real-time synergy between policy implementation and time-tested strategies for measuring energy sustainability as enunciated in the templates of sustainable development goals [46]. nigeria’s electricity generating capacity has continued to fluctuate between 3,000 mw and a little above 5,000 mw during the past years. the reported generating capacity in 2012 fluctuated between 4,000 mw and 5,000 mw, for an estimated population of 150 million. several years later in 2020, the capacity has not peaked significantly, as it continues to swing between 3000 mw and 5,000 mw. this implies that the power sector reform roadmap that set up the ambitious goals of revolutionising generating capacities of the energy mix to 5,690 mw (hydro), 20,000 mw (thermal) and 1,000 mw (renewable) has remained a mirage [47]. a recent international energy agency (iea) energy situation reports on nigeria shows a total energy consumption which stood at 1354.40 twh and a residential sector which consumed 77.89 % of it [40]. nigeria’s power sector has been cyclically marked by peaks and troughs in electricity generation over the years. a recent compilation captures the instability of the sector with figures of power generated with corresponding dates, as tabulated in table 2. before the covid-19 pandemic, nigeria’s households were known to endure epileptic power supply caused by the unreliability of the national electricity supply, resulting in poor rationing and load shedding [25]. compounding the situation was energy wastage among household consumers due to the unaccountability of energy use, the prevalence of energy-inefficient technologies and energy-irresponsible behaviours. with the emergence of the covid-19 pandemic, energy insecurity has pervaded many households as people moved their personal, professional and business activities to their homes as part of the strategies to slow down the spread of the pandemic. expectedly, energy demand and consumption rise with straining effects on grid-based infrastructures and distribution systems. of course, this scenario is common to all nations [50]. the scenario provides enough motivation to examine factors that influences energy conservation in nigeria’s households. moreover, if proactive steps are initiated by the government and consumers towards energy conservation, it can be safely projected that in the next 10 to 20 years, nigeria’s energy demand may not differ from the current figures despite the expected explosion in the number of technologies, households, population and building services. [51]. 4. energy conservation practices in nigeria a whole gamut of variegated factors militates against the entrenchment of energy conservation as a national ethos in nigeria. these factors encapsulate behavioural, building economics and technologies in use. a spectrum of these factors is depicted in figure 1. these factors are contextualised to elucidate the peculiar challenges confronting nigeria’s residential sector. although some of these factors have been discussed in relation to other countries that grapples with the challenges of energy conservation, they equally affect nigeria’s consumers in a peculiar way that requires principles and home-grown approaches to circumvent. in this section, we will briefly review these factors. a) energy consumption behaviour nigeria’s consumers exhibit peculiar consumption patterns due to their levels of energy literacy, financial capabilities and customer experiences with the electricity utility. energy literacy relates to the understanding of individual energy consumption and how final energy prices are arrived at, which could result in the willingness or otherwise, to adopt energysaving behaviours [52]. energy literacy sensitises a consumer, and the lack of it can lead to poor interest in energy conservation practices [46] and energy-irresponsible behaviours [53]. in nigeria, consumer-electricity utility relationship is uninspiring and unable to improve consumer’s energy literacy due to supply-demand imbalance and accountability problems. generally, consumers are unfairly charged for unreliable and under-supply of electricity, which results to demotivation towards leveraging their energy international journal of sustainable energy planning and management vol. 32 2021 129 edwin a. umoh, yahaya m. bande en er gy c on se rv at io n energy consumption behaviour building economics energy technologies finance preferences consumer -utility relationship energy literacy amenities and electrical installations housing models and design self -generating sets appliances renewables grids lighting figure 1: spectrum of factors constraining energy conservation in nigeria. literacy in decision-making, since doing so may have little or no positive impact on their energy bills and supply reliability. financial capability as used in this paper, may be viewed from the perspective of the consumer’s ability to pay for utility-modelled charges for energy consumed or their ability to self-generate. the former perspective does not encourage literacy as it is conceived as the mere ability to pay for electricity cost, whether value-added or otherwise. the latter perspective relates to the purchasing power of acquiring self-generating sets to ameliorate the effects of the lack of electricity and the bashed psychology of poor customer-electricity utility relationships. consumer preferences are inhibited by lack of sustainable alternatives to grid-based electricity. the bulk of nigeria’s residential consumers have no financial muscles to procure and install solar home systems. consequently, they are constrained to passively accept and endure erratic and insufficient electricity supply or selfgenerate for complementation using electrical generators, both of which do not promote energy literacy, at least with the typical mindsets that is skewed through exploitation by the electricity utility. b) building economics according to [54], building economics is concerned with identifying the optimal allocation of resources for building owners and developers. it is also about economising the use of scarce resources throughout the life-cycle of a building. an energy-efficient building, modelled to conserve energy depends on factors such as quality of the building materials, technical installations such as electrical (electrical wiring, lighting and power installation and fittings ) and mechanical (air-conditioning, cooling and heating system control and automation) and the ways building services are subsequently maximised by owners and other end-users [55]. in this connection, building forms [56] and the effects of compartmentalisation of living spaces [57] affects energy use and preferences [58]. energy can also be conserved through load 130 international journal of sustainable energy planning and management vol. 32 2021 a template for promoting energy conservation in nigeria’s residential sector management and communication and information systems, ultimately resulting in optimised energy costs, reduced consumption and improved reliability and availability[59]. since building owners and developers are usually not generally equipped with basic knowledge on how to integrate energy-efficient electrical installations into building projects, it is common to see buildings with superfluous installations in the residential sector of nigeria. superfluous lighting and power installation layouts admittedly taps extra energy in these buildings. in the same vein, when enforcement of building standards and codes are not strengthened, developers and owners tend to build to waste scarce energy resources as is obtainable in the nigeria’s residential sector. c) energy technologies the types of energy technologies in use contributes significantly to the characterisation of buildings as energy-efficient or otherwise. energy conservation can be affected when energy-inefficient lighting technologies and appliances are in dominant use in a building. this is common among households with poor finances or low energy literacy. as posited earlier, the use of energy-inefficient lighting technologies like incandescent light bulbs and appliances is still popular among the low-income population who cannot afford energy-efficient counterparts such as light-emitting diode (led) lamps and compact fluorescent lamps (cfl), and are therefore constrained to patronise cheap, energy-guzzling and unreliable technologies. renewable energy technologies have not significantly penetrated the nigeria’s built environment, partly due to consumers’ perception of solar home systems as “elitist” and unaffordable by the poor and middle bracket population, and also due to low energy literacy and apathy. admittedly, solar home systems are not affordable by the majority poor population who constitutes the bulk of consumers in the rural and urban areas. self-generation of electricity through small, medium and large-scale diesel and gasoline generators has been normal in nigeria, as a way of mitigating unreliable and undersupply electricity from the electricity utility [60]. it has been projected to account for 50% of electricity, with over 14 gw capacity in existence [61]. the peculiar challenges confronting nigeria’s residential consumers concerning energy conservation requires genuine commitments from the government and stakeholders to unearth the interrelated factors militating against the normalisation of energy conservation as a national ethos and behaviour to be internalised by consumers. in the following sections, we unearth some activities and programmes that are precursors of energy conservation culture, enablers of energy conservation and the benefits and sequels to the entrenchment of an energy conservation culture in nigeria. 5. precursors of energy conservation in nigeria’s residential sector precursors of energy conservation are sets of actions, policies, interventions and technologies that are expected to be in existence or in place to pave the way for sustainable use of energy and imbuement of energy conservation behaviours. in nigeria, certain basic norms that are taking for granted in other climes are made difficult to entrenched in the society. from the available literature, some of these precursors are: a) phasing out energy-inefficient technologies from the market promoting energy conservation requires the collaboration of stakeholders to scale up actions to phase out energy-inefficient technologies, especially lighting technologies (incandescent light bulbs) and address the ingrained obsession with technologies that are inimical to energy conservation. incandescent light bulbs guzzled much energy to produce about 10% of luminance, while 90% of the energy is dissipated as heat to the environment to contribute to climate change. the phase-out inefficient lighting technologies campaigns, initiated during the dying years of the last century by global stakeholders including the united nations organization (uno) and the world bank, has helped several countries to attain energy efficiency (or currently in the process of attainment) in their jurisdictions, and conserve energy and mitigate climate change. however, nigeria is yet to join the comity of nations who have successfully phased out, or are in the process of phasing out energy-inefficient lighting technologies from their jurisdictions [62]. while several residential homes have informally adopted energy-efficient lighting technologies, factors like unit cost, the proliferation of substandard quality lighting technologies and international journal of sustainable energy planning and management vol. 32 2021 131 edwin a. umoh, yahaya m. bande high tariffs have continued to militate against complete phase-out. it is presently difficult to know the percentage of households that have fully transited to energy-efficient lighting in nigeria. b) the proliferation of energy-efficient technologies in the market availability of energy-efficient lighting technologies and appliances can have a dramatic impact on the de-proliferation of their energyinefficient counterparts. during the halcyon days of the global phase-out incandescent bulbs campaign, compact fluorescent lamps (cfls) dominated the energy-efficient lighting technologies markets. however, with the development of light-emitting diode (led) lamps, comes better luminous efficacy and longevity improvement over cfls and a consequent shift of patronage to leds lamps. the high luminous efficacy of led lamps is a justification for replacing or retrofitting existing technologies with leds. in nigeria’s lighting markets, there is a preponderance of incandescent bulbs despite the big share of cfls and led lights on market shelves. the comparatively low cost of incandescent bulbs has continued to attract patronage than cfls and leds on account of their cheap high unit costs. c) increase access to grid-based electricity and renewables electricity access via grid or renewables is a requisite for entrenching energy conservation culture in nigerian consumers. as expressed in the previous section, energy conservation practices have not taken root as a culture in the residential sector of nigeria due to the deplorable condition of electricity supply and the inaccessibility of grid-based and off-grid electricity by the majority of the population. persistent unscheduled blackouts have proved beyond doubt the importance of the selfgeneration of electricity in nigeria. as a result, most consumers have lost interest in tracking their energy consumption for the sake of benefit comparisons, thus defeating the prospects of energy conservation. it has been estimated that approximately 50% of electricity generated in nigeria comes from the grid, while the rest are from individual self-generating sources [47]. d) availability of smart energy metering devices for the majority of household consumers who can access electricity, transparency and equitable energy pricing remains a challenge in nigeria. according to the nigerian electricity regulatory commission (nerc), only 50% of electricity consumers have meters [63]. and among these consumers, less than 10% may have smart (prepaid) meters. consumers are disgruntled by the prospect of acquiring prepaid meters due to previous experiences with the electricity utility. a burgeoning number of consumers who have installed “digital” electricity meters have not benefitted from their investments because the electricity utility habitually bypasses the computation of monthly consumption by opting to estimate bills, resulting in large-scale electricity pricing fraud. in the light of this, making smart meters readily available for consumers at a subsidized cost will contribute to energy literacy and assist consumers in making decisions that emphasise energy conservation. energy theft is a universal phenomenon that is endemic in nigeria, due to the lack of smart metering systems [64] and exploitative billing systems [65]. energy theft can deprive consumers of the avenues to understand energy conservation. real-time monitoring of energy consumption and tamper-proof installations of electricity meters can discourage energy theft, leaving consumers with no alternative than to imbibe energy-responsible behaviours. e) transparent and equitable energy pricing the achilles heel in the relationship between consumers and the electricity utility in nigeria is electricity billing systems. transparent billing systems generally contributes to enlighten consumers on the actual cost of consumption, indicating the positive and negative impacts of excessive use of loads on their finances, environments and quality of life. inappropriate electricity billing, on the other hand, dips motivation and slows down behavioural adjustments to energy conservation. the estimated billing model used by the electricity utility in nigeria foreshadows the imperative of transition to energy conservation practices among ill-treated consumers. thus, transparent and equitable energy pricing is a precursor of 132 international journal of sustainable energy planning and management vol. 32 2021 a template for promoting energy conservation in nigeria’s residential sector trust between the electricity utility and consumers and can serve as a strategy to change consumers’ mindsets towards energy conservation [65]. 6. enablers of energy conservation in nigeria’s residential sector enablers of energy conservation are sets of actions, policies, interventions and technologies that sustain behaviours, beliefs, awareness and adoption of building codes and technologies to facilitate the entrenchment of energy conservation culture. the absence of precursors implies the lack of enablers to sustain a conservation culture, and therefore the need to adopt and adapt the following enablers to the peculiarities of nigeria’s household sector. a) energy policies and incentives campaigns for energy conservation among consumers can serve to motivate them to key into the paradigm. initiatives aimed at energy conservation have been reported in some counties and countries. for example, the “big switch campaign” in durham county reportedly saved 5-10% energy through simple acts of switching off unused lights, computers and reduction in gas consumption for an hour per day, resulting in a 17% decrease in energy use in a year [66]. innovative programmes by the government, state and local government councils, targeted at residential consumers with the sole aim of orienting them toward energy conservation can be a big boost to the energy economy. adopting a similar strategy will save a quantum of energy in the residential sector of nigeria. b) stable grid-based electricity supply a stable electricity supply is an intrinsic enabler of energy conservation. measuring the benefits of energy conservation and providing feedback is inherently data-driven, and this is made possible by the availability of electricity, time and resources for measurement and analysis. without a stable electricity supply, the concept of energy conservation exists in a vacuum. and where electricity supply is epileptic or nonexistent, reliable data will not be available for strategic planning and benefit comparisons. c) availability of energy options for consumer preferences availability of energy options (grid-based or renewables) can serve as an enabler of energy conservation, as consumers are thus empowered to take responsibility and make informed choices on their energy preferences. thus, with the exercise of consumers’ prerogatives come the tendency to conserve purchased energy. d) availability of energy-efficient technologies availability of energy-efficient technologies can act as a precursor and an enabler of energy conservation as they can effectively demonstrate the benefits of efficiency and conservation through their efficacies and product lifespans. e) availability of smart energy metering devices the availability of smart metering devices is both a precursor and an enabler of energy conservation. as an enabler, the impact of appropriate energy pricing can fast-track behavioural change in energy-literate consumers, leading to prudence in energy use. f) energy-efficient housing before the recent emphasis on energy efficiency, many residential and public houses in nigeria were not built with energy conservation and sustainability in mind. property owners were motivated primarily by taste and financial capabilities, rather than the desire to build sustainable houses. consequently, some models used for electrical services (lighting installation, power installation and environmental security lighting) resulted in redundant and wasteful installations. to curb energy wastage and promote conservation therefore, an integrated design approach must be adopted by architects and other experts in the building sector, to promote buildings that integrates efficiency and conservation principles [57]. 7. subsequences of energy conservation practice in nigeria’s residential sector resultant benefits of entrenching an energy conservation culture in nigeria’s residential sector include the following: ▪ delays in the facilitation of the construction of new power generation plants. ▪ the greater motivation of consumers to adopt energy-saving technologies and integration of renewable energies into their preferences. ▪ enhancement of qualities of life of consumers. international journal of sustainable energy planning and management vol. 32 2021 133 edwin a. umoh, yahaya m. bande ▪ mitigation of climate change via the low carbon footprints of the country, as inefficient lighting technologies are effectively phased out of use among consumers. ▪ amelioration of the impacts of electricity pricing, as conserved energy adds to the energy reserve, resulting in uninterrupted electricity supply. consumers are thus willing to pay due to the assurance of constant supply. ▪ government is motivated to implement distributed energy systems to increase preferences among consumers, a strategic plan that is long overdue in nigeria. ▪ facilitation of smart grid infrastructures in nigeria. 8. strategies for promoting energy conservation in nigeria’s residential sector a) establishment of an energy information administration information is critical to meaningful engagement in energy efficiency and conservation. the establishment of an energy information administration (similar to the us department of energy (doe) counterpart) will serve the purpose of aggregating data on energy consumption in households and other sectors for strategic planning and development of the energy sector. energy information can be collected and uses to forecast future energy demand in different sectors [67]. b) re-invigorating the campaign to phase out energy-inefficient lighting technologies in nigeria nigeria may not attain energy efficiency and a sustainable energy future without phasing out energy-inefficient lighting technologies (incandescent lamps) from her jurisdictions. energy efficiency practices will tendentiously result in energy conservation. re-invigorating the campaign to phase out energy-inefficient lighting technologies will fast-track the internalisation and a holistic adoption of energy conservation principles among residential consumers [62]. c) mapping existing technologies in residential buildings modern developments in the housing and energy sectors are data-driven. the knowledge of how many households exists in a setting and taxonomy of technologies in use will aid appropriate authorities in policy decision-making to conserve energy in nigeria. d) positive image laundering of nigeria’s electricity utility the peculiar situation which relates to the sour electricity utility-consumer relationship in nigeria requires an improved image laundering by the electricity utility to regain the confidence of the population. the image of utility companies has been bashed by self-destructive policies and actions over the years. prominent among these actions is the forceful extortion of consumers through inequitable and exploitative electricity billing systems, coupled with perennially unreliable electricity supply and unscheduled outages. evolving new templates to resuscitating mutual trust and confidence is critical to a meaningful working relationship between the electricity utility and consumers in nigeria. e) installation of smart metering systems beyond politics and propaganda, the electricity utility must expedite actions to procure, distribute (or sell) and install smart meters in households, to push for accountability and reduction of incidents of energy thefts. f) initiating energy literacy programme for consumers raising awareness on energy conservation through energy literacy programmes using the print and electronic media is important. as a sequel to phasing out energy-inefficient lighting technologies and appliances, energy literacy programmes can provide the platform to inculcate energy-responsible behaviours in consumers. g) enforcement of compliance with energy-efficient lighting standards and building codes regulatory bodies must enforce compliance with energy-efficient lighting standards and formulate appropriate policies to stop the importation of energy-inefficient lighting technologies and appliances into nigeria. the process of steering the housing sector towards a new wave of research and development of energy-efficient houses for the future will also 134 international journal of sustainable energy planning and management vol. 32 2021 a template for promoting energy conservation in nigeria’s residential sector lead to the evolution of sustainable housing and cities where energy conservation is embedded as a structural characteristic and as an ethos in consumers, developers and owners. h) prioritisation of renewable energy for energy sustainability renewable energy holds the key to energy sustainability and security of the future. renewable energy, due to its inherent characteristics enforces accountability and prudence among users. this has encouraged several countries to invest in the large-scale development and utilisation of hybrid power systems (a mix of grid-based and renewable energy) in their energy mix [68]. hybrid power systems are especially recommendable for households in situations where grid-based electricity is intermittent and unreliable [69]. in addition, renewable energy is affordable for households in remote areas of the sahelian zone of nigeria that are unserved by grid-based electricity, but are endowed with intense insolation [70]. 9. conclusion and policy implications like other countries of the world, nigeria is passing through an unprecedented energy crisis that can be partly tackled through the behavioural characteristics of household energy consumers. with a generating capacity averaging 4,000 mw, which is grossly inadequate to meet the needs of a population of 200 million people, coupled with a household sector that consumes over 77.89% of her generated electricity, energy conservation practices can mop up a quantum of energy that can be used to improve electricity access to the unserved population. this paper systematically reviewed critical factors that have constrained the entrenchment of energy conservation culture in nigeria’s residential sector. reviewed literatures on the challenges of entrenching energy conservation culture in several countries shared similar threads like that of nigeria. however, certain factors that are related to electricity utility-consumer relationships, billing systems and value systems are found to be peculiar to the nigeria’s residential sector. the paper unearthed precursors to energy conservation such as the campaign to phase out energy-inefficient technologies, re-orientation of the electricity utility towards the use of equitable billing systems and stocking of the lighting markets with affordable energy-efficient technologies to incentivise household consumers who are willing to adopt energy conservation practices. the paper also unravelled the enablers that can sustain the culture such as stable electricity supply, construction of energy-efficient houses and a preponderance of smart metering devices for installations. the paper emphasised the need for the government to formulate sustainable policies to enforce energy-saving practices in the residential sector by streamlining the nreep to specifically target measurable goals. the need for 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https://www.interregeurope.eu/policylearning/good-practices/item/633/the-big-switch-off/ https://doi.org/10.1007/s40866-019-0063-3 https://doi.org/10.1007/s40866-019-0063-3 https://doi.org/10.1080/15567036.2018.1544996 https://doi.org/10.1080/15567036.2018.1544996 https://doi.org/10.1016/j.egyr.2019.01.010 https://doi.org/10.1016/j.egyr.2019.01.010 microsoft word ijsepm titelblad.docx editor in chief poul alberg østergaard, aalborg university, denmark  e‐mail: poul@plan.aau.dk  mail:    vestre havnepromenade 9, 3rd floor, 9000 aalborg, denmark     editorial board professor isabel soares, universidade do porto, portugal  associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university international journal of sustainable energy planning and management vol. 32 2021 79 *corresponding author email: dapi@dtu.dk international journal of sustainable energy planning and management vol. 32 2021 79–94 abstract simulating energy systems is vital for energy planning to understand the effects of fluctuating renewable energy sources and integration of multiple energy sectors. capacity expansion is a powerful tool for energy analysts and consists of simulating energy systems with the option of investing in new energy sources. in this paper, we apply clustering based aggregation techniques from the literature to very different real-life sector coupled energy systems. the purpose is to provide a robust comparison of methods to complement the literature, in which methods are either not compared or compared on very similar energy systems. we systematically compare the aggregation techniques with respect to solution quality and simulation time. furthermore, we propose two new clustering approaches with promising results. we show that the aggregation techniques result in solution time savings between 75% and 90% with generally very good solution quality. to the best of our knowledge, we are the first to analyze and conclude that a weighted rep resentation of clusters is beneficial. furthermore, to the best of our knowledge, we are the first to recommend a clustering technique with good performance across very different energy systems: the k-means with euclidean distance measure, clustering days and with weighted selection, where the median, maximum and minimum elements from clusters are selected. a deeper analysis of the results reveals that the aggregation techniques excel when the investment decisions correlate well with the overall behavior of the energy system. we propose future research directions to remedy when this is not the case. finally, we believe that to further strengthen the research area, a library of benchmarks instances should be developed. time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems mette gamsta, stefanie buchholzb, david pisingerb* a energinet, tonne kjærsvej 65, 7000 fredericia, denmark b dtu management, akademivej 358, 2800 kgs.lyngby, denmark september 14, 2021 keywords capacity expansion; energy system models; time aggregation; clustering; solution time reduction http://doi.org/10.5278/ijsepm.6400 1. introduction simulating energy systems is vital for energy planning. the green transition demands increasing introduction of fluctuating renewable energy sources and integration of multiple energy sectors. simulations are necessary to understand the behavior in such sector coupled energy systems. capacity expansion consists of simulating energy systems with the option of investing in energy sources. much work in the literature considers solution methods for the capacity expansion problem but focuses on single methods or specific energy systems, see e.g. [1–3]. in this paper, a capacity extension model consists of a year in one-hour resolution, i.e. of 8760 hours. the underlying energy system may be large and consist of many areas (e.g. geographical areas or bidding zones) and energy types (e.g. power, district heating, gas). solving the np-hard capacity expansion problem is thus 80 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems needs, etc. [2]. a general mathematical model for the cep is summarized as: min total system costs + investment costs (1) s.t. production + import + storage discharge = demand + export + storage charge (2) physical constraints on production units (3) available res (4) storage and electric vehicle constraints (5) capacity on interconnection lines (6) utilization ≤ investment (7) min investment ≤ investment ≤ max investment (8) the objective function (1) ensures that an investment takes place when the savings of utilizing the investment exceed the investment cost. the total system costs include fuel costs, emission costs, import and export costs, operation and management costs, startup costs etc. balance constraints (2) ensure that supply and demand meet in every area and in every hour. physical constraints on production units (3) include efficiency, technical production limits, production technology (condensation, back pressure, etc.) and ramping. constraints (4) consider available res subject to curtailment options. storage and electric vehicle constraints (5) include capacities, losses, charge and discharge rates. constraints (6) ensure that capacities on interconnection lines are satisfied. “utilization” in constraints (7) represents how the investment is utilized in terms of production (for production units and res), inventory level (for storage units) or import and export (for interconnection lines). the constraints say that the investment must be large enough to facilitate the desired utilization. finally, bounds (8) ensure that investments are within the user defined bounds. the cep is widely used for optimizing the configuration of future energy systems. examples of applications are non-trivial power systems [5], integration of renewable energy [6], large energy systems with sector coupling such as power, gas, transport and heating [1, 7, 8]. incorporating the uc in the cep is essential to analyze the need for flexibility capacities and the integration of res [9, 10]. this is particularly the case in systems with much res [11] or when alternative flexibility sources are analyzed [12]. the hourly time time consuming and often intractable. aggregating time steps is a common method to reach tractability. the literature suggests a wide variety of aggregation techniques. most studies, however, consider specific systems [3] and only few contributions compare their results with the literature [2]. the novelty of our work lies in analyzing the effect of time aggregation methods on the real-life sector coupled energy systems. to the best of our knowledge, we are the first to apply and compare multiple time aggregation methods on significantly different energy systems. this provides much insight in the potential of time aggregation techniques without the risk of overfitting the methods to specific energy systems. furthermore, we propose two new aggregation methods with promising results. we analyze methods for selecting cluster representatives and conclude that weighted selection has superior performance. finally, we provide a deeper analysis of the achieved results to highlight interesting future research areas in time aggregation techniques. to summarize, the paper addresses gaps in the current literature of time aggregation techniques applied to capacity expansion models: • comparison of methods on very different, reallife sector coupled energy systems • analysis of selection strategies in the clustering methods • recommendation on a method with overall good performance across very different energy systems the paper is structured as follows. the literature review in section 2 considers work from the literature to motivate the contributions of this paper. the implemented aggregation techniques are presented in section 3 and the real-life energy systems in section 4. the clustering methods are evaluated on the energy systems in section 5. the evaluation leads to the proposal of two new aggregation techniques in section 5.4. section 6 contains future work and conclusions are drawn in section 7. 2. literature review the np-hard unit commitment problem (uc) simulates an energy system, where demand must be met every hour [4]. the capacity expansion problem (cep) extends the uc with investment decisions. this enables analyzes of introduction of new technologies, energy mix in case of rapid technology development, flexibility international journal of sustainable energy planning and management vol. 32 2021 81 mette gamst, stefanie buchholz, david pisinger resolution in the uc limits the cep investments to the day ahead market, instead of considering balancing needs in an intra day or operational setting, which both consist of finer time resolutions. recall that the uc is np-hard. several studies have considered simplified approaches to include the uc in the cep [9, 13], e.g., by only considering a subset of the uc constraints [14, 15]. other approaches to handle the complexity are sophisticated solution approaches such as benders decomposition [16, 17] and dantzig-wolfe decomposition [18]. the resulting problem, however, remains very difficult to solve. a popular approach is time aggregation, where a subset of the 8760 hours of the year is solved. this reduces the size of the problem to make it more tractable, but with the cost of losing precision. several literature studies apply time aggregation and conclude that the quality is satisfying [5, 19, 20]. the next section further elaborates time selection methods. 2.1. time aggregation techniques for the capacity expansion problem many different time aggregation techniques exist, spanning from simple heuristic selections [21] to optimization methods [20]. heuristic approaches may be too simple and are at times associated with insufficient capture of variability [22] while the optimization approaches suffer from high computational efforts [20]. a compromise between quality and computational tractability is achieved by using clustering procedures [23]. a survey along with a proposed classification and tabular overview of time aggregation methods can be found in [2]. this literature study reviews literature on clustering methods, on selecting elements from clusters, and on comparing methods. finally we discuss how this paper contributes to closing gaps in the literature. 2.1.1. clustering techniques the aim of all clustering approaches is to minimize the similarity between clusters while maximizing the similarity within each cluster [24]. clustering approaches differ in how they group elements into clusters and how they select elements from each cluster. an example of a clustering technique can be found in [25], which clusters days according to the hierarchical clustering procedure and where the day closest to each cluster centroid is chosen. other popular approaches are k-means [26] and fuzzy clustering [27]. clustering techniques can be categorized into either exclusive (each element is assigned to only one cluster) or overlapping cluster techniques (each element is assigned to all clusters with a degree of membership) [2]. in relation to time aggregation, most clustering approaches belong to the exclusive category, although the use of some overlapping clustering techniques, such as a fuzzy clustering, also exists [2, 28, 29]. the most common exclusive techniques are the hierarchical clustering and the k-means clustering; the former builds a hierarchy of clusters through a sequence of nested partitions, while the latter initializes a grouping which is then iteratively improved [30]. 2.1.2. selecting elements from clusters elements must be selected from each cluster to represent the full time horizon. [31] provides an overview of selection strategies including cluster average, element closest to the cluster average and random element selection. cluster average is criticized for smoothing the profiles [19, 32] which underestimates the need for storage capacity and storage technologies [33]. random selection shows good results in [2] compared to average, minimum and maximum element selection. comparisons of element selections are also seen in [25] and [28]. after the selection, the elements are weighted such that the aggregation reflects the relative importance of the elements in the original problem. typically, fixed weighting is applied, assuming each cluster element to be equally important [29]. the weighting could also choose only to represent a partition of the clusters [34]. to our knowledge, there is no clear conclusion regarding the best selection criteria nor the best weighting strategy. 2.1.3. comparison of aggregation methods [35] compare clustering procedures selecting days. they compare k-means clustering, fuzzy cmean clustering and hierarchical clustering with varying linkage criteria. selection strategies are the mean and the median element selection. the selected element is weighted (repeated) according to the number of elements in its cluster. the paper analyzes electricity demand only, and it only considers how well the original data is represented by the clustering not the quality of the investment results. they conclude that the k-means clustering using median representative outperforms other clustering procedures, independently of the number of clusters. [29] also compare different clustering methods selecting days. they compare hierarchical clustering with 82 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems minmax linkage criterion and dynamic time warping; a double clustering strategy with k-means clustering and the mentioned hierarchical clustering; and a pure k-means clustering. the mean element is selected from each cluster, and selected elements are weighted (repeated) according to the number of elements in the clusters. the comparison is based on a single dataset covering three regions. the aggregation methods are compared on the resulting investments. they conclude that the hierarchical clustering and the double clustering have best performance. in [36], five clustering approaches selecting days are compared: a k-means and a k-medoids clustering each based on a euclidean distance metric and cluster centers as representative elements. a dynamic time warping barycenter averaging clustering. a k-shape clustering with a shape-based distance metric. a hierarchical clustering with euclidean distance metric. the comparison is based on two different mathematical models representing different types of investments: one based on a battery and one based on a gas turbine. they conclude that the centroid-based clusterings replicate the operational part well. in [37], three approaches to selecting days are analyzed in a sector-coupled energy system with storage. all three approaches use clustering to select days and weigh (repeat) the selected days to form the full system. the three approaches differ in how to maintain storage levels across the selected days; from no coupling to full detailed coupling. they analyze the approaches on a small synthetic energy system and conclude that the more coupling and more selected days, the better performance but also slower run times. different approaches to reducing the problem size are analyzed in [38]: down-sampling from hourly time resolution to e.g. six-hourly time resolution; clustering days; and heuristically selecting days. the approaches are tested on a representation of the power system in great britain with three different settings for renewable energy and storages and on 25 climate years. they conclude that the best performance is achieved by combining clustering with heuristic selection of extreme days. other contributions compare methods on quite small energy systems. [39] applies a mixed integer formulation clustering model on two small energy systems: the university of parma and a single building. they compare their method with k-means and k-medoids clustering and conclude that their model has better performance. in [40] six aggregation methods are compared on an energy system representing a single building. the clustering considers demand days and they conclude that k-medoids has best performance. in [2], three clustering procedures are compared to four non-clustering aggregation techniques. also, three new aggregation techniques are proposed; one based on dynamically blocking days, one based on optimizing the statistical representation of selected days; and one based on double clustering including correlation as distance measure. all methods are compared on three instances inspired by the danish power system. the study concludes that the double clustering has best performance, but that several approaches perform almost as well. 2.2. hypothesis and contribution of this paper the common approach in the literature is to solve specific energy systems to perfection, which makes it difficult to compare the results. [35] conclude that k-means has best performance, [29] hierarchical and double clustering, in [36] medoid based selection is best for investment decisions and [2] show that simple heuristic based aggregation approaches perform well. [36] compares across different energy systems, but these energy systems are based on different underlying models which makes it difficult to draw conclusions for the cep. a similar pattern can be seen for element selection strategy. [28] considers median and mean representatives with median as best option, [25] considers selection of centroid or historical day representation with centroid as best option, and [2] considers minimum, maximum, mean and random element selections with random as best option. to our knowledge, selecting multiple elements from each cluster has not been addressed before. in [28] and [29], a cluster representative is weighted by repeating it, instead of selecting multiple elements from each cluster. a different approach is not to solve each problem to perfection, but to find a technique, which provides overall good performance among different problems [41]. this is the approach we investigate in our work. the main contribution of this paper is a detailed and structured comparison of different time aggregation approaches on four very different energy systems, based on the same mathematical formulation. with the energy systems being realistic in size and detail, the conclusions are widely applicable. since the aggregation technique comparison also includes a very simple approach, this paper furthermore illuminates the relation between aggregation technique international journal of sustainable energy planning and management vol. 32 2021 83 mette gamst, stefanie buchholz, david pisinger complexity and performance. the paper further contributes by comparing different selection strategies when elements are to be selected from each cluster and by considering both single and multiple selections from each cluster. also, to the best of our knowledge, this paper is the first to illustrate the benefits of considering clustering weightings in the selection. this paper focuses on the energy system capacity expansion model, sifre. the full mathematical formulation of sifre is available at [42] and the capacity expansion module of sifre is available in appendix a in [43]. investment decisions are supported for production units, renewable units, storage, electric vehicles and interconnection lines. when solving the investment problem, a full year is simulated. sifre lp relaxes the problem to limit the simulation solution time. the integer variables in the unit commitment problem are lp relaxed and investments are linear instead of discrete (e.g. invest between 0 and 500 mw in a production unit, instead of investing in zero, one or two production units, each of size 150 mw). still, solving the problem may take many hours because of the problem instance size. this paper implements the aggregation techniques as part of sifre, but we still consider the results and analyzes valid for other capacity expansion models such as times, balmorel, energyplan and energypro [35, 44–46]. 3. solution methods numerous aggregation approaches are suggested in the literature. buchholz et al. [2] survey the many approaches and computationally compare aggregation strategies from the literature. according to their study, the following approaches show superior performance: • dummy selection, where every 13th element is selected from the residual load curve • statistical representation, which selects 10000 random samples and from this select the sample that best represents the means and standard deviation of the original data • optimized selection, which has same objective as statistical representation. instead of investigating 10000 random samples, this approach finds the optimal sample with respect to means and standard deviation of the original data • k-means clustering with squared euclidean distance measurement • cluster clustering which first applies k-means clustering with squared euclidean distances. each resulting cluster is re-clustered using hierarchical agglomerative clustering with dynamic time warp distance measure and complete linkage criterion (minimizes the maximum distance between two elements; one in each cluster) • level correlation clustering, which first applies fuzzy clustering with squared euclidean distances. then it applies hierarchical agglomerative clustering according to element correlations to scope the work in this paper, we decide to focus on the clustering methods (the three last methods). we also include dummy selection due to its simplicity. as the sector coupled energy systems consist of many timeseries (and not just the residual load), we select every 13th element from each timeseries in dummy selection. 3.1. configuration of the clustering approaches the survey in [2] shows promising results when clustering days into 28 clusters. we thus apply this configuration. both the cluster clustering and the level correlation clustering generates 7 outer clusters, each of which are re-clustered into 4 sub clusters. the k-means clustering and fuzzy clustering algorithms depend on an initial cluster. we divide the simulation period evenly into the number of desired clusters. e.g. consider a year of 365 days, where the number of desired clusters is 28 and where days are clustered. then the first 13 days are assigned to the first cluster, the next 13 days to the next cluster etc. 3.2. data dimensions the proposed methods are extended to handle complex sector coupled energy systems, by making them consider all fluctuating timeseries data. this means that the methods consider demand of all energy types (e.g. power, district heating, gas), res production, import/ export prices, fuel prices and availability profiles for production units and interconnection lines. the clustering approaches consider every fluctuating timeseries separately (instead of summing them into e.g. a residual load curve) and we also maintain the chronological order (in contrast to duration curves). demand is negated to make the selection of cluster elements more intuitively understandable. the minimum sum element in a cluster represents a day with low production and high demand. similarly, the maximum sum element represents a day with high production and little demand. 84 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems the clustering approaches must calculate the distance between two days. this is done for each matching pair of timeseries for each hour (e.g. the res production by offshore wind park horns rev 1 for each of the two days). all differences are summed across hours and timeseries to produce the final distance between the two cluster days. 3.3. selecting days from clusters two approaches can be considered for deciding the number of days to select from each cluster. either one day from each cluster (denoted non-weighted or fixed weighted), or a weighted number of days from each cluster. the benefit of the latter is that typical days and outliers in the full dataset remain (somewhat) typical and outlying in the aggregated dataset. the weight is set according to the cluster size: frequency total number of days in simulation number of clusters = (9) weight = max 1, round cluster size frequency � � � � � � � � � � � � (10) the total number of selected days may exceed the number of clusters for weighted selection. weighted selection in the literature consists of selecting a single element from each cluster and then repeating this element a number of times [25, 28, 29]. we propose to instead select a weighted number of elements from each cluster. the benefit of this is that time chronology is maintained, i.e., once selection of elements has finished, the original order of the selected elements is applied. also, selecting existing elements instead of generating new, should represent the original data better. several strategies are investigated for deciding which days to select from each cluster: minimum sum, i.e. the day(s) with smallest sum; maximum sum, i.e. the day(s) with largest sum; median sum, i.e. the day(s) with median sum; closest to cluster mean, i.e. the day(s) with shortest distance to the cluster mean, and random i.e. randomly chosen day(s). closest to cluster mean is calculated as follows: the mean of a day is calculated for every hour. the distance from an element to the mean is the total euclidean distance in the 24-dimensional space. 3.4. test setup the time aggregation techniques are compared to the optimal solution of each data instance. since only part of the problem is solved by the time aggregation techniques, the objective function values cannot be compared out of the box. it is, however, possible to generate two full year simulations with fixed investments: one simulation with optimal investments and another simulation with investments from using a time aggregation technique. the objective function values of these two simulations can then be compared. but the objective function values will not include investment costs and will thus be difficult to understand in relation to investment decisions. also, the objective function value is of very little interest in the analyzes in energinet, where focus is on the energy mix, the flows, etc. for this reason, we decide to only compare the investment decisions. the performance measure hence becomes: i i aggregated i optimal i i opti investment investment investment �� mmal� (11) where i is an index for the investments, investmenti aggregated is the investment decision made by the aggregation technique and investmenti optimal the investment decision from the optimal solution. 4. test instances the aggregation techniques are tested on four significantly different sector coupled energy systems, all stemming from analyzes in energinet and where data is based on overall assessments. the energy systems are different instances of the lp model summarized in section 2. an energy system consists of the following components: • areas, which represent an energy type and a geographical region, possibly attached an energy demand • external areas represent an energy type and a geographical region. they only have a price per mwh for each hour attached. they can only be connected to the rest of the system via an interconnection line • production units (or conversion units or generation units) convert energy types; examples are chps, ccgts and compressors, • renewable units (res) produce energy based on a production profile international journal of sustainable energy planning and management vol. 32 2021 85 mette gamst, stefanie buchholz, david pisinger table 1: detailed description of test instances energy system areas external areas production units res storages interconnectors electric vehicles demands dk classic 74 6 294 60 36 8 2 66 dk detailed 211 9 396 88 54 109 16 94 gas 74 2 70 7 6 11 0 15 ptx 27 8 31 1 16 10 0 3 • storages are any types of storages, e.g., batteries or water tanks. storages can also be used to model line pack in gas systems • electric vehicles which must be charged before requested driving time, however, the time of charging is flexible the sector coupled energy systems are described in table 1. the dk classic instance consists of a representation of the danish power and district heating system in 2020, see figure 1. the investment decisions focus on heat production and consist of two chps, three heat boilers and three heat pumps: a total of 8 investments. the dk detailed instance proposes a danish power and district heating system in 2050, see figure 2. the number of electricity areas are split into eight areas to represent possible future grid bottlenecks. also, the production system includes ptx technologies (power to x technologies), hence fuels are represented in greater detail than in dk classic and include parts of the trans portation sector. the investment decisions focus on seven ptx plants, modelled through fourteen condensing power plants, seven heat pumps and one storage: a total of 22 investments. the gas instance consists of a subpart of the danish gas transmission and distribution systems in 2020, see figure 3. the instance introduces large amounts of biogas and investigates investments in two compressors from gas distribution systems to the gas transmission system and one investment in connecting distribution systems directly: a total of 3 investments. the ptx instance models a power to x cluster as illustrated in figure 4. the investment possibilities decide how to dimension the ptx cluster and consists of 19 production units, one heat pump and one interconnection line: a total of 21 investments. figure 2: an overview of the dk detailed instance. the electricity areas are highlighted. district heating is modelled as 59 areas, as for dk classic. figure 1: an overview of the dk classic instance. the red circles represent electricity areas, the blue lines interconnection lines to neighboring electricity areas. the blue dots show district heating areas in denmark, which are modelled as 59 district heating areas in the dataset. 86 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems figure 4: an overview of the ptx instance. the system integrates many energy types. figure 3: an overview of the gas instance. the left figure illustrates the overall system. a total of 10 distribution systems are modelled in varying detail. the investments are colored red. the right figure illustrates an example of a modelled gas distribution system, where ng is short for natural gas, 40b is 40 bar and 4b is 4 bar. 5. results the computational evaluation is conducted on a 10 core 2,4 ghz machine with 128 gb ram, using gurobi 8.1 as solver. the following abbreviations are used in the remainder of this section: clustering methods: k for k-means, cc for cluster clustering, and lc for level correlation clustering. selection strategies: min for minimum sum, max for maximum sum, median for median sum, and cmean for closest to cluster mean. finally, we have w for weighted selection, n for nonweighted (fixed weighted) selection, and 28 to represent the 28 generated clusters. run time results are seen in table 2 and solution quality gaps in table 3. results are analyzed in the following sections. for more details and deeper discussions, the interested reader is referred to [43]. 5.1. time usage time reductions are plotted in figure 5. note that the solution times also include preand postprocessing of the data instances and not only time for solving the linear program. the time usage savings are consistent across the time aggregation techniques. the average time saving is 90%, which is very satisfying. the time savings are slightly smaller for the dk classic and gas instances, which could indicate that these instances spend relatively more time on preand postprocessing data than the dk detailed and ptx instances. international journal of sustainable energy planning and management vol. 32 2021 87 mette gamst, stefanie buchholz, david pisinger table 2: run times in minutes. dk-classic dk-detailed gas ptx full test instance 36,45 536,06 11,71 14,69 dummy selection 4,38 18,29 1,48 1,47 k,min,w,28 4,21 17,42 1,34 1,54 k,max,w,28 5,83 22,65 1,32 1,45 k,median,w,28 3,99 24,64 1,38 1,49 k,cmean,w,28 4,25 15,42 1,46 1,65 k,random,w,28 4,10 22,32 1,39 1,45 cc,min,w,28 5,74 43,48 1,63 1,07 cc,max,w,28 5,58 25,04 1,66 1,49 cc,median,w,28 6,16 48,25 1,62 1,06 cc,cmean,w,28 6,04 33,26 1,67 1,51 cc,random,w,28 5,66 31,73 1,71 1,21 lc,min,w,28 6,21 35,76 1,54 2,15 lc,max,w,28 8,20 27,42 1,93 1,53 lc,median,w,28 7,01 21,86 1,90 1,68 lc,cmean,w,28 6,70 35,30 1,90 1,07 lc,random,w,28 7,34 34,78 1,91 1,82 k,min,n,28 5,95 10,19 1,26 1,27 k,max,n,28 3,89 16,82 1,25 0,88 k,median,n,28 5,35 16,72 1,24 0,86 k,cmean,n,28 5,72 17,40 1,25 0,86 k,random,n,28 4,21 15,35 1,26 1,17 cc,min,n,28 6,56 21,20 1,36 1,15 cc,max,n,28 6,48 19,24 1,44 1,01 cc,median,n,28 5,08 18,80 1,45 0,86 cc,cmean,n,28 5,19 15,89 1,41 0,76 cc,random,n,28 5,24 25,55 1,40 0,77 lc,min,n,28 7,01 21,67 1,71 1,14 lc,max,n,28 4,83 17,72 1,75 1,05 lc,median,n,28 6,26 24,05 1,72 1,11 lc,cmean,n,28 6,41 35,26 1,74 0,93 lc,random,n,28 6,54 21,10 1,74 1,00 table 3: solution quality: the lower percentage, the better performance. dk-classic dk-detailed gas ptx dummy selection 8% 5% 25% 4% k,min,w,28 101% 3% 47% 2% k,max,w,28 65% 18% 25% 3% k,median,w,28 17% 4% 24% 0% k,cmean,w,28 19% 6% 39% 2% k,random,w,28 16% 8% 40% 2% cc,min,w,28 105% 4% 38% 1% cc,max,w,28 30% 23% 12% 7% cc,median,w,28 17% 2% 37% 2% cc,cmean,w,28 13% 5% 35% 1% cc,random,w,28 17% 5% 28% 2% lc,min,w,28 23% 4% 61% 1% lc,max,w,28 90% 23% 17% 5% lc,median,w,28 31% 6% 32% 1% lc,cmean,w,28 42% 9% 28% 0% lc,random,w,28 6% 2% 23% 0% k,min,n,28 102% 4% 51% 1% k,max,n,28 66% 7% 40% 6% k,median,n,28 9% 11% 23% 1% k,cmean,n,28 13% 4% 41% 3% k,random,n,28 5% 2% 25% 3% cc,min,n,28 75% 7% 51% 2% cc,max,n,28 74% 17% 49% 9% cc,median,n,28 45% 2% 59% 4% cc,cmean,n,28 23% 3% 57% 4% cc,random,n,28 37% 6% 55% 8% lc,min,n,28 33% 4% 68% 1% lc,max,n,28 57% 20% 49% 66% lc,median,n,28 40% 6% 35% 2% lc,cmean,n,28 47% 8% 29% 2% lc,random,n,28 49% 7% 33% 3% generally, the time savings are slightly smaller for the weighted selection algorithms. recall the weighting from section 3.3; rounding the number of elements to select from a cluster may increase the total number of selected days. indeed, the weighted selections result in more than 28 selected days, see table 4. 5.2. weighted vs. non-weighted selection weighted selection has better performance than nonweighted selection with respect to solution quality in 62% of the time aggregated simulations. the results are illustrated in figure 6. in 37 of 60 cases, the investment gap decreases with weighted selection. if gaps are averaged across instances, the gap decreases with weighted selection in 11 out of 15 cases. the average of all gaps is 21% for weighted selection and 26% for non-weighted selection. this confirms that weighted selection better represents the full dataset and that outliers are balanced well against the rest of the dataset. the improved quality may partly be due to the increased number of selected days, 88 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems 60% 50% 40% 30% 20% 10% 0% weigthed non-weigthed k,m ax ,28 k,c me an ,28 cc ,m in, 28 cc ,m ed ian ,28 cc ,ra nd om ,28 ic, ma x,2 8 ic, mi n,2 8 ic, me dia n,2 8 ic, ran do m, 28 cc ,m ax ,28 ic, cm ea n,2 8 k,m in, 28 k,m ed ian ,28 k,r an do m, 28 cc ,cm ea n,2 8 figure 6: quality gap percentages averaged across the four instances. 100% 95% 90% 85% 80% 75% dk classic du mm y s ele cti on k,m ax ,w ,28 k,c me an ,w ,28 cc ,m in, w, 28 cc ,m ed ian ,w ,28 cc ,ra nd om ,w ,28 ic, ma x,w ,28 ic, mi n,n ,28 ic, me dia n,n ,28 ic, ran do m, n,2 8 cc ,m ax ,n, 28 ic, cm ea n,w ,28 k,m in, n,2 8 k,m ed ian ,n, 28 k,r an do m, n,2 8 cc ,cm ea n,n ,28 dk detailed gas ptx figure 5: time usage reductions in percent. table 4: the number of selected days. dk classic dk detailed gas ptx dummy selection 28 28 28 28 k,n,28 28 28 28 28 cc,n,28 28 28 28 28 lc,n,28 28 28 28 28 k,w,28 31 34 34 36 cc,w,28 37 38 39 39 cc,w,28 38 37 36 38 see table 4. it is possible to increase the number of selected days for the non-weighted algorithms and compare the results. this would, however, require that the non-weighted algorithms generate more clusters, which again would make comparison more difficult. instead, we continue to compare the algorithms with 28 clusters. the interested reader is referred to appendix b in [43] for results for non-weighted selection with more clusters. 5.3. selection strategy the strategies for selecting elements in each cluster perform differently across the instances. results averaged international journal of sustainable energy planning and management vol. 32 2021 89 mette gamst, stefanie buchholz, david pisinger across the four instances are illustrated in figure 7. clearly, the minimum sum and maximum sum selections have worst performance. random and median selection vary slightly, while closest to cluster mean gives consistent results. the same pattern is seen, when considering results for weighted selection only, see figure 8. selecting only the minimum or maximum sum elements represents the clusters less well. random performs well which indicates that always selecting the median or closest to cluster mean elements may be too strict. 5.4. new approaches to promote diversification in selected days random selection performs well but due to its random nature, results are not consistently good. to eliminate 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% min,28 max,28 median,28 cmean,28 random,28 k cc lc figure 7: quality gap percentages averaged across instances and weighted and non-weighted selection. the randomness, we instead seek to mimic differentiated selection. we propose the medianmaxmin selection. the approach is only relevant in weighted selection where more than one element may be selected from each cluster. first the median element is selected. if more elements are to be selected from the cluster, the maximum element is selected. again, if more elements are to be selected, the minimum element is selected. if even more elements are to be selected from the cluster, the selection order repeats. we also propose the kk-means clustering approach (in short kk). the outer clustering is k-means with squared euclidean distances where the initial clusters are generated as explained in section 3.1. the inner clustering is also a k-means with squared euclidean distances, but this time the initial clusters are formed around the median, maximum sum and minimum sum elements (in the outer cluster). the two approaches are tested. run times are seen in table 5 and solution gaps in table 6. run times are consistent with the remaining aggregation approaches. solution gaps are illustrated in figure 9. medianmaxmin selection generally performs better than the other selections strategies. good results are especially achieved together with k-means, cluster clustering and kk-means. kk-means performs overall well, however, without outperforming the other clustering approaches. it gives consistent results except for min selection, which generally performs poorly regardless of clustering approach. 40% 35% 30% 25% 20% 15% 10% 5% 0% dummy selection dummy selection max,w,28 cmean,w,28min,w,28 median,w,28 random,w,28 k c c l c figure 8: quality gap percentages averaged across instances for weighted selection only. table 5: run times in minutes. dk-classic dk-detailed gas ptx k,medianmaxmin, w, 28 5,67 28,39 1,30 1,52 cc,medianmaxmin, w, 28 5,45 21,55 1,65 2,26 lc,medianmaxmin, w, 28 5,27 27,24 1,57 1,28 kk,min, w, 28 3,86 23,35 1,48 1,20 kk,max, w, 28 7,35 21,78 1,48 1,36 kk,median, w, 28 5,56 13,88 1,50 1,45 kk,cmean, w, 28 5,56 26,14 1,61 1,70 kk,random, w, 28 4,07 24,19 1,54 1,26 kk,medianmaxmin, w, 28 6,33 23,10 1,51 1,35 90 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems 6. further analysis the results reveal different quality across time aggregation techniques and data instance. the data instances are analyzed to better understand the results; specifically, we analyze the behavior of the investments in the optimal solution for the full test instances and what this means to the clustering approaches. average gaps for the instances are seen in figure 10. dk-classic: the investments are mainly utilized in the winter period. they are driven by district heating demand. data in the instance, however, also contains many other fluctuating timeseries, especially connected to the electricity system: demand, res production, electricity prices in neighboring countries and capacity restrictions on interconnection lines. the clustering methods end up generating clusters and selecting days, which are not relevant to the investments. gas: the investments are utilized in the summer period, where demand is low. in these hours, excessive biogas is either moved between distribution systems or sold to the transmission system. gas demand is, however, not the only varying data in the instance. electricity prices (considered by gas-fueled chps) vary throughout the year. line pack is modelled as storage space with highest value in the spring. gas demand varies more outside the summer period (the higher demand, the higher absolute variation). hence the clustering approaches end up generating clusters and selecting days from other seasons than the summer and the solution quality suffers. dk-detailed: the investments follow res production and electricity demand. most timeseries in the datset are related to res production and electricity, which explains the good solution quality. ptx: the fluctuation of the timeseries correspond well to the entire production system, including the optimal investments. all time aggregation methods thus have good performance. 6.1. overall best aggregation method given the analysis in this section and the results in the previous, we investigate which aggre gation method show most promising results. dummy selection performs well but the method is not robust towards investments, which are utilized in only part(s) of the simulated year. this is the case for the gas instance where dummy selection ends up with a 25% gap. for this reason, it may not generally be the best approach. it, however, benefits from being very simple to implement and to understand from the analyst’s point of view. 40% 35% 30% 25% 20% 15% 10% 5% 0% dk classic dk detailed gas ptx figure 10: average solution gap for each instance across the clustering methods. table 6: solution quality: the lower percentage the better performance. dk-classic dk-detailed gas ptx k,medianmaxmin, w, 28 4% 4% 15% 1% cc,medianmaxmin, w, 28 16% 2% 21% 2% lc,medianmaxmin, w, 28 29% 7% 31% 1% kk,min,w,28 104% 3% 43% 3% kk,max,w,28 41% 6% 7% 9% kk,median,w,28 29% 9% 20% 2% kk,cmean,w,28 14% 2% 37% 3% kk,random,w,28 12% 2% 48% 3% kk,medianmaxmin, w, 28 7% 9% 23% 6% 40% 35% 30% 25% 20% 15% 10% 5% 0% du mm y s ele cti on dummy selection ma x,w ,28 cm ea n,w ,28 mi n,w ,28 me dia n,w ,28 ran do m, w, 28 me dia nm ax mi n,w ,28 kklccck figure 9: quality gap percentages averaged across instances for weighted selection and dummy selection. international journal of sustainable energy planning and management vol. 32 2021 91 mette gamst, stefanie buchholz, david pisinger for the clustering approaches, we have already concluded that best performance is achieve with weighted selection and with other selection methods than min and max. the overall best performing method in our survey is k-means clustering with weighted selection and with the medianminmax selection strategy. the k-means is simple to implement and the medianminmax strategy diversifies selection without introducing the uncertainty of randomness. we recommend this method but are also aware that this is a close call. this could indicate that the performance bottleneck no longer lies in the clustering or selection itself. this is investigated in the next section on future work. comparing our results to the literature presented in section 2, we lean towards the same conclusions as in [35] and in [38] but with a different selection and weighting strategy. the benefits of medianmaxmin selection is similar to [38], which supplements clustering with selecting extreme days to achieve diversification in the selected days. the similar performance of the clustering methods across very different energy systems, indicates why literature studies have concluded on different approaches: the strength of a method may depend on the specific energy system. this topic is also discussed further in the next section on future work. 6.2. future work the clustering methods suffer from generating clusters based on data fluctuations irrelevant to the investment decision. we have identified four ideas to further dive into this. future work could focus on methods to better represent data. one method could be to normalize data to take on values between e.g. -1 and 1. this could lead to a fairer comparison of data stemming from different sources, e.g. comparing capacities with prices. this would, however, also erase the absolute amounts and thus treat e.g. large demands equally to small demands. fluctuations in small timeseries may cause unimportant days to be selected and thus negatively affect the clustering approach. future work could also focus on dimensionality reduction, e.g. by considering the subset of data needed to represent the statistical behavior of each day, or by considering the subset of data which correlates with the investment decisions. future work could focus on constructing and sharing benchmark instances representing challenging and different sector coupled energy systems with more investment decisions and where the utilization of the investment decisions is not correlated. the instances could be extended to include seasonal storages to further investigate the methods in [37]. this would allow better comparisons of clustering methods and could result in clearer recommendations. finally, future work could be to use other energy simulation models to evaluate the clustering approaches, for example the times, balmorel, energyplan and energypro models [35, 44–46]. 7. conclusion in this paper, we have investigated the performance of clustering techniques across very different energy systems to give a recommendation of a method with overall good performance. this contrasts the current approach of developing clustering techniques performing well on specific energy systems and thus contributes to closing a gap in the research literature. the clustering techniques all select a subset of days from the datasets, which cover a full year. the applied methods are k-means, hierarchical clustering and a double clustering procedure applying a fuzzy clustering, followed by a hierarchical clustering considering element correlations. also, we proposed a new method consisting of double k-means clustering. the methods cluster days and then selects a number of days from each cluster. we have tested several selection strategies from the literature: min, max, median, closest to cluster mean and random. we have also proposed a new selection strategy, medianmaxmin, which selects elements in the named order. finally, we have investigated the effect of selecting a single element from each cluster or a weighted number of elements from each cluster. all in all, this resulted in a comparison of 41 aggregation techniques, and the results were benchmarked against the full datasets. the comparison is evaluated on how well the investment decisions are matched. the methods were tested on four very different energy systems to investigate performance consistency and to analyze if certain energy system aspects are more difficult to replicate through aggregation. the tests showed that all aggregation techniques resulted in significant time reductions between 78% and 97%. the tests also revealed that weighted selection outperformed selecting exactly one element from each cluster. 92 international journal of sustainable energy planning and management vol. 32 2021 time aggregation techniques applied to a capacity expansion model for real-life sector coupled energy systems to the best of our knowledge, this has not been analyzed or concluded previously in the literature. selecting minimum or maximum elements from each cluster was generally not a good strategy. the new selection method, medianmaxmin, and clustering method, kk, both performed consistently well. especially k-means with medianmaxmin selection showed very good performance, and this is also the clustering approach we recommend. we also tested dummy selection, which simply selects every 13th day. overall, it performed surprisingly well. considering its simplicity, it could be a good alternative to the more complex clustering methods as it is easy to implement and understand. future work could focus on how data is considered when clustering. in this paper, all timeseries are considered. a closer analysis of the test instances revealed that this may not be the best approach as data irrelevant to the investments caused the aggregation techniques to select days, which were also irrelevant to the investment decisions. future work could also focus on constructing a library of benchmark instances. this would strengthen the research area of time aggregation techniques applied to capacity expansion models, as this would better allow for systematical comparison of methods. combining qualitative 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[online]. available: https://www.osti.gov/etdeweb/biblio/20235617 [47] p.f. borowski ”new technologies and innovative solutions in the development strategies of energy enterprises”. hightech and innovation journal, vol. 1, 2020, 39-58. https://doi.org/10.1080/09720510.2017.1395182 https://doi.org/10.1080/09720510.2017.1395182 https://iea-etsap.org/mrkldoc-i_stdmarkal.pdf https://iea-etsap.org/mrkldoc-i_stdmarkal.pdf http://www.osti.gov/etdeweb/biblio/20235617 http://www.osti.gov/etdeweb/biblio/20235617 international journal of sustainable energy planning and management vol. 28 2020 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 28 2020 01–02 abstract this editorial introduces the 28th volume of the international journal of sustainable energy planning and management. this volume is probing into the actors engaged in energy renovation, rural district heating in hungary, and hydropower expansion on the indonesian island of sulawesi. other work address power-to-gas technology and some of the obstacles facing this technology, pine needles and hydropower as sources of renewable energy in himalaya, how adaptive pricing can influence electricity demand and thus energy system performance, and finally community participation in renewable energy in tanzania. contents in energy efficiency in the building sector: a combined middle-out and practice theory approach, reindl & palm [1] investigate processes surrounding energy conservation projects in buildings with a focus on the knowledge of the processionals. one of the interesting findings is how tacit knowledge is not questioned. this work links up to another interesting study also focusing on the procedures and actors in the energy renovation process [2]. csontos et al. investigate the prospects of rural renewable energy-based district heating in their article spatial analysis of renewable-based hybrid district heating possibilities in a hungarian rural area [3] as a means to address import dependency, energy poverty, and air pollution. in their analyses, the authors find good prospects in rural settlements. tumiran et al. [4] look into expansion planning of hydropower on sulawesi, indonesia, finding that an expansion of up to 30% penetration is feasible in this case. in their article the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies, csedő & zavarkó [5] investigate how some of the main barriers to the power-to-gas technology may be overcome. the barriers—“perceived risks associated to its scalability” as well as costs can be addressed at more levels, however here the authors suggest amongst others “the establishment of regulatory sandbox models” for the development of the technology. malik et al. [6] investigate the use of pine needles as a source of biomass in the indian himalayan region, in different constellations with wind, photo voltaics (pv) and grid electricity finding the optimal solution under local circumstances to being a combination of gasifier run on one needles and pv panels. the scenarios were analysed using the homer model. "international journal of sustainable energy planning and management vol 28" in “a planning perspective on hydropower development in the indian himalayan region”, singh [8] puts another editorial international journal of sustainable energy planning and management vol 28 poul alberg østergaard* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords: renovation actors; rural heating; hydro expansion; power-to-gas barriers biomass; dsm incentives; url: http://doi.org/10.5278/ijsepm.5737 http://doi.org/10.5278/ijsepm.5737 2 international journal of sustainable energy planning and management vol. 28 2020 editorial international journal of sustainable energy planning and management vol 28 focus on the indian himalayan region’s role as a potential renewable energy source provider. in india, more focus is given other renewable energy sources like wind and photo voltaics, but the potential is large and more focus would benefits the technology’s utilisation. cepeda et al. [8] investigate the role of demand side management activities in stand-alone microgrids, testing how incentives and penalties applied to electricity tariffs may impact their temporal demand curve. results show a lowered cost of energy as one of the impacts on the energy systems. finally, bishoge et al. [9] address community participation within renewable energy in tanzania. the links go both ways with the exploitation of renewable energy sources proving income and employment opportunities – but community participation is also a facilitator for deployment. references [1] reindl k, palm j. energy efficiency in the building sector: a combined middle-out and practice theory approach. int j sustain energy plan manag 2020;28:3–3. http://doi. org/10.5278/ijsepm.3426. [2] mosgaard m, maneschi d. the energy renovation journey. int j innov sustain dev 2015;10:177–97. http://doi.org/10.1504/ ijisd.2016.075548. [3] csontos c, soha t, harmat á, campos j, csüllög g, munkácsy b. spatial analysis of renewable-based hybrid district heating possibilities in a hungarian rural area. int j sustain energy plan manag 2020;28:17–36. http://doi. org/10.5278/ijsepm.3661. [4] putranto lm. generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system. int j sustain energy plan manag 2020:37–52. http:// doi.org/10.5278/ijsepm.3247. [5] csedő z, zavarkó m. the role of inter-organizational innovation networks as change drivers in commercialization of disruptive technologies. int j sustain energy plan manag 2020;28. http:// doi.org/10.5278/ijsepm.3388. [6] malik p, awasthi m, sinha s. study of grid integrated biomassbased hybrid renewable energy systems for himalayan terrain. int j sustain energy plan manag 2020;28. http://doi. org/10.5278/ijsepm.3674. [7] [7] singh mk. a planning perspective on hydropower development in the indian himalayan region. int j sustain energy plan manag 2020;28. http:doi.org/10.5278/ijsepm. 4304. [8] cepeda jco, khalatbarisoltani a, boulon l, pinto gao, gualdron cad, martinez jes. design of an incentive-based demand side management strategy for stand-alone microgrids planning. int j sustain energy plan manag 2020;28. http://doi. org/10.5278/ijsepm.4293. [9] [9] bishoge ok, kombe gg, mvile bn. community participation in the renewable energy sector in tanzania. int j sustain energy plan manag 2020;28. http:doi.org/10.5278/ ijsepm.4477. http://doi.org/10.5278/ijsepm.3426 http://doi.org/10.5278/ijsepm.3426 http://doi.org/10.1504/ijisd.2016.075548 http://doi.org/10.1504/ijisd.2016.075548 http://doi.org/10.5278/ijsepm.3661 http://doi.org/10.5278/ijsepm.3661 http://doi.org/10.5278/ijsepm.3247 http://doi.org/10.5278/ijsepm.3247 http://doi.org/10.5278/ijsepm.3388 http://doi.org/10.5278/ijsepm.3388 http://doi.org/10.5278/ijsepm.3674 http://doi.org/10.5278/ijsepm.3674 http://doi.org/10.5278/ijsepm.4293 http://doi.org/10.5278/ijsepm.4293 _goback international journal of sustainable energy planning and management vol. 33 2022 3 *corresponding author e-mail: pmadsen@plan.aau.dk international journal of sustainable energy planning and management vol. 33 2022 3–6 abstract according to verbruggen the main obstacle to a decarbonized future of the european union and partly also the world is the notion that the buying and selling of permits to emit co2 is a panacea. on all possible accounts it has, however, proven to be a dead end. so rather than repeatedly remedying the system all attempts to implement such a general solution should be abandoned entirely. this could then pave the way for a more targeted ‘act now’ policy aiming at reducing the level of co2 emissions to zero as quickly as possible. if you wish to know more about why ‘pricing carbon emissions’ as a general policy is the wrong way to go, the book by verbruggen is required and indispensable reading. a review of “pricing carbon emissions. economic reality and utopia” by aviel verbruggen poul thøis madsen* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark 1. intro the book “pricing carbon emissions. economic reality and utopia” by aviel verbruggen [1] is an important and timely book. but it is not an easy read despite the fact that the target group is meant to be a ‘broad audience interested in climate policy eager to understand why decarbonization progress is [so] slow as it is’ (p. i). in this light, it is paradoxical that the detailed explanations are much more understandable than the introductory and concluding parts presenting the overview. the widespread use of acronyms, as so often seen within energy planning, does also contribute to making the reading much harder than necessary. my personal favorite is the less than obvious ‘ocf-sd’ (our common future-sustainable development). but to be fair, the book contains a list of acronyms covering as much as 2 1/2 pages (p. xxv-xxvii) which the present reader had to consult countless tiresome times. the strength of the book is in the criticism of arguments uncritically favoring the so-called market for buying and selling of permits to emit carbon dioxide as the solution to avoid climate change, while its constructive contribution in how to move the world towards sustainability is more modest than hoped for by the present reviewer. it adds to the complexity of the book that carbon pricing is discussed from two different perspectives and that the author effortless shifts between these two and presupposes that the reader do follow the author all the way. the title of the book does also indicate the two perspectives: how the market for permits to pollute works (reality) and how economists assume it ought to work according to mainstream economic theory (utopia). the emphasis in the book is about stating and explaining the obvious to all but neoliberal economists and politicians following their advice: essentially, that pricing carbon emissions does not solve the problem of global warming and even more importantly, focusing so much on this policy tool has already resulted in 20 years wasted on decarbonizing next to nothing in europe. the critique is based on often highly technical arguments but pedagogically placed in the appendices a-e at the end of the book. regrettably, the critique seems to tell us more about how most economists think than 4 international journal of sustainable energy planning and management vol. 33 2022 a review of “pricing carbon emissions. economic reality and utopia” by aviel verbruggen involving a high level of co2 emission. in other words, by understanding the wrongdoings of carbon pricing one is also able to understand why the process of decarbonization has been so slow. 3. how to accelerate the process of decarbonization? essentially, verbruggen suggest four steps to speed up the process of decarbonization. the first is to abolish the system of carbon pricing as a general solution all together everywhere. no less, no more. the second step would be to subsidize areas having zero emissions and heavily tax areas being part of the climate burden. these policies would, however, only work if they are developed locally as the world is diverse rather than homogenous. verbruggen does convincingly argue against one-size-suits-all policies on a european or global level. in addition, the federal level (like the eu) should focus on immediately giving up the direct and indirect support for nuclear power and oil and gas. thirdly, verbruggen emphasizes that economic incentives could and should be the main drivers in developing renewable energy technology as proven possible by the case of e.g., wind power in denmark. finally, industrial activity must be decarbonized directly sector by sector at a detailed level as much and as fast as possible. we are in a hurry. consequently, i would also have expected the last chapter (8) to be the most important: “from evaluation to a well thought-out ‘act now’”. in this chapter the author insists on the necessity for a ‘drastic and urgent change’ (p. 145). but what does the author tell us about how to bring about this change? not much as criticism also takes up (too?) much space in this chapter. but what is written is very important so in the following the substance is analyzed meticulously. we are told that it is already now technologically feasible to move very quickly towards a sustainable feature but getting there would be a process constrained by ideas, institutions, interests, and infrastructure (according to the important figure 1.1. (p.4)); or in shorthand: ‘numerous inertias’ (p. 155). this of course raises this pertinent question: what could be done to overcome all these inertias? basically, we should ‘act now’. this is not all that operational but as this point is so important, i have analyzed what about the alternatives. the largest part of the book is, hence, mostly devoted to proving that the author is right in his criticism of carbon pricing which might give most readers an unfair impression of a man with a cause. but a very important cause that is. 2. why is the process of decarbonization going so slow in eu? but returning to the opening sentence: what are then the main reasons why the decarbonization process is so slow according to the author? it is acknowledged that political scientists might have some plausible answers to this question, but the focus is on what i would very broadly call ‘economic’ reasons of course acknowledging that politics and economics are intimately linked. it is convincingly demonstrated that the pricing of carbon emissions is a policy tool that is impotent on all accounts (p. 141). most importantly, it has neither led to a reduction of emissions nor, as intended, spurred the development of innovations tailor-made to reduce emission. but even worse because the eu ets – ‘emissions trading system/scheme of permits to emit greenhouse gasses’ (p. xxvii) – has been regarded to be all what it takes, it has turned into becoming the climate policy in the eu. this has led to a long-term stalemate starting in 1998-2000 and does also threaten to endure to at least 2030. and this vision has also had a heavy impact on a global level and has been recommended and promoted by the un. part of the tragedy is that in a european setting it has been acknowledged repeatedly that this system has not yet delivered but the paradigm and the powerful actors favoring the system have been so strong and convincing that reality has been blamed for the malaise rather than the idea of carbon pricing. the system has, hence, been modified several times because it seems to be so intuitively obvious that we should make the polluters pay for their pollution – or internalizing externalities as economists would formulate it. the core of the book is several arguments substantiating why carbon pricing has not worked and would not ever work as a general policy. according to the author it might, however, make sense as a policy in smaller local settings addressing specific areas producing too much co2. trying to turn carbon pricing into a universal policy is blocking alternative policies which in contrast are guaranteed to work here and now like targeted taxation of commodities or services such as air transport international journal of sustainable energy planning and management vol. 33 2022 5 poul thøis madsen verbruggen writes more specifically about ‘acting now’. there is a need for a ‘strategic public policy’ supported by ‘economically effective and efficient financial instruments’ (pp. 151-52). the focus should of course be on electricity as verbruggen, as other authors within the area, underlines the importance of electrifying whatever could be electrified by renewable energy. in producing the much-needed electricity, it is, however, of vital importance to hit a balance between ‘bottom-up, distributed, consumer-owned’ electricity and ‘top-down centralized, company-owned’ (p. 152). in contrast to the criticized and dominant neoliberal paradigm this would require the existence of a ‘strong independent public interest regulation for setting and enforcing the effective and just rules for dispatching and pricing, rewarding the investment and delivery of power by both sides’ (p. 152). but how to get there is not at all clear. verbruggen becomes close to deterministic when he forwards the view that: ‘a new epoch irrevocably is arraying’ (p. 155). but on the other hand, the author is far more open when stating that: ‘it all starts with ideas’ (p. 155). so basically, the idea (!) is that if we change our perceptions of the world, we will also change our actions. verbruggen is, hence, in this respect a kindred spirit with the famous macro economists john maynard keynes who stated that “the ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. indeed, the world is ruled by little else” [p. 383, 2]. this does also explain why verbruggen spends so much time and space criticizing not mainstream economic theory as such but how it is being (mis) used. the alternative to the present policy would be to agree on a new paradigm. we need to create new images and institutions which are up for the challenge. the book does not get much more specific than this. policies should be ‘effective, efficient, fair and transparent [… and] diverse and locally anchored’ (p.157). the ‘numerous bottom-up initiatives should be based on principles of coordination’ (p. 157) but financial incentives are also important when practicing self-governance (with a reference to the only female winner of the nobel prize for economists elinor ostrom). we should govern ‘the commons’ with rationality and establish a self-governance framework for global climate policy. the hope is that in this process we would both identify forces and devices to overcome the before mentioned inertias. we would need to construct, operate, and protect the commons. verbruggen ends his book with a metaphor. we need to make a rebellion like the slaves did in relation to the roman empire. but restricting the analysis to demonstrate that the current thinking is unsustainable does not do away this policy when there are strong political and industrial interests – as also argued by verbruggen in preserving status quo. arguing against power is an important step in changing things but it is not enough. being persuasive does not necessarily lead to persuasion and consecutive corrective action. we need to be clearer about who the carriers of change could be and how we can empower them with more than an in-depth and relevant criticism of the existing system. 4. outro when the author is presented on the first page it is mentioned that he has experience and knowledge about politics. a bit odd this is only reflected in the book very superficially and the conscious choice of focusing on the economic dimension is not even discussed but taken for granted. the book is more interdisciplinary than most economists would master but it would have gained from giving more emphasis to the political process retarding or promoting sustainability. but verbruggen is still a young emeritus professor so maybe we can hope for a part two or a revised and extended and maybe more reader friendly edition of the present book. anyhow, the book is highly recommended by the present reviewer. i learned a lot and i guess you would do the same. about the reviewer poul thøis madsen holds a phd in european economic integration and is an associate professor at the sustainable energy planning research group at the department of planning at aalborg university, denmark. references [1] verbruggen a “pricing carbon emissions. economic reality and utopia”, isbn 978-1-032-00362-7, routledge, june 2021 [2] keynes, j m. “the general theory of employment, interest, and money”, isbn 978-3-319-70343-5, springer, 2018 [1936] international journal of sustainable energy planning and management vol. 33 2022 53 *corresponding author – e-mail: t.kurbatova@macro.sumdu.edu.ua international journal of sustainable energy planning and management vol. 33 2022 53–64 abstract utilization of landfill gas for electricity generation should be an attractive option for ukraine in light of the country’s rapidly growing municipal solid waste problem, the influx of intermittent renewable electricity into the national grid, and renewable energy adoption commitments. however, the deployment of landfill gas power plants has been slow vis-à-vis other alternative energy technologies despite the existing government incentives. this article aims to help understanding this trend by investigating the economic feasibility of landfill gas power plants. the research focuses on determining the levelized cost of electricity of these electricity generation facilities and comparing it to the feed-in tariff available to landfill gas electricity producers. the results show making an investment into a landfill gas-fired power plant is an appealing strategy due to a potential high and quick return on investment in 5.1 years. this leads to the ultimate conclusion that economic feasibility is not a cause for the slow adoption of landfill gas as a source of renewable electricity generation in ukraine. in addition, the article identifies several potential barriers to landfill gas electricity generation deployment to be investigated in future research. trash to hryvnias: the economics of electricity generation from landfill gas in ukraine tetiana kurbatova*a, roman sidortsovbc a sumy state university, 2, rimsky-korsakov street, ua-40007, sumy, ukraine b michigan technological university, 1400 townsend drive, houghton, mi 49931-1295, united states c university of sussex, sussex house, brighton, bn1 9rh, united kingdom keywords landfill gas; renewable electricity; waste management; energy policy; ukraine. http://doi.org/10.5278/ijsepm.6707 1. introduction over the past few years, municipal solid waste (msw) generation has seen a steady increase in ukraine. whereas many countries ramp up their recycling programs and infrastructure [1,2], ukraine’s progress in this regard remains pedestrian, thereby exacerbating the problem of msw growth. presently, the disposal of msw in landfills is the dominant method of waste management in the country. due to the lack of a coherent waste management strategy of the ukrainian government, the country’s municipal landfills are rapidly running out of capacity since 93.7% of all msw in the country is disposed in them [3]. the growing msw problem in ukraine has a silver lining – a plentiful resource base for electricity and generation. as international experience demonstrates, collecting and utilizing landfill gas for this purpose is an effective way to minimize environmental impact of msw while extracting economic value from waste [4,5]. landfill gas generally consists of 40%-45% carbon dioxide (co2) and 50% to 55% methane (ch4). the latter transforms noxious landfill gas with a high global warming potential into a flexible fuel that can be used, among other things, for electricity and heat generation. in addition, responsibly utilizing this valuable resource can create a pathway for developing sustainable waste http://doi.org/10.5278/ijsepm.6707 54 international journal of sustainable energy planning and management vol. 33 2022 trash to hryvnias: the economics of electricity generation from landfill gas in ukraine landfill gas as a renewable energy resource. we continue with outlining our methodology, data, and assumptions. we conclude by discussing our results, policy implications, and avenues for future research. 2. literature review and background as we elaborate in more detail below, the literature on the economic feasibility of electricity generation from landfill gas in ukraine is scarce, with only a few articles available in english-language academic journals. thus, we examined grey literature such as white and position papers, as well as technical reports. in addition to literature featuring the utilization of landfill gas for electricity production in ukraine, we reviewed literature on renewable energy incentives in the country. although our literature review produced modest results, the relevant works can still be categorized in three groups. these groups include works that: (1) describe the trends in lggp adoption; (2) explore the need for and benefits of lggps; and (3) assess the technical and economic feasibility of utilizing landfill gas for electricity generation. to contrast our results with the literature regarding lggps in other countries we conducted a google scholar survey (but not review) that was not limited to ukraine. in addition, to place the results of the literature review in the broader context of the national waste disposal and energy policies, we identified key statistics from ukrainian government sources and compared these data with the relevant e.u. statistics. to obtain the necessary data regarding the applicable financial incentives and conditions for obtaining them, we completed the following steps. first, we identified the recent programmatic policy statements and law. second, we analysed the applicable law to correlate the incentives with the lcoe inputs. 2.1. literature review a notable representative of the first category of the relevant literature is korpoo’s 2007 study that highlights the deployment of lgpps in ukraine as joint implementation (ji) projects under the kyoto protocol in 2007 [16]. korpoo notes a much lower rate of landfill gas utilization for electricity production in ukraine compared to russia despite its environmental and social benefits, as well as the presence of financial incentives. geletukha et al. [17] explore lggps in the larger context of biomass use for electricity production. management in ukraine while attaining significant environmental benefits [6,7]. domestic methane production from landfill gas would indeed be a welcome addition to the ukraine’s current energy mix because 42% of the country’s natural gas comes from abroad [8]. currently, there are 28 operating landfill gas power plants (lggps) in ukraine. in contrast, there are 564 lggps in the united states, which became a net natural gas producer in 2018 [9]. equally important is addressing the negative environmental impacts of municipal landfills, especially curbing greenhouse gas emissions. municipal landfills are a powerful source of methane emissions, the global warming potential of which exceeds that of carbon dioxide 28 times [10]. as of 2019, methane emissions from municipal landfills in ukraine accounted for 16% of the country’s total methane emissions ranking, third behind the energy and agriculture sectors that contributed 65% and 17%, respectively [11]. however, while methane emissions in the energy sector have remained flat over the last few decades, and in the agriculture sector, they have decreased, emissions in the waste management sector have seen steady growth. in addition, utilizing landfill gas to produce energy will help ukraine to achieve the renewable energy targets outlined in the programmatic policy statement entitled “the energy strategy of ukraine until the year of 2035” (energy strategy 2035) [12]. the construction of a lgpps require significant capital investment. therefore, because of the difficulties in access to and cost of private financing for renewable energy projects in ukraine, lgpps deployment requires support from the government in various incentive mechanisms [13,14,15]. such tools, the main of which is the feed-in tariff, were introduced over a decade ago but are yet to result in lgpps deployment on a meaningful scale. the overarching objective of this paper is to contribute to the understanding of potential reasons for the slow proliferation of lggps in ukraine. we aim to determine whether economic feasibility is among such reasons. to accomplish that, we calculate the levelized cost of electricity (lcoe) produced at an lgpp in ukraine, compare it to the feed-in tariff, at which a producer can sell electricity, and estimate the payback time for lggp projects. we begin the paper with a brief literature review and the background on the trends in msw management and incentives for renewable energy development in ukraine because ukrainian law designates international journal of sustainable energy planning and management vol. 33 2022 55 tetiana kurbatova, roman sidortsov among other things, they list all operating lggps in ukraine and the existing landfills that collect landfill gas for utilization. in contrast, zhuk provides a narrowly focused update on the state of landfill gas facilities, including the technical solutions therein [18]. zhuk also notes the new requirements for the landfill gas and the challenges of methane recovery from older landfills lggps. the update reports some encouraging developments, among them the use of specialised modelling software. an article by makarenko and budak highlighting ukraine’s msw problem represents the literature on the need for and benefits of lggp deployment [19]. the authors view landfill gas as a source of air pollution, contributing to environmental deterioration and negatively impacting public health. winkler and zharykov make similar observations based on a case study of a municipal waste disposal area [20]. the third category consists of technical and economic assessments of landfill gas use for electricity generation. remarkably, we were unable to locate sources that a combined, technoeconomic analysis. a notable representative technical assessment is the “user’s manual ukraine landfill gas model” prepared by a u.s. engineering firm on behalf of the u.s. environmental protection agency for the ukrainian government [21]. the manual provides a thorough description of the model to estimate landfill gas generation and recovery in the entire country. udovyk and udovyk also examine the technical feasibility of landfill gas utilization but place their assessment of lggps potential in the context of the prospects for sustainable energy development in ukraine [22]. a notable representative of the economic assessments and perhaps the closest to the subject of this study is an article by trypolska’s entitled “feed-in tariff in ukraine: the only driver of renewables’ industry growth? [23]. trypolska makes a broad assessment of opportunities for renewable energy development in ukraine, including landfill gas, in the aftermath of the aforementioned feed-in tariff legislation in ukraine. however, due to the broad scope of the study, her analysis is limited to a single paragraph in which she projects the broad deployment of lggps across the country. the scarce body of literature on electricity generation from landfill gas in ukraine, let alone on the economic feasibility thereof, stands in contrast with the vast literature on this subject featuring other countries. the subject remains novel (and therefore undersearched) in ukraine – the oldest study that mentions lggps dates back to 2007 [16]. there are some studies, for example, centring on the united kingdom that were conducted in the 1970s [24]. this is not surprising because electricity generation from landfill gas in ukraine remains in its infancy whereas in the united kingdom landfill gas for power generation became a reality in the mid-1980s with nearly 50 lggps in service in just a decade [25]. it is not just western countries, there have been numerous studies focusing on utilization of landfill gas for power in korea[26] taiwan [27], and south africa [28], among other countries that predate the 2007 korpoo study. the scarce body of literature and the aforementioned studies from other countries state environmental and social benefits of landfill gas utilisation for electricity generation. in addition, the literature provides evidence that lggps are a mature commercially-sclable technology that has been widely deployed worldwide for several decades. however, the literature does little to explain the reasons for the slow lggp adoption in the ukraine. in particular, it lacks an in-depth analysis of the economics of lggps, which is often cited as the main reason for government and corporate decision-makers for not developing an energy project. 2.2. trends in the msw generation and recycling in ukraine over the past few decades, despite the steady population decline, there has been a steady increase in msw generation in ukraine. currently, the national average msw generation rate per person is 250-300 kilograms a year. depending on the source, the annual amount of municipal solid waste generation is estimated from 11 to 13 million tons [12, 29]. the primary method of waste management in ukraine is the removal and disposal of msw in landfills. in 2020, 93.7% of all msw was landfilled, only 4.6% recycled, and 1.7% incinerated (we did not find any evidence that the inceneration included heat recovery). (figure 1) [3]. by 2020, more than 200 million tons of msw had accumulated in 5455 authorized landfills, the combined area of which exceeded 8500 hectares. about 258 of all landfills in ukraine (4.25%) have exceeded their capacity, thereby violating the allowable amounts of waste accumulation. about 905 of all dumps (15%) do not meet environmental safety standards [3]. what makes the waste management situation in ukraine even more 56 international journal of sustainable energy planning and management vol. 33 2022 trash to hryvnias: the economics of electricity generation from landfill gas in ukraine problematic is that almost 22% of ukraine’s population lack access to msw disposal services. it has led to widespread dumping, with as many as 27,000 smaller illegal waste disposal sites appearing every year [3, 18]. ukraine’s msw problem is one of the causes of significant environmental degradation in the country. as noted above, landfills are sources of carbon emissions and cause ambient air quality deterioration. in addition, uncontrolled emissions and the ability of msw to self-combust lead to unpredictable and often uncontrollable landfill fires that emit harmful substances such as dioxins, chloride and fluoride hydrogen, carbon monoxide, nitrogen, sulphur dioxide, etc. public health concerns do not end there – chemicals found in the discarded car and household batteries, fluorescent lamps, electronics can leach into the soil and contaminate ground and surface water. the legal and regulatory framework governing recycling has failed to provide sufficient incentives for firms to recover raw materials from msw [18]. in this regard, ukraine is far behind some european union countries – germany, austria, switzerland, the netherlands, belgium, slovenia, denmark, and italy – that recycle more than 50% of their msw [30]. in light of ukraine’s environmentally unsound and economically unproductive way of managing msw, harvesting landfill gas for electricity generation appears to be a particularly effective step to address both shortcomings. landfill gas is a product of anaerobic digestion of organic substances by a natural methane-producing bacterium. landfill gas is a multicomponent gas, the composition of which may vary depending on the morphological composition of waste in a landfill. as noted above, methane (50-55%) and carbon dioxide (40-45%) are the two main components of landfill gas, with the remainder (about 5%) consisting of nitrogen compounds, hydrogen sulphide, other organic compounds, and water vapor [31,32]. the volumetric potential for gas generation is one of the primary considerations for determining the prospects for constructing a landfill gas collection and utilization system. currently, the 90 largest landfills contain nearly 30% of all msw in ukraine. the potential for landfill gas suitable for electricity production at these landfills is about 400 million m3/year [18,20]. 2.3. governance of renewable energy development in ukraine the long-term goals and pathways for developing the renewable energy sector are outlined in the aforementioned energy strategy 2035. according to the energy strategy 2035, the share of energy from renewable resources in the country’s final use is projected to increase to 12% and 25% in 2025 and 2035, respectively [12]. therefore, subsequent numbering should be changed in chronological order. the main policy drivers aimed at encouraging electricity generation from landfill gas were first introduced in 2009. these policy drivers include incentive mechanisms such as the feed-in tariff, tax incentives, and customs privileges [34]. we assess their effectiveness in more detail below. feed-in tariff. according to “on the electricity market,” the feed-in tariff is a special rate at which electricity generated from res, including from landfill gas, is purchased [35]. “on the electricity market” designates figure 1: municipal solid waste management in ukraine in 2020 [3] international journal of sustainable energy planning and management vol. 33 2022 57 tetiana kurbatova, roman sidortsov figure 2: number of lgpps in ukraine in 2015-2019 [38] landfill gas as gas from biomass. biomass is a renewable organic substance, including forestry, agriculture, fish farming waste, and biologically decomposable industrial and domestic waste [35]. the feed-in tariff is calculated according to the formula provided in “on the electricity market” [35]. it is adjusted every month by the national commission for state regulation of energy and public utilities of ukraine and converted to eur according to the official exchange rate of the national bank of ukraine to protect electricity producers from inflation. “on the electricity market” provides an additional incentive for using domestically manufactured equipment. this incentive is calculated based on the feed-in tariff in proportion to the percentage of equipment used in the completed lgpp, as depicted in table 1. table 1: an additional incentive for using ukrainian equipment in a lgpp [35] additional incentive calculated as a percentage of the eligible feed-in tariff percentage of the ukrainian equipment, used 5 30 10 50 the manufacturing of such equipment in ukraine is confirmed by a certificate of origin issued by the ukrainian chamber of commerce and industry or its regional office. the aim of this additional incentive is to encourage the development of domestic manufacturing capacity, reduce dependence on imported equipment, and create a foundation for exporting ukrainian-made equipment abroad. the feed-in tariff for landfill gas electricity is not capped and will remain in effect through 2029. the tax code [36] and customs code of ukraine [37] provide the following incentives and privileges for lgpp construction: − value-added tax exemption for the equipment and components used for lgpp construction; − customs duty exemption for the imported materials, equipment, and components used for lgpp construction. the tax incentive and customs privilege are available as long as such materials, equipment, and components are not produced in ukraine. these incentive mechanisms provided a much-needed boost for the deployment of lgpps in ukraine, as shown in figures 2-3. despite the marked progress, lgpps still lag behind other renewable sources – in 2019, lgpps were last with only 1.4% of all renewable electricity generated in ukraine (table 2). to further emphasize the insignificant share of landfill gas electricity in ukraine’s generation mix – renewable energy sources, except for large hydro, contributed only 4.8% of the total electricity generated in ukraine in 2019. presently, the vast majority of electricity in ukraine continues to come from conventional power plants. in 2019, nuclear power plants provided 55.7% of the total amount of electricity generated in the country, fossil fuel power plants provided 35.7% (27.2% from thermal power plants and 8.5% from combined heat and power plants), and large hydropower plants provided 3.8% [39]. 58 international journal of sustainable energy planning and management vol. 33 2022 trash to hryvnias: the economics of electricity generation from landfill gas in ukraine figure 3: the total installed capacity of lgpps in ukraine in 2015-2019, mw [38] table 2: the total mix of electricity generated by renewable power plants in ukraine as of 2019, % [39] type of renewable power plants the contribution to electricity generation, % solar power plants 52.1 wind power plants 35.5 small hydropower plants 7.2 bioenergy power plants (solid biomass) 2.6 bioenergy power plants (agricultural biogas) 2.1 bioenergy power plants (landfill biogas) 1.4 because the primary tool to promote electricity gen¬eration from landfill gas is the feed-in tariff, we will estimate the cost of electricity generation by an lgpp to compare it with the current rate of the feed-in tariff to make sure that it sufficiently covers the electricity generation cost, to provide profit for lgpp owners and to return the initial investment. 3. data and methods 3.1. methodology as noted above, to determine whether economic feasibility contributes to the slow deployment of lggps in ukraine, we calculate the lcoe produced by an lgpp, compare it to the feed-in tariff, at which a producer can sell electricity at the electricity market, and estimate the payback time for lggp projects. the lcoe is the most common tool used to measure and compare the economic competitiveness of various electricity generation technologies [40]. the lcoe reflects the minimum price at which electricity must be sold to guarantee that investment will pay off. the lcoe generated from renewable energy resources should serve as the basis for setting feed-in tariffs to stimulate renewable energy growth [41]. the lcoe is determined by dividing the total cost of a power plant by the electricity generated by the power plant over the project’s lifetime. it is customary to use the financial lifetime of an energy project in the financial depreciation term and not the actual or useful engineering life of a power plant. at times, the financial lifetime of a power plant corresponds to its engineering lifetime, and at times, it does not. the cost of funding for this paper, we will refer to the lgpp lifetime as the financial lifetime of the project. it is important to note that lcoe is ultimately a modeling exercise based on many assumptions. for example, the discount rate and electricity price are presumed to be constant during the project lifetime [42]. to determine the lcoe for an lggp, the investment cost, operation, and maintenance cost, the amount of generated electricity, decommissioning cost, and the discount rate are entered as follows: lcoe i q d r e r t t t t t n t t t n � � � � �� � � �� � � � � � � � ( ) ( ) ( ) , 1 1 0 0 (1) where lcoe is the fixed cost for electricity generation during the lgpp lifetime, eur/мwh; et is the amount of generated electricity by the lgpp in t-year, мwh; it is the investment cost in t-year, eur; qt is the operation and maintenance cost in t-year, eur; dt is the international journal of sustainable energy planning and management vol. 33 2022 59 tetiana kurbatova, roman sidortsov decommissioning cost of the lgpp in t-year, eur; n is the lgpp’s lifetime in years; r is the discount rate; t is the year of the project implementation. the discount rate is calculated based on the weight average cost of capital (wacc) as follows [43]: wacc k w k w txs s d d� � � � � �( ),1 (2) where ks is the cost of equity for investment project implementation; ws is the part of equity by balance; kd is the cost of debt for the investment project implementation; wd is the part of the debt by balance; tx is the profit tax rate for the enterprise. the feed-in tariff is determined pursuant “on the electricity market” [35]. thus, according to the statute, the minimum rate of the feed-in tariff is calculated according to the following formula: ft t k e con ii ft min � � . . . . . 01 01 2009 01 01 2009 (3) where ftmin is the minimum feed-in tariff for electricity generated from landfill gas; tcon.ii 01.01.2009 is the retail price for electricity for the second-class-voltage consumers as of january 2009 (0.58 uah/kwh); kft is the feed-in tariff coefficient for the lgpps outlined in “on the electricity market” [35]. e01.01.2009 is the exchange rate of uah to eur, officially set by the national bank of ukraine on january 1, 2009 (1085.55 uah per 100 eur). the feed-in tariff coefficients for electricity generated by lgpps in ukraine during 2017-2029 are shown in table 3 [35]. the enabling legislation sets forth a gradual decline in the feed-in tarrif, 10% from 2015 to 2024 and 20% from 2015 to 2029. the legislation does have electricity cost escalation rate. table 3: the feed-in tariff coefficients for electricity generated by lgpps in ukraine during 2020-2029 [35] the feed-in tariff coefficients for electricity, generated by lgpps, put into operation: from 01.01.2020 to 31.12.2024 from 01.01.2025 to 31.12.2029 2.07 1.84 based on the ftmin, the ft at which the electricity generated by lgpps is sold is calculated: ft ft e� �min 30 , (4) where ft ‒ tariff at which electricity is sold (uah for 1 kwh without vat); e30 – the average exchange rate of uah to eur for the last 30 calendar days preceding the date of calculation of the ft, uah per 100 eur. it should be noted that the primary purpose of converting the ft into eur is to protect the investors from fluctuations in uah against eur and possible inflation. the discounted payback period of the lgpp investment project is calculated as follows: dpp cf r ict t t n � � � � � ( ) , 1 0 1 (5) where dpp is the discounted payback period of the investment project; ic0 is the initial investment during year zero of the project, eur; cft is the net cash flow in t-year, eur; r is the discount rate; n is the project lifetime, years; t is the year of the project implementation. 3.2. techno-economic assumptions and data as noted above, calculating lcoe is inherently a modeling exercise. the data and assumptions can vary depending on the country, the region within a country, and the timeframe. in this study, we relied on the most recent available data aggregated nationally by reputable organizations. thus, we relied on the lgpp projects implemented in ukraine [44], recommendations of the european bank for reconstruction and development under the ukrainian sustainable energy lending facility (uself) program [45], the international energy agency (iea) [46], and the danish energy agency [47]. based on the provided data, the techno-economic characteristics of an average lgpp in ukraine are listed in table 4 below: it should be noted based on the data that we used, the efficiency of ukrainian lggps is in line with modern plants deployed worldwide. although lgpps with combined heat and power production have a much higher total efficiency, this study relates only to electricity production. it is due to the fact that according to ukrainian legislation, heat generation is not supported by the fit [35]; as a result, investors prefer only electricity production. the cost of landfill gas required for the technological needs of an lgpp was taken as zero because it is standard practice in ukraine that the developer gets the gas for the operational needs of plants for free. the average lgpp construction time in ukraine is 1 year; this period was used in this study. its increase or 60 international journal of sustainable energy planning and management vol. 33 2022 trash to hryvnias: the economics of electricity generation from landfill gas in ukraine table 4: the techno-economic characteristics of an average lgpp in ukraine category characteristic value technical total electricity output capacity 1 mw projected annual amount of electricity generation 8,150 mwh time in construction 1 year lifetime 20 years expected investment cost feasibility study cost 170,000 eur installation and construction cost, including landfill gas collection equipment and all supporting infrastructure 537,000 eur generator cost 1,162,100 eur interconnection cost 80,000 eur cost contingency 20,000 eur operation and maintenance cost salaries 6,560 eur/year service and consumables 95,000 eur /year other cost (insurance, security, etc.) 30,000 eur /year decrease in each specific investment project may affect the lcoe value. it is worth noting that table 3 does not list lgpp decommissioning cost because the re sector is still in its infancy in ukraine there are no country-specific data. according to the iea, decommissioning costs are part of lcoe calculation and equal the sum of all costs associated with ceasing re power plant operations, including dismantling and removing all the equipment and infrastructure and site remediation [48]. if the ecommissioning costs are unavailable, the iea recommends estimating 5% of all investment costs [48]. therefore, 98,455 eur/ mw is estimated for decommissioning costs. the discount rate calculated according to formula (2) is 4.7%. the 40:60 equity to debt ratio and the cost of debt (8%) used to calculate the discount rate were determined in accordance with the standard terms offered by the uself program to finance re projects in ukraine. because the interest on such a loan is attributable to the prime cost of production, debt capital was adjusted by the percentage of profit tax to reduce the tax base. according to the tax code of ukraine, the corporate tax rate is 18% in 2021 [36]. the cost of equity (1.8%) was determined on the basis of the average maximum annual interest rates on eur deposits for companies in banks of ukraine as of 01.05.2021 [49]. 4. results and discussion based on the data noted above and according to formula 1, the lcoe generated by an lgpp in ukraine is 34.48 eur/mwh. next, we will calculate the ft at which electricity generated an lgpp will be sold. for this, we will use the coefficient of ft – 2.07 for lgpps, put into operation from 01.01.2020 to 31.12.2024 (table 3) and the average exchange rate of uah to eur for the period from 01.04.2021 to 01.05.2021, which amounted to 3351.01 uah per 100 eur [50]. therefore, the ft, calculated according to formulas (3) and (4), is 99.58 eur/mwh or 0.1 eur/kwh. thus, in ukraine, the feed-in tariff for electricity generated by lgpps exceeds the lcoe by a factor of 3.3. furthermore, according to the above data and equation 5, the payback period for an investment in a lgpp project at the feed-in tariff is 5.1 years. the results show that lgpp projects in ukraine present an attractive investment opportunity. the current feed-in tariff – lcoe ratio makes a high and quick return on investment a real possibility. therefore, it is reasonable to conclude that economic feasibility is not a cause for the slow adoption of lgpps in ukraine. the results confirm the growing consensus among energy research regarding the heterogeneity of drivers and motives behind adopting re technologies, including biogas-fired electricity generation [51, 52, 53]. while in some countries, entrepreneurial considerations might be the predominant drivers behind re adoption, in others, environmental, education, and gender considerations appear to be driving the shift towards renewable sources [54]. the fact that the aggressive feed-in tariff has not resulted in a more rapid proliferation of lgpps questions http://www.lingvo.ua/ru/translate/en-ru/feasibility study international journal of sustainable energy planning and management vol. 33 2022 61 tetiana kurbatova, roman sidortsov the ukrainian government primary strategy to support lgpps deployment. it is not to suggest that the current support is unimportant – there is plentiful evidence suggesting that aggressive government incentives are necessary for re adoption [55]. instead, because the current support is insufficient, it should be viewed as a part of a package solution in which several mechanisms complementing each other. determining such a package solution in substantive detail is outside the scope of this study. the following is a list of directions that researchers and public authorities managing re sector should consider when making decisions: • access to capital and transactional costs in addition to the aforementioned uself program, ukrainian commercial banks offer two credit programs: eco-energy and green energy, to support re development [56,57]. however, these two programs do not include support for lgpps. as a result, potential investors are confronted with interest rates in the 19-25% range. although lgpp projects qualify under the uself program, the financial, technical, and environmental project documentation required by uself leads to high transactional costs. because of the small scale of lggp facilities, high transactional costs undermine the financial viability of these projects, despite the attractive interest rate. a potential solution may include mechanisms that would allow smaller entities to consolidate financial resources and organizational capacities, such as energy cooperatives [58]. • stability of the governing legal and regulatory framework it is not uncommon to see the legal and regulatory regime of a former soviet nation in a constant state of flux. unfortunately, ukraine is no exception. although the existing incentive framework has been in place for a decade, the coefficients mentioned above have been adjusted several times without considering the technological development and changes in the cost of lgpps [35]. in addition, the grid interconnection rules for lgpps remain a moving target, whereas the stability of the current incentive framework is threatened by the emergence of green auctions [60]. the concern here is that they will replace the feed-in tariffs, thereby exacerbating the dominance of mainstream commercially proven technologies at the expense of grid stability. it is reasonable to envisage the chilling effect on investor and developer confidence due to a lack of legal and regulatory stability. a potential solution for these concerns is adding and not substituting incentive mechanisms to create more effective matches of established, emerging, and novel technologies and incentives used to support them. • alignment of government incentives and system benefits the current system of incentives for re support in ukraine largely fails to recognize the value that different re technologies bring to the grid [35]. as a result, developers appear to favour commercially proven scalable technologies such as wind and solar photovoltaic power. in addition, insufficient attention has been given to developing grid stability measures such as energy storage, weather forecasting, and strengthening transmission and distribution networks [62]. these shortcomings manifested during the recent drop in electricity demand caused by the covid-19 pandemic when the stability of the united energy system of ukraine was put at risk. to mitigate it, the system operator was forced to shut down several nuclear reactors that currently generate the cheapest electricity in the country [62]. it likely lead to an increase in residential, commercial, and industrial electricity rates [63]. unlike solar and wind, lgpps do not have an intermittency. in addition, lgpps are usually located near load centres, thereby eliminating costly transmission and distribution expenditures. yet, the current incentive system fails to offer pathways for monetizing the grid benefits that lgpps provide. • fragmentation of environmental and energy policies the advantages that lgpps bring to ukraine’s electric grid are not the only benefits that the current policy, legal, and regulatory framework fails to recognize. the lack of such recognition is due to the fragmentation of energy and environmental policies in ukraine that effectively lock renewable technologies in policy silos. landfill gas has been legislatively placed in the renewable electricity silo despite offering the flexibility of cooking, heating, and even transportation fuel [35], which is in contrast with the value-maximizing approach taken in several countries. for example, combined heat and power lggps constitute the predominant operational model of lggps in germany because of their overall efficiency [64]. in addition, the potential benefits of lggps as revenue-generating units of the struggling msw sector have been largely overlooked. as noted above, the environmental benefits of lppgs extend well beyond their 62 international journal of sustainable energy planning and management vol. 33 2022 trash to hryvnias: the economics of electricity generation from landfill gas in ukraine ghg reducing potential, which is something that the current incentives also fail to recognize fully. there are creative approaches to this problem deployed internationally that could also be deployed in ukraine. for example, lybæk and kjær highlight the role of municipalities in bridging the gap between environmental and energy policies when they serve as energy consumers, regulators, and facilitators of biogas adoption [65]. • uncertainties due to the ongoing military conflict the impact of the ongoing military conflict in the east of the country is not unique to lgpp projects of the renewable energy sector. yet, it is not difficult to see the abundance of caution by developers and investors in projects where capital expenditures represent the bulk of the cost. it is effortless to see such notification in the parts of the country that can be directly impacted by combat operation, even considering the short payback period of lggps. 5. conclusions lgpps bring a host of benefits including, ghg mitigation, improvements in the ambient air quality, and flexibility as an electricity generation source. they appear to be particularly appealing for deployment in ukraine due to the escalating msw crisis, ambitious re deployment targets, and aging national grid struggling to accommodate the influx of intermittent generation from renewable sources. yet, lggps have seen slow growth vis-a-vis other re technologies despite government support. in this article, we investigate whether economic feasibility constitutes a barrier to lgpp deployment. to accomplish that, we determine the lcoe of landfill gasfired generating facilities in ukraine and compare it to the feed-in tariff at which the electricity from these facilities is sold at the electricity market. we also estimate the payback period investors in lgpp facilities should expect under the current lcoe and feed-in tariff. based on the results of our study, it is reasonable to conclude that economic feasibility is not among the factors hampering lgpp deployment in ukraine. the feed-in tariff for electricity generated by lgpps exceeds the lcoe by a factor of 3.3, whereas the payback period in an lgpp project stands at 5.1 years. both indicators should make landfill gas generation facilities a prime target for investors as they promise a quick and plentiful return on capital. this paradox warrants further research, for which we offer several directions. we recommend that researchers consider access to capital and transactional costs, stability of the governing legal and regulatory framework, alignment of government incentives and system benefits, fragmentation of environmental and energy policies, and uncertainties due to the ongoing military conflict as potential barriers to lgpp deployment in ukraine. acknowledgments the study was carried out within the project “the greencoal paradox of ukraine’s energy sector: causes and pathways to barrier-free renewable energy development”. we are thankful to the czech development cooperation support, which allowed this scientific cooperation to start. references [1] j.fernández-gonzález, a.grindlay, f.serrano-bernardo, m.rodríguez-rojas, m.zamorano, economic and environmental review of waste-to-energy systems for municipal 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international journal of sustainable energy planning and management vol. 32 2021 61–78 abstract global energy demand is increased in recent years due to industrial development and higher standards of living. currently, fossil fuels, with more than 85%, are the most prominent source of energy in iran, but it has destructive impacts on the environment and human health. this study models and techno-economically assess renewable energy heating for replacing natural gas in qazvin city. the natural gas domestic demand is quantified, followed by consumption forecasting for 15 years. six different scenarios are investigated to assess renewables’ potential to meet the city heat demand for the next 15years. the study uncovers that the best practice scenario can reduce natural gas consumption and increase renewable energy sources share. finally, the proposed scenario is analyzed economically and environmentally. results revealed that the return on investment would occur in 3 years by exporting the saved natural gas. in addition, iran can reduce co2 emissions by about 1 million tons by the year 2029. modeling of transition from natural gas to hybrid renewable energy heating system younes noorollahi*a, negar vahidrada, shahab eslamia, muhammad nihal naseerb a department of renewable energy and environmental eng., faculty of new sciences and technologies, university of tehran, tehran, iran b national university of sciences and technology (nust), 44000-islamabad, pakistan. keywords hybrid renewable heating system; energyplan; energy modeling; techno-economic assessment; http://doi.org/10.5278/ijsepm.6576 1. introduction the positive environmental impact of renewable energy sources (res) is undoubtedly one of the top reasons which make them favorite resources. fossil fuel burning emits harmful greenhouse gasses (ghg), which have significant effects on the global warming phenomenon[1,2]. for instance, 28.2 and 26.9 percent of ghg emissions are transportation and electricity production, which directly burn fossil fuels [3]. using res would significantly decrease the total amount of ghg emissions, which would help to prevent more intensive climate change impacts. it would also provide new job opportunities and positively affect the economy [4,5]. the number of people employing within the renewable energy industry continues to grow, giving countries like germany, china, india, japan, and the usa an excellent opportunity to boost their economies [6,7]. with more emphasis on renewable energy and using domestic res and distributed generation instead of oil, we would drastically improve our energy security [8]. res offers various solar, wind, biomass, geothermal energy, and water resources, contributing significantly to our energy needs with its excellent potential for power[9][10][11]. statistics from 2018 indicate that the highest percentage of energy consumption in the world (85%) is supplied with fossil fuels (figure 1)[12]. according to the energy information agency (eia, 2019)[13], worldwide energy consumption is expected to increase by 1.4% annually until 2035, implying that buildings’ energy consumption will increase as well. fossil fuel meets more than 85 percent of energy needs. as the buildings are a large energy consumer, they are also a significant contributor to global carbon emissions and ghg production[14]. therefore, applying res in 62 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system energy mix with high dominance of lignite, a strong dependency on energy import, a poor energy system, and inefficiency in energy production. these challenges led this project to investigate the prospects for realizing the 100% renewable energy system in macedonia by applying the ep model. kapica et al., in 2015, reviewed the co2 reduction potential by replacing a hybrid solar-wind system [20] with a conventional heating system for a poultry house. the heat requirement for 2400 birds was calculated. they considered simple models for solar collectors, wind turbines, and heat storage tanks, modeled the system in a matlab/simulink environment, and analyzed various system configurations for typical climate conditions in central europe. they varied the solar collector area between 0 and 80 m2, the wind turbine diameter in the range of 0–20 m, and the number of heat storage tanks from 1 to 4. apart from the percentage of co2 emission reduction, two other indicators are introduced: renewable energy utilization ratio and weighted co2 emission reduction. the results indicated that although larger systems provide higher co2 reduction, at the same time, the energy utilization ratio will decrease. pfenninger and keirstead [21], in 2015, reviewed the number of scenarios for britain’s electricity system considering the cost, ghg emissions, and energy security. mitigating climate changes are driving the need to decarbonize the electricity sector. various possible technological options occur, alongside uncertainty over which options are preferable regarding cost, emissions reductions, and energy security. they compared renewables, nuclear, and fossil fuel technologies (with/without carbon capture and storage). the results indicated that buildings can reduce total fossil fuel consumption and associated ghg emissions [15][16]. the selection of renewable energy technology is limited by factors such as the availability of renewable energy resources, substantial area for establishing technology, and economic factors[15]. fernandes and ferreira[17], in 2014, carried out a study with an approach to a 100% renewable electricity system in portugal, supported by the application of the energyplan (ep) model. they investigated technical analyses like cost estimating and co2 emission for each scenario. the results revealed that each scenario’s cost structure is mainly driven by the low marginal cost of renewable technologies and their high capital costs. porubova and bazbauers [7], in 2011, conducted a study with an approach to 100% res in latvia by using domestic energy resources. they presented a potential solution to establish an energy and transport system solely based on the local primary resources for the year 2050. bazbauers & cimdina [18] performed a study to determine whether it is possible to use excess electricity produced by wind power plants during low-demand periods for district heating by using heat pumps in latvian. the results showed that it is promising to increase the share of res. therefore, decrease the use of primary energy sources and reduce co2 emissions per unit of energy can be gain by using the surplus electricity produced by wind power in the heat pumps combined with the heat storage system. cosic et al.[19], in 2012, introduced an approach to 100% renewable energy in macedonia. they point out that macedonia’s energy sector’s most critical problems are an unfavorable natural gasoil hydroelectricity renewablesnuclear energycoal 24% 27% 34% 4% 7% 4% figure 1: global energy consumption by fuel in 2018[6] international journal of sustainable energy planning and management vol. 32 2021 63 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer overall costs remain similar across various combinations, which implies that different technical and economic configurations are equally feasible. brouwer et al. [22] 2016 created three scenarios to reduce co2 emissions in western europe by 96%, with the shares of 40%, 60%, and 80% electricity production from res. results showed a 96% reduction in power sector co2 emissions in 2050 compared to 1990 can be reached with either higher shares of res (80% res) or a natural gas-fired generation with ccs, nuclear power, and 40% res. kumar et al. [23] 2016 created three scenarios for two countries in south east asia (sea) for the year 2050. the focus was on the transition of the electricity sector towards res to reduce co2 emissions. the leap energy model is used to develop different renewable energy policy scenarios from 2010 to 2050. noorollahi et al. [24] carried out a regional-scale energy-economic mapping for priority assessment of regions, including numerical modeling and optimization of gshp systems using genetic algorithm (ga), regional heating/cooling design load estimation, and spatial data analysis to achieve an economic-based map for 234 cities in iran. for the first time, iran’s regional shallow geothermal map is presented along with other geographical maps, including air and earth surface’s mean temperature, heating/cooling loads; gshp required operating hours and iran’s climatology. total annual cost (tac) values were categorized into five equal ranges from ca (the highest priority class) to ce (the lowest priority class), which highlight the convenient regions for shallow geothermal energy use. finally, iran’s provinces sort according to tac weighted average values. the presented economic priority maps offered policymakers planning support for ghsp systems subvention and promotion in iran. in another study in iran, noorollahi et al. [25] worked on numerical modeling to techno-economic analysis of heat pump potential provide energy for greenhouses in alborz province. both types of research are based on other prior investigations of iran’s biogas production potential and spatial analysis of regional-scale geothermal maps [26][27]. in another study, they examine a solution to replace natural gas with a hybrid renewable energy system. different scenarios have been investigated, all scenarios lead to a decline in co2 emissions equally. they found out, for their study region, and due to the current state of natural gas distribution in iran, the best scenario is to use solar thermal units besides using the natural gas[28]. according to iran’s energy policies, by 2029-2030, 20% of the country’s energy consumption should be provided by renewable energy [29]. energy supply in a country like iran with a vast geography and different environmental conditions such as variations in altitude, climate, and social issues reveals the necessity of careful and detailed energy planning and management [30][31]. besides the limited natural gas reserves, the unbalanced growth of energy consumption, and about 70% energy dependency of iran on natural gas could be a threat [32]. with around 616,741 million tons of co2 iran is the first responsible country for climate change in the middle east, and seventh in the world [33]. low diversity of energy mix and irregular increase in energy consumption are the main challenges of iran’s energy sector. hence, careful energy demand management and planning employing energy modeling are necessary [34]. besides, diversifying the energy basket of a country by using renewable-based systems can improve the energy security, affordability, and reliability in energy supplying of the end-user. this study’s ultimate goal is to find the best method for evaluating the potential of available renewable energy resources (qazvin city as a case study) for heating. the study investigates how far res can be replaced with natural gas to supply heat demand by considering economic and environmental conditions. after evaluating renewable energy potential, it is necessary to develop a plan to exploit these energy potentials. in this regard, using different energy modeling methods and tools can be helpful. the rest of this paper is organized as follows: material and methods are described in section 2. results are provided in section 3. three different scenarios are assessed and the results are investigated. conclusions are summarized in section 4. 2. material and methods 2.1. study area the solar radiation analysis tools could help to map the radiation and sun’s effects the sun over a geographic area for specific periods using arcgis. incoming solar radiation originates from the sun is modified as it travels through the atmosphere and is further amended by topography and surface features[35]. it intercepts the earth’s surface as direct, diffuse, and reflected components. one of the solar radiation analysis tools in arcgis calculates insolation across a landscape [36,37]. the entire amount of radiation measured for a particular location is provided as global radiation. the computation 64 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system solar energy potential of qazvin (whh/m2) 707118.75 (707118.75 991924.9) (991924.9 1276731.05) (1276731.05 1561537.2) (1561537.2 1846343.35) (1846343.35 2131149.5) figure 2: solar energy potential map of qazvin (wh/m2/year)[28] table 1: the total amount of methane emitted from bioenergy resources emitted methane volume (m3/yr) agriculture residue 237,408 animal manure 1,074,227 lya landfill 2,450,075 mohammadabad landfill 330,091 sewage system 325,495 total 4,417,296 total in twh/yr 0.05 of direct, diffuse, and global insolation is repeated for each feature location or every location on the topographic surface. dem is a digital elevation model that shows the terrain by a cellular network. dem can be color layed in both two-dimensional and three-dimensional in a gis environment. it should be noted that the dem model is the basis of the analysis in gis systems to provide the amount of solar radiation after discarding albedo effects. in this study, solar energy potential is calculated using a dem map. in figure 2, the solar radiation map is computed from the dem model. finally, the estimated potential by gis is equal to 9641 twh per year. 2.1.1. bioenergy resource in qazvin bioenergy is the energy from organic materials and natural derivatives (except fossil resources). using this energy will help a lot in protecting the environment from adverse emissions. therefore, using the data collected from various organizations in the city of qazvin, the amount of methane emitted from agricultural crop residues, animal manure, landfills (lya and mohammadabad), and the city’s sewage system have been calculated[38,39]. the total amount of methane emitted from different biomass sources can be found in table 1 [40]. since methane’s heating value varies from 35.280 to 42,840 kj/m3[41]. the average total volume of emitted methane from different biomass sources is equal to 0.05 twh per year. 2.1.2. geothermal heat pump the geothermal heat pump (gshp) is a device for cooling and heating residential buildings, offices, industrial environments, and supplying hot water for buildings [42]. this system’s efficiency is higher than the electrical heating and conventional heat pumps, which use air as a heat source [43]. in the depth of several meters under the ground, the soil temperature remains relatively constant over a year. in summer, this temperature is lower than ambient temperature, and in winter, it is higher. using this temperature difference and a heat exchanger at a depth of several meters and a heat pump at ground level, cooling, and heating of the living environment can be provided. figure 3 shows that temperature fluctuations during a year in depths of about 5 meters from ground level are insignificantly different with ambient temperature and constant. still, the change in air temperature has so many fluctuations. the geothermal heat pump uses this consistent temperature effect for supplying cooling and heating [44]. 2.2. energy modeling and scenarios planning energy models are useful tools in the energy planning process. the future energy systems behavior could be predicted using energy models, and due to the importance international journal of sustainable energy planning and management vol. 32 2021 65 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer jan ua ry t (0 c ) 1 m 3 m 5 m 25 23 21 19 17 15 13 11 9 7 5 fe bru ary ma rch ap ril ma y jun e jul y au gu st se pte mb er oc tob er no ve mb er de cem be r figure 3: air and ground temperature curves at different depths during a year in iran[33]. of knowing the future, they are vital analytical tools for energy planning[45]. the energyplan is developed by aalborg university and has many key advantages over some other considered energy modeling tools, and has already been used to analyzing many energy scenarios. energyplan can model all thermal, renewable, storage, conversion, and transport technologies. the model is a deterministic input/output model, and general inputs are demands, res, energy station capacities, costs, and optional figure 4: the structure of the energyplan model[36] 66 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system the average efficiency of the wall-mounted water heater is 75% to 85%. assuming that most of the buildings in qazvin use wall-mounted water heaters, the gaseous water heater’s efficiency has been entered about 80% to the ep model. by implementing the current condition with this data and using ep, results are shown in table 2. in this study, also the amount of natural gas demand for domestic consumption is forecasted, and the result can be found in figure 5. the trend is obtained using equation 1. in addition, the results are shown in table 3. figure 5: prediction of natural gas consumption trend in buildings up to the year 2029 (red line is measured, and the black line is simulated) table 2: modeling results of a current natural gas consumption condition (the year 2015) title amount primary energy consumption (twh) 8.25 co2 emission (mtones) 1.68 co2 emission cost (m us$) 21 natural gas consumption cost (m us$) 53 table 3: predicted domestic natural gas demand in qazvin year 2019 2024 2029 predicted domestic ng demand (twh) 8.78 10.31 11.83 different regulation strategies. outputs are energy balances and resulting in annual production and fuel consumption. the structure of the energyplan model is shown in figure 4. [46,47]. energyplan is based on analytical programming as opposed to iterations, dynamic programming, or advanced mathematical tools. energyplan makes the calculations direct and the model very fast when performing calculations. it’s an hour-based simulation model instead of a model based on aggregated seasonal demands and productions. consequently, the model can analyze the influence of fluctuating res on the system and weekly and annual differences in heat demands. a more detailed description of energyplan can be found in[48–51]. currently, heating demand in qazvin city is just supplied by piped natural gas. therefore in this study, it is considered to diversify the energy mix of heating systems for this city by entering exploitable res in different scenarios and analyzing them environmentally and economically to optimize it [48]. using the natural gas consumption data of qazvin city for 2015, the hourly distribution is computed and entered into the ep model. according to the qazvin energy balance report, the average tariff of each cubic meter of domestic natural gas is equal to 1.79 us$/gj [52]. the price of carbon dioxide is 12.5 us$/ton[49]. the water heater’s final and actual average efficiency is about 45% to 55%, and international journal of sustainable energy planning and management vol. 32 2021 67 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer table 4: share of different energies for intended scenarios year energy (twh) s1 s2 s3 s4 s5 s6 2014 natural gas 6.6 6.6 6.6 6.6 6.6 6.6 2019 natural gas 8.78 6.6 6.6 6.6 6.6 (75.2%) 5.94(67.6%) solar 0 1.065 2.18 0 0.53 (6.05%) 0.7 (8%) biomass 0 0.05 0 0 0.05 (0.6%) 0.05 (0.6%) geothermal 0 1.065 0 2.18 1.60(18.15%) 2.10(23.9%) 2024 natural gas 10.31 6.6 6.6 6.6 6.6 (64%) 5.28 (51.2%) solar 0 1.83 3.71 0 0.915(8.87%) 1.25(12.1%) biomass 0 0.05 0 0 0.05 (0.5%) 0.05(0.5%) geothermal 0 1.83 0 3.71 2.745(26.6%) 3.73(36.2%) 2029 natural gas 11.83 6.6 6.6 6.6 6.6 (55.8%) 4.62 (39%) solar 0 2.6 5.23 0 1.295(10.9%) 1.79(15.2%) biomass 0 0.05 0 0 0.05 (0.4%) 0.05 (0.4%) geothermal 0 2.6 0 5.23 3.885(32.8%) 5.37(45.4%) y cos x x � � � � � � 40 24 0 525 0 922064 61 346 338 1 . ( . . ) ( . ) / . (1) different scenarios have been used to analyze the natural gas consumption in the following years for achieving an optimized model for supplying heat demand in the future. in all scenarios, the number of devoted energies from different resources is entered into ep according to table 4 [53]. the investment cost for the assumed powers in each target year and co2 emission cost in all scenarios are entered into ep according to the international energy agency (table 5). in the first scenario (s1), it is assumed that natural gas is the only supplier of heat demand for the next 15 years (until 2029). to forecast the total amount of energy system cost, co2 emission, and primary energy demand for households, the predicted consumption, natural gas price, and co2 price [34] are entered into the ep model. the first scenario (s1) modeling results are shown in table 6. it should be noted that the natural gas price for future years is evaluated according to its price growth rate over the past 10 years using linear regression[54–56]. the second scenario (s2) is based on the assumption that the natural gas consumption is not increased as in 2014 (6.6 twh/yr), for the excess heat demand in next table 5: economic and technical data used for heat generation technologies technology investment cost (us$/mwh) operation & maintenance cost (us$/mwh) fuel cost co2 cost natural gas – – year us$/j year us$/t 2019 6.47 2019 20 2024 10.4 2024 27.5 2029 14.33 2029 35 electricity – – year us$/mwh – 2019 36 2024 53.6 2029 71.2 solar thermal 184.68 20.52 – – biomass 16.416 6.5664 14.036 (us$/mwh) – geothermal 28.728 6.156 – – 68 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system table 6: modeling results of scenarios scenario s1 s2 s3 s4 s5 s6 year 2024 2029 2024 2029 2024 2029 2024 2029 2024 2029 2024 2029 predicted domestic ng demand (twh) 10.31 11.83 10.31 11.83 10.31 11.83 10.31 11.83 10.31 11.83 10.31 11.83 primary consumption of ng & electricity (for a heat pump) (twh) 12.89 14.79 8.66 9.12 8.25 8.25 9.07 9.99 8.80 9.41 9.14 9.40 carbon dioxide emission from ng & electricity (for heat pump) (mt) 2.63 3.02 1.88 2.11 1.68 1.68 2.09 2.54 1.95 2.26 1.97 2.07 carbon dioxide emission cost (m us$) 72 106 51 74 46 59 57 89 53 79 54 72 ng consumption cost (m us$) 483 763 309 426 309 426 309 426 309 425 247 299 investment cost of renewable energies (m us$) 163 163 288 281 44 44 124 124 29 29 the operation cost of renewable energies (m us$) 3 6 5 11 4 7 8 11 electrical cost of the geothermal heat pump (m us$) 22 62 44 124 29 83 67 127 year’s, firstly the total available amount of biomass has been consumed (0.05 twh/yr). the rest of the demand has to be supplied by solar and geothermal energy equally. the model is run for this scenario inputs, and the results are illustrated in table 6. in the third scenario (s3), it was assumed that the natural gas consumption would not be increased as its rate in 2014 (6.6 twh/yr) and the excess demand in next years would be supplied totally by solar energy. by implementing this scenario, results would be achieved, as shown in table 6. in the fourth scenario, it is assumed that the natural gas consumption will be constant and equal to the amount of natural gas consumption in 2014 (6.6 twh/ yr), the excess heat demand in next years (2019, 2024, and 2029) would be supplied just by the geothermal energy. by implementing this scenario, results would be achieved according to table 6. by comparing the results of the third and fourth scenarios, it can be seen that the investment and operation costs and primary energy consumption are lower when all the share of res is supplied by geothermal energy. in the fifth scenario, the share of res has been distributed with the priority of geothermal energy and then solar energy. also, the total potential of biomass was consumed. in scenario five (s5), it is assumed that natural gas consumption would be the same as in 2014 (6.6 twh/yr). for the excess heat demand in the next years, the total available biomass amount would be consumed (0.05 twh/yr). due to the particular condition of existing buildings in qazvin and the impossibility of installing heat pump ground coils, 25% of buildings can be equipped with the heat pump system. results of implementing this scenario can be found in table 6. according to this study’s primary goal, which is replacing res instead of natural gas, in the last scenario, the natural gas consumption has a downward trend during the next years to review the environmental and economic impacts of its reduction. in the sixth scenario, natural gas consumption has been decreased every five years by 10%. for the excess demand in the next years, the total amount of biomass was consumed (0.05 twh/yr), 75% of the rest of the demand is supplied by geothermal energy and 25% by solar energy (table 6). 3. results and discussion 3.1. primary energy consumption (pec) the total pec amount in the geothermal heat pump equals the sum of natural gas and electrical energy consumption. according to figure 6, the pec for the first international journal of sustainable energy planning and management vol. 32 2021 69 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer figure 6: primary energy consumption trend up to the year 2029 in qazvin for six scenarios scenario in the target year will be 4.8 to 6.54 twh more than other scenarios. in all scenarios, except the first and sixth scenarios, the amount of natural gas consumption is almost the same. they would have the same pec, and the difference is because of electricity consumption due to the heat pump. the third scenario has the lowest pec due to the absence of a geothermal heat pump because of the electricity consumption by the heat pump provided by electricity from the national network. 3.2. carbon dioxide emission as shown in figure 7, the co2 emission for the first scenario in the target year will be 16 to 44% more than other scenarios due to more primary energy consumption. in the third scenario, the co2 emission has the lowest amount due to not using a geothermal heat pump. in the sixth scenario, there is a decreasing rate of co2 emission due to the assumed decreasing trend for natural gas consumption, but then it has an upward trend because of the increase in electricity consumption; nevertheless, it has a slower increasing rate than other scenarios. it should be mentioned that carbon emissions from biomass burning will be neutralized by reducing this biomass decomposition and preventing releasing its carbon dioxide into the atmosphere. according to figure 8, the cost of co2 emission is more than in other scenarios due to more co2 emission in the first scenario. in the third scenario, the co2 emission is constant due to constant natural gas consumption (6.6 twh), and the increasing rate of that is because of the rising co2 cost during future years. in the sixth scenario, the natural gas consumption has been decreased for the next years, the increasing rate of co2 emission has a more gradual slope than other scenarios. it is due to the growing cost of co2 emission from electricity consumed by the geothermal heat pump and natural gas consumption. 3.3. cost of natural gas consumption: according to figure 9, increasing natural gas costs during the years affects the charts’ increasing slope. the sixth scenario’s gradual slope is due to decreased natural gas consumption during the years and is 61% lower than the first scenario in 2029. the sharp slop of the first scenario is because of supplying the total heat demand by natural gas. in other scenarios, the natural gas consumption is the same during the years (6.6 twh), and just the cost of that is increased during the years. 3.4. renewable energies investment cost according to figure 10, there is no investment cost for the first scenario due to supplying the total heat demand just by natural gas. in the third scenario, the investment cost is 28% to 86% more than other scenarios due to supplying the res share for heat demand just by solar energy. in all scenarios, from the year 2019 (the first year of starting to provide a portion of heat demand by res), the investment cost reduces and approximately remains constant, which is due to the further use of res for the increasing demand during years. according to figure 10, the sixth scenario’s investment cost in years 70 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system figure 7: carbon dioxide emission trend up to the year 2029 in qazvin for six scenario figure 8: cost of carbon dioxide emission trend up to the year 2029 in qazvin for six scenario after 2019 is less than other scenarios and is equal to 29 million dollars. 3.5. renewable energies operation cost according to figure 11, there is no operation cost for the first scenario due to not using res. besides, there is no operation cost in the third scenario due to providing the renewable energy share for heat demand just by solar energy. in other scenarios, the operation cost has an increasing rate due to more use of res. its value for the second, fourth, fifth, and sixth scenarios are 6, 11, 7, and 11 millionus$ respectively, by 2029. international journal of sustainable energy planning and management vol. 32 2021 71 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer figure 9: cost of natural gas consumption trend up to the year 2029 in qazvin for six scenario figure 10: renewable energies investment cost trend up to the year 2029 in qazvin for six scenario 3.6. possibility of using solar energy by s6 scenario according to the 2011census, the population of qazvin is 381,597, and the growth rate is about 17.2% from 2006 to 2011 [35]. this study assumes that the population is increased with this rate every five years until the year 2029. by dividing the community by the number of family members (typically 4.2), the number of families living (homes) in qazvin has been evaluated. the heat demand of each family is calculated using the total heat demand in this city in kwh. multiplying this amount to the part of need that has to be supplied by solar energy and using a solar water heater [36], the number of water heaters that each family needs was evaluated and shown in table 7. 72 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system figure 11: res operation cost trend up to the year 2029 in qazvin for six scenario table 7: calculation of required solar water heaters for each home in the sixth scenario year 2019 2024 2029 predicted domestic ng demand (twh/yr) 8.78 10.31 11.83 population 446468 522368 611171 number of households 106301 124373 145517 domestic thermal energy consumption (kwh/day) 226 227 223 domestic consumption of solar thermal according to s6 (kwh/day) 18.08 27.47 33.90 capacity of each solar water heater (kwh/day) 16.5 16.5 16.5 number of solar water heater 1.10 ≈ 1 1.70 ≈ 2 2.10 ≈ 3 according to the above calculations, installing the above-calculated number of solar water heaters for each home is logical. the rest of each home’s heat demand can be supplied by natural gas or a combination of natural gas and geothermal heat pump. 3.7. using biomass as a heat source by the sixth scenario the heat demand for the total number of families (home) supplied by biomass has been calculated in table 8, about 600 families (home). the mentioned houses should be concentrated in a specific region to use anaerobic digestion and reduce the transfer cost. 3.8. environmental analysis of the sixth scenario the costs of environmental emissions are external costs created through the devastating effects of pollutants on crops, ecosystems, and human health. greenhouse gases are the most critical environmental pollutants, which cause climate changes and global warming phenomenon. the world health organization estimations indicate that annually about 800 thousand premature deaths occur in the world because of air pollution-related diseases [37]. air pollution in cities has the largest share of table 8: calculating the number of families (home) that can use biomass in the sixth scenario year 2019 2024 2029 predicted domestic ng demand (twh/yr) 8.78 10.31 11.83 population 446468 522368 611171 number of households 106301 124373 145517 domestic thermal energy consumption (kwh/day) 226 227 223 the total amount of biomass potential (mwh/yr) 50000 50000 50000 number of households that can use biomass 606 603 614 international journal of sustainable energy planning and management vol. 32 2021 73 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer environmental damages related to pollution effects on human health. carbon dioxide as a greenhouse gas has an essential role in the environment and sustainable development discussions and has been detected as the leading cause of global warming. this gas is directly linked to energy consumption which is crucial worldwide [38] — so estimating the co2 emission cost caused by fossil fuels such as natural gas is of great importance in economic parts in planning strategies and policy recommendations for the control of environmental pollutants. in this section, the interest in reducing co2 emissions in this energy planning has been calculated. in the first scenario, the o2 emission and its cost are calculated, assuming that the total heat demand would be supplied by natural gas. the benefits of carbon dioxide emissions reduction for 2019 to 2029 have been analyzed according to the natural gas consumption in the sixth scenario in table 9. in addition to the carbon dioxide emission from natural gas consumption, some carbon dioxide emission occurs due to geothermal heat pumps’ power consumption. referring to the 2013 energy balance sheet, the country’s power sector’s greenhouse gas emissions index for carbon dioxide is equal to 496 g/kwh [29]. the cost of carbon dioxide emission is calculated using this data and the total electricity consumption each year. carbon dioxide emission in the first and sixth scenarios for 2019 to 2029 is illustrated in figure 12. as can be seen, up to one million t per year of co2 emission can be avoided by applying the sixth scenario. 3.9. economic analysis of the scenarios in the first scenario, the cost of natural gas consumption calculated assuming that in the next 15 years, heat demand would be supplied by this energy. in the sixth scenario, the cost of natural gas consumption estimates that it will decrease by 10% every five years. due to the increase in table 9: calculation of co2 emission reduction profit between the first and the sixth scenario year 2014 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 co2 emission of s1 (mt) 1.68 2.24 2.32 2.40 2.47 2.55 2.63 2.71 2.79 2.86 2.94 3.02 cost of co2 emission s1 (m us$) 21 45 50 55 61 66 72 79 85 92 99 106 co2 emission of s6 (mt) 1.68 1.52 1.48 1.45 1.41 1.37 1.35 1.32 1.28 1.27 1.26 1.18 cost of co2 emission s6 (m us$) 21 30 32 33 35 36 37 38 39 41 41 41 co2 emission reduction (%) 0 16.5 19 20.4 22.3 23.9 25.1 26.2 27.9 28.3 28.6 31.5 co2 emission reduction profit (m us$) 0 15 18 22 26 30 35 41 46 51 58 65 co2 emission from ng & electricity (mt) 0 0.35 0.40 0.46 0.51 0.57 0.62 0.68 0.73 0.78 0.84 0.89 cost of co2 from ng & electricity (m us$) 0 7 9 11 13 15 17 20 22 25 28 31 total emitted co2 in s6 (mt) 1.68 1.87 1.88 1.91 1.92 1.94 1.97 2 2.01 2.05 2.10 2.07 figure 12: comparison of the co2 emission of the first and sixth scenario 74 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system table 10: calculation of the revenues of exporting saved natural gas item 2014 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 primary energy consumption by s1 (twh) 8.25 10.98 11.35 11.74 12.12 12.5 12.89 13.26 13.65 14.02 14.41 14.79 primary energy consumption s6 (twh) 8.25 10.51 8.12 8.06 7.99 7.91 7.89 7.83 7.78 7.75 7.71 7.61 difference in primary energy consumption between s1 & s6 (twh) 0 0.47 3.23 3.68 4.13 4.59 5.00 5.43 5.87 6.27 6.70 7.18 amount of ng saving (mm3) 0 47 33 37 42 46 50 54 59 63 67 72 interest of exporting the saved ng (m$) 0 22 156 179 200 222 242 263 284 304 325 384 table 11: calculation for the cost of the sixth scenario year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 electricity cost of the geothermal heat pump (m us$) 25 29 40 48 57 67 77 89 101 114 127 investment cost of renewable energies (m us$) 216.5 29 29 29 29 29 29 29 29 29 29 renewable energies’ operation cost (m us$) 5 5 6 7 8 8 9 9 10 11 11 figure 13: comparison of the primary energy consumption of the first and sixth scenario 2019 2029 population and 30% reduction of natural gas consumption during these 15 years, the extra demand would be supplied by res. according to the sixth scenario abroad, iran’s natural gas company can export the saved natural gas due to decreased natural gas consumption (e. g. turkey) (figure 15). according to the price of exporting natural gas to turkey in 2014, which is 48 cents/m3 [35] and the amount of saved natural gas consumption by applying this scenario, the revenues of exporting that amount were calculated, and results are indicated in table 10. regarding these calculations, the amount of saving in natural gas consumption will reach 72 million m3, and the revenues of exporting will be 384 million usd. also, table 11 shows the calculation for the cost of the sixth scenario. international journal of sustainable energy planning and management vol. 32 2021 75 younes noorollahi, negar vahidrad, shahab eslami, muhammad nihal naseer table 12: calculation of return on investment of the plan year 2019 (0) 2020 (1) 2021 (2) 2022 (3) 2023 (4) 2024 (5) 2025 (6) 2026 (7) 2027 (8) 2028 (9) 2029 (10) cost (m us$) –253.5 –72 –86 –97 –109 –121 –136 –149 –165 –182 –321 revenues (m us$) 37 174 201 226 252 277 304 330 355 383 413 difference (m us$) –216.5 –114.5 0.51 129.5 272.5 428.5 596.5 777.5 967.5 1168.5 1260.5 3.10. return on investment (s6) the operation cost for each year and calculated revenues of the selected scenarios, which are the sum of revenues due to natural gas export and carbon dioxide emission reduction, the return on investment of the proposed plan was calculated and presented in table 12. according to the calculations in table 12 and considering the saved environmental expenses and exporting the saved natural gas, the return on investment will be achieved in 3 years. figure 14 indicates the financial balance of the proposed scenario. due to the gradual development trend of res in the country, it is predicted that the share of res in qazvin would not be more than the amount provided in this plan until 2019. therefore, this amount of renewable energy replacement with natural gas consumption is sufficient for this study. 4. conclusion the study’s primary goal is to compute a new model that is economically and technically investigates the feasibility of a proposed scenario to replace res instead of natural gas consumption in qazvin city. six different scenarios are analyzed to evaluate renewables’ potential for city heat demand over the next 15 years. the result shows that the optimal scenario (scenario sixth) reduces natural gas consumption and increases res. the sixth scenario results indicate that this plan’s investment cost is significantly efficient than other scenarios. also, the cost of natural gas consumption due to its decreasing trend is less than in other scenarios. economic and environmental analysis indicated that such a plan is feasible due to its 3-year return on investment. also, the emission reductions of 35% by 2029 and the plan’s investments are achievable. this plan will help fulfill iran’s commitments to reduce carbon dioxide emissions up to 12 percent until 2030. also, it would allow iran to achieve its agreement in cop 21 to reduce greenhouse gasses. qazvin’s solar radiation map indicates that most of the areas have a high potential for harnessing solar energy in the home. besides, according to studies in this plan, using solar water heaters is reasonable and can be used on houses’ roofs. economic analysis indicated figure 14: return on investment of the plan from the year 2019 to 2029 76 international journal of sustainable energy planning and management vol. 32 2021 modeling of transition from natural gas to hybrid renewable energy heating system that this plan is noteworthy according to the shares allocated to each renewable energy in the sixth scenario. regarding the current energy system based on fossil fuels and the absence of res, the initial cost of establishing and using 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several factors including knowledge, attitudes, and behaviour have been reported elsewhere to influence the energy consumption rate globally. to assess the influence of these factors, some theories, models, and approaches were reviewed to provide a theoretical and conceptual framework on the influence of human knowledge, attitudes and behaviours on energy use and saving. this study assessed some parameters including, awareness, motivation factors, moral and normative concerns, environmental norms, knowledge concerns, technology adoption concerns, and contextual factors and habits. this study conducted a comprehensive literature review followed by seven-step model on studies related to this work. this review work found that behavioural change is significant to address the challenges facing humanity in utilizing natural resources including energy. also, energy consumption efficiency needs multidisciplinary and sectoral approaches. in energy-saving, individuals need to be informed on the new technologies, energy sources, production and use. energy consumption efficiency knowledge, attitudes and behaviour among the community obadia kyetuza bishoge*, a, b, godlisten gladstone kombec, benatus norbert mviled, e a department of environmental management, pan african university life and earth sciences institute, university of ibadan, ibadan, oyo state, nigeria. b national institute for medical research, postal office box 9653, dar es salaam, tanzania. c department of petroleum and energy engineering, college of earth science, the university of dodoma, postal office box 259, dodoma, tanzania. d department of geology, pan african university life and earth sciences institute, university of ibadan, ibadan, oyo state, nigeria. e department of physics, university of dodoma, postal office box 259, dodoma, tanzania. keywords energy consumption; energy efficiency; global warming; human attitudes and behaviours. http://doi.org/10.5278/ijsepm.6153 1. introduction the rapid increase of global carbon dioxide (co2) emissions from different sources including energy have increased alarming concerns [1]–[3]. recent studies have reported an average emission of about 36 million tonnes of co2 per annum globally, and the trend is on the increase [4]. while most of the emissions come from the most developed countries, the developing counties account for about 1% of the total global emissions. despite low levels of emissions, these countries are more vulnerable to the impacts of climate change [4]. despite high concerns about increased co2 emissions, energy demand and consumption has been increasing rapidly because of industrial development and population growth [5], [6]. the recent industrial revolution that introduced robotics and artificial intelligence technology has necessitated the rapid increase of global energy consumption at the rate of 2.9% [7]. the rate of energy consumption differs from one country to another, whereas china which is the leading consumer accounts for 23.6%, united states (16.6%), and africa accounts for only 3.3%, while and the rest of the world accounts for 56.5% consumption [7], [8]. 176 international journal of sustainable energy planning and management vol. 31 2021 energy consumption efficiency knowledge, attitudes and behaviour among the community the major energy-consuming sectors include residential, commercial, industrial and transportation (especially public transit systems) [8]–[10]. the energy in the residential sector is used for various applications including house cooling and heating systems, lighting, refrigeration, televisions and cooking. to optimize residential energy consumption users’ skills, attitudes, and behaviours, management need to be considered. energy consumption optimization is part of a solution to the increasing energy demand, global warming and climate change which will reduce costs and consumption, and improve energy efficiency and therefore minimize co2 emissions [12]–[14]. today, energy use behaviour has attracted the attention of researchers as one of the approaches to address global warming concerns [11]. to address the question of energy use behaviour, studies have recommended that some emphasis should be invested on users to acquire adequate knowledge, attitudes and behaviour change associated with energy demand and consumption [11], [12]. while residential energy consumption is affected by knowledge, attitude, and behaviour, energy users habits and practices such as water heating, lighting, cooking and freezing have not been adequately considered in current energy consumption efficient analysis tools [11]. there is a need for energy practitioners, researchers, planners and analysts to incorporate individual knowledge, attitudes and behaviour in modelling, planning and calculating energy consumption efficiency [13]. the reduction of total energy consumption at an individual level could transform current energy dynamics in the world [14]. behavioural matters are required in all aspects of energy development, from the increase of awareness on the necessities of energy efficiency and renewable energies, to ensure technologies are easy to apply and that financial decisions are done in a well-informed manner [15]. behavioural change must include both short and long term strategic plan and implementation actions [16]. human behaviour is a complex and dynamic ideal that changes according to time, place, generation and environment [17]. there are various theories and approaches which describe human behavioural changes [18], [19]. these are derived from disciplines such as psychology, economy, sociology, technology, political science, and communication. the main focus may be at individual, interpersonal, community or environmental levels. in energy use, human behaviour is considered as the driving factor which can influence energy efficiency and costs [20]. the change of social norms can be done through holistic and multi-prolonged approaches. these approaches may involve education, modelling, incentives, environmental restructuring, persuasion, and enabling [21]. only a single approach is less likely to create successful changes. while various theoretical perspectives have emerged in the literature, there is no single theory, approach, model, or conceptual framework that is universally accepted by scholars as providing an all-inclusive explanation of energy consumption and conservation to predict individual differences in behaviours [22]. this is because there are diverse human contexts such as populations, economic and cultures that need a clear and open theory approach to deal with them [23]. the use of an open theory approach allows the assessment of a range of human issues [19]. thus, this review intends to explore various previously and recent studies on the theories and practical issues related to the factors that influence personal knowledge, attitudes and behaviour toward energy consumption efficiency. 2. methodology this paper explores the most common factors that influence personal knowledge, attitudes, and behaviour on energy consumption efficiency, that have been published in academic journals through systematic literature review (slr). slr refers to the strict approach used to pinpoint relevant studies that address the study topic with an established inclusion or exclusion criteria and a well-defined methodological analysis and dissemination of the themes from the selected studies [24]. slr has used précised and standardized methods to identify and critically appraise the previous relevant studies [25] relating to individual knowledge, attitudes and behaviour on energy consumption efficiency. to date, few review papers have been published regarding factors influencing energy consumption efficiency knowledge, attitudes, and behaviour among the community [11]. the authors recommend clear and more slr papers to be carried out in this field to bridge the gap in the previous literature. thus, this paper aims at presenting the slr of some journal papers that exist in several academic databases regarding factors influencing personal knowledge, attitudes and behaviour on energy consumption efficiency from 2010 to 2020. these dates were selected to ensure that findings are relevant and up-to-date. international journal of sustainable energy planning and management vol. 31 2021 177 bente johnsen rygg, marianne ryghaugb and gunnar yttric this review applied a seven-step model (figure 1) which is used to conduct a comprehensive literature review [26]. first, researchers initiated the identification of the problem of the study whereby major themes such as ‘awareness’, ‘knowledge’, ‘attitudes’, ‘human behaviour’, ‘human behavioural change’, ‘energy consumption’, ‘energy efficiency’, ‘energy use’, and ‘energy savings’ were selected. second, researchers prepared an initial list of relevant studies that were identified through different bibliographic sources such as google scholar, web of science, and scopus, and government and non-government reports. researchers combined the pairs of words from personal knowledge, attitudes and behaviour and energy consumption efficiency. each keyword search resulted in a large number of hits. each of the hits were filtered down to relevant studies in the form of journal articles, working papers or book chapters, containing keywords regarding energy consumption efficiency and personal behaviour. all hits in each list were scrutinized and the resulting list was then explored for potential selection. in the second screening, the list was filtered down to 99 out of 136 studies. the selection process revealed the unsuitability of some studies mostly due to a lack of clear information about personal knowledge, attitudes and behaviour and energy consumption efficiency. thus, out of 99 studies, 69 studies were finally selected, as shown in table 1. out of 69 studies, 61 were research papers and the remaining (8) were review papers. table 1: potential studies relevant to this study. no. variable number of relevant studies per cent 1 awareness 6 8.7 2 motivation factors 30 43.5 3 moral and normative concerns 10 14.5 4 environmental norms, concerns and knowledge 03 4.3 5 technology adoption norms and concerns 06 8.7 6 contextual factors 10 14.5 7 habits 04 5.8 total 69 100 the selection of relevant studies allowed the identification of major themes that were in line with the study rationale. to ensure the reliability and validity of the data, comprehensive reading, analyzing and synthesizing were conducted to establish the relationship between the emerged themes from the relevant studies. then, systematic writing and compiling of the summaries of the themes using descriptive means to avoid plagiarism were conducted. finally, results and findings were disseminated. 3. results and discussion the study of energy users’ behaviours and energy efficiency is complex and influenced by multifactorial reafigure 1: the seven-step model used in the study. problem identification with researchers beliefs and interests a literature search of the relevant studies and materials from various bibliography sources selection of the relevant studies to the intended study a detailed study of the selected studies with relevant themes and questions to be dealt presentation of the final report on the findings and results in relation to the research questions critical analysis and synthesizing the information the selected themes organization and keeping the major themes from the relevant studies 1 st step 2 nd step 3 rd step 4 th step 5 th step 6 th step 7 th step 178 international journal of sustainable energy planning and management vol. 31 2021 energy consumption efficiency knowledge, attitudes and behaviour among the community sons, both personal and situational [27]. the complexity is observed since the decision making of this study involves fragmented and different disciplines such as psychology, economics, environment, engineering, sociology, and technology [15]. these factors differ among individuals, households, organizations, generations, regions, and nations. this study revealed seven major factors that influence personal knowledge, attitudes and behaviour towards energy consumption efficiency, as indicated in table 2. 3.1. awareness in energy-saving, awareness is considered among the determinants of human behaviour towards energy use [28], [29]. if the country wants to save energy, the citizens must become aware of the energy that they are responsible for and have the power to control. the increased awareness of society may increase simple changes in people’s behaviour that can quickly lead to significant energy savings [30]. individuals need to acquire energy awareness on (i) how much energy they use directly or indirectly, (ii) what energy is used for, (iii) where the energy used comes from, (iv) the negative impacts of the energy use (for example, depletion of energy resources, environmental changes, and pollution) [32], and (v) what can they do to minimize the energy consumption and its related negatives impacts. different energy technologies aimed at saving energy consumption [31]. society should be aware of these technologies which include smart metering, solar photovoltaic or solar panels, led lighting, reflective roofing, solar batteries, home automation, more efficient clothes dryers and smart glasses [74]. energy users should have awareness which may help them to change their behaviours on reporting leaks and equipment failures on the energy transmission systems, changes in equipment use at both home and working places, and choosing various modes of transport that can save energy. 3.2. motivation factors motivation is an urge to behave or act in a way that will satisfy certain conditions, such as wishes, desires, or goals. it is simply defined as an enthusiasm for doing something [75]. it is the driving force behind a person’s actions. there are two types of personal motivation. first, personal’s extrinsic motivation occurs when a person is motivated to perform a behaviour or engage in an activity to earn a reward or avoid punishment [76]. in this case, the person engages in behaviour not because he/she enjoys it or because he/she finds it satisfying, but to get something in return or avoid something unpleasant. secondly, personal’s intrinsic motivation exists when a person involves in behaviour because it is personally rewarding; basically, performing an activity for his/her own sake rather than the desire for some external reward [77]. here, the behaviour itself is a reward. the cognitive evaluation theory explains that a person’s intrinsic motivation can be influenced by both internal and external events [37]. various scholars have explained motivation through different theories. for instance abraham maslow’s theory of the hierarchy of needs anybody [78] by which table 2: main themes identified after a crl. no. factor references countries 1 awareness [28]–[32] tanzania, greece, portugal, bangladesh and macau, china 2 motivation factors [33], [34], [43]–[47], [35]–[42] china, qatar, italy, the netherlands, australia and spain 3 moral and normative concerns [5], [32], [48]– [54] the united states of america, denmark, germany, the netherlands, ghana, kenya, south africa, turkey and tanzania 4 environmental norms, concerns and knowledge [55], [56] china and portugal 5 technology adoption norms and concerns [57]–[61] malaysia, the united states of america, nigeria and china 6 contextual factors [32], [47], [62]–[69] the united states of america, burundi, the united kingdom, tanzania, china, australia, 7 habits [70]–[73] the united states of america, the united kingdom, the netherlands and spain international journal of sustainable energy planning and management vol. 31 2021 179 bente johnsen rygg, marianne ryghaugb and gunnar yttric a person is motivated to fulfil the satisfaction. according to maslow’s theory, human need is developed on five different levels in a hierarchical order that are physiological, safety, emotional, esteem needs and self-actualization [79]. the study conducted by cheung et al [80] in southern china on “the effect of self-determined motivation on household energy consumption behaviour in a metropolitan area” revealed that intrinsic and extrinsic motivations of an individual are vital predictors of pro-environmental energy consumption behaviour. moreover, maslow’s theory of the hierarchy of needs is extended by alderfer’s existence, relatedness, and growth theory which takes the need premise of need categories a bit further [81]. in this theory, it is assumed that when lower needs are satisfied, they occupy less of the human attention, but when higher needs tend to become more important, the more humans pursue them [82]. this theory is applicable when energy demand is low, human intention becomes low too, but when the energy demand becomes high, more people tend to pursue the demand. motivating factors include achievement, advancement, autonomy, personal growth, recognition, and responsibility, as presented in table 3. table 3: the influence of motivating factors in energy-saving behaviours. no. motivating factor implications for energy saving references 1. achievement according to the achievement motivation theory, the achievement of the people can change their behaviours on doing things including energy use. the theory explains that the needs of the individual alter over a while with changes in his/ her behaviour. it further explains that every individual’s motivation is driven by achievement, power, and affiliation regardless of sociocultural beliefs, age or gender. [83] [84] achievement motivation can be considered as behaviours toward dedication and demonstration of higher abilities. the higher the abilities of the person, the more the influence on the energy use behaviour change. socioeconomic achievement among society usually increases energy demand. the increased demand leads to an increase in energy consumption. 2. advancement advancement is more associated with the social-cultural and economic progress of an individual, group of people, organization or nations. human advancement usually influences behaviour toward doing something. humans have been developing through advancements in technologies since the birth of the human species to improve humans’ lives. these technologies have been changing over time with an influence on energy consumption. [35] the most advanced individual, society or nation tends to demand more energy for use. for instance, the study conducted by jin et al. [34], revealed that technological advancement and innovation lead to the increase of energy use in china but at the same time they can be used to achieve sustainability via improvement of energy efficiency and development of energy structure for developing countries. [34] 3. autonomy in developmental psychology and moral, political, and bioethical philosophy, autonomy is the capacity to make an informed, and uncoerced decision. the concept of autonomy is explained in the self-determination theory which argues that a person has basic psychological needs to experience autonomy, competence, or relatedness to other people, depending on the social environment [36], [37] self-determined motivations are necessary predictors of pro-environmental intentions and behaviours. thus, self-determined motivation on pro-environmental behaviours has a strong relationship with household energy consumption. [33] however, it is believed that personal intrinsic motivation is the most effective and longlasting way to enhance personal intention to adopt energy-saving behaviour and thus reduce greenhouse gas emissions. [38] in general, individuals are either extrinsically or intrinsically motivated to behave in specific ways that may encourage energy-saving and conservation through sustainable consumption. [39] 180 international journal of sustainable energy planning and management vol. 31 2021 energy consumption efficiency knowledge, attitudes and behaviour among the community 4. personal growth the idea of personal growth is explained in the optimistic theories developed by carl rogers and abraham maslow. both theories emphasize the opportunities, capacities and inborn course of human beings toward personal growth and psychological wellbeing. [85] [86] personal growth entails happiness that is brought to widespread attention with moral philosophy. energy consumption has significant positive direct and indirect impacts on happiness among the communities. [40] people tend to use their large part of their income the improvement of their lives by purchasing energy-consuming facilities such as houses, transport facilities like cars and motorcycles, mobile telephones, radios and televisions. this increases the energy demand and thus, the increase in energy consumption [41] 5. recognition recognition refers to the identification of something or someone from previous encounters or knowledge. it facilitates social interaction and the formation of identity. [87] recognition has both normative and psychological dimensions. in axel honneth’s theory of recognition, recognition is classified into love, respect and social norms. the theory emphasizes the idea of self-realization as the concern and effort to mobilize subjects of struggles for intersubjective recognition. [88] people tend to behave according to how they recognize themselves. this situation influences personal behaviour on energy use. [42] an individual should recognize the level of sorting and capable of handling whatever is thrown to save energy. however, they are some individuals who recognize what they are doing but still don’t behave positively in saving energy. [43] 6. responsibility every individual has things in charge. in real life, personal or individual responsibility is what is considered the idea that human beings choose, instigate, or otherwise cause their actions. responsibility is related to accountability. [44] in most cases, being accountable accounts for both being responsible and ultimately being answerable for the actions. the human being is responsible or accountable for those things within control, power, or management. [45] in energy consumption efficiency, there is a near connection between personal responsibility and energy saving. personal actions to minimize energy use enhance the beliefs about responsibility for the mitigation of climate change. [46] this responsibility towards energy saving and climate change differs according to age, sex, education level, or cultural differences. for instance, boto-garcía and bucciol [46] argued that females, elderly and highly educated people are more likely to feel responsible for climate change through practicing energy saving. elderly people not only physically protect energy, but also exercise inspiration for the younger generation. [47] the individuals’ responsibility should generate national ethical responsibilities. here, according to dernbach [89], countries should ethically have responsibilities to improve the quality of life of their citizens with prodigious insurance of access to modern energy and enhance greater energy efficiency use and conservation international journal of sustainable energy planning and management vol. 31 2021 181 bente johnsen rygg, marianne ryghaugb and gunnar yttric 3.3. moral and normative concerns moral values and principles determine how people should act and live in society [48]. anything happening in society is whether morally good or bad and/or right or wrong [49]. in energy efficiency, ethical and moral issues can raise on a wide range in energy production and use. globally, four general questions may arise to explain ethical and moral concerns [50]: (i) the world can continue relying primarily on the use of fossil fuels that accounts for over 80% of the global energy use, (ii) the world might shift to greater dependency on the nuclear energy, (iii) the world should develop and expand the use of renewable energy sources such as hydro, solar, wind, wave and tidal, and geothermal power and, (iv) the world should focus on the energy efficiency and conservation and pursues to reduce the overall demand for energy. all of these concerns face ethical and moral challenges if the world wants to address them for ensuring energy efficiency. for instance, to continue relying on fossil fuels as the major source of energy will be detrimental for future generations since fossil fuels are depleted, but also they contribute much to greenhouse gas emission and climate change [5], [51]. secondly, nuclear power generates a lot of toxic wastes that remain hazardous for thousands of future generations [90]. there is also high management of nuclear power because if they are not well handled they cause death to the people. besides, nuclear power brings concerns of international peace and security [52]. thirdly, investment in alternative or renewable energy technologies requires high costs and a lot of government subsidies and incentives [53], [91]. only developed countries and rich individuals will be able to afford these energies. the developing countries and poor individuals will still rely on fossil fuel sources. this will result in the rise of equality, freedom, and fairness concerns. finally, the noteworthy decrease in energy consumption is conceivable in two ways that are either a significant decrease in energy demand or a decrease in the population of the people. either option raises major questions concerning values such as individual freedom of choice, property rights, fairness, and equal opportunity, as well as ethical issues regarding population policy, standards of living, and quality of life [54]. 3.4. environmental norms, concerns, and knowledge according to mohr [92], environmental norms refer to “rules which restrict environmentally harmful behaviour or which prescribe ecologically friendly actions, seem to be on the advance everywhere”. norms govern individual behaviour and ensure the survival of the commune. individuals with certain environmental knowledge and concerns have positive attitudes toward environmental behaviour and are strongly willing to take action on issues related to environmental conservation including energy savings. this is supported by the study conducted by li et al. [55] which revealed that residents with high environmental knowledge and concerns have high attitudes and willingness to purchase and use energy-efficient appliances such as energy saver bulbs, and booster and solar water heaters in shanxi province, china. alternatively, it is reported by paço and lavrador [56] that “a higher level of environmental knowledge does not necessarily lead to more positive attitudes and behaviours regarding energy saving”. their study revealed that students with higher environmental knowledge levels did not differ in their attitudes with those with lower levels of environmental knowledge and there were slight differences in their behaviours towards energy savings in portugal. 3.5. technology adoption norms and concerns technology adoption refers to the extent to which a certain technology is accepted, approved and incorporated into social practices [57]. technology adoption is clearly described through the technology acceptance model (tam) which was proposed by davis [93]. the tam is applied to predict and explain various technologies that are accepted by users. it suggests that when new technology is presented to the users, several factors can occur to influence users’ decisions on how and when they can utilize it. these factors include: (i) perceived usefulness as “a degree to which a person believes that using a particular system would enhance his or her working performance”; (ii) perceived ease-of-use as “the degree to which a person believes that using a particular system would be free from effort”. the application of new technology depends on how easy can be used. for instance, it is not easy to use new technology if it is complicated in its applications. (iii) external variables such as cultural beliefs and social influence are necessary factors to determine the user’s attitude to use new technology. when these three things are in place, people may have the attitude and intention to use the technology. however, the perception may change depending on age and gender because individual differs [58]. 182 international journal of sustainable energy planning and management vol. 31 2021 energy consumption efficiency knowledge, attitudes and behaviour among the community the adoption of energy technologies is influenced by users’ behaviours and acceptance levels. for instance, the study conducted by wojuola and alant [59] revealed that perceived usefulness and ease-of-use are positively associated to use the of new renewable energy technologies such as hydro, solar, and wind power in nigeria. moreover, the study conducted by chen et al [60] in the united states revealed that usefulness and risk to privacy (the perceived technology attributes) have direct effects on adoption intention to smart meter technology and use of smart meters. smart meters are advanced electronic devices that are used to record detailed electricity use at certain time intervals through the feature of two-way communication, allowing utility companies to respond to the data [61]. the use of smart meters helps in energy consumption efficiency. 3.6. contextual factors contextual factors are special characteristics that reflect a particular context and unique to an individual, a particular group of people, community, and society [62]. in general, the factors or characteristics of the environment that influence the behaviour of human being or society are referred to as contextual factors [63]. in real life, a context shapes the effectiveness of knowledge implementation and influences human development through behaviour changes from visual perceptions to social interactions [64]. everything the human being does is influenced by the situation in which it is done. contextual factors usually help to make sense of other situations and determine the decision of whether a human being is to do a certain action or not. in energy consumption efficiency, contextual factors that influence human being include energy-related policies, laws and regulations, scientific and technical capability, biospheric value, institutional capability, energy concerns; climate change, technology conditions, access to information, financial support and incentives, risk, the role of models, and social support. these factors together with psychological and socio-demographic variables influence individuals’ or societal behaviours towards energy saving. for instance, the study conducted by sun and feng [47] revealed that biospheric value, climate change, and energy concerns, money-saving, and personal norm have high predicting power for residential energy use behaviour in china. energy-related policies, laws, and regulations play an important role to influence human behaviour on energy use. currently, most countries are formulating energy-saving policies and programs. for instance, according to zhou et al [67], china adopted energy-saving policies and programs during the 11th five year plan which have to strengthen enforcement of building energy efficiency codes, reformation of presence building heat systems and adoption of renewable energy technologies to the citizens. moreover, hall et al [68] report that australia established the energysavers energy behaviour change program for low-income households. the program resulted in the adoption of positive actions towards energy change among the local communities. the participation of local communities in the program increase their energy-saving actions, their control over energy use and they acquired new knowledge through social networks [32], [66], [94]. social interactions influence energy-saving behaviours among individuals. for instance, the study conducted by du et al [69] shows that the influence of an individual on energy saving is related to the connectivity and node to node weights of the social network. this study furthermore recommends that the use of a mathematical model to select nodes in the social networks provides the achievement of the necessary amount of extra energy saving in a very short time. 3.7. habits habits are forms of automatic and routine behaviours. people usually repeat behaviours due to different reasons including easiness, cheapness, rewarding or comfort of the behaviours [70]. the change in the situation usually initiates habits automatically. individuals usually do something by habits and sometimes without reasoning why they are repeating the same actions or doing them. repeating of executing actions in the same context becomes automatized and thus difficult to control [71]. habits are efficient, uncontrollable as wells as independent of intention and awareness [71], as presented in figure 2. habits have been considered as among the determinants of human behaviours in the theory of interpersonal behaviour [72]. the consequent repetition of actions influences the change in individuals’ behaviours. in energy consumption, individuals have the day to day habits of using energy such as cooking, ironing clothes, lightening the houses, using air conditioning, heat water for taking showers, or use transport. basing on the need to save energy, individuals can adopt energy-saving habits such as (i) switching off lights in the rooms with no person (s) at night, (ii) defrosting the fridge regularly, (iii) switching off the air conditioning when it is not very hot, (iv) changing light bulbs to international journal of sustainable energy planning and management vol. 31 2021 183 bente johnsen rygg, marianne ryghaugb and gunnar yttric leds, (v) unplug appliances that are not in use, (vi) getting rid of old technology, (vii) doing chores at night, (viii) avoid using hot heated water during the hot season, ( ix) maintain air conditioning and heating systems, and (x) eating together as much as possible to avoid using lights at different times [73]. repetition of these actions may help in energy-saving and thus lead to energy consumption efficiency. 4. the implication of this study achievement of energy consumption efficiency requires a multidisciplinary and multifactorial basis among the energyproducers, suppliers and users. however, energy-users are considered a more targeted group to sustain energy-saving [95], [96]. the study of energy-users knowledge, attitudes and behaviours can help to understand better how energy consumption efficiency can be achieved [97], [98]. there are limited reviews that provide detailed and comprehensive factors that influence personal and community behavioural change on energy use [99]. thus, this review provides a comprehensive analysis of the factors that influence personal behaviour on energy use. it offers a detailed overview of how human behaviour can change to address the challenges facing energy consumption efficiency. moreover, it adds more knowledge on existing information about the factors that influence human behaviour on energy consumption efficiency. 5. conclusion, limitations and remarks behavioural change is significant to addressing the challenges facing human in utilizing the natural resources including energy. thus, this review provides a critical discussion concerning the overall energy consumption efficiency behaviours among individuals. it is important to address the individuals’ behaviours toward energy use and saving to realize sustainable development. from this study, it is shown that the idea of energy consumption efficiency needs multidisciplinary and sectoral approaches. effective energy consumption efficiency depends on individuals’ behaviours, and different disciplines such as psychology, economy, sociology, technology, political science, and communication. it clear that the change of human behaviours at individual, family, organization and national levels influences and determines energy-saving capacity. in energy-saving, individuals need to be informed on the new technologies on energy sources, production and use. it is through awareness individuals will increase their knowledge, change their attitudes, appreciate their self-value and social norms, and then acquire intention towards behavioural change. the awareness should consider the culture of the relevant individuals or society. there are a lot of other factors influencing individual behaviour towards energy consumption efficiency. thus, there is a need for further and single studies on every factor in providing a deep discussion of their impacts on energy consumption efficiency. for instance, some studies can be conducted to evaluate the influence of costs and benefits of energy consumption efficiency. further studies should focus directly on major energy-consuming sectors such as residential, commercial, industries and transportation on an independent basis. it is recommended that one’s should incorporate energy-saving behaviour in the cultural activities of the relevant society because energy is a social good and its uses are strongly anchored cultural practices such as light, cook, and communicate that often happen in the society. figure 2: the mechanism of habitual behaviour. awareness attitudes social norms self efficacy intention behavior habitual behaviors 184 international journal of sustainable energy planning and management vol. 31 2021 energy consumption efficiency knowledge, attitudes and behaviour among the community the establishment of energy-saving culture means the creation of environmental for bright ideas, increased energy efficiency and reduction of operating costs for energy services. acknowledgements the authors thank african union and pan african university life and earth sciences institute for the award of phd scholarship and the national institute for medical research, tanzania, and the university 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[100] østergaard pa, johannsen rm, lund h, mathiesen bv. latest developments in 4th generation district heating and smart energy systems. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ijsepm.6432 https://www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-wastes/radioactive-wastes-myths-and-realities.aspx https://www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-wastes/radioactive-wastes-myths-and-realities.aspx https://doi.org/10.1016/0921-8009(94)90080-9 https://doi.org/10.1016/0921-8009(94)90080-9 http://doi.org/10.5278/ijsepm.6432 international journal of sustainable energy planning and management vol. 32 2021 37 *corresponding author e-mail: anapmartins@ua.pt international journal of sustainable energy planning and management vol. 32 2021 37–46 abstract energy literacy is seen as one of the most powerful tools, available to ordinary people, to contribute to a more sustainable world. since women tend to be considered the main caregivers, due to their maternal instinct, being generally more attentive, more altruistic, and more concerned with the future of their children, are women more involved in the transition to a more sustainable future? to answer this question, we seek to assess the literacy levels of portuguese university members and explore the differences between men and women. using the heteroskedastic ordered probit, we found that women tend to have lower levels of knowledge about energy, but a more positive and sustainable attitude and behavior. women vs men: who performs better on energy literacy? ana martins*, mara madaleno, marta ferreira dias research unit on governance, competitiveness and public policies (govcopp), department of economics, management, industrial engineering and tourism (degeit), university of aveiro, campus universitário de santiago, 3810-193 aveiro, portugal keywords attitude; behavior; energy literacy; knowledge; portuguese university members. http://doi.org/10.5278/ijsepm.6516 1. introduction the climate changes that have been registered over the last few years make it increasingly urgent to change from an energy matrix based on fossil fuels to one focused on renewable energies. this energy transition implies not only substantial changes in technology and policies but also in the behavior of each one. indeed, citizens’ preferences, choices, and behaviors directly influence energy demand and shape the acceptance and effectiveness of technologies, strategies, and policies [1]. defined by the us department of energy [2] as an understanding of the nature and role of energy in the world and our lives, and the ability to apply this understanding to answer questions and solve problems, energy literacy presents itself as an essential tool to this energy transition. according to the literature review carried out (see section 2) an individual’s energy literacy level is measured by their knowledge of energy-related issues, their ability to perform financial calculations (needed to understand the trade-off between price and efficiency), and their energy-related attitudes and behaviors. in general, knowledge about energy and financial knowledge are acquired at school, while attitude and behavior depend on awareness, willingness to change, and habits that are already ingrained. thus, given the history, culture, and innate characteristics of men and women, there may be significant differences in their knowledge, attitude, and behavior. starting with education, we found that until a few years ago women hardly took a higher education course (their society role was to take care of the house, husband, and children), and it was men who had to study to have a better job and be the breadwinner of the house, nowadays, fortunately, women’s are the majority in our universities [3]. still, they have to give proofs, every day, of their dedication, competence, and merit, to be recognized. we have also acknowledged a gradual demystification concerning certain areas of education. mathematics, engineering, management, communication, and information technologies, among others, are now chosen by both sexes, even persisting the trend towards masculinization of these areas [4]. the stereotypes defined by society often remove women from positions of leadership or of greater responsibility. in the same vein, they place an expectation on women, e.g., 38 international journal of sustainable energy planning and management vol. 32 2021 women vs men: who performs better on energy literacy? [14] analyze how gender differences affect the knowledge and importance of energy sustainability using a sample of 37 countries. in most of these countries, results support the findings that males have superior knowledge about energy sustainability than females. however, females are more concerned with energy sustainability importance. for swiss households, men are found to be more likely than women to choose nuclear or hydroelectric options, as opposed to solar [15]. concerning energy literacy studies applied to portugal, reis et al. [16] explore the issue but not considering gender differences. considering that a large part of the existing literature studies the energy literacy levels of students, we chose to study this segment of the population as well. we apply our study to university students because of three factors: some of them are having their first experience to live alone and to be responsible for the payment of electricity expenses; as university students, they have a higher level of education; and they represent the future adults or adults. however, we also included university professors and technicians to be able to consider the perspective of someone that generally has already its own home. thus, using a sample of portuguese university members (students, teachers, and technicians), we aim to measure the knowledge, attitude, and behavior related to energy and the energy literacy levels of men and women. as well, we test and verify if there exists evidence of significant differences, trying to measure these differences. additionally, we provide some policy recommendations for the improvement of energy literacy levels, focusing on the proven gender differences. 2. literature review although there are several definitions of energy literacy, the most used in the literature seems to be the one provided by dewaters and powers [17]. these authors refer that energy literacy is divided into three main components: knowledge, attitude, and behavior. knowledge assesses what a person knows about energy, attitude assesses personal beliefs and concerns related to energy and the willingness to adopt saving behaviors. finally, behavior seeks to verify what the person does in their daily lives, trying to mirror the actions, even the most routine ones, related to energy. however, more recently, blasch et al. [18], kumar [19], and filippini et al. [20] warned about the importance of energy-related financial literacy, that is, the ability to perform calculations that allows to correctly understand the trade-off between price and efficiency. in truth, financial literacy seems to that they are obligatorily and naturally more attentive, collaborative, and altruistic, without this type of attitude deserving recognition. by opposition, men are often rewarded for such attitudes [5]. concerning sustainability, energy consumption, and involvement in the energy transition, there are also significant differences between men and women. women are more sustainable consumers [6], as they value more eco-labeled products and green shopping, and are also more willing to change their energy-related behavior in favor of more sustainable options [7]. in the same vein, the study of räty and carlsson-kanyama [8], applied to four european countries (germany, greece, norway, and sweden) reveals that, in general, men who live alone consume more energy than women who live in the same situation (mainly in transport and eating outside the home). however, it is men who fill most positions with the power to influence the energy transition, both in the corporate sector as well as in the public energy sector and civil society initiatives [9]. so, who will achieve the best results in energy literacy: men or women? answering this question is the main objective of this paper. although gender is frequently a significant item considered by environmental education studies [10], to the best of our knowledge, no study in portugal analyses the differences between the levels of energy literacy of men and women. literature shows some gender disparities, mainly in knowledge and attitude, with women showing lower levels of knowledge and more positive attitudes when compared to men. looking at gender differences becomes relevant to evidence, validate and confirm, or not, these disparities and try to adequate the environment and climate change policies according to this information, to obtain better results. in reality, climate change and environmental policies affect people differently depending on various factors like gender, age, education, income, ethnicity, and religion. recently, qarnain et al. [11] explore which factors cause social inequality and injustice finding the top three to be the limited participation of women in environmental campaigns, variations in building energy regulations worldwide, and ethnic/racial discrimination regarding environmental safety. dorji et al. [12] investigated the gender differences in learning and energy-saving awareness through digital games finding that playing these games can decrease the gender differences. lee et al. [13] found that female students displayed superior knowledge and affection regarding energy saving and carbon emissions reduction. more recently, arachchi and managi international journal of sustainable energy planning and management vol. 32 2021 39 ana martins, mara madaleno, marta ferreira dias have a positive and significant impact on energy literacy as demonstrated by martins et al. [21]. in the last fifteen years, the literature reveals low levels of energy literacy in new york [17], due to low levels of energy knowledge and behavior, and in denmark [22] and poland [23], mainly due to low levels of knowledge about energy costs. in truth, in italy, the netherlands, and switzerland, most people do not know the average price of 1kwh of electricity [18]. there is also evidence of strong dichotomies between attitude and behavior in taiwan, with attitude being significantly more positive [13,24], showing not only the difference between what people say and what people do but also the fact that most of the behaviors related to energy are often almost automatic and little thought, being defined by strong habits difficult to change. in portugal, the reality seems to be the same, considering the results of the study recently published by the energy services regulatory authority (erse)[25], showing the lack of information of the majority of consumers about the existing producers, distributors, and providers of electricity, and about the existing simulators of electricity price. the same study shows that only 42.2% of private users and 54.8% of business users know what items are presented in electricity bills. consumer involvement is also explored by krog et al. [26] and their necessary involvement in energy transition issues was identified. the literature mentions several factors capable of influencing energy literacy levels, namely age [19], frequency of energy-related courses [13,22], is responsible for the payment of electricity [27,28], parents’ influence, and recommendations [29], risk aversion [30], and concern with free-riding [19]. another important factor is gender. much of the previous literature reports that women have less knowledge about energy and financial related issues [18–20,31,32]. looking at the statistics related to the areas of training for men and women, we find that courses related to mathematics and finance are still mostly attended by men [4]. however, another trend of the existing literature argues that women show a more positive attitude towards the need to save energy [6,8,33,34]. zelezny et al. [35] also support this idea, suggesting that women are more receptive to sustainability. 3. data and methodology to explore the differences between women and men concerning energy literacy and its dimensions, we use data from a questionnaire defined by martins et al. [21] and applied it to portuguese university members (technicians, teachers, and students) from several universities and polytechnic institutes of the country. the questionnaire has 31 closed questions to measure energy knowledge, which include questions about the units in which energy is measured, ways to produce energy, different types of energy, what is the correct temperature for heating/cooling and saving energy, etc., and 4 closed questions to assess financial knowledge, which includes questions about interest and inflation rates, and the trade-off between price and efficiency. additionally, the questionnaire includes an open question to measure price awareness, 19 likert scale questions to measure attitude, where we try to understand if people are concerned about the necessity of saving energy and change some behaviors, and finally, 11 likert scale questions to measure behavior, where we try to check if people have the correct habits related to the consumption of energy. to determine the levels of energy and financial knowledge we assigned one point for each correct answer and zero points for each incorrect answer. to assess the energy price awareness, we ask the participants to indicate the average price of 1kwh of electricity. according to pordata information for 2019, the correct value was 0.2150 euros, so we considered the answers between 0.15 and 0.27 euros correct and assign them a point. for the questions related to attitude and behavior, we assign points between 1 and 5, with 1 corresponding to a negative attitude or an incorrect behavior and 5 corresponding to a positive attitude or correct behavior. following the works of barrow and morrisey [36], armstrong and impara [37], and dewaters and powers [17], we summed the points obtained in each question and obtained the total points for each dimension. then we add up the totals obtained in each dimension to obtain the energy literacy level. the maximum energy literacy level it could be achieved is 186 points. thus, we define that literacy levels between 0 and 70 (0-38%) were considered low, from 70 to 140 (38-75%) were considered moderate, from 140 to 160 (75-86%) were considered good and levels from 160 to 186 (86-100%) were very good. appling this questionnaire between january and october of 2020, we were able to collect 428 valid answers. most of the participants are women (68.22%), just over half live in their own home (58.88%) and approximately half are responsible for the payment of electricity expenses (50.70%). the proposed methodology to study gender differences is, comporting with other studies undertaken by researchers modeling individual-level survey responses, following filippini et al. [20]. however, [20] uses the simple 40 international journal of sustainable energy planning and management vol. 32 2021 women vs men: who performs better on energy literacy? table 1: differences on energy literacy scores between men and women. mean std. err. t (h0: diff=0) p-value energy knowledge men 0.6985 0.01085 women 0.6363 0.0082 difference 0.0622 0.0141 4.4238 0.0000 price awareness men 0.4191 0.0425 women 0.2568 0.0256 difference 0.1623 0.0474 3.4226 0.0007 financial knowledge men 0.6801 0.0247 women 0.5163 0.0182 difference 0.1639 0.0315 5.1958 0.0000 attitude men 0.7991 0.0071 women 0.8185 0.0039 difference –0.0195 0.0075 –2.6024 0.0096 behavior men 0.7820 0.0085 women 0.8038 0.0045 difference –0.0218 0.0088 –2.4801 0.0135 energy literacy men 0.7727 0.0063 women 0.7743 0.0036 difference –0.0016 0.0068 –0.2420 0.8089 ordered probit model, while in the present article we apply the heteroskedastic ordered probit model considering the nature of our dependent variable being levels of knowledge, attitude, and behavior, evidenced by the respondent’s answer. the heteroskedastic ordered probit model generalizes the ordered probit allowing the variance to be modeled as a function of independent variables and to differ between subjects or groups in the population. let yi denote an observable variable based on responses to literacy levels. therefore, yi * will represent an unobservable variable capturing the literacy level of the ith individual, where responses refer to the percentage of correct answers. the literacy outcome can be expressed as a function of a vector of explanatory variables (xi) using equation (1) and β being a vector of unknown parameters. y x ni i i i * ~ ( , )� � �� � � where 01 (1) we assume that yi * is related to the observable variable yi as follows (the ordinal values of the literacy score) and μj′s are the threshold parameters. these are represented by [‘low literacy levels’] if – ∞ < yi * < μ1 [‘moderate literacy levels’] if μ1 ≤ yi * <μ2 [‘good literacy levels’] if μ2 ≤ yi * < μ3 and [‘very good literacy levels’] if yi * ≥ μ3. for more details about the heteroskedastic ordered probit model, we refer to green and hensher [38]. the assumption of threshold homogeneity (σ2 = 1) is crucial to specify the ordered probit model. however, the ordered probit model estimates are known to be subject to bias and inconsistency in the presence of heteroscedasticity. provided we are interested in determining the separate impacts of covariates of the mean and variance of the latent dependent variable we have incorporated a general form of heteroscedasticity (equation (2)). � �i wi� exp( ) (2) being wi a matrix of variables found to be the source for the residual dispersion and δ a vector of unknown parameters. we assume this model considering it provides a fairly simple structure, that the simple non-linear variance form has fewer convergence computational problems in maximum likelihood estimations, and ensuring the estimated variance is positive. we estimated the model separately for each score that we were interested in, namely, energy knowledge, energy attitude, energy behavior, and energy literacy. concerning the energy knowledge of individuals, we computed both the homoskedastic and heteroskedastic ordered probit models. to model the variance, we chose the gender variable, which proved to be adequate and significant in explaining the variance of the components of attitude, behavior, and also of energy literacy. the estimated model for knowledge does not seem to present heteroscedasticity problems, considering the p-value of the c2 statistic (0.5613), the reason why we present also the result of the ordered probit model (table 2). 4. results to begin our analysis, we decided to test whether the results obtained in terms of knowledge, attitude, behavior, and energy literacy levels are significantly different between men and women. the results obtained are described in table 1 overall, the levels of energy and international journal of sustainable energy planning and management vol. 32 2021 41 ana martins, mara madaleno, marta ferreira dias financial knowledge seem to be reasonable, which would be expected considering that our sample is constituted by university members. the behavior seems to be good, which can be explained not only by the reasonable levels of knowledge and by the good levels of attitude, but also by the high prices of electricity. the biggest differences between women and men are verified in the levels of price awareness and financial knowledge, with men obtaining the best results. men also get the best results in energy knowledge, although the difference is smaller. concerning attitude and behavior, it is women who seem to demonstrate a more positive and proactive attitude towards the need to save energy, more easily implementing sustainable habits in their daily routines. this can be explained by the high percentage of women of our sample that study natural and environmental sciences (10.27%) comparing with the percentage of men that study this theme (2.94%). these results are also confirmed by the study of wall et al. [3], applied to portugal, that shows that men prefer fields like engineering, manufacturing, and construction industries, and services (personal, transport, security, and environmental protection) at the expense of education, health, social welfare, social science, commerce, and law. these last scientific fields are more prone to be chosen by women as their field of education. finally, in the levels of energy literacy, the difference between men and women seems to be diluted, not being statistically significant, however, women show slightly higher results. the level of energy literacy is good, however, there is still space for improvement, mainly in energy and financial knowledge that are moderate, and in energy price awareness that is moderate for men, and low for women. lack of energy and financial knowledge and low energy price awareness can compromise the energy transition, so it is necessary to bet on energy and financial training. knowing that women have the less financial knowledge and have more difficulty in saying correctly the electricity price can help national authorities to define more targeted policies and measures to improve this reality. then we estimate the influence of some factors on the different components of energy literacy and also on energy literacy, using the heteroskedastic ordered probit model (see table 2). considering the results, we may say that females possess lower energy knowledge despite demonstrating stronger attitudes, behavior, and energy literacy levels than males (positive coefficient, on average, in table 2). concerning gender differences, our results contradict those of lee et al. [13] but favor those of arachchi and managi [14]. energy literacy scores include the three dimensions of knowledge, attitude, and behavior, which justify the results also evidenced previously in table 1. also, qarnain et al. [11] reveal the limited participation of women in environmental campaigns causing social inequalities and injustice. thus, education and learning are valuable suggestions to surpass it [12]. regarding knowledge, the results show that women know less about energy-related topics than men. the level of education is not significant in determining the level of knowledge; however, the background seems to play a very important role. participants who have backgrounds in exact sciences and engineering and on natural and environmental sciences have significantly higher levels of energy knowledge than participants who studied health and life sciences. in turn, participants who have backgrounds in social and human sciences and others have significantly lower levels of energy knowledge than those who have studied health and life sciences. the fact of living in a house or a rented house does not seem to have any influence on energy knowledge. contrary to our previous expectations, the responsibility for paying electricity bills seems to have a negative influence on energy knowledge levels, which may be related to the fact that the participants who are responsible for paying the electricity bill are mostly the adults or seniors, that probably have not been as aware for the importance of these themes as were the younger generations. financial knowledge and concern about the price of electricity seem to positively and significantly influence energy knowledge. we also find that older respondents, on average, have higher levels of energy knowledge although the effect of age on attitude, behavior, and energy literacy is insignificant. more discussion of age effects on energy literacy may be found in martins et al. [39] and martins et al. [40] in the portuguese context. regarding knowledge, our results contradict those of filippini et al. [20]. thus, we favor the opinion that older respondents faring better on energy knowledge suggest that improvements in the quality of education at the present is necessary to increase energy literacy over time. this may as well impede the necessary knowledge to pursue the requirements of the necessary energy transition. krog et al. [26] defend that the building’s heat demand has to be reduced and consumer behavior has to be adapted for the energy transition, which can only be done through higher energy knowledge. 42 international journal of sustainable energy planning and management vol. 32 2021 women vs men: who performs better on energy literacy? table 2 heteroskedastic ordered probit estimations. energy knowledge attitude behavior energy literacy het. ord. probit ord. probit het. ord. probit het. ord. probit het. ord. probit gender –0.2744** (0.1148) –0.2664** (0.1120) 0.3142*** (0.1070) 0.3331*** (0.1064) 0.2297** (0.1065) age 0.0129** (0.0061) 0.0125** (0.0059) –0.0018 (0.0054) 0.0014 (0.0053) 0.0050 (0.0054) education level –0.0570 (0.0555) –0.0571 (0.0540) 0.0149 (0.0479) 0.0475 (0.0467) –0.0029 (0.0485) background on exact sciences and engineering 0.4786*** (0.1769) 0.4611*** (0.1691) –0.1539 (0.1492) –0.2285 (0.1457) –0.0026 (0.1498) background on environmental and natural sciences 0.4182* (0.2334) 0.4044* (0.2239) 0.1624 (0.1933) –0.0889 (0.1878) 0.2348 (0.1955) background on social sciences and humanities –0.7500*** (0.1887) –0.7358*** (0.1816) –0.0837 (0.1617) –0.0069 (0.1580) –0.4301*** (0.1620) background on others –0.4562* (0.2428) –0.4499* (0.2355) –0.1035 (0.2091) 0.2432 (0.2028) –0.1861 (0.2107) home –0.0191 (0.1146) –0.0132 (0.1106) 0.0444 (0.0971) 0.0482 (0.0943) 0.0521 (0.0985) responsibility –0.2634** (0.1280) –0.2504** (0.1221) 0.0285 (0.1074) –0.0447 (0.1045) –0.1128 (0.1085) energy knowledge 1.3185*** (0.3838) 1.4859*** (0.3775) financial knowledge 1.3230*** (0.1911) 1.2859*** (0.1748) 0.0940 (0.1600) 0.0444 (0.1561) 1.0108*** (0.1673) price awareness 0.3728*** (0.1182) 0.3588*** (0.1125) 0.1223 (0.1002) 0.1810* (0.0976) 0.3967*** (0.1029) lr chi2 178.14 177.88 34.18 36.57 93.70 p-value 0.0000 0.0000 0.0006 0.0003 0.0000 pseudo r2 0.0745 lnsigma gender 0.0444 (0.1182) –0.1728** (0.0763) –0.2116*** (0.0799) –0.1548** (0.0762) lr chi2 0.34 13.27 7.28 4.26 p-value 0.5613 0.0003 0.0070 0.0391 number of obs. 428 428 428 428 428 note: standard errors are in parenthesis; *, **, *** refer, respectively, to the 10%, 5% and 1% significance levels. as well, our results also highlight the importance of energy knowledge on the attitude and behavior of individuals, as financial knowledge is important for energy knowledge and literacy [20]. thus, only improvements in energy knowledge, through adequate educational levels, could reduce gender disparities and ensure the future energy transition [26]. looking at price awareness, we note that on average, respondents with higher sensitivity to price changes are those with higher levels of energy knowledge, present greater behavior and possess energy literacy levels, which is as well consistent with the need for energy-educational issues and highlights the need for consumer behavior adaptation needs [26] to follow the correct path for the desired energy transition, despite the finding presented in table 2 that responsibility for the energy bill, by the household, negatively affects energy knowledge. looking now at the results obtained for the attitude, we find that its major determinants are gender, with women showing a more positive attitude, and energy knowledge, showing a positive ad significant impact. concerning behavior, women also seem to be in advaninternational journal of sustainable energy planning and management vol. 32 2021 43 ana martins, mara madaleno, marta ferreira dias tage, showing more appropriate behaviors. energy knowledge and electricity price awareness also seem to play a positive and significant role. finally, looking at the estimation for energy literacy, we see a positive and significant influence of gender, financial knowledge, and electricity price awareness. having a background in social and human sciences seems to be synonymous with a lower level of energy literacy when compared to the level of energy literacy of participants who have backgrounds in health and life sciences. we surveyed university members including students, professors, and other employees, making the sample a general one for university members, even if a small one. the portuguese society assumes a different behavior regarding heating in winter since there are no such coldest winters as in some other eu countries [26,41], and consequently, people do not need to heat houses as much. moreover, the portuguese population faces one of the heaviest electricity burdens in the eu [42], so they have a particular interest in adopting energy-saving behaviors. therefore, results can be generalized to other citizen samples in portugal and faced with differences from other countries facing opposite situations or compared with those eu countries in similar conditions. this work is left for a broader article collecting data from a broader eu sample and comparing differences and similarities among respondents’ levels of energy knowledge, attitude, behavior, and energy literacy, which in our opinion will provide more insightful and interesting results. 5. conclusions since energy literacy is a powerful tool, capable to sensitize citizens to adopt sustainable energy consumption habits, and considering the important role of citizens in the energy transition, we think that it will be useful and necessary to assess the levels of energy literacy among portuguese. this assessment allows us to understand in which dimensions of energy literacy it is necessary to act, and helps us to understand which policies should be adopted to improve energy literacy levels. our results show that portuguese university members have good levels of energy literacy and that there are no significant differences between the energy literacy levels of women and men. however, we verify significant differences in the levels of energy price awareness and financial knowledge, with men obtaining the best results. the fields of study predominantly chosen by women may determine their low financial knowledge and energy price awareness. the results also suggest that, although women show less knowledge related to energy and finance, they seem to demonstrate better attitudes and behavior. consequently, women seem to have slightly better levels of energy literacy. the field of education seems to have an important role in knowledge and energy literacy levels, with participants with backgrounds in social and human sciences presenting significantly lower levels than those who have studied health and life sciences. financial knowledge and concern about the price of electricity seem to positively and significantly influence energy knowledge. despite the good levels of energy literacy observed, our study also demonstrates there is still space for improvement, mainly in energy and financial knowledge that are moderate, and in energy price awareness that is low for women, and moderate for men. to improve these low levels of energy and financial knowledge we suggest providing energy and energy-related financial lessons to students, using practical activities that bring them closer to everyday situations, at all levels of education and independently of the field or area of study. girls, in particular, should be alerted to the importance of financial literacy and should be encouraged to study areas such as mathematics, finance, engineering, among others. to improve the energy literacy of adults free specific energy and financial literacy training should be developed, and television programs that address these issues, giving correct information, and teaching them how to make better choices when purchasing electrical equipment, for example. in further studies, it is suggested to measure the gender differences in energy literacy among elementary students, or if possible of households to have a better perception of the energy literacy levels in portugal. additionally, it is also suggested to study the influence of other factors such as income and concern about free-riding on energy 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https://doi.org/10.1080/00958964.1989.9943027 https://doi.org/10.1080/00958964.1991.9943060 https://doi.org/10.1080/00958964.1991.9943060 https://doi.org/10.1017/cbo9780511845062 https://doi.org/10.1017/cbo9780511845062 https://doi.org/10.1145/3434780 .3436653 https://doi.org/10.1145/3434780 .3436653 https://doi.org/10.1016/j.egyr.2019.09.007 https://doi.org/10.5278/ijsepm.3417 https://doi.org/10.5278/ijsepm.3417 https://doi.org/10.5278/ijsepm.3483 http://doi.org/10.5278/ijsepm.6850 03_562-3121-1-le.qxd 1. introduction the need for investing in renewable energy sources (res) is clear given the finite nature of many of earth’s resources, particularly fossil fuels [1]. the european commission directive 2009/28/ec reinforces the european res strategy, underlying the contribution of the sector to reduce greenhouse gas emissions, to promote local and regional development and to contribute to security of energy supply. the electricity sector is particularly relevant and the contribution of res to electricity production in the eu-27 has been increasing from 14.2% in 2004 to 21.7% in 2011 according to data drawn from [2]. however, these res power projects are frequently characterised by high investment costs, high uncertainty and risk in the long run and substantial impacts on society and the international journal of sustainable energy planning and management vol. 04 2014 17 population’s well-being [3, 4, 5, 6]. the return of these projects is highly dependent on the availability of natural resources such as wind, sunlight or rain, making them extremely vulnerable to the climatic conditions and to the seasonality. as such, the possibility of using different res technologies on each electricity generation portfolio can be seen as a risk mitigation strategy exploring the diverse and possible complementary behaviour of each renewable resource related to their annual seasonality and even to their intra-daily pattern. several works (e.g. [7, 8, 9, 10, 11, 12, 13, 14]) have demonstrated how the mean-variance approach (mva), formerly applied for the selection of portfolios of financial assets, can also be used for the selection of electricity generation portfolios, as an alternative to the * corresponding author e-mail: jscunha@dps.uminho.pt international journal of sustainable energy planning and management vol. 04 2014 17–30 designing electricity generation portfolios using the mean-variance approach ������� �� � ���� ����������� �������� � �� �������� � � �������� � �������� �� �� ��� ���������� ������� a b s t r a c t the mean-variance approach (mva) is commonly used in the financial literature for the optimal design of financial asset portfolios. the electricity sector portfolios are also guided by similar objectives, namely maximising return and minimising risk. as such, this paper proposes two possible mvas for the design of optimal renewable electricity production portfolios. the first approach is directed at portfolio output maximisation and the second one is directed at portfolio cost optimisation. the model was implemented on data compiled from the portuguese electricity system collected for each quarter of an hour, for a period close to four years. three renewable energy sources (res) portfolios were used, namely hydropower, wind power and photovoltaic. this highlighted the resource seasonality demonstrating that hydropower output positively correlates with wind power and that photovoltaic correlates negatively with both hydro and wind power. the results show that for both models the least risky solutions are characterised by a mix of res technologies, taking advantage of the diversification benefits. as for the highest return solutions, as expected, these are the ones associated with higher risk but the portfolio composition largely depends on the assumed costs of each technology. keywords: renewable energy sources, electricity generation, portfolio selection, mean-variance approach, investment risk url: dx.doi.org/10.5278/ijsepm.2014.4.3 18 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach traditional least cost approach. however, it should be recognised that the characteristics of electricity generation technologies are not always comparable to the characteristics of financial assets. in the electricity planning context, authors have resorted to models either optimising the expected power output (e.g. [13]) or optimising portfolio cost (e.g. [14, 15]). this paper contributes to the analysis of different electricity production portfolios recognising the importance of addressing both risk and return and proposes the use of the mva approach as an electricity generation planning tool. the return of the portfolio is dependent on the power output of each technology included in the portfolio for a given period. as for risk, investments in renewable energy are affected by many sources of risk as described in [4]. the mva approach addresses mainly the risk related to the variability of this power output, which in turn depends on the intra-daily and seasonal variability of renewable energy resources. the model is applied using the portuguese case as an example and emphasising the particular role of the res technologies, under a policy decision-making perspective. optimal res electricity generation mixes for the future are proposed, taking into account the past production pattern of each res and optimising the trade-off between maximising output and minimising portfolio variability. with the growth in the deployment of res in portugal, it becomes pertinent to study possible scenarios of exploiting res (e.g. hydro, wind, photovoltaic, and biomass) in electricity generation projects to ensure the necessary power to customers and quality in supply, while conveying a sense of trust to consumers. therefore, it becomes crucial to introduce electricity planning methodologies that acknowledge the correlation between various electricity generation options, as well as the respective risk. following the previously identified common approaches, in this paper two optimisation problems were formulated: one maximises the expected portfolio output for a given level of risk, and the other minimises portfolio cost for a given level of risk. the results of the study show the usefulness of this approach for electricity power planning in a system with strong res influence, contributing to a sustainable future. simultaneously, it was possible to compare the set of portfolios resulting from the application of this approach with the combination of technologies currently comprising the portuguese electricity system. an advantage of the proposed approach is that it enables policy makers to consider the mix of electricity generation technologies from a broader perspective, explicitly including the expected return and the risk of the res portfolio. the remainder of the paper is organised as follows. section 2 presents the theoretical foundations of the mva approach in the context of electricity generation planning. section 3 corresponds to the empirical study undertaken focusing on the portuguese case and considering only three res technologies for the portfolio proposal. in section 4 a discussion of the main results achieved is presented. finally, section 5 draws the main conclusions of the paper and presents avenues for further research. 2. electricity generation planning and the mean-variance approach electricity generation planning is related to energy and demand forecasting, supplyand demand-side management, evaluation of future power investment plans, assessment of the optimal expansion strategy and its feasibility [16]. the traditional approach to electricity generation planning has been the least-cost methodology [17], which is based on calculating the levelised costs of electricity generation, expressed in €/mwh, for different alternative production technologies and, after comparing those costs, choosing the lowest cost options. however, this approach has met with some criticism both when used to support policy-decision making and when used to support private investment decisions. from the point of view of policy decision-making, a wide range of alternative technologies for electricity generation can be considered and can be operated in different institutional frameworks. this, coupled with a future that appears increasingly complex and uncertain [18], brings new challenges to electricity planners. additionally, there is the issue of security of energy supply [14]. in fact, given the global shortage in terms of primary fuel sources [1], policy makers increasingly need to consider a diversification of electricity production. simultaneously, the price volatility of fossil fuels raises the question of what are the best options in terms of energy needs of a country. as for the private investors’ perspective, liberalisation of the energy markets has fostered interest in the quantification and management of market risks [19]. in fact, with the deregulation and liberalisation of electricity markets and the corresponding increase in competition, electricity generation companies will no longer have a guaranteed return because the price of electricity varies depending on a number of factors. in this context, it is essential that those companies can manage electricity price risk [20]. finally, an important feature of renewable technologies is that they correspond to capital intensive investments, which translates into a relatively fixed cost structure over time, with very low (or practically zero) marginal costs, and that are uncorrelated with important risk drivers, such as fossil fuel prices [20, 14]. therefore, since different technologies are considered in electricity planning, which differ not only in terms of costs but also in terms of the associated level of risk, some authors (e.g. [7, 8, 9, 10, 11, 12, 13, 14]) argue that a better alternative methodology would be the use of the mean-variance approach (mva). in the particular case of res production portfolios, this approach takes into account not only resource variability, but also the possible complementarity between resources, which can result on a better assessment of the storage needs and of the installed power. the mva approach was initially proposed by [21] for the efficient selection of financial asset portfolios and is based on the investors’ goal of maximising future expected return for a given level of risk they are willing to accept (or minimising risk for a given level of return they wish to achieve). the main underlying assumption is that investors are risk averse, which means that when faced with a choice between two investments with the same risk level they always choose the one with higher expected return. therefore, the mva approach highlights the advantages of investment diversification among several financial securities [22]. in fact, the characteristics of a portfolio can be very different from the characteristics of the assets that comprise the portfolio [23]. particularly, when the returns on different assets are independent, a portfolio comprising multiple assets can have lower risk than each individual asset. this effect can be illustrated using the example of a two asset (a and b) portfolio, p. the portfolio expected return, e(rp), is given by the weighted average return of each asset, e(ra) and e(rb), included in the portfolio: e(rp) = ωae(ra) + ωbe(rb) (1) where ωa and ωb represent the proportion of each asset on the portfolio. for their turn, the risk of the portfolio, σ 2p, is computed as: σ 2p = ωa2σ 2a + ωb2σ 2b + 2ωaωbρabσ aσ b (2) where σ 2a is the variance (i.e. the risk) of the returns on asset a, σ 2b is the variance (i.e. the risk) of the returns on asset b, ρab is the correlation coefficient between the returns on the two assets, and σ a and σ b are the standard deviations of the returns on assets a and b, respectively. the last term in the expression of the variance is often written in terms of the covariance of returns between two assets: σ ab = ρabσ aσ b. one can see that the risk of the portfolio, σ 2p, is not just the weighted average of each asset risk, but includes the correlation coefficient between assets’ returns, which means that the benefits of diversification are a function of the correlation coefficient. generalising these results for the case of a portfolio comprised of n assets, its expected return, e(rp), and risk (variance), σ 2p, are given by, respectively: (3) and (4) where ωi and ωj represent the proportion of asset i and j on the portfolio (with i ≠ j), e(ri) is the return of asset i, ρij is the correlation coefficient between the returns on assets i and j, and σ i and σ j are the standard deviations of the returns on assets i and j, respectively. it is clear that the variance of the portfolio (i.e. its risk) is partially determined by the variance of each individual asset (i.e. its risk) and partly by the way they move together − the covariance (σij) of the assets belonging to the portfolio (which can also be measured statistically by the coefficient of correlation). and is this term that explains why and in what amount portfolio diversification reduces the risk of investment. therefore, as emphasised by [24], portfolios of financial assets should be chosen not only based on their individual characteristics but also taking into account how the correlation between assets affects the overall risk of a portfolio. this suggests that the proportion (or share) of each asset in the portfolio can be determined by solving the following optimisation problem: σ ω ω ρ σ σp i j j n i i n j ij i j 2 11 = = = = = ∑∑ ε ε( ) ( )r rp i i n i i= = = ∑ 1 ω international journal of sustainable energy planning and management vol. 04 2014 19 jorge cunha and paula ferreira where two additional constraints have been included: the fact that the sum of the individual share of each asset is equal to one; and that the share of each asset is a nonnegative number. following this reasoning, there has been a growing application of the mva approach to electricity generation planning in recent years. in fact, this approach can be used to determine the optimal portfolios of electricity generation both for a company and for a country. since the main idea of the mva approach is that the value of each asset can only be determined by taking into account portfolios of alternative assets [14], energy planning should be focused more on developing efficient production portfolios and less on finding the alternative with the lowest production cost [18, 14]. for example, in the context of combining conventional and renewable technologies for electricity production, awerbuch [18] emphasised that although renewables may present a higher levelised cost, it does not necessarily mean that the overall cost of the portfolio of generation technologies become more expensive. this is due to the statistical independence of renewables costs, which tend to be not correlated with fossil-fuel prices. in fact, the inclusion of renewable technologies in an electricity generation portfolio is a way to reduce the cost and risk of the portfolio, although in a stand-alone basis the cost of those renewable technologies might be higher [14]. therefore, the mva approach allows analysing the impact of the inclusion of renewable technologies in the mix of generating sources of electricity, providing a better risk assessment of alternative generation technologies, something that the traditional stand-alone least cost approach cannot do. max r e r s t p i i i i n p i j j n i ( ) ( ) . . ε = = = = = = = ∑ ∑ ω σ ω 1 2 111 2 1 1 0 i n j ij i i n i = = ∑ ∑ ≤ = ≥ ω σ σ ϖ ϖ ˆ it should be noted that the advantage of applying the mva approach to electricity generation planning is not the identification of a specific portfolio, but the establishment of an efficient frontier where the optimal portfolios will be located. these are pareto-optimal, that is, an increase in returns (or a decrease in costs) is only achieved by accepting an increased risk. in fact, it illustrates the trade-off between production costs and risk: the lower the cost the higher the risk, meaning that it is not possible to achieve a lower electricity production cost without assuming higher levels of risk. on the other hand, an important aspect in the mva approach is the assumption that past events are the best guide for predicting the future. not to say that unexpected events will not occur, but that the effect of these events is already known from past experience [14]. francés et al. [8] analysed the relationship between energy security and res, since efficiency and diversification are important elements to improve energy security and to reduce energy vulnerability. focusing on the european union (eu) mediterranean solar plan, they have concluded that “green electricity from res, whether domestically produced or not, could improve energy security” [8]. a similar result was achieved by bhattacharya & kojima [9] which have demonstrated that a diversified electricity generating portfolio including low risk res can in fact reduce the overall investment risk of the portfolio, contributing to “reduce the cost of risk hedging in terms of achieving a certain level of energy supply security” [9]. in another study arnesano et al. [10] have recommended an increased investment in technologies based on res, given that a reduction in total generation cost can be attained for the same level of risk. a similar empirical finding was obtained by delarue et al. [11]: “lowering the overall risk can be a motivation for the implementation of wind power”, which “confirms the renewables risk-lowering argument often found in the literature (…), at least to a certain extent” [11]. also, zhu & fan [17] have evaluated china’s medium term (2020) planned generating-technology portfolio, which aims to reduce the portfolio’s generating risk through appropriate diversification of generating technologies, and where a strong focus on the deployment of renewable energy technologies is foreseen. their major conclusion was that “the future adjustment of china’s planned 2020 generating portfolio can reduce the 20 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach portfolio’s cost risk through appropriate diversification of generating technologies, but a price will be paid in the form of increased generating cost” [17]. finally, awerbuch [18] presents a summary of the application of the mva approach in the evaluation of different electricity generation planning scenarios for the case of u.s., eu and mexico concluding that the mix of electricity generation can be improved in terms of cost and/or risk, by expanding the use of renewable technologies. the author states that “compared to existing, fossil-dominated mixes, efficient portfolios reduce generating cost while including greater renewables shares in the mix thereby enhancing energy security. though counterintuitive, the idea that adding more costly renewables can actually reduce portfoliogenerating cost is consistent with basic finance theory” [18]. it follows an important conclusion: “in dynamic and uncertain environments, the relative value of generating technologies must be determined not by evaluating alternative resources, but by evaluating alternative resource portfolios” [18]. the above mentioned papers have demonstrated the possibility of adapting a pure financial theory to electricity planning problems. in fact, the increase of res in electricity generation creates important challenges to grid managers due to the expected variability of the power output of most of these res power plants. the adoption of a model based on portfolio theory can be particularly useful for electricity systems highly res supported as it takes into account both yearly seasonality and intra-daily variations of the production. therefore, this paper proposes the use of the mva approach on these systems based on the particular case of the portuguese electricity system to identify optimal res portfolios. the aim is to optimise the tradeoff between the variable production that characterises some of the res and the return of these projects, measured according to a set of proxy variables. in the following section an application of the mva approach to the case of portuguese electricity generation planning is shown, with a particular focus on the role of res technologies. 3. empirical study one advantage of the mva approach is the fact that it explicitly recognises portfolio risk as a decision variable influenced by the risk of each technology output and, most importantly, by the correlations between those outputs. for the mva model, the risk of the portfolio is proxied by the variability of the expected power output which is measured by the standard deviation of each technology power output. in the empirical study undertaken, the main goal was to present possible res generation mixes that would ensure minimum cost for each given portfolio risk level, obtaining the correspondent efficient frontier. the use of the portuguese case, as an electricity system strongly influenced by res seasonality behaviour, is expected to contribute to demonstrate how mva approach can provide a way to complement cost optimisation models with a quantitative risk evaluation of the electricity generation portfolio. 3.1. res in the portuguese electricity sector one feature that should be highlighted in the portuguese electricity system is the significant share of res in the current technological production mix [25]. in fact, the role of res has been increasing over the years due to the government objectives of reducing energy imports and co2 emissions. therefore, the electricity system is mainly based on a mix of thermal, hydro and wind power technologies. the wind sector grew rapidly in the last years and an increase on the hydropower investment is also foreseen for the next years, strongly justified by the need to compensate the variable output of wind power plants. figure 1 shows the evolution of the share of electricity consumption from res, fossil fuel sources and imports balance for the period 1999-2012. one can observe the increasing share of res on electricity consumption along those years, starting with a share of 21% in 1999 and reaching a value of 52% in 2010, although being reduced to 38% in 2012. the share of res is mainly due to large hydropower and wind power plants. it should also be noted that, regarding hydroelectricity production, total res contribution is extremely vulnerable to the rainfall conditions, which explains why in rainy years, such as 2003 and 2010, the share of res in total production was higher than in remaining years (37% and 52%, respectively) and in dry years, such as 2005 and 2012, its share is lower. this pattern is also shown by the evolution of the hydroelectricity productivity index (hpi) which is much higher in rainy years than in dry years. the figure also demonstrates that in most recent years the impact of international journal of sustainable energy planning and management vol. 04 2014 21 jorge cunha and paula ferreira the hpi on the overall res share is not as high as in the first years of the 2000 decade, which is largely explained by the increasing role of wind power able to smooth to a certain extent the impacts of a dry year. 3.2. data set the data used to solve the optimisation models were drawn from public information available on [28]. the data consisted, for each technology included in the study (i.e. wind, small-hydro, and photovoltaic), of the load output measured for each quarter of an hour for a time period between january 2009 and october 2013, comprising 168,572 measures for each technology, which allowed to capture the daily and yearly seasonality of res technologies output. to get some insights on this variability, figures 2–4 show the average power output (mw) of wind, small-hydro, and photovoltaic computed for each month of the analysed period. from the three figures, one can see the high variability of the res output, which is mainly due to the non-storage capacity of res production. the wind and small-hydro output production is much higher on autumn and winter seasons than in summer whereas for photovoltaic the contrary happens. although representing yet a small fraction of total production, it is also possible to witness the increasing share of photovoltaic for electricity production. as for the small hydropower plants most of them do not present storage capacity and as so it was assumed that their production could represent a proxy variable for the hydro availability. both the wind power and photovoltaic loads were assumed as proxy variables for the underlying resource availability. to allow for comparability among variables, the output of each technology (wind, small-hydro, and photovoltaic) was normalized by the respective installed power for each year for the period 2009–2013. the proxy variables included on the proposed mva model are characterised in table 1 and include the normalized small hydro output, representing the hydro inflows (hydro availability) to the system; the normalized wind power output, representing the wind availability of the 22 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach 1999 res 21% fossil fuel 81% imports-exports −2% hpi 0.68 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 −10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 31% 35% 22% 37% 25% 17% 31% 31% 28% 35% 52% 45% 38% 67% 64% 74% 57% 62% 70% 59% 54% 55% 56% 44% 50% 47% 2% 1% 4% 6% 13% 13% 10% 14% 18% 9% 5% 5% 15% 1.08 1.19 0.75 1.33 0.83 0.41 0.98 0.77 0.56 0.77 1.31 0.92 0.48 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 figure 1: evolution of the share of electricity consumption from res, thermal sources and imports in portugal, 1999-2012, and the hydroelectricity productivity index (hpi). source: own elaboration of [26, 25, and 27]. international journal of sustainable energy planning and management vol. 04 2014 23 jorge cunha and paula ferreira 2,250 2,000 1,750 1,500 1,250 1,000 l o a d o u tp u t (m w ) 750 500 250 0 2009 2010 2011 2012 2013 o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r figure 2: average power output (mw) of wind computed for each month for the period january 2009-october 2013. (source: own elaboration from ren data). o ct o b e r 350 300 250 200 150 100 l o a d o u tp u t (m w ) 50 0 2009 ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r 2010 2011 2012 2013 figure 3: average power output (mw) of small-hydro computed for each month for the period january 2009-october 2013. (source: own elaboration from ren data). system; and the normalized photovoltaic output, representing the sun availability of the system. from table 1, one observes that the hydro technology is the one with the higher level of output production for each unit of installed capacity, whereas photovoltaic shows the lower value. on the other hand, using the coefficient of variation, the normalised wind output shows the lower variability whereas photovoltaic shows the higher one. regarding the correlation between the outputs of each technology, it is seen that hydro is positively correlated with wind and that photovoltaic is negatively correlated with hydro and wind. 3.2. illustration of the mva approach to apply the mva approach reasoning, two different optimisation models were performed: one consisted in maximising portfolio output electricity generation, and the other in minimising portfolio electricity generation costs. to find optimal solutions for each optimisation problem the excel solver was used. the trade-off method was applied, consisting in the minimisation of one objective at a time, considering the other as a constraint bounded by allowable levels. the pareto front was found by varying these levels. the return of the portfolio function was the primary objective and the risk was assumed as the constraint. varying the risk allowable levels will make possible to obtain a set of solutions representing trade-offs between return and risk. 24 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach o ct o b e r 70 60 50 40 30 20 l o a d o u tp u t (m w ) 10 0 2009 ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly ja n u a ry a p ri l ju ly o ct o b e r ja n u a ry a p ri l ju ly o ct o b e r 2010 2011 2012 2013 figure 4: average power output (mw) of photovoltaic computed for each month for the period january 2009-october 2013. (source: own elaboration from ren data). table 1: characteristics of the proxy variables for mva models. hydro wind photovoltaic mean (mw/installed mw) 0.3146 0.2509 0.1667 standard deviation (mw/installed mw) 0.2859 0.1874 0.2211 correlation coefficient: hydro 1 0.2633 −0.0688 wind 1 −0.2255 photovoltaic 1 3.3.1 . maximising portfolio electricity generation in this first case, the aim was to obtain the efficient frontier that can maximise the expected res production per unit of installed capacity for each risk level. the optimisation model is described by (5) to (8). objective function: (5) constraints: (6) (7) (8) where e(lp) represents the expected normalised output of the portfolio, wi represents the share of technology i, e(li) represents the expected i technology output (i generation per installed mw), σ (lp) represents the standard deviation of the portfolio, σ i represents the standard deviation of i technology output, and ρik represents the correlation coefficient between i and k technologies outputs. table 2 and figure 5 describe the results obtained, including the efficient frontier, the characterisation of a set of optimal portfolios (portfolios 1–7), and also the 2012 res (wind, hydro and photovoltaic) portfolio computed according to the installed power of these technologies in 2012 [25] and the expected 2023 portfolio computed according to the national plan for renewable energy [29]. each of these portfolios is characterised by the expected normalised output (return), the standard deviation (risk), and the contribution of each res technology for electricity generation. from the analysis of table 2 and figure 5, the following results can be highlighted. firstly, the 2012 mix and the 2023 scenario are on the efficient frontier, wi i≥ ∀0 wii ==∑ 11 3 σ σ ρ σ σ lp i ( ) = + == = ≠( )∑∑ w w wi k ik i kk k ii i i 2 2 1 3 1 3 1 3∑∑ max l lp i iie w e( ) = ( )=∑ 1 3 reflecting the portuguese energy policy goals of increasing res share on the electricity system, diversifying the energy sources, and promoting a strategy based on hydro reinforcement to deal with the increasing wind share. secondly, most of the less risky scenarios point to a mix of hydro-wind and even photovoltaic power demonstrating that these are the more efficient portfolios. finally, more risky strategies rely, mainly, on hydropower which can be justified by its highest risk (standard deviation) but also by its highest return (output mean). 3.3.2. minimising portfolio electricity generation costs in this second case, the optimisation problem aims to achieve an efficient frontier with the objective of minimising the expected levelised cost of the res system. the objective function is then computed as the normalised output of each technology multiplied by the corresponding levelised cost. the optimisation model is described by (9) to (12). objective function: (9) constraints: (10) (11) (12) where e(lcp) represents the expected levelised cost (lc) of the portfolio per unit of installed capacity, wi i≥ ∀0 wii ==∑ 11 3 σ σ ρ σ σ lc lc lc l p i i i ( ) = + = = ∑ ∑ w w w i i i i k ik i k 2 2 2 1 3 1 3 cck k k i= ≠( ) ∑ 1 3 min lc lc lp i i iie w( ) = ( )=∑ e1 3 international journal of sustainable energy planning and management vol. 04 2014 25 jorge cunha and paula ferreira σ(lcp) represents the standard deviation of levelised cost of the portfolio and lci represents the levelised cost of each i technology. the values for the lc of each technology were based on the indicative values of the feed-in-tariffs for the three technologies under the portuguese market conditions in 2013. these values are defined according to decree-law 225/2007 and were assumed to be a good proxy for the lc, corresponding to 74 €/mwh for wind, 91 €/mwh for small hydro and 310 €/mwh for photovoltaic (information obtained from [30]). table 3 and figure 6 describe the results obtained, including the efficient frontier and the characterisation of a set of optimal portfolios (portfolios 1–7), as well as the 2012 mix and the 2023 scenario. from table 3 and figure 6 the following findings emerge. firstly, the results seem to be driven by the levelised cost of the technologies. secondly, a strong reliance on wind power is evident along the efficient frontier. thirdly, what seems to be the best solution (portfolio 1) in terms of minimum cost achieved is, however, compromised by a 100% wind power share. from a technical point of view it would be an extremely improbable solution, due to the already existing hydro capacity and for motives of security of supply. fourthly, the solutions with lower risk (e.g. portfolio 7) are characterised by a mix of wind, hydro and photovoltaic technology. fifthly, although the 2012 mix is not on the efficient frontier (but is near) the 2023 scenario is on the efficient frontier and near portfolio 7, reflecting the increasing share of technologies that 26 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach table 2: characterisation of the set of optimal portfolios. σ (lp) e (lp) hydro wind photovoltaic portfolio 1 0.29 0.31 100.0% 0.0% 0.0% portfolio 2 0.26 0.31 88.7% 11.3% 0.0% portfolio 3 0.23 0.30 74.4% 25.6% 0.0% portfolio 4 0.20 0.29 57.0% 43.0% 0.0% portfolio 5 0.17 0.27 43.0% 49.3% 7.7% portfolio 6 0.14 0.25 30.1% 48.7% 21.2% portfolio 7 0.12 0.22 11.9% 47.8% 40.3% 2012 mix 0.20 0.28 56.2% 41.6% 2.2% 2023 scenario 0.20 0.29 57.9% 38.9% 3.2% 0.32 0.30 0.28 0.26 0.24 n o rm a lis e d r e s p o rt fo lio e xp e ct e d o u tp u t normalised res portfolio output standard deviation 0.22 0.20 0.10 0.12 portfolio 7 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28 0.30 portfolio 6 portfolio 5 portfolio 4 2023 2012 portfolio 3 portfolio 2 portfolio 1 figure 5: efficient frontier for maximising portfolio electricity generation. allow to reduce portfolio electricity generation risk but that have higher costs. finally, it should be noted that the proposed mva model only included data related to small hydropower plants, which show a much higher variability than large storage hydropower. 4. discussion of results the results indicate that both the 2012 mix and the 2023 scenario [25, 29] are close to the efficient frontier for the first optimisation model (maximising res output). in fact, both these scenarios reflect the portuguese energy policy goals of increasing res share on the electricity system, diversifying the energy sources and promoting a strategy based on hydro reinforcement to deal with the increasing wind share. in the same way, most of the less risky scenarios described in figure 5 point to mix hydrowind power scenarios as the more efficient ones. more risky strategies rely mainly on hydropower, the option with higher expected return but also the one with higher standard deviation. although a positive correlation exists between wind and hydro, it does not seem to be enough to jeopardize the mix of these technologies in most of the scenarios. on the other hand, photovoltaic presents a less interesting expected value and a risk level close to the hydro one. it presents, however, the advantage of being negatively correlated to both wind and hydro. as so, less risky scenarios tend to include also this option combined with hydro and wind. the second optimisation model performed (minimising portfolio electricity generation costs) presents quite different results, clearly driven by the levelised cost of the technologies. a strong reliance on wind power is evident along the efficient frontier, as this is the option with lowest expected cost and with the international journal of sustainable energy planning and management vol. 04 2014 27 jorge cunha and paula ferreira table 3: characterisation of the set of optimal portfolios.s σ (lcp) e (lcp) hydro wind photovoltaic portfolio 1 13.87 18.56 0.0% 100.0% 0.0% portfolio 2 13.50 19.02 0.0% 98.6% 1.4% portfolio 3 13.25 19.38 0.8% 97.0% 2.2% portfolio 4 13.00 19.78 2.5% 94.6% 2.9% portfolio 5 12.75 20.26 4.4% 91.8% 3.8% portfolio 6 12.50 20.90 7.0% 88.1% 4.9% portfolio 7 12.29 22.19 12.3% 80.5% 7.2% 2012 mix 12.66 20.71 11.1% 85.8% 3.1% 2023 scenario 12.30 21.98 11.6% 81.6% 6.8% 23 22 21 20 n o rm a lis e d s e d r e s c o st p o rt fo lio normalised res portfolio output standard deviation 19 18 12 portfolio 7 13 14 portfolio 6 portfolio 5 portfolio 4 2023 2012 portfolio 3 portfolio 2 portfolio 1 figure 6: efficient frontier for minimising the levelised cost of the portfolio. lowest standard deviation when considering the levelised cost normalized by the installed power. solutions with lower risk are characterised by a mix of wind, hydro and, to a lower extent, photovoltaic technology, leading to a higher expected cost but also taking advantage of the portfolio diversification. as in the first optimisation model, both the 2012 mix and the 2023 scenario [25, 29] are close to the efficient frontier. the 2023 scenario demonstrates a risk reduction trend comparatively to the 2012 mix, however this is achieved at the expense of an increasing levelised cost of the portfolio. although the usefulness of the mva approach for electricity generation planning scenarios has been demonstrated, the obtained results also highlight the need to supplement this approach with additional technical, legal and economic constraints when moving from the analysis of financial asset portfolios to the analysis of portfolios of real projects. in fact, there are some limitations of the mva approach that should be dealt with. for example, allan et al. [12] emphasised two issues. on the one hand, the failure to consider transaction costs associated with changes in generation mix. second, the fact that, generally, the studies carried out do not take into account the feasibility of the efficient portfolios obtained with the mva approach in the context of existing energy infrastructure. moreover, awerbuch & berger [14] pointed out that the characteristics of electricity generation technologies are not always comparable to the characteristics of financial assets for which the mva approach was originally developed. firstly, markets for assets (e.g. turbines, coal plants) related to electricity generation are usually imperfect in contrast with capital markets, which also make them less liquid. secondly, financial assets are almost infinitely divisible and fungible, which does not happen with electricity generating real assets. finally, investments in electricity production technologies tend to be lumpy, especially renewable technologies. however, awerbuch & berger [14] argue that “for large service territories or for the analysis of national generating portfolios, the lumpiness of individual capacity additions becomes relatively less significant”. 5. conclusion sustainable development depends, to some extent, on changing the electricity generation paradigm. in this regard, res play an important role in the design of strategies for a sustainable future. these strategies have been fostered by several international environmental agreements, such as the kyoto protocol and the res directive, which have the advantage, for countries like portugal, of promoting the use of endogenous resources, reducing external energy dependency and diversifying energy supply. however, the raising trend of res brings considerable challenges to decision makers due to the uncertainty of production, which is highly dependent on the availability of the underlying resources. therefore, this paper was an attempt to apply an alternative tool for electricity planning – the mva approach – in relation to the traditional least cost methodology. this allowed addressing both the expected return and the res portfolio risk, taking into account both the standard deviation of each technology output and the correlation coefficient between technology outputs. the major findings of the study were that: (a) less risky solutions are characterised by a mix of res technologies for both optimisation models performed; and (b) both the 2012 production mix and the 2023 forecasted scenario are on or close to the efficient frontier for both optimisation models. both models allow the design of efficient frontiers, but it is still up to the decision makers to determine their preferred tradeoff between risk and return. for example, in figure 6 the cost can be reduced, but this will increase the risk. in fact, the obtained efficient portfolios represent pareto optimal scenarios taking into account the risk and return variables, and no implication on the social interest of these scenarios can be inferred. the first model represents a technical analysis of the system, where only the power output of each res technology is considered. from this point of view, it can be considered that ren 2012 and 2023 represent scenarios reaching for a compromise between power output and variability of these outputs. however, the second model shows a different perspective where scenario ren 2023 represents a solution of low cost risk but which is more expensive when taking into account the assumed costs for each technology. evidently, the least cost solutions are the ones requiring only wind power as it presents the lowest costs. less risky solutions rely on a mix of technologies including more expensive ones. however, it should be underlined that the results of both models are not directly compared: the first model proposes optimal res portfolios comprised of wind, photovoltaic and 28 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach hydro (small and large) power and the second model proposes optimal cost res portfolios also comprised of wind and photovoltaic but only small hydro is considered, according to the available feed-in-tariffs. the results demonstrate the need to properly assess the cost of the technologies and for different projects to be included in the portfolio, as lc of res can dramatically change from one location to another depending on the renewable resource conditions. in fact, the 2012 and 2023 scenarios are strongly constrained by other restrictions not included in these models, namely the res and non-res power plants already operating in the electricity system, the legal and technical requirements, the demand requirements and fluctuations and the existing interconnection with spain. notwithstanding, it is worth to underline that both mva point to the same solution for the minimum risk portfolio, establishing that diversification is in fact an effective strategy to reduce risk not only for financial assets but also for the electricity production sector. the proposed portfolios do not attempt to represent 100% res scenarios for an electricity system but rather to represent possible optimal combinations of res technologies that can be included in electricity systems containing also other non-res technologies. the results have demonstrated that the mva can make an important contribution to decision making in the electricity sector, due to the recognition of the risk variable and correlation of technologies. though recognising its usefulness, the results obtained also clearly indicate that this approach should be enriched with additional technical, legal and economic constraints given the different nature of financial assets (for which the mva approach was initially proposed) and real assets (as is the case of power plants). in particular, future work addressing res portfolios should also consider the demand variability and its relationship to res power output aiming to minimise not only the variability of the portfolio output (standard deviation) but also to minimise the deviation between the demand and the res production in each moment. also, the inclusion of other technologies such as hydro with dam and biomass can make a significant contribution to the reduction of the portfolio risk as the power output of these plants can be controlled to some degree. acknowledgment this work was financed by: the qren – operational programme for competitiveness factors, the european union – european regional development fund and national fundsportuguese foundation for science and technology, under project fcomp-01-0124-feder011377 and project pest-oe/eme/ui0252/2014. references [1] campbell cj, the oil age in perspective, energy exploitation 31 (2) (2013) pages 149–165. http://dx.doi.org/10.1260/0144− 5987.31.2.149 [2] eurostat, energy from renewable sources, http://epp.eurostat.ec.europa.eu/statistics_explained/index.ph p/energy_from_renewable_sources, (consulted on january 2014). 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[30] dgeg website, http://www.dgeg.pt/ (consulted in january 2014) 30 international journal of sustainable energy planning and management vol. 04 2014 designing electricity generation portfolios using the mean-variance approach http://dx.doi.org/10.1016/j.enpol.2010.08.028 http://dx.doi.org/10.1016/j.enpol.2009.07.048 http://dx.doi.org/10.1016/j.energy.2014.02.036 http://dx.doi.org/10.1016/j.energy.2009.11.024 http://dx.doi.org /10.1016/j.eneco.2007.11.008 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice au_35.indb international journal of sustainable energy planning and management vol. 35 2022 97 *corresponding author – e-mail: z_adel@sbu.ac.ir international journal of sustainable energy planning and management vol. 35 2022 97–110 abstract energy efficiency enhancement is considered a solution for enhancing energy conservation and sustainability. the present study deals with two major challenges in improving energy efficiency: the initial investment cost and the rebound effect. funding of energy efficiency solutions and mitigating the rebound can be achieved through energy subsidy reduction. to be an effective policy, there must be a plan that considers the dependency between energy efficiency, avoided subsidy, and required funds for all efficiency solutions. thus, there is a problem at the aggregate level of the economy whose roots are in engineering details. the combination of a top-down dynamic general equilibrium model with a bottom-up efficiency improvement module is used to find the set of efficiency practices that should be realized in each period along with the required increase in energy prices. choosing efficiency practices depends on their costs and the available funds that are retrieved from avoided subsidies in the previous period. the model is applied to the energy-intensive industries in iran. the model results show that using the recommended policy, over less than ten years, the energy efficiency of electrical and natural gas equipment in energy-intensive industries of iran can be increased by 12.7% and 18.1% respectively. the rebound effect starts with values above 80% and then falls below 0% which indicates the success of the proposed policy in mitigating the rebound effect. results also demonstrate that the implementation of the policy realizes the 4% reduction in co2 emissions by 2030 which is iran’s unconditional pledge. investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries zahra adel barkhordar* faculty of mechanical and energy engineering, shahid beheshti university, bahar street, 1658953571. hakimiye, tehran, iran. keywords energy efficiency improvement; subsidy removal; general equilibrium model; rebound effect; http://doi.org/10.54337/ijsepm.6726 1 introduction the industry and especially, the energy-intensive industries have a high share of energy consumption in the world. after allocating electricity and heat emissions to final sectors, i.e., accounting for the emissions associated with electricity and heat generation, the industry is found to be the largest emitting sector, with over 40% of global ghg emissions in 2019. [1]. according to the report of the latest energy balance sheet released in iran, industries (excluding energy industries) consumed 2.3 tj in 2019 [2]. improving energy efficiency is regarded as an important solution to reduce energy consumption and mitigate climate change. in 2018 it was claimed that if all the available cost-effective energy efficiency potential are realized by 2040, the global energy intensity could be halved from 2018 levels by 2040. [3, p.27]. literature on evaluating the effects of improving energy efficiency is vast. from an economic perspective, increasing energy efficiency may not be as successful as expected in reducing energy consumption. the reason lies in the fact that energy efficiency improvement reduces the effective price of energy which increases the demand for energy services. therefore, part of the expected energy saving becomes offset [4]. this is 98 international journal of sustainable energy planning and management vol. 35 2022 investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries called the rebound effect. a wide variety of economic models has been employed to measure the magnitude of rebound at the sectoral and economy-wide levels. the economy-wide rebound captures all the price and income effects that might propagate throughout the economy as a result of increasing energy efficiency. the studies on the economy-wide rebound can be divided into two categories based on their approach to introducing the energy efficiency in the model [5]. the first category which comprises the majority of economywide rebound studies is based on realized efficiency improvement, and too little or no explanation is given about how the efficiency is increased (in technical meaning) or how the energy productivity is improved (in economic terms). in these studies, energy efficiency enhancement is included using some aggregate parameters such as increasing energy productivity and autonomous energy efficiency improvement (aeei). the trend of changes in these parameters is exogenously fed into the model and the associated effects are analyzed. increasing energy efficiency is costless and thus the economics of energy efficiency increase is not fully considered. the second category of studies is based on potential efficiency improvement, i.e., these studies estimate the rebound effect from an actual, typically costly, energy efficiency policy and are called policy-induced energy efficiency improvement [6]. the importance of including efficiency costs in rebound effect estimation has been highlighted in many studies. greening et. al [5], who raised the issue of capital cost in rebound estimation, stated that measurement of the rebound declines in size due to explicit consideration of the capital cost of efficiency enhancement. therefore, including costs of increasing efficiency may lead to a more precise estimation of the rebound effect. the present study aims at investigating the economywide effects of increasing energy efficiency (in technical terms) based on the second approach. in addition to including the costs of efficiency practices, the novelty of the present paper is that it decides where the efficiency improvement should come from (in technical meaning). the efficiency solutions are based on viable previously studied efficiency potentials in the energy-intensive industries of iran. the other novelty of the paper is that the model can prioritize energy efficiency potentials based on their costs and benefits and then implements them in the economic model. the economic model is a general equilibrium model and has the capability of assessing the economy-wide effects of increasing energy efficiency. computable general equilibrium (cge) models are the most appropriate approach to use in evaluating the economywide rebound [7]. as greening et al. [5] note, ‘prices in an economy will undergo numerous, and complex adjustments. only a general equilibrium analysis can predict the ultimate result of these changes.’ because the required investment and the economywide response to implementing energy efficiency solutions are included in the model, the results of the model determine the set of energy efficiency potentials which should be realized each year along with the required investment and economy-wide rebound effect. determination of energy efficiency pathways can help analyze the rebound mitigation policies. for each year, the efficiency potentials and the reduction in the effective price of energy can be calculated. rising energy prices is one of the main solutions to deal with the rebound effect because it neutralizes the decline in effective energy price [8, 9]. where energy is subsidized, this approach can reduce the energy subsidy and rebound effect simultaneously, and thus it is regarded as a win-win solution [10]. given the dependency between the energy price and efficiency improvement, the use of mixed instruments creates synergy in reducing energy consumption. using the combination of the financial instruments (such as pricing and taxation and increasing energy efficiency simultaneously, contributes to the correct pricing of energy as well as eliminating the rebound effect [11]. birol and keppler [12] define the policy of price change and the technology development of efficiency improvement as two faces of the same reality which should be developed together. thus, the present study contributes to the current studies in two aspects. first, it determines the energy efficiency pathway and calculates the economy-wide rebound effect based on engineering details of energy efficiency solutions. second, it determines a temporal subsidy removal plan that would mitigate the rebound effect. it is worth noting that the proposed approach in including efficient technologies and increasing energy efficiency is generic and can be applied to economic models that study the rebound effect. the present study is organized as follows. section 2 discusses the literature on the rebound effect and focuses mainly on the studies that deal with mitigating the rebound. section 3 illustrates the model and the international journal of sustainable energy planning and management vol. 35 2022 99 zahra adel barkhordar although applying mixed instruments in counteracting the rebound has a theoretical foundation, few studies have been conducted on the evaluation of the impact of using mixed instruments on counteracting the rebound effect. in a study performed in austria, the energy tax was used to deal with the rebound effect [20]. the study evaluated the standardization of equipment along with energy tax as a useful instrument in reducing energy consumption in the household sector. it integrates the aggregate technological variables as a driver of energy demand. in an attempt to study the effect of the revenue_ neutral financing of incentive efficiency programs from avoided energy subsidies, gopal et al. [21] at lawrence berkeley national laboratory (lbnl) used the lbnl energy efficiency revenue analysis model to estimate the amount of energy that can be saved in several emerging economies. they calculate the savings from avoided subsidies achieved through energy efficiency from an engineering perspective. the benefits from energy savings and the savings from avoided subsidies are compared with the associated costs in the lifetime of chosen appliances in the household sector. as an example, the net present value of the savings from avoided subsidy as a result of 25% efficiency improvement for a 15-year lifetime refrigerator is $150. compared to the $107 incremental cost of the efficient refrigerator, a government incentive result in $43 savings from avoided subsidies. the amount of energy savings is corrected with the value of rebound that is exogenously given to the model based on literature estimates (e.g., an 11 % rebound for refrigerators). although engineering details are accounted for, the economic interaction among agents is not included in the model. li et al. examined the impact of the subsidy elimination on the rebound effect by using a cge model for china and suggested that renewable resources should be subsidized to reduce the adverse economic effects caused by eliminating fossil fuel subsidies [16]. they introduced the autonomous energy efficiency improvement (aeei) parameter as an indicator of energy efficiency enhancement and set scenarios with different exogenous technology advancement levels from 1% to 7%. following different subsidy removal programs, the calculated rebound range from 95.8% (no subsidy removal) to -23.1% (all fossil energy subsidy is removed, additional energy subsidy rate for some energy carriers). methodology for incorporating the proposed energy efficiency program. results of the model are presented in section 4. finally, section 5 concludes the suggestions in the field of evaluating the effects of energy efficiency improvement and discusses the policy implications of the present study. 2 literature review most estimates of the rebound are based on realized rather than potential efficiency improvement, i.e., these estimates capture the trade-offs ex-post, and too little or no explanation is given to how to increase the efficiency (in technical meaning) or how to improve energy productivity (in economic terms). there are numerous studies estimating the rebound effect of realized energy efficiency enhancement. examples include grepperud and rasmussen who studied the rebound effect in norway by interpreting efficiency improvements as exogenous factor productivity changes [13], a study by broberg et al. in which the rebound effect was calculated in the swedish economy as a result of a 5% exogenous increase in efficiency of industrial energy use [14], wei and liu who assumed that the energy efficiency in 2040 is 10% higher than the bau case for all non-energy sectors in all regions of the world [15], li et al. who studied the rebound effect associated with exogenous improvement in autonomous energy efficiency improvement (aeei) parameter [16] and lu et al. who assumed that energy efficiency of five types of energy carriers is improved by 5% and 10% in production sectors of china [17]. all these studies assume a costless efficiency increase. in addition, as zimmerman et al. indicated in their study, the rebound effect must be assessed with attention to the relationship between energy and capital (complementarity/ substitutability). otherwise, the rebound would be overestimated [18]. a correct estimate of rebound is important especially in the energy-intensive industries and developing countries because the magnitude of rebound may be higher. the rebound effect in energy-intensive industries is higher due to the higher share of fuel costs in these industries. developing countries have a higher potential for the occurrence of the rebound effect, due to the nonsaturation of energy consumption [18]. when the value of the rebound effect is high, relying only on efficiency improvement is not effective and other tools should be used to reduce energy consumption [19]. the literature on rebound mitigation is yet sparse [16]. 100 international journal of sustainable energy planning and management vol. 35 2022 investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries vector of efficiency potentials available funds investment on energy efficiency potentials possibility to increase energy price effective price of energy energy consumption subsidy funds + + + energy efficiency increase + figure 1: the schematic cause and effect diagram of the proposed energy efficiency plan array of efficiency enhancement module total financial resources r ed uc in g na tu ra lg as de m an d r ed uc in g el ec tr ic ity de m an d electricity natural gas petroleum products capital labor force energy intermediate materials production of energy intensive industries added value total intermediary materials solution1 solution2 solution3 ….. solution n nested production function figure 2: the relationship between the nested production function of the energy-intensive industries from the cge model and the efficiency improvement module international journal of sustainable energy planning and management vol. 35 2022 101 zahra adel barkhordar from an economic perspective, increasing energy efficiency reduces energy consumption. because energy is subsidized, reducing energy consumption reduces energy subsidy payments. in addition, efficiency enhancement reduces the cost of energy services and this is the main driver of the rebound effect. to mitigate the rebound, a reduction in the cost of energy services should be neutralized. thus, energy prices should increase (i.e., energy subsidies should be reduced). both the reduction in energy demand and energy subsidy release subsidy funds. the revenue from increased energy prices (avoided subsidies) can be used to finance the next group of selected energy efficiency solutions. the suggested process of realizing energy efficiency potentials is illustrated in fig. 1. the process can be continued until all viable efficiency solutions are implemented. the production function of the general equilibrium model is modified to capture these effects. to consider the technical details of the energy efficiency improvement projects, an efficiency improvement module is developed and linked to the dynamic general equilibrium model. the cge model calculated the total volume of available financial resources that can be allocated to efficiency enhancement and the efficiency improvement module selects the energy efficiency improvement solutions based on the financial resource constraint. the total amount of energy savings and the change in the leontief coefficients of the energy-intensive industries are determined in the efficiency improvement module and are considered as input data to the general equilibrium model. figure 2 displays the conceptual model of the relationship between the manufacturing section of the energy-intensive industries in the cge model and the efficiency improvement module. a detailed mathematical explanation of the modifications is presented in section 3.3. 3.1 array of energy efficiency solutions energy efficiency solutions are specified as an array of discrete technologies. barkhordar et al. [23] evaluated efficiency improvement potentials in energy-intensive industries of iran including steel, aluminum, cement, brick, glass, and paper industries. based on their study and the value of energy-saving potentials and their relevant costs, the efficiency improvement solutions for which the government is supposed to supply their financial resources are organized. there are 42 out of 79 efficiency opportunities that have payback periods under three years. implementing all of the studied efficiency li and lin [22] analyzed the impact of fossil-fuel subsidies on the rebound effects across chinese sectors using the input/output model. they calculated the aggregate technological advancement in each sector from 2006to 2010 based on the leontief matrix of the chinese input/output table. the rebound effect is then calculated based on the reduction in energy consumption and output growth promoted by technological advancement. their analysis shows that the aggregate sectors’ rebound effect without subsidy removal has been 11.31% and if the subsidies were removed, the rebound effects could have been 10.64%. in addition, the technical aspects of increasing energy efficiency play a vital role in determining the level of efficiency enhancement. there is certainly a bound on the level of technically possible energy conservation and this bound varies across sectors. 3 conceptual and methodological frameworks theoretically, improving energy efficiency reduces the cost of provided energy services. energy subsidies can be reduced to stabilize the effective price of energy. avoided subsidies can be used as a source of financing for energy efficiency programs. the proposed program curbs the growth of energy consumption via decreasing the rebound and overcoming the first cost barrier in efficiency investment and can also reduce energy subsidies. the suggested process of realizing energy efficiency potentials is described hereafter. curtailing energy demand using energy efficiency increase initially requires comprehensive knowledge about energy efficiency potentials. therefore, as the first step, the energy efficiency potentials in the energy-intensive industries of iran are found and the corresponding costs (investment and o&m) and benefits (energy saving and emission reduction) are analyzed. the gathered information comprises an array of energy efficiency potentials. more detail on the array and efficiency potentials will be given in section 3.1. depending on the available funds, efficiency solutions are chosen in a bottom-up manner and are then translated to a top-down general equilibrium model. the computable general equilibrium (cge) model is an appropriate choice in analyzing economy-wide effects of efficiency improvement due to the consideration of different economic sectors, economic agents, and their interactions. an overview of the cge model of iran is presented in section 3.2. 102 international journal of sustainable energy planning and management vol. 35 2022 investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries solutions is expected to save more than 110 peta-joule. this is an engineering-based calculation of the energysaving potential. a shortlist of selected solutions is presented in table a1. various criteria for prioritizing projects are available, such as net present value (npv) and internal rate of return (irr). in the current analysis, it is supposed that the government is concerned with energy-saving and emission reduction and it does not aim at making money from energy cost savings. therefore, the financial flow of the benefits from the implementation of energy efficiency solutions is not transferred to the government. instead, the amount of saved energy and the corresponding costs are important for the government in prioritizing solutions. the higher the energy saving from one dollar investment in energy efficiency practices, the better. the efficiency improvement solutions are ranked based on the energy-saving potential per unit of required investment. it should be noted that energy can be conserved through different strategies. in some industries, saving energy may be accompanied by reducing capital, not adding investments. this is the case where the production process is changed. in such cases, energy and capital are complements. however, the present study only deals with energy efficiency solutions that save energy by replacing old technologies with more efficient technologies or by installing systems that increase the efficiency of a system. hence, capital and energy are substitutes. the array of energy efficiency solutions is fed into the cge model. the structure of the cge model is presented in the next section. 3.2 the general equilibrium model the general equilibrium model of iran’s economy (gremi) is a recursive multi-sector and dynamic model. the developed model is consistent with neoclassical general equilibrium models, as explained in [24]. the central core of the model is the static general equilibrium model explained in [25]. a detailed description of the model along with model validation is presented by barkhordar and saboohi [26]. the agents have comparative expectations. the reason lies in the fact that the assumption of complete knowledge of agents about the future, especially in a country where its economy is in transition, is not reasonable. therefore, it is better to consider the agents’ behavior in response to the policies as a comparative expectation. the effects of policy-making are examined from 2018-to 2030. the cge models have the advantage of considering all economic agents, their behaviors, and the financial transaction among them. economic agents in the model are urban and rural households, 14 activities, the government, and the rest of the world. based on neoclassical foundations, households’ demand for goods and services is determined based on their motivation toward maximizing their utility from consumption subject to their budget constraint. the linear expenditure system (les) is used to represent household demand (eq. (1)). in the linear expenditure system, the minimum subsistence requirement is imposed on each good. this subsistence parameter is considered a direct function of the population. thus, unemployed people need to meet their minimum subsistence requirement although the revenue of employed persons supplies the expenditure of the whole people of the community. therefore, it is assumed that the income of the employed people is primarily used to meet the minimum needs of all individuals, and then, the remaining value is divided among different groups of goods and services by constant ratios. i i, t ,h i, t ,h i, t ,h t ,h j, t ,h j, t ,h j 1i, t ,h ( p ) p = α = β + × µ − β ×∑x (1) in which xi,t,h is the demand for commodity i by the household type h at time t. αi,t,h is the share parameter, the βi,t,h is the subsistence bundle, and the μt,h is the household total expenditure. the value of demand parameters α and β are given in table a2. the incomeexpenditure balance of households is considered an identity in the model. households supply labor and their savings and earn income, pay tax and receive a direct transfer from the government. firms produce commodities and demand capital, labor, energy, and material. firms try to maximize their profit subject to their production function. the production function of firms has a nested structure in which the primary inputs (labor and capital) are combined under the constant elasticity of substitution (ces) function and generate the added value of the firm. the intermediate inputs (materials and energy) are also combined based on a fixed proportion (leontief production function) and constitute the total intermediate input (eq. 2). further, the total intermediate input and the added value of the firm are combined according to the leontief production function. the nested production function is illustrated in fig. 2. international journal of sustainable energy planning and management vol. 35 2022 103 zahra adel barkhordar , ,= ×c a c a aqint ica qinta (2) where: qinta,c: quantity of intermediate input c in production sector a qintaa: quantity of aggregate intermediate input in production sector a ica a,c: leontief coefficient for intermediate inputs c in production sector a ica a,c reflects the share of intermediate inputs in producing one unit of output. for energy carriers that are used as intermediate inputs to industries, this coefficient indicates how much energy is used in producing one unit of output. it is thus a measure of energy efficiency in economic terms. this is the main connection point between the efficiency module and the cge model. energy productivity changes in response to energy efficiency improvement. the effect of the energy efficiency program on energy and capital productivity is explained in the next section. the government is considered an agent who demands commodities, receives taxes, and makes investments. given the difference in the incentives for governmental investment relative to the private sector, these two sectors and their dynamics are included in the model differently to reveal the effects of the non-optimal allocation of governmental investment in manufacturing activities on production. for private sectors, the allocation of capital to each sector is determined based on its relative return to capital [27]. however, governmental investment is considered as the allocation of a certain share of the development budget to various sectors such as services (defense, public health, etc.), oil and gas, and industry. in contrast, the private sector investment is a function of the profitability of manufacturing units in the past period. the cge model clears markets for commodities and primary factors by finding a vector of prices that equals the aggregate demand with the aggregate supply. the rest of the world is considered as the origin of imports to and destination for export from a country. the current account is considered in the model to balance the supply and demand of foreign currency. the cge model presented so far is not adapted to include the efficiency solutions. it should be further modified to include the mechanism of the efficiency program. the economic challenge of specifying energy efficiency solutions in the cge model is discussed in the next section and the proposed solution is elaborated. 3.3 representation of energy efficiency solutions engineers choose among different technologies based on technical details of the technologies. there is always a criterion such as a project cost or the project benefit that should be minimized or maximized. the energy and mass balance are usually included in engineering models. for an end-use technology, the energy balance can be stated as a relationship between the energy input of the technology (final energy) and the useful energy that the technology provides (useful energy). (eq. (3)) _ _= ×useful energy final energyη (3) where η is the physical energy efficiency of the technology. the formulation looks similar to a leontief production function. in increasing the energy efficiency of a production process, there is a trade-off between energy and capital. the decision about whether to invest in an energy efficiency solution or not is made based on maximization or minimization of the chosen criteria, such as cost minimization of the process. economists, on the other hand, use production functions to show the aggregate relationship between real output and input factors. the production function is commonly used to represent a production process. a suitable production function should be able to depict the range of substitution possibilities. the parameters of the function are measured from real data using regression analysis. using the regression results for the future requires the assumption that the underlying production function causing the relationship between the input factors and real output is valid beyond the range of the historical data. the validity of this assumption is questionable when efficient technologies are new or when increasing efficiency has not been a concern before and historical patterns do not have inside information about using existing efficient technologies. table 1: efficiency improvement in energy intensive industries efficiency enhancement 2019 2020 2021 2022 2023 2024 2025 electricity 1.53% 3.95% 5.22% 0.53% 0.38% 0.58% 0.41% natural gas 16.74% 0.11% 0.31% 0.54% 0.37% 0.00% 0.04% 104 international journal of sustainable energy planning and management vol. 35 2022 investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries when energy-efficient technology is new, herring and sorrel [7] suggest including technology parameters that can affect the inputs of production factors. the technology parameters depict how technology can make each input more effective in producing output by simply multiplying the inputs by a technology parameter. as they also mention on page 115, “the task of estimating the parameters of such (production) functions is also challenging”. from an engineering perspective, using production functions for energy-saving studies has two challenges. first, non-linear production functions do not necessarily follow the law of conservation of energy. second, the parameterization of substitution possibilities with highly aggregated production functions is difficult to validate empirically. to resolve these issues, this study attempts to benefit from engineering details of energy efficiency solutions within an economic production function. discrete energy efficiency solutions are ranked in an array of efficiency potentials based on their energy savings to cost ratio. in each period, a set of efficiency solutions are chosen depending on their energy savings to cost ratio. the total cost of implementing selected solutions should not exceed the efficiency funds provided by the government. according to the technical specification of efficiency solutions, implementing the kth efficiency solution reduces energy consumption by δeek percent and requires investment equal to eeik. implementing nt efficiency solutions in year t results in a ∆∑ n k k ee percent decrease in aggregate energy demand of a production sector. the aggregate energy demand in the nested production function of energy-intensive industries is represented by fixed (leontief) coefficients. implementing energy efficiency practices reduces the energy demand per unit of output. to represent energy efficiency enhancement in the production function of energy-intensive industries, the leontief coefficients of energy input ( , , base energy a tica ) in the baseline scenario (the scenario in which efficiency enhancement is not funded by the government and everything continues as it did in the past) should be multiplied by a productivity factor. (eq. (4)) the productivity parameter (τe) is calculated each year after the implementation of energy efficiency solutions (eq. (5)). , , , , , : = × ee base energy a t energy a t j tica ica e j types of final energyτ (4) , ,1 : = + ∆∑j t k j k e ee k energy efficiency solutionsτ (5) where . , ee energy a tica is the updated leontief coefficient, τej,t is the energy productivity factor that demonstrates how increasing energy efficiency could make energy input more effective in producing output. δeek,j is the percentage change in energy consumption due to the implementation of energy efficiency solution k. investment in increasing energy efficiency increases the capital stock of the production sector under the same quantity of real output. the capital productivity factor, τkj,t , demonstrates how increasing energy -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 20 19 20 20 20 21 20 22 20 23 20 24 20 25 20 26 20 27 20 28 20 29 20 30 20 31 20 32 20 33 20 34 20 35 20 36 20 37 20 38 20 39 20 40 pe rc en ta ge c ha ng e natural gas demand electricity demand figure 3: percentage change in electricity and natural gas demand concerning the baseline scenario international journal of sustainable energy planning and management vol. 35 2022 105 zahra adel barkhordar efficiency changes the productivity of capital in producing output. the capital productivity factor is derived from eq. (6). , , 1 : , 1 : = + ∑j t k jk k j types of final energy i k efficiency solutions τ (6) where ik,j is the required investment to implement efficiency solution k. the same can be defined for the labor productivity factor, τlj,t, although in most cases efficiency solutions are assumed to be neutral concerning labor demand (i.e., τlj,t= 1). considering the productivity factors, the general expression for the production function takes the form of eq. (7). it should be noted that the productivity factors are endogenously calculated each year based on the selected efficiency solutions. this feature of the model enables it to find the optimum pathway for increasing energy efficiency. ( ), , , = × × ×t t t t t t tqa f k k l l e e mτ τ τ (7) in each period, the set of energy efficiency potentials is chosen such that the total amount of investment does not exceed the total available funds (eq. (8)) , , , : , : ≤∑ k j t t k j the i fund j types of final energy k efficiency solutions (8) except for the starting year of the efficiency program, where the amount of funds is supplied from the government budget, the total available fund is calculated based on the amount of avoided subsidies (eq. (9)) , , . : = ∆∑ eet j t j t j fund ed subsidy j types of final energy (9) where ,∆ ee j ted is the realized energy demand reduction of energy-intensive industries and subsidy is the rate of energy subsidy for energy type j. in contrast to the expected energy demand reduction which is known a priori to model execution, the realized energy demand savings are determined based on model results. the success of the efficiency program in curtailing the demand is assessed using the rebound effect. in other words, the realized energy demand savings is equal to the expected energy demand saving corrected for the rebound effect. the calculation of the rebound effect is explained in the next section. 3.4 rebound effect calculation the rebound effect is calculated to examine the success of the proposed efficiency program in reducing the energy demand. the rebound effect is calculated using eq. (10) [28]. 1 tt t aes re pes = − (10) where ret illustrates the value of the rebound effect in each year, aest indicates the actual energy saving that is -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 20 19 20 20 20 21 20 22 20 23 20 24 20 25 20 26 20 27 20 28 20 29 20 30 20 31 20 32 20 33 20 34 20 35 20 36 20 37 20 38 20 39 20 40 re bo un d va lu e natural gas electricity figure 4: the economy-wide rebound resulting from the efficiency improvement of the electricity-consuming and natural gas-consuming devices in the energy-intensive industries 106 international journal of sustainable energy planning and management vol. 35 2022 investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries realized in each year, and pest is regarded as the expected value of energy savings based on engineering calculations. in economy-wide rebound effect calculations, the economy-wide expected value of energy-saving is calculated based on the expected value of energy savings in energy-intensive industries, as well as the share of energy-intensive industries in energy consumption (eq. (11)). j, te = α × τ∑t t j pes (11) where α indicates the share of energy consumption of the energy-intensive industries from national energy consumption and eτ indicates the efficiency improvement of the energy-intensive industries. 4 model results based on environmental concerns, petroleum products in the industries of iran have been substituted by natural gas to a large extent. the share of petroleum products in the energy consumption of industries in iran has decreased from 38% in 2000 to 9% in 2019 [2, 29]. the vector of energy efficiency potentials in energy-intensive industries of iran only contains solutions that decrease the demand for electricity and natural gas. therefore, oil demand is not directly affected by the implementation of the energy efficiency program. for 2019 which is the first period of the analysis, it is assumed that the government finance the energy efficiency solutions from the development budget. the amount of funds is set equal to 0.1% of the oil revenues of 2019. after that, the required funds are supplied from avoided subsidies. based on the supplied funds, the energy efficiency solutions are chosen in the model depending on their costs. based on model results, some of the efficiency solutions which are selected in the first period of starting the program include hot air channel insulation and heat recovery from the chimney in the brick industry, the use of waste fuels for agglomeration (waste coal), adding automation system and process control in coking in the steel industry and the optimization of heat recovery in clinker cooling in the cement industry. table 1 shows the pathway of realizing energy efficiency potentials in energy-intensive industries. the results show that all efficiency enhancement solutions can be financed before 2026. the efficiency solutions in each year are chosen based on their energy-saving potential per unit of required investment and based on released funds from avoided subsidies in the previous year. after seven years, the viable predetermined energy efficiency solutions in energy-intensive industries are all implemented. this contributes to the cumulated amount of 12.7% electricity end-use efficiency improvement and 18.1% natural gas end-use efficiency improvement in these industries. leontief coefficients of the input/ output table in the cge model (icaa,c in eq.(2)) are updated in accordance with the improved energy efficiency and the subsequent amount of energy savings. initially, in the baseline scenario the value of , , base energy a tica (in eq.(4)) for energyintensive industries is 0.049 for electricity and 0.035 for natural gas. the seemingly low value of energy share in the production function of energy-intensive industries is due to the high energy subsidy to these sectors that results in a low share of energy cost in the total cost of production. after efficiency improvement the value of , , ee energy a tica (in eq.(4)) for energy-intensive industries is reduced to 0.041 for electricity and 0.027 for natural gas. the price and income effects of these changes are propagated throughout the economy. over time, due to improved energy efficiency, the price of the outputs of energy-intensive industries gradually decreases. the price reduction relatively increases demand for the products of the energyintensive industries. the relative price of the products in industries with a high share of intermediate inputs from energy-intensive industries (downstream industries), such as construction and machinery sectors, reduces over time. therefore, improving efficiency in energyintensive industries shifts the supply curve of downstream industries to the right and reduces the equilibrium price of outputs of those industries. on the other side, improving energy efficiency in the energy-intensive industries reduces the energy demand of the industries. it puts downward pressure on energy prices. however, any decrease in energy price increases the energy demand of the household sector. because the household sector has not been nominated for subsidy removal, improving energy efficiency in the industries increases energy demand in the household sector. this offsets some of the energy savings achieved in the industry sector. results show that the aggregate effect of improving energy efficiency on total energy demand is still in favor of energy-saving. that means the rebound effect is less than one and there is no backfire effect. international journal of sustainable energy planning and management vol. 35 2022 107 zahra adel barkhordar figure 3 illustrates the trend of changes in demand for electricity and natural gas, compared to the baseline scenario. the results of the model indicate that in the long run about 0.73% of total natural gas demand and 2.5% of total electricity demand are saved compared to the baseline scenario. the implementation of the proposed efficiency program leads to a 0.46% and 0.74% increase in gross domestic product and capital stock in the long term, respectively. among industries, the energy-intensive industries, construction, and machinery sectors have the highest growth in the long term (0.9%, 0.7%, and 0.7% increase compared to the baseline scenario, respectively). the growth of the construction and machinery sector is due to their higher share of intermediate inputs from energy-intensive industries. further, the electricity and natural gas sectors are the only sectors experiencing negative growth. the oil sector is almost not affected by the proposed energy efficiency program. oil production increases by 0.01% due to the spurred economic growth. the model results indicate that the implementation of the proposed efficiency program reduces emissions by about 25 million tons of co2 in 2030. this is the economy-wide effect of increasing the energy efficiency of energy-intensive industries and is calculated based on the average emission factors of natural gas and petroleum products. the amount of avoided emissions implies that iran can reduce greenhouse gas emissions by more than 4% until 2030. this is enough to fulfill iran’s commitment to the paris agreement. the accumulated co2 emission reduction during the period under study is about 554 million tons of co2 the rebound effect of increasing the efficiency of electricity-consuming devices and natural gas-consuming devices is calculated according to eq. (10-11). figure 4 demonstrates the rebound value for the period under study for electricity and natural gas. as shown, the value of the economy-wide rebound effect becomes negative. the negative value of rebound implies that the amount of actual energy saving is higher than its expected value. in other words, decreasing energy subsidies along with improving energy efficiency neutralizes the rebound effect. this is due to the induced changes in the sectoral composition of the production and changes in the relative prices and activity level of energy-intensive industries. mitigating the rebound alongside subsidy removal improves sustainability. according to razmjoo and sumper [30] economic and environmental sustainability can be calculated using indices including per capita consumption of commercial energies, final energy intensity, and carbon intensity. decreased consumption of natural gas and electricity reduces the per capita energy consumption and co2 emission. in addition, because the induced increase in gdp (0.46%) is less than natural gas and electricity demand reduction (0.73% and 2.5% respectively), the energy intensity also declines. this in turn improves both economic and environmental sustainability. synchronizing efficiency enhancement with increased energy prices prevents the deterioration of socioeconomic conditions caused by rising energy prices. this is especially noteworthy when electricity price rises are to be implemented as part of electricity reforms. as discussed by abdallah et al., [31] implementing energy reform to increase efficiency and market considerations generally requires upward adjustments in prices to provide for the required investments. this would have a negative impact on social sustainability. however, entangling price adjustment with efficiency improvement addresses some aspects of social concerns about sustainability. 5 conclusion the present study aims at investigating the economywide effects of increasing energy efficiency (in technical terms) based on a detailed representation of energy efficiency potentials. it provides a foundation that honors both engineering and economic principles. efficiency potentials are based on viable previously studied efficiency potentials in the energy-intensive industries of iran. the model can prioritize energy efficiency potentials based on their costs and benefits. the potentials are then fed into the general equilibrium model and the energy efficiency pathway and the yearly amount of subsidy removal is calculated. the prototype for increasing energy price is consistent with mitigating the rebound effect. the present study emphasizes two points. first, from a methodological point of view, in calculating the rebound effect the amount of investment needed to improve the energy efficiency and its financial sources should be included in the model. the scarcity of investment funds and the impact of allocating a part of it for improving efficiency automatically reduces the calculated rebound effect in the model. the reason lies in the fact that using a scarce resource puts upward 108 international journal of sustainable energy planning and management vol. 35 2022 investigating the cost-effective energy efficiency practices with mitigated rebound: the case of energy-intensive industries in the community. in contrast to the normal condition in resource-rich countries where the employment and revenue are mainly created through energy extraction and consumption, the proposed efficiency program generates a force for creating revenue from reducing energy consumption and clean production. the results of the model have indicated a long-term decrease in demand for natural gas and electricity (about 0.73% and 2.5% compared to the bau scenario). the accumulated co2 emission reduction during the period under study has decreased by about 554 million tons of co2 compared to the baseline scenario. the calculation of the rebound effect has demonstrated the success of the proposed efficiency program in neutralizing the rebound and reducing energy consumption by more than the expected value in the long term. the impact of applying mixed policy instruments on the employment and consumption culture can be the subject of further studies. finally, the impact of the proposed efficiency program on the penetration of renewable energies and clean production can be considered for further research. acknowledgments this research has been done using research credits of shahid beheshti university, g.c. under contract number: 600/922. pressure on its price. higher rates of return on capital mean higher production cost and this acts in the opposite of energy efficiency which lowers the production cost. second, from a policy-making point of view, applying policies that simultaneously target energy efficiency and energy subsidy can increase the speed of reducing energy consumption and emission. it should be noted that the implementation of the proposed efficiency program requires effective government assistance, which is especially highlighted in developing countries where there are multiple barriers to improving efficiency. the government, as a stimulus to improve efficiency, initiates a cycle that improves efficiency and reduces energy subsidies together. the government can borrow from national financial resources such as national development fund to finance efficiency solutions for the first year of the program. the loan can be repaid from the accrued benefits of the program. at the time the prioritized efficiency solutions are all implemented, there will be no need for government to finance efficiency solutions. yet, the energy conservation and energy price are higher than the base year. thus, after some years the saved financial resources are not used to finance energy efficiency solutions and the loans can be repaid to the national development fund. the proposed efficiency program has secondary benefits such as the boom in the work of energy service companies, leading to job creation and the promotion of the consumption culture, and the efficiency improvement appendix a: list of selected energy efficiency opportunities table a1: selected energy efficiency opportunities in six energy-intensive industries of iran. [23] efficiency solution cost of energy efficiency solution [million$/ton of output] energy saving [pj/ton of output] the furnace insulation in the brick industry 0.00019 0.17 using tunnel dryer in brick industry 4.32 1 automation system and process control in coke making in the steel industry 0.092 0.042 recycling heat from ashes in the blast furnace 13.12 0.925 optimization of heat recovery in the cooling system of clinker in the cement industry 0.218 0.104 using waste heat in the process of peeling in the paper industry 0.231 0.545 reducing the melting time in the furnace in the glass industry 0.929 0.265 preheating tunnel for preheating the material in the aluminum industry 1.77 0.22 international journal of sustainable energy planning and management vol. 35 2022 109 zahra adel barkhordar references [1] eia (energy information administration). iea (2021), greenhouse gas emissions from energy: overview, iea, paris. last accessed: 3/24/2022 url: https://www.iea.org/ reports/greenhouse-gas-emissions-from-energy-overview [2] ministry of energy (moe). iran’s energy balance 2019. office of energy and power tariffs. 2019. http://pep.moe.gov.ir. 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(2015). energy reforms in the developing world: sustainable development compromised?. int j of sust energy planning and management, 5, 41–56. https://doi.org/10.5278/ijsepm.2015.5.5 https://doi.org/10.1016/j.eneco.2021.105703 https://doi.org/10.1016/j.eneco.2021.105703 https://www.eea.europa.eu/publications/consumption-and-the-environment-2012 https://www.eea.europa.eu/publications/consumption-and-the-environment-2012 https://doi.org/10.1016/j.apenergy.2015.03.086 https://doi.org/10.1016/j.apenergy.2015.03.086 https://documents.worldbank.org/en/publication/documents-reports/documentdetail/386191468765592396/general-equilibrium-models-for-developmentpolicy https://documents.worldbank.org/en/publication/documents-reports/documentdetail/386191468765592396/general-equilibrium-models-for-developmentpolicy https://documents.worldbank.org/en/publication/documents-reports/documentdetail/386191468765592396/general-equilibrium-models-for-developmentpolicy 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34, 53850 lappeenranta, finland url: http://doi.org/10.5278/ijsepm.6329 this is a corrigendum to the article transition toward a fully renewable-based energy system in chile by 2050 across power, heat, transport and desalination sectors published by the international journal of sustainable energy planning and management with doi: http://doi.org/10.5278/ijsepm.3385 [1] in the original published version of the article, figure 16 (right) and the corresponding numbers in the article were incorrectly displayed. the authors regret the error. the corrected figure and text are available below. 1. page 77, in abstract: in the sentence “in consequence, the levelized cost of energy will reduce by about 25%.”, instead of “25%” it should be “38%”. 2. page 88: instead of the bar graph of figure 16 (right) it should be 3. page 88: in the sentence "however, as can be seen in figure 16 (right), the levelized cost of energy for the full system would be reduced through the transition from about 114 in 2015 to 85 €/mwh by 2050.", instead of "114" and "85" it should be "58" and "36", respectively. 4. page 91: in the sentence "this increase in system energy efficiency is a key reason for the reduction in total system cost from 114 €/mwh in 2015 to 85 €/mwh in 2050.", must be adjusted to "this increase in system energy efficiency is a key reason for the reduction of the total cost of energy in the system from 16.3 b€ in 2015 to 12.5 b€ in 2050." these errors do not affect the main results or conclusions of the publication in any way. the authors would like to apologize for any inconvenience caused.                                                          corresponding author – e-mail: juan.osorio@uach.cl international journal of sustainable energy planning and management vol. 25 2020 109    international journal of sustainable energy planning and management vol. 25 2020    110 references 1. osorio-aravena, j.c.; aghahosseini, a.; bogdanov, d.; caldera, u.; muñoz-cerón, e.; breyer, c. transition toward a fully renewable-based energy system in chile by 2050 across power, heat, transport and desalination sectors. int. j. sustain. energy plan. manag. 2020, 25, http://doi.org/10.5278/ijsepm.3385 international journal of sustainable energy planning and management vol. 28 2020 89 *corresponding author e-mail: manojsinghenv@gmail.com international journal of sustainable energy planning and management vol. 28 2020 89–106 abstract: the indian power sector(ips) is under gradual transition from over-reliant fossil fuel (62%) to sustainable energy source(ses), primarily to achieve targets of sdgs and the paris agreement to base 40% of the total power generation capacity on non-fossil fuel resources by 2030. in this context, the solar power generation is on the fast-track whereas, hydropower development is lagging behind due to various reasons causing time and cost escalation, hence the sustainability of ips in terms of flexibility and reliability in integration with other renewable energy source will remain a challenge. with this concern, the focus of this study is to (i) analyze and prioritize the hydropower potential (hpp) in the indian himalayan region, (ii) identify the prime constraints in the way of hydropower development and (iii) discuss the way-forward for sustainable planning of hydropower development whilst appropriately managing time & cost over-runs including socio-environmental concerns. the methodology involves literature review and analysis of secondary data about ips, hydropower resources and project-specific risks prevalent in ongoing heps in india. the result shows that the indian himalayan region has enough (73%) balance hpp in 12 different states; sustainable harnessing of which requires proper addressing of the prime constraints viz., multiple public consultations in clearance process, litigations, high investment, socio-political and contractual issues, mainly through procedural reforms by the state governments which have constitutional right over land and water in the federal structure of india. the finding of study will be useful for planning process of entrepreneurs, investors and policy makers in the direction to achieve the target of ses beyond india’s nationally determined contribution. 1. introduction the indian himalayan region (ihr) constitutes 67% of total himalayan region and approximately 18% of india’s total geographical area [1]. it is located between 21°57’–37°5’ n and 72°40’–97°5’e and has a total geographical area of about 533,604 km2 with 39,628,311 inhabiting population [2]. the ihr comprises fully/partially twelve states of india (figure 1) stretching over 2500 km from jammu and kashmir in the northwest to arunachal pradesh in the northeast. ihr is significant for its high conservation value due to its rich biological diversity [3, 4], socio-cultural and aesthetic values. besides, ihr has rich source of water as glaciers melt in summer, heavy snowfall in winter and rainfall from southwest monsoon as well as northwest winter rains. availability of water potential combined with topographical variation in ihr offer huge hpp. ihr accounts for approximately more than 75% of total exploitable hpp (148.7 gw) of the country as per assessment study conducted by cea [1]. hydropower holds special significance for the growth of indian economy. the first prime minister of india, pt. jawaharlal nehru had proudly proclaimed dams as the temples of modern india. a number of river valley a planning perspective on hydropower development in the indian himalayan region ashis k. dash and manoj kumar singh* environment & dm division, nhpc limited, faridabad-121003, india key words: ihr; hydropower; indian power sector; paris agreement; constraints; url: https://doi.org/10.5278/ijsepm.4304 https://doi.org/10.5278/ijsepm.4304 90 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region projects were envisaged mainly to increase the agricultural productivity and to accelerate the industrial development in the post-independence era of india. the inherent attributes of hydropower like reliability, flexibility, and variety in project scales and sizes, gives it the ability to meet large centralized urban and industrial needs as well as decentralized rural needs [6]. heps constructed across the country over the years bear testimony to large scale ‘local area development’ in terms of infrastructure facilities such as road, bridge for proper connectivity, job prospects in construction works, medical facilities, market and other civic facilities in the hitherto remote hilly terrain [7,8]. more importantly, in our increasingly carbon constrained world, hydropower has the uniqueness to meet the economic, social and environmental criteria of sustainable development while considering its very important role in future mitigation of scenarios of climate change. despite these inherent attributes, hydropower development in india is at a slower pace in comparison to thermal source; as a result the ips is presently over reliant (62.7%) on fossil fuel (figure 2 & 3). however, in wake of the growing global concern regarding the impact of fossil fuel on climate change, rising energy-cost and the ratification of paris agreement, india has embarked on energy transmission strategy to reduce acronyms ihr indian himalayan region hpp hydropower potential heps hydroelectric projects ips indian power system indc india’s nationally determined contribution ihr indian himalayan region sdgs sustainable development goals res renewable energy source ses sustainable energy source cea central electricity authority hsap hydropower sustainability assessment protocol figure 1: location of states in ihr [5] international journal of sustainable energy planning and management vol. 28 2020 91 ashis k. dash and manoj kumar singh reliance on fossil fuel, augment ses and improve energy efficiency. the paris agreement was adopted on 12th december 2015 and india signed the agreement on 22nd april 2016 and while agreeing to ratify the agreement, it had declared that it would treat its national laws, its development agenda, availability of means of implementation, its assessment of global commitment to combating climate change and predictable & affordable access to cleaner source of energy as the context in which the agreement was being ratified [10,11]. accordingly, india submitted its nationally determined contribution to the unfccc on 2nd october, 2015, outlining the climate actions intended to be taken under the paris agreement. india’s ndc aims to base 40% of the total installed power generation capacity on non fossil fuel resources by 2030. this includes the government of india’s ambitious target of achieving 175gw of renewable energy by the year 2022 primarily from solar power. to achieve the emission reduction target and to ensure reliable supply of electricity, an integration of hydropower with solar and wind power could be a preferred alternative over other energy source in terms of flexibility to meet peaking requirement, reliability and bulk generation ability vis-à-vis availability of huge hpp in ihr. although, heps are categorized as complex structures and the construction phase of these projects are susceptible to various technical, socio-political, geological surprises and environmental risks; which impose restriction on the pace of hydropower development in india over the last decade or so. the track record of the construction industry to deal with these risks has not been very good [12]. due to which, most of the heps are facing time and cost overruns[13]. however, the core thermal: 62.7% (fossil fuel) renewal sources: 23.1% (solar,wind,biomass,small hydro<25mw) hydro:12.6%(>25mw) nuclear: 1.9% figure 2: energy-mix (%) in ips (as on dec, 2019) [9] 0 10 20 30 40 50 60 70 80 90 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 d ec .,2 01 9 pe rc en ta ge c ap ac ity a dd iti on thermal hydro nuclear figure 3: trends of capacity addition as % of total hydro thermal mix 92 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region element of ‘project success’ depends on its timely completion within the specific budget for the benefits of developers, investors and energy security of the country. therefore, it is imperative to analyze the challenges in indian hydropower sector and explore resolution thereof. most of these issues could be resolved through renewed planning and procedural reforms under the purview of the constitutional framework of india. with this perspective, the present study is focused to (i) analyze and prioritize the balance exploitable hydropower potential in the territory of different states/region in ihr (ii) identify the prime constraints including time and cost-overrun in the way of hydropower generation in ihr and (iii) discuss the way-forward for appropriate planning of hydropower development whilst appropriately managing environmental concerns and time-cost escalation (iv) emphasizing the responsibility of respective state governments in timely completion of heps alongwith other res in order to accomplish indc target, sustainability of ips and sdgs as well. 1.1 scope and structure: the outline of the article is as follows. section 2 describes the methodology of research along with flow-chart, section 3 presents literature review. in section 4 we discussed the result and accordingly in section 5 we presented the way forward for development of hydropower in a sustainable way. finally, concluded with section 6. 2. methodology as per the scope of study outlined above, comprehensive literature review has been done by referring the published reports in international and national journals to get insight about the global and indian trend in dealing energy issues with special reference to hydropower prospects in the ihr and sustainable development perspectives. further, as per requirement of this study, we refered secondary data from cea reports about ips, indian hydropower sector and status of all heps under construction stage and clearance stage in india till march 2019. based on hydro-potential data and project-specific risk prevalent in heps, data was analyzed in light of relevant reports and policy(ies) of government of india (i.e central electricity authority, ministry of power, ministry of environment, forests &climate change) and statutory acts/notifications linked with development of heps in india to arrive at result and accordingly recommendations as way forward have been drawn up. also, for this study, different reports like world bank, iea reports (india-2020), sustainability protocol of iha, media reports and google search engine have been referred. the flow chart of methodology depicting systematic steps is shown in figure 4, which is based on the pattern adopted by ebhota w.s [14]. 3. literature review based on the review of the previous studies, we correlate here three important energy aspects viz., energy transition strategy from fossil to ses, advantage of hydropower over other res and relevance of hydropower in indian context to find the latest trends and gap in research in context to the objectives framed in this study. 3.1 transition from fossil fuel to ses østergaard and sperling [15] presented an overview of the of global energy trends focusing on energy costs, energy use and carbon dioxide emissions. they highlighted that the rising energy costs, anthropogenic climate change, and fossil fuel depletion calls for a concerted effort within energy planning to ensure a sustainable energy future. understanding the ips to outline the scope of study literature review to find global trends on energy issues and establish gap in the study analysis of secondary data in line with scope of work discussion on the outcome of data analysis to arrive at result draw recommendation conclude the main issues of this study figure 4: flow chart of study international journal of sustainable energy planning and management vol. 28 2020 93 ashis k. dash and manoj kumar singh narula [16] defines sustainable energy security (ses) as “provisioning of uninterrupted energy services in an affordable, equitable, efficient and environmentally benign manner. with this concept, he undertook a comparative assessment of ses of various energy sources for the residential sector in india and by development of se index he concluded that the energy sources which are relatively more secure and sustainable for rural and urban india. waenn et al. [17] put forward the hypothesis, that it is required moving from the national level to the regional level when addressing energy system scenario design and energy system analyses with the goal of achieving sustainable energy systems. drummond and marsden davidson [19], holling [20], and roseland [21] deliberated that the energy sector reforms being undertaken need to satisfy the requirements of sustainable development, which according to them is to balances economic, social, and environmental interests of economies [18]. ferreiraa et al. [22] state that sustainable development challenges call for a multidisciplinary approach to energy decision making and require an effective bridge-building between political, technical, economic and social aspects. moreover, by bringing to the debate different disciplines and authors with different backgrounds we expect to create synergies and merge social, economic, environmental and technical knowledge to support policies towards a sustainable energy transition. abdallah et al. [18] examined whether energy reforms being taken in developing countries conforms to the concept of sustainable development. they described that the energy sector reforms with an emphasis on electricity growth have been taking place extensively worldwide and in developed north, reforms are motivated chiefly by classical economics’ standpoint of efficiency and market considerations; this models of reforms in the north have in turn been replicated in developing countries. taking a case study of kenya and neighboring countries, they examined whether the models used are suitable on sustainable development perspective for the mostly rural and socioeconomically disadvantaged economies in the south and observed that importance being placed by kenya on rural electrification and renewable energy is noteworthy. nonetheless, the kenyan energy policies and strategies that are shaping electricity reforms are heavily skewed towards the economic aspect of sustainability. ebhota [14] deliberated that power infrastructural development in emerging economies attracts international investments, supports and aids because of the dominant role access to electricity plays in the socioeconomic development of a country or region. taking note of growing threat of climate change, rigot sand demaria [23] highlighted that the accounting standards as followed by financial intermediaries (banks and insurers) in the energy market do not differentiate between low and carbon intensive investment and do not take into account climate risks beforehand, hence is a critical issue for the development of a sustainable economy. he emphasized the need for reform in order to foster long-term and then low-carbon capital spending in europe. the outcome of several studies has corroborated the benefits of res over fossil fuel. the study conducted by owusu & asumadu-sarkodi [24] brought to light the opportunities associated with renewable energy sources; energy security, energy access, social and economic development and climate change mitigation and reduction of environmental and health impacts. the study further examined how a shift from fossil fuel-based energy sources to renewable energy sources would help reduce climate change and its impact. in india, panwar et al. [25] described the role of renewable energy sources in environmental protection as renewable energy technologies provide an excellent opportunity for mitigation of greenhouse gas emission and reducing global warming through substituting conventional energy sources. he tried to find out the scope of renewable energy gadgets to meet out energy needs and mitigation potential of greenhouse gases mainly carbon dioxide. as regard to renewable energy scenario in india, kumar and majid [26] presented the significant achievements, prospects, projections, generation of electricity, as well as challenges and investment and employment opportunities due to the development of renewable energy in india. he deliberated that the strong government support and the increasingly opportune economic situation have pushed india to be one of the top leaders in the world’s most attractive renewable energy markets. the government has designed policies, programs, and a liberal environment to attract foreign investments to ramp up the country in the renewable energy market at a rapid rate. however, in this study, challenges for in res in general have been deliberated; but the sector specific concerns have not been discussed. 94 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region kumar et al. [27] analyzed the low impact renewable energy technologies, energy planning tools and renewable policy framework for promotion of renewable in india. bhattacharya [28] deliberated that a number of renewable energy technologies (rets) are now well established in india and number of factors are likely to boost the future prospects of renewable energy in the country; these include global pressure and voluntary targets for greenhouse gas emission reduction, a possible future oil crisis, intensification of rural electrification program, and import of hydropower from neighboring countries. the iea in a recent report [29] mentioned that india’s per capita emissions today are 1.6 t of co2, well below the global average of 4.4 t, while its share of global total co2 emissions is some 6.4%. however, government of india is implementing reforms towards a secure, affordable and sustainable energy system to power a robust economic growth. in this direction, country has launched a number of important energy policy programmes along the four priority pillars: energy access at affordable prices, improved energy security and independence, greater sustainability, and energy efficiency. 3.2 relevance of hydropower over other res each renewable source of electricity has its own limitations. however, among res, hydropower technology has additional advantages as deliberated in substantial literatures. lund et al.[30] in their study mentioned that the renewable energy is not a viable option unless electricity can be stored and electrical energy storage systems (ess) are one of the most suitable solutions to increase the flexibility and resilience of the electrical system. kaunda et al. [31] and ahmad and farooq [32] reviewed the world energy scenario and described how hydropower fits in as the solution to the global sustainable energy challenge. issues of hydropower resource availability, technology, environment and climate change have been also discussed. they urged that a sustainable hydropower project is possible, but needs proper planning and careful system design to manage the challenges. well-planned heps can contribute to supply sustainable energy and therefore an up-to-date knowledge is necessary for energy planners, investors, and other stakeholders to make informed decisions concerning heps. however, policy and constraints have not been covered in the study. gopalkrishna [33] urged that india has the capacity to play a lead role in energy security and stability of grid by harnessing all the 3/4th of exploitable hydro energy in the region, including himalayas in collaboration with its neighboring countries like bhutan and nepal. this can make south asia’s energy position quite enviable. world bank [8] in its report about hydropower project in india corroborated that hydropower has brought power, roads and much-needed development to himachal pradesh, especially to remote mountain communities. singh & dash [7] in a case study of a parbati-iii hydropower project located in western himalayan state in india and observed that hydropower is a tool of local area development in the remote himalayan valley by provisioning of infrastructure(road, bridges), health, education facilities and livelihood prospects besides supplying reliable green power to national grid. as regard to the prospects of small hydro power (shp<25mw) in india, mishra et. al 2015[34] analyzed the barriers in the growth of shp which must be overcome to accelerate the growth of the sector and should target a capacity addition rate of nearly 600 mw/year to harness full shp potential even by 2050. as per sensitivity analysis they suggested that cost of generation is sensitive to capital cost, interest rate, and capacity factor, but less sensitive to life time and o&m cost. in a study conducted by hussain et al. in 2019 [35] analyzed the hydropower development prospects in four hindu kush himalayan countries – bangladesh, india, nepal and pakistan. they asserted that despite several challenges, hydropower continues to be the leading renewable energy option in view of global agenda aims to reduce the carbon intensity of energy in long-term climate change mitigation strategies, and to achieve sustainable development goal-7 (sdg-7) on affordable and clean energy. to achieve these goals, they suggested capitalizing on emerging opportunities such as large hydropower development using a ‘smart approach’, micro-hydropower promotion, energy trade, and regional cooperation for collective energy development programs. however, author has not covered the enhanced prospects of hydropower generation in india due to outcome of policy declaration stating ‘measures to promote hydropower sector’ by government of india in march 2019. also, mechanism of appraisal of environmental issues in light of further capacity addition of hydropower has not been covered in the study. laha et al. [36] explores the possibility of a zero import-dependent indian electricity system in 2030 by international journal of sustainable energy planning and management vol. 28 2020 95 ashis k. dash and manoj kumar singh developing a model of the electricity system, exploiting the optimal mix of res namely solar pv (photovoltaic), wind, river hydro and biomass. however, in the study, constraints in ips especially hydropower sector in india has not been correlated. 3.3 relevance of hydropower in indian context hydropower, besides reliable res, the following points highlights its significance to meet the long-term goal of the india and best suited for the power market as well as sustainability of ips. • in the energy-mix of ips, the percentage of hydropower (small & large) has come down from 45% in 1970 to 16 % in 2019 and presently ips is over-reliant on fossil fuel (62.7%) as thermal source of electricity. dominance of coal in india’s energy-mix is highly problematic for the country [37] and lower percentage of hydropower may affect the stability of grid. • even at this stage, the country faces lack of sustainable power sources capable of meeting peaking deficits [38] and with quick response characteristics. • as regard to demand, iea [29] reports that based on current policies, india’s energy demand could double by 2040, with electricity demand potentially tripling as a result of increased appliance ownership and cooling needs. • in india, the energy sector is a large water user. as india’s energy demand continues to grow, the government should ensure that energy planning takes into account the water–energy nexus, as well as future space cooling needs [29]. • unlike, thermal and solar power, the hydropower technology does not consume water. rather, it is technically designed for flood moderation, water storage and regulated water supply for agriculture and domestic use besides electricity. moreover, hydropower contributes significantly to climate change mitigation, and could play an important role in climate change adaptation regarding the availability of water resources [6]. • heps are generally located in very remote himalayan terrain; the activities carried through this developmental process promotes socioeconomic development of the ihr [7,8] and thus partnering in achieving sdgs for the developing country like india. • hydropower offers significant potential for carbon emissions reductions [6, 39] and dealing with the global warming issue as a substitution for a fossil fuel power source [40]. it can contribute significantly in achieving the targets of indc. 4. result and discussion 4. 1 hydropower potential in the ihr india ranks fifth in the world in terms of availability of hpp [33]. total hpp of 145.32 gw (>25mw) capacity has been identified by cea. out of which, as of nov, 2019, about 27.95% hpp is under operation stage, 7.45% is under the construction stage and remaining 64.60% of total potential is yet to be taken up for construction as depicted at figure 5 and table-1 [41]. the contribution of electricity generated from hydropower and other sources in the existing total power scenario of india have been illustrated at figure 2 &3, which shows that india is presently drawing 62.7% of electricity from thermal source, 23.2% from renewable sources(comprising of mainly solar, wind, biomass small hydro <25mw), 12.6 % hydropower (>25mw) followed by nuclear source(2%). it can be seen that the exiting 12.6% contribution of hydroelectricity in indian power-mix has been achieved in the country till the november, 2019 and therefore, the remaining 64.60% (93.8gw) of total hpp (>25mw) is still available that can be harnessed in order to reduce the existing dependence on the primary source of electricity i.e thermal from fossil fuel (62.7%). on analysis of the availability of remaining 64.65% hpp in different region in india, it is found that the north-eastern region of india contains maximum un-harnessed hydropower potential of about 93% (54.3 gw) followed by the northern region (53.05%) and the eastern region (42.8%) located in ihr as depicted at figure-5 & table-1. the scenario is in sharp contrast to the southern and the western regions of the country where more than 65% of the potential has already been harnessed. besides clean power, state governments of these regions get revenue equivalent to 12% of total annual power generated from the hydropower developers in india, so it is perennial source of income for the state. the regional availability of total hpp in india has been discussed above. in each region there are different 96 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region states, out of which 12 indian states located in ihr (figure-1, table-1) contains 78% (113.4gw) of total hydropower potential (>25mw) identified in the country. out of total potential available in ihr, 26.55% has already been harnessed and remaining 73.4 % (83.3 gw) is yet to be harnessed in these location/states. a comparison between ‘total hydropower potential identified initially through reassessment study and hpp remain balance presently after hydropower generation’ in ihr has been depicted in figure 6 & 7. it reveals that arunachal pradesh state has maximum balance unharnessed hpp of 46.9 gw (93.78%) out of total potential identified in assessment study by cea. similarly, uttarakhand has about 12.7 gw un-harnessed hydropower potential (71%) followed by j&k of 6.2 gw (54%), himachal pradesh 6.8gw (37%) and sikkim 0.9gw (22.2%) out of total potential identified initially. the remaining states like nagaland, manipur meghalaya etc. have very minimal hpp in terms of installed capacity (mw), but on analysis of data in terms of percentage, the balance potential comes out more than 85%, which is confusing. this is because of the least difference between ‘hpp identified initially and potential (mw) remain balance after the development of hydropower i.e these areas/states have low installed capacity (hydropower potential) and that has also not table 1: status of hydro-electric potential development (as on 30th november 2019,cea )[41] indian region/ state identified capacity(hydropower potential) capacity in operation capacity under construction capacity in operation + under construction capacity yet to be taken up under construction total (mw) above 25 mw (mw) % (mw) (%) (mw) (%) (mw) % northern 53395 52263 190233 36.4 5516.5 10.56 24539.8 46.95 27723.2 53.05 western 8928 8131 5552 68.3 400 4.92 5952 73.2 2179 26.8 southern 16458 15890 9688.9 61.0 1060 6.67 10748.9 67.65 5141.1 32.35 eastern 10949 10680 4922.5 46.1 1253 11.73 6175.5 57.82 4504.6 42.18 north-eastern 58971 58356 1427 2.5 2600 4.46 4027 6.9 54329 93.1 all india 148701 145320 40613.6 28.0 10829.5 7.45 51443.1 35.4 93876.9 64.6 0 20 40 60 80 100 northen western southern eastern northeastern hydroelectric potential/installed capacity(%) in di an s ta te s/ re gi on s installed capacity yet to be taken up under construction(%) installed capacity in operation + under construction(%) installed capacity under construction(%) installed capacity in operation(%) figure 5: comparative aspects of harnessing of hpp in indian region international journal of sustainable energy planning and management vol. 28 2020 97 ashis k. dash and manoj kumar singh been developed. therefore, for planning purpose, these areas may be construed as not so significant source of hydropower. in pre-para, it is derived that ihr still holds 73.4% of its total hydropower potential (hpp) which is equivalent to 83.3 gw potential located in 12 states of ihr. for planning perspective, we considered 83.3 gw as 100% balance hpp in ihr and to find which is the most potent states among ihr, the balance hpp in each state is compared with total potential of ihr. the result is 0 10000 20000 30000 40000 50000 60000 ja m m u & k as hm ir h im ac ha l p ra de sh u tta ra kh an d w es t b en ga l si kk im m eg ha la ya t ri pu ra m an ip ur a ss am n ag al an d a ru na ch al p d m iz or am h yd ro po w er p ot en ti al states in ihr total hydropotential identified(> 25mw) balance hydropotential yet to harness (mw) figure 6: comparison of hpp balance out of total potential identified in each state of ihr 0 10 20 30 40 50 60 70 80 90 100 h p p (% ) states in ihr figure 7: balance hpp (%) in states of ihr 98 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region shown in figure-8 in terms of percentage. finally, it is found that among 12 states in ihr, arunachal pradesh state is the most potent source of hydropower by holding 53% share of total hpp (in terms of installed capacity) available in ihr, followed by uttarakhand (15%), himachal pradesh (8%), j&k (7.4%) and remaining states contain less than 3% share of total hydropower potential available in ihr. it is expected that this finding shall be quite useful for the policy makers and planners in the country for devising procedural reforms to ensure ease of business in hydropower generation in ihr. 4.2 prime constraints in the way of hydropower data analysis shows, india has abundant hpp. however, the pace of its development has been very slow in the last few decades. despite various advantages of hydropower over conventional sources of energy and res, the hydro power sector has been saddled with many bottlenecks [42,43] impacting the gestation periods and cost. the prime constraints are discussed below: 4.2.1 enabling infrastructure mostly, heps are located in the remote and inaccessible himalayan terrain which poses challenges to the developers. implementations of these projects require development of associated infrastructure such as roads and bridges for accessibility of sites and power evacuation system. in most of the heps, the expenditure incurred on development of such associated infrastructure exerts financial load on per unit cost of power generation, which ultimately affects project’s viability and sustainability in comparison to power available from solar and wind energy. this aspect has been taken in to consideration by the government of india in march 2019 by declaring measures to promote hydropower sector, which entails inter alia, provision for budgetary support to heps for enabling infrastructure like road/ bridges @ 15 m inr/mw for project up to 200mw and 10 m inr/mw for above 200mw [44]. these measures shall be economical for capacity addition through new heps, but not applicable for the ongoing heps. 4.2.2 technical challenges heps are site specific and every hydro power project is different from others. techno-economic viability of heps depends primarily on the topography, geology, hydrology and accessibility of the project site, etc. these aspects are duly investigated during survey and planning stage of project. even then, geological surprises during construction stage cannot be ruled out as has been seen in many projects located in ihr [45]. this ‘unpredictable geology’ is more pronounced in the young fold himalayas where most of the indian hpp resides. such technical challenges add to construction risks and attendant cost to resolve them. the time required for resolution of geological surprises also causes impact on construction schedule as envisaged during planning of project. therefore, it is imperative for planner or project proponent to keep a cushion of emergency fund and time for managing such surprises efficiently. 4.2.3 statutory clearances there are standard procedures for statutory clearances and concurrence of heps under india’s electricity act, 2003, environment (protection) act, 1986, forest (conservation) act, 1980 and other acts. however, the progress of many projects has been affected because of environment and forest issues [46]. among other reasons, such delay is primarily attributed to the localized sociopolitical concern which causes hindrance in clearance processes like public hearing, gram-sabha meetings, public consultation under sia process etc. in a case study [47] it is observed that some projects have been stalled on the demands of the non-government organizations and those people who are completely not concerned and not affected by the project. on account of such actions, the states get reluctant to sign powerpurchase agreements with developers and financers causing uncertainties and discouragement in further development and funding of heps. on data analysis of pending heps (table 2) it is observed that the viability of these projects on jammu & kashmir himachal pradesh uttarakhand west bengal sikkim meghalaya tripura manipur assam nagaland arunachal pd mizoram figure 8: hpp share (%) among ihr states international journal of sustainable energy planning and management vol. 28 2020 99 ashis k. dash and manoj kumar singh techno-economically fronts have already been concurred by cea at a total estimated cost of 2235.25b inr for total 26.4 gw installed capacity, however the construction of these projects have not been started due to pending statutory clearances, court and other matters. about 88% (23.4 gw) of total projects are pending for clearance, in which clearances of 14% projects (3.3gw) are sub-judiced in hon’ble courts. the location of more than 96% projects are in ihr mainly in arunachal pradesh, uttarakhand, j&k, and sikkim, which are among 12 states identified strategically rich in hpp. in the north-eastern region of india, even after approval of the statutory clearances; projects are embroiled in litigations for years which cause delay in implementation of projects. such litigation issues are attributed to the concerns raised by the certain localized groups on the pretext of environmental concern or land acquisition or other socio-political aspects of heps. in some cases, the court has rejected their plea after long investigation of facts and figures. to curb such situation, from the perspective of both developers and regulatory agencies, it is imperative to take procedural reforms to ensure that the concerns raised by certain groups of people do not act as deterrents to the development of projects. 4.2.4 land acquisition land is a limited asset in any society and mostly inherited in the successive generation, thus people attach a lot of economic and emotional significance to it. resistance against relentless land acquisition has drawn public attention in last two decades and it is far more organized and powerful than what it was in the past [49]. it tends to create an anti-development and undemocratic sentiment among the people. there are several cases where disputes in land acquisition were an important cause for plan delays and cost over-runs [43, 50]. in the recent past, local movements against land acquisition in west bengal (india) for the tata nano project and another in odisha state for vedanta projects and posco and many such problems faced across the country with respect to the processes under the colonial land acquisition act1894 necessitated the reforms in land acquisition process. subsequently, the government of india notified the new land acquisition act named as ‘right to fair compensation, transparency in land acquisition, rehabilitation and resettlement (rfctlarr) act’, 2013, which came into effect from january, 2014 after replacing erstwhile land acquisition act-1894. the new act attempts to address the social inequities in the existing framework of land acquisition by provisioning of fair compensation of land, consent of landowners, r&r scheme and many others provisions addressing the concerns of landowners. however, there are certain lengthy procedures in land acquisition like sia study, updating of land records, formulation of r&r scheme, multiple public consultations, etc. which need to be addressed timely to fasten the land acquisition process. as per the constitutional framework of india, ‘land’ is under the purview of state government and acquisition process of land is being done by the concerned state government for the developers. therefore, timely completion of land acquisition process solely depends upon the political-will of government as well as hydropower policy of state. it has been observed that state like sikkim and other states table 2: heps techno-economically concurred by cea but yet to be taken up for construction [48] (as on 31st march, 2019) reason for delay installed capacity (mw) estimated cost (billion inr) projects location in ihr (%) a) pending for clearance i) environment clearance (ec) accorded but forest clearance (fc )awaited 13813 1210 89 ii) both ec and fc awaited 6266 521 100 iii) ec &fc sub-judice in courts 3345 236 100 sub-total 23424 1967 96 (average) b) pending due to other reasons like approval for invest of fund and contractual issue 1846 147 83 c) developers denied for implementation of projects 1190 122 100 total 26460 2235 100 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region in the country where land acquisition process for heps have been delayed due to sia aspect, legal issues and non-updation of land records. also, in north-eastern states of india, particularly arunachal pradesh where land revenue records are not aligned with the existing pattern in the rest of the country, the process of land acquisition is complicated thus likely to be delayed. 4.2.5 time and cost overrun electricity infrastructure is prone to cost overrun issues almost independently of technology or location [51]. the economic impact of a construction cost overrun is the possible loss of the economic justification for the project as the cost overrun can be critical to policies for pricing electricity on the basis of economic costs, because such overrun would lead to under-pricing. also, the financial impact of a cost overrun is the strain on the power utility and on national financing capacity in terms of foreign borrowings and domestic credit [51,52]. thus, project proponents, investors and energy analysts need to rethink and re-evaluate the present status of time and cost overrun of projects and factors responsible for time and cost overruns. in indian hydropower sector, case studies of total 35 nos. of heps with total 11.9 gw under construction stage till march 2019 [48] reveals that these projects are lagging behind their fixed schedule of commissioning. the data analysis of their cost estimate shows that total cost overruns amounting to 477.13 b inr has been occurred and time overrun is surging from 9 months to 240 months till march 2019. in certain project like subansiri lower hep (2gw) under construction in india, the surge in cost overrun has been estimated as 132.11b inr, which is the highest among the stalled hydel projects as has been reported in national print media [43,53]. the reasons behind time and cost overrun are of varying degrees of issues specific to individual project. however, the factors plaguing the hydro sector in the country under the present circumstances have been analyzed and reflected in the table-3. in the above assessment, factors have been categorized based on the analysis of project specific reasons identified in the different heps referred in the relevant reports [46,48] across the country. the aforementioned issues acting as impediments in the process of smooth implementation of projects in the country are common to hydropower projects being implemented through all three sectors namely, centre government, state governments and private agencies. mostly, reasons like delay in statutory clearances, law and order problem as well as contractual issues are equally responsible for delay in harnessing of heps. when combined, these issues account for more than 33% of total observed instances holding back heps in the country. 4.2.6 long gestation and high investment hydropower demands high investment and long gestation in comparison to other res, thus contributes slow capacity addition. in purview of the paris agreement, india has to achieve ambitious target of electricity generation from renewable source to comply with the indc target. in this concern, the priority of hydropower generation is lagging behind solar power in the last few years. it is fact that hydro and solar power technologies are two time-tested forms of renewable energy and both have pros and cons [54]. however, hydropower holds strong advantages over solar and wind power, particularly flexibility to meet peak load and promoting local area development in the vicinity of project area located in remote table 3: major reasons for cost and time overruns of heps being implemented through three sectors/agencies (factors depicted as percentage of total observed instances) sectors/ agencies executing heps reasons geology civil/ mech. works statutory clearances law & order contractual issues land acquisition/ r&r natural calamities litigation /arbitation other issues (poor approach road/fund constraint ) central government 17.5 5 11.3 11.3 11.3 2.5 20 12.5 7.5 state government 11 3.7 7.4 11 14.8 18.4 7.4 7.4 18.5 private 20.5 5.8 11.5 5.8 2.9 8.8 11.7 5.8 26.4 international journal of sustainable energy planning and management vol. 28 2020 101 ashis k. dash and manoj kumar singh himalayan terrain. [7]. in spite of the drawback of long gestation and high investment, hydropower is required for the timely synergy with solar and wind power to ensure sustainability of ips. off late, looking into the advantage of hydropower vis-à-vis constraints of high investment, the government of india notified institutional measures to promote hydropower sector by introducing tariff rationalization measures and hydropower purchase obligations besides budgetary support [44] in order to make hydropower compatible with other res. 4.2.7 environmental concern and sustainability aspects although hydropower is a reliable res however, the environmental and social impacts associated with it need to be addressed thoroughly while planning for capacity addition of hydropower. in india, ministry of environ ment, forest & climate change is apex body of government of india in the environmental matter. to deal with such challenges, the mechanism of cumulative impact study (cia) and carrying capacity study (ccs) of various river basins study are in place. the ccs gives idea about optimal number of power projects in a basin, whereas cia study of a basin reflects the cumulative impact of commissioned and up-coming hydro-power projects in the basin taking into account of environmental flow, bio-diversity, muck disposal sites, r & r issues etc. [55]. based on the appraisal of project specific environment impact assessment and cia report of river basin, statutory clearance of a project is accorded by the government stipulating therewith conditions for compliance of environ-social safeguard measures. subsequently, the performance audit on ‘environmental clearance and post clearance monitoring’ is done to examine the process of grant of environmental clearance with respect to timeline and transparency and its compliance with the prescribed process. the social impacts of hydropower mainly due to land acquisition aspects are adequately addressed in the newly promulgated land acquisition act i.e rfctlarr act, 2013. on sustainability aspects, the hsap developed by iha is a global framework for assessing the sustainability of heps. the protocol defines good and bad practice at each stage of life cycle of a hep across twenty four environmental, social, technical and economic topics. in india, sustainability assessment of teesta-v hydropower station in sikkim has been conducted during 2019, which is the best learning experience for other ongoing and proposed heps. as regard to ghg emission from hydropower, research is still underway in this field. the previous study reveals that the ghgs are emitted from reservoir which depends on the characteristics and location of the heps. high emissions were related most strongly to low area-to-electricity ratios, large reservoir surface areas and high air temperature. therefore, each hydropower project should be carefully analyzed for its ghg emissions [56]. in india, study of ghg emission from reservoirs of tehri hydropower [57] and koteshwar hydropower in uttarakhand [58] have been studied through grat model. the co2 emissions from tehri reservoir were lower than the other tropical hydropower systems in the world, partly due to the higher depth and lower allochthonous organic carbon input from the reservoir catchment [59]. in an another study [60], it is concluded that even though a lot of efforts have undergone in determining the ghg emissions from reservoir however, due to various uncertainties like lack of standardized measurement tools and techniques, till date the determination has been little difficult and full picture of ghg emission at worldwide is still unknown [60]. in such scenario, it is obvious that careful removal of vegetation and other easily degradable organic matter from the inundated area of a reservoir, treatment of catchment area are fundamental in minimizing ghg emissions from it [56]. other res are also associated with ghg. the outcome of 41 studies shows that both the wind and solar systems are directly tied to and responsible for ghg emissions when viewed in a holistic manner; including initial materials extraction, manufacturing, use and disposal/decommissioning. they are thus not completely emissions free technologies [61]. therefore, for the planning and development perspectives, the ghgs emission cannot be a sole factor for prioritizing the res. 5. the way forward addressing the procedural gaps and constraints prevalent in the energy system would go a long way in furthering the spirit of the paris agreement and india’s commitment towards ndc and sustainability of ips, particularly through capacity addition of hydropower. the following recommendations may be a step forward in this direction. • based on the lesson learnt from the past experiences in hydropower development, project developers should formulate efficient ways and means, sharing of technical know-how among other developers to deal with geological surprise, 102 international journal of sustainable energy planning and management vol. 28 2020 a planning perspective on hydropower development in the indian himalayan region technical/construction issues and contractual matter to avoid arbitration cases. also, the awareness and monitoring of compliance of environment and social norms and other stipulations pertaining to heps be looked into. • at each project level, extensive awareness drive (about project’s features, compensation and benefits aspects) should be done among local people by the developers and district administration together. also, a mechanism of grievance-redressal should be established to address the aspiration of stakeholders to avoid legal intricacy at later stage. • both the governments at centre and state level should work collaboratively to achieve capacity addition targets through alignment of policy and institutional framework. in this context, procedural reform is required to streamline the clearance process by addressing the issue of ‘multiple public hearings’ in three aspects viz., environment clearance, forest clearance and land acquisition. • the result of this study (figure 8) indicates that out of 12 states in ihr, 04 states are rich in hpp. therefore, to facilitate the hydropower development in these 04 states, a ‘nodal officer’ may be nominated by the respective state governments for ensuring coordination among state government departments, project proponents and central government for re-dressal of various issues pertaining to effective implementation of heps. • the state government should bring land acquisition process on the digital platform in line with diversion of forestland in india. the online processing of land acquisition proposal would bring transparency and accountability for delay, if any. • hydropower is capital intensive. the concerned state government could help in managing the financial viability of the project by way of relaxation in realization of its share of 12% free power in staggered manner, relaxation in levy of cess/taxes, excise duty, local area development fund(ladf) wherever applicable; in the first few years of commissioning of project. • the construction of heps is challenging task in himalayan terrain, for which, the developers should adopt an effective human resource management policy to sustain the professional performance of its internal stakeholders (i.e employee) and aspiration of external stakeholders (i.e local people, gram-panchayats, administration, etc.). 6. conclusions india, one of the emerging economies in the world has clearly embarked on the path of energy transition from over-reliant fossil fuel to ses for the sustainability of ips and energy security of the country. hydropower has very important role in this direction by virtue of its inherent flexibility to meet peak load and balance out variability in the solar and wind power in the synergic state. moreover, hydropower promotes the development of the remote himalayan villages through infrastructure support (access road,bridge), flood moderation, water supply and many more. further, in pursuance to the paris agreement, india is committed to achieve its ambitious target to base 40% of the total power generation capacity on non-fossil fuel resources by 2030. in this concern, the solar and wind power generation are on the fast-track whereas, hydropower development is still growing at a slower pace due to various constraints. hence, a skewed power development scenario is a challenge for the sustainability of ips. to meet such challenges, the finding of our study indicates that there are substantial opportunities to strengthen the ips through capacity addition of hydropower and reducing reliance on fossil fuel. the 12 states of ihr accounts for a staggering 65% of the total estimated hpp of the country. the development of hydropower requires addressing of the prime constraints i.e delay in statutory clearance, litigation, geological issues, time and cost escalation etc. also, the specific procedural issues like multiple public hearings in clearances and land acquisition process of a project needs to be streamlined. further, certain initiatives like digitization of land acquisition proposal, nomination of nodal officer, grievance-redressal mechanism etc. as recommended in this study would be a way forward in sustainable planning and development of hydropower in india through the proactive approach of the state governments as the ‘land’ and ‘water’ two vitals for hydropower development are under their purview in the constitutional framework of india. given the rich cultural and biological diversity vis-a-vis fragility of ihr, the practice of cia & cc study during appraisal of projects and international journal of sustainable energy planning and management vol. 28 2020 103 ashis k. dash and manoj kumar singh post-clearance monitoring of projects duly address the environmental impacts of heps. the promulgation of rfctlarr act-2013 adequately addresses the social aspects in comparison to the previous land acquisition act, 1894. moreover, the hsap, a global framework for assessing the sustainability of heps, is applied in india to ensure sustainable implementation of heps. while acknowledging the capital intensive nature of hydropower, the recent hydro-policy framework contemplated by the government of india is definitely a welcome step in promotion of hydropower. however, given the existing federal structure of government functioning in india, a coordinated and active participation of the respective state governments will have a significant effect on overall development of hydropower as well as sustainability of ips. as future research opportunities, a simulation study to optimize the further capacity addition of hydropower taking different parameters viz., projected short and long term demand of electricity, environmental carrying capacity and investment aspects in to account may explore the better planning perspective of ips. references [1] agrawal d. k, lodhi m.s and panwar s., are eia studies sufficient for projected hydropower development in the indian himalayan region? current science, vol.98,no.2, (25january-2010), page:154–161, https://www.jstor.org/stable/ 24111505 [2] sharma sanjeev and j c kuniyal, hydropower development and policies in india: a case of himachal pradesh in the northwestern himalaya, india, energy resources, part b: economics, planning, and policy 2016,vol.11, no.4, 377–384, http://dx.doi.org/10.1080/15567249.2011.633593. 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eco-innovation; emissions; european carbon market http://doi.org/10.5278/ijsepm.6567 1. introduction in consequence of the worldwide growing concerns about the emission of greenhouse gases (ghgs) to reduce the impact of climate change, the european union (eu) has launched a strategy that comprises several initiatives, such as the international climate policy (e.g. the paris agreement) [1], the climate and energy action framework for 2030 [2], the renewable energy directive, among others. preceding the paris agreement as an international climate pact [3], the kyoto protocol emerged, which was based on three mechanisms, namely the clean development mechanism, the joint implementation, and the european union emissions trading scheme (eu-ets). this last system acts as a cap (global limit), where a maximum of co2 emissions is established, determining the number of emission allowances provided. therefore, if an installation emits more co2 than the licenses received, it will have to buy licenses, but if it emits less, it will be able to sell the remaining ones. companies, in particular those in the sectors involved in the allowances market, are subject to pressures to adopt better environmental behaviors, either compulsorily through policy measures or voluntarily through the market and competition, or simply to reduce related operating costs, concerning, for instance, energy, raw materials or waste treatment. in this way, there are several motivations for eco-innovating. eco-innovation (ei) is understood as any product, process, organizational, social, or institutional innovation that can reduce environmental impact and resource use [4, 5, 6]. several studies look for the determinants of ei. these determinants can be internal or external to the company [7, 8]. environmental policies, namely the aforementioned eu-ets, are within the external determinants of ei [9]. 6 international journal of sustainable energy planning and management vol. 32 2021 eco-innovation and emissions trading: a sector analysis for european countries of lock-in problems of well-developed and well-embedded technologies in power supply and transport, the ei policy is stronger than the traditional innovation policy [4]. del río et al. [6] state that regulatory stringency affects the rate and direction of eis and is a crucial element to encourage them, especially the radical ones. moreover, according to the so-called porter hypothesis, stricter environmental regulations encourage environmental technologies that reduce both the environmental impact of production activities and the costs of complying with regulation [14]. environmental innovative firms cooperate on innovation with external partners (suppliers and universities) to a higher extent than other innovative firms [8]. in a study applied to spain, de marchi [8] presents some results that suggest that the r&d cooperation is more intense for environmental innovators than for other innovators. the policy action, within the form of public grants, fosters innovations that reduce the impact on the environment to an higher extent than other innovations. a study conducted by borghesi et al. [15] about italy, suggests the importance of well-designed, long-term, and time-consistent policies to promote the development of cleaner technologies for energy efficiency and co2 abatement. results show that current and future expected regulations are highly correlated to ei and the policy stringency is negatively related to innovation diffusion, a result that applies to both types of ei considered, internal and external to the firm. it is also important to understand how the green system works at a regional level. a study by antonioli et al. [16] for emilia-romagna, in italy, shows that firms that share the municipality location with ei adopters are more likely to adopt eis, which highlights the relevance of agglomeration economies and native institutional conditions in providing concrete (innovative) contents to the green economy paradigm. moreover, at a municipal level spillovers tend to prevail over other geographical factors and to the respective economic activity sector, and, therefore, eis may be considered as a key source of growth for regional systems, particularly when spurred by local spillovers. in crespi et al. [17] the authors differentiate weak ei (e.g. incremental or radical innovation with low penetration rates) from strong ei (e.g. incremental or radical ei that have high penetration rates and thus a high environmental impact) and state that policies should be focused on the uptake of strong ei, and on radical ones, to maximize the environmental benefits. some authors show that environmental regulation is one of the strongest determinants of this ei [10, 11], although other authors show that its effect is not so relevant [12, 13], with no consensus in the literature. thus, this article intends to estimate the impact of a specific regulation, eu-ets, on the eco-innovation activities of the companies involved in the market, to assess its effectiveness in changing the environmental behavior of companies. the proposed metric is effective to deliver the expected outcomes, specifically on the eco-innovation strategy, as caught up by the firm-level data from the community innovation survey (cis). therefore, we intend to contribute to the existent literature by empirically examining whether the eu-ets and its ‘stringency’ is significantly related to ei, taking into account both the internal and external factors that might be correlated with ei. furthermore, we compare economic activity sectors, contributing with a different approach to analyze the relationship between ei strategies and the effectiveness of the eu-ets market. the rest of the article is divided as follows. section 2 presents an overview of previous research exploring the links between ei, policy regulation and competitiveness, and the eu-ets market. section 3 exposes the methods and data collected for this work, while section 4 presents the empirical results and discusses some policy implications derived from these. finally, section 5 concludes the work, pointing some future research direction needs. 2. literature review in this section, a theoretical framework is provided to understand the influence of regulatory policies on eco-innovation, as well as their effect on market competitiveness. additionally, a literature review on the origin and evolution of the european union – emissions trading system (eu-ets) together with its impacts on ei are presented, which is the aim of our study. 2.1. eco-innovation, policy regulation, and competitiveness innovation has always been seen as part of the solution to environmental problems. however, before 2005 few programs at the eu level had specifically addressed the stimulation of environmental innovations. since then, eco-innovation started receiving growing attention [4]. indeed, the literature about the role of policy regulation in ei promotion is developed mainly after 2010. as the benefits of ei are undervalued in the market and because international journal of sustainable energy planning and management vol. 32 2021 7 pablo da silva, margarita robaina, mónica meireles, mara madaleno in countries with a certain level of policy stringency, and where the choice of environmental policies is more flexible, there is a greater propensity to generate widely diffused innovations and to benefit from innovations generated elsewhere [18]. indeed, results from kemp and pontoglio [19] show that flexibility has a positive impact on eco-innovation. however, they found that the flexibility of eu-ets, within the banking and borrowing context, worked against the development of innovations. furthermore, the results did not find the best instrument to foster innovative response to environmental regulations, although taxes and emissions trading systems were found to be superior in promoting innovation than regulation. yet, this can be true for low-cost improvement innovations but does not appear to be true for radical innovation. as it is shown by horbach et al. [11], the regulation in germany features a strong influence on eis, particularly to push firms to scale back air (e.g. co2, so2, or nox), water or noise emissions, to avoid hazardous substances, and to increase the recyclability of products. cost savings are also of great importance as a motivation for reducing energy and material use, with the energy and raw material prices and taxation considered as drivers for ei. another important source of ei is the customer requirements [20], especially products with improved environmental performance and process innovations that enhance material efficiency, and reduce energy consumption, waste, and therefore the use of dangerous substances. a robust and well-functioning financial market helps investors to tap into the commercial potential of clean energy, contributes to social desires, the expansion of cleaner energy, and energy efficiency and environmental sustainability [21]. however, al mamun et al. [22] warn for potential key policy implications. indeed, smoothing the availability of finances to renewable energy firms should be a key priority for governments to allow those firms to be able to increase cleaner energy production and address the threat of the increasing greenhouse gases and the achievement of intergenerational energy security. another potential key policy appointed by the authors is the provision of tax credits to investors in stocks of cleaner energy firms, encouraging the socially faithful investors and others to invest more funds in the stocks of companies that produce cleaner energy. they also claim the development of government policies to scale back the economic incentives to use, produce and invest in fossil fuels, through measures like the increased carbon tax, stringent usage guidelines for producing and using fossil fuels, while providing increased governmental support for cleaner energy initiatives. horbach et al. [7] compare france to germany. in their study, it is possible to ascertain the relevance of the regulatory push-pull effect for eis documented by the significance of the respective variables, which confirms the importance of regulatory instruments in stimulating eis by industrial firms. furthermore, the results show that eco-innovative firms tend to patent significantly more than other innovators and that eu-wide centralized policies, like the eu-ets, seem to be capable to promote eco-innovation. moreover, it is possible to observe that in germany the cost savings, especially the material and energy savings, play an important role in triggering eis, as well. according to porter and van der linde [9] (p. 98), “competitive advantage rests not on static efficiency nor on optimizing within fixed constraints, but on the capacity for innovation and improvement that shift the constraints”. taking this thought into account, porter and van der linde [9] (p.116) claimed that “the focus should be on relaxing the environment-competitiveness trade-off and the orientation should shift from pollution control to resource productivity”. furthermore, it is asserted that success can not come from policies that proclaim that environment will triumph over the industry, nor from policies that promise that industry will conquer the environment. as an alternative, the success must involve innovation-based solutions to promote environment and industrial competitiveness. 2.2. eu-ets the world’s largest carbon pricing regime is the eu-ets, a cap-and-trade system of co2 allowances – constrains the aggregate emissions of regulated sources by creating a limited number of tradable emission allowances, requiring those sources to surrender allowances according to their emissions. it was adopted in 2003, with a pilot phase from 2005 to 2007, a kyoto phase from 2008 to 2012, and the third phase from 2013 to 2020 [23]. a new phase (phase iv) has recently started in 2021 and will be extended until 2030 to fulfill the emission reduction targets as a part of the eu´s contribution to the paris agreement [2]. in the study of borghesi et al. [24] for italy, most respondents across different sectors agreed that energy costs’ factors tend to dominate specific co2-targeted policies in terms of ei-related impacts. within the same 8 international journal of sustainable energy planning and management vol. 32 2021 eco-innovation and emissions trading: a sector analysis for european countries study, it is stated that policy certainty and financial support are two pre-conditions to sustain initial innovation adoption. in this particular case of italy, borghesi et al. [15] assert that, in the first phase of the eu-ets, the majority of the firms adopted a “wait and see” policy, using the allowances at their disposal instead of investing in new technologies to benefit from the opportunity to sell the permits. the over-allocation (in phase i) and therefore the economic recession (in phase ii) have reduced the direct impact of the eu-ets on emissions, however, the combination of rigorous monitoring and awareness, as well as a positive carbon price, has driven some abatement on emissions [25]. interviews from this study suggest that the eu-ets has affected investment decisions in limited ways (e.g. mainly small-scale efficiency-related investments instead of being sufficiently clear to drive large, long-term investment decisions). furthermore, pieces of evidence from phase i and phase ii claim that significant windfall profits only endure for a limited time, as a policy can and will respond once the evidence is obvious. thus, the eu-ets system has been ready to deter major carbon-intensive investments and consequently to release capital that could be turned to low carbon investment, which reinforces the importance of eu-ets in business decision-making. in an italian-based study of pontoglio [26], it is possible to observe that the eu-ets scheme is not able to award and stimulate investments, having been scarcely favorable to innovations. this study refers to the investment and the limited span of the allocation periods as a long-term problem since they resulted not be sufficient to provide a predictable long-term signal for investments. the author states that carbon dioxide emitted by energy-intensive industries can not be reduced using low-cost end-of-pipe abatement solutions. in contrast, it requires improvements in energy efficiency and investments in renewable resources, whose adoption is influenced both by energy and carbon prices. furthermore, the actors involved in their development and diffusion are machinery suppliers who are fundamental actors in the innovation system. nevertheless, theoretically, it is expected that environmental policies can stimulate the adoption and diffusion of carbon-friendlier technological solutions. in this study, it is shown that its potential in the eu-ets phase i was sharply weakened due to some flaws in its design, more precisely in the allocation principles, new entrants and closures rules, and issues related to its time profile, which depart the phase i of eu-ets from an ideal trading mechanism. in fact, in the first two phases of the eu-ets allowance prices were volatile and sometimes very low, therefore resulting in a weak incentive to implement energy efficiency and innovation [27]. but, despite an imperfect design, it has managed to incite an increase in the adoption of emitting technologies [28]. even in the third eu-ets phase, which was more stringent, it only had limited effects on the rate and direction of corporate research, development, and demonstration (rd&d) and its adoption [28]. in this study, the authors state long-term emission reduction targets as an important trigger of rd&d. furthermore, it was found that technology policies, in the form of demand-pull and technology-push instruments, have significant effects on low carbon technological change, and are therefore an important factor compensating for the insufficient effect of emissions trading. the porter hypothesis states that a policy like the eu-ets can incite ei and improve the financial performance of regulated firms. however, according to osses [29], the policy did not enhance the financial performance of regulated companies, which can be further expounded by the time lag associated with the profitability of eis. in this study, it is shown, by a comparison among the eco-patent output, that eu-ets only induced innovation in its second implementation phase, which can be a result of a higher degree of regulatory stringency and an increased level of certainty compared to phase one. thereby, policymakers should enact eu-ets reforms focused on decreasing the emission cap, introducing means to stabilize the allowance price, carefully assessing if the scheme can be extended to other sectors, and launching other ei enhancing instruments. innovation risks and the related high initial investment costs of technological boundaries limit investments in technological innovation to reduce carbon emissions, and thus investments tend to focus mainly on market-available technologies for core processes [27]. the study of gasbarro et al. [27] for the italian pulp and paper industry concludes that, since financial uncertainties usually deter both technical and organizational innovation, it is necessary to highlight and maintain the commitment to improving environmental performances. as a consequence, it is strictly crucial to stimulate the investment in innovation through regulation enforcements, which will potentially affect the international competitiveness of pulp and paper companies. international journal of sustainable energy planning and management vol. 32 2021 9 pablo da silva, margarita robaina, mónica meireles, mara madaleno in the rogge and hoffmann [30] study, for the sectoral innovation system of power generation technologies, it is possible to see that the eu-ets has impacted at four levels: (i) knowledge and technologies; (ii) actors and networks; (iii) institutions; and (iv) on-demand. regarding the first impact, eu-ets accelerates the innovation process, being an additional driver for rd&d on higher efficiency levels (materials, components) and indirectly benefiting rd&d on renewables. actors and networks include the regulatory pull from power generators to technology providers, the increased corporate rd&d spending, especially of larger players, and the heterogeneity of actors. on institutions, eu-ets fosters changes in thinking, including in top management, and promotes the distribution of co2 policies across the organization through its integration in procedures, structures, and corporate innovation routines. finally, on-demand was impacted especially because of new plants, with a temporary spike in pre2012 interest in investments, and due to the incentives provided for fuel switching and cogeneration, and the measures improving energy efficiency that raised plants’ profitability. in the study of rogge and hoffmann [30], it can also be found that the eu-ets scheme mainly affects the rate and direction of technological change of power generation technologies within the large-scale, coal-based power generation technological regime, to which carbon capture technologies are added as a new technological trajectory. for the german pulp and paper industry, rogge et al. [31] found that the eu-ets and the international climate policy had barely affected their innovation activities. instead, rd&d decisions and companies’ adoption tend to keep them on established and primarily market-factor-driven technological business-as-usual trajectories. low prices for co2, a high share of free allocation, and regulatory uncertainty are some of the likely reasons for the low relevance of the eu-ets. therefore, increasing the stringency and predictability of the current policy mix would be expected to contribute towards a decarbonization path [28, 31]. 3. methods the data collection matched the same period and sectors of both the cis database and the eu-ets database. the sample is composed of 11524 firms answering the cis (sectors c, h, and d, see table 2), from 13 european countries (bg-bulgaria; cy-cyprus; cz-czech republic; de-germany; ee-estonia; el-greece; hr-croatia; hu-hungary; lt-lithuania; lv-latvia; pt-portugal; ro-romania; sk-slovakia), belonging to the sectors that participate in the eu-ets and that are also included in cis. these include the thermoelectric plants, ceramics, cement and lime, cogeneration, combustion plants, iron metals, pulp and paper, refineries, glass and aviation. the cis survey is a three years survey, where only 2008 (2006-2008) and 2014 surveys (2012-2014) directly asked firms if they had adopted any eco-innovation strategy and if these were related to the product, process, marketing, or organizational innovations. to have a common period of analysis among both datasets, we have collected data from the period 2012-2014. for the eu-ets the total number of available firms reporting allowances allocation and total emissions during the 2012-2014 period was 2727 (see table 1). both datasets were joined by computing averages, considering the values reported by each firm in each economic activity sector. in the analyzed countries, it was considered the individual data of all companies participating in the eu-ets, regarding their level of emissions and the number of licenses allocated, available on the european commission’s website (https://ec.europa.eu/clima/ets/), in millions of tonnes. the observed emissions and received allowances per company were aggregated by sector, and following [15] we constructed an eu-ets policy indicator to capture policy stringency that will be used as an explanatory variable in the econometric analysis to be performed in the following section. the indicator s is a ratio between the emissions (e) of sector i and the eu-ets allowances allocated to that sector (eua), as presented in equation (1). s e eua i i i = (1) the more emissions the sector i produces and the lower the level of its allowances, the more stringent is the ets policy. if si > 1, it means the number of allowances at disposal to sector i is lower than its emissions level, therefore the ets policy is stringent for that sector. if, in contrast, si ≤ 1 then the permits allocated to sector i are equal or lower to its emissions, so the ets policy is not stringent. table 2 presents the available cis data in the period 2012-2014, especially considering the ei strategies implemented. 10 international journal of sustainable energy planning and management vol. 32 2021 eco-innovation and emissions trading: a sector analysis for european countries table 1. number of available firms on cis 2014 and eu-ets by country and sector cis countries bg cy cz de ee el hr hu lt lv pt ro sk total se ct or s 17 155 34 106 83 109 115 135 90 129 98 80 102 28 1264 19 179 28 124 182 29 135 54 100 60 47 140 151 30 1259 23 336 75 153 132 106 168 147 134 141 52 299 181 56 1980 24 92 55 106 119 85 149 271 79 117 56 64 119 26 1338 25 779 55 250 353 85 149 271 634 117 56 583 339 205 3876 35 123 1 116 150 54 27 32 116 49 36 41 149 60 954 51 20 67 8 7 96 200 158 9 146 95 27 16 4 853 total 1684 315 863 1026 564 943 1068 1162 759 440 1234 1057 409 11524 eu-ets countries bg cy cz de ee el hr hu lt lv pt ro sk total se ct or s 7 5 0 6 127 2 12 0 4 0 2 22 6 6 192 2+3 64 3 230 874 35 20 20 124 52 72 48 115 76 1733 6+7+8 30 9 61 233 3 39 15 33 6 9 40 29 19 526 5 9 0 7 66 1 19 5 4 0 1 1 21 10 144 4 3 0 7 34 0 5 4 3 1 0 2 12 1 72 1 1 0 1 8 1 0 1 3 0 1 0 5 2 23 aviation 4 1 4 2 7 1 3 2 1 9 2 1 37 total 116 13 316 1342 44 102 46 174 61 86 122 190 115 2727 notes: 17 (7 on eu-ets) manufacture of paper and paper products; 19 (2+3 in eu-ets) manufacture of coke and refined petroleum products; 23 (6+7+8 in eu-ets) manufacture of other non-metallic mineral products (cement, ceramics, and glass); 24 (5 in eu-ets) manufacture of basic metals; 25 (4 in eu-ets) manufacture of fabricated metal products, except machinery and equipment; 35 (1 in eu-ets) electricity, gas, steam, and air conditioning supply; 51 (aviation in eu-ets) air transport. table 2. variables description environmental benefits obtained within the enterprise ecoeno reduced energy use or co2 footprint (reduced total co2 production) 1 = yes; 0 = no environmental benefits obtained during the consumption or use of a good or service by the end-user ecoenu reduced energy use or co2 footprint 1 = yes; 0 = no factors driving the enterprise’s decisions to introduce innovations with environmental benefits enereg existing environmental regulations high = 3; medium = 2; low = 1; not relevant=0 enetx existing environmental taxes, charges, or fees high = 3; medium = 2; low = 1; not relevant = 0 enregf environmental regulations or taxes expected in the future* high = 3; medium = 2; low = 1; not relevant = 0 engra government grants, subsidies, or other financial incentives for environmental innovations high = 3; medium = 2; low = 1; not relevant = 0 other variables size1 if the number of employees under 50 1; 0 otherwise tg turnover growth between 2012 and 2014 (%) notes: *for example preparing environmental audits, setting environmental performance goals, iso 14001 certification, iso 50001 certification, etc. international journal of sustainable energy planning and management vol. 32 2021 11 pablo da silva, margarita robaina, mónica meireles, mara madaleno although cis is referred to the entire period 20122014, the period of analysis was reduced to just one average year to avoid reducing the number of observations further. the eu-ets data was reduced to the period average, as well. provided both dependent and independent variables are in average terms for one year only, we used cross-section regression analysis. all estimations have been performed using the stata software. equations (2) and (3) were estimated to understand how the chosen factors drive the company’s decisions to introduce eco-innovations according to the variables in table 2. the two dependent variables are the environmental benefits obtained within the enterprise, ecoeno, meaning reduced energy use or co2 footprint (reduced total co2 emissions), and the environmental benefits obtained during the consumption or use of a good or service by the end-user, ecoenu, meaning reduced energy use or co2 footprint. ecoeno x w si i j i j j i j i i� � � � �� � � � �, , 7 (2) ecoenu x w si i j i j j i j i i� � � � �� � � � �, , 7 (3) where i refers to the economic activity sector, α is the regression constant, β the coefficients associated with each independent variable, x the vector of factors driving the enterprise’s decisions to introduce innovations with environmental benefits, namely, enereg (existing environmental regulations), enetx (existing environmental taxes, charges or fees), enregf (environmental regulations or taxes expected in the future), engra (government grants, subsidies or other financial incentives for environmental innovations), and w the vector of control variables composed by size1 (if the number of employees in the firm is under 50) and tg (turnover growth between 2012 and 2014). the variable si is the average eu-ets stringency policy indicator of firms that traded in this market during the 2012-2014 period and ε is the random component of the linear relationship between x and ecoenoi/ecoenui. 4. results the number of available firms on cis has been associated with the companies in the eu-ets and the results are discussed based on the interaction between the two groups. in this section, we will present the empirical results and discuss some policy implications derived from them. 4.1. empirical findings as can be observed in table 3 all variables have the same observation number (91, which corresponds to 7 sectors in 13 countries), except the ets stringency policy indicator, which has a lower sample, presenting 78 cases, for the same countries and sectors. nevertheless, there were countries with missing data for some sectors, meaning, there are sectors with available data in cis that were not present in eu-ets and vice versa, which made us match both sets of information, not being able to work with complete data for all sectors in all countries. in the descriptive statistics table, table 3, we can also observe that the mean values are all positive, with si representing the highest value in contrast to the ecoeno and ecoenu that present the lowest ones, while the others have similar values between the ecoenu and si. regarding the deviation, we can observe that the values are quite close and similar, except for ecoeno and ecoenu that are lower. it is also important to refer that the values are within the expected range, with all of them presenting null or positive values, except for tg suggesting the possibility of negative values for turnover growth, between 2012 and 2014. provided that on average si ≤ 1, more specifically, si = 0.709, then the permits allocated to sector i on average are higher to its emissions, meaning that jointly for all sectors considered, the eu-ets policy is not stringent. moreover, the two dependent variables (environmental benefits obtained within the enterprise, and the environmental benefits obtained during the consumption or use of a good or service by the end-user), present very low average values, being those with the lowest standard deviation as well. thus, on average the firms answering the cis survey during 2002-2004 have stated to introduce table 3. descriptive statistics variable obs mean std. dev. min max ecoeno 91 0.180 0.149 0.000 1.000 ecoenu 91 0.115 0.094 0.000 0.469 enereg 91 0.524 0.444 0.000 3.000 enetx 91 0.424 0.399 0.000 3.000 enregf 91 0.430 0.409 0.000 3.000 engra 91 0.260 0.216 0.000 1.122 size1 91 0.553 0.232 0.000 1.000 tg 91 0.307 0.449 –0.333 2.750 si 78 0.709 0.338 0.268 2.419 12 international journal of sustainable energy planning and management vol. 32 2021 eco-innovation and emissions trading: a sector analysis for european countries very few environmental benefits, which may be explained by the low incentives they had to perform eco-innovations, representing higher imposed costs. however, this would as well imply that higher amounts of licenses need to be bought or lower emissions need to be released by these same firms. with a weak stringent eu-ets policy (on average) and low stated ei measures, it is reasonable to state that the eu-ets policy implications are not producing the desired effects within these sectors, and they need to be reformulated to be more stringent and produce the environmental desired effects effectively. the pearson correlation analysis (table 4) provides clear evidence, for a significance level of 1%, that there is a very large and positive relationship between enetx and enereg (0.977), enregf and enereg (0.986), and enregf and enetx (0.985), which reflects a very regulated market, potentially damaging corporations that do not have a strong financial background, especially if the stringency ratio is higher than 1 (table 3). this means that the corporations emit more than the allowances allocated, and therefore there is a more stringent policy, and the innovation in this particular field is lower. these high values of correlation among explanatory variables might also conduct to multicollinearity issues, demanding that these should be inserted individually in the regression performed to avoid spurious regressions. this might be because we have a small number of observations within the sample. even so, the vif values computed do not reveal multicollinearity issues. it is also important to note that for a significance level of 1%, the correlation between the indicators ecoeno, ecoenu, enereg, enetx, enregf and engra is positive and has a moderately weak relationship (namely, between enetx and ecoenu, 0.404). on the other hand, for all the remaining indicators with a statistically significant correlation, some with a level of 5% (for example, between tg and ecoene) and others with a level of 10% (such as size1 and ecoenu), there is a negative and considerably weak relationship. it should also be noted that the indicator si does not present any significant correlation with the other variables, for the tested significance levels, namely at 1%, 5%, and 10% significance. table 5 presents the cross-section regression results where both enetx (existing environmental taxes, charges, or fees) and enregf (environmental regulations or taxes expected in the future) reveal to have a negative impact over ecoeno, the latter in a nonsignificant way, thus turning harder to reduce energy usage or co2 footprint. moreover, enereg (existing environmental regulations) and enegra (government grants and subsidies) have a significant and positive impact on energy and co2-related ei, which can evidence the effectiveness of this kind of policy. size has a significant and negative impact on the dependent variable, which means that small enterprises (in particular, with a number of employees under 50) have more difficulties on eco-innovating in energy and emissions fields. nevertheless, concerning turnover growth, evidence shows that companies with a higher tg, eco-innovate less. the stringency indicator (s) revealed only to be significant in explaining ecoenu, with a negative coefficient sign, which means that the more stringent the eu-ets policy is, the fewer eis activities are pursued. results point for some interesting policy directions to be pursued as will be discussed in the next subsection. similar to the results presented by madaleno et al. [32], table 4. pearson correlation analysis ecoeno ecoenu enereg enetx enregf engra size1 tg si ecoeno 1 ecoenu 0.652*** 1 enereg 0.791*** 0.481*** 1 enetx 0.782*** 0.404*** 0.977*** 1 enregf 0.791*** 0.428*** 0.986*** 0.985*** 1 engra 0.449*** 0.727*** 0.650*** 0.591*** 0.602*** 1 size1 –0.074 –0.205* 0.068 0.076 0.092 –0.119 1 tg –0.253** –0.184* –0.188* –0.174* –0.198* –0.109 –0.151 1 si –0.132 –0.159 –0.064 –0.057 –0.082 –0.059 0.039 –0.135 1 note: *, **, *** statistically significant at 10%, 5% and 1% respectively international journal of sustainable energy planning and management vol. 32 2021 13 pablo da silva, margarita robaina, mónica meireles, mara madaleno size exerts a particular influence over the adoption of ei strategies. indeed, smaller companies support higher costs and have lower access to government grants and subsidies preventing them from having higher investment levels, as well as preventing them from the desirable future sustainability that should be achieved. therefore, policymakers should provide more incentives, lower taxes, and ensure that smaller firms’ participation in the eu-ets market will be fair and properly weighted (prioritizing these is important for the future sustainability of the eu market). to perform a robustness check, estimation results have been repeated to decrease the possible effects of heteroskedasticity that may be presented by the data. regarding table 6, where robust standard errors are used in the estimation, the differences that distinguish it from table 5, for example, a change in the standard error values and a non-significant change in some of the values of p > t, do not change the overall interpretation of the study. the exception is the effect of environmental regulations (enereg) whose impact is no longer significant (up to a 10% level) in reducing energy use or co2 footprint during consumption or use of a good or service by the end-user. table 5. cross-section regression results dependent: ecoeno coef. std. err. t p > t f(7, 70) = enereg 0.499 0.181 2.75 0.008 12.3 enetx –0.343 0.183 –1.88 0.064 prob > f = enregf –0.177 0.215 –0.83 0.411 0.000 engra 0.240 0.142 1.69 0.095 r-squared size1 –0.099 0.044 –2.24 0.028 0.5515 tg –0.050 0.024 –2.12 0.038 adj r-squared si –0.041 0.030 –1.36 0.178 0.5067 _cons 0.165 0.038 4.33 0.000 dependent: ecoenu coef. std. err. t p > t f(7, 70) = enereg 0.218 0.122 1.78 0.079 15.44 enetx –0.192 0.123 –1.56 0.124 prob > f = enregf –0.063 0.145 –0.44 0.665 0 engra 0.272 0.096 2.84 0.006 r-squared size1 –0.041 0.030 –1.38 0.173 0.6069 tg –0.034 0.016 –2.1 0.039 adj r-squared si –0.035 0.020 –1.74 0.087 0.5676 _cons 0.094 0.026 3.64 0.001 looking at both tables 5 and 6, we also confirm the overall significance of the results achieved provided the f-stat results and considering the adjusted r squared obtained from estimations. from the results, it may be as well inferred that existing environmental regulations are important to justify a firm’s implementation of ei strategies. however, existing environmental taxes, charges, or fees seems not to be significant to force companies to pursue these strategies (depending on the ei strategy). the same happens when we consider the impact of environmental regulations or taxes expected in the future, which could lead policymakers to increase taxes in the future, as for now, they do not represent a concern. since in this phase 4 (2021-2030), and based on the current legislation, scope changes have not been agreed, but yet considered as part of the review of the ets foreseen (under the 2030 climate target plan), it leaves room for stricter policies and perhaps the inclusion of more economic activity sectors in the eu-ets scheme. table 6. cross-section regression results with robust standard errors dependent: ecoeno coef. robust std. err. t p > t f(7, 70) = enereg 0.499 0.196 2.55 0.013 14.59 enetx –0.343 0.193 –1.78 0.079 prob > f = enregf –0.177 0.175 –1.01 0.316 0.000 engra 0.240 0.123 1.95 0.056 r-squared size1 –0.099 0.043 –2.30 0.024 0.5515 tg –0.050 0.016 –3.06 0.003 root mse = si –0.041 0.028 –1.45 0.150 0.087 _cons 0.165 0.050 3.28 0.002 dependent: ecoenu ecoenu coef. robust std. err. t p > t f(7, 70) = enereg 0.218 0.145 1.50 0.138 14.81 enetx –0.192 0.120 –1.60 0.115 prob > f = enregf –0.063 0.158 –0.40 0.691 0.000 engra 0.272 0.096 2.83 0.006 r-squared size1 –0.041 0.030 –1.35 0.182 0.6069 tg –0.034 0.012 –2.80 0.007 root mse = si –0.035 0.018 –2.00 0.050 0.059 _cons 0.094 0.032 2.89 0.005 14 international journal of sustainable energy planning and management vol. 32 2021 eco-innovation and emissions trading: a sector analysis for european countries in contrast, government grants, subsidies, or other financial incentives for environmental innovations justify increased measures of ei within the firms considered in the sample, leaving them highly dependent on the government, which opens room for the discussion of the effectiveness of these supports. further, it may impact future competitiveness in the market, imposing additional costs to the desired sustainability goals [17-19; 28-30]. 4.2. results discussion in this subsection, we raise some discussion about the empirical findings obtained in the previous subsection. industrial competitiveness has an important role in consumer effectiveness, especially in achieving sustainability targets [33]. in the literature, it is pointed that the industry’s environmental reputation is related to the adopted sustainability strategies [33-34]. consumers are becoming more aware of the need to save the planet and to adopt sustainable practices, starting with household responsible consumption patterns adoption. industries should then take the needed steps in adopting these behaviors keeping themselves competitive in a globalized market while keeping answering the consumers’ demand [33]. this can only be done with improved technologies [34], changes in energy demand, and increased consumption [20]. the literature also highlights that industries’ environmental reputation increases sustainability strategies while considering customers’ environmental concerns and keeping financial and market performance [33]. individuals will continue consuming and population consumption needs will continue to rise. industries will have to follow the growing pattern and provide goods at an accelerated rate. this will certainly increase the environmental impact and imply sustainability goals patterns to be rethought and reformulated. the best solution, from our viewpoint, will be to favor the necessary conditions for industries to be able to answer the growing needs patterns while attending simultaneously to sustainability goals, which can only be achieved at the expense of renewable energy technologies [35], thus favoring the adoption of ei strategies in firms. additionally, we should be aware of the possible cost pass-through identified in the literature [36] from firms in the eu-ets to consumers in some sectors. the ei strategies explored in this article are actions based purely on returns over investments realized by the firms considered in the sample (or stated, since the data has strived from the cis survey). even with low governmental support, which turns the new desired green world unrealistic thus far, both businesses, consumers, and the environment can win by working jointly. this can only be ensured if being green is no longer a cost of doing business, but a result of innovation, new market opportunities, advanced technologies, and wealth creation [37,38]. policymakers are required to devise mechanisms and offer incentives as to the adoption of ei strategies within firms, or even government intervention to support the eu-ets scheme to lower the cost burden supported either by firms and consumers [36,38]. these pursued strategies have to be done especially in those industries where there is evidence that paying to be green is ambiguous, or where environmental management practices investments in ei are not evident. thus, incentives to encourage the enhancement and adoption of environmental initiatives in economic activity sectors should be offered, as proved in our results and as highlighted by postula and raczkowski (2020) [39]. for these policies to be pursued there should be a clear distinction among firm dimensions [32] and risk exposure [21]. in madaleno et al. [32] there is clear evidence that additional costs are imposed by the final consumer. smaller firms should thus benefit from higher government support since image issues are harder to maintain, adopt and adapt, provided turnover growth is reduced in these firms if greater ei strategies are to be followed [32]. therefore, and considering that most firms in the european markets are smes (small and medium enterprises) [40], investors and subventions should be prioritized for smaller firms, even if the largest firms are more capable of minimizing the risk perception [3432]. concerning eu ets phases, and the replicability of our results, some considerations can also be made. as mentioned before, this study focuses on the period 20122014, including the last year of the second eu ets trading period (2008-2012) and two years of the third trading period (2013-2020). the results presented for this period can be easily extended for the complete third period, as the main distinctive feature of phase 1 and phase 2 is the number of allowances to be allocated for free to the industry. nevertheless, for the following phases, our results should be rather conservative. for instance, for the third period, as the main difference between the first two phases and phase 3 is that no free allocation for electricity production exists and the free allocation to the industry is based on eu harmonized rules, we believe that conclusions could be different and thus eu-ets could reveal to be a strong incentive to eis and to affect the financial international journal of sustainable energy planning and management vol. 32 2021 15 pablo da silva, margarita robaina, mónica meireles, mara madaleno performance of regulated companies. moreover, as the main aim of the fourth period (2021-2030) is to increase even more the pace of emissions cuts, to establish a better-targeted carbon leakage framework, and to provide funds for low-carbon innovation and energy sector modernization, we believe these impacts (on innovations, emissions, and finance) could even be more empathize. most of the well-succeeded industries, like the petroleum companies, have shown to fail to be fully committed to climate change mitigation, only willing to pay off their emissions. therefore, only with the promotion of the investment in breakthrough technologies, such as carbon capture, will be possible to meet the paris agreement goals. the literature provides several policy suggestions to help to promote the investment in these technologies. a primary requirement provided by bataille et al. [41] is to make the decarbonization of energy-intensive industries a priority at all levels, i.e. from the international to the sectoral level, incorporating it in each country’s climate policy. stakeholders are also important drivers to communicate, coordinate and legitimate transitions. they can create a common vision among government, industry, and society while defining long-term strategies for the whole innovation chain. another crucial measure would be the elimination of subsidies for fossil fuel production and use, and the internalization of carbon content, through carbon pricing, at all stages of the material’s life cycle, from production to end-use, with more stringent regulation. research into supporting institutions and business models should also be prioritized. other authors (e.g. wesseling et al. [42]) claim that changes in user behavior, culture, and industry strategies help decarbonizing industries. this can be attained by a well-designed consumer education program to help some already developed technologies to be introduced more rapidly into the market [43]. moreover, the government should become less risk-averse in its support for investment in breakthrough technologies and both risks and costs should be shared between industry and governments [42]. therefore, a globally coordinated policy approach would be crucial. it is difficult for emerging technologies, like electric and fuel cell vehicles, to compete in a market with mature technologies, like internal combustion engines. indeed, when some incumbents perceive climate-related concerns as a threat rather than an opportunity, they tend to lobby to avoid the threatening of their competitors [44]. these lobbying groups comprise industry associations that have political influence. the new technologies, in turn, are perceived as risky, costly, and unable to compete with the economies of scale of established technologies. to thrive in such an unjust scenario bataille et al. (2018) [41] propose these firms engage in research collaborations and cooperations with other stakeholders to help developing economies of scale for green procurement. furthermore, governments should stop giving in to pressure from lobbies by eliminating the subsidies for fossil fuel-related technologies and adopt more stringent carbon-related regulations. 5. conclusions this paper provides new evidence on the role of the eu-ets for innovation in energy efficiency and co2 abatement. our estimates show that eis are associated with various factors, both internal and external to the firm. external forces, as the existence of environmental regulations and financial incentives for environmental innovations (e.g. government grants and subsidies), have a positive impact on reducing energy use or co2 footprint within the enterprise and during the consumption or use of a good or service by the end-user. in contrast, environmental taxes, charges or fees, and the stringency of the eu-ets revealed not to be an incentive for this kind of eis. we find that future expected regulation is not significant for explaining ei. different authors have studied the possibility to apply carbon taxation or other market policies to share the emissions responsibilities between consumers and producers, but the conclusions are not consensual. for instance, jakob et al (2021) [45] proposed an “economic benefit shared responsibility” scheme to account for carbon emissions associated with the production of traded goods and services. the authors suggest the use of the economic benefits producers and consumers derive from being able to generate emissions-free of charge, as a measure to share responsibility for trade-related emissions, through a carbon price. by contrast, other studies apply alternative approaches, based on the counterfactual perspective of the absence of trade, evaluating a country’s imports and exports either relative to the average global emission intensity for the respective goods and services [46], or from the perspective of how a country’s trade specialization contributes to meeting global consumption in a carbon-efficient way [47]. these last authors proposed a scheme for assigning credits and penalties. in this sense, reductions in global emissions resulting from cleaner exports can be accounted for. combining such schemes 16 international journal of sustainable energy planning and management vol. 32 2021 eco-innovation and emissions trading: a sector analysis for european countries with accounting schemes for shared producer and consumer responsibility in dashboards for “multiple carbon accounting” [48] could help to create a broad depiction of the responsibility for trade-related emissions. several authors view the fulfillment and reinforcement of the paris agreement as the next steps in the global response to climate change [49]. any international negotiation about assigning burdens (or distributing efforts, or sharing responsibilities) should be subject to basic considerations, as criteria for equity and fairness, historical responsibilities, and the countries’ capacity to pay [47]. internal factors, as the size, have a significant and negative impact on the dependent variable, which means that small enterprises have more difficulties in eco-innovating. nevertheless, the turnover growth coefficient evidence that companies with a higher tg eco-innovate less. our results are aligned with the literature, once eu-ets has barely affected companies innovation activities and did not enhance the financial performance of regulated companies [28, 29, 31]. in this sense, policymakers should focus on decreasing the emission cap, introducing means to stabilize the allowance price, carefully assessing whether the scheme can be extended to other sectors. they should also launch other eco-innovation enhancing instruments, and increase the stringency and predictability of the current policy as part of a policy mix aiming to steer the rate and direction of technological change towards low carbon emissions, a non-linear process characterized by lock-ins [28, 29, 31]. as the regulatory conditions for the eu-ets are determined up to the last phase, in the short to medium term, policy-makers should rely on complementary policies like innovation, and thus on technology-push policies to guide rd&d activities towards low carbon production technologies at competitive costs. besides, a good complementary step would be the achievement of a globally binding climate deal that would set long-term reduction targets. utopically, such a treaty would lead to a global carbon price and hence at the same time address producers’ concerns about competitiveness, leading to a larger international demand for low-carbon technologies by technology providers [31]. this study has, however, some limitations. the period of our selected data was short due to the small cis survey period, which has prevented us from performing a more complex estimation. moreover, a wider range of countries should have been considered to minimize the error of this european study that has encompassed 13 countries only, and we should have used more recent data, which was not possible due to the lack of recently available data. furthermore, we needed to use average values by economic activity sector, since there is no possibility to cross-check data for each company between cis and the eu-ets, due to confidentiality issues. thus, in future studies it would be interesting to study the impact of these measures on individual companies’ financial performance, using more recent data, expanding the countries’ range and variables, and exploring different regression models. acknowledgments we acknowledge the support by the research unit on governance, competitiveness and public policy (uidb/04058/2020), funded by national funds through fct fundação para a ciência e a tecnologia. this research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. thanks are due to the comments received from participants of the 5th annual conference of the portuguese association of energy economics (apeen), held online during 21-22 january 2021, where a first version of the article was presented. the 5th annual apeen conference was organized by cense (center for environmental and sustainability research) from nova school of science and technology, lisbon, portugal. the authors thank, as well, the opportunity to submit the article to the international journal of sustainable energy planning and management (special issue: energy systems sustainability) and to the valuable comments of the editorial [50], which helped us improve the article to its current version. references [1] united nations, «paris agreement» (2020, november 8) (2018). retrieved from https://unfccc.int/resource/bigpicture/. 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_hlk78735763 _hlk78735838 _hlk78735862 _hlk78735941 _hlk78735978 _hlk78736057 _hlk78736116 _hlk78736250 _hlk78736304 _hlk78736430 _hlk78711638 _hlk78736551 _hlk78736620 _hlk78736757 _hlk78736846 _hlk78736917 _hlk78717710 _hlk66670816 international journal of sustainable energy planning and management vol. 29 2020 127 *corresponding author e-mail: oleodg@mail.dk international journal of sustainable energy planning and management vol. 29 2020 127–140 abstract europe is facing a great technical and regulatory challenge in transitioning the energy supply from fossil fuels to sustainable renewables. within the heating sector, the heat roadmap europe studies have demonstrated great potential and benefits from expanding district heating (dh) throughout the continent. however, as a monopoly structure, dh grids require well-thought-out regulatory regimes to be accepted by cities and consumers. effective regulation must safeguard consumers against misuse of monopoly prices and set the right incentives to enhance efficiency and to introduce new technologies. founded upon the approach of concrete institutional economics, this paper contributes to the literature on dh regulation by reviewing and describing regulatory experiences in denmark and other countries. this article demonstrates that a wide range of regulatory mechanisms are available for implementing dh and describes how regulation must take into account whether the dh companies are privately or publicly owned by municipalities or consumer groups. dh is typically a monopoly supply, which may result in higher consumer prices if proper regulation is not in place. both privately and publicly owned dh supplies must be guided by various efficiency-enhancing measures. regulated prices and the use of benchmarks must be carefully prepared in order to work by the book in an often-complicated organisational set-up. the use of private enterprises to develop and operate a public dh enterprise must involve the establishment of proper incentives and performance measures in the contract, etc. a mix of price-setting regimes and ownership models can be determined. the choice of model may depend on the specific circumstances, considering, among other concerns, the scale of the heat market, the local availability of waste heat, existing ownership of housing, access to (cheap) financing, a stable regulatory framework, and confidence-building measures for commercial or public investors. review of price regulation regimes for district heating ole odgaarda1* and søren djørupb a paul-petersensvej 10, 2820 gentofte, denmark b department of planning, aalborg university, rendsburggade 14, aalborg, denmark keywords district heating; regulation of district heating; price regulation models; ownership and consumer prices; experiences with heat planning; danish and european district heating experiences; url: https://doi.org/10.5278/ijsepm.3824 1. introduction in the coming few decades, europe is compelled to transition its energy systems towards a lowor zero-carbon supply. for this to happen, a key challenge is to achieve a substantial decrease in fossil fuel consumption in the heat sector. the thermal energy demand currently accounts for approximately 50% of final energy consumption in europe [1]. previous studies have demonstrated great economic and environmental potential in a wide expansion of dh systems across europe [2]. the heat roadmap europe studies suggest that dh systems should cover about half of the heat supply in 2050 [3]. experience, however, has shown that a key barrier to establishing new dh systems in many countries are some institutional obstacles. most notably, questions of ownership and price regimes are central questions to address, which have been dealt with at a theoretical level [4,5]. previous research has focused on local policies [6], the effect of electricity and fuel prices on dh investments and dispatch strategies [7–12], and the effect of mailto:oleodg@mail.dk https://doi.org/10.5278/ijsepm.3824 128 international journal of sustainable energy planning and management vol. 29 2020 review of price regulation regimes for district heating dh tariffs schemes on energy savings [13–15] and customer experiences [16]. wissner looks into the general necessity of district heating regulation in germany [17]. sandberg et al. review dh regulation, but the study is limited to existing regimes in nordic countries [18]. with respect to specifically addressing the price regulation models within district heating, there seems to be a gap in the literature. none of the existing contributions provide an overview in which a broader range of empirical observations are systematically reviewed and described. this paper reviews and describes regulatory regimes regarding price regulation in district heating systems. first, seven different principles for regulating dh systems are described and reviewed. afterwards, price regulation is set into a regulatory context, and seven mechanisms are described which surround price regulation in order to strengthen the development of efficient dh systems. finally, main points are summarised in the conclusion. 2. methodology the methodological approach for this study is to describe and collect real-world experiences with price-setting regimes and bring them into the context of the academic literature. this approach is connected to a theoretical approach to concrete institutional economics [19]. this theory is based on the conception that theories within economics and public policy often do not address the real-world institutional structures that exist and shape economic activity. the approach is related to ronald coase’s scientific paradigm of describing “the world of positive transaction cost” in order to inform and improve economic theories and practices within public policy [20–23]. in the context of this paradigm, the systematic description of the diversity of existing realworld institutions has an important role in enhancing the regulatory toolbox for addressing regulatory problems. the collection and description of institutional diversity contributes to theoretical understanding by conveying practical experience to the academic literature. the following review is primarily based on lifelong experience in heat planning in the context of the danish energy agency, combined with academic and theoretical reflections. hence, in reviewing empirical regulatory regimes, the aim of the paper is also to describe and convey the informal and tacit knowledge gained through practice and set it into dialogue with academic literature. 3. price regulation regimes in district heating systems dh differs from electricity supply or natural gas supply in a significant way that warrants special regulation. the electricity sector can easily be made competitive, as individual producers can opt in or out as suppliers of electricity to a large grid, which can be interlinked on a regional or even national scale. natural gas is also delivered by regional or national grids, although the supply is usually characterised by few suppliers. but dh is a locally bound supply of hot water or steam, where the heat loss often restricts large supply grids. large dh grids can of course be established by cooperation between the heat producers, but dh is typically a natural monopoly with restricted competition. therefore, the choice of price regulation and investor security has a significant impact on the development of dh. this should be considered before the establishment of dh as part of a national policy framework. the use of market forces and regulation must be based on thorough and well-tested experiences in order to ensure a well-functioning dh sector with affordable consumer prices and continuous technological improvements. based on danish and european experiences, the following seven main types of regulation principles will be described: 1) true costs, 2) true costs plus investor return, 3) prices set by the market, 4) substitution price, 5) price cap, 6) private operation under public ownership, and 7) an esco (energy service company) model. consumer prices may differ greatly according to ownership in at least two of the seven models, which will be elaborated upon. 3.1 true-cost principle the true-cost principle implies that the consumer price equals all necessary costs of production and distribution. thus, only necessary costs are allowed to be paid by the consumers. this price setting protects consumers against potential misuse of the natural monopoly supply, as the prices are largely non-profit. denmark has adopted this mechanism for most of its dh supply. prices and delivery conditions are supervised by national independent authorities. the danish experiences point to several advantages in terms of low prices and a high level of security of supply. however, the precondition is that each dh supply has been carefully designed and approved on the basis of a thorough feasibility study that documents that international journal of sustainable energy planning and management vol. 29 2020 129 ole odgaard and søren djørup dh is the least-cost option compared to alternative heat supplies. the calculation method applied is a levelised cost of energy, whereby low consumer prices over a 20-year period are obtained through investments in quality pipes, energy efficient plants, and well-insulated buildings. this standardised feasibility study must also be applied in the case of major renovations, investments in new technology, and revised/extended supply areas, and so on. the reason for this is that the increased energy efficiency of a carefully designed and integrated energy system can bring about lower consumer prices in the medium to long term, as the saved energy more than outweighs solutions with low capital investment costs and also if fuel prices are cheap. this regulatory set-up is not a guarantee of low consumer prices and efficient solutions at all dh plants, as local mismanagement can occur and cause discontent. a rule of thumb is that between 5 and 10% of the small dh supplies—often owned by the consumers—can improve their local management and obtain lower dh prices. nearly all dh supplies outside large cities as well as some in the big cities are owned by municipalities or consumer groups, which are usually not driven by a profit motive or the like. these dh supplies are typically financed by municipally guaranteed loans with low interest rates. the loans are not subsidised, and the credit scheme is non-profit and based on true costs. the disadvantage can be that there is no direct economic incentive to lower consumer prices via investment in new technologies or other efficiency-enhancing measures. however, specific means have been devised to enhance efficiency in publicly owned dh companies under the true-cost regime in order to obtain low consumer prices (described later). it is difficult to quantify the effect of these means, although incomplete international comparisons suggest that danish dh prices are relatively low. euroheat & power has compiled relevant gross data for all eu member states [24]. however, an international comparison must be based on true costs, and no true cost analysis of the consumer prices are made, as these must be based on standardised prices, taking direct and indirect subsidies into account. likewise, the countries’ different energy taxes and fees must be adjusted for in order to compare the true costs. furthermore, some countries have policies demanding co-production of power and heat at the dh plants in order to enhance the energy efficiency of the electricity production, while other countries have restricted the use of fossil fuels in order to promote renewable energy. the danish energy agency has made preliminary attempts to adjust for some of these parameters, and the unpublished data suggest fairly low consumer prices in denmark per delivered gj district heat. the danish district heating association has also made an attempt, and their analysis suggests that consumer prices in sweden and germany are 6% and 19% higher than in denmark when the differences in taxes and fees have been adjusted for [25]. 3.1.1 requirements for special regulation of privately owned dh supply the true-cost principle has the disadvantage that privately owned dh companies have an incentive to boost expenses, as high costs will also be covered by the consumers. the danish regulation aims to prevent such behaviour by stipulating that all costs must be market conducive [26,27]. if a local dh company purchases fuel and services from a mother company, the prices must not be higher than the market price. thus, transfer pricing must explicitly be prevented. however, the danish experiences with a large, transnational energy company show that the principle of nonprofit costs can be circumvented, when daughter companies purchase equipment, fuel, and services from a mother company. there is no fixed definition of a so-called market-conducive price, i.e. some actors purchase fuel, equipment, and administrative services at relatively high prices, whereas others do so at relatively low prices. all decentralised heat plants were financed with loans obtained from the mother company at very high interests. thus, by selective price setting, among others, at several combined heat and power plants, it proved possible to increase the local dh costs and thus consumer prices substantially from 2007 onwards. some dh companies increased the consumer price by 40-60% in the course of roughly 4 years. the danish utility regulator publishes the consumer prices for all dh companies at regular intervals [28]. if january 2009 is taken as the base period for comparison, the dh plants in hjortekær, gørløse, skævinge, ørslev terslev, annebjergparken, and in other locations have experienced significant increases in their consumer prices. all these plants are or were owned by the transnational energy company e.on. when owned by this transnational energy company, each dh company was organised as a daughter company 130 international journal of sustainable energy planning and management vol. 29 2020 review of price regulation regimes for district heating directly under the mother company of the transnational energy company. the consumer prices consequently rose considerably due to three factors: 1. relatively high market prices for the purchase of fuel and administrative services, etc., from the mother company. 2. high costs for repayment of loans to the mother company. this was due to the unexpected use of a legal option; the mother company could charge consumers an amount for the repayment of loans that was higher than the actual loan expense. 3. a previous agreement on the consumer price that was entered into between the dh company and consumers was cancelled. after consumer prices rose by roughly 50% over the course of 4 years, several municipalities decided to buy back the crisis-ridden dh supplies from the transnational energy company in 2013. this resulted in lower consumer prices at several dh companies, which is illustrated in table 1 below. the six dh companies still owned by the private transnational company experienced nearly unchanged or higher consumer prices during 2013. the three dh companies that were transferred to local municipal or consumer ownership saw declining prices in the range of 4,591 dkk to 18,788 dkk over the course of one year for a standard household. one of these (slagslunde) is now owned by a consumer cooperative, which has lowered the price from 30,205 dkk in 2012 to 25,614 dkk in 2013 and to 17,278 dkk by 2016. thus, several expenses have been notably reduced since the transfer of ownership. the transnational company reported and charged for a daily water loss of 2,000 litres, which has been brought down to 8–9 litres per day. the annual administrative costs declined from 1.3 m. dkk to 0.3 m. dkk. the annual interest on the capital investments was lowered from 7% to 2%. these cost reductions constitute important reasons behind the attainment of favourable consumer prices. most of the dh supplies owned by the transnational energy company by the end of 2013 were transferred to municipal ownership during 2014 and 2015. significantly lower consumer prices were obtained for all dh supplies. this was possible due to a special municipality credit scheme in denmark. a credit institution jointly owned by all municipalities was established in 1899 and has since offered financing for all municipalities’ investments in infrastructure (energy, schools, roads, etc.). it operates on a non-profit basis and offers financing 2–3% less than normal commercial loans. the credit scheme has not had any bad loans during its more than 120 years of operation [29]. thus, the true-cost principle may in general secure low consumer prices when the owner exhibits no interest in bypassing the intended regulation by using substantial legal and administrative resources. thus, low consumer prices under a private ownership regime require: • a carefully prepared and detailed regulation, which takes time to prepare and implement. • access to a substantial amount of data from dh producers and distributors. • efficient and independent authorities with sufficient legal authority and staff to monitor prices and delivery conditions and to handle complaints and investigate possible infringements, etc. table 1: dh consumer prices for dh companies owned or previously owned by the transnational energy company e.on (danish kroner per year) name of dh company dh price: dh price: change in dh price change in ownership15 dec. 2013 18 dec. 2012 hjortekær 37,090 37,096 –6 no. privately owned annebergparken 31,793 31,803 –10 no. privately owned ørslev-terslev kraftvarmeforsyning 31,041 31,005 36 no. privately owned slagslunde kraftvarmeværk 25,614 30,205 –4.591 yes. consumer group buys dh supply præstø fjernvarme 23,573 21,329 2.244 no. privately owned lendemarke varmeforsyning 18,971 13,151 5.820 no. privately owned skævinge fjernvarmeforsyning 17,178 27,901 –10.724 yes. municipality buys dh supply. frederikssund kraftvarme 17,653 17,653 0 no. privately owned gørløse fjernvarme 16,338 35,125 –18.788 yes. municipality buys dh supply. consumer prices are listed for a typical house (130 m2, 18.1 mwh heat consumption). 1 euro ~ 7.5 danish kroner. international journal of sustainable energy planning and management vol. 29 2020 131 ole odgaard and søren djørup the need for independent supervision and monitoring of prices at private dh companies is also acknowledged in, for example, estonia. most dh systems in estonia are owned by private enterprises. in 2003, estonia enacted the law of district heating, which provides local governments the right to establish central heating districts/dh zones and to require the private dh companies to supply these buildings with dh. the dh companies are ensured a supply period of up to 12 years; thus, a supply monopoly is granted. the consumer price is regulated by the estonian competition authority, and in 2010 detailed principles for determining the upper limit of the consumer price in a district/zone were established. all prices related to heat supply must be approved by the estonian competition authority in order both to protect consumers and to ensure that the dh company can recover its operating costs and earn a sufficient profit [30,31]. 3.2 regulated return to investor another way of setting the dh consumer price is to base the heat price on the true costs, as described above, but to allow for a higher loan cost. thus, external investors can provide credit based on market conditionality. this is typically the case for the use of waste heat from industries to dh in denmark. in order to establish an economic incentive for companies which are not necessary a part of the dh supply a real interest rate of typically 8% can be added to the true cost for heat in terms of waste heat [32]. however, the negotiated price must not be higher than the alternative heat costs, and in the case of complaints, the price must be approved by independent authorities. waste heat is usually cheap and efficient to use for dh; thus, the industries are given an economic incentive to sell their excess heat at a reasonable profit. dh companies owned by municipalities and consumer groups can obtain relatively cheap loans granted by a joint municipality-owned credit institution that offers an interest rate of about 2–3% less than market-based credit institutions [33,34]. this is to the benefit of consumers at the dh plants owned by municipalities and cooperatives, but it limits the access of more commercialand market-based actors in the dh sector. it can be argued that fair earnings on commercial investments should be encouraged in order to achieve greater diversity in the ownership structure and access to large investment funds, especially among investors with an interest in stable, long-term investments, such as pension funds, etc. and those with a preference for secure and not necessarily high-earning investments. this can be considered in countries where there is no access or only limited access to cheap loans and financing. one possible means to achieve fair earnings would be to introduce a market-based interest rate on the actual capital investments. a possible market-based interest level could be the interest of long-term bonds and maybe 2–3% per year for a 20-year period. the external investor would then have to adhere to a set of contractual obligations regarding corporate investment responsibility, etc. the long-term interest of consumers can eventually be secured by: • public ownership of the dh production company in which the external funds are invested with restricted or prescribed management according to carefully prepared management and decisionmaking structures. • public ownership of the dh transmission and/or distribution net, which prevents external investor control of the entire dh supply; thus, the distribution company can choose another supplier in the case of unforeseen or undesired misuse of market power. • essential endorsement of incentives to improve efficiency, as the true cost principle does not necessarily impose such pressure. the disadvantage is that large investments from pension funds, etc. require carefully prepared projects based on detailed regulatory specifications for investment protection and possible shared management and so on. this is typically not compatible with smaller dh companies. when pension funds invest in wind farms, solar pv parks, etc., it is a more standardised set-up with easy-toforecast rates of return. small-scale dh supplies are much more heterogeneous with regard to choice of fuel mix, heat density, and specific local demand fluctuations from industries, among other aspects. 3.3 liberalised price set by the market another option is to fully liberalise dh consumer prices, which can be set on a market driven by supply and demand. the theoretical advantage to this is that the market forces are in full swing to increase competition and lower costs. the disadvantage, however, is that dh is a natural monopoly, where market force can be exerted and misused against consumer interests. one such example is sweden, where the heating sector was deregulated 132 international journal of sustainable energy planning and management vol. 29 2020 review of price regulation regimes for district heating and opened to competition in 1996 (with the exception of some municipalities which are forced to use cost pricing, i.e. true costs). the 2008 dh act introduced negotiated prices and means to strengthen transparency in pricing. in a 2010 survey among 150 dh plants, 28% indicated that profit maximisation was their highest priority, while others prioritised issues such as municipal policy objectives and non-profit operation. due to limited competition on the heat production side, dh prices increased by 30% between 2006 and 2011. dh producers simply increased the price to a level close to the alternative heat price of individual heating [35]. the incidence of higher prices due to the privatisation of natural monopolies was also concluded in a report to the swedish ministry of finance in 2011 [36]. therefore, the swedish government introduced new reforms in 2012 in order to strengthen a new price-setting scheme to the benefit of consumers. the market regulation authority and the swedish competition authority were granted the authority to supervise the price in the heat-supply market and to control the behaviour of the dh producers. a bargaining mechanism has been enforced, which requires the dh companies to submit their operation reports to the regulatory bodies and be committed to the provision of information [37]. the swedish reforms also endorsed the privatisation of dh supplies. eighty-three municipality-owned companies were privatised. in order to secure lower heat prizes, 21 of these 83 dh companies have been re-transferred to public ownership by the municipalities [38]. thus, the swedish experiences suggest that liberalised price setting of dh requires competitive and available heat alternatives for consumers. this is rarely the case in most places due to at least two reasons. first, heat customers in cities usually live in apartment blocks with limited access to individual heat devices, apart from costly or inefficient heat supply from air conditioners and the like. second, suburban areas with individual housing often face exit costs if they choose to exit the dh supply and opt for individual heating. many dh customers can only leave the dh supply if they pay off their share of the debt in the dh supply, after which a capital investment or entry cost payment shall be made to an individual heat technology. therefore, liberalised price setting often requires substantial regulation with access to multiple data delivered from the market actors if the price setting is to be transparent. it may take time to ensure effective capacity building of the independent authorities and to develop new procedures. these must be in place before liberalised price setting is implemented. denmark has in recent years introduced another variant of negotiated prices at the large combined heat and power plants around the big cities. in order to establish an incentive to convert from coal and maybe gas to alternative sources, a new incentive has been introduced. danish energy taxes and fees on fossil fuels are among the highest in the oecd, but biomass is exempted from most of these taxes and fees. therefore, there is a substantial financial incentive to use biomass as a fuel. however, most of these large-scale dh producers are commercially owned, and the owners will not receive the benefits from exempted taxes and fees. only consumers will receive benefits in the form of lower prices, as consumer prices must reflect true costs. in order to give commercial owners a share of this economic benefit, the dh act has been amended so that the benefit from exempted taxes and fees can be shared between the dh producer and consumers. independent authorities must approve the price in the case of complaints, as the price cannot be higher than the alternative heat cost. this was endorsed for the substitution of coal with biomass by political agreement in parliament on 22 march 2012 [39]. this opened up the possibility for additional policies regarding regulated and controlled profit connected to the use of all types of renewables, and a broad political agreement in parliament o 29 june 2018 settled this pricing policy for all renewables [40]. thus, a part of the dh price is officially negotiated for the group of 16 so-called centralised combined heat and power plants (chps), i.e. the largest chps and the earliest dh companies in denmark which have a special regulation in parts of the heat supply act. this arrangement has had a significant effect, as nearly all of the large-scale dh producers have converted or decided to convert to biomass-based dh before 2023. denmark’s largest utility ørsted has decided to convert from coal to biomass by 2023 at the latest [41]. only 1 of 16 centralised chps will not have converted to biomass by 2023—nordjyllandsværket, which aims to use excess heat and renewables other than biomass, is expected to have phased out coal by 2028 at the latest [42]. there is as yet no analysis of how these partly negotiated prices affect consumer prices, i.e. if some costs are higher relative to the previous costs. international journal of sustainable energy planning and management vol. 29 2020 133 ole odgaard and søren djørup 3.4 natural gas-based substitution price of heat another way of regulating the dh price is to link the consumer price to the same level as heat produced in individual natural gas boilers. thus, if dh is established, the heat cannot be sold for more than the heat price for individual natural gas. the advantage would be that dh cannot exert a potential misuse of a monopolistic supply to the detriment of consumers. this price setting faces at least two disadvantages. firstly, the (market) price for coal or biomass, etc. varies according to supply and demand of these particular fuels, and the prices are different from the (market) price of natural gas. if the production of, for example, straw has been limited due to a natural condition, the procurement price for straw will often increase due to a limited supply. if the dh company cannot cover its true costs, as the consumer price is linked to natural gas, then the dh company will face a deficit. if this occurs several years in a row, the dh company may accumulate a deficit, which will make the company unable to invest in operation and maintenance, which are crucial for long-term sustainability. alternatively, the state could subsidise dh by financing the gap between the actual dh production price and the substitution price of individual natural gas. this is a political option, but such an arrangement entails the risk of a continued financial burden on the state budget and consequently a lack of funds for other prioritised purposes. secondly, the price of individual natural gas can to some extent be influenced by the natural gas supply companies, which may be used strategically to limit the establishment of competition from dh using other fuels. for example, the natural gas company can lower the consumer procurement price on natural gas—and thereby the consumer price for dh—by extending the pay-off period of the loan granted to the gas distribution net. this may also be a strategic option if supply zones for individual natural gas were considered for conversion to dh zones. danish experience has shown that lower market prices for natural gas and extended periods for loan repayments, among others, have made natural gas heating more competitive vis-a-vis dh. in 2012, only 5.2% of all dh consumers paid more for their heating compared to heating from individual natural gas boilers. in 2013, the share had increased to 27.4% of dh consumers, partly due to longer periods for loan repayments as well as cheaper gas prices [43]. the case illustrates the difficulties in linking the dh price to natural gas heating. thus, it is not an easy task to establish transparent and justifiable benchmarks or substitution prices for dh. it requires careful preparation and a continuous difficult administrative supervision and monitoring. this regulatory approach has been considered in some countries, but has only been implemented few places. but the substitution price of natural gas is used as a benchmark when choosing between dh and natural gas for heat zones in denmark. 3.5 price cap based on alternative supplies another way of regulating the dh price is to regulate the price according to the heat price of the alternative dh supply. this can be applied to dh produced from waste or excess heat from industries, etc., which is sold to a dh supply company. denmark has applied a price cap for dh produced from waste incineration as a special price setting for only this type of dh. the price cap for dh from waste incineration plants is set by the price for dh from the largest combined heat and power plants in denmark [26]. the advantage of this system is that the dh supply companies/consumers are guaranteed a price that equals the price of the large-scale heat supply, and waste incinerations plants do not favour or disfavour local consumers economically. however, a price cap may have a disadvantage in that it contains an incentive to set the dh price as the maximum allowed price. there is not necessarily an economic incentive to lower the price via increased efficiency, etc. for the waste incineration plant. another disadvantage—which is not the case in denmark—is that the true costs may not be covered if the price of waste is relatively high. this could threaten the long-term economic sustainability. alternatively, as mentioned above, the state could subsidise dh by financing the gap between the actual dh production price and the substitution price of individual natural gas, which may place a continued financial burden on the state budget. 3.6 private operation under public ownership local governments may own a dh supply without operating it. this sort of public-private partnership (ppp) can be a relevant option if a municipality or the like lacks experience in proper operation and maintenance, does not possess experience in efficient business development, 134 international journal of sustainable energy planning and management vol. 29 2020 review of price regulation regimes for district heating or if the legal framework for public management is insufficient. the private operation may be temporary or permanent. if the purpose is to promote a relatively quick development of dh, the contract can stipulate that the operation can be transferred to a public entity after, for example, 10 years with training of public staff during the last 3 years, for example. thus, the responsibility of the dh operation and related new investments are transferred to private enterprises through lease or authorisation contracts, in which the investments, management, and operation risks incurred from all facilities are transferred to private enterprises. joint finance can also take place; for example, the local government can contribute with equity in the form of transfer of assets or land. the united kingdom and other countries in europe, plus china and other asian countries, have developed this model for dh [44,45]. a variety of specific models has evolved in different countries [46]. typical business models are reconstruction-operation-transfer (rot) and transfer-operation-transfer (tot). during the construction period, the private enterprise is typically tasked with project investment and financing, design, and construction. during the operation period, the private enterprise is responsible for the operation, maintenance, and the use of collected fees, and maybe a subsidy to cover construction and operating costs. when the operation period expires, all facilities are transferred to the local government. a building-operation model (bo) has also been developed for private operation under public ownership, which means the heating infrastructure is invested in and constructed by private enterprises. the company can also transfer the ownership, so the local government will own this infrastructure after the contract expiration. that is the case in the so-called building-operation-transfer model (bot). thus, china has implemented a concession operation system for management of the dh supply in most of its towns and cities. the heating enterprises sign a contract with the local government through public bidding, after which the heating company participates in the construction, operation, and renovation of the plant and the heat distribution net. in short, the heating companies are given monopolies in heat production and distribution with integrated operation management. the heating price and other conditions are set up by the municipal departments and must be submitted to the provincial price authorities for approval. the advantage of this system is that private management expertise can be used to improve the efficiency and service quality under a market regime. the disadvantage is that private enterprises take fewer risks, and the rate of return is typically fairly low; thus, the incentive to adopt long-term efficiency-enhancing measures may be limited. based on experiences from the danish energy agency, commercial investors often require 8% or more as an internal rate of return, while municipally owned or consumer-owned dh companies require a substantially lower return in order to make economic ends meet, as their purpose is to establish an affordable and locally controlled long-term heat solution. a similar trend is found in the uk [47]. furthermore, the public-private contract must be very specific and extensive regarding the choice of quantitative criteria for measuring performance, etc., which often requires previous experience from the sector. it must also be taken into account that the bo and bot models may cause undesirable costs because of the “buy or pay” provision due to the purchase guarantee; thus, the final consumer may encounter higher costs for the heat energy. 3.7 esco market for commercial owners in order to allow market actors to gain a fair earning on their investment, while at the same time protecting consumers from unintended price hikes from misuse of market forces or insufficient provision of data, another option can be considered. if a new or retrofitted dh supply is planned, an energy service company (esco) can provide the required investment capital, technology, and information to establish dh. in many countries, an esco is a well-tested means to improve energy efficiency by implementing energy efficiency projects in the private and public sector. the advantage is that an esco offers a (group of) energy consumer(s) the energy service at a competitive price if the consumer(s) agrees to buy the service for a fixed period under specified conditions. typically, heat is sold for a fixed price for a number of years in advance, which makes it easy for heat consumers to estimate the potential cost advantages. thus, heat consumers are somewhat protected against unexpected price hikes, as they are guaranteed a fixed price. danish experience with escos in the heat sector is relatively new. private escos offer, for example, small villages the opportunity to replace their individual oil stoves with small-scale dh based on large heat pumps or large wood pellet stoves at favourable terms. the esco makes the investment, and establishes, runs, and international journal of sustainable energy planning and management vol. 29 2020 135 ole odgaard and søren djørup maintains the local heat plant at a fixed price, which typically is lower than the heat price of individual oil stoves. this business concept exists in various forms and can also be used to develop mediumor large-scale dh in other countries. the business model was analysed and recommended in a report for the danish energy agency [48]. this paved the way for a new support scheme, where 4 enterprises won a public bid to promote heat pumps as a replacement for oil stoves [49]. other dh plants offer small community heat solutions based on solar heating or biomass on similar esco terms. however, escos are very active in energy services with a high internal rate of return. energy savings and increased energy efficiency at large industries are often preferred, as the investment can be repaid over the course of only 2–4 years. dh differs from such projects, as dh is a long-term investment with a stable but limited internal rate of return. the danish experience is that escos now are becoming very active in supplying small-scale dh to small villages and medium-sized communities if the present heat price is relatively high due to the heat source being individual oil stoves, etc. but the esco businesses are now considering business in mediumor large-scale dh, which may be an active future business. a fairly large number of such dh plants are now promoting renewable energy-based heat to villages, e.g. the village-based heat projects in the rebild municipality [50]. one challenge with escos (and possibly ppps) is that the private company can (un)intentionally run into issues not specified in the contract, which then leads to renegotiations and legal challenges to raise the revenue for the private company. one solution is to let a third party standardise the terms and verification of the services under contract. escos typically require stable investment conditions, i.e. a stable regulatory framework and carefully prepared contractual obligations with regard to delivery conditions, maintenance, and calculation of costs. they also require the presence of several competing escos in order to ensure competitive prices. the esco model can be implemented in various forms. establishing incentives to operate and maintain the dh plants sustainably, e.g. incentives to hand over the plant in an optimal technological state when the contract expires after maybe 20 years, should be considered. this can be achieved by the stipulation of proper incentives and technical specifications in the contract. the use of escos in larger dh supplies requires carefully prepared contractual obligations with regard to delivery conditions, maintenance, and calculation of costs. in order to minimise risks, standard contracts could be developed by key stakeholders in cooperation with the responsible ministry. in larger dh supplies, the consumers could also be safeguarded by establishing public ownership of the distribution net, i.e. production and distribution is unbundled. 4. regulatory context of price models some types of price-setting regimes may serve as a favourable cornerstone in a country’s dh model, but they may require a legal set-up, well-established institutions, and access to data, etc., and that takes time. therefore, a gradual development of one or several preferred types of dh models may be an option. that would enable the central dh authority to implement dh in the short term, while developing the institutions, legal regulations, and so on needed for a preferred model at a later stage. furthermore, a uniform model may not be the best solution if the dh communities differ according to market size, size of population, proximity of excess heat, different types of housing and consumer groups, etc. thus, one specific dh model may apply for a small, geographically remote town, while the dh supply to a large city may benefit from another dh model. finally, the use of efficiency-enhancing regulation should be considered to the largest extent possible in all preferred dh models. the danish experiences and specific means and policies listed below could be considered and adjusted to a specific setting in other countries. there are many local, well-functioning ways to address these issues, which could also be highlighted. 4.1 means and incentives to ensure low costs when selling heat for true costs in denmark at least seven different means can be applied to strengthen the development of an efficient dh system with reasonably consumer prices: 4.1.1. compulsory use of a standardised feasibility study dh project approval must be based on a feasibility study built on a standardised and well-tested method. the feasibility study must document that dh is the least-cost option compared to alternative heat supplies. calculations on, for example, the consumer economy and the 136 international journal of sustainable energy planning and management vol. 29 2020 review of price regulation regimes for district heating socio-economy must be performed. the calculation method applied is a levelised cost of energy, whereby low consumer prices over a 20-year period are obtained. the above-mentioned district heating assessment tool has been developed to transfer this method to other countries [38]. 4.1.2 an efficiency-enhancing measure exists due to competition via third party access third party access must be guaranteed if a feasibility study documents that an external heat supplier can lower the consumer price and enhance the socio-economic benefits. 4.1.3 actual costs are covered by the consumer heat prices a down payment or installation fee per installation can contribute to repayment of the capital investment loans. thus, it ensures a guaranteed payment to the dh company, which facilitates safe repayment of the investment loan. a tariff per gigajoule of consumption that covers fuel purchase and other running costs should be employed. thus, consumers pay for the actual heat (gj). this offers an incentive to save heat and have a lower heating bill. some dh supplies have also established a capacity price (e.g. gj/h) to decrease peaks. lower prices per gj/h can also be obtained for a lower temperature of the return water—this is often executed by an app, where each heat consumer can follow the temperature and the lower price for the lower temperature, etc. 4.1.4 subsidies are passed on directly to dh plants and consumers the central government passes on subsidies for biomass-based energy production, etc. directly to the dh companies. thus, the transmission system operator, which has the data needed, administers and conveys financial subsidies directly to the dh company. it is not passed through local governments, which prevents the risk of local government expropriation of central state subsidies. targeted subsidies are available for low-income consumers, so the true-cost tariffs do not hurt vulnerable groups. in order to ensure that such subsidies reach the target groups, the heating bill—including possible subsidies—is sent directly from the dh plant to each individual consumer. the heating bill is not passed on through a local government authority. 4.1.5 access to data and standardised consumer price benchmarks consumer price benchmarks for fixed and variable tariffs are made publicly available for all dh companies 2–3 times per year, which puts pressure on the dh company boards to continuously improve their economic performance. the statistics are published by the central authority for monitoring supply companies (danish utility regulator). all heat companies are obliged to hand over a standard set of detailed information on their prices, tariffs, delivery conditions, etc. to the relevant central authorities. non-compliant heat companies can be punished by fines, and so on. in order to ensure full transparency and proper benchmarking, dh companies must use a standardised account plan and the same accountancy period (calendar year). 4.1.6 voluntary economic performance benchmarks the national branch organisation calculates and publishes economic benchmarks for each dh company. this is widely used as a point of entry for the informal exchange of information among dh companies on how to improve company performance. furthermore, the national branch organisation for all dh plants offers voluntary courses in the adoption of new technology and advice on technical issues, etc.; thus, the branch organisation offers proactive consultancy on behalf of their members. it takes time to establish such a national organisation, to gain the confidence needed among all stakeholders, and to task the branch organisation. other countries may, alternatively or until a well-functioning organisation has been established, use third party organisations and consultancy companies for specific tasks. 4.1.7 independent central authorities independent central authorities to monitor prices and handle complaints are pivotal for obtaining legitimate supervision and monitoring of prices and delivery conditions. 5. conclusion the collection of experiences of regulating dh shows the diversity of options available. in this paper, an attempt has been made to collect and categorise these experiences. they are based mainly on danish experiences, but findings from other countries have also been international journal of sustainable energy planning and management vol. 29 2020 137 ole odgaard and søren djørup included. the general findings are summarised below, which of course should be adjusted to the specific local setting according to the culture, technological capability, existing energy structure, institutions, regulations, policies, etc. 5.1 true-cost principle danish experiences are mainly positive with regard to affordable consumer prices and increased efficiency, but efficiency-enhanced measures have been implemented, and proper regulation and supervision need to be applied. 5.2 regulated return to investor if the central or local authorities are short of investment funds or prefer to share the responsibility with professional, external investors, this system may be an option. however, investors with stable, long-term interests must be identified and detailed investment conditions, and maybe opt-out options, must be prepared. dh distribution nets can be owned or controlled by local heat authorities or the like, as unbundling is an important safety measure. 5.3 liberalised price set by the market swedish experiences suggest the (potential) misuse of market power when dh is a natural monopoly. thus, new reforms for price setting were adopted, which required active administrative interference with respect to regulation and access to multiple data from market actors. a similar tight public supervision and monitoring of dh data have also been found to be necessary in estonia. 5.4 natural gas-based substitution price of heat fixing of dh prices may cause unviable heat sale revenues, which threaten o&m and investments in new technologies. furthermore, the price of individual natural gas can be lowered by strategic business decisions rather than increased effectiveness. 5.5 price cap based on alternative supplies if the price cap is too high, the cap may give an incentive to raise the price to the maximum price allowed. if the price cap is too low, it may threaten the long-term economic sustainability. 5.6 private operation under public ownership if a local government lacks expertise in developing or operating an efficient dh supply, such management may be transferred to a private enterprise through lease or authorisation contract. but undesirable costs may occur due to a “buy or pay” provision via a purchase guarantee or the like; thus, the final consumer may encounter higher costs. as the risk for the private enterprise is typically limited, and proper incentives must be prepared, performance measures must be specified in the contract. 5.7 esco market for commercial owners esco may provide a framework for competitive market prices and delivery conditions. the advantage is that consumers are assured a fixed heat price. compared to several of the above types of price regimes, relatively limited regulation and supervision is required. however, the use of standard contracts formulated by stakeholders and the ministry responsible should be considered. efficiency-enhancing means and policies must be considered in the planning phase and adopted in each specific dh supply. a mix of price-setting regimes and ownership models, etc. can be chosen. the choice of model may depend on the specific circumstances, considering, among others, the scale of the heat market, the local availability of waste heat, existing ownership of housing, present and future development of a stable regulatory framework, and confidence-building measures for commercial or public investors. this article has provided an empirical collection of approaches to price regulation. further research could 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http://doi.org/10.5278/ijsepm.4302 _hlk43205072 _goback international journal of sustainable energy planning and management vol. 28 2020 107 *corresponding author e-mail: international journal of sustainable energy planning and management vol. 28 2020 107–120 abstract demand side management strategies (dsmss) can play a significant role in reducing installation and operational costs, levelized cost of energy (lcoe), and enhance renewable energy utilization in stand-alone microgrids (samgs). despite this, there is a paucity in literature exploring how dsmss affects the planning of samgs. this paper presents a methodology to design an incentive-based dsms and evaluate its impact on the planning phase of a samg. the dsms offers two kinds of incentives, a discount in the flat tariff to increase the electrical energy consumption of the users, and an extra payment added to the fare to penalize it. the design of the methodology integrates the optimal energy dispatch of the energy sources, the tariff design, and its sizing. in this regard, the main contribution of this paper is the design of an incentive-based dsms using a disciplined convex approach, and the evaluation of its potential impacts over the planning of samgs. the methodology also computes how the profits of the investors are modified when the economic incentives vary. a study case shows that the designed dsms effectively reduces the size of the energy sources, the lcoe, and the payments of the customers for the purchased energy. 1. introduction the access to affordable and high-quality electricity service is considered as one of the barriers to overcome in order to achieve sustainable economic and social development in rural areas [1]. the installation of stand alone microgrids (samgs), when the extension of the utility grid is not feasible, is the most common alternative for rural electrification [2]–[6]. samg projects are generally considered as a good solution to provide electric energy services to isolated communities [7]. however, samgs face technical and financial challenges that need to be addressed in their planning. the technical aspects of the planning of samgs refer to the sizing and the design of an appropriate energy management strategy (ems). the ems must consider the uncertainties introduced by the renewable energy resources (rers) [8, 9]. one of the ways to deal with the uncertainties is the addition of demand side management strategies (dsmss) to the ems. sending a signal to the customers to increase or decrease the consumption can reduce the risk of excess and lack of energy introduced by the rers. additionally, dsmss can reduce operational costs, harmful environmental emissions, and increase the reliability of the microgrid [10]–[12]. design of an incentive-based demand side management strategy for stand-alone microgrids planning jco cepedaa*, arash khalatbarisoltanib, loïc boulonb, german osma-pintoa, cesar duartea and javier solanoa a escuela de ingenierías eléctrica, electrónica y de telecomunicaciones, universidad industrial de santander, calle 9 carrera 27, 680002, bucaramanga, santander, colombia. b department of electrical engineering, université du québec à trois-rivières, 3351 boulevard des forges, g8z 4m3, trois-rivières, quebec, canada. keywords: stand-alone microgrids; planning; sizing; energy management; demand-side management; url: https://doi.org/10.5278/ijsepm.4293 https://doi.org/10.5278/ijsepm.4293 108 international journal of sustainable energy planning and management vol. 28 2020 design of an incentive-based demand side management strategy for stand-alone microgrids planning table i: variable declaration samg modeling πflat original price of the tariff without dsms usd/kwh t hour of optimization hours πf flat price of the tariff usd/kwh t total number of hours to optimize hours πi,t price of the incentive at t hour usd/kwh n specific customer in the microgrid unitless ψl diesel price per liter usd/liter m specific generator or storage system of the microgrid unitless гninc payments of the n customer under the designed tariff usd m total number of generators and storage systems of the microgrid unitless do,t initial electrical demand of the community kwh dt final electrical demand of the community kwh dno,t initial electrical demand of the n customer kwh dnt final electrical demand of the n customer kwh ent self-elasticity of the n customer unitless im unitary initial investment of the m device usd/kw cm installed capacity of the m device kw, kwh em quantity of energy delivered with the m device kwh eb,t stored energy in the battery at time t kwh λm unitary costs of generation of the m device usd/kwh ξm unitary maintenance costs of the m device usd/kwh lpsp loss of power supply probability unitless epsp excess of power supply probability unitless capex capital expenditures usd opex operational expenditures usd financial analysis ζ total capital expenditures usd ϑ total operational expenditures usd φci percentage of the capex paid by investor unitless φcg percentage of the capex paid by government unitless φoi percentage of the opex paid by the investor unitless φog percentage of the opex paid by the government unitless φpr percentage of the profits to pay the incentives unitless r internal rate of return for the investors unitless fc electric energy conservation factor unitless incentive-based dsms design πt vector of prices of the incentive-based tariff usd/kwh πmin minimum value of the incentive usd/kwh πmax maximum value of the incentive usd/kwh study case cdg installed capacity of diesel generator kw cpv installed capacity of photovoltaic generation kw cb installed capacity of battery kwh idg unitary investment costs of diesel generator usd/kw ipv unitary investment costs of photovoltaic generation usd/kw ib unitary investment costs of battery usd/kwh ξdg unitary maintenance costs of the diesel generator usd/kwh ξpv unitary maintenance costs of the photovoltaic system usd/kw ξb unitary maintenance costs of the battery usd/kw edg,t amount of energy delivered with the diesel generator kwh fdg,t fuel consumption of the diesel generator kwh epv,t amount of energy delivered with the photovoltaic generation kwh eee,t amount of energy in excess kwh ele,t lack of energy to fulfill the demand kwh npv number of photovoltaic panels unitless ρpv derating factor of the photovoltaic system unitless α, β, γ parameters to compute fuel consumption unitless pstc output power of one pv module under standard conditions kw ga,t global solar radiation on the surface of the pv array w/m2 gstc global solar radiation at standard conditions w/m 2 ct temperature coefficient of the pv modules %/˚c tc,t working temperature of the pv cells ˚c ta,t ambient temperature near to the pv cells ˚c tstc temperature of the pv cells at standard conditions ˚c gnoct solar radiation at noct conditions w/m 2 tnoct working temperature of the pv cells at noct conditions ˚c ta,t,noct ambient temperature at noct conditions ˚c international journal of sustainable energy planning and management vol. 28 2020 109 juan carlos oviedo cepeda , arash khalatbarisoltani, loïc boulon, german alfonso osma-pinto, cesar antonio duarte gualdron and javier enrique solano martinez the dsms can affect the patterns of consumption of the customers using direct or indirect strategies [13]. one of the advantages of indirect dsmss is the possibility of the customers to choose either to participate or not in the program [14]. indirect dsmss include pricing programs, incentive programs, rebates, subsidies, and education programs. incentive programs offer economic incentives to the customers either to reduce or to increase the electrical energy consumption [15, 16]. adequately designed incentives can reflect electricity production costs, which can motivate the customers to shift their demand when it is more convenient to produce electricity [17]. additionally, adequately designed incentives can lead to energy conservation, and therefore, are desired when the energy generation is limited [18]. palma-behnke et al. introduce a dsms for the op eration of a microgrid based on sending information to the customers about the availability of electric energy [19]. lighting red, yellow, or green leds, they inform the customers to make a significant reduction, medium reduction or keep the current electrical consumption, respectively. the signals are communicated several hours in advance. the authors did not design any economic incentive or punishment to incentivize consumers to participate. mazidi et al. introduce a dsms to improve the reserve capacity of a microgrid and minimize opera tional costs [20]. using responsive loads and distributed generation units, they create the reserve requirement for compensating renewable forecast errors. residential, commercial, and industrial customers can participate in the program either to reduce energy consumption or to schedule reserve capacity. agbayani et al. propose a stochastic programming model to minimize operating costs and emissions in a smart microgrid with renewable sources [21]. the authors formulate a dsms to reduce the uncertainties introduced by rers using incentive based payments. residential, commercial, and industrial customers can participate in the dsms. chenye et al. use dynamic potential game theory to tackle the intermittent nature of wind power generation on a samg [22]. the authors formulate a decentralized dsms to reduce operational costs. additionally, a characterization of the self-interests of the end-users helps to build the best strategies of the formulated game model. simulation results with field data show a reduction of 38% of the operational costs compared to a benchmark where any dsms was applied. references [19]–[22] show the benefits of using dsmss in the operational phase of a microgrid. how ever, they do not consider the potential effect of applying a dsms in the planning phase of a microgrid project. the integrated resource planning (irp) framework measures the benefits of implementing dsmss in the planning phase of microgrids [23, 24]. zhu et al. use a similar approach to evaluate the impact of load control, interruptible loads, and shiftable loads over the design of a microgrid in shanghai, china [25, 26]. the study shows that using dsmss, it is possible to reduce the size of the facilities of the microgrid, decrease investments, and reduce social costs. kahrobaee et al. consider dynamic tariffs in the sizing of wind-turbine/battery energy storage system (bess) for a house [27]. the authors combine a rule-based controller, a monte carlo approach, and a particle swarm optimization (pso) to perform the sizing of the components. however, the combination of multiple steps of different types and the lack of an optimization formulation for energy management can lead to sub-optimal results. erdinc et al. aim to improve these drawbacks by providing a mixed integer linear programming (milp) formulation to design the optimal energy management strategy [28]. the work considers a real-time pricing tariff scheme. however, this work did not consider how to design the dsms itself and how different dsmss will impact the sizing of the energy sources. nojavan et al. propose a mixed-integer non-linear programming (minlp) formulation for the sizing of a microgrid considering a tariff-based dsmss [29]. however, the authors assume that 20% of the load reacts to a time of use (tou) tariff ignoring the effects of the selfelasticity of the demand. majidi et al. use monte carlo to determine the size of a bess in a microgrid [30]. however, similarly to [29], the authors did not consider how the customers react to the dsms; they assume that 20% of the load will react to a tou tariff. mehra et al. propose a work to measure the economic value of applying dsmss in the sizing of a nanogrid [31, 32]. nevertheless, the work considers the effects of only one kind of dsmss and over a small size grid. kumar et al. analyze the techno-economic viability of a rural grid connected microgrid considering a demand response strategy using homer software [33]. the study shows the feasibility of applying the demand response strategy reducing the levelized cost of energy (lcoe). however, the study does not use an optimal energy dispatch 110 international journal of sustainable energy planning and management vol. 28 2020 design of an incentive-based demand side management strategy for stand-alone microgrids planning strategy, neither an optimal tariff for the demand response strategy, which can lead to sub-optimal solutions. despite that literature has shown that applying dsmss in microgrids planning reduces the total costs of the project, the studies found by the authors present some drawbacks that can be improved. the first drawback is that some works combine different methods to implement the ems, dsms, and sizing, which can lead to sub-optimal results. the second drawback is the tendency of the works to ignore the effect of the selfelasticity of the customers when the planner applies a tariff-based dsms. a third drawback is that the authors do not focus on the design of the dsms itself. in this regard, the present work aims to fulfill the gaps found in the literature by providing a methodology that uses one single formulation for the planning of samgs considering the application of an incentive-based dsms. the proposed methodology considers the self-elasticity of the customers to compute their responses to the tariffs. additionally, the methodology designs the dsms itself and evaluate its impact on samgs planning. a summary of the contributions of the methodology to the state of art proceed as follows: • design a methodology to obtain the optimal sizing, the optimal energy dispatch strategy, and the optimal economic incentives to guarantee the financial viability of a samg project using a disciplined convex formulation. • evaluate the impact of the economic incentives for the customers over the sizing, energy management, and fuel consumption of a samg project. • compare the results of the proposed method against a scenario without dsms under a sensitive analysis that considers variations in the solar radiation, the fuel price, and the price of the storage system. the description of the rest of the article proceeds as follows: section 2 presents the definition of the problem and the proposed solution. section 3 presents a study case as an example of the application of the method ology. section 4 presents the results of the simulations. finally, section 5 presents the conclusions and future direction. 2. problem formulation and proposed solution the considered problem is the design of an economic incentive-based dsms and the evaluation of their potential impact over the sizing of a samg. in this matter, solving two problems is required: sizing and energy management. on one side, the sizing must define the capacity of each of the energy sources of the samg. in this process, it is highly desirable to increase reliability while minimizing investment costs, output energy costs, or fuel consumption, among others [34, 35]. on the other side, the dsms is in charge of doing the economic dispatch for the microgrid. the dsms includes the monetary incentives or punishments for the customers to increase or reduce the consumption, respectively. the methodology uses a disciplined convex formulation that integrates economic incentives as indirect demand response mechanisms. the methodology assumes that the planner knows historic weather variables and electrical demand data over the optimization horizon. moreover, the methodology assumes that the planner can know the price elasticity of the demand of the customers and that the customers will change their patterns of consumption to minimize their payments. the formulation uses the initial demand do and final demand df notations to make a difference between the demand without economic incentives and the demand with economic incentives. figure 1 shows the inputs and outputs of the proposed methodology. 2.1. proposed solution the proposed solution considers the possibility of having public funding for the samg. the following equations use φcg, φci, φog and φoi to measure the impact of the subsidies offered by the government for the capital expenditures and operational expenditures of the samg project according to eqs. (1) and (2). the aim of the methodology is to minimize the capital expenditures (capex=ζ) and the operational 1 1 ci cg oi og ϕ ϕ ϕ ϕ + = + = (1) (2) global horizontal radia�on , temperature , electrical demand sizing formula�on installed capaci�es c f , , , , , , , , , , , , dispatch of the energy sources e , hourly incen�ves of the tariff , figure 1: flowchart for the methodology international journal of sustainable energy planning and management vol. 28 2020 111 juan carlos oviedo cepeda , arash khalatbarisoltani, loïc boulon, german alfonso osma-pinto, cesar antonio duarte gualdron and javier enrique solano martinez expenditures (opex=ϑ) that the government need to pay for the samg project. where ζ and ϑ are shown by eqs. (4) and (5) respectively. the proposed formulation considers the energy prices as the only revenue stream for the investors. in this regard, they must be enough to guarantee the recovery of their investments and the expected internal rate of return (r є (0, 1)). eq. (6) guarantees that the investors recover their investment and the value of r for the worstcase scenario. eq. (7) introduces an energy conservation factor fc є (0, ∞). fc defines how the electric energy consumption will be modified after the implementation of the incentive-based tariff πt. if fc = 1, the sum of the final demand is the same as the sum of the original demand. the designed dsms encourages energy consumption offering a discount to the flat tariff. to discourage energy consumption, the dsms charges an extra price to the flat tariff. to define the economic value of the incentive, the investors need to estimate how much money they can offer and how much money they can charge to the customers as an extra fare. if the incentives are paid by the investors to increase the electric energy consumption, the profit of the investors reduces. on the other side, if the incentives are paid to the investors to reduce electric energy consumption, the profit of the investors will increase. figure 2 illustrates the two scenarios. the design of the incentives requires two different prices πf and πt. πf is a decision variable of one dimension, πt is a decision variable of dimension t. the final tariff πt charges the customers with the sum of πf and πt as described by eq. (8). in eq. (9) dnt represents the electric energy consumption of the customer n and time t. eq. (9) multiply the electric energy consumption with the price of the energy πt, to obtain the payments of the n customer using the incentive-based tariff. eq. (10) set a limit to the values that the planner offers as incentives. the planners can also define the amount of money that they want to use to pay the economic incentives. eq. (11) defines a restriction to guarantee that the total payments of incentives do not overpass a predefined percentage (φpr) of the profits. the planners will need not only to know how much money to pay or charge, but also they will need to know how much the customers will modify their patterns of consumption in the presence of the stimulus. different approaches are being considered by researchers to solve this problem. considering the customers’ response to the price signal and the profit of the system operator (so), the authors maximize customers and so utility in [36]. the research presented in [37] formulates a methodology to estimate the optimal real-time price signal, considering how the customers will respond to it. on another side, [38] proposes to use self-elasticity and cross elasticity of each user to estimate how customers will react to an emergency demand response program and a time of use tariff. here, the proposed methodology uses a concept from microeconomics that relates the price of the min +cg ogϕ ζ ϕ ϑ (3) 1 m m m m c iζ = = ∑ (4) 1 1 ( ) ξ = = ϑ = λ +∑∑ t m m ,t m ,t m ,t t m e (5) 1 ( ) (1+ ) + 0 t ci t oi t tr dϕ ζ ϕ ϑ π = − + ≥∑ (6) 1 1 0 t t t c o ,t t t d f d = = − =∑ ∑ (7) i ,tt fπ π π= + (8) 1 t n n inc t t t min t max d π π π π = γ = ≤ ≤ ∑ (9) (10) 1 1 ( ) t t t pr t t t t d ci oiπ ϕ π ϕ ζ ϕ ϑ = =   ≤ − +    ∑ ∑ (11) electrical demand available genera�on incen�ve kw t kw t lack of energy , < excess of energy , > , > , < figure 2: possible scenarios for the economic incentive of the dsms 112 international journal of sustainable energy planning and management vol. 28 2020 design of an incentive-based demand side management strategy for stand-alone microgrids planning goods with its consumption [39]. this concept allows predicting how customers will react to different price incentives [38, 40]. 3. study case the study case aims to illustrate the capabilities and performance of the proposed methodology. to do so, the sizing and the design of an incentive-based dsms operate over a hypothetical samg located at longi tude 77'16'8'' west and latitude 5'41'36'' north (nuqui, colombia). the microgrid is composed of photovoltaic panels (pv), a bess, a diesel generator (dg) and a demand response (dr) system. table ii summarizes the unitary costs obtained from the local providers and used for the simulations. table ii describes the maintenance as the yearly costs of the installed capacities of the energy sources per kw or kwh. due to the lack of a historical electrical demand of the community, we propose here to generate a typical community profile using the synthetic load profile gener ator of the homer pro software. the standard community profile is scaled up to make it coincide with the reported average peak in nuqui [41]. meteonorm database of pvsyst software provides the global horizontal radiation (ghi) and temperature. figure 3 show the daily average load profile, figure 4 shows the daily average ghi, and figure 5 shows daily average the temperature. 3.1. application of the proposed methodology this section aims to show how to use the proposed methodology. for all the following equations t represents the hour of simulation over an optimization horizon of one year. 3.2. objective function eqs. (13), (14) and (15) are the application of eqs. (3), (4) and (5), respectively. eq. (14) presents the capital expenditures. cdg, cpv and cb are variables of one dimension. these values, multiplied by the unitary investment costs provide the total capital expenditures. eq. (15) presents the operational expenditures. to simplify the application of the methodology, eq. (15) only considers the operational costs of the dg. ψl represents table ii: unitary system costs for simulations. system initial investment maintenance (year) operation pv 1,300 usd/kw 0.02 usd/kw 0 usd bess 420 usd/kwh 0.01 usd/kwh 0 usd dg 550 usd/kw 0.75 usd/kwh eq. 27 figure 3: daily average electrical demand figure 4: daily average global horizontal radiation figure 5: daily average temperature ( ) e ( ) π − = π − π n n t t o,tn t n o,t flat t d d d (12) international journal of sustainable energy planning and management vol. 28 2020 113 juan carlos oviedo cepeda , arash khalatbarisoltani, loïc boulon, german alfonso osma-pinto, cesar antonio duarte gualdron and javier enrique solano martinez the diesel price per liter, and α, β and γ are the parameters of the diesel generator. edg,t is a variable of dimension t and represents the dispatch of the dg. 3.3. constraints additionally to constraints (6), (7), (10) and (11), it is needed to define the physical constraints of the load balance, generators and storage systems. eqs. (16) to (27) introduces the energy sources models and their respective restrictions. it is important to notice that eqs. (21) to (27) introduce epv,t , eb,t and edg,t to measure the amount of energy produced by the energy source during the time t, where the energy produced is the integral of the output power of the source over the time t. 3.3.1. load balance: where ele,t and eee,t are variables introduced to control the lack or the excess of energy during the optimization horizon. the desired reliability for the samg is guaranteed using ele,t and eee,t [42]. according to [43], the loss of power supply probability (lpsp) is: similarly, the excess of power supply probability (epsp) is: lpsp and epsp are introduced in the restrictions of the problem using ele,t and eee,t in eqs. (19) and (20): 3.3.2. photovoltaic system: references [44]–[46] describe the output power epv,t of a npv number of photovoltaic panels as: where tc,t is the working temperature of the pv cell at hour t. reference [47] describes tc as a function of the ambient temperature and incident solar radiation over the pv module. where gnoct, tnoct and ta,t,noct are the solar radiation, working temperature and ambient temperature at nominal operational cell temperature (noct) conditions [48, 49]. 3.3.3. battery energy storage system: eq. (23) describes the initial residual energy of the bess [50]. the simulations assume that the battery starts discharged (30% of its nominal capacity). additionally, the simulation assumes that the minimum level of discharge of the battery is 30%, and that the maximum level of charge is 90% of its nominal capacity. eq. (24) describes these limits. moreover, the simulations consider the maximum rate of charge and discharge of the battery. the simulation assumes that the maximum rate of charge and discharge in each time slot is 30% of its nominal capacity. for all the simulations the slot of time is one hour. eq. (25) and (26) describes the limits of charge and discharge of the battery for each time slot respectively. 3.3.4. diesel generator: the fuel consumption of a diesel generator is a function of its capacity and output power. this function uses linear or quadratic formulations [51, 52]. reference [53] makes a quadratic fit to estimate α, β, and γ parameters as a function of the capacity of the generator using min cg ogϕ ζ ϕ ϑ+ (13) ( + ) ( + )dg dg pv pv pv b b bc i c i c iζ ξ ξ= (14) 2( + ( + ) + )t dg ,t dg ,t dg ,tl eϑ ψ αε β ξ= ∗ γ (15) 1b ,t b ,t pv ,t dg ,t le ,t ee ,t te e e e e e d+ = + + + + − (16) 1 1 t le ,tt t tt e lpsp d = = = ∑ ∑ (17) 1 1 t ee ,tt t tt e epsp d = = = ∑ ∑ (18) 1 1 0 t t le .t t t t e lpsp d* = = ≤ ≤∑ ∑ (19) 1 1 0 t t t ee ,t t t epsp d e = = ∗ ≤ ≤∑ ∑ (20) (1+ ( ))a,tpv ,t pv pv stc t c ,t stc stc g e n p c t t g ρ= − (21) ( )a,tc ,t a,t noct a ,t ,noct noct g t t t t g = + − (22) 0 1 1 0 3 0 3 0 9 0 3 0 3 b , b b b ,t b b ,t b ,t b b ,t b ,t b e . c . c e . c e e . c e e . c + + = ≤ ≤ ≥ − ≤ + (23) (24) (25) (26) 114 international journal of sustainable energy planning and management vol. 28 2020 design of an incentive-based demand side management strategy for stand-alone microgrids planning manufacturer-provided fuel consumption data. using the same method, we make a linear fit to diesel generators ranging from 20 kw to 200 kw, considering 25%, 50%, 75% and 100% of output power. the resulting formulation expresses the diesel consumption as a function of the output power, as shown in eq. (27). the maximum output power for the diesel generator is considered to be 80% of its nominal capacity. 4. simulations and results analysis the simulation take as inputs the values of fc, e, φcg , φci, φog , φoi, r, ga,t, ta,t, λm,t, ξm,t, and im. the planners can define these values or perform sensitivity analysis over each one of them to know how the results vary when one of these parameters varies. table iii shows the values used for the simulations in this work. 4.1. financial analysis the percentage of public funding for the development of the samg modifies the profit of the private investors. additionally, the implementation of the incentive-based dsms modifies the profits of the investors compared to the base case. figure 6 shows the profits of the private investors for the two tariffs, four different percentages of private investment (φci) and three different elasticities of the customers. figure 6a shows the profits of the private investors using a flat tariff and figure 6b shows the profits of the private investors using the proposed incentive-based dsms. the negative values represent that the private investors are loosing money to run the project. due to this, the figure only considers values of φci until 0.4. the incentive-based dsms introduces variations in the final price of the energy. figure 7 shows the daily prices offered to the customers. the continuous line rep resents the daily average and the shaded area represents the standard deviation computed over the 365 days of the optimization horizon. the variation in the final price of the energy modify the total payments of the customers. it is interesting to notice in figure 7 that the incentive based dsms allow to the investors to offer a negative final price for the energy to the customers. a negative final price means that the investor are paying to the customers to consume energy at certain hours of the day. despite this, the formulation guarantee the reliability of the business model to the investors. additionally, negative payments can be easily avoided by modifying the limits of the constraint presented in equation (10). an interesting analysis as well is how the payments of the customers change when the planner applies the incentive-based dsms. the variations in the payments of the customers depend on different aspects. two of the 2(0.00203 + 0.2248 + 4.2272)dg ,t dg ,t dg ,tf e e= (27) table iii: values of the input parameters for the simulations input value input value fc 1 r 15% e 0.3 ga,t figure 4 φcg 0.9 ta,t figure 5 φci 0.1 λm,t see table ii φog 0.9 ξm,t see table ii φoi 0.1 im see table ii (a) profits using flat tariff (b) profits using a dsms with economic incentives figure 6: profit of the private investors for different values of elasticity and different percentages of private investments for the capex figure 7: final prices for the energy offered to the customers international journal of sustainable energy planning and management vol. 28 2020 115 juan carlos oviedo cepeda , arash khalatbarisoltani, loïc boulon, german alfonso osma-pinto, cesar antonio duarte gualdron and javier enrique solano martinez aspects are the amount of private investment in the project, and the elasticity of the customers. figure 8 shows a comparison of the customer payments for the flat and the incentive-based tariffs. figure 8a shows the total payments of the customers when the planner applies a flat tariff. figure 8b shows the payments of the customers when the planner applies an incentive-based tariff. however, to facilitate the comprehension of the results, figure 8b shows the percentage variation of the payments that eq. 28 computes. by using the results of figure 8b is possible to compute the average reduction in the payments of the customers. the average reduction of the payments after the introduction of the dsms is 10.8%. 4.2. sizing and energy dispatch analysis the variation in the price shown in figure 7 incen tivizes the customers to modify their patterns of consumption. figure 9 shows the variations in the demand after the application of the dsms for an elasticity of −0.3. to make a clear visualization of the results, only the daily average and the daily standard deviation are shown in the figure. the blue and red continuous lines represent the daily average. the blue and red shaded area represent the standard deviation. the average and the standard deviation are computed over the 8760 hours of simulation. the proposed methodology uses the tariffs of energy as a dsms. the tariffs modify the patterns of con sumption of the customers, which in the end, modify the installed capacities of the energy sources. however, tariffs have superior and inferior limits. the limits in the tariffs and the elasticity of the customers limit the response of the demand. in this regard, the bess acquires relative importance in the energy dispatch of the samg. the bess can store energy in periods where it is cheaper to generate electricity. the stored energy can supply the demand of the customers when it is more expensive to generate electric energy. this behavior allows the reduction of the installed capacity of the dg when the planner chooses to apply the dsms. figure 10 shows the daily average dispatch of the ems with and without the application of the incentive-based dsms. 4.3. solar radiation sensitive analysis figure 11 shows the impacts of varying the ghi on facility size and lcoe. figure 11 reveals the correlation between the ghi and the lcoe. when the ghi increases, the lcoe decreases. this inverse relationship is valid even when the installed photovoltaic capacity remains almost constant. besides, figure 11 reveals that 1 1 1 n nn n inc flatn n var n n flatn % = = = γ − γ = γ ∑ ∑ ∑ (28) (a) payments of the customers using flat tariff (baseline case) (b) percentage change in payments of the customers using a dsms with economic incentives figure 8: payments of the customers before and after of the introduction of the dsms figure 9: comparison of the electrical demand before and after the application of the dsms 116 international journal of sustainable energy planning and management vol. 28 2020 design of an incentive-based demand side management strategy for stand-alone microgrids planning for reductions in ghi higher than 24%, the fixed sizes of all power sources decrease considerably. despite this, the lcoe continues to increase. 4.4. diesel’ price sensitive analysis figure 12 shows the variations in the sizing of the energy sources when different diesel prices are considered. on the one hand, the flexibility of the dsms allows the size of the energy sources to be kept almost constant, even when the price of diesel increases 40%. this fact highlights the relevance of the dsms to face variations in the price of diesel without having to increase the capacities of energy sources. on the other hand, the reduction in the price of diesel allows reducing the installed capacities of pv and bess. this occurs because the sizing methodology chooses to increase the installed capacities of the dg. by increasing dg capacity, it is possible to supply more demand with diesel generation, taking advantage of low fuel prices. 4.5. bess costs sensitive analysis figure 13 shows the impact of the bess price on the sizing of the energy sources of the samg. figure 13 shows that the installed capacities of the bess decrease as the purchase price increases. the lcoe maintains a direct relationship with the acquisition price of bess. even when the bess installed capacity decreases, the lcoe keeps to increase. furthermore, the sizing figure 10: daily average dispatch before and after the application of the dsms figure 11: comparison of the variations of the size of the energy sources before and after of the application of the dsms when percentage variation in the ghis are considered figure 12: comparison of the variations of the size of the energy sources before and after of the application of the dsms when variations in the diesel price are considered figure 13: comparison of the variations of the size of the energy sources before and after of the application of the dsms when variations in the bess price are considered international journal of sustainable energy planning and management vol. 28 2020 117 juan carlos oviedo cepeda , arash khalatbarisoltani, loïc boulon, german alfonso osma-pinto, cesar antonio duarte gualdron and javier enrique solano martinez methodology chooses to increase the dg’s installed capacity when the acquisition price of bess increases. another aspect worth mentioning is that the reduction in lcoe due to the introduction of dsms remains almost constant. the average reduction in the lcoe when the ghi varies is 15.18%. the average reduction in the lcoe when the price of diesel varies is 15.45%. the average reduction in the lcoe when the bess price varies is 15.07%. these results highlight the fact that the dsms can keep the reduction in the lcoe stable despite the variations in ghi, the price of diesel per liter, and the acquisition price of bess. 5. conclusions the present study shows the design of a demand side management strategy using a disciplined convex approach for the planning of stand-alone microgrids. the application of the methodology help samg planners to compute the sizing of the facilities consid ering different sources of energy and apply an optimal energy dispatch strategy for the microgrid. moreover, the methodology allows the planners to compute the expected expenses and revenues of any samg project. additionally, the methodology allows computing the required amount of subsidies from the government to make financially feasible samg projects. the application of sensitivity analysis in a study case shows a reduction in the total costs of the project and the levelized cost of the energy. the study case shows that the profit of the investors decreases when the elasticity of the customers’ increases. in the same way, the payments of the customers reduce when the elasticity of the customers’ increases. this means that the methodology is able to redistribute the excessive profits of the private investors to the customers. however, clear policies are required for samg projects to guarantee that the customers benefit from the application of dsmss in the planning of samgs. acknowledgments the authors wish to thank the department of electrical, electronics, and telecommunications engineering (escuela de ingenierías eléctrica, electrónica y de telecomunicaciones); the vice-rectorate for research and extension (vicerrectoría de investigación y extensión) from the universidad industrial de santander (project 8593); and the administrative department of science, technology, and innovation (departamento administrativo de ciencia, tecnología e innovación) colciencias (contract no. 80740-191-2019, funding source). the authors also wish to thank to the emerging leaders for the americas program (elap), offered by the 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[online]. available: https://doi.org/10.1007/s11081-0179355-4 https://doi.org/10.1016/j.energy.2008.02.008 https://doi.org/10.1016/j.energy.2008.02.008 https://doi.org/10.1016/j.renene.2006.04.008 http://j.zolan https://doi.org/10.1007/s11081-017-9355-4 international journal of sustainable energy planning and management vol. 27 2020 51 *corresponding author e-mail: salman.siddiqui.16@ucl.ac.uk international journal of sustainable energy planning and management vol. 27 2020 51–66 abstract in future uk energy scenarios with a high level of electrification, a large share of electricity is expected to be generated from renewable sources. to accommodate the variability of renewable generation, flexibility in the network is vital. an important flexibility option is grid scale electricity storage. the aim of this paper is to develop a methodology to study the effect of storage on electricity prices and then to demonstrate its application. a simulation is made of the electricity system with variable renewable generation, electricity storage and flexible high carbon generators, assumed to be gas ccgt, for various uk scenarios. the simulation uses historical hourly meteorology to drive models of demand and renewable variation, and the consequent input/output operation of storage and dispatchable generation to balance differences between demand and renewables. a marginal cost method is devised to calculate the storage, renewable and dispatching capacity and operational costs incurred in each hour. these cost structures can form a transparent economic base for informing market design and setting prices for use in energy system models. results show that while marginal costs for renewable generation are relatively low, reliance on battery storage for backup particularly during peak periods can result in high electricity prices and without a significant increase in projected fossil fuel or carbon prices, traditional high carbon electricity generators will still be cheaper to operate. this work will be used to analyse the interaction between district heating with thermal energy storage and heat pumps, and the electricity system. 1. introduction to meet its decarbonisation goals, the uk targets a near zero emissions electricity grid and consequently, an expansion of renewable generation capacity [1]. the uk already has a large amount of variable renewable energy (vre) on the electricity grid and with predicted mass electrification of other sectors such as heating and transport, the demand on the grid is also likely to grow. managing this demand with vre will require a change in the way in which the grid is operated, possibly requiring significant amounts of electricity and other storage operated in a smart energy system. the increase in vre on the grid is creating challenges with grid balancing and meeting peak electricity demand, a problem that is currently solved largely through the use of dispatchable, fossil fuel operated plants such as gasfired turbines. battery electricity storage is an option to provide flexibility and reduce curtailment of renewable resources but their economic viability and impact on prices requires analysis, which is a major objective of this work. historically, electricity prices have followed a predictable pattern of daily cycles of peak and off-peak prices with seasonal variability and a strong link with a novel method for forecasting electricity prices in a system with variable renewables and grid storage salman siddiqui*, john macadam, mark barrett ucl energy institute, central house, 14 upper woburn place, london,wc1h 0nn, united kingdom keywords: electricity prices; variable renewable energy; storage; economic model; url: http://doi.org/10.5278/ijsepm.3497 http://doi.org/10.5278/ijsepm.3497 52 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage fluctuations in fuel prices [2]. this predictability enables planning of smart grid infrastructure requirements as well as the electrification of other sectors by making informed investment decisions. however, with vre composing a larger share of the electricity system’s generating capacity, electricity prices are becoming less predictable as exemplified by a recent record run of negative prices following by a sharp spike in balancing costs on the grid [3,4]. as vre increases, imbalances between supply and demand at daily, seasonal and annual timescales are expected to increase [5]. to avoid curtailment of vre and to ensure that low carbon electricity is supplied during periods of vre, some forms of electricity storage will be required on the grid. with capital costs declining, lithium-ion batteries are experiencing a rapid uptake at the utility scale with it suggested that upwards of 15gwh of battery storage could be deployed on the grid by 2030 [6]. at present, in a system with low penetration of vre and fossil fuel plants composing the largest share of electricity generation, flexibility is largely achieved by dispatchable plant using stored fossil, nuclear and biomass fuels, that provide a large amount of the balancing requirements in the current great britain power system, with this being complemented by storage such as pumped storage and off peak storage heaters. vre generators have been rapidly reducing in capital costs and have very low operational costs [7], but they are inflexible, and the costs of integrating vre must then be considered. as the penetration of vre on the system increases, the flexibility costs associated with them are envisioned to rise [8]. what effects a larger battery storage capacity will have on the electricity generation cost patterns is uncertain, particularly when future demand and supply profiles are uncertain. however, while many studies show that vre reduce electricity prices, there has been little analysis into what effect factoring the cost of energy storage has on system electricity generation prices. this paper outlays a methodology used to derive a series of electricity supply prices for high renewables scenarios with large capacities of grid connected energy storage. this methodology and results will be used to assess the economic viability of thermal storage in district heating in managing the electricity system. 2. literature review of vre price variance forecasting of electricity prices has been well explored with various approaches such as econometric, statistical or multi-agent models used to assist in estimating electricity spot prices over various time horizons. weron has provided a detailed review on the state of the art in electricity price forecasting techniques [9]. there have been numerous studies analysing the effects of increased vre in electricity systems on spot prices, many of these show a rise in volatility of prices. much of this analysis has been performed on historical data of northern european electricity markets. dong et al. showed using historic data on the nordpool market that electricity price volatility increases with a higher penetration of renewables and that this increase in volatility is more pronounced in regions where wind generation dominated [10]. wozabal et al. performed a statistical analysis of spot price variance in germany [11], challenging the assumption that higher vre always increases price variance. they found that small fractions of vre actually decreased price volatility but higher fraction penetrations of vre resulted in larger increases in price variance. they highlight the importance of price variance as a revenue stream for smart grid infrastructure such as storage. dillig et al. use historic spot prices in germany to create counterfactual prices in the absence of vre [12]. they found increased hourly volatility in prices and show that prices in a higher vre system are lower on average than a system without vre. they also find that increasing vre in the system results in a higher cost of dispatchable generation, potentially due to lower capacity factors. comparing the german system with high solar capacity and the danish system with high wind over various timescales, rintamaki et al. studied volatility of prices during high vre periods [13]. they observe that daily volatility in the wind dominated system is reduced in high wind areas, owing to stable wind speeds over daily timescales but increased in a high solar system due to the daily fluctuation in solar power. price volatility on a weekly scale was shown to increases in both cases. this is supported by wozabal et al. which found that small fractions of wind power leads to a reduction in price volatility as wind power penetration in australia currently accounts for below 5% of all electricity generation [14]. there have recently been some attempts to quantify the effects of largescale vre in future scenarios in various markets. pikk and viiding use a nordpool market spot price analysis and predict a higher volatility of prices in a high vre scenario and similarly in germany, ketterer found that an increase in wind generation capacity will lead to a more volatile electricity spot price but with reduced average prices [15,16]. sorknæs et al. international journal of sustainable energy planning and management vol. 27 2020 53 salman siddiqui, john macadam, mark barrett investigated the effect of vre on wholesale prices using a market economic simulation in energyplan [17]. they calibrated their economic model with 2015 nordpool spot prices then simulated future vre capacity effects on prices. the authors determined that any increase in vre generation reduces wholesale prices. badyda and dylik studied historical market and renewable generation data for several european countries [18]. extrapolating their observations, they predict a pronounced seasonality in the price variance with up to three times higher average prices in high demand periods. maxwell et al. used a similar method to investigate the role of renewable subsidies in denmark and state that future work would benefit from a better understanding of how vre effects electricity prices [19]. 2.1. marginal cost methods the previous authors have studied price variance using statistical or econometric analysis to model and describe prices in high vre scenarios. another class of pricing models described by weron falls into the “fundamental model” category [9], so called as it attempts to describe the important physical and economic factors that give rise to electricity prices. the use of marginal generating costs falls into this latter class. these models typically use defined marginal cost curves for generators and locations and determine prices by the point at which it intersects with demand curves. the use of marginal costs in predicting electricity prices is a standard method to predict system electricity prices and is a useful price estimator [20]. electricity markets consist of many generators bidding to supply electricity, each with differing costs. economic theory predicts that in a market with perfect competition and sufficient capacity, the market auction price should clear at the cost of supplying a marginal increase of demand in the system. further, the price of electricity should be equal to the marginal cost of the most expensive generator active on the system. this is as even though cheaper generators may be active on the system, market price is set at the highest auction clearing price and all electricity generators obtain the same remuneration. however, the actual wholesale price of electricity is rarely at the marginal cost due to market imperfections and secondary costs, but marginal costs provide a reference point about which wholesale prices have been shown to deviate. marginal costs have been shown to be the largest component of day-ahead wholesale electricity prices in the uk which includes the added costs of transmission, distribution and mark-ups from utility companies, composing about 40% of end electricity prices [21]. haas et al. study the impact of solar power in european electricity markets using a marginal cost method [22]. similar to other studies, they predict higher volatility at both hourly and daily timescales which will in turn result in higher prices for dispatchable generators in the long term. they highlight the growing importance of balancing markets going forward in europe. morales et al. used locational marginal costs to study the impact of regional wind power generation on a simulated electricity market to obtain statistical characterisation of wind prices with wind power and musgens has used marginal costs with a dispatch model to study market power in germany and the effect of integration with other markets [20,23]. a study of the merit order effect due to the price of wind generation found depressed electricity prices and lower returns to other generators in the spanish market [24]. the authors used this to highlight the inadequacy of the iberian power market to incentivise further investment. marginal costs have been used by lamont to assess the system value of vre and to optimise generator capacity on the gb system [25]. they use a simplified dispatch model of ‘always-on’ baseload, then a selection of vre or dispatchable plant based on marginal costs assuming that the cost of constraining wind power is at the price set by the renewable obligation certificate rather than marginal run costs. green and vasilakos used a market equilibrium model with marginal generator costs to study market behaviour and the impact of wind power on longterm electricity prices using data on expected wind generation capacity and demand for 2020 [26,27]. hourly wind data for the period 1993–2005 are used to obtain wind output generation profiles for thirty regions (onshore and offshore. they find that yearly variations of wind output can affect intra-year revenue for wind generators by up to 20%, but this is lower than the effect of fluctuating fuel prices at present. in addition, they find that that the prices wind generators receive for constraining output has significant consequences on the resulting capacity mix. the impact of including storage is left for future work. seel et al. have used marginal costs to analyse wholesale electricity price patterns in four grid regions in the usa [28]. first using a capacity expansion model to derive high vre scenarios, they found a reduction in average annual prices throughout but differing average price patterns based on vre type mix and region. notably, in the literature presented, there has been a lack of analysis on the effect of large-scale grid battery 54 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage storage on electricity prices and how this alters marginal electricity prices. the method presented in the following sections attempts to address this. 3. modelling methodology nomenclature d demand, mwh g generation, mwh c capacity, mw a capacity factor/availability, % p price, £/mwh v variable costs, £/mwh m constrained-down loss, £/mwh f fixed costs, £/mw/annum r forced outage rate, % n number of hours count q charge/discharge quantity, mwh l storage loss factor, % e efficiency, % subscripts i hour i lcb low carbon generation bsl baseload ons onshore wind ofs offshore wind sol solar pv srp surplus hours chr charge hours all chrc charge hours in cycle dch discharge hours, dchf discharge hours, full cycle dchp discharge hours, part cycle dsp dispatch hours dspp dispatch hours, peak dspo dispatch hours, off peak cdd all charge, discharge and dispatch hours m marginal renewable generator n incremental renewable generator c dispatchable generator s storage d discharge the methodology presented here first describes how the dispatch model is designed and then in detail how marginal costs are used with the dispatch model to derive marginal electricity supply prices. 3.1. dispatch model a simplified representation of the electricity system for possible future low carbon energy system scenarios with large fractions of variable renewable energy (vre) and grid connected electricity storage is developed. the main simplifications are each generator type is treated as an aggregate and while spatial and transmission constraints are not explicitly modelled. generation capacity is split into flexible and inflexible generation. flexible generators are assumed to be ccgts that are able to adjust output instantly to follow demand. vre output varies uncontrollably with the wind resource but can be spilled. baseload is assumed to be nuclear generation with constant output. the modelling work conducted here is focused on scenarios where flexibility is first achieved with grid battery storage, and secondly with dispatchable ccgt. the methodology will later be applied to include heat demands, thermal storage and heat pumps in district heating. note that the prices calculated are at the point where generator and storage supply electricity to the high voltage grid, and do not include transmission and distribution losses and costs. these costs might be simple constant additional costs per kwh, or more complex such as also reflecting peak flows which drive capacity and maximum losses. these additional costs will be smaller for high voltage supply, such as to industrial heat pumps for example, than lower voltage to the majority of consumers. renewable generation is defined via hourly capacity factors (percentage of installed capacity generating), from historical meteorological data and projected installed capacity, while dispatchable generation capacity is assumed to be sufficient to meet any residual demand. the maximum required dispatchable generation occurring in a year is then one input to the capital cost of the system used in the calculation of marginal costs. demand data is an exogenous input to the model and assumed inelastic i.e. demand is always met regardless of the cost of electricity. hourly demand has been scaled for each scenario from a historical demand timeseries such that it corresponds to the hourly renewable generation capacity factors from the same location and time period to maintain the weather effects that fundamentally link them. the scaling assumes that historical demand load profiles are preserved in future demand profiles. international journal of sustainable energy planning and management vol. 27 2020 55 salman siddiqui, john macadam, mark barrett the capacity factor for each renewable generator is multiplied by the installed capacity to obtain hourly renewable generation which is added onto a baseline generation capacity assumed in the scenario. baseload generation is assumed constant throughout the simulated period and always less than demand and consequently never sets the marginal price in this model. total low carbon electricity generation for each hour, i, is then the sum of baseload and all vre generators: if there is a surplus of electricity generation over demand di, glcb,i – di > 0, then glcb,i – di is allocated to the available storage if charge capacity is available otherwise the renewable power is constrained. if the demand exceeds the available generation glcb,i – di < 0, then the electricity storage is discharged by the amount di – glcb,i. if the discharge is insufficient, the dispatchable power generators, ccgt is then activated and the dispatchable generation is gdsp = di – glcb,i – gdch,i. here it is assumed that storage operates in coordination with vre to meet residual demand or absorb surplus generation and a modelling assumption is made that all stores charge and discharge simultaneously by the same fraction of their capacity. high carbon dispatchable power generation is treated as a last resort in order to minimise the associated emissions from generating electricity i.e. rather than a conventional market where generators bid to supply electricity, the smart grid infrastructure prioritises limiting of carbon emissions. it is initially assumed that there are no constraints on the charging and discharging power of storage, an assumption that becomes reasonable as the number of individual stores increases. 3.2. marginal pricing method upon completing a simulation of the electricity system, each hour is divided into four basic hour types some of which have further subdivisions. for each hour type there is a different algebraic expression used to calculate the marginal electricity generation price. • type 1 srp: hours with surplus renewable generation, “surplus generation hours”. these are hours where supply exceeds demand and remaining storage capacity. • type 2 chr: hours in which electricity storage is charged “charge hours” • type 3 dch: hours in which electricity storage is discharged “discharge hours” subdivided into: – full cycle discharge (dchf) hours where storage capacity is full prior to discharging – part cycle discharge (dchp) hours in which storage is partly charged prior to discharging • type 4 dsp: hours in which backup dispatchable generation is required “dispatch hours” subdivided into: – peak dispatchable hours dspp where the difference between electricity demand and low carbon generation is at its highest which determines its capacity – off-peak dispatchable hour dspo which are all other dispatchable hours the procedure must be carried out in a particular order. after simulating the electricity system for a period of a year (or number of years), psrp, surplus generation hours are calculated followed by the generation price for dispatch hours, pdsp, both peak and off-peak. charge hours pchr, are then calculated which are then required for the calculation of pdch, discharge hours. 3.2.1. surplus generation hours when baseline and renewable generation exceeds demand and electricity storage charging capacity, curtailment of renewable generation will be required. it would be economic to curtail the renewable technology with the highest variable cost (however small these are for renewable generators). this is analogous to creating a merit order of net variable cost and identifying where demand intersects the resulting merit-order stack. this indicates the particular renewable technology that sets the price during that hour and may vary hour by hour. this technology is the “marginal technology”, denoted by the subscript m. lcb ,i bsl ons ons ,i ofs ofs ,i sol sol ,i g c c a c a c a= + + + (1) dispatch model simula�on surplus genera�on hours prices dispatch genera�on prices charge hour prices discharge hour prices figure 1: order of operation to calculate prices per hour type 56 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage the price for surplus generation hours is then given by the variable minus the cost of constraining output: 3.2.2. off-peak dispatch hours when electricity demand exceeds the available low carbon power including stored electricity, demand must be met by dispatchable plant, this is assumed to be ccgt but could be one of several plant types. to minimise carbon emissions, it is assumed that this plant only operates during the hours required to make up the generation shortfall. therefore, all of the year-on-year costs of the dispatchable plant must be met by this operation; but it is assumed these are legacy plant with sunk costs so they do not incur capital costs. hence, for off-peak dispatchable hours, the electricity generation price is given by the variable operating costs of the dispatchable plant: the variable operating costs include fuel and carbon costs, and variable o&m costs. the o&m costs in this case will need to be a conservative estimate due to the impact on efficiency and o&m of frequent ramping, part load and cold start. 3.2.3. peak dispatch hours the annual fixed operating costs of the dispatchable plant are recovered during the peak dispatch hours. these costs are often called fixed other-works costs (fowc) which are a close approximation of the net avoidable cost (nac), the net cost of keeping the plant open for another year. in a system with vre, there is uncertainty as the operation of dispatchable capacity and therefore of the revenue it will obtain from the hourly market. therefore, the uk has had a capacity market auction whereby the generator or store receives a guaranteed annual payment regardless of the amount generated. this market is currently under investigation but is assumed to apply in the pricing methodology [29]. battery storage was permitted to participate in the capacity market; however, the marginal cost of providing peak demand from storage remains high. the national grid recovers the cost of the capacity market auctions during peak weekday demand periods, november-february 4–7pm or around 240 hours or 2.7% of hours in the year (though this means of allocation is somewhat arbitrary) [30]. following this means of recouping marginal capacity costs, 2.7% of the dispatch hours with the highest difference between demand and low carbon generation, di – glcb,i, are allocated as peak dispatch hours. 3.2.4. charge hours a projection of the incremental renewable generator is made which is the renewable generator that sets the charge price. the incremental technology in the uk would likely be offshore wind, given the constraints on the building of further onshore wind, its higher output in winter when demand is high and the higher cost of solar generators. the incremental technology is distinct from the marginal generator which can be any vre (including incremental), storage or dispatchable, during an hour. the generation cost during charge hours is set by the incremental technology for a given scenario. the variable cost of the incremental technology during surplus hours in which it is less than that of the marginal technology must also be recovered. the ‘energy credits’ can be calculated by: the fixed costs of the incremental renewable generator during across the year (or the chosen time period for calculation) must be recovered. this fixed cost is given by: substituting for pdch and using the following approximation gives: ( ) ( )dspp1 100 c c ,idsp dspp ,i c c c ,i f max g p v r g = +   −    ∑ (4) ( ) ( )n ,i m ,i m ,i n n srp g v m v m − − − ∑ (5) ( ) ( ) ( ) ( ) ( ) ( )1 n n ,i chr ,i n ,i dch ,i n ,i dsp ,i chr dch dsp n ,i n n cdd n ,i m ,i m ,i n n srpn ,i f a p a p a p a v m g v m v m c = + + − −  + − − −  ∑ ∑ ∑ ∑ ∑ (6) ( ) ( ) ( ) ( ) n ,i n ,i i n ,i dch chrc chrc n ,i n ,i i n ,i dch chr chr a a p a a a p a             ≈      ∑ ∑ ∑ ∑ ∑ ∑ (7) srp ,i m ,i m ,ip v m= − (2) dspo ,i cp v= (3) international journal of sustainable energy planning and management vol. 27 2020 57 salman siddiqui, john macadam, mark barrett the charge price is given, from (6) and (7), and from (12) below, by: 3.2.5. discharge hours assuming the battery has a constant loss factor of l (thus an efficiency e of 1-l) with no standing loss assumed then for every unit of power discharged, 1/e units of power must be charged. the cost of charging the storage must be recouped from discharging. the assumption is made that all the individual batteries are charged and discharged evenly across each individual unit in the capacity as if one single aggregate battery. the cost incurred from this charging is dependent on the cumulative charge hour generation costs preceding the discharge, back to when the store was last empty, denoted with chrc. the average cost of charging during charge hours in the period preceding the discharge, weighted by the availability of the incremental renewable generator is given by: the fixed cost of storage capacity must also be recovered during discharging. here it is assumed that the marginal electricity generation cost of supplying power from discharging storage is driven by the incremental storage cost to meet incremental demand and the cost of charging the storage from renewable generators. this recovery of the fixed cost of storage during discharge hours in this method is recovered through full charge-discharge cycles. a full discharge cycle is defined as each time the storage capacity is full preceding the discharging cycle which can run for multiple hours. a part discharging cycle are other hours when storage is not full prior to the discharge cycle. the cost of storage capacity during a part and full discharge hour k is: the generation cost during a discharge hour is then given by: 3.3. data sources the capacity factor data to construct hourly renewable generation profiles have been obtained from the work of pfenninger and staffell published on the ‘renewables ninja’ website [31,32]. the capacity factors are derived from a combination of historical meteorological data and known or planned renewable generator locations. electricity demand data is obtained from the national grid’s historic demand data archive which contains the demand on the transmission network and a breakdown of output from each generator type per half hour [33]. hourly demand is calculated from the sum of two half hourly periods. this data however is not representative of the true gb electricity demand as it does not include any power generation embedded in the distribution network. 4. results and discussion the model output is first compared to historic generation data for the year 2016 before the results from two high vre scenarios are presented. these scenarios are adapted from the national grid’s future energy scenarios [34], using the projected generation capacity mix from the two scenarios that conform to the 2050 decarbonisation targets. 4.1. dispatch model validation the model output using 2016 renewable capacities is compared to historic generation data for the year in table 1 [35]. this method is designed for a renewable and storage dominated system thus an exact match for electricity generation and prices with a present-day system should not be expected. however, it is useful to ( ) ( ) ( ) 1 1 1 1 1 1 n dch ,i n ,i n ,i dsp ,i n ,i m mdch dsp srp s n chr ,i n ,idch chr n ,i s n ,ichr n ,i n ,i n nsrp cdd n n ,i n ,idch chr s f k a a p g v m e c p a n a e a g a v m c a a e − − − − =   +        + −   + + ∑ ∑ ∑ ∑ ∑ ∑ ∑ ∑ ∑ (8) ( ) ( )n ,i i n ,i chrc chrc a p a∑ ∑ (9) dchp ,i s s s dchf ,i d ,idchf k r e f c k r q =    = +    ∑ (10) (11) ( ) ( ) 1 n ,i ichrc dch ,i dch ,i s n ,ichrc a p p k e a    = × +        ∑ ∑ (12) table 1: comparison of 2016 low carbon generation statistics with modelled generation onshore wind twh offshore wind twh solar pv twh nuclear twh 2016 data 21.1 16.4 10.3 65 modelled 24.3 16.0 10.7 78 58 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage compare the low carbon generation output from the model with the data. in the model, all other generation is assumed to be dispatchable whereas this is not the case in the present-day system. baseload nuclear generation is overestimated as the model assumes a 100% availability. the data shows an 83% annual capacity factor for nuclear generators which would be due to maintenance and seasonal availability. comparison for the output of the renewable generation data from stafell and pfenninger [31,32] shows that it has been calibrated accurately. solar pv and offshore wind outputs are very close while onshore wind has been slightly overestimated. 4.2. scenario analysis the scenarios “two degrees” and “community renewables” from the national grid’s future energy scenarios are designated here as ‘scenario a’ and ‘scenario b’. the details of these scenarios are presented in table 2. the renewable generation and grid storage capacity from the two scenarios was used as input for the scenario analysis and 5% interest on all capital costs has been applied for initial analysis. a comparison of the electricity generation prices for each scenario and 2016 in table 3 shows that the average daily cost of electricity generation is lower than 2016 average in both high vre scenarios modelled here. the input cost assumptions can be found in appendix b. the maximum average daily cost increases however due to the fixed annual costs of dispatchable generation (assumed here as ccgt) being recouped over fewer hours of the year. additionally, these would also be the days that have the highest difference (residual) between electricity demand and renewable generation, requiring dispatchable plant to fulfil the remaining demand. the scenarios were modelled using demand and renewable data from 2006–2016. the results for individual years can be found in appendix. a. detailed look at scenario a in figure 2 shows a winter month period in 2013 with the residual renewable generation (above) and storage levels and electricity prices (below), showing electricity prices frequently spike corresponding to cycling of electricity storage levels in the system. when storage levels are full, surplus generation hours result in low prices. however, as a result of renewable fluctuation the storage level rapidly varies requiring discharge then dispatch periods of higher prices. a peak dispatch hour occurs towards the end of november when residual generation is most negative. figure 2 suggests that the storage capacity in scenario a is insufficient for the renewable capacity in the absence of other flexibility options. explicit constraints on charging and discharging rates have not been applied. however, the peak power to energy ratio in the simulations of the scenarios was 0.66. this is within the limits of grid scale lithium-ion storage where typical power to energy ratios are 1.0 [36]. off-peak dispatch hours are cheaper than discharge hours under the current cost projections used. this is the case with the current assumptions of short run variable costs of dispatchable hours being less than that of discharge prices (fuel £35/mwh, carbon £70/mwh, o&m £1.5/mwh). for the storage capacity defined in table 2: nationalgrid fes 2017 scenarios (2050) comparison scenario name demand (relative to 2017) offshore wind gw onshore wind gw solar pv gw nuclear gw total capacity gw grid storage gwh a (two degrees) +25% 43.4 22.3 43.7 20.0 224.3 17.3 b (community renewables) +48% 32.5 50.7 66.2 18.6 267.6 29.0 table 3: price comparison with renewable capacity and storage scenario renewable capacity gw share of total capacity wind share of total capacity solar ave price £/mwh a (two degrees) 109.4 29% 19% 34.1 b (community renewables) 149.4 31% 25% 35.1 2016 actual 26.79 16% 11% 41.12 http://1.5/mwh international journal of sustainable energy planning and management vol. 27 2020 59 salman siddiqui, john macadam, mark barrett scenario a, a total short run variable cost for dispatchable generation would need to be at least that of the highest discharge prices, £251/mwh. from the perspective of limiting carbon emissions, it would be desirable to have dispatch hours cost higher than discharge hours. adjusting dispatch hour prices to be higher than discharge hours meant that the average price in scenario a 2013 increased from £36.34 to £49.83, almost a 40% increase in average annual prices. within the current market framework where bids are accepted based on price, unless fuel or carbon costs increase above projected values, dispatchable/thermal generation would be higher in the merit order than less carbon intensive electricity from discharging electrical storage, owing to their lower marginal costs, figure 3. figure 4 shows adjusted dispatch hour costs to reflect an ideal scenario where dispatch costs are higher than discharge costs. for both scenarios, the positive residual generation from renewables is far higher than negative, figure 5, which perhaps suggests an overcapacity of renewables in both scenarios. analysis of the residual duration curves as well as the absolute maximum of negative residual generation can allow better estimates of storage requirements and the corresponding effect on prices, but an optimisation of scenario storage levels is beyond the scope of this paper. figure 6 shows a 24-hour rolling average of the mean generation prices for scenario a from the 2006–2016 data, scenario b exhibited a very similar distribution. a clear seasonality can be observed in the prices with higher prices periods being concentrated in the winter figure 2: residual renewable generation (above) and resulting cycling of storage and prices (below) for scenario a 2016 60 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage periods where despite wind generation in these scenarios being higher during the winter, there are periods of low generation coinciding with high demand often leading to higher prices. also observable is that an increase in the share of renewables does not directly lead to lower average electricity generation prices. this can be seen in the average price difference between scenario a and b being very similar, despite b having a significantly higher renewable capacity to meet a significant difference in demand. neither scenario has consistently higher average prices than the other across the modelled years, with some years resulting in scenario a having higher average prices. the fewer dispatch hours that occur within a year, the higher the maximum prices become as there are fewer hours where dispatchable plant operates. the fixed annual costs of the dispatchable plant per mwh of electricity grows as there are fewer peak dispatch hours against which to recover fixed costs of the capacity. the price of peak dispatch would decline if dispatchable plant capacity decreased, in other words, if the highest negative residual generation decreases. 0 100 200 300 400 500 600 700 800 0 1000 2000 3000 4000 5000 6000 7000 8000 £/ m w h scenario a scenario b figure 3: scenario price duration curves 2013 0 100 200 300 400 500 600 700 800 0 1000 2000 3000 4000 5000 6000 7000 8000 £/ m w h hours scenario a 2013 scenario a dsp > dch figure 4: scenario a 2013 price duration curve with adjusted dsp costs international journal of sustainable energy planning and management vol. 27 2020 61 salman siddiqui, john macadam, mark barrett this peaking function at high demand times is normally performed by open cycle gas turbines (ocgt) that are able to ramp output, consequently they have high o&m and variable costs but low fixed costs. cost for dispatchable hours here are based on projections from closed cycle gas turbines (ccgt) due to their higher efficiency and predicted improvement in technology and ramping ability. also, as renewable generation grows dispatchable generation will be gradually retired; by about 2050, the remaining dispatchable plant is likely to be already-existing residual ccgts. 4.3. sensitivity analysis scenario b is presented alongside high and low cost projections to display the sensitivity of prices to capital cost projections. in this case, the interest rate on capital -40000 -20000 0 20000 40000 60000 80000 100000 0 1000 2000 3000 4000 5000 6000 7000 8000 m w h hours scenario a scenario b figure 5: residual renewable generation for both scenarios 2013 0 20 40 60 80 100 120 0 50 100 150 200 250 300 350 £/ m w h day figure 6: scenario a 24-hour rolling average prices and trendline 2006–2016 62 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage costs for renewables and storage has been adjusted from the base case of 5% to a low case of 2.5% and high case of 10%. the variable operational costs of dispatchable generation have been adjusted to ±20%. it is observable in figure 7 that surplus hours are the same for each case as these are only dependent on the variable operating costs of renewables. peak dispatch hours (not shown here) are affected in the same way as off-peak dispatchable hours as it is assumed that no new dispatchable plant is built and thus no new capital is required. discharge hours are affected as expected due to the changed annuitised capital costs of storage capacity. in this particular scenario, the prices for charge hours in the high costs case is below the base case (table 4). this is due the increased revenue to the incremental renewable from higher prices in both dispatchable hours and discharge hours. if dispatchable generation costs were left unchanged, then it is expected that charge hour costs would be changed in line with the change in annuitised capital costs of the incremental renewable generator. 5. conclusion higher vre capacities in the future will increase the need for flexibility options. the gb system currently has a lot of flexible dispatchable generation using stored fossil fuels. to reduce carbon emissions from power generation, the reliance on fossil fuel dispatchable generation will need to be virtually eliminated. flexibility can be provided with electricity storage of some form, but also by storage such as with heat or bioenergy or synthetic fuel such as hydrogen input to chp or electricity only plant. transmission links with other countries can help average out demands and vre and thereby reduce storage needs. table 4 average price comparison for high and low cost cases £/mwh scenario b scenario b high scenario b low average annual price 36.40 40.51 31.05 average discharge price 156.97 181.65 134.95 average charge price 62.88 58.02 53.79 0 50 100 150 200 250 0 1000 2000 3000 4000 5000 6000 7000 8000 £/ m w h scenario b b high b low figure 7: scenario b with high and low cost projections (clipped for detail) international journal of sustainable energy planning and management vol. 27 2020 63 salman siddiqui, john macadam, mark barrett vre, particularly wind, has rapidly reducing total generation cost and low marginal short run avoidable costs but requires other technologies to balance demand and supply. the cost patterns of future electricity generation will become more uncertain and unpredictable, which translates to uncertainty in wholesale electricity spot prices. better knowledge of these price patterns enables better decision making and encourages investment in smart grid infrastructure and electrification of other sectors as well as being important for electricity utility and industrial consumers. a simplified electricity dispatch model has been described as well as the details of a marginal cost based pricing method to output potential price patterns corresponding to high vre and storage scenarios. forecasting precise electricity prices is infeasible and nor is it required. rather, the method presented here allows an exploration of future price patterns and magnitudes that can provide some insight into how electricity purchasing decisions can be made. the output from the price time series can then be used in energy system models to assess options such as district heating storage, and to help define markets for investment and dynamic operation. previous studies that have quantified the distribution and variance of future electricity generation prices have been based on detailed simulations of the electricity market but have lacked detail on how to replicate these prices without access to custom tools or software. most have also lacked an analysis of the effect of integrating electricity storage into a system with renewables. electricity prices arising from markets should reflect the costs of building and operating electricity assets, including storage, such that economic optimality arises to the degree possible given market imperfections. markets should be sufficiently competitive regardless of who owns and controls storage operation: the operational market might be managed by, for example, national grid, even if owning no storage. the costing method presented here can inform the design of efficient, cost reflective markets that also meet other criteria such as the avoidance of penalising the poorer consumers with extreme price spikes. the modelling of marginal costs here assumes perfect foresight. in practice, in real-time indicative marginal costs could be estimated ex-ante, using modelling taken forward as the rolling year develops, and using past history and forecasts of demand and of generation availability. at the end of the accounting year, adjustments could be made to settlements so that they conform to accurate marginal costs calculated ex-post. the method presented here has made several key assumptions, one of which is that the carbon intensity of electricity generation should take precedence in the merit order of supply. the analysis of two high vre and storage scenarios shows that that the capacity cost of storage means that the cost of battery discharge is higher than the marginal costs of dispatchable plant. the merit order would be the same as a typical cost based order if the short run cost of dispatchable generation was more expensive than electricity discharged from storage but this will require carbon or fuel costs to be significantly higher than is assumed in appendix b. the high vre scenarios modelled here show prolonged low marginal cost periods that last for several days followed by spikes usually occurring at high demand periods where peaking plants are normally required. this confirms the observation from previous work that short term variability is reduced in high wind scenarios but intra-day variance is increased, related to the frequency of wind front generating high vre. these price spikes may be predictable in advance through projections of demand and advanced forecasts of vre generation that is particular to these high wind scenarios. another trend observed from these high wind scenarios is the seasonality in mean prices that are observed in both scenarios for each modelled year. that is, the frequency of prices from discharge and dispatch hours is higher in winter periods and suggests that there is a role for seasonal energy storage to reduce this seasonality effect. 6. future work this method has been developed to provide a series of electricity generation prices for use in energy system models to analyse the effects of interventions in the grid. previous studies have shown that electricity storage alone can be an expensive option and other forms of storage in a smart energy system can be a lower cost solution [37]. future work will be to analyse the effect of integrating electrified heating and the potential use of large-scale thermal energy storage in the uk and contrast the reduction in battery storage requirements this facilitates. a further step, outside this paper’s scope, is to optimise renewables and storage capacities such as to find a 64 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage least cost near zero emission system. renewables and storage might include other technologies not considered here such as solar heat and thermal storage. acknowledgements this paper was prepared for the ijsepm special issue on the 5th international conference on smart energy systems and 4th generation district heating in copenhagen [38]. the research was made possible by support from the epsrc centre for doctoral training in energy demand (lolo), grant numbers ep/l01517x/1 and ep/ h009612/1. references [1] committee on climate change, net zero: the uk’s contribution to stopping global 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https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/604695/press_notice_march_2017.pdf https://doi.org/10.3390/en10122107 https://doi.org/10.3390/en10122107 https://doi.org/10.5278/ijsepm.2016.11 https://doi.org/10.5278/ijsepm.3664 https://doi.org/10.5278/ijsepm.3664 https://www.gov.uk/government/publications/leigh https://www.gov.uk/government/publications/leigh https://www.gov.uk/government/publications/arup https://www.gov.uk/government/publications/arup https://www.lazard.com/media/451086/lazards-levelized-cost-of-energy-version-130-vf.pdf https://www.lazard.com/media/451086/lazards-levelized-cost-of-energy-version-130-vf.pdf https://www.irena.org/publications/2017/oct/electricity https://www.irena.org/publications/2017/oct/electricity 66 international journal of sustainable energy planning and management vol. 27 2020 a novel method for forecasting electricity prices in a system with variable renewables and grid storage appendix a. modelled scenario results table 5 modelled scenario results and average prices all years modelled year demand a twh ren. gen a twh demand b twh ren. gen b twh ave. price a £/mwh ave. price b £/mwh 2006 426.25 507.20 504.68 589.87 46.42 47.11 2007 417.19 510.49 493.95 594.53 43.55 43.02 2008 414.89 523.95 491.23 609.91 41.25 41.28 2009 393.29 502.12 465.66 587.15 39.84 40.38 2010 400.05 477.85 473.66 552.22 45.28 46.15 2011 384.82 511.35 455.63 596.13 36.76 37.13 2012 386.22 499.52 457.29 578.17 38.37 38.58 2013 381.88 510.53 452.14 596.28 36.34 36.41 2014 363.11 503.10 429.92 584.94 32.11 33.18 2015 352.73 523.59 417.63 612.54 29.47 30.25 appendix b. input cost assumption table 6 input cost assumptions used in price modelling capex fixed o&m var o&m eff. fuel cost carbon cost lifetime refs £/kw £/mw/a £/mwh % £/mwh £/mwh years ccgt class h 526.8 15,520 1.5 0.6 35 19 25 [7,39] off.wind 1860 45,715 3.5 0 0 0 25 [7,40] ons.wind 1395 22,100 5 0 0 0 23 [7,40] solar pv 652 4,792 0.1 0 0 0 25 [7,40] li-ion (mwh) 337 2,120 2 0.9 0 0 15 [41,42] http://off.wind http://ons.wind _hlk22747022 _hlk21689339 international journal of sustainable energy planning and management vol. 29 2020 91 *corresponding author e-mail: maleki@sharif.edu international journal of sustainable energy planning and management vol. 29 2020 91–108 abstract the iranian government has set a target of a 20% share of non-fossil fuel electricity generation by 2030, whose main result is reducing green house gas (ghg) emissions (about 182 million tonnes in 2017) to achieve the targets pledged under the paris climate accord. so, this paper presents a comprehensive model on the expansion of non-fossil technology to evaluate the impact of increasing their share in iran’s electricity supply system. this analytical approach is based on system dynamics (sd) that was developed based on dynamic behavior of electricity market, with an emphasis on the expansion of non-fossil fuels (solar photovoltaics, wind turbines, expansion turbines, and hydro power) in the supply side of this model by electricity price reformation. for this purpose, we developed four scenarios with different share percent of non-fossil technologies in iran’s electricity system. the findings demonstrate that electricity price must be determined based on the costs of non-fossil technologies, as well as based on fossil fuel prices which are low in the current energy supply system and its value was predicted that increased to maximum of 2.03 cent usd/kwh. in conclusion, in the best scenario, the paris climate accord criteria is achieved with a 20% growth of non-fossil fuels and increasing electricity price to 2.54 cent usd/ kwh in 2030 with 0.19 price elasticity of emission. 1. introduction the energy sector plays a major role in global ghg emissions with about a 75-percent share, and there are critical actions in this sector that can make or break efforts to achieve global climate goals aimed at tackling the increasing global average temperatures started since the mid-20th century. therefore, one of the most important, globally adopted agreements was met in december 2015 called the historic paris agreement, which includes ghg mitigation actions covering the period 2020-2030, and its long-term goals include limiting the mentioned temperature rise to well below 2°c and pursuing efforts to limit the rise to 1.5°c [1]. iran intends to participate by reducing its ghg emissions in 2030 by 4% compared to 2020 based on its intended nationally determined contributions (indc). one of the most important solutions in ghg emissions mitigation is increasing the expansion of non-fossil power plants, such as renewable resources, hydropower, and expansion turbines, in the energy supply system. in 2018, about 2,807 pj distributed on 86% ng, 8% gas oil and 5% fuel oil was consumed by power plants in the electricity supply system, and because of shortage of natural gas in cold months, this sector had to use gas oil for gas turbines and fuel oil for steam technologies [2]. as a result, about 1,280 mt of co2 equivalent of ghgs were emitted to iran’s atmosphere, which is equal to more than 29% of the total policy framework of non-fossil power plants in iran’s electricity sector by 2030 ali abbasi godarzi, abbas maleki* department of energy engineering, sharif university of technology, azadi street, p.o. box 11155-8639, tehran, iran keywords: system dynamics; green house emission; electricity price; modeling; url: https://doi.org/10.5278/ijsepm.5692 mailto:maleki@sharif.edu https://doi.org/10.5278/ijsepm.5692 92 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 emissions in the country, demonstrating the importance of the energy supply system for ghg reduction (fig. 1) [3]. thus, new energy resources and technologies, such as non-fossil fuels, are required to ensure sufficient energy supply for the growing demand. the process of implementing iran’s unconditional mitigation of ghg emissions will be facilitated and speeded up with increasing the share of non-fossil fuels in the electricity supply system, and iran’s government intends to achieve a 20% share [4]. this share, as shown in fig. 2, was 5% in 2018 [2]. this paper describes an analysis performed to assess reaching a 20% share for non-fossil fuels in the electricity supply system for iran to meet these emission targets pledged in cop21. in particular, it attempts to determine the electricity price such that it enables non-fossil fuel power plants to compete with conventional power plants in gaining electricity market share and to compute the resulting overall costs. so, the main output of this paper is electricity price which determine share percent of non-fossil fuel power plant in iran’s electricity production system. however, energy price reformation has not been effectively pursued in iran, and therefore, there has not been a successful sensible reduction in utilizing fossil fuels in recent years. iran’s parliament passed an energy reformation in 2010 and according to it, fossil fuel prices should increase to international prices within five years [5]. hence, based on changes in fossil prices, share of these fuels should be decreased in iran’s electricity production system, but this share changed only from 95.55% to 91.64% on years between 2010 to 2018 [2]. indeed, the main concern of this paper is the possibility of electricity prices for the development of non-fossil power plants which, on one hand, can satisfy the growing electricity demand and, on the other hand, can help achieve a 20% share of non-fossil fuels in primary energy by 2030, which can mitigate iran’s ghg emissions according to the paris accord targets. electricity price has high impact of energy consumption in iran and is an important input to all demand sectors that were shown in fig. 1. so, this policy tool could household, commercial and public (25%) industry (17%) transport (24%) agriculture (2%) refinery (3%) power plants (29%) figure 1: shares of energy sections in ghg emissions in iran, 2017 [3] nomenclature pt electricity price in cent usd/kwh pt i electricity price index in cent usd/kwh at adjustment time in hour sr reference supply in kwh dr reference demand in kwh es effect of price on supply ed effect of price on demand es price elasticity of supply ed price elasticity of demand ebp effect of demand per supply balance on price f import coefficient s price sensivity of demand per supply balance λi co2 equivalent emission factors in grco2/ kwh λi . co2 co2 emission factor in grco2/kwh λi . c carbon emission factor in grc/kwh λi . n2o n2o emission factor in grn2o /kwh λi . ch4 ch4 emission factor in grch4/kwh pceillingt price ceiling in cent usd/kwh α variation of price ceiling cfi capacity factor in % oci.t operation costs in cent usd/kwh fci.t fuel costs in cent usd/kwh soi.t subsidy of power plants in cent usd/kwh efi.t efficiency of power plants ti.t applied tax on power plants in cent usd/kwh pj petajoules mt million tonnes subscripts i power plants technology number (1 to 13) t time international journal of sustainable energy planning and management vol. 29 2020 93 ali abbasi godarzi, abbas maleki impose to these sectors in changing consumption pattern from fossil resources to their non-fossil types. because of low electricity price of fossil power plants, supply side do not have incentive to decrease ghg emissions. since renewable energy resources have intermittent availability and fossil fuel costs contain uncertainty in their future pricing policy, we analyze the impact of both expansion capacity of non-fossil fuel power plants and fuel costs of fossil power plants on the trend of the expansion of these zero emission resources. so, determination of electricity price that make the most impact on ghg emissions with calculation of emission elasticity (novel parameter) is considered in current study as research gap and this point directly was not investigated in previous papers. in this paper, we tried to set an energy policy path for an electricity pricing mechanism in iran’s energy supply system for the realization of the paris accord targets, for which purpose research and development was done on decreasing ghg emissions based on the proposed method shown in fig. 3. this paper is structured as follows. after reviewing previous studies, the methodology and the applications of system dynamics (sd) in an energy supply system were presented. in the continuation of this section, we describe the fuel cost and non-fossil fuel pricing mechanism to derive key electricity pricing components. therefore, the sd model is constructed, described, and validated in section 3. results are discussed in section 4. the paper finalizes with conclusion and policy implications. 2. literature review in order to understand iran’s future energy consumption and emissions and to investigate the potential utilization of renewable energies, many studies have recently been conducted to simulate various future development pathways. however, they lack an explicit description of how increasing the expansion of non-fossil resources aid in achieving the paris accord targets in their analytical model. some of these articles have proposed analytical models to estimate the overall cost of utilizing renewable resources for emission reduction or have provided general strategies for devising long-term energy policies, but they have not provided a practical and economic method for increasing the expansion of non-fossil fuel technologies in the energy supply system. kachoee et al. investigated the current iranian electricity supply and demand to forecast future generation trends in the power plant sector. based on their results, this sector will emit about 668.2 mt of co2 equivalent of ghgs in the business as usual (bau) scenario by 2040, which could be reduced to 294.6 mt by adopting renewable development policies [6]. setiartiti et al. developed four scenarios for transportation sector of yogyakarta province in indonesia and showed that mitigation scenario could reduce ghg intensity [7]. in 2017, manzoor and aryanpur presented a retrospective optimization model for iran’s power sector and showed that demand-side strategies and shifting to renewable supplies are two of the most important key drivers in achieving a low-carbon generation mix [8]. 31% 3% 27% 31% 0% 0% %0%% 0% 3% 2.48 pj 1.83 pj 57.52 pj 3.16 pj 1.08 pj [procentdel] (non-fossil fuels) steam power plant reciprocating engine (dg) gas turbine combined cycle plant diesel generator conventional coal plant advanced supercritical coal light water reactor solar photovoltaic small hydropower large hydropower wind turbine (on-grid) expansion turbine figure 2: shares of power plants types in iran’s electricity production system, 2018 [2] 94 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 although fossil fuels still heavily dominate iran’s electricity supply system, especially natural gas, there are great and diverse renewable opportunities that should be considered as distributed generation in different province [9]. this practical solution can lead to the possibility of foreign and domestic investment opportunities. for instance, shasavari and akbari focused on potential barriers for promoting solar energy resources and increasing their expansion in the power grid, and claimed that this renewable energy has benefits that can absorb foreign direct investment (fdi) [10]. studies similar to the mentioned papers have been conducted in other countries, arguing that the cooperative planning framework in the development of non-fossil fuel power plants is capable and possible. finding the most efficient method based on different incentives in the form of governmental executive scenarios is necessary for increasing the share of renewable resources in meeting the growing future electricity demand [11]. in 2019, wahba et al. analyzed the effect of green strategy models on building design in areas with hot and dry climatic zones. they announced that building sector has a big responsibility in 62% of total electricity consumption and around 70% of resultant co2 emissions and application of green wall is very powerful way that enhances the ecosystem health [12]. burciaga et al. implemented construction and demolition waste (cdw) strategies in reducing co2 emissions of housing building and found that they can reduce 53% of co2 [13]. khan et al. presented integrated association model of green building rating tool (mycrest) with life cycle costing (lcc) and its final result was that criteria environmental management plan has lowest costing role in green building projects [14]. in 2018, darabpour et al. focused on practical approaches toward sustainable construction industry by considering the experts’ opinion in iran [15]. candia et al. evaluate the flexibility of the bolivian power generation system in terms of renewable energy and found that 30% participation of solar and wind technology are required for grid reinforcements [16]. at 2020, a comprehensive investigation has been done by european researchers who developed a strategy under a modern portfolio theory (mpt) for replacing conventional electricity generation technologies with renewables supply reference economic features modeling of electricity price based on system dynamics method technical features environmental features external inputs scenario features (non-fossils share) electricity price total emissions emission elasticity results deviation from iran’s paris accord target price module demand module production module mathematical calculation by running of stock and flow section price reference demand reference figure 3: research methodology flowchart and overall investigation structure international journal of sustainable energy planning and management vol. 29 2020 95 ali abbasi godarzi, abbas maleki energies when defining efficient portfolios with less risk [17]. yuan et al. presented a multi-region and multi-period model to explore the carbon and spillover impacts of investments in non-fossil fuel electricity generation and tried to explain how these investments affect co2 emissions in china [18]. atanasoae et al. assessed the employment impact of low capital cost of on-grid power generation on the expansion of renewable energy resources on romania’s electricity supply system [19]. according to their investigation, these production technologies can be profitable at less than 2300 euro/kwh, depending on the self-consumption share of electricity produced by renewable resources. in recent years, many papers were published suggesting that an energy policy domain based on system dynamics (sd) has many advantages in providing a better comprehension of complex interactions between different variables. furthermore, sd itself can also be combined with other scenario planning methods, which helps obtain solid results from the dynamic behaviors of energy systems such as the electricity supply system [20]. liu et al. investigated the mobility management policy of beijing’s transport sector and its effects on energy savings and emission reduction using sd approach [21]. their results show that the effects of energy conservation and emission reduction are two key solutions in comprehensive dynamic policies, and their efficacy is assessed in their study. the cost-benefit analysis based on sd model has been done on the simulation of energy saving from combining renewable energy and energy efficiency improvements in reference [22]. the results showed that renewable energy has more social benefits than energy efficiency improvements, and every country should introduce appropriate renewable development policies for its emission reduction targets. shafiei et al. presented an integrated sd model for iceland’s energy system to explore the transition process towards a hydrogenand biofuel-based market considering both supply and demand sides [23]. they again focused on the application of renewable-based energy system for making this transition pathway. from the above mentioned papers, it can be understood that the sd method is a suitable way of structuring the causal and indirect relationships with randomness and uncertainty aspects such as electricity price [24]. so, to develop insights into the economic impacts of electricity pricing, we present a dynamic model that provides useful policy implications for iran’s future emission reduction, as there was a substantial increase in the installed capacity of non-fossil fuel technologies in the period under study. indeed, reducing ghg emissions of power plants by increasing the share of non-fossil energy to 20% is key for iran to meet its targets in paris accord. 3. model this section provides a general model representing iran’s electricity pricing that can be applied to the proposed pricing method of power plants owners, and its integrated system dynamics model has three subsystems: production, demand, and price. in order to understand the effect of technological and economical motivators on the whole electricity sector, it is important for the new non-fossil fuel and conventional capacities to be able to adequately serve the increasing electricity demand of the country. apart from what is affected by the market, these motivators affect the produced energy and certificate prices. we investigate the effective management of non-fossil fuel power plants expansion in iran’s electricity supply system on its (electricity) pricing mechanism. so, our model is designed by following a principle similar to the one in klaus-ole vogstad’s phd thesis [25] where a complex system is divided for clarifying the sectorial interactions. through a review of the existing literature, the causal relationships of electricity pricing considering the share increase of non-fossil resources are presented, and after selecting other causal variables, causal loop diagrams (clds) of modules will be constructed. after a qualitative examination of the causal relationships, three modules are derived, and the required data are applied in causal relationships followed by the formulation of these relationships in the next stage. finally, the integrated stock-flow diagram will be developed. nevertheless, this study’s objective is to investigate the non-fossil fuel certificate policy with the time horizon of 2020-2030 (the paris accord timeline). 3.1 production module the production module is constructed to model the supply side of electricity energy system associated with fossil and non-fossil resources as shown in fig. 4. as can be seen, the new power plant investments are based on investors’ expected profitability of the new capacity, which is influenced by price variation, capital 96 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 costs, o&m costs, fuel costs, and capacity factor. increasing the expected price and capacity factor soar the expected profit, and conversely, increasing costs decreases it. variations of profit versus total costs will affect the rate of return and investments of power plants. so, capacity expansion has two delays: 1) requesting a construction permission, verification, and confirmation receiving, 2) time required for investing in new power plant capacity. these two mentioned delays have been considered in the proposed cld of the production module. since capacity will grow with investment, the utilization of current and new power plants is a function of capacity and capacity factor, and is in a direct relationship with electricity price and total costs (o&m, capital, and fuel costs at fig. 3). in this module, we considered 13 various competing generation technologies (see table 1) which were divided into two categories: fossil and non-fossil fuel power plants. using the capacity of these technologies depends on their profitability and new investments in capacity. 3.2 demand module the demand module aims at clarifying the causal path from the electricity consumers’ behavior to factors affecting electricity price that comprise the affordability aspect of the energy market, as shown in fig. 5. according to fig. 5, demand variation in the electricity market is a function of price factors (price ceiling and price elasticity of demand) and real factors in economics (growth rate), with price having a negative effect and real factors having a positive effect on demand. a rise in demand increases the demand to generation ratio (d/g), leading to electricity price soaring which in turn results in decreasing the demand in the next feedback. furthermore, demand also relies on external factors such as weather (temperature), which affects the level of generation. on the other hand, price is the main feedback between the demand side and the supply side, which is described through the price elasticity of demand measured on a yearly basis. for modeling future development in our model, a fixed growth rate is considered exogenously for the demand module, which is a representation of iran’s economy demanddemand to generation ratio price variation equilibrium price electricity generation investment expected trend of price efficiency of power plant expected profitability of new capacity capacity factor taxoperational costs fuel costs + + + + capacity + + + ++ rate of return capital costs o and m costs + + feed in tariff figure 4: cld of the electricity production module international journal of sustainable energy planning and management vol. 29 2020 97 ali abbasi godarzi, abbas maleki t ab le 1 : t ec h n ol og ic al f ea tu re s of p ow er p la n ts i n e le ct ri ci ty s u p p ly s ys te m [ 26 , 27 , 28 , 29 , 30 , 31 ] n o . t ec h n ol og y c ap it al co st ($ /k w ) f ix ed o & m ($ /k w ) v ar ia b le o & m ($ /m w h ) e ff ic ie n cy (% ) p la n t li fe ti m e (y ea r) p la n t fa ct or (% ) s el fco n su m p ti on (% ) d ec re as in g ra te o f in ve st m en t co st ( % /y ea r) u p p er l im it o n n ew ca p ac it y ad d it io n sa (m w /y r) t yp e b 1 s te am p ow er pl an t 11 00 9. 4 0. 48 41 .2 30 75 6. 8 0 0 f 2 r ec ip ro ca ti ng en gi ne ( d g ) 80 0 8 5 40 –4 5 10 80 0. 7 0 11 9– 81 1 f 3 g as t ur bi ne 55 0 4. 4 0. 64 34 .3 –3 8. 9 12 70 0. 8 0 0 f 4 c om bi ne d cy cl e pl an t 76 0 4. 3 0. 41 50 –5 5 30 80 1. 9 0 0 f 5 d ie se l ge ne ra to r 55 0 3. 8 0. 74 33 10 70 6. 5 0 0 f 6 c on ve nt io na l co al pl an tc 16 00 64 0 35 .3 30 85 5. 5 0 0 f 7 a dv an ce d su pe rc ri ti ca l co al 37 00 88 0 46 –5 0 40 85 5. 6 0. 7 0 f 8 l ig ht w at er re ac to rd 48 00 92 0. 5 31 40 80 10 0 0 f 9 s ol ar p ho to vo lt ai c 40 00 50 0 0 25 25 0 3 48 –6 70 n f 10 s m al l hy dr op ow er 20 00 14 0 0 40 50 0. 5 0 19 2 n f 11 l ar ge h yd ro po w er 15 00 10 .8 0 0 50 15 0. 5 0 10 80 n f 12 w in d tu rb in e (o ngr id )e 15 00 48 0 0 20 30 1. 4 1. 5 30 55 n f 13 e xp an si on t ur bi ne 78 0 30 0. 45 0 15 70 0 0 11 5 n f a a n up pe r li m it o f a te ch no lo gy f or m ax im um c ap ac it y of i ts p ow er p la nt t ha t is i m po se d on t he m od el . b t yp e of t ec hn ol og y is p re se nt ed t ha t f i s re la te d to t he f os si l fu el s an d n f i s no nfo ss il p ow er p la nt s. c t he c ou nt ry w il l co ns tr uc t ca pa ci ty o f th is t ec hn ol og y ab ou t 65 0 m w u nt il 2 03 0. d a cc or di ng t o nu cl ea r sa nc ti on t ha t w er e im po se d on c ou nt ry , it c ou ld b e on ly i ns ta ll 1 00 0 m w c ap ac it y of t hi s te ch no lo gy s im il ar t o b us he hr ’s n uc le ar p ow er p la nt u nt il 2 03 0. e b as ed o n ca pa ci ty f lu ct ua ti on s of w in d tu rb in e in t he c ou nt ry , ca pa ci ty o f th is t ec hn ol og y w il l be f iv e ti m e un ti l 20 30 . 98 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 3.3 price module the price module focuses on management of electricity price formation in the energy market, which includes total demand and total supply with consideration of import and export, as shown in fig. 6. power plants should come up with an accurate estimate of the required power to supply the total electricity demand. on the other hand, offering electricity to the market with a lower price than the real one is a major reason for a rise in the energy consumption rate, with the difference between two prices being paid by the government as subsidy, which is a subject of controversy in iran. nevertheless, price variations are not considered as a driving force, and its value is assumed about 6cents/kwh in different scenarios [32]. to determine electricity price, generation scheduling of each unit can be performed as separate optimization tasks, allowing optimization across utilities’ production systems, with import being considered as external provision. 3.4 integrated module we integrate the three modules into the cld, and develop the stock and flow diagram as shown in fig. 7. price ceiling effect of price on demand price of electricity price elasticity of demandequilibrium price capacity factor demand demand to generation ratio demand growth rate electricity generation capacity + + + + + + + + figure 5: cld of the electricity demand module export demand of electricity domestic demand price of electricity supply of electricity generationimport price of electricity market price ceiling average annual price forecasting of next years + + + + + + figure 6: cld of the electricity price module international journal of sustainable energy planning and management vol. 29 2020 99 ali abbasi godarzi, abbas maleki in order to check the structural consistency and validity of the model, verification tests and some new important causal paths are utilized to explain the real electricity pricing mechanism. after the addition of the new causal paths, the final structure of the model is presented according to these modifications. commonly, reviews show that price adjustment time, price index, and demand to supply ratio should be inserted into a balanced loop between supply and demand for electricity pricing. electricity demand has a direct impact on the demand of non-fossil fuel energies, as well as to some extent on the demand of oil, coal, natural gas, and nuclear energy. furthermore, we considered a certain share of non-fossil fuel power plants in electricity generation for modeling the exogenous effect of these energies on the final electricity price. attracting private investors is a very crucial issue in electricity market. the government should provide sufficient support through allocation of incentives to attract them to constructing power plants, especially non-fossil fuel ones, to cope with the growing electricity demand in the future. these investment motivators are considered in the “feed-in tariff”, “fuel costs”, and “tax” parameters whose values will affect both operational costs and expected profitability of new capacities. 3.5 greenhouse gas emissions in this paper, ghg emissions are evaluated based on co2 equivalent concept estimated by the eq. 1: where λi.co2, λi.c, λi.n2o, and λi.ch4 are emission factors of co2, carbon, n2o, and ch4, respectively. eq. 1 is a measure of how much energy the emission of one tonne of a certain gas will absorb over 100 years relative to the emissions of one tonne of co2. moreover, in eq. 1, relation factors α, β, γ, and δ are 1, 3.7, 265, and 28, respectively [33]. in this paper, the mentioned emission factors in eq. 1 have been valued based on real data collected from various installed power plants in iran (as shown in table 2). our model has a nonlinear and complex structure that will cause some difficulties for investigators in describing demand, production, and pricing principles of the above modules. therefore, we implement our model in vensim software [34]. the details of the models and principle equations are presented in appendix a. 2 2 4. . . .i i co i c i n o i ch λ αλ βλ γλ δλ= + + + (1) p ric e o f e le c tric ity p rice va ria tion p rice a djustme nt t ime p rice inde x e ffe ct of de ma nd pe r supply ba la nce on price + p rice se nsivity of de ma nd pe r supply ba la nce d e ma nd p rice e la sticity of de ma nd d e ma nd pe r supply ba la nce + + r e fe re nce price s upply g e ne ra tion p rice e la sticity of supply + import coe fficie nt d e ma nd to ge ne ra tion ra tio price variation 0 e quilibrium price e le ctricity ge ne ra tion inve stme nt e xpe cte d tre nd of price e fficie ncy of pow e r pla nt e xpe cte d profita bility of ne w ca pa city c a pa city fa ctor t a x o pe ra tiona l costs f ue l costs + + + c a pa city + + + ++ r a te of re turn c a pita l costs o a nd m costs + -+ f e e d in t a riff p rice ce iling e ffe ct of price on de ma ndp rice of e le ctricity 0 p rice e la sticity of d e ma nd 0 e quilibrium price 0c a pa city fa ctor 0 d e ma nd 1 d e ma nd to ge ne ra tion ra tio 0 d e ma nd grow th ra te e le ctricity ge ne ra tion 0 + + + + + + e xport import + + + + + + s ha re of nonfossil pow e r pa lnts + e mission fa ctors t ota l e missions d e via tion from ira n’s p a ris a ccord ta rge ts e mission e la sticity + ++criteria cop21 figure 7: stock and flow diagram of the integrated model http://λi.co http://λi.ch 100 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 3.6 validation in order to test the model, we examine how the model output fits the historical data by performing the behavioral reproduction test. as shown in fig. 8 and fig. 9, for two modules (production and demand) from 2007 to 2018, our model-simulated behavior well matches the behavior of the real system. also, by comparing the data in the time horizon mentioned above, statistical error values, such as mean average error (mae) and root mean square percentage error (rmspe), were evaluated in our model based on eq. 2 and eq. 3. where ri and si represent real value and the simulated value of i, respectively, and n represents the quantity of the data. the values of mse and rmspe for the production module are 3.38% and 3.59%, respectively, with their values for the demand module being 4.37% and 4.54%, respectively. our model has good conformity to historical trends. all efforts in r&d, competition of technologies, and government’s laws in the energy sector are reflected as changes in electricity demand and production. indeed, if 1 1 n i i ii r s mae n r = − = ∑ (2) 2 1 1 n i i ii r s rmspe n r =  −  =   ∑ (3) 710 760 810 860 910 960 1010 1060 1110 1160 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 e le ct ri ci ty p ro du ct io n (p j) real simulated figure 8: simulated and real electricity production in iran’s energy system table 2: pollutant and ghg emission factors in iran power sector by power plant types for the year 2017 (gr/kwh) [3] ownership type of plant co2 c n2o ch4 governmental sector steam 684.874 186.784 0.002 0.015 combined cycle 493.708 134.648 0.001 0.010 gas 832.395 227.017 0.002 0.016 diesel 811.159 221.225 0.007 0.033 private sector steam 680.974 185.720 0.001 0.012 combined cycle 497.376 135.648 0.001 0.011 gas 752.758 205.298 0.002 0.015 international journal of sustainable energy planning and management vol. 29 2020 101 ali abbasi godarzi, abbas maleki behaviors of these module outputs are reproduced by the final model, this model passes the behavior-reproduction test [35]. error values obtained by this test confirm the validity of the results. 4. system simulation and results one of the main weaknesses of the existing system dynamics models in the literature is the unstructured process of policy scenario development. through a structured process, we can apply a common view of the future of non-fossil fuel power plants to finding the plausible combination of modules, and then to developing scenarios [36]. electricity producers are managing two types of electricity production: traditional (fossil) and renewable (non-fossil) resources. based on electricity market price, the capacity mix of non-fossil fuels and traditional resources will be defined. since a simple relationship between electricity production, demand, and price cannot be obtained, we tried to derive such a relationship by considering two performance measures: first, promoting non-fossil fuels to reduce ghg emission from electricity production. second, bringing the attention of electricity producers to the economic gains of renewable generation. according to the environmental and economic factors of developing iran’s electricity supply system and to determine the conditions under which the electricity 545 595 645 695 745 795 845 895 945 995 1045 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 e le ct ri ci ty d em an d (p j) real simulated figure 9: simulated and real electricity demand in iran’s energy system production system meet the paris accord target by 2030, four possible1 scenarios defined by varying share percent of non-fossil fuel power plants. wide range of share percent is chosen in order to assess electricity price in increasingly ghg emissions models. the reference scenario has a 5% share of non-fossil resources in the power plant sector, describing the iran’s energy system status quo (in 2018). the “nonfossil fuels 1 (nff1)” with a 10% share presents a low growth of non-fossil fuels in the electricity production system. such an ineffective policy and unfavorable conditions would exacerbate energy efficiency and the state of infrastructure. “non-fossil fuels 2 (nff2)”, the medium scenario, corresponds to the average of share percent, nff3 scenario corresponds to the upper limit of share percent, and nff1 scenario corresponds to the lower limit of share percent. in nff2 scenario, non-fossil fuels have a 15% share of the electricity supply. moreover, “nonfossil fuels 3 (nff3)”, where non-fossil fuels have a 20% share, demonstrates a high growth in electricity production and it is an optimistic scenario that can be applied to iran’s future energy supply system. almost all foreseeable scenarios for the futures fall between the nff1 and nff3 scenarios. an overview of the four mentioned scenarios is presented in table 3. 1 in this paper, the base year, time of scenario implementation, and time horizon are selected at 2017, 2020, and 2020-2030, respectively. 102 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 in fact, we have set up a method to simulate the energy system for achieving the long-term goals of iran’s paris accord targets, which consists of economic, environmental, and social goals. in short, the investment policy will change energy prices which are considered constant (or compounded with inflation) in applying investment decisions. so, in this paper, we integrate long-term investment decisions and short-term operational features. if we try to estimate the electricity price in the future with the reference scenario, where non fossil fuels have a 5% share, we can see that between 2020 and 2030, the price is stable and has a routine profile in each year (fig. 10). as shown in fig. 10, the electricity price peaks in the 5th month (august) of each year due to the rise in demand in this month, with a growth rate of about 3% for each year. conversely, the electricity price has reached its lowest in the 8th month (november) of each year that has the lowest electricity demand. however, after this month, the price witnesses a sharp increase, with its variation also substantially increasing, which happens because the increased demand must be supplied. this pattern is repeated through years between 2021 to 2030. also, this estimation is done for the other scenarios, and the result are shown in fig. 11. as shown in fig. 11, the reference scenario has lower electricity prices than other scenarios, but does not mitigate the increase in prices in the time horizon. this trend can also be viewed in other scenarios, with the maximum value of electricity price occurring in nff3 scenario which is 2.54 cent usd/kwh at 2030. the growth in price indicates redundancy in supply capacity (increase in wind, hydro, solar and expansion turbine), therefore reducing the usage of fossil fuels. this happens because the share of the mentioned non-fossil technologies has been increasing in the period under study, and ghg emissions will probably have lower values in different scenarios compared to the reference scenario. so, in order to encourage investments in renewable capacity and sustain the development of traditional capacity in the electricity generation sector, it is essential to reform the current electricity price and apply the following price pattern (fig. 11) which will develop a proper business model for electricity producers. however, choosing between nff1, nff2, and nff3 patterns is also dependent on ghg emission reduction table 3: scenario features and their assumptions scenario growth grade share percent variations as driving force time horizon reference – no change from 5% 2020–2030 nff1 low 5% – 10% 2020–2030 nff2 medium 5% – 15% 2020–2030 nff3 high 5% – 20% 2020–2030 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 1 2 3 4 5 6 7 8 9 10 11 12 e le ct ri ci ty p ri ce (c en t u sd /k w h) time (month) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 10: electricity price variations in reference scenario on monthly basis international journal of sustainable energy planning and management vol. 29 2020 103 ali abbasi godarzi, abbas maleki for attaining the paris accord targets. the variations of this reduction are presented in fig. 12. in the beginning of the time horizon (2020), the amount of greenhouse gas emission is 193.75 mt of co2eq. in the reference scenario, it will reach 292.01 mt of co2eq with an average growth rate of 4.2% until 2030. thanks to ghg emission reduction policies, by increasing the share of non-fossil fuels, it is expected that ghg emissions plummet to 213.92, 188.83 and 178.23 mt of co2eq in nff1, nff2, and nff3 scenarios, respectively. as a result, if the government adopts nff3 scenario, realizing the paris accord targets would be feasible. based on fig. 12, ghg emission in the reference scenario is increasing substantially over time due to the large share of fossil fuels in electricity production. moreover, in this scenario, the deviation from cop21 criteria is about 106.01 mt of co2eq, which signifies the 1.4 1.6 1.8 2 2.2 2.4 2.6 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 e le ct ri ci ty p ri ce (c en t u sd /k w h) reference nff1 nff2 nff3 figure 11: average electricity price variations in different scenarios on monthly basis 170 190 210 230 250 270 290 310 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 t ot al e m is si on (m t. c o 2) reference nff1 nff2 nff3 cop21 criteria figure 12: the total ghgs emission in different scenarios 104 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 importance of focusing on decreasing the share of pollutant technologies, such as steam power plants, and increasing the share of combined cycle and non-fossil resources. in nff1 scenario, ghg emission deviation has decreased to 27.92 mt of co2eq, but has not met cop21 criteria. indeed, applying a 5% increase in the share of non-fossil technologies in electricity production in this scenario could decrease emissions of high ghg-emitting power plants but is not sufficient for satisfying the paris accord targets. however, ghg emissions have followed an upward trend after 2026 and the gradual growth the share of non-fossil fuels falls short of controlling this increase. in nff2 scenario, the deviation optimistically falls to 2.83 mt of co2eq above cop21 criteria, and it is proven that increasing the share of non-fossil resources in electricity production is necessary for ghg emission mitigation, thus contributing to achieving the paris accord targets. however, total emissions start rising after 2028, therefore stopping the government from realizing cop21 criteria in the accord deadline using this scenario. the government is aware of the challenges and is seeking a number of reforms in electricity price to improve the performance of non-fossil power plants, including private sector in the generation of green electricity and implementation of a power pool in a competitive market. based on 2.36 cent usd/kwh of electricity price in nff2 scenario in 2030, formation of this market can effect on decrease of ghg emissions. although, attain 15% share of non-fossil power plants that will cause to emit only 2.83 mt of co2eq above cop21 criteria, is acceptable in this environmental accord. as a result, in the final scenario, nff3, the deviation from cop21 criteria drops to 7.77 mt of co2eq under iran’s paris accord targets, following a declining trend until 2030. so, by adopting the policies for reaching a 20% share of non-fossil technologies, iran can meet its paris accord targets, and this achievement will be sustainable even after 2030 (the paris accord deadline) and tackle rising ghg emissions with 2.54 cent usd/kwh of electricity price. furthermore, price elasticity of emission is one of the main indicators of the amount of ghg emission relative variation versus electricity price relative variation, presenting the amount of ghg that would be emitted for increasing the electricity price to improve the share of non-fossil fuels. it is evaluated according to the following equations. where εe, ∆e, ∆p, e, and p are price elasticity of emission, emission variation, price variation, emission average, and price average in the calculation period, respectively. this equation is applied to different scenarios, and the results are presented in table 4. in the reference scenario, the share of non-fossil fuels did not change, so the calculation of εe is undefined. based on table 4, the average values of εe for nff1, nff2, and nff3 are 0.1, 0.17, and 0.19, respectively. in fact, nff3 scenario has both the highest variation in the share of non-fossil resources in electricity production and the price elasticity of emission. nevertheless, εe should increase in this scenario compared to the two previous ones, meaning that it is possible to achieve iran’s reduction target (according to its indc) as stated in the paris accord. it should be noted, however, that the difference between nff1 and nff2 scenarios is larger in terms of εe mainly due to the high expansion of non-fossil technologies. thus, one unit change of electricity price in nff3 scenario leads to a 190,000 tonnes of co2eq decrease in ghg emissions. so, by considering only the environmental efficacy of the energy supply improvement by non-fossil resources, it is fair to conclude that iranian price policies are effective for emission reduction. another notable finding is the higher emission elasticity of iran’s electricity market in nff3 scenario that can diffuse more share of non-fossil resources in the market. indeed, after 2027 (table 4), εe increases and the tendency of the electricity market to change price for emission reduction soars. in 2027, electricity price in nff3 scenario will reach to 2.34 cent usd/kwh that is near to / /e e e p p ε ∆ = ∆ (4) table 4: price elasticity of emission in different scenarios at various time periods scenario 2020– 2021 2021– 2022 2022– 2023 2023– 2024 2024– 2025 2025– 2026 2026– 2027 2027– 2028 2028– 2029 2029– 2030 nff1 0.01 0.06 0.10 0.03 0.09 0.10 0.27 0.03 0.24 0.14 nff2 0.17 0.13 0.31 0.17 0.14 0.07 0.10 0.20 0.28 0.19 nff3 0.30 0.20 0.22 0.11 0.19 0.10 0.22 0.06 0.20 0.28 international journal of sustainable energy planning and management vol. 29 2020 105 ali abbasi godarzi, abbas maleki this price in nff2 scenario at 2030. according to higher emission elasticity in nff3 rather than nff2, increasing of electricity price in nff3 cause to decrease ghg emissions between 2027 and 2030 and cop 21 criteria will available for iran. but because of less value of εe, this action will not occur in nff2 and decreasing of ghg emissions will stop at 2.83 mt of co2eq above cop21 criteria. this approach puts emphasis on proposing appropriate policies contributing to the competitiveness of non-fossil resources, considering εe, that leads to the environmentally sustainable development of the electricity supply system, which can be done through reforming the current electricity market price. 5. conclusion and policy implications this study investigates the expansion policy of non-fossil fuels and its impact on ghg emission reduction and the electricity market to meet paris accord targets. for analyzing the practicality of this method and its implications, four scenarios with various growth rates of non-fossil technologies were presented: reference, nff1, nff2, and nff3. if the private sector could be encouraged to invest in these low-carbon power plants by reforming the electricity price, nff2 scenario with a 5%-15% expansion of non-fossil technologies is suitable for the mid-term development of the power plants for ghg emission reduction and electricity price must be increased to 2.36 cent usd/ kwh by 2030. although ghg emissions in this scenario is about 10.60 mt of co2eq over cop21 criteria, the average value of emission elasticity in this scenario is 0.17 and the policy maker can decrease 170,000 tonnes of co2eq with a single unit increase in electricity price in each year (between 2020-2030). in nff3 scenario electricity price will increase to 920 irr/kwh that is about 0.18 cent usd/kwh over nff2 in 2030. on the other hand, nff3 scenario with a 5%–20% expansion of non-fossil technologies decreases ghg emissions to 178.23 mt of co2eq (7.77 units lower than cop21 criteria) which will keep its downward trend in the long run even after 2030, and the government is assured that the paris accord targets would certainly be achieved. as a result, a 15% share of non-fossil fuels is considered as the driving force to decrease ghg emissions (in nff2), but it individually fails at decreasing emissions for successful achievement of the paris accord targets. the share of non-fossil fuels must be increased to 20% (nff3), especially while emission elasticity in this scenario is higher than nff1, nff2, and the reference scenarios. however, there are many barriers to the successful implementation of nff3 scenario, the main ones being underpricing the input fuel for power plants and low fits for renewable energies. therefore, the government must modify the performance of the generation sector by reforming electricity price and developing a competitive market in order to attract the private sector to invest in the expansion of non-fossil technologies as low-emission power plants. without tackling these issues, the impact of reform attempts is temporary, and after a while, ghg emissions start following a rising trend. based on the presented results, the policy makers must decide to apply energy price reform to iran’s electricity market to develop a suitable plan for reducing the emission of the power plant sector. on the other hand, in the current dynamics model, the uncertainty of fuel prices is not considered, which can be added to the relevant equations in future works. furthermore, other pollutant sectors such as transport and industry (see fig. 1) can be investigated by similar approaches. acknowledgement 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[37] østergaard, p.a.; johannsen, r.m.; duic, n. sustainable development using renewable energy systems. int. j. sustain. energy plan. manag. 2020, 29, http://doi.org/10.5278/ ijsepm.4302. https://www.iea.org/publications/freepublications/publication https://www.iea.org/publications/freepublications/publication http://www.iea.org/publications/freepublications/publication/hydropower_essentials.pdf http://www.iea.org/publications/freepublications/publication/hydropower_essentials.pdf https://doi.org/10.1016/j.energy.2015.08.107 https://doi.org/10.1016/j.energy.2015.08.107 https://vensim.com/vensim https://vensim.com/vensim https://doi.org/10.1016/j.enpol.2012.10.074 https://doi.org/10.1016/j.enpol.2012.10.074 https://doi.org/10.1108/eum0000000002725 https://doi.org/10.1108/eum0000000002725 http://doi.org/10.5278/ijsepm.4302 http://doi.org/10.5278/ijsepm.4302 108 international journal of sustainable energy planning and management vol. 29 2020 policy framework of non-fossil power plants in iran’s electricity sector by 2030 appendix a the main equations that describe system dynamics model used in this papers, are presented below: eq. a 11 t t tp p price change dt+ = + ∫ eq. a 2 i t tp pprice change at − = eq. a 3 * se r r r p s s es s p   = =     eq. a 4 * de r r r p d d ed d p   = =     eq. a 5*it t pp p eb= eq. a 6 s p d eb f s   =     eq. a 7( )1 tt t t ceilingp p price change dt p+ = + ∫ ≤ eq. a 8( )1 1 0 1t tceiling ceilingp p whereα α+ = + < ≤ eq. a 9 [ ]12*12 12*12 12*12 @ 2018 . . input matrix s d p= eq. a 10[ ]12*12 @ 2019 2030 output matrix p −= eq. a 11. . i t i t p cf oc = eq. a 12. .. . . i t i t i t i t i t fc so oc t ef − = + _ref24840863 690-3532-1-le.qxd introduction albania, a small european country with 2.831 million inhabitants [1], is making every effort to develop its international journal of sustainable energy planning and management vol. 05 2015 3 democracy and free market economy. working towards these goals has not been without its challenges, and the country has faced many barriers and difficulties that 1corresponding author e-mail fbidaj@yahoo.com international journal of sustainable energy planning and management vol. 05 2015 3–14 evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania ������� ��� ����������������������������� �� � ����������� ����������� ������� ����� ��� �� ���������� ����������� �������� ����������� ����������� ������� ������� ������ ���� ����� ��� �� ������������ ����������� �������� ����������� ����������� ������� ������� ����� ��� �� ������ ��� �� ��������� ������� ����������� �������� �� ��! �"�� !����� ##$� %������� &�� �'%'�' �� ������ $������ ��� �� ������(��������� ����� �� &���������� $� �'%'�' abstract albania’s residential sector represents a large share of the country’s energy consumption, especially of electric power. other important characteristics of the sector include a fast growing energy demand and a high level of energy losses, which challenge the possibility of sustainable development. the electricity losses, being 29–52 % of total electricity supplied, consist of both technical and nontechnical losses (theft and unpaid electricity). a large share of the electricity demand is used for heating purposes – a demand that could potentially be met in a more energyefficient manner. however, the precise portion of electricity used to meet heat needs is unknown. the main objective of this article is thus to determine the share of electricity used for heating in the largest albanian city. based on a sample of households in tirana, a statistical model is established and applied to perform a regression analysis to derive an estimation of household electricity demand. the heating share of the domestic electricity consumption is then quantified using additional information validated by actual measurements. the distribution of the electricity consumption data is better understood through an analysis of heat-related electricity consumption. additionally, the monthly relative share of household electricity consumption reveals the number of households with electricity demand above the monthly 300 kwh limit established by the albanian energy regulatory authority, which, if exceeded, triggers a higher electricity tariff. during 2011, 67% of the sample’s households resulted with higher monthly average electricity consumption than this limit, with a slight reduction to 64 % in 2012. it is suggested that household electricity consumption will continue to grow in the near future, due to rising incomes and changing climatic conditions that are influencing the amount of heat used by albanians, who rely primarily on electricity to heat their homes. this situation has been impacted by the high system losses and high migration rate from rural to urban areas, including emigration abroad, and distorted energy prices. in tirana county, only 31% of the households use wood for heating, usually due to a lack of electricity. keywords: household energy consumption; regression analysis; heating energy policy. url: dx.doi.org/10.5278/ijsepm.2015.5.2 4 international journal of sustainable energy planning and management vol. 05 2015 evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania have affected and influenced this transition. the energy sector is greatly affected by this transition, so it is important to understand the larger albanian context as it pertains to the complex energy sector. to better understand albania’s energy situation, it is useful to examine certain economic and energy indicators for the country and the region. two of these are shown in figures 1 and 2. these graphs reflect the fact that albania is a poor country even relative to neighbouring countries, and that it consumes less electricity per capita than its neighbouring countries. however, the figures also reveal that both of these indicators have grown annually since 2006. the electricity consumption of the residential sector relative to total electricity consumption in albania is similar to the average of the 27 countries in the eu [8], while in absolute terms (per capita electricity consumption) the albanian residential sector consumes less power than other eu countries. for instance, among neighbouring countries, the average consumption of the residential sector as a portion of total electricity consumption is 34% for greece, 48% for macedonia and 53% for serbia [9]. the nontechnical losses level explains the difference seen in albania. the specific energy sources that comprise the albanian energy consumption are shown in detail in figure 3, which reflects a fairly constant ratio of the various energy sources over the past decade [3]. during these past ten years, oil has remained the dominant source of energy, while natural gas has played a very minor role, only representing 0.2% of total final energy consumption in 2012. national electricity generation has been dominated by hydro power in recent years. since 1990 until now, albania has been a net importer of electricity, with the exception of 2010. the net import of electricity for 2011 through 2012 was 42% of total final electricity consumption. figure 3 presents the national balance of the final energy consumption by the primary energy sources. the electricity share includes electricity production by hydro power. to understand which sectors are using energy in albania, a breakdown of energy consumption by sector in 2012 is shown in figure 4. 2012201120102009200820072006200520042003200220012000 0 5,000 g d p /c a p , (c o n st . 2 0 11 $ /c a p ) 10,000 15,000 20,000 25,000 30,000 35,000 albania macedonia croatia montenegro greece serbia kosovo turkey figure 1: comparison of gdp/capita for eight selected balkan countries [2]. 100 90 80 (p j) 70 60 50 40 30 20 10 0 1998 2000 2002 2004 2006 2008 2010 2012 lignite oil natural gas fire wood others figure 3: albanian annual final energy consumption [3]. transport 37% services 14% industry 17% households 27% agriculture 5% figure 4: distribution of primary energy supply on demand sectors in albania 2012 [4]. 20112010200920082007200620052004 0 1000 2000( kw h /c a p .) 3000 4000 5000 6000 7000 albania macedonia croatia montenegro greece serbia kosovo turkey figure 2: comparison of per capita electricity consumption for eight selected balkan countries [2]. as seen in figure 4, households represent the second largest energy-consuming sector in the country, underscoring the importance of understanding residential energy-use characteristics. in general households in albania do not have access to a natural gas network, which greatly influences household energy consumption as other types of energy resources are used instead. electricity is a main source (see next paragraph) while the other energy sources used in albanian households include wood and propane, but their use is largely limited to rural areas. while propane/lpg is used mainly for cooking purposes, especially in urban areas, wood is used for heating purposes and in industrial thermal processes. the contribution of wood in total energy consumption is estimated to be 10.28%. the 2012 albanian electricity production and consumption can be seen in figure 5. households in albania were responsible for 54% of the electricity demand2, reflecting the heavy reliance on electricity as household energy sources. this was confirmed in a 2011 census [6] of albanian households, which are indeed responsible for the majority of the nearly 8 twh of electricity supplied annually [5]. the service sector ranks second with 23% of electricity consumption, followed by the industrial sector with 20%. the agricultural sector only accounts for 1% of consumed electricity [7]. one notable characteristic of albania’s electricity use is the major electricity losses, which amounted to 41% of the total electricity production in 2012 [8]. the electrical losses are due to: • technical losses in the high voltage (transmission) network or in the low voltage (distribution) network, due to losses in transformers and power lines; • nontechnical losses, which include: nonpayment, theft, etc. the majority of these losses occur in the residential sector. the losses have remained constant or increased over the years, and no reductions in losses have been seen in spite of the privatisation of the distribution network. although there is not an annual breakdown for electric power losses, it is accepted that technical electricity losses are 18–20 % [12] – thus; non-technical losses exceed technical losses. this situation of extensive losses has persisted for years, due mainly to the political and economic situation in the country. in albania, the success of a transition to a sustainable economy depends greatly on improving the energy sector, and electricity in particular. two critical indicators reflect the immense need for improvement in the albanian electricity sector: the mean electricity price in albania is higher than in some regional countries [10] as shown in the figure 6; and in certain years albanians have experienced significant electricity shortages, power failures, and planned power cut offs, up to an average of 3.4 hours/day in 2007 [12]. a better understanding of how electricity is used in albania, and where improvements could be made, is necessary. the main objective of this article is to help build a better understanding of albanian electricity use. based on statistical analyses, this article examines how much electricity is used by households, and how that electricity is used within homes, focusing specifically on heating and domestic hot water use. while the sample international journal of sustainable energy planning and management vol. 05 2015 5 flamur bida, ramadan alushaj, luela prifti anna chittum final users, 4.36, 55% techn & nontechn. losses, 3.25, 41% central use, 036, 4% households, 2.16, 27% others, 2.20, 28% figure 5: distribution of the albanian electricity consumption for 2012. amounts in percent and twh. total production is 7.97 twh. central use is on power stations [8]. 0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 e u r / kw h 0 eu regional albania electricity heating figure 6: average electricity and heat prices in 2012 in the eu, balkan region, and albania [10]. 2 in 2012, households consumed 2.16 gwh of electricity (paid) plus an estimated 1.95 twh (unpaid/theft) out of total ex works supply of 4.36 twh + 3.25 twh (see figure 5) and analyses are derived from data on tirana, the results are certainly valuable for the country as a whole. additionally, the methodology used is applicable to other countries as well. the sample to analyse electricity consumption in tirana, a sample of 72 urban households was constructed. monthly electricity consumption was measured for each household, and a calculation of the mean monthly and annual energy consumption was developed over a twoyear time period: 2011 2012. the sample’s households were chosen at random, without impacting individual consumer behaviours. only households that used electricity exclusively and paid for their own energy use were chosen. during the study period, household electricity prices remained constant. all the sample units were dwellings that lacked insulation, had single-pane glass windows, and were constructed between 1980 and 2010. the average number of dwellers per sample unit was 3.4. for geographical diversity, the sample units were chosen from ten of the in total eleven municipality units [13]. the sample did not include units from municipality unit 11, owing to its rapid and chaotic development, high informality, high levels of migration, and low rates of employment. it was thus not viewed as a “typical” municipality unit of the city. all of the sample data was reviewed in detail prior to being used in the larger statistical analyses. two units of the 2011 sample were rejected after being analyzed in detail. one of the rejected units had monthly electricity consumption of zero kwh, while the other had monthly electricity consumption that was not within the realm of expected values. upon verification, it was revealed that the electricity was used for other purposes. the final valid sample size was reduced to 70 household units for 2011. during the data validation process, specific attention was paid to ensure that the entire sample unit regularly paid their monthly electricity bills. in table 1 the sample households are shown, distributed by their monthly average electricity consumption in each year. in both sample years, more households fell into the 300-550 kwh per month consumption category than any other category. figure 7 shows which of the four categories of monthly electricity consumption during the study period was most prevalent in the sample. the inner ring shows 2011 categorization, while the outer ring shows 2012 categorization. the first two categories (of smaller consumption) increased by 1% and 2% in 2012 compared with 2011. meanwhile, the third category saw a reduction of 3% from 2011 to 2012. the fourth category remained almost unchanged. this indicates that the sample household units shifted slightly to the categories of lower average monthly electricity consumption from 2011 to 2012. this is a result of declining incomes caused from the effects of the regional crisis, which were more pronounced in households with lower incomes. to determine how much electricity was used for different purposes within the sample units, a regression analysis was applied to the sample. this analysis took 6 international journal of sustainable energy planning and management vol. 05 2015 evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania table 1. nr. of sample households, distributed by monthly electricity consumption, 2011:2012 month distribution (kwh) 0–100 100–300 300–550 >550 years '11 '12 '11 '12 '11 '12 '11 '12 january 1 2 11 12 30 27 28 31 february 2 2 17 13 30 30 21 27 march 1 3 19 18 30 29 20 22 april 1 3 19 26 36 33 14 10 may 3 4 21 25 35 27 11 16 june 4 4 25 27 32 35 9 6 july 2 5 27 34 34 26 7 7 august 4 5 33 37 26 24 7 6 september 2 2 30 31 31 31 7 8 october 4 8 17 20 33 32 16 12 november 4 2 16 17 30 34 20 19 december 3 2 10 14 29 33 28 23 into account the three major uses of electricity, examining 1) space heating; 2) domestic hot water (dhw); and 3) lighting and other appliance and servicerelated uses, such as refrigerators, electronic devices, cooking uses, washing machines, and miscellaneous uses. of the three major uses identified, the first two were determined to be the most important and the most in need of analysis. the share of total household electricity consumption attributable to space heating was evaluated using data on hot domestic water consumption and additional analysis of the monthly average electricity consumption collected in the sample. basic electric power meters were used to measure the electricity used for domestic hot water. the electricity used for lighting was derived by applying an accepted percentage to the total monthly consumption, while the electricity used for the refrigeration, appliances, and services mix was analysed as a constant based on consumption for may, a month in which there would be no electricity use for either heating or cooling. the model in general, household energy consumption is well studied. emphasis on the energy use of individual households often focuses on efforts to reduce individual household consumption, and policies and programs that can reduce greenhouse gas emissions associated with household energy consumption. despite the long history of household-level consumption analysis, households are complex energy users, and different cities, regions, and countries require different models to reflect and analyse energy consumption factors that are unique to certain regions or people. new models are also needed in order to assess the impact of energy efficiency and renewable energy programs and the adoption of related technologies suitable for residential applications. different models rely on different techniques and inputs, and different assumptions and scopes. of course each model has its strengths, weaknesses, and explicit purposes, yielding results with varying relevance and applicability to different household sectors. a good analysis of these various models is given in [14]. for household energy consumption, income and price elasticity have been studied very well. household energy consumption is viewed as a function of seven so-called energy functions: space heating, water heating, lighting, refrigeration, cooking, cleaning, and other services [15]. demand derived from each of these functions is determined by a set of driving factors. considering the electricity price as an important driver for energy policy, one study [16] has shown the influence of energy prices on domestic electricity demand elasticity. the main objective of the paper [17] is to show electricity end uses and the influence of low income family on their consumption. other studies have included the other factors. based on these studies, it is accepted than the energy consumption for heating is proportional with heating degree days (hdd) [18]. the other factors that influence energy consumption are: the number of occupants, home characteristics, energy efficiencies, etc [19]. some recent studies take into account the critical influence of human behaviour, and some focus on energy consumption within urban households due to high levels of energy consumption, as discussed in [20,21]. a rather different treatment of household energy consumption is explored in [22], where the “neural network” method was shown as capable of accurately modelling residential end use energy consumption. importantly, most studies have been converging on a model that finds household energy consumption to be highly dependent on household incomes, energy prices, home size, and local urbanization rates [23]. in this case the function of energy consumption is generally expressed by: (1) where: et is the residential electricity consumption, in kwh per capita; it is the real income per capita in eur, ln ln lne a a i a p a ut t t t t= + ⋅ + ⋅ + ⋅ +0 1 2 3 ε international journal of sustainable energy planning and management vol. 05 2015 7 flamur bida, ramadan alushaj, luela prifti anna chittum 2011, 29% 2012, 31% <100 kwh 5% 4% 22% 22% 45% 42% 100 to 300 300 to 550 >550 figure 7: relative frequencies of monthly electricity consumption by category, 2011:2012. generally found as gdp per capita; pt is the real electricity price in euro/ kwh; and ut is the urbanisation rate (in percentage of total population residing in urban areas); coefficients a1, a2, a3 are the constants, being respectively a1>0, a2<0, a3>0; εt is residual. the above model and others like this analyze the household energy consumption from an economic point of view, determining the energy burden for each family. economic models depend primarily on the relevant factors given in equation (1), but also on other parameters, such as weather conditions, number of new buildings, equipment, and building ownership (using historical data, etc). however, these models do not consider all the influencing factors, because the factors not only affect the energy consumption of residential buildings significantly, but they also interact and interconnect with each other. the proposed model [24] is based on total of 19 selected indicators, analyzing the correlations between the known energy consumption and each indicator. technical models are related to all the energy appliances. in this context the household energy consumption is expressed as the sum of final energy consumed by this household for energy use services: space heating, water heating, lighting, refrigeration, cooking, cleaning and other services. from these functions, some of them are less important, especially concerning their variations. the results [25] show that four of them need to be monitored and viewed as the most important factors. apart from the energy used for space heating, the energy used for dhw is one of the most important energy functions as it has been analyzed in detail through residential end use model (reum) [26]. a general linear model with two variables is used to analyze the electricity for space and water heating [27]. the household energy consumed by refrigeration can be accepted as constant because compressor technology has had a great effect on the performance and economy of domestic refrigerators [28]. although the lighting energy usage in residential dwellings is a function of more variables, as shown in study [29], its relative annual variation is small. for this reason it can be considered as constant as well, in addition to the rest of the so called energy factors. assessing energy consumption in households, by relying on this technical model, will help analyze and predict energy demand; increase energy efficiency; increase the use of renewable energy, and also determine the maximum electricity demand. drawing from the economic model, and based on the model described in [14], this study’s proposed model has the following basic form: (2) in equation (2): et is the monthly average electricity consumption during the year; eh is the electricity used for heating; eh,w is the electricity used for dhw; el is the electricity used for lighting in the household; and emx is the electricity used for other appliances in the household. the model is a linear equation, yielding an average monthly electricity consumption expressed in kwh. it does not consider variations in monthly energy consumption attributable to the other appliances. hence the fourth term in equation (2) is accepted as constant. in equation (2), the first three variables are proportionally dependent on heating degree days (hdd), which are implicated in the electricity consumption. in matrix form, equation (2) can be expressed in this form: (3) in the equation (3), ei denotes total average monthly electricity consumption; yi,1 denotes electricity consumed for heating; yi,2 denotes electricity consumed for dhw; and yi,3 denotes electricity consumed for lighting. the remaining terms are considered to be constants. the last term is the residual value and its value is set 0. index i denotes the respective month, ranging from i=1 for january to i = 12 for december; j is used for components of monthly electricity consumption, with j = 1 for heating, j = 2 for dhw and j = 3 for lighting ones. this model takes into account the weight of the factors mentioned before, including electricity used for dhw, which is determined by analysing real-time measurements of the energy consumption made at the inlet of electric supply for the boiler. so (yi,2), representing electricity attributable to dhw, is developed by elaborating on the data shown from the measurements. for electricity attributable to lighting, (yi,3), the energy consumption is developed by using a pre-defined share of the total household consumption, e e e y y y y y 1 2 12 1 1 1 2 1 3 2 1 2 2 ... , , , , , ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎟ = yy y y y 2 3 12 1 12 2 12 3 , , , , ..... ..... ..... ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠⎠ ⎟ ⎟ ⎟ ⎟ ⎟ ⋅ ⎛ ⎝ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ + ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ 1 1 1 1 2 12 c c c .... ⎟⎟ ⎟ + ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎟ ε ε ε 1 2 12 ... e e e e et h h w l mx t= + + + +, ε 8 international journal of sustainable energy planning and management vol. 05 2015 evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania which is 10%. the proposed model is better to use when electricity is mainly used for space heating and dhw as well. the weather-related values for the constant column (ci) are determined by monthly consumption data, where the hdd and cooling degree days (cdd) are equal to 0. according to equation (2), by measuring the electricity consumption for dhw and accepting the value for lighting and for the service mix, the average monthly electricity consumption used for household space heating can be determined. the results the sample and focus area of tirana county has household electricity consumption that mirrors that of the country as a whole, representing 34.3% [30] of albania’s total electricity consumption. this again underscores the importance of focusing on electricity use in this sector. prior statistical analyses performed for this function, as well as for the other functions, have demonstrated the difference between average and median as estimators. based on the regression analyses of the sample under this study, the average and the median of the monthly electricity consumption were derived. while the analyses and conclusions were based on the average estimator, the median was also taken into account. for both study years, the median values were lower than the average values for the monthly electricity consumption. using the derived average and median values for the sample units in this study, a histogram was developed, right asymmetric, reflecting the fact that the median value is lower than the average. aiming to more clearly understand the electric energy consumption in an average household, more attention is paid to the average than the median. the resulting findings reflecting the average monthly electric energy consumption are shown in the following figure 8. figure 8 shows the monthly average electricity consumption for one household within the sample of the tirana urban area, during years 2011 and 2012. the average annual electricity consumption for one household from the sample can be seen in figure 9. the figure 9 shows an increase of 7% in the average annual electricity consumption from 2011 to 2012 for the selected sample. the 7% increase in electricity consumption can be explained mainly due to the rising quality of life and from the noted variations in the number of hdd. the annual number of hdd is dependent upon average monthly temperatures, which directly influence household heat-related electricity consumption. the hdd values and definition for the tirana district (ura tabakeve station) are based on the international standards, mainly from the eu, referring to the standard temperature of 15 degrees celsius. the variation of the hdd and cdd for a 10 year period is taken into account. referring to equation (2), the monthly average temperature is the variable for the two first elements eh and eh,w, as well. additionally, reflecting the warming and changing tirana weather climatic conditions, annual household total energy consumption has begun to be influenced by the number of cdd as well. there is no reliable data on the use of air conditioners in apartments for cooling purposes, but a qualitative assessment can be made if the data reflects an average change of electric power demands in the albanian power system. based on the data it seems that the power on the summer-time period has not been reduced, but has in fact increased. if the average power international journal of sustainable energy planning and management vol. 05 2015 9 flamur bida, ramadan alushaj, luela prifti anna chittum 500 600 700 400 300 e le ct ri ci ty ( kw h ) 200 100 0 0 1 2 3 4 5 6 month y = 0.2217 x3 + 3.0651 x2 − 84.874 x + 721.73 r2 = 0.9827 y = 0.3779 x3 − 0.9584 x2 − 48.895 x + 597.83 r2 = 0.9827 2011 2012 figure 8: the monthly average electricity consumption for a household, 2011 and 2012. 6000 5000 4000 3000 2000 2011 5036 a n n u a l e le ct ri ci ty c o n su m p tio n (k w h ) 5382 2012 1000 0 figure 9: sample’s average annual electricity consumption for a single household, 2011–2012. rate in august compared with june 2007 was 0.88, in 2012 this ratio reached in 1.094, based on annual reports of the ere. a similar analysis can be done to observe the average monthly consumption values for the sample. this trend will likely be more evident in the near future, when heat pump systems begin to dominate many households and other factors change heating and cooling choices. a goal of this work was to understand how much electricity consumption within a household might be contributable to heating activities. analysing just the average annual electricity consumption for a household, even if normalized per square meter, would not reveal a full picture of heat-related energy use. such an indicator would not be useful because electricity attributable to space heating is not apparent and is a factor of many variables in addition to just a household’s energy use. by using equation (2) it is possible to determine the electrical energy consumption attributable to space heating uses. the two other equations, addressing dhw and lighting respectively, are needed. households in the sample have electric boiler systems that provide dhw. the energy consumption in households attributable to dhw varies within each month and within each annual period. a representative variation in monthly electricity consumption by one dhw system can be seen in figure 8. the data are based on measurements taken during monitoring activities in the sample households. the period of the dhw electricity energy measurements was from december 2010 to march 2013. as can be seen, less electricity is used to produce hot water in the warmer summer months than in cooler and colder ones. one important factor to consider in dhw use is water supply. the household sector of tirana does not yet have access to an uninterrupted fresh water supply. hence dhw system tanks hold 24 hours worth of water to ensure satisfactory supply. they are cold-water tanks with capacity ranges of 0.5-5 m3, which discharge to indoor electric boilers. however, the model does not consider the influence of solar radiation on the fresh water temperature in the tank. fresh water temperature is thus assumed to be constant. the parabolic equation, given in figure 10, shows that dhw electricity consumption depends on the outside temperature and human behaviour. the electricity consumption in households attributable to lighting varies each month during the annual period. this variation is given in figure 11, and is probably best explained by the increased hours of sunlight during the summer and adjacent months. by comparing the annual electricity consumption for single households in absolute terms, it is evident that electricity used for dhw is the single biggest use within a household, confirming its important role in any analysis of the residential sector. in this specific case, energy attributable to cooling during the summer months is not considered. therefore, for tirana and its specific climate, electrical energy attributable to dhw is the main variable in household electricity consumption, and comparable to the amount of electricity consumption attributable to heating. the variation range between maximum and minimum of this component, in absolute terms is 96.4 kwh in 2012. a different discussion could be done concerning the peak power demand, where the space heating and cooling are determining factors. the calculation to derive electricity consumption attributable to dhw for one family during the 2012 heating season is given in equation (4) below: (4) e e x x x h w t , . . . .= ⋅ − ⋅ − ⋅ +0 0004 0 0033 0 82 0 28013 2 10 international journal of sustainable energy planning and management vol. 05 2015 evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania 180 160 140 120 100 e le ct ri ci ty ( kw h ) 80 60 20 40 0 0 2 4 6 8 10 14 month 12 y = 2.9433 x2 − 39.281 x + 197.6 r2 = 0.9616 figure 10: average monthly electricity consumption by dhw system (one unit, 2012). 70 65 60 55 50 e le ct ri ci ty ( kw h ) 45 40 35 30 0 2 4 6 8 10 12 month y = −0.0223 x3 + 1.1747 x2 − 10.753 x + 62.421 r2 = 0.9825 figure 11: average monthly electricity consumption attributable to lighting (one unit, 2012). equation (4) expresses eh,w in relative terms. it is obtained by dividing the dhw monthly electricity consumption by the average monthly electricity consumption for a single household. as in other cases the “x” refers to the month. it is interesting to notice that the polynomial exponent is greater than 1. this reflects the fact that energy consumption for dhw cannot be considered a constant and instead depends on the outside air temperature and human behaviour. by turning our attention specifically to the 2012 heating season, and considering the existing model, it is possible to determine the electricity used for heating and its share for a single household in tirana. figure 12 presents the average monthly electrical energy used for heating during the 2012 heating season. in this figure 1 stands for november, 2 for december, etc., until 5 for march. the heating season for tirana spans 5 months (from november until march), and the estimated function for the heating-related electricity is applicable only for this heating period. the presence of a maximum is acceptable and in line with the climatic conditions of tirana city. the estimation of the electric energy used for seasonal heating by a single household is 1,164 kwh, calculated by adding together the average heating-related electricity consumption for the five relevant months. as a measure of a household’s total annual electric energy consumption, the share of the electricity attributable to heating was 21.63% for a single household unit in tirana during 2012. a breakdown of the annual average electricity consumption for a single household in relative and absolute terms is given in figure 13. in relative terms, the electric energy used to heat a single unit in the urban tirana area can be expressed by the estimated regression function: (5) equation (5) expresses eh in relative terms. it is obtained by dividing the monthly electricity consumption for every month during the heating period, by the respective average monthly consumption of electricity for a single household. it is a trendline, yielding a r2 = 0.9994. the high value of r2 shows that the cubic model expressed in function (5) explains 99.94 (%) of the observed variation in . the extent to which the points in the sample shown in figures 9, 10, and 11 deviate from the estimated line, suggest a very small value for the estimate of the variance σ2 of the random error term. there are several caveats and considerations to remember when considering these proposed functions. while figure 12 does not reflect that intra-month variation of electric power supplied to heating systems during the heating season, it is still important information for the demandside management (dsm) programs and efforts. as discussed in other cases such as [31], the monthly results derived can be used to help predict the impact of dsm programming in the residential sector in the first albanian climatic zone, where tirana is placed. equations (4), (5) can be used for the other cities aiming to determine the share of the heating and/or dhw electricity consumption, if total monthly electricity consumption information is known. due to the sample households’ location within the albanian climatic zone, and as a result of other factors, e e h t e e x x xh t = ⋅ − ⋅ − ⋅ +0 0006 0 0358 0 202 0 19853 2. . . . international journal of sustainable energy planning and management vol. 05 2015 11 flamur bida, ramadan alushaj, luela prifti anna chittum 350 300 250 e le ct ri ci ty ( kw h ) 200 150 100 0 1 2 3 4 5 6 month y = 6.5522 x3 − 84.922 x2 + 298.73 x − 24.049 r2 = 0.9758 figure 12: average monthly electricity attributable to heating only (one unit, 2012). mix: 2458.8; 46% heating: 1164.5; 21% dhw: 12204; 23% lighting: 538.2; 10% figure 13: the breakdown of absolute and relative annual average electricity consumption for single household, 2012 (in kwh and in %). household-scale heat pumps are expected to dominate future heating infrastructure investments. assuming fast penetration of these heat pump systems, the previously described model would be useful for future energy planning. on the other hand, annual increases in electric energy demand have also been influenced by an increase in cooling demand. while cooling demand has not been an important factor in this study or in analyses of electricity use in the past, its importance will increase in the near future. considering the electricity use profiles of the sample in this study, a combination of a heat pump and a solar thermal system, combined with household thermal insulation, would be an optimal and energy-efficient system design. many countries in europe offer examples of how to sustainably meet individual buildings’ heating needs. in particular, district heating systems could potentially offer sustainable solutions for both space heating and domestic hot water [32]. conclusions using a statistical model and an analysis of actual electricity consumption at the household level, an analysis of its findings yields some important conclusions that could influence energy policy design and future research relevant to electricity consumption patterns in the albanian climatic zone. these include: 1. the annual electric energy consumed by one household in the urban tirana area during 2012 is estimated to be 5,382 kwh, with a relative growth of 6.86% over 2011 consumption. this year-overyear rise is perhaps explained by an improving quality of life and changing climatic conditions and resulting human behaviour. 2. the proposed model can be used to undertake future energy research and to understand the influence of economic conditions on electricity consumption and vice versa. this model can help inform scenarios designed to model the impact of dsm programs, as it adequately considers the electricity consumption attributable to the operation of household-scale heat pumps. penetration of heat pumps with the average value of cop 2-3, will help reduce peak power demand in winter, but it is expected to increase annual energy consumption by 10% and power demand in summer as well. 3. on average, the electric energy used for heating during the 2012 heating season in tirana represented 21.63% of a household’s total annual electric energy consumption. 4. the results of the model show that electric energy used for domestic hot water is the largest single electricity use among households, representing the biggest share, at 22.7%, of total electricity consumption. this suggests that the impact of higher penetration of solar panels for domestic hot water would make a very measurable impact on net domestic electricity consumption. a policy and technical approach that considers how to more sustainably address three critical areas of energy use in albania will be more likely to see success and increase the sustainability of albania’s energy use than an approach that fails to address these issues. these three areas are: a. sustainably meeting space heating needs, b. sustainably meeting domestic hot water energy needs, and c. giving priority attention to improving individual building insulation. albania’s energy challenges can be viewed as opportunities to respond to the country’s changing economic and climatic conditions with smart choices that provide albanians with reliable and sustainable energy services. nomenclature abreviations eu: european union gdp: gross domestic product cap.: capita toe: tonne oil equivalent hdd: heating degree days cdd: cooling degree days dhw: domestic hot water dsm: demand side management cop: coefficient of performance references [1] instituti i statistikave. 2014. “bilanci i energjise.” www.instat.gov.al [2] word bank. 2014. “world bank open data.” accessed june 2014. http://data.worldbank.org/?display=default 12 international journal of sustainable energy planning and 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[31] prudenzi a, silvestri a, lucci gdsm impact prediction through model of the italian residential end use 16 th international conference on intelligent system applications to power systems, 2011, iee, pp 1-5; http://dx.doi.org/10.1109/isap.2011.6082251 [32] chittum, a., and østergaard, poul a: how danish communal heat planning empowers municipalities and benefits individual customers. energy policy 72 (2014), pp. 465-474. http://dx.doi.org/10.1016/j.enpol.2014.08.001 14 international journal of sustainable energy planning and management vol. 05 2015 evaluation of the heating share of household electricity consumption using statistical analysis: a case study of tirana, albania http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lighting-study.pdf http://www.ere.gov.al/doc/rap_vjet_2009_derguar_ne_kuvend.pdf http://dx.doi.org/10.1109/isap.2011.6082251 http://dx.doi.org/10.1016/j.enpol.2014.08.001 << /ascii85encodepages false /allowtransparency false 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 549-1469-1-le.qxd 1. introduction the progress of international negotiations on mitigation of climate change due to global warming has been slow, insufficient and hampered by controversies between industrial and developing countries. at the same time, there is an urgent need for fast emission reductions of co2 and other greenhouse gases (ghgs) in order to avoid the so-called tipping-points. the most important contribution to man-made ghgs is due to combustion of fossil fuels. thus, the energy international journal of sustainable energy planning and management vol. 01 2014 59 sector has a central role for mitigation of climate change. the only long-term sustainable solution involves a transition to an energy supply system based on renewable energy sources (res) like solar, wind, hydro, waves and some types of biomass combined with energy conservation. although research shows that it is technically possible and economically viable to make such a transition [2–4], there are a number of serious barriers for this transition including vested interests and lock-in to traditional energy supply 1 corresponding author e-mail: bvm@plan.aau.dk. international journal of sustainable energy planning and management vol. 01 2014 59-66 barriers and potential solutions for energy renovation of buildings in denmark ������� � ���� ����� ��� �� ��������� �������������������� ��������� � �� ���� � �� ���� �� ���� ���� � �������� �� �� ����� ������ � ���� � �!�� �� ���� !�������� � �� ��������� � � � "�� � �� #��!��� � ��������� #$ $ %����� &' �� �(� �)*+,(��� ���� .&� �� ���� ��������� � �� ��������� � � � "�� � �� #��!��� � ��������� &����� /�� ������ ��� 0� �)*0--#��!���� �� ���� a b s t r a c t buildings account for a substantial part of the total energy consumption. in denmark this number is about 40 % and this is approximately the same in most industrial countries. on this background there is an urgent need to develop strategies for reducing the energy demand in the building sector. renovation of existing buildings must have high priority as houses often last for 50 to 100 years, while the time perspective for the desired transformation to low-energy houses is less than 30 years in order to mitigate global warming and avoid irreversible tipping-points. the only sustainable energy supply in the perspective of centuries is renewable energy provided by the sun and exploited in the form of solar heat, solar electricity (pvs), wind power, hydro power, wave power, and some types of biomass etc. a future dominating role of intermittent renewable sources requires new integrated systems thinking on both the supply and demand side for heat, electricity and transport. implementing such smart energy systems requires integrated strategic energy planning on the national and local level. with the fundamental changes in the energy supply technologies expected during the coming years, it is important to synchronize investments in energy conservation measures with investments in the supply side, in order to avoid overinvestment in supply systems and thus to minimize the total costs of the transformation to smart energy systems. this paper highlights some of the most important barriers for renovation of existing buildings in denmark and points to policies for overcoming these barriers. some of the policies have been presented in the reports of a recent danish research project (ceesa). keywords: building renovation; energy savings, renewable energy systems, policy means, synchronization of supply and demand url: dx.doi.org/10.5278/ijsepm.2014.1.5 60 international journal of sustainable energy planning and management vol. 01 2014 barriers and potential solutions for energy renovation of buildings in denmark systems based on fossil fuels. thus, it is important to develop professional and realistic scenarios that demonstrate that this transition is both technologically possible and positive for the societal economy. this should be combined with policy scenarios describing efficient policy means for the implementation of the most feasible technological scenarios from a socioeconomic and environmental perspective. both technical and policy scenarios will differ from region to region, depending on climate, consumption patterns, and present legislation and market conditions. the danish case below exemplifies a general methodology, underlining the importance of concrete technical scenarios linked to concrete policy scenarios. the danish project “coherent energy and environmental system analysis” (ceesa) [5] is a recent example of an integrated analysis using this general methodology to describe the phasing out all fossil fuels in denmark before 2050. in the spring of 2012 a broad majority in the danish parliament agreed on short term goals for such a transition towards 2020 focusing on expanding wind power to 50% of the electricity supply, expanding the use of biomass in chp plants (combined heat and power) as well as increasing the ambitions regarding energy savings in general [6]. this political agreement is an important part of realising the phase-out of fossil fuels by 2050. a special feature of the ceesa project is its focus on policy instruments for realizing the proposed transition including significant changes in principles of market regulation, tax systems, planning methods and priorities, and institutional structures. the transition will hardly be realized in time without such policy changes. there is an overall need to look at the policy and planning framework in a strategic energy planning context if 100% renewable energy systems are to be implemented locally and nationally [7, 8]. in this paper, however, the focus is on the building sector. the potential for energy savings in this sector have been analysed in recent danish reports. the report by the danish building research institution sbi [9] on renovation of existing danish buildings has provided useful background material for the present paper. assessment of future heat supply technologies in a renewable energy system context has been presented in [10,11]: the main focus in the present paper is on the barriers and solutions for the technical and economic realisation of the desired changes in the danish building sector. the building stock accounts for about 40% of total final energy consumption in denmark and about 55% of the final heat consumption goes to one-family houses. similar analyses have been carried out in germany taking into account the special german conditions [12,13]. recently, analyses of the european energy system have also shown that there are large benefits from heat savings – also from an energy system perspective [14]. the efficient policy means are, however, dependent on local conditions including climate and political traditions. for this reason, our paper is focusing on the special technical as well as institutional conditions in the danish building sector. the case study illustrates the general statement that both the technical and institutional solutions are available and may be designed to solve the problems by detailed analyses. it can be learned from the ceesa project that both “god” and the “devil” is in the detail, and that it consequently is necessary to analyse the technical and institutional details at an adequate level of aggregation. thus, it is not sufficient to rely on a general co2 tax, or a co2 trading system to secure the needed transformation of the energy system. building technologies have now been developed that can reduce the consumption of heat per m2 by more than a factor of 10 compared to the existing stock of buildings. this is demonstrated by the so-called “passive houses” which have been promoted in recent years especially in austria and germany. as most new buildings are supposed to last 50 years or more, one should accelerate strengthening of national building codes for new houses to “passive house standards”. however, this will not solve the urgent problem of reducing energy consumption in buildings due to the long turn-around time in the building sector. historically there has been no net-decrease of energy consumption in the danish building sector as the building area has been growing in the last 40 years by about 1% per year. if we assume the same growth in the future we will have a situation with a building stock in denmark by 2050 that will consist of around 70%–80% of to-day’s buildings, and around 20%–30% new buildings. for this reason, the focus of this paper is on renovation of the existing buildings. as basic building renovation such as better insulated walls, roofs, floors, windows etc. will last for 40–60 years, one should make sure that renovation standards as well as incentive systems should be strengthened compared to present standard requirements and energy conservation incentives in 2014. this is also important in order to avoid overinvestments in supply systems and to synchronize house improvements with investments in new supply technologies such as low temperature district heating, individual heat pumps, solar heat collectors and pvs. 2. historical development of energy intensity in danish buildings in denmark the total heat demand per m2 per year has been decreased by 35% since 1980, see figure 1. the reduction over time has mainly been due to extra insulation in old buildings and less energy intensity in new buildings. the strongest reductions were obtained in the period from 1979 to 1985 promoted by the two jumps in oil price and a systematic danish heat planning and energy conservation policy. heat planning was introduced in 1979, and it was mandatory for municipalities to establish a heat plan in accordance with specific rules given by the ministry of energy. in addition to this a heat energy conservation policy was introduced based on a “stick and carrot” principle with high taxes on oil, the establishment of a network of registered energy consultants and relatively high (30%–50%) subsidies for investments in energy conservation. the procedure was that a house or flat owner would contact one of the registered energy consultants, who then would examine the house and make an energy report, indicating the most economic energy conservation measures and the total costs of an economically feasible set of investments. based on the recommendations in this energy report, the house owner would then, in a non-bureaucratic process apply for a 30%–50% investment subsidy. in order to cope with a potential energy poverty problem, 50% subsidy was reserved for low-income pensioners with high heating bills. this incentive system was a success, and resulted in a fast reduction in energy consumption per m2. after 1986 the oil price fell from approx. 70 to 25 us $ per barrel, and remained at that level until the midnineties. the oil price reduction was partly counterbalanced by higher oil tax, and the price reductions proceeded at a slower pace. this high tax policy on oil and electricity was purposely implemented in order to continue the energy savings, as the political system assumed that low oil prices was not a permanent situation and wanted to prepare the energy consumption and costs for future increases in fuel prices. this energy demand reduction has been rather slow in the last ten years. although the energy conservation efforts still has an effect due to continued larger insulation rates and requirements for new energy buildings energy demand, the total end heat demand has increased and the savings have been found in a higher efficiency reducing local losses by replacing oil boilers with district heating and more efficient natural gas boilers, see details in fig.1. the supply system has also changed and the amount of primary energy for heating per living area has decreased and the fuel demand has also decreased, mainly due to international journal of sustainable energy planning and management vol. 01 2014 61 niels i. meyer, brian vad mathiesen and frede hvelplund 140 130 120 110 100 90 80 70 60 1 9 8 0 ‘8 1 ‘8 2 ‘8 3 ‘8 4 ‘8 5 ‘8 6 ‘8 7 ‘8 8 ‘8 9 ‘9 0 ‘9 1 ‘9 2 ‘9 3 ‘9 4 ‘9 5 ‘9 6 ‘9 7 ‘9 8 ‘9 9 ‘0 0 ‘0 3 ‘0 2 ‘0 1 ‘0 4 ‘0 5 ‘0 6 ‘0 7 ‘0 8 ‘0 9 ‘1 0 ‘1 1 ‘1 2 households and heat supply (index) heated area end heat consumption incl. local losses net end heat consumption excl. local losses end heat consumption pr.m2 incl. local losses figure 1: indexed developments in the end heat demands and local losses in the heating sector [15]. combined heat and power production and the expansion of district heating. however, the total energy consumption in the danish housing sector has been increasing during the last 20 years due to an increasing living area per person. the relative decrease in intensity can be accredited to initial insulation subsidies and information campaigns and in the later years mostly levies and information campaigns. 3. present danish policies for energy savings in buildings the danish government has proposed a number of policies to reduce the heating demand. the most important in addition to increased levies and energy prices are: – maximum u-values for single building elements in connection with renovation (e.g. in relation to windows). the u-values must be consistent with the regulations for new buildings. – when more than 25 % of a building is renovated, then the total building after renovation must fulfil the regulations for new buildings. – demand for energy labelling of houses when sold or rented as well as regularly if the building is above 1.000 m2. – demand for maintenance of oil boilers and large ventilation units. in addition, campaigns promoting energy savings have been carried out for decades, e.g. by the danish electricity savings fund promoting more efficient household appliances and circulation pumps etc. this has resulted in a shift to more energy efficient equipment and less direct electric heating. the electricity savings fund was replaced in 2011 by an energy saving unit in the danish energy agency, but has now been replaced by general information activities from the agency towards end consumers and the building sector as such. it remains to be seen whether this change will give rise to an overall improved promotion of less energy intensive equipment. furthermore a general system has been introduced, where the energy supply companies are obliged to promote energy conservation among their customers. this system has worked with regard to energy conservation in public and private companies, but has not given sufficient incentives to generate the desired heat conservation in private households at this stage. it can be concluded that the above policies have so far not resulted in significant reductions in the energy consumption of the building sector. small reductions have been observed in the heating sector while the electricity consumption has increased slightly. this is explained by a higher level of comfort, more energy consuming equipment with higher user intensity and more square meters. 4. potential for energy conservation in existing danish buildings according to the report “policy means for promotion of energy conservation in buildings” [9] from the danish building research institute, the potential for heat and electricity conservation in existing danish buildings based on pay-back times in accordance with traditional principles for 20 or 30 year loans is estimated as follows: improved insulation: 31 pj/y in private houses and 6 pj/y in commercial buildings. renovation of installations: 21 pj/y in private houses and 3 pj/y in commercial buildings total estimated savings are 61 pj/y corresponding to 30% of the present consumption (203 pj/y). it therefore is a problem that the present incentive system does not seem to address the private households in an efficient way. the report [9] points out that this is a conservative estimate, and that a more detailed analysis leads to higher numbers: 68 pj/y for heat and 19 pj/y for electricity. investments in renovation of private houses may be based on a number of different considerations other than mitigation of global warming and conservation of energy. the report also lists a number of investor considerations that are negative in relation to energy renovation [9] e.g.: • too long pay-back times. • free money is reserved for other purposes, e.g. a modern kitchen, larger panoama windows, a new organisation of rooms etc. • better wait until a major renovation is necessary. • private comfort is disturbed during renovations. • lack of detailed knowledge concerning economic and comfort advantages of energy renovations. • major renovations may harm the original architecture. 62 international journal of sustainable energy planning and management vol. 01 2014 barriers and potential solutions for energy renovation of buildings in denmark 5. lock-in to old tariff systems about 60% of the heat demand to danish households is supplied by co-generation plants and district heating systems. the tariff schemes of these heat suppliers have a significant influence on the promotion of energy conservation in private households. unfortunately, the present tariff systems are mostly a barrier against the desired energy conservation due to a relatively high fixed part of the heat tariff. this is discussed in the following. the district heating companies have tariffs with a different but often very high fixed share. this is illustrated in figure 2. the figure shows that in some parts of copenhagen, the fixed share of the total heat bill is between 50% and 62%. table 1 shows that in tårnby, brøndbyvester and gentofte, where the fixed tariff is relatively high, it only pays to invest around 12,000 dkk (1,600 €) for a reduction in heat consumption of 25%. 15 years loans on average is realistic with the present situation at the housing market, with low prices, and also reduced possibilities for getting long term loans. if we had calculated with 30 years loans, it would pay to invest up to 17,000 dkk (2,270 €). at the same time empirical data show that on average a 25% reduction will cost international journal of sustainable energy planning and management vol. 01 2014 63 niels i. meyer, brian vad mathiesen and frede hvelplund 24 48 21 37 54 51 40 44 44 42 26 18 26 20 0 35 25 26 21 47 37 62 0 ve st fo r b ræ nd in ge n al be rts lu nd g re ve s tra nd by hu nd ig e hv id ov re m id t hv id ov re n or d m oe se de ro sk ild e sv og er sle v va lle ns bæ k fr ed er iks be rg g en to fte g la ds ax e tå rn by hv id ov re s yd 10 20 30 40 50 60 70 fixed share of total heat bill for a house in copenhagen (pct.) kϕ be nh av n en er gi hϕ je t aa st ru p rϕ do vr e so lrϕ d is hϕ j br ϕn db yv es te r av ed ϕr e figure 2: fixed share of total heat bill for a house in copenhagen [16]. table 1: break even investment for 25% reduction in heat consumption per m2 in parts of copenhagen with 15 years loans (1 € equals 7.45 dkk) [17]. break even investment (6% annual saving discount rate/15 annual heat annual variable in case of 25% house year lifetime-25% payment dkk payment dkk improvements dkk house improvement. tårnby 13.000 4.949 (38%) 1.235 11.994 gentofte 10.000 5.300 (53%) 1.325 12.868 albertslund 13.800 10.902 (79%) 2.725 26.465 københavn energi 13.500 10.260 (76%) 2.565 24.911 brøndby vester 10.000 4.600 (46%) 1.150 11.169 frederiksberg 10.000 7.900 (79%) 1.975 19.181 around 30,000 dkk. (4,000 €), when implemented as a part of house renovation. and more than the double, if 50% reduction of heat demand per m2 is required. in this case only albertslund is close to have tariffs, where it pays to invest in 25% heat reductions. the tariff situation in other district heating cities is very similar to the average situation in copenhagen. although it pays, from a societal point of view, to reduce heat consumption per m2 up to 50%, this will not happen if people react economically on the present tariff conditions. as a consequence, it is proposed in the ceesa project to abolish the fixed part of the heat tariffs. 6. policy recommendations it is important to underline that according to the calculations in the ceesa project it is necessary to implement efficient energy conservation measures. and to make sure that these are implemented in time, both in order to avoid overinvestment in the supply side of the energy system, and in order to synchronize the conservation measures with the design of the supply side energy system. this balance between investment in the supply side and the conservation side is essential for the whole transition towards a lower demand and better supply system. it is also very difficult to achieve, as it requires the introduction of a set of coordinated and concrete policy measures. the list below are examples from the danish case, giving the general message that concrete policies are necessary, but that they should be designed to the concrete institutional setting of a specific region. one cannot expect that a general co2 trading system will give sufficient energy conservation incentives. it should always be supplemented by policy measures that give incentives in the concrete setting of the concrete region to be dealt with. a number of proposals for policy means in the danish institutional setting are listed in [6 and 9] and additional proposals based on the ceesa project are included in the following: 1. in the district heating systems, tariff systems with a high fixed share should be changed to 100% variable tariffs or close to 100%. this will on the average increase the annual savings of a given energy conservation investment by around 40%, which in district heating systems is more than 10 times the effect of a co2 price per ton of 20 €. 2. an incentive system consisting of energy consultants, energy reports and investment subsidies should be introduced. this is necessary as the present system with an annual supply company conservation obligation does not work sufficiently efficient on 80% of the heat conservation potential located at the household level. the current tax deductions for house renovation should have a stronger focus on energy savings and should be combined with other incentives. 3. a financial reform could consist of: a. long term low interest loans should be made possible for house renovation according to the recommendations in the energy report from the energy consultant. b. public guaranties should be supplied for loans in energy conservations that have been recommended in the energy report. c. heat consumers should have incentives to shift to low temperature district heating networks where possible, in order to be able to integrate the intermittent renewable energy sources or where district heating is not an option to invest in geothermal heat pumps. d. a system of investment subsidies should be established. for instance with 15% in subsidies the next 3 years. after that 10% in 3 years, and then no subsidy. e. expenses linked to the points a, b, c, d, should be paid by the heat supply utilities and should not be paid by the state through taxes. f. green building tax graduated in accordance with the energy intensity of the house. g. labelling of energy intensity of all houses could be the basis for green building taxes. h. introduction of a new scheme where old houses unsuited for an efficient total renovation are demolished. graduated green building tax (cf. f above): this scheme could be combined with the proposed labelling of energy intensity (cf. g. above). a 64 international journal of sustainable energy planning and management vol. 01 2014 barriers and potential solutions for energy renovation of buildings in denmark short-cut may be to register the total consumption of heat and electricity in the house and divide it with the area of the house to obtain a measure of energy intensity. a strong tax graduation could have a substantial positive influence on new investments for energy efficiency in old buildings. a social problem is related to “energy poverty” where low income households live in apartments and houses with relatively high energy intensity. this may be compensated by other policy means, but could complicate the scheme. labelling of energy intensity (cf. g. above): this scheme should include proposals for relevant reductions in energy intensity as a support for new investments. such a scheme has now been introduced by the danish government. investment subsidies (cf. d. above): this scheme will need a precise description of the requirements to obtain the investment subsidy. this is made by the energy consultants. this may include a condition that the renovation must move the house a specified number of places up on the scale of energy efficient houses. this scheme has partly been introduced by the danish government, as tax deductions can be obtained for costs of labour in energy renovations of buildings. replacement by a passive house (cf. h. above): this scheme needs further investigation in order to evaluate the potential for replacement of old houses by passive houses and to evaluate the investment subsidy necessary to activate the house owners. other practical questions include housing of the owner during the building period. it should be pointed out, that even these policy measures may turn out to result in too low energy reductions. in that case, the danish government may consider to introduce stronger policy means such as e.g. the so-called personal carbon allowance scheme [18] or other means. 7. conclusions in most industrial countries heating and electricity of buildings account for about 40 % of the total energy consumption. especially the heating part can be drastically reduced in new low energy buildings. the main problem is that existing buildings have a lifetime of 50 to 100 years while mitigation of global warming implies much shorter reduction times for the consumption of fossil fuels. as a consequence, renovation of existing buildings is an important part of the mitigation strategy. experience from denmark and other industrial countries have shown that present policies for renovation of buildings are too slow and inefficient in comparison to the potential for energy savings in existing buildings. the danish ceesa project and other danish analyses have pointed to a number of barriers in the existing tax and tariff systems and have proposed new policy means. it is estimated that the proposed policy means in this paper should be able to reduce energy consumption in existing danish buildings by more than 40%. 8. references [1] hansen j, sato m, kharecha p, beerling d, berner r, massondelmotte v et al. target atmospheric co2: where should humanity aim? the open atmospheric science journal volume 2(2008) pages 217–31. [2] mathiesen bv, lund h, karlsson k. 100% renewable energy systems, climate mitigation and economic growth. applied energy (2011). [3] connolly d, mathiesen bv. a technical and economic analysis of one potential pathway to a 100% renewable energy system. ijsepm 1(2014). http://dx.doi.org/10.5278/ijsepm.2014.1.2. [4] steinke f, wolfrum p, hoffmann c. grid vs. storage in a 100% renewable europe. renewable energy 50(0)(2013) pages 82632. http://www.sciencedirect.com/science/article/pii/s0960148 112004818 [5] lund h, hvelplund f, mathiesen bv, østergaard pa, christensen p, connolly d et al. coherent energy and environmental system analysis (ceesa). 2011; http://www.ceesa.plan.aau.dk/publications/ [6] danish ministry of climate, energy and building. accelerating green energy towards 2020. march 2012. [7] sperling k, hvelplund f, mathiesen bv. centralisation and decentralisation in strategic municipal energy planning in denmark. energy policy 39 (2011) pages 1338-51. http://dx.doi.org/10.1016/j.enpol.2010.12.006 [8] hvelplund f, möller b, sperling k. local ownership, smart energy systems and better wind power economy. energy strategy reviews 1(3) (2013) pages 164-70. http://dx.doi.org/10.1016/j.esr.2013.02.001 [9] jensen om. virkemidler til fremme af energibesparelser i bygninger (policy means for promotion of energy international journal of sustainable energy planning and management vol. 01 2014 65 niels i. meyer, brian vad mathiesen and frede hvelplund conservation in buildings). 2009; sbi 2009:06; http://vbn.aau.dk/files/17143382/sbi_2009-06.pdf [10] lund h, möller b, mathiesen bv, dyrelund a. the role of district heating in future renewable energy systems. energy 35(3 (2010/3) pages 1381–90. [11] dyrelund a, lund h. heat plan denmark 2010: a road map for implementing the eu directive on renewable energy (varmeplan danmark). 2010. [12] weiss j, dunkelberg e, vogelpohl t. improving policy instruments to better tap into homeowner refurbishment potential: lessons learned from a case study in germany. energy policy 44(0) (2012) pages 406–15. http://www.sciencedirect.com/science/article/pii/s0301421512 001024 [13] galvin r. german federal policy on thermal renovation of existing homes: a policy evaluation. sustainable cities and society 4(0) (2012) pages 58-66. http://www.sciencedirect.com/ cience/article/pii/s2210670712000297 [14] connolly d, lund h, mathiesen bv, werner s, möller b, persson u et al. heat roadmap europe: combining district heating with heat savings to decarbonise the eu energy system. energy policy 65(0)(2014) pages 475-89. http://www.sciencedirect.com/science/article/pii/s0301421513 010574 [15] energistyrelsen. energistatistik 2012. 2013; http://www.ens.dk/sites/ens.dk/files/info/tal-kort/statistiknoegletal/aarlig-energistatistik/energistatistik2012.pdf [16] larsen a. towards a sustainable district heating system in copenhagen. 2009;master thesis. [17] hvelplund f, meyer ni, morthorst pe, munksgaard j, karnøe p, hasberg ks. policies for a transition to 100% renewable energy systems in denmark before 2050. 2011. http://www.ceesa.plan.aau.dk/publications/ [18] fawcett t, hvelplund f, meyer ni. making it personal: per capita carbon allowances. in: generating electricity in a carbonconstrained world, boston: academic press; 2010, p. 87–107. 66 international journal of sustainable energy planning and management vol. 01 2014 barriers and potential solutions for energy renovation of buildings in denmark << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 31 2021 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 31 2021 01–04 abstract this editorial introduces the 31st volume of the international journal of sustainable energy planning and management. this volume reports some of the latest developments in energy systems analyses of smart energy systems and of district heating as well as in methods and analyses using multi-objective optimisation. in one of the analyses, the authors investigate the effects of decentralised storage in district heating systems, finding positive effects on grid design as the impact of peaks can be reduced. three contributions address the more sociological factors influencing acceptance and energy system development such as ownership, awareness, and moral. latest developments in 4th generation district heating and smart energy systems poul alberg østergaard*a, rasmus magni johannsena, henrik lund a, brian vad mathiesenb adepartment of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark bdepartment of planning, aalborg university, a.c. meyers vænge 15, 2450 copenhagen sv, denmark keywords district heating grids storage and systems optimisation acceptance and ownership http://doi.org/10.5278/ijsepm.6432 1 introduction this editorial introduces the 31st volume of the international journal of sustainable energy planning and management which partly reports work from the 6th international conference on smart energy systems 4th generation district heating, electrification, electrofuels and energy efficiency. this conference organised by aalborg university with energy cluster denmark, was initially planned to be held in aalborg, denmark, october 2020 but was eventually moved online to accommodate for covid 19 restrictions. this has proven to be a successful conference series attracting a large international gathering each year, and it has resulted in a series of previous special issues in energy [1–4] as well as in this journal [5–10] in addition to reporting the latest research from the mentioned conference, this volume also reports other new findings from within the general smart energy systems and energy planning sphere. 2 special issue district heating grids and systems based on a case study of heide in germany, röder et al. [11] investigate the possibilities of including distributed storage in district heating systems with a view to reducing grid sizing and losses in e.g. systems with low heat densities. both losses and costs can be reduced by some 10-13% if e.g. a 1000 l heat storage is included in the houses of the case study. minimum spanning tree is a methodology that may be applied to investigate optimal district heating layouts for new district heating systems [12]. dénariá et al. apply the methodology to analyse grid layouts taking milano, italy as a case. lund [13] also investigates heat storage in energy systems with a focus on compressed heat energy storage, which functions both as a heat and an electricity storage. the energy system impacts and thus relevance of the storage depends on the system in question, but in mailto:poul@plan.aau.dk 2 international journal of sustainable energy planning and management vol. 31 2021 latest developments in 4th generation district heating and smart energy systems places with district heating and electrified heat production, the system shows promise. these results are found analysing germany as a case. kersten et al. [14] also investigate district heating in germany. they investigate the composition of the energy system using the open energy modelling framework (oemof), finding that district heating systems based on a combination of cogeneration of heat and power, photovoltaics, heat pumps and storage show promise. such systems can reduce co2 considerably compared to current systems. trabert et al. [15] investigate the use of river waterbased heat pumps for district heating provision using energypro finding seasonal coefficient of performance values between 3.4 and 3.7. the system, however, is not cost efficient against currently applied solutions – though flexibility of the system can improve the economic performance. vilén et al. [16] investigate two different policy means of decarbonising the district heating system of gothenburg, sweden: a direct ban on fossil fuels vs a more gradual phasing out through gradually increasing carbon taxes. the analyses conducted in times do not reveal a difference in the district heating use – however the fuel consumption clearly depends on whether there is a direct ban from a given data – or a gradual phasing out caused by the phasing in of a carbon tax. 3 special issue smart energy systems mezzera et al. [17] investigate different overall compositions of the italian energy system with a focus on the role of power-to-x in the energy system and the exploitation of waste heat streams for district heating systems. groissböck [18] also investigate integrated smart energy systems, but with a focus on open source tools to analyse these. based on a review of existing frameworks, groissböck synthesises a new modelling framework for the analyses of smart energy systems. 4 general energy planning analyses d’alessandro et al. [19] investigate the effects of the 2008/2009 financial crisis and the 2011 earthquake, tsunami and ensuing meltdown of the fukushima nuclear power station on electricity demand. their analyses indicate that a “combination of both economic incentivization and philanthropical messaging may be positively leveraged in sustaining and enhancing the response of all users to the need for energy use reduction in times of disaster, and for engendering low-carbon energy transitions”. rygg et al. [20] investigate small hydro plants in norway with a view to ownership and acceptance in line with previous work by e.g. hvelplund [21–24]. rygg and co-authors identify a necessity to keep ownership in mind and conclude “that local ownership of small hydropower projects is valued highly among the municipality actors”. bishoge et al. [25] investigate the energy consumption from a more sociological perspective, focusing on ”awareness, motivation factors, moral and normative concerns, environmental norms, knowledge concerns, technology adoption concerns, and contextual factors and habits”, stressing the importance of acknowledging these issues and implementing further studies for their analysis. the same authors have previously reported their work on community participation in the renewable energy sector in tanzania [26]. hasibi [27] investigate optimal renewable energy expansion based on multiple objective optimisations with costs and emissions as objective functions. applying the methodology to bali, indonesia, results indicate that there is an unresolved policy issue in indonesia as there is a mismatch between what is optimal in terms of costs and what is optimal in terms of emissions. finally, bowley and evins [28] develop transition scenarios for an urban area using multi objective optimisation, investigating different supply options and also carbon-negative measures under different frameworks. references [1] lund h, duic n, østergaard pa, mathiesen bv. smart energy systems and 4th generation district heating. energy 2016;110. http://doi.org/10.1016/j.energy.2016.07.105. [2] lund h, duic n, østergaard pa, mathiesen bv. smart energy and district heating: special issue dedicated to the 2016 conference on smart energy systems and 4th generation district heating. energy 2018;160:1220–3. http://doi. org/10.1016/j.energy.2018.07.012. [3] lund h, duic n, østergaard pa, mathiesen bv. perspectives on smart energy systems from the ses4dh 2018 conference. energy 2020;190:116318 https://doi.org/10.1016/j. energy.2019.116318. [4] nielsen tb, lund h, østergaard pa, duic n, mathiesen b v. perspectives on energy efficiency and smart energy systems from the 5th sesaau2019 conference. energy 2021;216. http://doi.org/10.1016/j.energy.2020.119260. http://doi.org/10.1016/j.energy.2018.07.012 http://doi.org/10.1016/j.energy.2018.07.012 international journal of sustainable energy planning and management vol. 31 2021 3 poul alberg østergaard, rasmus magni johannsen, henrik lund, brian vad mathiesen [5] østergaard pa, lund h, mathiesen bv. smart energy systems and 4th generation district heating. int j sustain energy plan manag 2016;10:1–2. http://doi.org/10.5278/ijsepm.2016.10.1. [6] østergaard pa, lund h. smart district heating and electrification. int j sustain energy plan manag 2017;12. http://doi. org/10.5278/ijsepm.2017.12.1. [7] østergaard pa, lund h. editorial smart district heating and energy system analyses. int j sustain energy plan manag 2017;13. http://doi.org/10.5278/ijsepm.2017.13.1. [8] østergaard pa, lund h, mathiesen bv. editorial smart energy systems and 4th generation district heating systems. int j sustain energy plan manag 2018;16:1–2. http://doi. org/10.5278/ijsepm.2018.16.1. [9] østergaard pa, lund h, mathiesen bv. developments in 4th generation district heating. int j sustain energy plan manag 2019;20. http://doi.org/10.5278/ijsepm.2019.20.1. [10] østergaard pa, johannsen rm, lund h, mathiesen bv. new developments in 4th generation district heating and smart energy systems. int j sustain energy plan manag 2020;xx. http://doi.org/10.5278/ijsepm.3664. [11] röder j, meyer b, krien u, zimmermann j, stürhmann t, zondervan e. optimal design of district heating networks with distributed thermal energy storages – method and case study. int j sustain energy plan manag 2021;31. http://doi. org/10.5278/ijsepm.6348. [12] dénarié a, macchi s, fattori f, spirito g, motta m, persson u. a validated method to assess the network length and the heat distribution costs of potential district heating systems in italy. int j sustain energy plan manag 2021;31. http://doi. org/10.5278/ijsepm.6322. [13] lund r. energy system benefits of combined electricity and thermal storage integrated with district heating. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ ijsepm.6273. [14] mathias k, bachmann m, kriegel m. methodology to design district heating systems with respect to local energy potentials, co2-emission restrictions, and federal subsidies using oemof. int j sustain energy plan manag 2021;31. http://doi. org/10.5278/ijsepm.6323. [15] trabert u, mateo j, bergstraesser w, best i, kusyy o, orozaliev j, et al. techno-economic evaluation of electricity price-driven heat production of a river water heat pump in a german district heating system. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ijsepm.6291. [16] vilén k, selvakkumaran s, ahlgren eo. the impact of local climate policy on district heating development in a nordic city – a dynamic approach. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ijsepm.6324. [17] mezzera f, fattori f, dénarié a, motta m. waste-heat utilization potential in a hydrogen-based energy system an exploratory focus on italy. int j sustain energy plan manag 2021;31. http:// doi.org/10.5278/ijsepm.6292. [18] groissböck m. energy hub optimization framework based on open-source software & data review of frameworks and a concept for districts & industrial parks. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ijsepm.6243. [19] d’alessandro km, chapman a, dargusch p. disruption, disaster and transition: analysis of electricity usage in japan from 2005 to 2016. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ijsepm.6327. [20] rygg bj, ryghaug m, yttri g. is local always best? social acceptance of small hydropower projects in norway. int j sustain energy plan manag 2021;x. http://doi.org/10.5278/ ijsepm.6444. [21] hvelplund f, østergaard pa, meyer ni. incentives and barriers for wind power expansion and system integration in denmark. energy policy 2017;107. http://doi.org/10.1016/j. enpol.2017.05.009. [22] hvelplund f, djørup s. consumer ownership, natural monopolies and transition to 100% renewable energy systems. energy 2019;181:440–9. http://doi.org/10.1016/j. energy.2019.05.058. [23] hvelplund f, möller b, sperling k. local ownership, smart energy systems and better wind power economy. energy strateg rev 2013;1:164–70. http://doi.org/10.1016/j. esr.2013.02.001. [24] krogh jensen, louise; sperling k. who should own the nearshore wind turbines-a case study of the wind and welfare project. department of development and planning, aalborg university; 2016. [25] bishoge ok, kombe gg, mvile bn. energy consumption efficiency knowledge, attitudes and behaviour among the community. int j sustain energy plan manag 2021;31. http:// doi.org/10.5278/ijsepm.6153. [26] bishoge ok, kombe gg, mvile bn. community participation in the renewable energy sector in tanzania. int j sustain energy plan manag 2020;28. http://doi.org/10.5278/ijsepm.4477. [27] al hasibi ra. multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia. int j sustain energy plan manag 2021;31. http://doi.org/10.5278/ ijsepm.6474. [28] bowley w, evind r. energy system optimization including carbon-negative technologies for a high-density mixed-use development. int j sustain energy plan manag 2021;31. http:// doi.org/10.5278/ijsepm.5843. http://doi.org/10.5278/ijsepm.2017.12.1 http://doi.org/10.5278/ijsepm.2017.12.1 http://doi.org/10.5278/ijsepm.2018.16.1 http://doi.org/10.5278/ijsepm.2018.16.1 http://doi.org/10.5278/ijsepm.6348 http://doi.org/10.5278/ijsepm.6348 http://doi.org/10.5278/ijsepm.6322 http://doi.org/10.5278/ijsepm.6322 http://doi.org/10.5278/ijsepm.6273 http://doi.org/10.5278/ijsepm.6273 http://doi.org/10.5278/ijsepm.6323 http://doi.org/10.5278/ijsepm.6323 http://doi.org/10.5278/ijsepm.6444 http://doi.org/10.5278/ijsepm.6444 http://doi.org/10.1016/j.enpol.2017.05.009 http://doi.org/10.1016/j.enpol.2017.05.009 http://doi.org/10.1016/j.energy.2019.05.058 http://doi.org/10.1016/j.energy.2019.05.058 http://doi.org/10.1016/j.esr.2013.02.001 http://doi.org/10.1016/j.esr.2013.02.001 http://doi.org/10.5278/ijsepm.6474 http://doi.org/10.5278/ijsepm.6474 732-1996-1-le.qxd 1. sustainable development of energy water and environmental systems the 8th conference on sustainable development of energy, water and environment systems – sdewes conference, held in dubrovnik in 2013, was dedicated to the improvement and dissemination of knowledge on methods, policies and technologies for increasing the sustainability of development by decoupling growth from natural resources and replacing them with knowledge-based economy, taking into account its economic, environmental and social pillars, as well as methods for assessing and measuring sustainability of development, regarding energy, transport, water, environment and food production systems and their many combinations. sustainability being also a perfect field for interdisciplinary and multi-cultural evaluation of complex system, the sdewes conference has at the beginning of the 21st century become a significant international journal of sustainable energy planning and management vol. 03 2014 1 venue for researchers in those areas to meet, and originate, discuss, share, and disseminate new ideas. the event was organized by university of zagreb, croatia and instituto superior tecnico, lisbon, portugal in cooperation with the university of dubrovnik, croatia; aalborg university, denmark; institute national polytechnique de grenoble, france; cologne university of applied sciences, germany; university of pannonia, veszprém, hungary; macedonian academy of sciences and arts, skopje; delft university of technology, the netherlands; vinča institute of nuclear sciences, belgrade, serbia; jozef stefan international postgraduate school, ljubljana slovenia and the industrial university of santander, colombia. the eighth sdewes conference was the most successful up to date attracting authors from 63 countries with 554 presented papers at 61 regular sessions, ten special sessions and five poster sessions, seven invited lectures and two panels. * corresponding author, e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 03 2014 1-4 sustainable energy, water and environmental systems �������� ��� � ��� ��������� � ������� ��������� � �� �� ������ � � � ��� � �� ������� � � ������� �������� �� ���� ��������� � �� � ����� ����� � �� ���� � � � � ��� �� �� � � ������ �� ������� ������� ������� a b s t r a c t this editorial presents research results from the 8th conference on sustainable development of energy, water and environment systems – sdewes held in dubrovnik, croatia in 2013. topics covered here include the energy situation in the middle east with a focus in cyprus and israel, energy planning methodology with ireland as a case and the applicability of energy scenarios modelling tools as a main focus, evaluation of energy demands in italy and finally evaluation of underground cables vs overhead lines and lacking public acceptance of incurring additional costs for the added benefit of having transmission beyond sight. keywords: natural gas use in israel and cyprus regional energy planning in ireland contingent evaluation of underground cables energy performance requirements in italy url: dx.doi.org/10.5278/ijsepm.2014.3.1 https://dx.doi.org/10.5278/ijsepm.2014.3.1 2 international journal of sustainable energy planning and management vol. 03 2014 sustainable energy, water and environmental systems 2. national energy systems while the world is on the one hand required to turn towards the use of renewable energy sources not least due to climate change issues [1] , individual nations also have a pronounced self-interest in exploiting locally available fossil energy resources where market prices exceed extraction costs or where societal benefits such as self-sufficiency and security of supply are factored in. such factors are thus also criteria applied when assessing the appropriateness of different energy futures [2]. natural gas use is experiencing a growth both as conventional natural gas and as methane from fracking – for economic, resource availability reason as well as for greenhouse gas emission reductions reasons. taliotis et al. [3] have investigated energy security prospects in cyprus and israel in the light of recent off-shore discoveries, and based on scenario development, analysed the potential export of liquefied natural gas (lng) and electricity. significant energy savings of us$ 182 billion may be realized, with the highest benefits being if the resource is used for export in the form of lng in spite of initial investments for processing plants. waenn et al. [4] put forward the hypothesis, that it is required moving from the national level to the regional level when addressing energy system scenario design and energy system analyses with the goal of achieving sustainable energy systems. from this starting point they address the south west region of ireland and develop one reference and three alternative high-res scenarios for the region. secondly, the authors investigate the applicability of a certain computer energy system’s simulation model – the energyplan model – in performing such analyses. in conclusion, the said region may be converted to 100% res supply – and the model was also found to be an adequate tool for performing such analyses. 3. electricity systems transmission systems are a focal point for public debate in several countries, and in denmark, analyses have investigated the possibility of replacing above-ground transmission lines with underground cables or better local integration of res-based electricity [5, 6] – while other analyses have addressed the policy implication of a so-called supergrid vs smart grid [7]. menges & beyer [8] have conducted an extensive investigation of underground cables versus overhead lines based on a contingent valuation survey in germany. in a survey, 60% of respondents favour undergrounds cables, but nearly half of those favouring undergrounds cables are not willing to pay a premium for that treat. surprisingly, the authors conclude, that the “thesis that cables increase acceptance of grid development has to be rejected” – though also drawing attention to a low response rate of the survey. 4. optimisation of energy systems buildings account for a very large part of the global energy consumption, and in the european union (eu), the eu energy performance of buildings directive targets savings within the building sector. based on this, tronchin et al [9] analyses the cost-optimal level of energy performance improvement in an italian case – as well the applicability of using the cost optimal levels as metrics for comparing scenarios for energy renovation of buildings. acknowledgements we would like to express our appreciation to all the presenters and authors as well as the organisers of the sdewes conference. moreover, we would like to thank all the reviewers for their many helpful comments. lastly we would like to thank the sponsors danfoss, planenergi, desmi and aalborg university. references [1] østergaard p, sperling k towards sustainable energy planning and management. international journal of sustainable energy planning and management 1(2014) pages 1–5. http://dx.doi.org/10.5278/ijsepm.2014.1.1. [2] østergaard pa reviewing optimisation criteria for energy systems analyses of renewable energy integration. energy 34(9)(2009) pages 1236–45. http://dx.doi.org/10.1016/ j.energy.2009.05.004. [3] taliotis c, howells m, bazilian m, rogner h, welsch m energy security prospects in cyprus and israel: a focus on natural gas. international journal of sustainable energy planning and management 3(2014). http://dx.doi.org/ 10.5278/ijsepm.2014.3.2. [4] waenn a, connolly d, ó gallachóir b moving from national to regional energy planning using energyplan. http://dx.doi.org/10.1016/j.energy.2009.05.004 http://dx.doi.org/10.1016/j.energy.2009.05.004 http://dx.doi.org/10.5278/ijsepm.2014.3.2 http://dx.doi.org/10.5278/ijsepm.2014.3.2 international journal of sustainable energy planning and management 3(2014). http://dx.doi.org/10.5278/ijsepm. 2014.3.3. [5] østergaard pa transmission-grid requirements with scattered and fluctuating renewable electricity-sources. appl energy 76(1-3)(2009) pages 247–55. http://dx.doi.org/10.1016/ s0306-2619(03)00065–5. [6] lund h, østergaard pa electric grid and heat planning scenarios with centralised and distributed sources of conventional, chp and wind generation. energy 25(4)(2000) pages 299–312. http://dx.doi.org/ 10.1016/s03605442(99)00075–4. [7] blarke mb, jenkins bm supergrid or smartgrid: competing strategies for large-scale integration of intermittent renewables? energy policy 58(0)(2013) pages 381–90. http://www.sciencedirect.com/science/article/pii/s030142151 3002176. [8] menges r, beyer g underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany. international journal of sustainable energy planning and management 3(2014). http://dx.doi.org/10.5278/ ijsepm.2014.3.4. [9] tronchin l, tommasino mc, fabbri k on the “cost-optimal levels” of energy performance requirements and its economic evaluation in italy. international journal of sustainable energy planning and management 3(2014). http://dx.doi.org/10.5278/ ijsepm.2014.3.5;. international journal of sustainable energy planning and management vol. 03 2014 3 poul alberg østergaard and neven duic http://dx.doi.org/10.5278/ijsepm.2014.3.3 http://dx.doi.org/10.5278/ijsepm.2014.3.3 http://dx.doi.org/10.1016/s0306-2619(03)00065%e2%80%935 http://dx.doi.org/10.1016/s0306-2619(03)00065%e2%80%935 http://dx.doi.org/10.1016/s0360-5442(99)00075%e2%80%934 http://dx.doi.org/%2010.1016/s0360-5442(99)00075%e2%80%934 http://www.sciencedirect.com/science/article/pii/s0301421513002176 http://dx.doi.org/10.5278/ijsepm.2014.3.4 http://dx.doi.org/10.5278/ijsepm.2014.3.4 http://dx.doi.org/10.5278/ ijsepm.2014.3.5 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 03_ 6979-article text-23699.indd international journal of sustainable energy planning and management vol. 33 2022 91 *corresponding author – e-mail: juha-antti.rankinen@oulu.fi international journal of sustainable energy planning and management vol. 34 2022 91–106 abstract the importance of stakeholder analysis and stakeholder management is magnified as project complexity increases. complex projects can be characterized by uncertainties arising from emerging technologies and the involvement of various types of stakeholders and their interests. positive energy district (ped) projects are an example of such undertaking, coupling novel energy solutions with distinct stakeholders and their diverse positions, claims, and requirements pertaining to the project. in this study, our objective is to provide a stakeholder management framework for future ped projects. the qualitative case study follows the theory elaboration methodology and aims to formulate a conceptual stakeholder management framework for ped projects. thus, our contribution focuses on expanding the domain of project stakeholder management by characterizing and validating it in a new, time-relevant project context. stakeholder management in ped projects: challenges and management model juha-antti rankinena*, sara lakkalaa, harri haapasaloa and sari hirvonen-kantolab a industrial engineering and management, university of oulu, p.o. box 4300, 90014 oulu, finland b oulu school of architecture, university of oulu, 90014 oulu, finland keywords positive energy district; inter-organizational collaboration; project stakeholder management. http://doi.org/10.54337/ijsepm.6979 1. introduction a structural shift from an energy system that is based on finite energy sources, such as fossil fuels, toward a system that uses more renewable energy sources is considered “energy transition.” historically, energy systems have been relatively centralized, that is, energy has been centrally produced in large power plants, transmitted into cities, and then distributed among the various consumers. today, along with energy transition, energy systems are decentralizing and decarbonizing, which have given rise to a strong interest in local communities generating and supplying energy [1, 2]. to achieve the european energy and climate targets and ensure the attainment of the long-term vision for energy transition, urban development must move from individual building solutions towards positive energy districts (peds) or other similar concepts [3]. a ped is a platform that consists of “buildings that actively manage the energy flow between them and the broader energy (electricity, heating, and cooling) and mobility systems by making optimal use of advanced materials, local renewables, storage, demand response, electric vehicle smart-charging and ict” [4]. as such, novel technological solutions and the relationships between the buildings and the entities residing in the district are being integrated [5]. locally, the technological execution of an innovative ped solution requires intensive expertise from energy system designers and energy solution providers. notably, besides technological novelty, a ped project entails challenges arising from the complicatedness of the stakeholders involved. as a district development undertaking, a ped involves multiple municipality agencies concerned with the planning, development, and governance of city districts. the other involved parties are energy system designers, contractors, housing companies, business 92 international journal of sustainable energy planning and management vol. 34 2022 stakeholder management in ped projects: challenges and management model informed strategic and operative decisions that cater to stakeholders’ interests and expectations [10, 11]. notably, the key issue in this domain arises from the identification and recognition of different stakeholders. therefore, understanding the convoluted stakeholder environments of complex projects is crucial to attain success [7]. the term “stakeholder” has been given several definitions in project management literature. one of the pre-eminent definitions is by freeman [12], who stated that stakeholders include all organizations or individuals that can affect or be affected by the project. narrower definitions highlight the nature of interest or claim that a stakeholder has on a project [13]. however, inclusions that are too narrow may result in some stakeholders being disregarded and their potential claims being overlooked [14]. remarkably, in practice, the adoption of a wide array of definitions can result in near infinite stakeholders, resulting in additional challenges. in addition to stakeholder definitions, project management scholars have created various categorizations for stakeholders. one of the widely utilized classifications separates internal and external stakeholders. internal stakeholders are formal members of the project group and, thus, are usually aligned with the project objectives [15]. by contrast, external stakeholders are not formal participants to the project, but they can affect or be affected by the project’s achievements and, hence, have vested interest in the project [16]. 2.1. stakeholder prioritization not all stakeholders deserve the same effort or endowment. limited project resources make managing all stakeholders equally a problematic and unfavorable task [17]. the project entity and the management should focus attention where it is essential and prioritize those who have ultimate influence over the project. the stakeholder salience framework [18] enables this prioritization by classifying and ranking various stakeholder types according to their power, legitimacy, and urgency. power is a stakeholder’s ability to bring about outcomes it desires [19]. legitimacy is a stakeholder’s capacity to make sound claims perceived as desirable and appropriate within the socially constructed system of norms, values, and beliefs [18]. urgency is the dynamism of a stakeholder or the ability to call immediate actions for its claims [18]. depending on the possession and combination of these attributes, a typology for stakeholders can be formed. stakeholders possessing all three are owners, customers, and local residents in the area that hitherto might not have had relations with each other. as peds are planned and implemented as projects, and due to the previously highlighted technological and relational complexities, project management serves as a critical step toward achieving desirable outcomes. as complexity heightens, the significance of project stakeholder management concurrently increases [6]. therefore, understanding the stakeholder environment and efficiently managing it would boost the chances of success [7]. with the intent to replicate to 100 cities by 2025 [8], the success of early districts is key to catering to replications and to avoiding the emergence of opposition. the aforementioned premises serve as the principal motivations for this research. this study aims to explore stakeholder management in the context of ped projects and to develop new knowledge on how the project stakeholders of a ped project should be catered to. the goal is to contribute to the existing body of project stakeholder research and to seek practical implications for future ped projects and other similar endeavors. to address these research objectives, the following research questions were formulated. rq1: how should stakeholders be managed in complex project settings? rq2: what are the main challenges encountered in ped projects? rq3: what are the main steps for stakeholder management in ped projects? this paper is organized as follows. we begin with a literature review that clarifies stakeholder management activities, and then we synthesize a generic framework for project stakeholder management, thus addressing the first research question. next, we present our methodology for the empirical case research. we then provide descriptions for two parallel case projects in the same ped setting. thereafter, key challenges are identified and described, thereby answering the second research question. finally, based on both prior literature and the identified challenges, we present the main steps for stakeholder management in ped projects, and end with the discussion and conclusions. 2. project stakeholder approach stakeholder management is one of the key areas of project management [9] whose central purpose is to enable and enhance management’s capabilities in making international journal of sustainable energy planning and management vol. 34 2022 93 juha-antti rankinen, sara lakkala, harri haapasalo and sari hirvonen-kantola recognized as definitive stakeholders, whilst those with no or minimal number of attributes are considered least important for management and decision-making. salience can vary during a project’s duration [18], implying that the hierarchical structure and prioritization can develop as the project moves forward. olander [20] expanded stakeholder characterization by considering the impact level, probability to impact, and positioning toward the project, together with the saliency attributes, thereby fostering a more comprehensive stakeholder analysis. aapaoja and haapasalo [21] further conceptualized olander’s approach into a stakeholder assessment matrix that categorizes stakeholders into different groups according to their salience and probability to impact or ability to contribute. the proposed framework conceptualizes the influence of stakeholders and helps in allocating resources where they are most appropriate. 2.2. integration and early involvement generally, construction projects suffer from poor performance that manifests as time and cost overruns that are partially caused by the inability of project participants to work together effectively [22, 23]. integration aims to facilitate inter-organizational collaboration which, in a project environment, can be regarded as a process whereby different organizations are linked together to work collaboratively toward the common objectives of the project [24]. integration aids in aligning the objectives of various subprojects and supports the pursuit of common goals [25] rather than focusing on sub-optimization [26]. one of the key activities to empower inter-organizational integration is the early involvement of relevant actors. this refers to the inclusion of stakeholders in the project from the earliest moments to altogether formulate the project objectives and determine the means by which these objectives will be reached [27]. the opportunities to influence project success are at their highest during the early stages of the project [28]. late revisions are usually more complicated to implement and the associated costs are much higher [29]. furthermore, unique or complex projects often require the collaborations of multiple private and public organizations in the development of the project and end-product. therefore, the early involvement of reasonable stakeholders enables uniting the competencies of the project organization and choosing better solutions for the customer to ultimately deliver more value [30]. instituting integration and initiating early involvement may entail a multitude of challenges, including contractual complexity, lack of prior experience in collaborative project environments, and challenges to leadership in the form of deficient team-building efforts [31]. project participants are often reluctant to invest in early project stages where uncertainties are at the highest level [32]. resistance to cultural change prevails as the biggest figure 1: stakeholder assessment matrix [21] 94 international journal of sustainable energy planning and management vol. 34 2022 stakeholder management in ped projects: challenges and management model barrier to implementing and adopting early involvement, and the major cause of this resistance arises from a lack of understanding the concept and its benefits [33]. 2.3. stakeholder engagement stakeholder engagement has become the key concept describing how organizations practice the stakeholder theory [34]. while many definitions and descriptions exist, perhaps the most widely used is the one by greenwood [35], which describes stakeholder engagement as practices that the organization undertakes to involve stakeholders with organizational activities in a positive manner. stakeholder engagement helps the stakeholder network achieve a higher-quality collaboration, thereby increasing the economic sustainability of the project [36]. as the complexity of the project environment increases, so does the effort required for the stakeholder engagement activity to achieve its intended performance targets [7]. stakeholder engagement is an iterative process throughout the project’s life cycle [37], and it should commence during the earliest stages possible [38]. 2.4. conceptual framework our project stakeholder management framework based on literature research consists of six key activities: stakeholder identification, analysis, prioritization, early involvement, integration, and engagement. effective project stakeholder management aims to unify stakeholders as a project organization working collaboratively toward project objectives to mitigate the silo mindset and sub-optimization and to synergize individual competencies to be able to choose the best solutions for a project. notably, it is critical to create a stakeholder management model for ped projects, balancing even the contradictory requirements of separate stakeholders for the benefit of the project. the early involvement of stakeholders engenders collaboration, which, in turn, facilitates mutual trust and communication and enables better results, performance, and value creation for the project [39, 40, 41]. 3. research methodology this research started with an aim to understand stakeholder management for forthcoming ped projects and subsequently expand the body of research on managing stakeholders in complex inter-organizational projects. a forthcoming ped project enabled a case study approach, and we collected empirical data from two interconnected case projects that were embedded in the same ped. our study followed the theory elaboration methodology. in theory elaboration, prior conceptual ideas and models are used as a basis for developing new theoretical insights [42, 43]. the case study approach was chosen for its feasibility for the theory elaboration method [44] and its suitability for practical implications within the specific context. furthermore, a case study is an appropriate approach as the nature of the project is new and unique, requiring a detailed qualitative analysis. for this study, we began by drawing the general conceptual framework for managing stakeholders in complex projects, and then elaborated it to the context of ped projects for a more detailed illustration. data for the case study were collected in 2020 using various methods to form a comprehensive understanding of the project’s background, important events, impacting actors, common objectives, and challenges encountered. ten semi-structured interviews were arranged with representatives of relevant project partners. in addition, our case ped project meetings were participated in, enabling participatory observation. memorandums of past meetings were also examined. the project’s eu level figure 2: generic stakeholder management model for complex project settings international journal of sustainable energy planning and management vol. 34 2022 95 juha-antti rankinen, sara lakkala, harri haapasalo and sari hirvonen-kantola deliverables, technical plans and drawings, related websites, newspaper articles and land use contracts between project partners were likewise studied. the case analysis started with analyzing the case materials and forming an understanding of the cases’ events and main stakeholder positions. based on the collected data, timelines for both cases were formed to recognize major occurrences and the actions leading to them. afterward, detailed case descriptions covering the key actors and events of the cases were written. stakeholder salience assessment was constructed to illustrate stakeholder positioning in the case projects. during the empirical analysis of the data, the focus of examinations was on deployed stakeholder management practices and stakeholder management related issues. the aim of the empirical analysis was to identify the differences, shortcomings, and additions compared with the presented theoretical framework. 4. positive energy districts by a definition, a ped consists of “buildings that actively manage the energy flow between them and the broader energy (electricity, heating and cooling) and mobility systems by making optimal use of advanced materials, local renewables, storage, demand response, electric vehicle smart-charging and ict” [4]. it can be described as an urban neighborhood working toward a surplus production of renewable energy with annual net zero energy import and net zero co2 emissions. ped projects seek to implement energy transition, optimize the amount of energy produced locally, and boost the use of renewable energy, waste recovery technologies, and innovative storage solutions to reduce greenhouse gas emissions. the impacts of a ped can also be recognized at social and economic levels with the creation of new business models and jobs, attraction of investors, and increase of the citizens’ involvement in energy issues through citizen engagement. ped projects can be characterized as complex inter-organizational projects because they apply new technologies with relatively low maturity levels, combine various stakeholders with different backgrounds, and require the formation of new collaborative business models. peds require aligning multiple city departments’ and other stakeholders’ processes and objectives table 1: main informants in the case project interviews type of data collection title organization interview geodesist city interview urban planner city interview project manager city interview development manager city interview researcher, urban design and planning university interview principal scientist research center interview development manager energy company interview development engineer energy company interview construction manager housing company interview project engineer grocery company figure 3: research methodology and research process 96 international journal of sustainable energy planning and management vol. 34 2022 stakeholder management in ped projects: challenges and management model figure 4: ped project phases in our case projects by overcoming the traditional silo mindset in collaborative work. however, managing the interests and constraints of both internal and external stakeholders of a ped requires a high degree of coordination. in our case projects, an initial plan for the optimal path of planning and implementing peds aiming to harmonize cities’ spatial planning with energy planning (figure 4) was created. at the beginning of a ped, a thorough diagnosis of the city must be made to clarify and assess the state of city plans, energy demand, and long-term visions. potential areas should be researched and compared to identify the optimal district location and set geographical boundaries for the ped. the later phases rearrange the focus toward citizen participation and the needed technologies and energy solutions. barriers and enablers for the ped project should be recognized and evaluated to identify any political, economic, social, technological, environmental, or legal constraints that require specific actions. the planning process is completed with a verifying calculation of the annual energy balance and the formation of detailed plans for the technical solutions. 4.1. case descriptions the case project is a ped project taking place in oulu, finland. it is a part of an eu horizon 2020 smart cities and communities lighthouse innovation project entitled making-city – energy efficient pathway for the city transformation (2018–2023). herein, the ped concept is demonstrated, tested, and validated in two lighthouse cities. during the project, the aim is also to replicate the demonstrated ped solutions in six follower cities by utilizing the knowledge gathered in the pilot projects. for the oulu ped, there are seven local partners and an eu project level coordinator planning and implementing the ped as a collaboration. the ped in oulu will be consisting of at least a grocery store and multiple apartment buildings in its vicinity. these buildings will be sharing an energy network infrastructure that works around an existing district heating network. the buildings are equipped with energy systems utilizing new technologies to generate renewable energy and heat to be transferred between the ped actors. the ped partners and their roles in the project are presented in table 2. the two cases are sub-projects under the ped project of oulu. the two are studied and described separately to gain more comprehensive insights into the ped and its challenges. 4.1.1. case 1 the first case revolves around a collaboration between the city-owned rental housing company and the cityowned energy company in the ped project. the housing company takes part in the ped project by building two new apartment buildings and retrofitting an existing one to fit the ped energy network. the energy solutions for these buildings are planned and implemented as a collaboration with the energy company. international journal of sustainable energy planning and management vol. 34 2022 97 juha-antti rankinen, sara lakkala, harri haapasalo and sari hirvonen-kantola the stakeholder network of case 1 is presented in the stakeholder assessment matrix in figure 5. the eu project application formation was conducted with the whole project consortium and can be described as the planning phase of the ped project. this phase consisted of meetings with the whole project group, smaller gatherings with some of the actors, and emailing information back and forth. the housing company planned their own premises in the ped network, the energy solutions used in them and the required investments together with the energy company. table 2: partner organizations’ roles in our case ped project partner organization role in the ped project fundacíon cartif, spanish nonprofit research institution (coordinator) coordinating at the eu project level, reporting, managing the entity city of oulu (lighthouse city) decision making and enabling, urban and land use planning, coordinating at the local level, organizing meetings university of oulu (technical partner) recognizing the idea of a ped in oulu, gathering the project group, conducting research, supporting partners vtt technical research centre of finland, a finnish government-owned nonprofit technology research center (technical partner) innovative energy systems design, managing the technical planning, implementing a monitoring system city-owned energy company (energy company) owner and operator of district heating network, planning, investing, and implementing the related energy systems, as well as measuring and maintaining them finnish grocery and restaurant cooperative (grocery company) building a grocery store that produces heat for the ped network city-owned rental housing company (housing company) building two new apartment buildings and renovating one apartment building with innovative energy solutions, enabling monitoring of ped solutions private construction company (construction company) building (expectedly) two new apartment buildings with innovative energy solutions, main constructor of the grocery store figure 5: case 1 stakeholder network 98 international journal of sustainable energy planning and management vol. 34 2022 stakeholder management in ped projects: challenges and management model when the application was accepted and the project officially started, the energy company began to rethink the centralized energy production system they had originally planned and agreed upon with the project partners. the plans would have required a low temperature heat distribution network infrastructure besides the district heating network already existing in the area. for various financial and technical reasons, constructing an overlapping infrastructure solely for the ped project’s purposes no longer seemed like the most feasible decision. the energy company began changing the plans to include the existing district heating network by replacing one centralized heat pump with four smaller ones that would operate in different buildings of the ped. this fundamental change caused close to a year-long delay in the project, as the systems for each ped building had to be rethought and the investment financials recalculated. after the new solutions were planned, a competent system supplier was chosen to deliver energy solutions. as of this writing, the project is at construction and implementation phase. as the city of oulu wanted to ensure a diverse housing stock in the area, the land use agreements implementing the regeneration plan for the wider urban neighborhood included a schedule that allowed for the private construction company to begin non-subsidized construction and selling before the cityowned housing company. this delay posed an inconvenience for the energy company, as their preferred option would have been a swifter schedule. the final collaborative business model concerning the energy solutions and heat transfer between the housing company and the energy company is still in progress. the basis of the energy system is in the district heating network owned by the energy company, but the new equipment will be operating in the housing company’s buildings, making them the platform of energy production. both companies have invested in the shared systems, and both utilize each other’s energy and surplus heat in their own energy processes. this arrangement makes the pricing and compensation policies complicated. 4.1.2. case 2 the second case is an analogical case description with the prior one. its events take place in the same ped project in oulu but are focused on the planning and building of a grocery store that works as a central energy producer in the ped network. the participants of this case are presented in figure 6. once the ped project group began the technical planning of the ped entity, the grocery company started to plan its store’s energy solutions in detail together with the energy company. the store was planned to have versatile energy-efficient solutions, such as a carbon dioxide-based refrigeration system, energy-efficient led lighting, condensing heat recovery, and solar panels. the produced energy would cover the store’s energy demand and the surplus would be transferred to other ped buildings through a low-temperature heat distribution network that would be constructed during the project. although the grocery store was built a lot earlier than the rest of the ped buildings, the upcoming energy network had to be taken into consideration during the construction of the store. the store with its energy systems was constructed with the construction company as the main contractor. multiple subcontractors hired by the grocery store and the energy company worked with the store’s hvac, electricity, refrigeration appliances, and energy systems. shortly after the official launch of the eu project, the energy company realized that the original plan with the low-temperature heat distribution network was not executable. the whole project group had to move from the agreed plan to a decentralized system that worked along the existing district heating network. as the grocery store had been constructed according to the original plans, the modification ended up being an inconvenience for the grocery company. some of the energy systems had to be replaced with different ones, which resulted in technical difficulties for the transfer of the produced energy from the store into the district heating network. the low-temperature heat distribution network would have been the preferred choice with more benefits and efficiency for the grocery company. at the time of our research data collection, the grocery company and the energy company do not have a contract on their shared business model yet. instead, they rely on mutual trust and a verbal agreement. the basis of the business model is that the grocery company produces energy for the district heating network owned by the energy company and should receive some compensation. the fundamentals of the pricing politics are still under discussion and both actors want to keep track of and learn more about the energy amounts and efficiencies before final agreements are drawn up. international journal of sustainable energy planning and management vol. 34 2022 99 juha-antti rankinen, sara lakkala, harri haapasalo and sari hirvonen-kantola 4.2. challenges in stakeholder mapping and management the identification of influential stakeholders in the project is critical for success. while no distinct stakeholder management process or a designated manager for stakeholder activities was in place, the project group and representatives managed in conjunction to identify and integrate all relevant internal stakeholders of the project. external stakeholders were identified and approached by hosting multiple participatory urban planning events and by asking public opinions before the eu and ped project preparation as the city was planning for the regeneration of the district. nonetheless, the energy-planning aspect was not included in the participatory urban planning, and many of the interviewed participants felt that the informing and incorporation of external stakeholders was not sufficient and should have been given more effort. lacking the official stakeholder management, there was no clear perception which stakeholders and claims should be prioritized. often enough, the interviewees felt that those with the loudest voice got their will though. the ambiguity was further heightened by the fact that management was divided into two levels. at the eu project level, the project was managed by the coordinator, while at the local level by the project manager. at times, the participants perceived the eu project level management to be problematic due to the bureaucracy involved. due to the separation of management, decisions were more difficult to change, inducing inflexibility to the project. at the local level, the project utilized a shared leadership approach, rather than a traditional strict management one. this arrangement received varied feedback. some felt that in a project of this type, it was the only feasible method, while others noted its engendered unclarity and would have welcomed a more coordinated and sturdier managerial grip. nevertheless, due to earlier collaborations between a few of the local project participants, common trust was still present within the project organization, enabling smooth cooperation and decision making. still, it was noticeable that the shared leadership style with no strict or clear responsibilities facilitated a rather uncontrolled management of various project participants’ requirements at some points of the project. one of the preeminent challenges the project faced was when a distinct revision had to be made to change the plans from a centralized energy system to a decentralized one. the change was initiated by the energy company and stated as necessary. this instilled uncertainty and inconvenience among the project partners. however, the project group managed the adjustment well, and many a partner recognized such unpredictability as inevitability in a long-lasting novel project. the uncertainty within the open eu project call was also acknowledged. not all parties were willing to invest figure 6: case 2 stakeholder network 100 international journal of sustainable energy planning and management vol. 34 2022 stakeholder management in ped projects: challenges and management model more effort to a project of which funding was not certain yet. simultaneously, others required and demanded a higher degree of commitment from the rest. the participants felt that a deeper commitment could have made the eu project application phase easier. it was also noted that the challenges in the application phase could have been reduced with clearer roles and responsibilities among the project participants. the project lacked a shared working location, which could have made the project environment and progress clearer for many. instead, shared virtual workspaces were created for the project. as per the interviewees, virtual workspaces are not intended to replace a shared workspace and unfortunately lacked further utilization for collaborative purposes beyond project documentation sharing. the lack of a shared environment conjoined with diverse stakeholder groups may have given rise to disparate perceptions about the project. for some, the project had the position of being a pioneering research project. for others, it was perceived most as a daily construction business. the variety of the perceptions and goals, while aligned at the broader level, induced a burden for the project stakeholders. clearer roles and more distinctly articulated project objectives could have granted remedy. the main challenges encountered in our case projects can be summarized as lack of definite stakeholder analysis and prioritization, a feeble integration toward an inter-organizational project entity, sluggish decision making, technological redevelopment, unwillingness for early commitment, and incoherent coordination of responsibilities. 4.3. ped stakeholder management model integrated energy and spatial planning, optimized land use agreements, and detailed plans the empirical study identified detailed urban plans and land use agreements as key preconditions for the ped project. detailed plans outline the course of urban development in the neighborhood in the form of determining buildings’ and constructs’ functions, sizes, locations, and other characteristics, such as plans for transportation, public and commercial services, and retaining appropriate recreation areas. land use agreements determine how the owners or tenants of the properties will execute the detailed plans for the area. thus, these plans lay the foundation and baseline for the ped project. these plans also determine the actors of the ped and act as initiators and enablers for ped projects. in both cases, the detailed plans and land use agreements were prepared before acknowledging the prospects of ped projects in the area. thus, the implementation of the ped in the area was not a succession to a systematic planning. rather, it was fitted to figure 7: stakeholder management model of a ped international journal of sustainable energy planning and management vol. 34 2022 101 juha-antti rankinen, sara lakkala, harri haapasalo and sari hirvonen-kantola pre-existing requirements and agreements. the findings suggest that such a case can cause multiple challenges for the project implementation. in an optimal scenario for future cases, integrated energy and spatial planning approach should account for future ped prospects and incorporate infrastructure readiness for novel renewable energy solutions. stakeholder analysis and prioritization a ped project involves multiple stakeholders that have a central part in accomplishing project tasks and play a crucial role in the overall project success. due to the variety of stakeholders coming from different industries with various backgrounds and connecting the goals of private businesses, plans of public institutions, and desires of future residents, the role of stakeholder management is emphasized. it is worth mentioning that stakeholder management processes are needed to improve the project management’s understanding of the involved stakeholders and their needs. stakeholder analysis should be conducted to unveil information about the expectations and requirements that the different stakeholders have about the project to help management come up with informed decisions and to support the project partners. the key stakeholder analysis activities that should be included are identification, classification, and prioritization of ped stakeholders. the first objective should be to identify all constituents who enable the project, affect the project’s success, or who should be further analyzed. once these stakeholder groups are identified, their importance to the project should be analyzed and their capability to influence the project should be evaluated. early involvement of relevant stakeholders stakeholders should be involved early on in the ped discussions and planning. they should also be integrated in the detailed energy systems design and investment planning conducted in the early stages of a ped project. this would ensure a more accurate and efficient planning, decrease costly revisions in later stages and enhance the collaboration and integration among the project participants. the three key focus areas are 1) enabling commitment, trust, and collaboration 2) clarification of common project objectives, and 3) finalization of technical solutions, investments, and schedules. management of collaboration and communication a ped combines multiple stakeholders working together toward a mutual goal, with each simultaneously maintaining its own objectives in the project. managing this expansive combination of demands, interests, and claims requires a high level of coordination from the project management side. a project manager with clearly delineated responsibilities is essential to coordinate the collaborations of project partners and to ensure progress toward the attainment of the common goals. the project manager leads the direction of collaboration and collaborative decision making. to foster an efficient and collaborative project environment, open communication should be practiced. regular meetings with clear agendas are a practical way to keep all partner organizations informed. mutual trust is one of the cornerstones of collaboration, and it requires sophisticated effort, especially if the partnering entities have no prior relationships. clarification of ecosystem structure and business models an additional complicating element to a ped project is devising and agreeing on ecosystem structures and business models regarding energy production. the groups of businesses and entities forming the completed district form a new cooperated energy ecosystem, linking the participants together. this new ped ecosystem can be regarded as a new entity established by adjusting the pre-existing business models of the partners. if the structure and detailed agreements of the ecosystem are left open ended or only agreed upon at the moment of completion, unnecessary uncertainty may emerge during the project. such include energy flow between the entities, investments for the equipment, compensations paid for the energy produced, and the maintenance requirements and responsibilities for the systems. therefore, it is critical to plan the principles in such a way that they are beneficial for both the individual organizations and the whole ecosystem. making an unequivocal business model and structure for an entity is problematic, as multiple actors exchange energy back and forth. further challenges exist in different legislations, whereby taxation and energy transmission costs may be applied repeatedly. in order to implement new, optimized and energy-efficient business models that endorse sustainable development, legislations concerning energy production and transmission may require updating. involvement of local residents an increasingly important part of stakeholder management is the acknowledgement and engagement of external stakeholders. in the ped context, these external stakeholders are mainly local neighboring residents and future 102 international journal of sustainable energy planning and management vol. 34 2022 stakeholder management in ped projects: challenges and management model residential customers. in the case of the oulu ped, being based in the district heating network that is developed as part of a public infrastructure and joined by housing cooperatives, the citizens are not vital for ped project implementation but they certainly are for reaching an energy surplus during the ped use. if these stakeholder groups are not properly involved and embedded in the project, they may end up opposing it. their involvement aims to convey information and understanding about the project and its purpose to these stakeholder groups. a more comprehensive approach should involve participatory planning regarding external stakeholders’ preferences for living conditions and energy solutions. when the end-users of the ped project are heard, project outcomes are more likely to be satisfactory for them. explaining and informing the purpose of a ped may also increase the interest and demand for services and housing for those sharing the values of sustainability and decrease any potential confusion that the project may cause. 5. conclusions a ped is characterized by its convoluted stakeholder environment. the sheer number of project stakeholders in the district development project can become substantial and the variety of involved actors may be considerable. together with the demand for energy-related technical requirements, this calls for a degree of collaboration that goes beyond traditional project delivery. furthermore, employment of new technologies entails new types of parties being involved into project environment. with these major characteristics present, we emphasize the crucial role of stakeholder analysis and management for the success of a ped project. the vast array of stakeholders and their interests need to be carefully understood and balanced to create a viable working environment and to form an integrated project team to undertake these nontraditional district development projects. integration and early involvement improve the chances of project success through mutual trust building and synergetic problem solving, as similarly noted by prior literature assessing complex projects [e.g., 25, 27]. distinct to a ped, a few key actions are identified and described. unique to the ped project context are the aspects of integrated energy and spatial planning, optimized land use agreements, and detailed urban plans. in addition, the initial step of the project phases carries significance, as the land use agreements and detailed urban plans may work as enablers or limiters of the success of a ped. ecosystem structure plays another significant and rather unique part in a ped project. conjoining the new energy ecosystem into existing business models requires sophisticated planning and agreements. finally, the involvement of local residents in the upcoming ped area is crucial for peds to reach their energy targets. based on these findings, we propose a new stakeholder management framework (figure 7) targeted for ped projects. 5.1. scientific implications the findings of this research are in agreement with many principles of stakeholder literature. our findings align with the stakeholder approach [12] for project success. the findings also support the advantage gained by early involvement [27] and stakeholder prioritization [18, 20, 21] in the context of ped projects. studying a ped project serves the project stakeholder management research, as it represents a complex inter-organizational project that is characterized by the simultaneous engagement of various stakeholders with vastly different backgrounds, and objectives, and the involvement of new technologies, concepts, and business models. furthermore, this paper contributes to the time-relevant and growing body of research addressing the transition toward next generation district energy systems (see e.g., [45, 46, 47]). local energy transitions play a significant part in achieving set sustainability and carbon neutralism objectives [45], and peds are one of the meaningful pathways for implementing these transitions. our approach strongly supports butu and strachan [45] in wide stakeholder engagement in early project planning and is aligned with krog et al. [47] in highlighting the importance of end-user involvement and engagement in enabling successful technological transition for district energy systems. 5.2. managerial implications to achieve a desirable project performance for ped formation and implementation, management needs to incorporate a stakeholder mindset. the findings offer reasoning and evidence on the importance of stakeholder understanding and management in upcoming ped projects. understanding the distinctive characteristics and stakeholder dynamics of a ped environment enables management to focus appropriate resources and efforts to the most crucial areas. besides peds, the findings offer utilization in other forms of inter-organizational energy related projects in international journal of sustainable energy planning and management vol. 34 2022 103 juha-antti rankinen, sara lakkala, harri haapasalo and sari hirvonen-kantola urban environments. the emphasized issues remain the same regardless of the specific environment: the influence of urban planning and land use agreements, the role of management, stakeholder behavior, communication across stakeholder groups, and the challenges initiated by new shared business models. 5.3. limitations and further research areas being an innovation project, the ped concept and project was studied under specific circumstances. the case project took place within the making-city project. thus, some of the partnering organizations were able to obtain eu funding for their investments. as this may not be the case in upcoming peds, stakeholder saliency findings, for example, may not be directly applicable in future ped projects. additionally, most of the project actors knew each other well from earlier collaborations. this enabled particularly easy decision making and collaboration in the endeavor, which may distort the implications for upcoming projects. in future peds, forming rather complex ecosystem structures may prove to be a more challenging feat if a sufficient degree of mutual trust between the participants has not been reached. the city’s role in peds may also vary from project to project depending on the location. therefore, the results may not be directly suitable for all peds; rather, they may server as guidelines as to what factors affect the stakeholder network of peds. being an innovation project and part of a larger development scheme, the presence of research interests may distort parts of the findings. validating studies could be initiated in future ped projects to confirm the findings in a more independent, market-driven environment. acknowledgements this project has received funding from the european h2020 research and innovation program under the grant agreement n°824418. the content of this document reflects only the author’s view. the european commission is not responsible for any use that may be made of the information it contains. references [1] goldthay a. rethinking the governance of energy infrastructure: scale, 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navigating pathways for community renewable electricity in rural areas: exploring stakeholders’ perspectives on shape community project. international journal of sustainable energy planning and management, 33 (2022) p 19-34. http://dx.doi.org/10.5278/ijsepm.6813 https://www.fundacionseres.org/lists/informes/attachments/1118/stakeholder%20engagement.pdf https://www.fundacionseres.org/lists/informes/attachments/1118/stakeholder%20engagement.pdf https://www.fundacionseres.org/lists/informes/attachments/1118/stakeholder%20engagement.pdf http://dx.doi.org/10.3846/1392-3730.2009.15.337-348 http://dx.doi.org/10.3846/1392-3730.2009.15.337-348 https://www.researchgate.net/publication/265177402_the_level_of_stakeholder_integration_-_sunnyvale_case https://www.researchgate.net/publication/265177402_the_level_of_stakeholder_integration_-_sunnyvale_case https://www.researchgate.net/publication/265177402_the_level_of_stakeholder_integration_-_sunnyvale_case 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associate professor erik o. ahlgren, chalmers university of technology, sweden  dr christian doetsch, fraunhofer institute for environ., safety, and energy technology umsicht, germany  professor frede hvelplund, aalborg university, denmark  professor bernd möller, university of flensburg, germany  professor brian vad mathiesen, aalborg university, denmark  dr karl sperling, aalborg university, denmark  professor paula varandas ferreira, universidade do minho, portugal  professor sven werner, halmstad university, sweden  professor anthony michael vassallo, university of sydney, australia  professor neven duic, university of zagreb, croatia  professor h yang, the hong kong polytechnic university, hong kong  professor henrik lund, aalborg university, denmark  dr jeremiah k kiplagat, kenyatta university, kenya  professor michael saul isaacson, university of california, united states  dr david toke, university of aberdeen, united kingdom  professor erling holden, sogn og fjordane university college, norway  dr david connolly, aalborg university, denmark  dr alice moncaster, university of cambridge, united kingdom  dr matthew lockwood, university of exeter, united kingdom  professor volkmar lauber, university of salzburg, austria,   professor robert lowe, university college london, united kingdom  dr maarten arentsen, university of twente, netherlands    issn   2246‐2929   published by aalborg university press    journal website journals.aau.dk/index.php/sepm  layout esben norby clemens, aalborg university, denmark   ditech process solutions, mumbai, india ‐ www.ditechps.com    sponsors danfoss, planenergi, desmi, aalborg university international journal of sustainable energy planning and management vol. 29 2020 141 *corresponding author e-mail: louise@plan.aau.dk international journal of sustainable energy planning and management vol. 29 2020 141–152 abstract in the transition towards 4th generation district heating (4gdh), supply and demand side measures have to be coordinated better than in previous generations of district heating (dh). the heat demand of buildings has to be reduced, and heating installations as well as consumer behaviour have to be adapted so as to be compatible with and support lower network temperatures. it is therefore necessary to investigate and understand how consumers can be meaningfully and strategically included in the transition towards 4gdh. this paper provides a literature review of the consumer level’s role during 4gdh in the transition towards 100% renewable energy systems. current literature on 4gdh has been investigated to identify the connection and involvement of consumers in the transition. even though consumers within the existing building mass have a large role in the transition in terms of heat savings and instalment of energy efficient technologies in the buildings, only a few publications address how these actions should be implemented at consumer level. from the results of the analysis it is recommended that further research should investigate how to strengthen the coordination between the supply and demand side in order to secure the right 4gdh initiatives are implemented in the right order. consumer involvement in the transition to 4th generation district heating louise kroga*, karl sperlinga, michael kvist svangrenb, frede hvelplunda a department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark b department of computer science, aalborg university, selma lagerlöfsvej 300, 9220 aalborg ø, denmark keywords: 4th generation district heating; low-temperature district heating; supply and demand side management; consumer involvement; url: https://doi.org/10.5278/ijsepm.4627 1. smart energy systems and 4gdh energy systems and the use of fossil energy resources are major contributors to the emission of co2 occurring all over the world [1]. especially, energy consumption in buildings, transport and industry are of significance [2]. in 2014, a 2030 framework for climate and energy was agreed upon by the european council [3], containing three key targets: a minimum reduction in greenhouse gas emissions of 40% compared to 1990, minimum 32% renewable energy and a minimum 32.5% energy efficiency improvement [3]. on a national level, some countries, including denmark, have committed themselves to creating a 100% renewable energy system in 2050 [4]. to optimally and cost effectively achieve 100% renewable energy systems, it has been advocated that the different sectors (electricity, heat, transport, gas) should be coordinated in a smart energy system where synergies between grids can be utilised to develop the best overall solutions for the energy system as well as for the individual grid or sector [5]. heating is one sector that many policy makers have found difficult to address. furthermore, the heating sector in many countries still heavily depend on fossil fuels, such as coal and natural gas. the heating sector can play an important role for the integration of the different energy sectors in the energy system [6,7]. it is primarily in the nordic countries (denmark, finland, sweden) that largest shares of dh are visible in the energy systems [8], but also estonia are starting to invest largely in dh [9]. in other countries such as uk, germany, italy, netherlands, slovakia and hungary gas grids are largely developed and, finally, there are many countries, including ireland, spain, mailto:oleodg@mail.dk https://doi.org/10.5278/ijsepm.4627 142 international journal of sustainable energy planning and management vol. 29 2020 consumer involvement in the transition to 4th generation district heating portugal, where the heating sector is primarily developed around individual heating in the residential buildings. [8] dh systems can utilize energy from various sources and convert them into hot water distributed in a pipe network. since dh was introduced around 1880, it has gone through a major development [10]. from 1st generation dh based on steam to pressurised hot water over 100°c and later below 100°c, until today, where there is an ongoing transition from 3rd generation dh based on pressurised hot water below 100°c to 4th generation based on low-temperature water (<70°c) [10,11]. during recent years the concept of 4th generation dh has been developed in dh and smart energy systems research [5]. 4gdh has been defined as follows: “4gdh systems are consequently defined here as a coherent technological and institutional concept, which by means of smart thermal grids assist the appropriate development of sustainable energy systems by providing heat and supply to low-energy buildings with low grid losses in a way in which the use of low-temperature heat sources can be integrated with the operation of smart energy systems. the concept involves the development of an institutional and organizational framework to facilitate suitable planning, cost and motivation structures.” [[5], p. 137] 4gdh is one of the key elements for more efficient energy systems, due to its possibilities to utilize renewable energy sources in a more efficient way leading to e.g. a decrease in heat losses in the district heating network [12–14]. low-temperature dh – i.e. lower dh network temperatures – is a central element in 4gdh because it supports the integration of low temperature heat sources and improves the energy efficiency of the energy system [15]. low temperature dh can be implemented, both, in new building sites that are being prepared and developed as well as in the existing building mass with the difference that existing buildings may have to undergo more far-reaching energy efficiency upgrades in order to be compatible with lower dh temperatures. low-temperature dh is defined as; “low temperature district heating (ltdh) system is defined as a system of district heat supply network and its elements, consumer connections and in-house installations, which can operate in the range between 50-55⁰c supply and 25-30⁰c to 40⁰c return temperatures and meet consumer demands for thermal indoor comfort and domestic hot water.” [ [16], p. 9] following from the above, 4gdh represents a paradigmatic shift in the interaction between the supply and the demand side in the district heating system. lower supply temperatures increase the dh system’s vulnerability to fluctuations in production and consumption, necessitating careful planning and operation. buildings and building installations need to be adapted in many cases in order to operable with lower supply temperatures, and in turn, supporting the actual lowering of the supply temperature [17]. implementing low-temperature dh in the existing building mass requires more than in new areas in terms of technical solutions that allow the temperature to be lowered in the dh network [12]. this also includes short-term and long-term behavioural changes at the level of homeowners, including investments in different energy improvements that increase the buildings’ compatibility with low temperature dh [18]. in denmark, it is estimated that the heat consumption in existing buildings should be lowered to 80 kwh/m2 by 2050 which is equal to around 40% reduction in the heat demand, while it is sufficient in new buildings to maintain a heat demand of around 55 kwh/m2 [19–21]. research within 4gdh and low-temperature dh has so far mainly focused on the new technical components in and the system configuration of the dh network and new building mass [22–25]. however, the existing building mass has one of the largest energy efficiency improvement potentials within the energy sector [26]. in this paper, the focus is on the existing building mass and how homeowners can be motivated and supported to prepare their homes for low-temperature dh and 4gdh. a new coordination challenge arises here, because building-level efforts have to be coordinated strategically to enable the conversion of neighbourhoods of existing buildings to low temperature dh – and in order to avoid single buildings becoming a barrier for the roll-out of low-temperature dh. as a consequence, the interaction between supply and demand has to be intensified and made more strategic. it is, thus, relevant to investigate to what extent the existing literature on 4gdh deals with this issue. the paradigm shift to smart energy systems and 4gdh requires a change in the current approach of the planning and implementation within the heating sector development in order to secure the most optimal system design without over-investing in (oversized) infrastructure. this is emphasised by hvelplund et al. [20]; international journal of sustainable energy planning and management vol. 29 2020 143 louise krog, karl sperling, michael kvist svangren, frede hvelplund “ […] to synchronize the right amount, in time and of the right types of investments in heat conservation with investments in the energy supply system.” [ [20], p.1] apart from that, in order to achieve low-temperature dh it is necessary to think and coordinate across different professional competences. for instance, implementation of low-temperature dh can have a negative effect on the indoor climate if the existing building mass do not go through the proper energy restoration. therefore, it is relevant to investigate how the connection between the transitions to 4gdh and actions at the consumer level have been addressed in current scientific literature. this leads to the formulation of the following the research question for this paper: what is the status of the current research on consumer involvement in 4gdh and implementation of low-temperature district heating? 1.1 structure of the paper the research question is answered through a literature review where 4gdh literature is examined with a specific focus on the consumer level. the literature review is supplemented with knowledge from real-life cases that are working or have worked with the consumer level in the transition to 4gdh. the paper consists of four sections. the second section presents the methodology used in the paper. in section three the results of the scientific literature review are presented, which is followed by section four, where preliminary insights from the identified real-life cases are summarized. finally, the conclusions of the analysis are presented in section five along with recommendations to further research. 2. methodology this paper is based on a literature review of scientific publications identified in searches on the two databases sciencedirect and scopus. there are numerous papers available when searching for papers within the search criteria; “4th generation district heating” and low temperature district heating”. a total of 2.273 papers were identified using the two search criteria in sciencedirect and scopus. the searches reveal that the papers date back to 1996, but the majority of the papers are from 2010 and forward. the high number of papers within the topic along with the increase in papers during the last 10 years, indicate that this is a topic that has been gaining scientific interest during the recent years. in 2018 lund et al. [11] published a literature review summarizing the state-of-the-art of 4gdh. in their paper lund et al. include a total of 298 papers within the scope of 4gdh [11] and from their results it is clear that the primary focus in 4gdh research is on the technical development of the dh system and actions that are required to prepare the dh grid for low-temperature dh [11]. this literature review differs from lund et al.’s study, in the sense that this paper has a more detailed focus on the involvement of the consumer level in 4gdh and low-temperature dh. the authors did not find other scientific publications with this focus, which makes this article a novel contribution to the emerging 4gdh literature. lund et al. [11] identify a strong focus on the technical elements in the 4gdh literature and along with the increase in scientific papers within the subject, it is therefore important to also identify some of the (non-technical) potentials in the transition towards smart energy systems and 4gdh in order to guide further research and the practical transition to 4gdh. to narrow down the number of papers included in the literature review to papers that address the consumer level in the transition to 4gdh a number of different search criteria were defined, see figure 1. figure 1 illustrates the work process in the literature review. the search for papers resulted in 464 papers with the selected search criteria. after elimination of overlaps in between searches the number of identified papers was narrowed down. the search for papers in sciencedirect included papers containing the search criteria in the complete paper. subsequently, papers not mentioning the search criteria in the title or abstract were eliminated from the study. this resulted in a total number of 82 papers to be included in the further assessment. the more detailed examination of the 82 papers, revealed that most of the papers only mentioned the consumer level briefly without further addressing or investigating it directly. thus, only 28 papers were included in the actual literature review figure 1. 4gdh is a relatively new term within collective heating and it can be assumed that relevant learnings, in terms of consumer involvement in dh literature in a more general perspective can supplement the findings of the literature review of consumer involvement in 4gdh. therefore, an additional literature search in sciencedirect on (“district heating” and (“consumer involvement” or “user involvement”)) has been added to identify important learnings that can be transferred into the implementation of 4gdh in local societies. 144 international journal of sustainable energy planning and management vol. 29 2020 consumer involvement in the transition to 4th generation district heating this literature search resulted in a total of 38 papers, out of which 9 were relevant to be included in this paper. 3. results of the literature review the results of the literature review are divided into three sections, where the first section is based on the literature on consumer involvement in dh in general. the second section is based on literature addressing the supply-side in relation to 4gdh and in the third section the demandside focus in relation to 4gdh is presented. finally, the results are summarized to highlight identified topics in the 4gdh literature. 3.1 consumer involvement in district heating in general the literature review on consumer involvement in district heating in general shows that, consumers are primary mentioned in publications after 2009, and often in a broader perspective then only dh, such as the transition towards smart energy systems [27] and climate targets [28]. heat consumers are primarily mentioned in three different ways. 1) end-users with no interest in dh [29], 2) end-users with no importance for the dh development [29] or 3) important players in energy transition and there is a need for more consumer involvement [30–33]. several studies indicate the importance of involving the consumers, such as walnum et al. [28] who state that just because users have access to decision-support tools it is not given that they will adapt these and therefore, is it important to involve different stakeholders, including users, in the development of such tools in order to secure an acceptance. furthermore, valkila and saari [34] indicate that even though, the consumers are aware that they need to reduce their energy consumption, they hesitate to do so because they are too “comfort-loving” to take any actions. however, one example of consumer involvement in terms of ownership can be seen in the danish case of dh. district heating in rural areas in denmark has a history of being consumer-owned with 341 consumer-owned dh companies in 2016 [35]. gorronõ-albizu et al. [35] indicate that the large amount of consumer ownership of danish dh is due to the “non-profit-rule” that sets limits for profit accumulation in dh companies and requires dh companies to pay any excess profit back to the dh consumers. it is therefore, the consumers, as owners, that have an interest in the organization and economy of the dh company in order to secure low dh prices. even though several studies point at the importance and need for more consumer involvement, no papers have been identified which present cases or suggestions for how this dh consumer involvement can happen in a search in sciencedirect and scopus search criteria "4th genera�on district hea�ng" and "consumer involvement" "4th genera�on district hea�ng" and "consumer" "4th genera�on district hea�ng" and "involvement" "4th genera�on district hea�ng" and "user involvement" "low temperature district hea�ng" and "consumer involvement" "low temperature district hea�ng" and "consumer" "low temperature district hea�ng" and "consumer" and "implementa�on" 1. paper selec�on from 464 papers to 82 papers based on assesment of paper �tles and abstracts. 2. paper selec�on from 82 papers to 28 papers referenced in the results of the literature review. selec�on based on a more throurogh assesment of the paper to see if the consumer level was actually adressed. figure 1: methodology overview for the selection of reviewed papers. international journal of sustainable energy planning and management vol. 29 2020 145 louise krog, karl sperling, michael kvist svangren, frede hvelplund practical way. one reason can be that dh is not widely developed outside the nordic countries. furthermore, since dh until now has been delivered at relatively high water temperatures, the sensitivity of dh systems has been low making it unnecessary for consumers and suppliers to investigate (4gdh) demand side measures, apart from saving money on dh consumption. 3.2 supply-side in 4gdh overall, the literature review shows that the primary focus in the identified literature is directed at a technical level. the main technical topics addressed in the literature on consumer involvement in 4gdh are: temperature: i.e. how much can the temperature in the dh network be lowered without causing any health or comfort issues [12,36]; use of new and fluctuating heating sources such as waste heat from industry, biomass, solar thermal, geothermal, sewage water etc. [14,26,37,38]; as well as the combination of different energy sources and thermal storage to increase the efficiency and reduce the co2 emissions from energy production [39,40]. also, many studies analyze the dh systems using different models, times [37,41] balmorel [26], trnsys [42,43]. these models rely on e.g. production and demand inputs, which for the demand-side often are based on assumptions and forecasts [44]. 3.3 demand-side perspective in 4gdh literature the identified literature that has a demand side focus often frames the consumer level in terms of technical obstacles to 4gdh [10,45–47]. one example of barriers for the transition at the demand-side is that consumers heating devices are designed for higher temperatures [48]. another reported barrier is the need for technical measures in individual buildings (e.g. new radiators, insulation of houses, energy efficient windows, mechanical ventilation [26] [49]). blumberga et al. study the challenges related to the development of renovation projects in different european countries [50]. they find even though different grant schemes are provided from the european union and local governments’ renovation of the building mass is still happening at a slow pace. consumers should understand the benefits and importance of improving energy efficiency and renovating their buildings and, therefore, thorough communication with homeowners is an important instrument [50]. nord et al. [25]point out that the existing building mass should undergo improvements to be capable of fitting into a 4gdh network. furthermore, the fact that the heating devices in buildings are not being operated in optimally results in high return temperatures from the consumers, which is a challenge for the development of 4gdh [25]. in relation to demand-side management, it is highlighted that technical installations such as the radiators´ heat transfer surfaces need to be increased to allow the dh supply temperatures to be lowered, while still securing the right comfort level for the consumers [12,51]. zhang et al. [52] recognize the importance of the consumers in the transition to integrated flexible energy systems, however even view the participation of consumers as a disadvantage, without going further into detail [52]. one of the important actions mentioned for the consumer level is the reduction of energy consumption for space heating [26]. some studies argue that it will require large investment costs to reduce heat demand in existing buildings [53], especially if the investments are not made in relation to already planned renovations of the existing building mass [19–21]. lund et al. [10] argue that demand-side management could be improved through education of craftsmen for them to be able to understand and handle the coordination of different components in smart energy systems.. nuytten et al. [39] emphasize that flexible energy systems that combine heat and power require focus on demand-side management and the flexibility the demand-side can provide in these “new” energy systems. interestingly, nuytten et al. [39] argue that this demand-side flexibility can be achieved through centralized and decentralized thermal storage [39]. paiho and saastamoinen [54] investigate challenges and opportunities for district heating in finland and point at the consumers lack of knowledge and interest in dh as one of the most important challenges for the development of dh. thus, consumers should be more strongly involved in this sector. other studies highlight municipalities as an actor that should an obvious motivation to better involve dh consumers [50] and/or become frontrunners through development of pilot projects [54]. even though, several obstacles for 4gdh are identified in connection to the consumer level, only a few papers are identified which directly address consumer or user involvement in relation to 4gdh or low-temperature dh [20,43,55]. hvelplund et al. [20] discuss necessary incentives for energy conversation in existing rental 146 international journal of sustainable energy planning and management vol. 29 2020 consumer involvement in the transition to 4th generation district heating buildings and apartments. they conclude that it is important that all house owners have posibilities to make the needed investments in energy conservation, and suggest incentives that combine of 100% variable dh tariffs and guaranty for 30-year loans with a low interest (2%) [20]. these suggestions are supported by djørup et al. [56] who show how 100% variable tariffs and low interest loans can help close the gab between the economic and private economic optimum of heat savings in single-family houses in a 4gdh system. volkova et al., discuss in [55] and [9] the importance of consumers for the transition towards low temperature dh. for this purpose, they [55]introduce a mobile app as a tool that should improve dh consumers’ level of information and motivation through access to basic information about heat consumption; comparisons with other heating sources; and display of how different behavioural changes affect the heat consumption and co2 emissions. 3.4 summary – results of literature review the reviewed literature covers several topics related to the transition to 4gdh for, both, the supply-side and demand-side. these topics are summarized in table 1. table 1 is a snapshot of the topics addressed in the scientific literature in relation to consumers’ role and involvement in 4gdh. in general, it appears that a) a stronger involvement of dh consumers and the demand-side is acknowledged in the existing literature; b) there is (some) knowledge of the technical adjustments and measures supporting 4gdh at the consumer level; c) however, a further or more direct involvement of consumers either is not yet researched further, (too) difficult or even counterproductive. this suggests that the 4gdh literature has not (yet) been taken to the “next level” outlined in the introduction: analysing and proposing how specifically dh consumers can be supported and involved in 4gdh, i.e. the “what works and what does not and why” in table 1: summary of identified topics in the reviewed literature. identified topics through literature review supply-side topics references demand-side topics references storage units/systems [39,57] old heating devices designed for high supply temperatures [10,45–47] temperature (low temperature opportunities [12,36] old heating devices designed for high supply temperatures [48] heat sources (new and fluctuating) [14,26,37,38] need for individual actions and investments in new heating devices and/or energy saving measures [12,25,26,49,51] system optimization (combination of energy sources and heat storage) [39,40] slow renovation rate of existing buildings due to lack of or wrong communication with the homeowners [50] energy models [26,37,41–43] wrong operation of heating devices [25] demand based on assumptions and forecasts [44] consumer involvement important in the transition to 4gdh [52,55] consumer involvement a disadvantage in the transition to 4gdh [52] high renovation investment cost [19,20,53] right education of craftsmen [10] flexibility at the demand-side can help the implementation of flexible energy systems [39] lack of knowledge and interest among consumers [54] need for consumer involvement [54] municipalities important actors as frontrunner or motivator [50,54] mobile app as a tool to motivate consumers [9,55] international journal of sustainable energy planning and management vol. 29 2020 147 louise krog, karl sperling, michael kvist svangren, frede hvelplund relation to adopting 4gdh measures from a consumer perspective. 4. consumer involvement in 4gdh r&d projects this section takes a brief look at a few completed and ongoing development and demonstration projects within the field of consumer involvement and 4gdh – within the nordic context. the purpose is not to draw a complete picture of the non-academic literature within the field, but rather, to see if examples of concrete 4gdh practices and projects can point to some issues that do not necessarily emerge from the academic literature, and thus, to supplement this literature. 4.1 combining building retrofits with lowtemperature dh between 2010 and 2014 the danish energy technology development and demonstration programme (eudp) as well as the danish district heating association funded a number of pilot projects on low-temperature dh within existing dh supply areas and buildings [58]. in one of the projects, focus was on a small number of detached, single-family houses with the aim to reduce dh grid losses by means of renovating the dh distribution grid, the houses and lowering the supply temperature. the results confirmed that it is not enough to renovate the building envelope in order to be able to reduce the supply temperatures, but that the renovations should be combined with an installation of new radiators with increased effect [58]. in terms of consumer involvement, the project showed that it proved to be difficult for the local utility company to motivate the building owners to retrofit their buildings even with information and energy audits carried out by the utility company and access to subsidies for building retrofits [58]. another issue raised in the project was that lowering the supply temperature should be done in close communication with consumers to not risk decreasing their comfort level, which may lead to suboptimal investments in additional heating sources, such as heat pumps or wood stoves, which would somewhat counteract the improvement of the dh system [58]. in another project, deep renovation of council flats together with a modernization of the dh grid at the building level was demonstrated in albertslund municipality. starting with a few pilot renovation projects, until 2015 590 council flats and their dh network were modernized to accommodate low-temperature dh, and achieving up to 60% reduction in net heat demand [59]. the project was based on a close cooperation between the housing association (bo-vest), technical partners, the municipality and the residents. for instance, individual renovation preferences within an allocated budget were taken into account and a residents’ satisfaction survey was carried out. albertslund was based on this "albertslund concept” appointed “nordic energy municipality” 2011 by the nordic council [60]. this is a case of an association of council flats, which, amongst others means that there was a centrally organized expertise and investment capacity and possibility to achieve economies of scale benefits. in terms of consumer involvement, it appears that citizens did not have to collect their own information and make own investment decisions but were involved in a guided and strategic way. these two examples indicate that communication between dh consumers and dh suppliers / organizations responsible for building refurbishment should be made “easy”, well-guided and improve the actual decision competences of consumers. the examples also highlight the transition to 4gdh cannot “just be done” by the dh suppliers without close communication with the consumers. one issue for future research that emerges is to what extent consumer involvement can and should be different in housing associations (with centralized investment decisions) as compared to single-family houses, where investment decisions and coordination of dh supply and demand happen at the level of the individual building owners [59,60]. 4.2 appand display facilitated energy consumption feedback the danish electricity supplier and distributor seasnve has developed a free mobile phone app, called watts, to enable consumers to monitor their electricity consumption based on hourly smart meter data [61]. several other energy supply companies have joined a collaboration with seas-nve with the objective to develop the app such that it can several types of consumption (electricity, heat, gas, water). one of these companies is aalborg forsyning (aalborg utility company), who in 2019 launched the app among 15,000 consumers [62]. the app allows consumers to follow their dh consumption hourly, daily, weekly and quarterly as well as their expected heat 148 international journal of sustainable energy planning and management vol. 29 2020 consumer involvement in the transition to 4th generation district heating consumption use based on their consumption in previous years. users can see their dh costs and are presented with a budgeted dh consumption based on previous consumption patterns. colors – green, yellow or red – when users are below, within or above their budgeted consumption. the app is being deployed and developed continuously and the goal is to expand the service to include strategic and long-term communication around energy savings and transition to 4dh. in the danish town of frederikshavn, the local housing association has combined deep energy retrofits of their buildings with the installation of real-time displays in each apartment. the panels show information on tenants’ energy consumption and give feedback using smiley icons – similar to watts [63]. while watts targets building owners, this display system, so far, is only available in rented apartments. 5 concluding discussion – what can we learn? the aim of this paper was to examine, what the status of the current research, on consumer involvement in 4gdh and implementation of low-temperature district heating, is. the literature review reveals a significant focus on the demand-side, as seen in table 1. the literature especially addresses the technical design of 4gdh systems and points out measures that needs to be addressed at the demand-side in order to enable lower temperatures on the supply-side. the existing research provides important knowledge regarding the design of 4gdh systems in general, however, so far, not many insights are provided on how dh consumers should be involved in the actual implementation these demand-side measures in their own homes. the existing building mass is responsible for 40% (2016) of the energy consumption in denmark [64] and it is therefore important that research within the development and implementation of 4gdh, begins to take the concrete implementation possibilities and challenges into account. a new feature of 4gdh compared to previous dh set ups is that the demand side is becoming more critical for the operation of the whole dh system – e.g. in terms of network temperature levels. it has therefore become essential to understand how to involve consumers and develop the right policy measures for the transition to 4gdh. one of the main points to take away from the literature study is the importance of the coordination between the supply-side and demand-side in 4gdh. for dh consumers this means that there is a need to renovate old heating devices and to update consumers’ knowledge to ensure optimal operation of (new) heating installations. these short-term measures need to go hand in hand with more strategic actions regarding heat demand reductions through e.g. energy efficient building renovation. high renovation costs and low levels of interest and knowledge among dh consumers are pointed out as important barriers to these measures in the literature. at the same time, research on these specific aspects is only beginning to emerge. generally, there is a gap in the existing literature regarding the connection between consumer actions, involvement and motivation and the transition to 4gdh. to improve the level of information reaching consumers, lund et al. [10] suggest that education of craftsmen regarding the specific demand-side technologies and components 4gdh and smart energy systems [10]. this could lead to better practical recommendations to consumers in terms of operation of heating devices and energy efficient renovations of buildings. this, along with mobile-apps, such as the one described by volkova et al. [55], as a tool to promote changes in the consumer behaviour through access to information about their heat consumption, are some of the few identified papers that begin to develop tools and recommendations for concrete consumer involvement in terms of demand side measures in 4gdh. at the level of utilities, a similar development can be seen, for instance, at seas-nve with their watts app giving consumers access to follow their electricity and heat consumption. as a next step, it will be relevant to investigate how these new information systems can incorporate 4gdh elements, such as information on dh temperature and long-term building energy efficiency – in addition to behavioural changes. a need for better interaction possibilities between dh suppliers and dh consumers could arise and be included in the further development of mobile apps and similar tools. here also, the existing research on building energy efficiency and renovation can be of inspiration (andrea mortensen [65], kirsten gram-hansen [66–68]), showing, for instance, how consumers can be motivated to adapt behaviour and investment decisions for better building energy efficiency. the missing link and a topic for further research is, however, the concrete application and adaptation of building energy efficiency research to 4gdh – i.e. including the supply side perspective. similarly, the field of human-computer interfaces (hci) and eco-feedback technology can be of inspiration. hci international journal of sustainable energy planning and management vol. 29 2020 149 louise krog, karl sperling, michael kvist svangren, frede hvelplund research indicate that people with a general interest in technology and energy consumption are enabled by feedback on their energy consumption e.g., through smartphone apps and smart meters. however, for the majority of consumers, information to changing behaviour is not sufficient, but must fit with peoples actual practices which are often less focused on managing energy consumption [73]. as such the majority are less willing to manage their energy use actively and more willing to invest money in long term energy renovation to overall reduce their overall consumption (e.g., smart automation) [69–72]. however, to support long term decisions, recommendations on long term investments based on consumer energy consumption is important. towards this end, svangren et al. [73] found that householders’ energy literacy is limited with respect to making informed decisions about building renovation and hasselqvist et al. [70] found that displaying and recommending for long term investments had a positive effect on informing collective’s decisions in energy renovation. the identified real-life projects show that actors working with the implementation of low-temperature district heating in practice are starting to recognize the importance of connecting energy saving measures in the building mass with the implementation of low-temperature district heating. this can e.g. be seen through a focus on the consumer level in the demo projects. here, the challenge is to transfer this knowledge to less “uniform” consumer groups in the dh system, such as single-family homeowners. to sum up, we identify and recommend the following topics for further research on consumer involvement in 4gdh: • further develop it tools (mobile apps etc.) to better link the demand and supply side, through e.g. improving availability and exchange of information on a specific building’s performance, role and possibilities in a 4gdh system • collecting and synthesizing practical knowledge on the integration of building renovation and 4gdh (e.g. low temperature dh) obtained in real-life projects. transferring this knowledge to “difficult” groups, such as the single-family building group. • linking building energy efficiency research with a consumer focus to 4gdh research • the influence of different organizational and ownership models on dh demand and supply side coordination [20], together with the design of economic incentives (subsidies, tariffs, loan conditions etc.) [74] acknowledgement the work with this article has been supported by a strategic, cross-departmental research fund at the technical faculty of it and design at aalborg university. this paper belongs to an ijsepm special issue on sustainable development using renewable energy systems [75]. references [1] iea. global energy & co2 status report 2019. paris: 2019. 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then, ccgt installations increase co2 emissions above 2020 levels. assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys roberto david heredia fonsecaa*, francesco gardumia a department of energy technology energy systems, kth royal institute of technology, brinellvägen 68, 10044 stockholm, sweden. keywords open-source; generation; social discount rates; hurdle rates; osemosys; http://doi.org/10.5278/ijsepm.6820 1. introduction in the last decade, ecuador has undergone significant energy infrastructure decisions, particularly in the power sector. the power sector has faced significant improvements from the enhancement of the service quality and decrease in energy losses to substantial investment in infrastructure, to name a few. investment in the power sector reached more than $11 billion from 2007 to 2016. notably, the government mainly invested in renewables with particular attention to hydropower and thermal power plants fueled by domestic production of fossil fuels such as oil products and natural gas. as a result, the country doubled the installed electricity generation capacity that it had before 2006 and achieved more than 99% access to electricity in 2018 [1,2]. in 2018, the total installed capacity reached approximately 7.2 gw, and around 70% is hydropower (table 1. installed power supply capacity in 2018 in ecuador.). a key aspect of such investments in the power sector is the government’s alignment to the agenda 2030, the sustainable development goals (sdgs), and sdg #7 [3]. according to the government, in the long-term, the power sector’s enhancement would be primarily based on renewables rather than conventional technologies, and it would be funded by investments from the private sector [4,5]. the total capacity used in this work did not include self-generating capacity for 2018. nominal self– generating capacity was around 1.6 gw, and only around 168.9 mw were available for the public, as seen in table 6, in appendix 1. http://doi.org/10.5278/ijsepm.6820 36 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys states and those applied in the european commission (eu) impact assessments. the latter, in turn, the authors modified the inputs for hurdle and social discount rates and analyzed the outputs of two well-known models, etsap-tiam [7] and times-norway [8]. this study showed that changes in both social and hurdle rates affect the energy system, i.e., the lower the sdr, the higher the renewable contribution. while these studies focus on the european region, a literature review did not show similar analyses in the latin american region (lac). as such, the first and primary objective of the present paper is to investigate the sensitivity of the results from a capacity expansion model to different sdr and hr due to the lack of studies in the lac region. secondly, to test the sensibility of the model outputs, we first develop an open-source energy system optimization model for ecuador. this model determines different future investments in conventional and renewable generation technologies and provides a view of the potential role of each of these technologies in the electricity mix. with the aid of this open-source model and open energy data, we support the transparency and reproducibility of energy systems models. the present paper builds on the data from governmental agencies. the energy system model is developed by using the open-source energy model generator osemosys [9]. in the following section, we describe the structure of the model, the underlying assumptions, and the scenarhowever, the fact that ecuador’s government is considering investments from the private sector raises uncertainty and risk. public investment is the investment by a state in particular assets, for instance, generation technologies. public investments account for a global discount, the social discount rate (sdr). contrary to public investment, private investment has individual discount rates or hurdle rates (hr) for every single generation technology. in other words, hr is the expected return from an investor perspective. generation technologies usually have a long useful lifetime (e.g., hydropower, thermal power plants). electricity generation projects face costs at different times during the useful life, i.e., during the evaluation process, at the construction phase, during operation, and in the decommissioning phase. since such time span is so large, it is crucial to select the proper discount rate when a government or private investor is likely to invest in a long lifetime and high capital-intensive energy projects. in this regard, only a few studies in the literature, for instance, garcia-gusano et. al. [6] and hermelink et. al. [7], have analyzed social and hurdle rates and their effect on energy models outputs. the former discusses findings in modeling assumptions as inputs in the primes [6] energy system model. the main findings suggest that higher discount rates make less attractive high-energy efficiency investments. the authors found differences between the discount rates used by member table 1: installed power supply capacity in 2018 in ecuador. type power plant nominal capacity (mw) effective capacity (mw) %4 renewables hydro 5050.5 4970.6 70.6 wind 16.5 16.5 0.2 solar pv1 24.5 23.6 0.3 bio-gas 7.3 6.5 0.1 non-renewable ice2 786.1 680.4 11.0 combustion turbine3 820.6 698.6 11.5 thermal-steam 446.0 418.0 6.2 total 1 7151.5 self-generation thermal, hydro 1494.2 1180.8 biomass 144.3 135.4 total 2 1638.5 total 1 + total 2 8.7 [gw] 1solar photovoltaic. 2internal combustion engine. 3includes single cycle gas turbine (scgt). 4based on total 1 international journal of sustainable energy planning and management vol. 33 2022 37 roberto david heredia fonseca, francesco gardumi table 2: renewable energy potential in ecuador. resource potential source hydropower large scale > 50 mw 10903.9 mw [23]medium scale 10-49 mw 1215.2 mw small scale 1-9 mw 200.8 mw geothermal 554 mw [1] wind 475 mw [24] biomass1 500 mw [25] solar2 2543 wh.m-2.day-1 [26] 1 potential calculated by taking advantage of 50% of biomass residues. 2 average solar direct insolation ios developed for this study. section 3 shows the results and scenario comparison, including the sensitivity to both sdr and hr. relevant results and policy implications are discussed in section 4. finally, concluding remarks of this study are made in section 5. 2. materials and methods in this section, we give a brief description of the modeling tool selected for this study. we show the reference energy system (res) that represents the model we developed, including resources and existing and future generation technologies. these future generation technologies include renewable potentials, as shown in table 2. additionally, we include the underpinning assumptions related to demand projections, renewable targets, and energy efficiency policies that the country aims to achieve. we give a brief explanation of how the individual discount rate is incorporated into the modeling tool and a short literature review related to discount rates. finally, the scenario definitions are shown in section 2.3 2.1. model structure this study traces the development of the open-source, long-term energy system model for ecuador. with the aid of the open-source model generator osemosys, we investigate the sensitivity of generation technologies to sdr and hr. the power sector development needs data and energy system models to aid government instances to achieve optimal decision-making. to date, there are a number of well-known and established long-term energy system modeling frameworks [6,7,10], such as markal/ times, message, and primes that have served as tools to analyze long-term energy policies and strategies according to [11,12]. some of these models have become free for academic purposes or completely available as an open-source under gnu general public license, as seen in [12]. however, these frameworks often require a valid commercial license for user interface (ui) and solvers for the optimization process. unlike models described earlier, a fully open-source model generator such as osemosys does not require an upfront cost [9]. zero cost means its user interface (ui) and model are freely available. several studies [13–15] have used osemosys to develop local and regional applications and upscaled globally. furthermore, studies have shown that this tool can replicate results from other renowned models, as seen in [16,17]. osemosys minimizes the total system cost for a given available and mix of technologies. in doing so, the optimization process meets energy demands and complies with several exogenous constraints in the analysis period. such constraints account for the availability of resources (e.g., oil, gas, coal) and performance and costs for different conversion technologies (e.g., gas power plants, hydropower plants, solar pv), domestic and import energy resources such as fuel prices for electricity generation. the reference energy system (res) is a graphic abstraction that represents the model that we developed. in this graphic representation, lines symbolize energy carriers. they are connected to blocks representing conversion processes or energy services. res illustrates the conversion chains from energy resources on the left to generation, transmission and distribution, and final energy demands on the right. figure 1 presents the res for ecuador and provides a breakdown of resources, technologies, and energy carriers. the period within which the modeling occurs is from 2018 to 2050. further key techno-economic assumptions, fuel prices, and future investments in generation are presented in 38 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys figure 1: simplified reference energy system of the ecuador power sector. appendix 2; a supplementary webpage developed for this paper, as seen in [18]. concerning resources, ecuador produces crude oil focused on exports but also for its own consumption. the country produces oil products such as fuel oil, residue, diesel, and natural gas fueling thermal power plants. in this study, we disaggregated thermal power plants by technology and fuel (e.g., internal combustion engines, steam turbine), hydropower potential by size (large, medium, small), and the potential for non –hydro renewables (e.g., geothermal, wind, solar). in this model, we used the effective capacity as inputs for the existing capacity. according to the ministry of energy, the geothermal potential is around 900 mwe. however, in this study, we use a more conservative value based on several studies that have examined the geothermal potential, as seen in [19,20]. in the last years, as seen in [21], capacity factors for an existent wind farm have increased from 41 to 63 % and 98% for availability. instead, in this model, wind potential has a conservative value based on wind speed higher than 7.5 ms-1 and 25% capacity factor. table 2 shows the renewable energy potential for ecuador. this information is open for public use and was taken from several public institutions [22]. we also considered all existing and the most recent power generation installations. the residual capacity and recent installations allowed the country to increase its total installed capacity to approximately 7.3 gw. this model further considers future new potential installations, as seen in table a3, in appendix 2, a supplementary webpage developed for this paper [18]. 2.1.1. demand projections in the last decade, different electricity demand forecasts have been proposed to illustrate how the demand will change in the coming years. these demand forecasts were the result of either statistical evaluations or projections from former consumption trends. also, such projections were developed by government agencies, as shown in [27], in collaboration with external institutions, as noted in [28], or by individual studies, as seen in [29]. in the ecuadorian model, we use demand projections from the electrification master plan 2016-2025 [1]. this electrification plan was the latest study developed by multiple institutions, including the ministry of energy, ecuador’s regulatory agencies, and supported by the inter-american development bank (idb). the methodology used for developing demand projections considered technical and economic variables such as gdp, international journal of sustainable energy planning and management vol. 33 2022 39 roberto david heredia fonseca, francesco gardumi population, household number, and size. additionally, it also considered four different electricity consumption sectors: residential, commercial, industrial, and public lighting. we accounted for an average demand growth (see in figure a 2aappendix 1) and individual load curves (see in figure a 2bappendix 1) for each of these four sectors. ecuador experiences a dry and rainy season in a year. the dry season tends to occur from october to march, while the country has a rainy season from april to september. as such, the electricity supply varies according to those seasons. for instance, thermal power plants usually generate more electricity during the dryer season than in rainy seasons. this variation in the generation is because most hydropower facilities are located in the eastern basin of the country, including paute-mazar, one of the largest reservoirs. the dry season negatively affects hydropower plants by reducing river flows; thus, decreasing generation. we divided a year into several time slices to capture the variability of renewable resources and demand variations. to define the time slices, we used and explored the time series every 30 minutes of demand in 2018, as seen in figure 2 [30]. we use boxplots to identify the high peaks by month and time of demand, as seen in figure a 1a and figure a 1b in appendix 1. twelve seasons were identified, one per month, given the dissimilarities of average demand per month. additionally, a day was subdivided into six different periods and different lengths to capture significant demand variations. one single day type was select for the model. therefore, in the model for ecuador, we used 72-time slices. 2.1.2. renewable targets and energy efficiency ecuador does not undertake legally binding emissions reduction targets due to being a non –annex i country of the united nations framework convention on climate change (unfccc). however, the country voluntarily self-imposed a target to reach at least 60% of renewable generation capacity by 2017 [31]. in recent years, the national development plan for the period between 2017 and 2021 [3] stated that the ecuadorian government’s goal was to increase from 60 to 90% of electricity generation from renewables by 2021. increasing generation from renewables follows ecuador’s nationally determined contributions (ndc) [32]. ndc includes an energy efficiency plan (planee), efficient cocking (nation-wide adoption of electric cookstoves), and the development of hydropower and non-hydro renewables, including biogas from landfills. other relevant energy efficiency goals adopted by the government are shown in table 3. planee is seen as a public policy instrument. its goal is to promote a culture of energy efficiency based on disseminating success cases and recognizing good practices in all demand sectors. as such, the government, h yd ro n o n -h yd ro res th erm al jan feb mar apr may jun jul aug sep oct nov dec jan 1000 2000 3000 0 25 50 75 100 200 400 600 800 1000 d em an d [m w ] figure 2: electricity demand in 2018. non-hydro renewables include solar, wind, biomass, and biogas. 40 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys by implementing energy efficiency policies, will contribute to achieving sustainable development goals (sdg) and specifically sdg 7. increasing the rate of energy efficiency by 2030 is one of the targets in sdg 7 and the sustainable energy for all initiative (se4all). 2.2. discount rates in osemosys the osemosys model is written in blocks of equations that compute energy balances, capacity and activity constraints, and costs. all costs are summed up into a system cost minimized over the entire model period in the objective function. the total cost includes fixed and variable costs, capital investment, emission penalty, and salvage value by technology each year. in osemosys gnu mathprog, the discount rate is a function of the region (r), as seen in equation eq. (1). param discountrate{r in region}; (1) being an open-source energy modeling system allows the modeler to update the model in specific parameters to meet individual necessities. for instance, in this model, we apply different discount rates for each technology. as such, the discount rate can be defined as a function of a technology (t) in a region (r) eq. (2). param discountrateidv{r in region, t in technology}, default discountrate[r]; (2) this update in the osemosys model allows the modeler to use a global discount or sdr as input for eq. (1) and the specific hr as inputs for eq. (2). we modified in the osemosys code the instances involving both discountrate, and discountrateidv. in addition, we implemented a new parameter pvannuity which allows the calculation of the present value of the investment cost for each of the technologies when using specific discount rates. this new definition is deemed as an important contribution to the tool itself, with potential applicability beyond the electricity and energy sectors. as such, the modeler can set individual discount rates for each technology. the code implementation used for this study is further elaborated in appendix 2, a supplementary webpage developed for this paper [18]; additionally, it is hosted in a public repository [34]. 2.3. scenario definitions. in this study, we first defined a baseline, a business as usual scenario (bau). this scenario accounts for existent, committed, and under construction hydro and thermal power facilities. for example, committed infrastructure includes 14.6 mw, 254.4 mw, and 593 mw hydropower plants. additionally, the model accounts for a combined cycle gas turbine (ccgt) of 110 mw). this scenario is set free to optimize future installations after the installation of committed infrastructure, and it does not include any energy efficiency targets. regarding fuels, we assumed no future investment to increase natural gas production and distribution for electricity generation in the bau scenario, currently decreasing from around 10.5 pj per year, as seen in [35]. however, the other set of scenarios exhibit an opposite effect for natural gas, assuming investments to keep the current natural gas production as shown in [36]. all scenarios have the possibility to use imported natural gas for generation. additionally, all scenarios account for committed and future planned power generation infrastructure that the ecuadorian government is likely to invest in. as a key assumption in this model, future generation infrastructure will follow the schedule proposed by the government, as shown in table a 3 in appendix 2 [18]. except for the bau scenario, the other scenarios are combined with different sdr and hr to define individual scenarios, as shown in table 4. these scenarios include energy efficiency on the demand side, as described in section 2.1.2. additionally, each scenario is allowed to install new capacity within the potential for hydropower and non-hydro renewables, as seen in table 2. in osemosys, a global discount rate is used to discount the total system cost for a given mix of technologies under several exogenous constraints. the total system cost includes operating cost, investment cost, emission penalties, and salvage value. however, when using specific discount rates-hurdle rates for each individual technology, the individual discount rate is used to table 3: energy efficiency goals goal description source renova plan: upgrading old inefficient for new high efficient appliances for the residential sector. [33] iso 50001 implementing energy management systems for the demand sector. distribution losses. reduction from ~12 to 8% [1] renewables decrease the use of fossil fuels electricity generation international journal of sustainable energy planning and management vol. 33 2022 41 roberto david heredia fonseca, francesco gardumi calculate a series of equal payments, from the capital investment, spread over the operational life of generation technology. then, the individual payments are discounted to the model base year by the global discount rate. in the ecuadorian model, a 7.5% social discount rate is considered as a baseline. this discount rate is an optimistic assumption for a country in south america. there is only one piece of evidence from country to regional studies that establish such a discount factor for nonoecd countries as a reference [37]. in addition, two social discount rates of 10 and 12% are used in the model to define new scenarios for analysis; these are set as mid and upper bounds, respectively. several researchers [38–40] have studied how social discount rates vary in developing economies. these studies show that international multi-lateral development banks often apply discount rates from 10 to 12% to developing countries. a more specific study by moore et al. [41] states similar values for discount rates for several south american countries, except for ecuador, ranging from 10 to 12%. only chile accounts for the lowest value of six percent in south america. further, a power systems interconnection in south american based on the samba model developed by pinto de moura et al. [14] assumes a global discount rate of 8%. notably, only one specific hydropower project in ecuador shows the discount rate at 10% as a reference [42]. the secretary for planning in ecuador suggests using a social discount rate of 12% as a reference value for latin american countries (lac) (e-mail to secretary of planning, june 15, 2020; unreferenced). in this study, we use three social discount rates of 7.5, 10, and 12%. this study also includes specific discount rates or hurdle rates for different technologies on the supply side. the purpose of using technology-specific hurdle rates (hr) is to note the sensitivity in the whole system when installing specific technologies. because of the lack of data for the lac region, we use hurdle rates developed by the committee on climate change and the department of energy and climate change [43,44]. these reports used an extended capital asset pricing model (capm) for determining hurdle rates. the hurdle rates are consistent with data obtained by estache et al. [45]. this study reveals an average cost of capital for the lac region of 12%, specifically for upper-middle-income countries such as ecuador [46]. additionally, it suggests the cost of capital from 10 to 11% in the energy sector. since literature advises low and high hurdle rates, two scenarios were drawn using such values, as seen in table 5. 3. results and discussion to test the sensitivity of several electricity generation technologies to sdr and hr, we developed six scenarios in an open-source energy modeling system. interestingly, there is one significant finding when considering committed and future planned energy infrastructure by the government. installations of large hydropower, geothermal, and ccgt power plants from 2022 to 2027 make future installations decline in the period between 2028 and 2035, as seen in figure 3. in general, reducing distribution losses and improving grid efficiency make new capacity installations lower for sdr and hr scenarios than the base scenario table 4: scenarios definition for ecuador’s model. sets scenario discount rate [%] hurdle rates3 facilities natural gas energy efficiency demand1existent under construction expansion plan2 social discount rates bau_75a 7.5   sc_75 7.5      sc_10 10.0      sc_12 12.0      hurdle rates lhr 10.0 low hr5      hhr 10.0 high hr5      note. all scenarios account for the existent capacity and decommissioning of power plants. 1baubusiness as usual does not include energy efficiency on the demand side and transmission-distribution lossless (planee). bfuture planned generation facilities (see in table a3, appendix 2). 3low and high hurdle rates, as seen in table 5. 42 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys table 5: hurdle rates for different technologies in the ecuadorian model. technology lhr (%) hhr (%) source geothermal 8.9 12.1 [43] steam turbine (oil products) 8.3 11.5 internal combustion engine/reciprocating 8.0 11.2 hydro large scale 6.8 10.0 [43,47]hydro medium scale 6.8 10.0 hydro small scale 6.8 10.0 biogas 7.0 10.0 [44] biomass 9.0 13.0 solar photovoltaic 6.0 9.0 wind onshore 7.0 10.0 combustion turbine 6.0 9.0 single-cycle gas turbine 6.0 9.0 natural gas combined cycle 6.0 9.0 2020 2025 2030 2035 2040 2045 2050 ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r ba u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r 0 4 8 12 ] w g[ yticapac wen detalu mucca solar pv wind wind_pot geothermal ice_biogas ice_res ice_fo ccgt hydro_l hydro_m hydro_cmd figure 3: accumulated new capacity [gw] for bau, sdr, and hr scenarios bau_75. new capacity decreases from 12.9 gw in the bau_75 scenario to an average of 11.5 gw for sdr, hr scenarios. as a result, future investments make new capacity lower by around 1.4 gw for sdr and lhr scenarios; however, the lhr scenario exhibits an opposite effect (see figure 3). lhr scenario accounts for the higher installed new capacity of 11.9 gw due to the higher deployment of large-scale hydro. large-scale hydro reaches 6.3 gw for the lhr scenario. the following subsections present selected results for specific technologies in the model. 3.1. large and medium scale hydro large-scale hydropower stands out as the technology for a large deployment for all sdr and hr scenarios. there is no marked difference in the size of installations for new large (hydro_l) and medium (hydro_m) scale hydropower as the sdr increases. large-scale hydropower shows low sensitivity to sdr; this technology reaches an average of 5.8 gw. similarly, large-scale hydropower varies by about 0.5 gw or around $96 million, in 2018 money, for hr scenarios and reaches around 6.3 gw for the lhr scenario. medium-scale hydropower appears to be little sensitive to discount rates. there is no variation in the total installed capacity for this technology, reaching 0.98 gw in 2050 for bau and hr scenarios (see figure 5). this constant capacity can be attributed to a higher cost-competitiveness of medium-scale hydropower than other technologies, related to upfront costs, construction period, and low operational costs. however, this international journal of sustainable energy planning and management vol. 33 2022 43 roberto david heredia fonseca, francesco gardumi b a u _75 s d r _75 s d r _10 s d r _12 lh r h h r 2034 2038 2042 2046 2050 0.0 0.5 1.0 0.0 0.5 1.0 0.0 0.5 1.0 0.0 0.5 1.0 0.0 0.5 1.0 0.0 0.5 1.0 n ew c ap ac ity [g w ] solar pv wind wind_pot ice_biogas ice_res ice_fo ccgt hydro_l hydro_m figure 4: new capacity [gw] for bau, sdr, and hr scenarios from 2035 to 2050 technology does not reach its full potential, which is more than 1.2 gw. figure 4 shows installed new capacity from 2035 to 2050 for all scenarios. this figure makes it possible to appreciate the low sensitivity of medium and large hydropower to sdr and hr. a variation in the discount rate makes few differences in hydropower installations. for instance, new medium and large hydropower installations start in 2038 and 2044 for scenarios sdr_12 and hhr, respectively. decreasing the discount rate, as in scenarios sdr_75 and lhr, in turn, makes the investments in hydropower occur from one to two years earlier. a variation in the discount rate shows no effect on wind and solar pv generators, as discussed in section 3.2. in general, findings in this study indicate similarities to those developed by pinto de moura et al. [14] and inter-american developed bank [48] regarding the increasing generation from hydropower. these similarities imply that ecuador will continue relying on hydropower generation in the mid and long term. however, contrary to the former studies, this study uses different discount rates to explore the sensitivity of generation technologies. this high dependency on hydropower can be attributed to lower operation costs. hydropower projects, once these are commissioned, need low maintenance during operation; thus, they have low variable costs. the ecuadorian government used to set a variable cost for hydropower generation, which was used not only in the dispatch but also in other transactions. this cost reached values as low as 2 usd/mwh, as seen in [49]. concerning discount rates for hydropower, the rate increases or is adjusted to reflect risk mainly in the development and construction stages. a low discount rate from 6.8 to 7.5% used in this study is related to lowrisk technology, given that hydropower is a mature technology. nonetheless, a higher discount rate; for example, 12%, reflects risk and a significant uncertainty level given three specific reasons. first, private investors can have several risk interpretations; therefore, they can have differences in their rate of return. as a result, private investors may require a higher return (risk premium) to compensate them for the risk. second, we assume both social discount rates and hurdle rates with no variation over the model period in this model. the latter is not entirely correct because there is less confidence in the likely future estimates for these rates, as suggested in [43]. for instance, the rate of return is considered speculative and high during the feasibility study in the development stage of any renewable project. later, in the operation stage, this discount rate becomes real and conservative [50]. third, studies developed in 44 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys the early 2000s [51] suggested that climate change would affect the financial performance of hydropower. in ecuador, however, there is a high level of uncertainty regarding climate change. studies [52,53] suggest that climate change would affect river flows and negatively affect hydropower generation. on the contrary, a vulnerability assessment of water resources developed in ecuador in 2008 [54] showed no conclusive results given the lack or incomplete time series of hydro-meteorological data. 3.2. non-hydro renewables installations non-hydro renewables, such as solar pv, biomass, geothermal, are part of the mix for sdr and hr scenarios, but at a lower scale. results show that modifying sdr and hr did not have a noticeable effect on the new installed capacity for these technologies. wind, solar, and biogas accounted for around 160 mw, 221 mw, and 20 mw at the end of the modeled period, respectively. new investments in these technologies only take place to replace old installations after these have reached their lifetime. consequently, non-hydro renewables represent only three to four percent of the total installed capacity in the country (see figure 5). 3.2.1. solar pv the lack of new solar pv installations seems to stem from low incentives. no policies support solar pv or incentive to install solar applications despite the country’s sizeable solar potential, as seen in table 2. ecuador used to have one feed-in tariff (fit) scheme for solar installations until 2011 [55]. such regulation was updated in 2014 and excluded incentives for solar pv and wind power [56]. in 2016, fit schemes were derogated, given the new law of electricity for public service and promoting a new scheme based on credits for grid-connected pv systems [57]. the lack of incentives is one aspect that needs further development and assessment to ensure penetration of solar pv installation in the future. a study developed by jacobs et al. [58] identified several issues related to lac region policies with limited renewable energy deployment. the study showed that not well-designed fit policies, political and regulatory risk were the leading causes of market constraint for renewables and specifically solar pv. further assessments are needed combining falling electricity costs for solar pv and different discount rates. the latter can aid in developing or redesigning low-risk policies that can attract new investments [59]. 0.03 0.040.040.04 0.040.04 0.73 0.72 0.73 0.72 0.720.71 0 4 8 12 16 20 0.00 0.25 0.50 0.75 1.00 bau_75 sdr_75 sdr_10 sdr_12 lhr hhr to ta l c ap ac it y [g w ] sh ar e o f r en ew ab le s solar pv wind wind_pot geothermal biomass ice_biogas ice_res ice_fo ice_diesel scgt ccgt hydro_l hydro_m hydro_cmd hydro_ext figure 5: total capacity [gw] for bau, sdr, and hr scenarios in 2050 (left axis). share of renewables installations (right axis). red and cyan marks represent the share of non-hydro renewables and hydro capacity, respectively. international journal of sustainable energy planning and management vol. 33 2022 45 roberto david heredia fonseca, francesco gardumi 3.2.2. biomass another technology not considered in the mix of technologies is biomass. the result shows that only a specific application would contribute to the future by generating electricity, which is waste-to-energy (wte). this technology is currently in the country, and it is fueled by bagasse from sugar cane plantations. other plug&play technologies fueled by biogas from the anaerobic digestion of the poultry industry are also present in the country but at a lower scale [60]. according to the atlas of bioenergy for ecuador, the country accounts for large quantities of biomass. several studies [61,62] have contributed to the analysis and development of biomass as an energy source. however, only a single study showed biomass as a promising feasible solution not for electricity generation but in biofuels production, as see in [63]. 3.2.3. geothermal even thought, as seen in [64], geothermal becomes more cost-competitive at higher than 80% of capacity factor and at higher fossil fuel prices, for example, imported natural gas, this was not the case in this model. geothermal power did not stand out in both sets of scenarios due to its high capital investment. geothermal reached a limited deployment of around 160 mw for all scenarios, as seen in figure 3. regarding discount rates, these are considered high for geothermal, given the risks associated with the development stage. the limited access to the resource, often remote, increases the risk of developing geothermal energy and its commercial development [65]. as such, geothermal needs incentives from the public sector and clean development mechanisms (cdm) to be economically competitive, as suggested in [66]. 3.3. fossil fuel power plants ccgt is predominant among several other thermal generation technologies for all sdr scenarios. large-scale hydropower has a higher cost-competitiveness than ccgt. the new installed capacity for ccgt does not face a significand change reaching on average around 3.3 gw, for sdr and lhr and hhr scenarios (see figure 3 and figure 5). in hr scenarios, higher discount rates did not benefit less capital-intensive technologies, such as ccgt, which offers a shorter construction period from one to two years, and lower capital costs. as a result, approximately more than 70% of the total installed capacity is dominated by hydropower, reaching 80% for the hhr scenario. ccgt loses competitiveness when considering this type of generation fueled by a mix of local and imported natural gas at higher prices. ecuador would import natural gas to secure supply for generation, industry, and residential sectors in about 50 mmcf, given the depletion of local resources [67]. on the other hand, thermal technologies fueled by oil products are affected by different hurdle rates. scenarios lhr and hhr show a marked increase in new installations for generators fueled by local oil products. conventional generators reach from 0.95 gw to 1.2 gw for hhr and lhr, respectively. 3.4. electricity generation mix the evolution of the generation mix in the study period is another aspect highlighted (see figure 6). comparing sdr and hr scenarios, these show a significant contribution of hydropower. the country will achieve more than 90% of electricity generation from renewables in the short and mid-term; however, it would fail in the long term. on the other hand, increasing the sdr decreases the fraction of generation by renewables from higher than 0.90 to 0.84. this change in the fraction is because at higher sdr, the investments for ccgt increase. there is no noticeable change in the fraction by renewables in lhr and hhr scenarios regardless of the hurdle rate. 3.5. emissions of co2-eq when accounting for planned infrastructure by the government, results show a steady decline in emissions from 3000 kt of co2-eq to 250 kt by 2027, as shown in figure 7. even though results show significant investments in hydropower and geothermal, these do not ensure low emissions levels after 2027. in fact, there is a steady increase in emissions to 2018 levels, which reach 3 million tons of co2-eq by 2035 due to early ccgt installations for sdr and hr scenarios. emissions can reach between 5 to 6 million tons of co2-eq by 2050 for sdr and hr scenarios. this increase in emissions is due to investments in non-gas thermal power plants (e.g., oil products) affected by the low and high hurdle rates. the findings in this study are subject to three limitations. first, techno-economic assumptions adopted in this model are set to have no variation over time. these assumptions include costs, fuel prices, and technology cost projections, to name a few. the no variation over time of these assumptions is considered acceptable if the 46 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys 0. 85 0. 85 0. 85 0. 85 0. 85 0. 85 0. 85 0. 85 0. 85 0. 85 0. 85 0. 91 0. 92 0. 92 0. 92 0. 92 0. 92 0. 97 0. 97 0. 97 0. 97 0. 97 0. 97 0. 89 0. 91 0. 91 0. 91 0. 91 0. 91 0. 88 0. 88 0. 87 0. 87 0 .8 9 0. 87 0. 87 0. 85 0. 86 0. 87 0. 85 0. 86 0. 87 0. 88 0. 86 2018 2020 2025 2030 2035 2040 2045 2050 b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r b a u _7 5 sd r_ 75 sd r_ 10 sd r_ 12 lh r h h r 0 50 100 150 200 250 0.00 0.25 0.50 0.75 1.00 g en er at io n [p j] re n ew ab le fr ac ti o n solar pv wind wind_pot geothermal biomass ice_biogas ice_res ice_fo steam_fo ice_diesel scct_diesel scgt ccgt hydro_l hydro_m hydro_cmd hydro_ext figure 6: electricity generation mix (left) and renewables fraction (right) for bau, sdr, and hr scenarios 0 2000 4000 6000 2018 2022 2026 2030 2034 2038 2042 2046 2050 c o 2eq [k t] bau_75 sdr_75 sdr_10 sdr_12 lhr hhr figure 7: emissions per year for bau, sdr, and hr scenarios. purpose is to compare scenarios by modifying the discount rates. however, more research is needed, analyzing the impact of variations in fuel prices and the declining costs for non-hydro renewables, for instance, through a sensitivity analysis or stochastic program. these analyses can help to understand and, to some extent, quantify the implications of the uncertainty surrounding these parameters on the generation expansion plan. second, this study does not consider the socioeconomic and environmental impacts of the future expansion plan and impacts of climate change on generation. these impacts, in turn, may have significant effects on the development of the power system, especially in large hydropower projects. climate change and the frequency of severe events could put at risk hydropower facilities and alter the cost of capital for future investments. third, hurdle rates as the cost of capital can vary over time, not considered in the present model. this variation in hurdle rates is due to the capm model; the risk premium and beta can vary over time depending on a specific country and investor. international journal of sustainable energy planning and management vol. 33 2022 47 roberto david heredia fonseca, francesco gardumi 3.6. policy implications the growing electricity demand across the lac region is one of the main factors that have attracted the development of renewable energy policies. these policies include renewable energy laws and renewable energy targets (ret), and regulatory instruments such as auctions, feed-in tariff (fit), net metering and self-supply, fiscal incentives, and grid access [68]. across the lac region, governments and policymakers are making efforts to consider intermittent renewables into the power sector, as seen in [69–71]. in the case of ecuador’s model, results show that hydropower is the selected technology for generation in the country, under a cost-minimization perspective and not considering climate uncertainty. new installations in hydropower can reach an average of 6 gw by 2050. on the other hand, non-hydro res produces only a fraction of the total from renewables. this limited fraction would justify the interest of national policymakers in hydropower as a source of baseload generation in the long term. other considerations are that large and medium hydropower projects provide additional benefits than generating electricity, such as flood control and firm water supply. nevertheless, if the government aims to fund future medium and large hydro projects by private utilities, in that case, they will have to deal with contentious social and environmental constraints [72]. previous developments in the country had faced similar issues and shown how national policymakers and politics played an important role in designing such projects. [73,74]. regarding energy policy for renewables, ecuador had a ret. the main objective of this target was to increase electricity generation from renewables from 60 to 90% and decrease the use of imported liquid fuels for generation by 2021. however, this target did not have any disaggregation regarding specific contributions by different renewable technologies. in our model, we did not use any ret to limit the installation of conventional technologies; yet, we include future non-hydro investments. this lack of a specific ret is one of the triggers that makes hydropower the most common installed technology. according to irena [68], a specific ret, which included non-hydro renewables, is stated only in two countries across the lac region; this is the case of mexico and el salvador. mexico ret includes specific hydropower, wind, geothermal, bioenergy, and solar fractions. auction is one of the most common regulatory instruments in the lac region. auction is a bidding procurement process for electricity from renewables. often, a long-term contract, a power purchase agreement (ppa), is signed after procurement. in the last years, ecuador has made available only two non-hydro-res projects for auction. these projects consist of a 258 mw solar pv and 110 mw wind, and the concession of the infrastructure lasts 20 and 25 years, respectively. other countries in the lac, such as argentina, chile, mexico, and brazil, are leading auctions, including non-hydro renewables. these auctions showed clear and defined transition targets and regulatory instruments to support the development of renewables in such countries, as seen in [75–77]. feed-in tariff and net metering, and self-supply are other instruments used to support the deployment of renewables. however, as discussed in section 3.2.1, ecuador has no feed-in tariff schemes anymore. on the contrary, there is no statement regarding net metering and self-supply in the country. still, self-generation capacity in the country is about 1.6 gw, and only around 10% is available to the public, as seen in table 6, in appendix 1. in the last five years, only small biomass (144 mw) and hydropower plants produced a surplus; thus, these were able to feed electricity to the grid [22]. with respect to geothermal, moya et al. [66]found that one of the main barriers for ecuador to implement such technology is the lack of one specific geothermal law. in addition to this specific public policy, clean funding mechanisms and public incentives are necessary to make new non-hydro renewables financially and economically feasible. as such, new discussions regarding renewable energy policies and techno-economic assessment of non-hydro renewables should be done in the country in partnership with nongovernmental organizations and agencies that can help promote the diversification of renewable sources, for example, as seen in [78]. 4. conclusions to meet future demand, significant investments in energy infrastructure are necessary and imminent in ecuador. this study sets out to develop the first longterm open-source energy system model to provide a foundation for ecuador to analyze long-term investment scenarios. the scenario comparison analysis illustrates that renewable technologies significantly contribute in 48 international journal of sustainable energy planning and management vol. 33 2022 assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys the mid and long-term, and hydropower stands out in the generation mix. hydropower contributes in around 70% in sdr and lhr scenarios of total installed capacity. it reaches 80% in the hhr scenario. the share of renewables in generation exceeds 90% in the short and midterms but decreases in the long run. unlike the substantial contribution of hydropower, other technologies such as solar pv and onshore wind participate in the generation mix but at a lower scale. as such, further research is required in low-risk policies that can potentially attract investment and increase the influence of non-hydro renewables. similarly, geothermal is shown to have a limited deployment in the country in scenarios accounting for government plans and hurdle rates, as seen in figure 3. the deployment of geothermal happens after 2026, at a fraction of its full potential of around 554 mw. geothermal can become a cost and environmentally feasible option to conventional generation by incorporating financial incentives and clean development mechanism (cdm). in this paper, we have examined the impact of applying sdr rates into the model. the results provide evidence of the high importance of sdr in evaluating long-term energy infrastructure, and these are considered one of the most critical drivers in any analysis. specifically, this is the first study to make available evidence for the sensitivity of sdr and hr for generation technologies in ecuador. considering both sdr and hr, results reveal that the country would continue relaying in large hydropower in the mid and long terms. unfortunately, no studies have been developed in the lac region to determine hurdle rates specifically for the energy sector. we applied hurdle rates from well-renowned institutions in this paper. finally, hurdle rates from the private sector remain uncertain in the lac region and often unavailable for researchers; we identified this limited access of such rates as a gap for future assessment. acknowledgments funding for the present work was provided by the scholarship scheme from the higher education secretary of the ecuadorian government senescyt references [1] meer, plan maestro de electricidad 2016-2025, 2017. https:// www.celec.gob.ec/hidroagoyan/images/pme 2016-2025.pdf. 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(a) by month (b) by time. appendix 1: average demand in 2018, load curves by sector, and demand projections for ecuadors' model. (a) (b) 0 1 2 3 4 5 6 7 8 0 2 4 6 8 10 12 14 16 18 20 22 24 time (h) lo ad p er ce n ta g e [% ] sector residential commercial industry public lighting 10 20 30 40 50 60 70 80 90 2018 2023 2028 2033 2038 2043 2048 year d em an d (p j) sector residential commercial industry public lighting (a) (a) (b) 0 1 2 3 4 5 6 7 8 0 2 4 6 8 10 12 14 16 18 20 22 24 time (h) lo ad p er ce n ta g e [% ] sector residential commercial industry public lighting 10 20 30 40 50 60 70 80 90 2018 2023 2028 2033 2038 2043 2048 year d em an d (p j) sector residential commercial industry public lighting (b) figure a 2: (a) load curves by sector. the public lighting load curve presents an instant demand at sunset, following zero demand at sunrise. adapted from [5,79]. (b) demand projections. table 6: self-generation capacity in 2018 capacity (mw) public no public total nominal real nominal real nominal real 168.9 165.4 1469.6 1151.8 1638.51 1317.2 1includes biomass (bagasse) power plants, based on [22] au_35.indb international journal of sustainable energy planning and management vol. 35 2022 1 *corresponding author – e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 35 2022 1–4 abstract this 35th volume of the international journal of sustainable energy planning and management includes work investigating different biomass resource utilisation scenarios for mexico as well as scenarios for the transition of thailand. the latter finds significant photo voltaic requirements when factoring in the transition to green hydrogen for transportation. transportation is also the focal point in a study of indonesia, finding that cost and emission optimisation are pushing optimum in different directions. continuing with indonesia, the country is seeing a rapidly growing electricity demand, and siregar investigates social, environmental, technical, and economic criteria for the development of the system towards a more sustainable electricity supply. the scenario analyses are largely based on larger societal transitions, but appiah makes a more concerted effort to investigate the actual investments in renewable energy sources. lastly, an article focuses on the industrial sector and how energy efficiency may be affected by policies. energy transition in the global south – editorial for the international journal of sustainable energy planning and management vol 35 poul alberg østergaard1, rasmus magni johannsen department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords transition scenarios thailand renewable investment ghana biomass scenarios for mexico transport transition scenarios energy efficiency http://doi.org/10.54337/ijsepm.7393 1. energy transition in the global south a new study led by breyer [1] has synthesized much of the work on 100% renewable energy systems finding that there is consensus in the scientific community that 100% renewable energy systems are indeed technically and economically feasible. one thing that was also identified in the study is a lack of studies on the global south. this is also exemplified by another recent study which while finding some application of the energyplan [2] model in, e.g., latin america, there is very little application in africa and south east asia [3]. in this issue of the international journal of sustainable energy planning and management, the articles address different angles of the energy transition in different countries of the global south and thus help fill this gap. hernandez-escalante et al. [4] use a swot methodology to assess and prioritise different biomassbased power generation scenarios for baja california sur in mexico, finding prospects for a 61% share in 2032. in a previous study, hernandez-hurtado and martin-del-campo [5] developed sustainability indicators for mexican power system planning. using the aim/enduse model, pradhan et al. [6] investigate scenarios for the decarbonisation of thailand, finding that 64 gw of wind power and 40 gw of photo voltaics would be required. if the transport sector is to transition to res-based hydrogen, an additional 200 gw photo voltaics is needed. in addition comes carbon sequestration from land-use changes. kwakwa et al. [7] previously analysed fossil fuel consumption in ghana, identifying a need for increasing the energy efficiency of the energy system, and momodu [8] investigated transition pathways for the west african power pool, finding, in addition to a need for renewable energy investments, also a need for energy efficiency improvements. using indonesia as a case, siregar [9] develop a multi-criteria decision analysis approach to assess the 2 international journal of sustainable energy planning and management vol. 35 2022 energy transition in the global south – editorial for the international journal of sustainable energy planning and management vol 35 sustainability of a variety of electricity generation methods. in indonesia, electricity demand has tripled since the year 2000, and the vast majority has been in the form of fossil fuel-based power generation. this calls for an immediate focus on other expansion options as well as options for transitioning the current system to renewable energy. in the assessment, siregar investigates social, environmental, technical, and economic criteria – and several relevant subcategories such as job creation and public acceptance within these general categories of criteria. interestingly, among the stakeholders involved in the research from government, fossil fuel industry, renewable industry, university-think tank, civil society international organisation, all rank solar alternatives highest – while even stakeholders from the fossil industry give low priority to coal and oil. al hasibi and pramono hadi [10] focus on the transportation sector and how to transition the energy demands and supply to renewable energy sources. analysing three different scenarios using a mixed integer linear programming model, they optimise according to greenhouse gas emissions and costs for the province of yogyakarta, indonesia. they find, that compared to the business-as-usual scenario and a renewable energy scenario, the renewable energy with storage scenario has the lowest emission levels albeit at the highest costs. al hasibi together with setiartiti [11] has previously investigated low-carbon transportation strategies in an indonesian context for this journal. appiah [12] looks into how the investment in renewable energy sources can be facilitated in ghana. using resources based view (rbv) and porter’s five forces, appiah develops an “approach to analysing investments in renewable energy sources”, finding that “entrepreneurial competency, financial resource, marketing capability and technological usage significantly relate to investment in renewable energy”. barkhordar [13] addresses the cost and potential rebound effects of energy efficiency measures in the energy-intensive industry of iran. using both a topdown and a bottom-up simulation approach, barkhordar seeks to simulate the effect of different policy measures, showing how they can contribute to energy efficiency improvements and the realisation of iran’s carbon dioxide emission reduction goal. in this journal, godarzi and maleki [14,15] previously analysed policies to increase the res share of the power production of iran, noorollahi and co-authors [16] analysed the transition of the iranian heating system and caldera et al. analysed prospects for res-based desalination in iran. the integration of desalination into res-based energy systems is an emerging issue with studies in this journal for chile [17] and jordan [18]. references [1] breyer c, khalili s, bogdanov d, ram m, oyewo as, aghahosseini a, et al. on the history and future of 100% renewable energy systems research. ieee access 2022;10:78176–218. http://www.sciencedirect.com/10.1109/ access.2022.3193402. [2] lund h, thellufsen jz, østergaard pa, sorknæs p, skov ir, mathiesen bv. energyplan – advanced analysis of smart energy systems. smart energy 2021:100007. http://doi. org/10.1016/j.segy.2021.100007. [3] østergaard pa, lund h, thellufsen jz, sorknæs p, mathiesen bv. review and validation of energyplan. renew sustain energy rev 2022;(in press. http://doi.org/10.1016/j. rser.2022.112724. [4] hernandez-escalante m, martin-del-campo c. a biomass waste evaluation for power energy generation in mexico based on a swot & fuzzy-logic analysis. int j sustain energy plan manag 2022;35. http://doi.org/10.54337/ijsepm.7073. [5] hernandez-hurtado u, martin-del-campo c. a development of indicators for the sustainability assessment of the mexican power system planning. int j sustain energy plan manag 2021;32. http://doi.org/10.5278/ijsepm.6572. [6] pradhan bb, et al. energy system transformation for attainability of net zero emissions in thailand. int j sustain energy plan manag 2022;35. http://doi.org/10.54337/ijsepm.7116. [7] kwakwa pa, adu g, osei-fosu ak. a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa. int j sustain energy plan manag 2018;17. http://doi.org/10.5278/ijsepm.2018.17.4. [8] momodu as. energy use: electricity system in west africa and climate change impact. int j sustain energy plan manag 2017;14:x-y. http://doi.org/10.5278/ijsepm.2017.14.3. [9] siregar yi. ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis. int j sustain energy plan manag 2022;35. http://doi. org/10.54333/ijsepm.7241. 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[18] østergaard pa, lund h, mathiesen bv. energy system impacts of desalination in jordan. int j sustain energy plan manag 2014;1. http://doi.org/10.5278/ijsepm.2014.1.3. http://doi.org/10.5278/ijsepm.5896 http://doi.org/10.5278/ijsepm.5896 539-1428-1-le.qxd 1. introduction since the first development plans for the german electricity transmission network (“netzentwicklungsplan”) have been published after the nuclear meltdown in fukushima 2011, the expenditure of german transmission capacities has attracted much public attention. public discussion centers on the questions where and to what extent new transmission lines ought to be constructed. another controversy revolves around two rivaling technological approaches: local protest international journal of sustainable energy planning and management vol. 03 2014 33 movements demand for overhead-lines to be replaced by underground cables and delay administrative approvals and construction works in many cases throughout germany [1]. based on case studies and stakeholder statements international studies conclude that the negative impacts from overhead lines necessitate the use of underground cables, although an energy policy perspective suggests that anticipated advantages related to cables are of temporary nature and might materialize to a lesser extent * corresponding author, e-mail: roland.menges@tu-clausthal.de international journal of sustainable energy planning and management vol. 03 2014 33-48 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany ������� �� � ���� ����� � � �������� � �� ������� ������ � ������� �� � ����� � � � ��� ������ ��������� � �������� �� ���� ������ ������� �!����"���#� $� %&$'& ����������(���������� )���� �* a b s t r a c t transmission network development plans have led to protests throughout germany. many studies present underground cables as a means to increase public agreement to transmission line construction. this paper investigates this thesis reporting results of a contingent valuation study conducted in late 2012 in four regions of germany, which are affected by transmission line development in different ways. in an analysis of 1,003 household responses a majority of households favour underground cables (about 60%). willingness-to-pay (wtp), however, changes the significance of the result as almost 50% of the households voting for underground cables are not willing to accept an increase in electricity prices to finance cable projects (free riders). also, households stating a positive wtp for regional cables do not acknowledge larger supra-regional underground cable projects with higher wtps in 60% of cases. this further underlines that cables are not supported unconditionally. the empirical results presented in this paper need to be interpreted cautiously because of low response rates and non-representative samples that are typical for mail surveys. based on the wtp-evaluation described, however, the thesis that cables increase acceptance of grid development has to be rejected. keywords: willingness-to-pay, free-riding, underground cables, grid development, contingent valuation, energy transition. url: dx.doi.org/10.5278/ijsepm.2014.3.4 https://dx.doi.org/10.5278/ijsepm.2014.3.4 34 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany than expected [2]. while the average transmission line still runs overhead, doubts about this construction technique are increasing. not only in designated construction areas do major parts of population reject overhead lines. fear for landscape and nature as well as the threat of unmitigated radiation are the oldest and most common concerns [3]. particularly the importance of negative visual effects caused by transmission line pylons should not be underestimated [4]: in a study initiated by deutsche umwelthilfe in 2010, over 70% of participants at least “agree fully” to the statement “overhead lines impair a landscape’s character”. in contrast, 70% of respondents see no noteworthy landscape impairment in the case of underground cables [5]. the preference for underground cables is not limited to active, organized opposition to overhead cables, as a representative study on the social acceptance of the german energy transition1 conducted by tns-infratest suggests. in october 2012 3,800 private households were asked under which conditions transmission line construction in direct vicinity (defined as 5 km around place of residency) would be agreed to [6]. one of the major findings was that more than three quarters of participants (77%) would support construction works without any further conditions if underground cables were used. other instruments to increase social acceptance of grid development lead to lower approval rates: the financial participation of residents for instance lead to an approval rate of 21%. this refers to instruments such as the so-called “bürgeranleihe”, which is currently field-tested in schleswig-holstein. here private households may sign a loan to finance grid construction for an interest of around 4.6% p.a. on the same note, the inclusion of residents into planning processes does not result in higher rates of acceptance, either (49%). this result was homogenous throughout the sample and robust. even between regions that are affected by the results of the energy transition in different ways no significant differences could be observed. tnsinfratest also found approval to underground cable construction (77%) to hardly be dependent on incomes (approval increases from 71.2% to 80.3% over all income intervals). the evidence provided leads to the conclusion that underground cables are a means to increase the social acceptance of the energy transition and the transmission network development it demands [7]. meanwhile, a favoring public opinion is not the only argument supporting underground cables. literature stresses the generally high environmental compatibility of underground cables as well as the low social costs incurred, referring to lower landscape impairments, shorter approval processes and lower health risks caused by electromagnetic fields [2]. on the other hand, underground cable technology remains largely untested and expensive. comparisons of economic feasibility between overhead lines and underground cables find the latter to be three to 20 times as costly [8].2 hence, in an attempt to economically weigh up benefits provided and costs incurred by underground cables it needs to be considered that • underground cable projects provide almost only regional benefits (e. g. scenic effects) • while additional costs are socialized and distributed amongst all electricity consumers via network charges nationwide. this allows for strategic protests against overhead lines in designated construction areas. from communities’ perspectives, this not-in-my-backyard-behavior might only be stopped by paying compensations – or by installing underground cables, if local grid systems meet the technical requirements for cables construction (see [9] for details). albeit of great importance, such calculations are not measured in conventional surveys since opportunity costs and decision scenarios are generally not framed in classic questionnaires. consequently, additional examinations are needed to test the hypothesis that underground cables increase the social acceptance of grid development. these examinations must meet two criteria: firstly, strategic (response) behavior needs to be identified when measuring preferences for underground cables. secondly, opportunity costs need to be framed. this is to say that not only a mere preference for underground 1 the term energy transition refers to the german agenda aiming to modernize the german energy economy and increase its sustainability. major objectives are to decrease the dependency on fossil fuels by growing the share of renewables in the energy mix, to increase energy efficiency in all parts of society and to reduce overall energy demand. a wide array of environmental policy instruments are used to pursue these goals with significant consequences, the renunciation of nuclear power being one of the more prominent examples. 2 this paper does not aim to assess the overall properties of underground cables. readers interested in technical features and attributes of cables and a comparison to overhead lines are advised to see [10]. cables, but also a corresponding intensity of preference needs to be determined. the results of one of these examinations are described in this paper. in addition to the question whether underground cables are a means to increase social acceptance, special attention is giving to the factors suitable to explain households’ opinions on underground cables. data used, specifically the willingness-to-pay (wtp) of private households for underground cable projects, is derived from a contingent valuation survey. the concepts of this study method are described below. 2. the contingent valuation method accompanied by intense methodological and theoretical debates the contingent valuation method (cvm) has become an acknowledged and wide-spread instrument to value complex public goods [11]. it is commonly used in politic decision-making and in court, where results of contingent valuations are used to determine compensations in cases of environmental damage [12]. contingent valuation determines the value of a public good by hypothetically varying the allocation level of the public good. study participants are then asked for their preferences for the new allocation level and asked to quantify the strength of their preference by stating their willingness-to-pay [13]. individual willingness-to-pay is interpreted as consumer rent for the variation of the public good, and, when extrapolated on the population, leads to a monetary value of the public good examined [14]. in order for the method to arrive at valid results, special care needs to be invested into questionnaire design. questionnaires need to activate and engage study participants, so that stated preferences are most likely to mirror real preferences. here contingent valuation relies on scenarios, which serve to illustrate the different levels of allocation. one scenario frames a reference point, while the second scenario presents a different allocation level of the public good. usually catchy and plausible scenes such as the construction of a park in an urban area are used to vary allocation levels. if further methodical criteria are met [15], contingent valuation results are considered to be a good indicator of true preferences. contingent valuation is well suited for determining preferences for underground cables for a variety of reasons: 1. both local and national population considers the choice between overhead lines and underground cables meaningful. 2. underground cables and overhead lines present clearly distinct alternatives to one another. since energy-economic properties are equal, differences between both alternatives can be reduced to differences in environment impairment. 3. realization of one alternative is highly likely in many areas, which allows for very realistic reference and valuation scenarios.3 4. advantages and disadvantages of either alternative are well defined and easily distinguished. 5. network charges as concurrent method of financing network operations and construction are well-known and comprehensible. willingness-to-pay can thus be examined in a familiar payment-vehicle. 3. study design & procedure the object of investigation in this study is the willingness-to-pay of private households for underground cables. underground cable projects are offered in two variants: a hypothetical regional project of 8 km length is concretized on the example of kreiensen in lower saxony, a region marked by intense discussions between transmission network operator and local protest movements opposing overhead lines. this example is used to picture properties of both overhead lines and underground cables. additionally, households are offered a second underground cable project that differs from the regional one only in length (400 km). this supra-regional project, which is framed as a sum of “many regional projects”, intentionally remains physically undefined. in an introductory note households are informed about the scientific character of international journal of sustainable energy planning and management vol. 03 2014 35 roland menges, gregor beyer 3 here a simplification hast to be made. in several regions of germany underground cables are discussed in alternating and direct current forms. both types of underground cables have different technological and economic properties (for details see [2]). since this study does not primarily address well informed and technologically educated households, the possibility of underground cables in direct current form is expressively ignored (as was done in tns infratest study). from a methodical view-point the comparison between underground cables and overhead lines is to be reduced to environmental effects. an additional technical dimension such as currents would require multi-level decisions and further complicate an already demanding survey design. a differentiating and multi-dimensional comparison including technical information can be found at [11]. this study. specifically, the fictitious character of later referendums is underlined. the final questionnaire consists of three information elements, which are shortly presented in the following: the first part of the questionnaire aims at providing relevant and sufficient information to survey participants and consists of several information sections. the first two pages of the questionnaire explain the energy-economic background of network development. focus is put on the necessity to build new transmissions lines in germany. on another page, a real example for the consequences of line construction is given on the example of kreiensen, lower saxony. here actual construction plans for an 8-km-long transmission line are presented. next, the reference scenario (alternative 1: overhead lines) is introduced, followed by a description of the alternative scenario (alternative 2: underground cables). advantages and disadvantages respectively environmental properties of both alternatives are presented neutrally with the help of pictures and schematic pro/contra-lists. the purpose of the second part of the questionnaire is to determine preferences for underground cables and corresponding willingness-to-pay. both items are investigated in separate sections. firstly, study participants are to state a general preference for two independent hypothetical underground cable projects in separate referendums. as mentioned, the two projects are described as 1) a regional underground cable project of limited length (8 km) inspired by the example of kreiensen that had previously been introduced. 2) a supra-regional underground cable project (400 km total), derived from a not specified number of small regional projects. the project description states that regional and supraregional projects are identical in everything but length and position. it is also underlined that either project can be realized in every part of germany. this approach is chosen to avoid for study participants from regions far from the example of kreiensen to feel unaffected by the outcome of the vote at hand. both referendums are set up with a detailed characterization of the hypothetical market, which includes an explanation of the situation that leads to the vote. to remind study participants of personal budget restrictions and the consequences of a positive vote for underground cables, the power cost increase related to underground cables is highlighted. also, a ‘cheap talk’ formulation is implemented to minimize the effect of fundamental opinions on transmission network development itself rather than the choice between overhead lines and underground cables. following the referendums participants are asked to state their personal willingness-to-pay for projects supported, while a positive willingness-to-pay is framed as condition for project realization. in a first step, two payment vehicles are introduced: – households are asked for their tolerance of accepting increasing network charges. the maximum yearly amount households are willing to spend in order to facilitate underground cables is to be stated. – the second payment vehicle is based on the assumption that increases in network charges are not sufficient to finance underground cables. households are given the option to voluntary invest (one-time payment) into a regional development fund. no further information (interest rates, runtime, etc.) on the fund is given other than its sole purpose of financing underground cables. in both cases willingness-to-pay is elicited in open-end formats. in order to increase response validity a reference point was offered in network charge models: the average electricity expenditures of german households of 900 euro per year are given for orientation. also, the average payments for network fees are stated at 180 euro per year or 20% of yearly total electricity costs. even though this procedure provokes distortions in stated wtp [anchoring-effect, 16], it is chosen to strengthen response rates. additionally, “cheap talk”-framing is used to counteract possible starting-point biases. having determined preferences and wtp, demographic properties and attitudes potentially fit to explain said variables are collected in the third questionnaire section. this includes reasons for rejecting underground cables and personal experiences with network development. amongst other variables households were asked to estimate the distance of their home to the nearest transmission line. also, a variety of opinions on general matters of energy politics were inquired. examples are attitudes towards the energy transition and global warming, questions on decisionmaking competencies in the energy sector et cetera. a complete list of variables is given at a later point in table 9. a variety of surveys [5, 6] find preferences of german households for underground cables to be 36 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany general and reject significant regional differences in the social acceptance of these cables. here samples were selected in order to investigate the structure of households preferences in more detail (theoretical sampling) [17]. four sample regions were identified which systematically differ in terms of their regional exposition to new grid constructions: • the community kreiensen in lower saxony is immediately affected by network development plans and serves to picture the example regional underground cable project. • niebüll on the north sea coast in schleswigholstein is massively influenced by the expenditure of wind power capacities; regional wind farms are commonly shut down because of short transmission capacities. • viechtach in bavaria is similar to niebüll and kreiensen in population and its rural structure. there are no plans to set up transmission networks in a noteworthy vicinity to viechtach, however. • lastly, a major city of lower saxony is included with braunschweig. households here are not directly affected by transmission network construction, a topic that is also much less debated than in other regions it is important to note that the goal of this research method is not to achieve representativeness of results or to highlight aggregate welfare measures. achieving representativeness would require identifying a set of relevant socio-economic variables (with respect to the object of research) and to control for the variation of these variables within the sample. our study differs from other surveys by introducing a more detailed and theory-based framework (including project description, budget restriction and payment mechanism) for investigating household’s decisionmaking behaviour in this field of interest. this approach attaches greater weight to the issue of (internal) validity than to the representativeness of the sample. we adopted a mail survey format. cvm studies using mail surveys typically face the problem of low return rates and non-representative samples. on the other hand, mail surveys have the advantage that respondents are much more likely to respond truthfully to personal and attitudinal questions since the problem of social desirability and interviewer biases can be avoided. internal validity is also improved as respondents can take as much time as they need to think about the proposed scenario and about their answer to the wtp elicitation questions [18]. this study was conducted in four regions of germany in november and december 2012. a total of 21,000 questionnaires were distributed by local press. advertising journals were chosen over regular newspapers in order to gain access to every household of a given region, independent from subscription models. every questionnaire consisted of a 16-page brochure in din a4-format, printed in color and wrapped in foil. enclosed was a pre-directed and post-stamped bag to encourage responses. final survey period ranged from november 25th 2012 (date of distribution) to december 12th 2012 (entry deadline). 4. results 4.1 sample regional composition of final sample can be seen in table 1: roughly 5% of households approached returned the questionnaire. 178 households did not state places of residency. sample is not representative in various regards: sample composition is distorted with an over proportional share of responses from kreiensen, which may be explained with the local reference of the illustrative scenario. representativeness is further constricted by demographic properties of the sample. households owning real estate make up for a much international journal of sustainable energy planning and management vol. 03 2014 37 roland menges, gregor beyer table 1: sample composition. region responses response rate sample share n/s 178 – 17.74% kreiensen 298 5.73% 29.71% viechtach 74 1.68% 7.38% braunschweig 325 4.25% 32.40% niebüll 128 2.64% 12.76% total 1,003 4.54% 100.00% larger share in the sample (86.7%) than in the entity of germany (45.7%) [19]. the mean stated monthly net incomes in the range of 2,500 – 2,999 euro per month, however, include the factual federal average, which was 2,988 euro in 2011 [20]. 4.2. preferences for underground cables voting outcomes clearly favor both regional and supraregional projects. the regional project is approved by 60.3% of the total sample with a disapproval rate of 24.9% (14.8% of households are undecided, n = 921). results vary significantly between sample regions. as expected, support for underground cables peaks in kreiensen (71.8%) and is at a minimum in braunschweig (51.1%). this result is sound considering that there are currently no plans to enlarge the transmission network in the area, which leaves braunschweig’s population only indirectly affected by and thus relatively neutral to questions of construction techniques. the hypothesis that the vote on regional projects does not depend on place of residency has to be rejected with a probability of error of 0.000 (n = 765). an overview of regional differences in voting behavior is given in table 2. voting outcomes on the supra-regional underground cable project are similar. over the entire sample 57.0% of households wish for the project to be realized (n = 921). the share of disapproving households is slightly larger than before with 26.6%, same as the share of undecided households of 16.4%. here, too, a significant correlation between voting behavior and place of residency can be observed (see table 3). another correlation in voting behavior exists between regional and supra-regional votes. 87.2% of households voting in favor of a regional project also approve of the supra-regional project. again regional differences are significant: in kreiensen 92.5% of households judge both projects positively, whereas that share drops to 78.0% in viechtach (coefficient of contingency: 0.211, p = 0.002). this observation is substantiated by the finding that in kreiensen households that vote in favor of the supra-regional project in spite of voting against the regional project are more prevalent than in the other sample regions (18.4% versus: viechtach 7.7%, braunschweig 6.1%, niebüll: 8.9%). households were given the opportunity to state their motives for either supporting or declining underground cable projects. assessment of supporting motives shows no noteworthy outcomes: pre-made responses were chosen in near identical numbers. a look into refrains to underground cables, however, produces heterogeneous results. figure 1 lists the most common reasons for declining underground cable projects (n = 517; multiple answers included). 38 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany table 2: referendum results (regional underground cable project). referendum results regional project coefficient of region pro undecided contra contingency significance kreiensen 71.8% 11.4% 16.8% niebüll 61.5% 13.7% 24.8% 0.187 0.000 viechtach 61.8% 13.2% 25.0% braunschweig 51.1% 17.6% 31.3% table 3: referendum results (supra-regional underground cable project). referendum results supra-regional project coefficient of region pro undecided contra contingency significance kreiensen 72.4% 13.8% 13.8% niebüll 62.8% 11.6% 25.6% 0.258 0.000 viechtach 50.7% 16.4% 32.8% braunschweig 44.1% 19.9% 35.9% most households voting against at least one underground cable project do so out of disinterest: 192 households consider the debate on underground cables unnecessary, implying that overhead lines do not cause concerns. similarly, underground cables are rejected because households do not possess financial means to carry increasing energy costs (181 mentions). also very important for the evaluation of underground cables are general doubts about transmission line development. 172 households state to prefer decentralized electricity production over the extension of transmission networks and thus disregard underground cables.4 unexpected was the finding that the fear of landscape impairment persists even when underground cables replace overhead lines (130 mentions). possible explanations lie in the scenic effects of construction works and wood clearing requirements, which are smaller but still noticeable for underground lines. 4.3. willingness-to-pay for underground cables before elicited willingness-to-pay could be analyzed, modifications had to be made to reduce distortions and inconsistent responses in the sample. following standard cv procedures [21] responses were excluded from analyses in principle if preceding referendum questions remained unanswered, wtp was not specified (household answered “uncertain” or did not answer at all), households clearly identified their statements as protest bids or wtp international journal of sustainable energy planning and management vol. 03 2014 39 roland menges, gregor beyer 4 many study participants used this questionnaire section to repeat their demand for direct current transmission technology. in several cases presented underground cable projects were rejected solely because framing focused on alternating current transmission. several households affiliated with protest movements expostulated against this simplification in the form of editor letters in newspapers and direct mail. no valuation of benefits provided protect against regional limitation lack of personal benefits protest against energy turnover protection of housing grounds insufficient information disturbances from service works fear of immissions protest against private financing impairment of scenery pro decentralized power production willing to pay but insolvent undergroung cables unnecessary 250200150100500 figure 1: refrains to underground cables. table 4: correlation between favouring voting behaviour in regional and supra-regional projects. sample region cases supra-regional voting behavior “pro regional” pro undecided contra kreiensen 186 92.5% 6.5% 1.1% viechtach 41 78.0% 12.2% 9.8% braunschweig 155 80.0% 11.6% 8.4% niebüll 71 94.4% 2.8% 2.8% total 453 87.2% 8.2% 4.6% was severely exaggerated. in order for a household’s response to be considered a protest bid households had to expressively state not to be willing to participate in a wtp study. exaggeration was assumed for wtps exceeding 500 euro (network charges) or 5,000 euro (development funds). this procedure resulted in a total of eight questionnaires being removed from the sample.5 whether a dataset was considered in wtp-analysis only after modification was depended on household responses in elaborating questions. here a first measure set wtp to zero if a household voted against the underlying underground cable project. secondly, households had to be sufficiently solvent to realistically pay the wtp stated. solvency was assumed on principle; only if households stated expressively that no financial means to pay for costs increases were available wtp was set to zero. three wtps were measured this way: • wtp 1: yearly wtp for a regional underground cable project, payment vehicle network charges • wtp 2: yearly wtp for a supra-regional underground cable project, payment vehicle network charges • wtp 3: one-time wtp for a regional underground cable project, payment vehicle development fund. figure 2 illustrates the effects that above measures of sample modification had on the original sample for wtp 1. a share of about 25% of original sample is not incorporated in wtp analyses. this value is comparably high in the remaining two wtp models. this is in line with other cv reports [21]. key parameters of collected wtp are presented in table 5: the following analysis is focused on the network charge models. a comparison of wtp between sample regions reveals significant differences. average wtp is relatively high in niebüll in both network charge models (regional project: 28.6 €, supra-regional project: 34.5€) and relatively low in braunschweig (15.4€, 19.9€). because measured wtp distribution is right skewed and non-normal and because of the relatively high standard deviation in wtp differences in mean wtp as displayed in figure 3 have to be interpreted cautiously. however, correlation between place of residency and wtp can also be confirmed with more robust nonparametrical test. a kruskal-wallis-test affirms that correlation for both regional project (p = 0.020) and supra-regional project (p = 0.009). a meaningful result of this survey lies in the observation that nearly 50% of households voting in favor of cable projects behave as free-riders as they do not express a positive wtp. in economic theory the term “free-riding” addresses the problem that individuals face incentives to not reveal their “true” preferences when they are asked to evaluate different levels of a public good. this problem arises because any method to elicit individual preferences for public goods cannot be run without assumptions concerning the question how to finance the provision of the public good [22]. basically speaking, individual preferences for any kind of good are measured by the maximum quantity of other goods individuals are willing to give up for the good in question (wtp). the observation that nearly 50% of households who voted for underground cables in the referendum format are not willing to accept an increase of grid fees at all (wtp = 0) has to be interpreted as free-riding behavior. in the regional (supra-regional) model the share of free-riders is 46.2% (48.7%) of households. with a share of 65.2% free-riding is most prominent in the development fund model. this result underlines the validity of collected data and confirms numerous studies on free-riding behavior, which find a strong tendency to free-ride in cases of voluntary contributions [23, 24]. 40 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany pro cable 550 psitive wtp 263 don’t know/not specified 148 exaggerations 3 true wtp 761 protests 0 insufficiently solvent 163 no wtp (0) 501 undecided 135 total sample 1.003 don’t know 91 contra cable 227 95 0 501 18 3 53 38 99 26 20111126163 260 245 w ill in g n e ss -t o -p a y r e fe re n d u m 5 this threshold was chosen in regards to the orientation help offered in the questionnaire. if the average german household spends a yearly 200 euro on network charges, a stated wtp of 2.5 that amount seems unrealistic even for larger households with higher electricity consumption patterns. the limit of 5,000 euro was based on prevalent minimum investment amounts in yield orientated investment funds of the “green energy” market. figure 2: sample structure wtp 1 (regional, network charges). free-riding digresses between sample regions, too. as table 6 shows free-riding is significantly less prominent in niebüll than in other sample regions. more insights on household preferences are gained by examining wtp reaction to the physical extension of cable deployment. at first glance, mean wtp of households stating a positive wtp for the regional project (n = 229) rises by an average 13.50 euro transitioning from 8 km to 400 km project (table 8). however, it can be observed that this increase in mean wtp is carried by a minority of households. only about 40% of households are willing to make additional payments for a transition from regional to supra-regional project: mean wtp of a relative majority of households remains constant between projects and decreases in 15% of cases. since the questionnaire text clearly conveys that regional and supra-regional project only differ in cable length while sharing the same fundamental characteristics, this is a noteworthy result. in environmental economic literature the effect of wtp not scaling with an extended allocation of goods is discussed as part-whole-bias [11]. this bias presents a possible explanation for the fact that in spite of a positive marginal benefit a majority of households do not assign a higher value to larger cable projects. (see table 7). international journal of sustainable energy planning and management vol. 03 2014 41 roland menges, gregor beyer table 5: willingness-to-pay in euro. willingness-to-pay n max σ ø std. dev (€) wtp 1 761 300 14,021 18.24 40.67 wtp 2 752 450 16,886 24.54 49.06 wtp 3 779 5,000 64,626 82.96 354.29 40 35 30 25 20 15 10 5 0 wtp regional project wtp supra-regional project kreiensen niebuell viechtach braunschweig figure 3: mean wtps (euro/year), regional vs. supra-regional network charge models. table 6: free-riding after sample region and payment vehicle. free-riding after sample region and payment vehicle regional supra-regional regional sample region network charge network charge fund kreiensen 46.1% 47.9% 64.4% viechtach 50.0% 50.0% 75.0% braunschweig 42.3% 46.6% 64.0% niebüll 35.4% 37.1% 54.1% total (incl. n/e) 46.2% 48.7% 65.2% 4.4. explanatory models the previous analysis was focused on statistical differences between sample regions. in the following, demographic properties and general attitudes of households are tested on their effect on voting behavior and stated wtp. for that purpose households’ voting behavior is expressed in a multinomial variable of four specifications: 1: household votes against underground cables and in favor of overhead lines. 2: household is indifferent between underground cables and overhead lines. 3: household votes for underground cables, states a wtp of zero (free-rider). 4: household votes for underground cable, states a positive wtp. in an attempt to grasp the simultaneous effect of variables elicited, regression models were employed. more precisely, the method of multinomial logistic regression was used since dependent variable comprises four specifications [25]. table 8 lists all variables incorporated in regression models as well as respective specification occurrences. it is to be noted that not all variables measured are included in regression analyses. household size in number of residents for instance is not regarded because of multi-collinearities with household monthly net income. for the same reason the variable of “personal impairment by transmission line construction” is excluded, which correlates strongly with “place of residency”. in the following, the logistic regression models presented all regard outcome four, “pro project, positive wtp”, as reference categories. subsequently, tables 9 and 11 provide summaries (likelihood-ratio-tests) on regression models explaining regional and supraregional referendum results. the significance stated for each effect indicates the probability of error with which the effect influences referendum outcome. since here the mere existence of an influence can be pictured while its direction remains unknown, explanation on every significant item will be given in text. model summaries show that a simultaneous analysis of all explanatory variables serves to explain 29.3% (regional project) and 36.3% (supra-regional project) of total measured variance. a variable that is highly significant is the preferred method of network financing. households that prefer taxes over network charges are more likely to free-ride. on the other hand, those households that prefer network charges state positive wtps more frequently. ownership of equipment to produce power from renewable sources also serves to explain voting behavior implying a higher likelihood of being indifferent to regional underground cable projects. another significant influence is found in the support for financial compensation for regions impaired by transmission line constructions. households that favor such reconciliations are more likely to behave as free-riders or express indifference when voting on regional underground cable projects. the impact of a household’s distance to the nearest transmission line is to be highlighted. table 10 shows the average distance of households within each group of voting outcomes. contrary to expectation probability for a household to support underground cable projects rises with increasing distance. in other words: households are more likely to approve of overhead lines the closer they live to existing lines. this result is surprising, considering major advantages of underground cables over overhead lines are related to optical and aesthetic effects. nevertheless, other studies evaluating 42 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany table 7: mean wtp for enlargement of underground cable projects. mean wtp changes for enlargement of underground cable project: regional project vs. supra-regional project δ average wtp sinks wtp constant wtp rises sample (n) (€) std. dev. (% hh) (% hh) (% hh) kreiensen (85) 11.05 39.54 12.9 49.4 37.6 viechtach (16) 20.63 73.44 12.5 31.3 56.3 braunschweig (67) 13.18 46.69 20.9 37.3 41.8 niebüll (39) 16.72 39.99 7.7 59.0 33.3 total (229) 13.50 44.36 14.8 45.4 39.7 environmental effects make similar observations [26]. the correlation between physical proximity and preference is referred to as habituation effect, which implies that households already impaired by negative effects weigh the degree of impairment lower than households in impending impairment. in this study, habituation effect is observed to a certain mean distance, at which households become indifferent to the kind of transmission line constructed; mean distance to nearest transmission line is highest for indifferent households with 5.71 km (regional project) and 7.66 km (supra-regional project). an examination of voting behavior on supra-regional projects leads to fundamentally comparable results (table 11). difference are found in the possession of power production capacities, which is here not fit to international journal of sustainable energy planning and management vol. 03 2014 43 roland menges, gregor beyer table 8: dependent and independent variable specifications and response distributions. dependent variables response distribution vote regional project contra 27.0% n = 319 indifferent 11. 6% pro, no wtp 21.6% pro, positive wtp 39.8% vote supra-regional project contra 30.6% n = 252 indifferent 15.5% pro, no wtp 15.1% pro, positive wtp 38.9% shares independent variables, factors shares regional supra-regional global warming anthropogenic 82.1% 81.7% not anthropogenic 17.9% 18.3% attitude energy transition pro transition 89.7% 89.7% contra transition 10.3% 10.3% necessity network necessary 87.5% 88.5% development not necessary 12.5% 11.5% choice of power supplier renewable energy only 45.5% 42.1% energy source irrelevant 54.5% 57.9% household power production produces power 16.0% 18.3% does not produce power 84.0% 81.7% preferred method of taxes 45.5% 40.9% network financing network charges 54.5% 59.1% decision making affected regions 16.9% 15.9% competencies for energy projects federal state 8.8% 8.7% regions & state 74.3% 75.4% financial compensation pro compensation 73.7% 73.0% contra compensation 26.3% 27.0% hh knows of particular line known 61.8% 62.7% construction plans unknown 38.2% 37.3% gender head of household male 90.0% 90.1% female 10.0% 9.9% housing situation rent 12.5% 11.1% ownership 87.5% 88.9% place of residency kreiensen 36.4% 36.9% viechtach 7.8% 8.7% braunschweig 40.1% 40.1% niebüll 15.7% 14.3% further independent variables (covariates) distance from household to nearest transmission line household’s monthly net income age head of household 44 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany table 9: logistic model on regional project referendum results (likelihood-ratio-tests). -2 loglikelihood-ratio-tests likelihood of effect reduced model chi-square degrees of freedom significance constant 727.811 .000 0 . global warming 729.245 1.434 3 0.698 energy transition 731.470 3.659 3 0.301 necessity network development 730.301 2.491 3 0.477 choice power supplier 732.669 4.858 3 0.182 household power production 737.591 9.780 3 0.021** financing method network 744.863 17.052 3 0.001*** decision-making competencies 732.948 5.137 6 0.526 regional compensation 736.685 8.874 3 0.031** knowledge of construction plans 728.074 .263 3 .967 age 731.117 3.306 3 0.347 gender 731.862 4.051 3 .256 hh monthly net income 730.018 2.207 3 0.531 housing situation 733.902 6.091 3 0.107 place of residency 735.477 7.666 9 0.568 distance to nearest line 736.023 8.212 3 0.042** model summary: n = 319; log-likelihoods: 828.720 (only constant term), 727.811 (final model); chi-square: 100.909 (p = 0,000); pseudo-r2 : 0.293 (nagelkerke), ***/**/*: significant on 1-/5-/10%-level table 10: voting behaviour and average distance to nearest transmission lines. mean distance supra-regional referendum result mean distance regional project project contra 3.34 km 3.48 km pro, wtp of zero 3.88 km 4.36 km pro, positive wtp 5.57 km 5.52 km indifferent 5.71 km 7.66 km table 11: logistic model on supra-regional project referendum results (likelihood-ratio-tests). -2 log-likelihood likelihood-ratio-tests effect of reduced model chi-square d. o. f. significance constant 553.838 0.000 0 global warming 555.197 1.358 3 0.715 energy transition 556.841 3.003 3 0.391 necessity network development 556.364 2.526 3 0.471 choice power supplier 558.245 4.407 3 0.221 household power production 557.679 3.841 3 0.279 financing method network 570.226 16.388 3 0.001*** decision-making competencies 556.755 2.917 6 0.819 regional compensation 564.547 10.708 3 0.013** knowledge of construction plans 555.581 1.743 3 0.627 age 555.662 1.823 3 0.610 gender 555.561 1.723 3 0.632 hh monthly net income 556.749 2.911 3 0.406 housing situation 572.179 18.341 9 0.031** place of residency 560.188 6.350 3 0.096* distance to nearest line 562.525 8.687 3 0.034** model summary: n = 252; log-likelihoods: 657.018 (only constant term), 553.838 (final model); chi-square: 103.180 (p = 0,000); pseudo-r2 : 0.363 (nagelkerke) ***/**/*: significant on 1-/5-/10%-level explain voting behavior, and place of residency, which becomes significant in this model. households in braunschweig and viechtach both vote differently than households in kreiensen and niebüll. in both sample regions households are more likely to object to supraregional underground cable projects. households in braunschweig are also more inclined to vote indifferently. in regards to housing situation the observation that households in renting tend to free-ride is significant. the habituation effect persists in this model. as in the model on regional projects, mean distance to existing lines increases from objecting households (3.48 km) over free-riding households (4.36 km) to households willing to pay positive amounts to realize underground cables (5.52 km). analogous to previous results mean distance of indifferent households is largest with 7.66 km. aside from this analysis of general voting behavior, the level of wtp is a promising subject of investigation. wtp as measured via contingent valuation is limited on a lower end of zero. classic regression methods based on least-square-methods are unsuitable in cases of restricted domains of dependent variables and produce erroneous or inconsistent parameter estimates [27]. more effective are techniques that build on the method-of-moments or maximum-likelihood-method [28]. in this paper tobit regression is used to analyze wtp, a method strongly established in econometrics in general and wtp-analysis in particular [29]. while details on this method will be not be addressed here, readers interested in the fundamentals of tobit-models are advised to see [30]. table 12 introduces three tobit models each regarding one of the three measured wtps. independent variables are identical to those used in above logit models.6 a distinctive result is that wtp is determined partially by other variables than the referendum results regarded in previous logit models. furthermore, differences persist within the three tobit models. with regards to contents, coefficients in all models are consistent throughout. a support of energy transition for instance leads to a higher stated wtp, as does a international journal of sustainable energy planning and management vol. 03 2014 45 roland menges, gregor beyer table 12: coefficients and significances in tobit models. dependent variables model 1: model 2: model 3: regional, supra-regional, independent variables network charges network charges regional, fund hh believes in global warming –6.866 –17.940 134.117 hh supports energy transition 53.004*** 89.284*** 311.966 hh: net development is necessary 18.534 13.172 40.046 hh buys power from renewable sources 17.862* 17.764 362.877*** hh produces power renewable sources 21.522* 31.656** 326.877*** hh favors network charges 30.579*** 26.661** 226.315** hh: decisions by affected regions 22.891* 14.876 83.997 hh pro financial compensation 3.725 –4.260 107.603 hh knows specific transmission line 0.952 7.867 252.412** age head of hh 1.591 –1.085 –111.378** head of hh is male 23.314* 18.399 –62.581 hh's monthly net income 7.095** 8.276** 70.433** hh owns residential property 4.847 10.470 210.992 dummy: hh located in kreiensen 19.668* 32.061** 100.006 distance to nearest transmission line 0.097 0.293 3.548 constant –311.455*** –367.910*** –3.264.224*** log-likelihood –1.068.828 -1.010.922 –1.025.711 n 398 391 402 */**/***: significant on 10%-/5%/1%-level, hh: household 6 nominal variables of more than two specifications and variables of non-interpretable coefficients are examined in case-to-case-examination with dummyvariables. final models include most significant specifications respectively dummies. the variables “kreiensen” (place of residency), “network charges” (favored method of network financing) and “decisions by affected regions” (competencies in energy politics) are chosen this way. preference for power from renewable sources. also, a preference for financing electricity networks via network charges inspires a higher stated wtp in all models. the same is true for the observed correlation between rising household incomes and increasing stated wtps, which also confirms a standard finding in wtpstudies [31]. a noteworthy finding presents itself in the role of place of residency. while in an isolated analyses kreiensen’s average wtp is the lowest compared to other sample regions, the simultaneous model produces opposite results. in all tobit models coefficient of kreiensen-dummy is positive, even though the effect is not statistically significant in fund model. in both models based on network charge payment vehicle, however, stated wtp is higher in kreiensen than in all other regions. another remarkable result concerns the preferred allocation of decision-making-competencies in the field of grid development. this variable is significant only in tobit model 1 and does not contribute to explain either referendum behavior. considering the extensive efforts made by transmission network operators to include population near construction areas into transmission line planning procedures [32], one might argue, quite provocatively, that these efforts might not serve to increase acceptance at all. as shown in table 8, a clear majority of 90% of study participants accepts grid development as a necessity. investigating the effect of decision-makingcompetencies on this vote, however, it appears that within the group of households advocating regional decision-making the share of households not believing grid development to be necessary rises to 32.8%. this share is three times as high as in the reference groups of households wishing either for the federal government to be in charge or for decisions being made in conjunction of federal government and affected regions. if a vote for regional decision-making is interpreted as a wish for stronger participation of effected regions, it appears that stronger participation does in fact lead to decreasing acceptance of grid development. 5. conclusions this paper examines the willingness-to-pay of private households for underground cable deployment as elicited by contingent valuation. results presented in this paper may be interpreted with regards to the concurrent public debate on the social acceptance of the energy transition and related price increases in the energy sector. whether and to what extent german energy consumers are willing to accept further price increases can consequently not be answered exhaustively, especially considering the sample used is not representative. yet in principle, the results of other studies can be confirmed as a clear majority of about 60% of households favors underground cables over overhead lines in both regional and supra-regional dimensions. even so, it is doubtful for this vote to be sufficient to accept the hypothesis that underground cables increase the social acceptance of grid development and can thus be implemented to solve regional conflicts. this is because of a large share of households voting strategically in favor of underground cables without assigning positive economic value as expressed in wtp. noticeably, free-riding cannot be explained by household income or other socio demographic factors. neither are general opinions on energy policies, such as attitudes towards global warming or the energy transition, suitable explanatory variables. instead, normative attitudes like preferences on method of network financing are statistically significant. also, regional factors such as place of residency and distance to nearest transmission lines influence behavior. the observation that agreement to underground cable projects rises with increasing distance to existing transmission lines can be explained by habituation effects. households living relatively close to transmission lines apparently consider visual effects of overhead lines a lesser evil than households unfamiliar with the sights of high voltage pylons. these differences between sample regions contradict various studies [6] that diagnose an undifferentiated support for underground cables. this study was conducted simultaneously in four parts of germany that are influenced by network development in very different ways. in an isolated view of the effects of sample regions on voting behavior, support for underground cable projects is highest in kreiensen, a community affected by grid development. preference intensity as expressed in wtp does not reflect this finding, however: wtp in niebüll is much larger than in other sample regions. this observation may be explained by the share of free-riding households in the region, which is significantly lower than in remaining sample regions. this underproportional share of free-riders in niebüll suggests that in this region shaped by wind energy underground cable might indeed be an instrument to secure social acceptance of network development. that 46 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany this vote coming from a population financially profiting from value-adding-processes of the energy transition is not transferable to other regions follows from great differences to the other sample regions. finally, the fact that even in niebüll only one third of households stating a positive wtp for regional projects is willing to accept a further cost increase for supra-regional extension affirms the 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[32] amprion. nep 2013: konsultation beendet; 2013. http://www.amprion.net/pressemitteilung-102, seen 11.06.2013. 48 international journal of sustainable energy planning and management vol. 03 2014 underground cables versus overhead lines: do cables increase social acceptance of grid development? results of a contingent valuation survey in germany https://www.destatis.de/ de/zahlenfakten/gesellschaftstaat/einkommenkonsumlebensbedingungen/einkommeneinnahmenausgaben/tabellen/haushaltsnettoeinkommen.html https://www.destatis.de/ de/zahlenfakten/gesellschaftstaat/einkommenkonsumlebensbedingungen/einkommeneinnahmenausgaben/tabellen/haushaltsnettoeinkommen.html https://www.destatis.de/ de/zahlenfakten/gesellschaftstaat/einkommenkonsumlebensbedingungen/einkommeneinnahmenausgaben/tabellen/haushaltsnettoeinkommen.html https://www.destatis.de/ de/zahlenfakten/gesellschaftstaat/einkommenkonsumlebensbedingungen/einkommeneinnahmenausgaben/tabellen/haushaltsnettoeinkommen.html << /ascii85encodepages 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 28 2020 121 *corresponding author e-mail: obishoge@yahoo.co.uk international journal of sustainable energy planning and management vol. 28 2020 121–134 abstract community participation (cp) is emphasized in the planning and implementation of various projects and sectors. the renewable energy (re) sector just like other sector requires community participation for its effectiveness and efficiency. this review aims at exploring the community participation in the renewable sector in tanzania. a seven-step model was used to review various kinds of literature and five identified themes were analyzed: (i) access to information on re resources; (ii) community awareness of re technologies and related regulatory and institutional framework; (iii) employment opportunities in re sector; and (iv) contribution of re in quality of life improvements. the study revealed that despite different efforts taken by the government and other energy stakeholders, the community still lacks awareness about re technologies, institutional and regulatory framework. however, the re sector plays an important role in providing employment opportunities to the local communities and in alleviating poverty. for instance, hydropower has increased electricity supply, solar energy has improved the local households’ standard of living, education and health services. it is recommended that the government and other energy stakeholders cooperate in providing more information and awareness of re technologies to the community. this should be accompanied by the introduction of a national policy and law which is specifically for renewable energy to enable its development. 1. introduction the economic development of any society has been linked with energy utilization [1]. traditionally, fossil fuels have been the main driving force in providing energy which drives different economic activities. unfortunately, the world’s heavy reliance on fossil fuels utilization has raised several challenges including: global warming which leads to climate change, price fluctuations, environmental pollutions and insecure supply [2], [3]. besides, it is predicted that the global oil and gas reserves will be depleted by 2060 with coal lasting just sixty years later [4]. these challenges have influenced the increase in efforts of promoting sustainable energy planning and management into the public agenda [5]. in lieu of this, renewable energy (re) have been accepted widely as a possible solution to tackle the aforementioned challenges [6], [7]. re can provide clean and sustainable energy, it offers countries around the world an opportunity to improve their energy security and accelerate economic development. furthermore, re is now becoming more popular for small scale utilization due to their scalability and applicability to serve the community participation in the renewable energy sector in tanzania obadia kyetuza bishogea,b,*, godlisten gladstone kombec & benatus norbert mviled,e a department of environmental management, pan african university life and earth sciences institute, university of ibadan, nigeria b department of environment, masasi district council, postal office box 60, masasi-mtwara, tanzania c department of petroleum and energy engineering, college of earth science, the university of dodoma, postal office box 259, dodoma, tanzania d department of geology, pan african university life and earth sciences institute, university of ibadan, nigeria e department of physics, college of natural and mathematical sciences, university of dodoma, postal office box 259, dodoma, tanzania keywords: access to information; community awareness; community participation; renewable energy; the seven-step model; url: https://doi.org/10.5278/ijsepm.4477 https://doi.org/10.5278/ijsepm.3661 122 international journal of sustainable energy planning and management vol. 28 2020 community participation in the renewable energy sector in tanzania raising energy demands and provide critical services such as lighting, water pumping/purification [8], [9]. to successfully manage the adoption and development of re technologies, community participation (cp) is required [6]. the community can be involved in the sector with consideration of various aspects. these aspects include community knowledge, awareness, acceptance, involvement in the investment, securing employment opportunities, accessing timely and true information on re technology developments [10]. cp addresses sustainable development of re through collaborative management in energy production and supply. tanzania has an approximate total power capacity of 1,450 mw of electricity by which natural gas, hydropower and liquid fuel accounts for 652.5 mw, 609 mw, and 188.5 mw, respectively [11]. hydropower is one of the re which encourages the national electricity contribution compared to other re sources such as solar (26 mw), wind (77 mw), and geothermal (expecting to generate 200 mw by 2025) and biofuels [12]. tanzania has abundant and high-quality re resources which are unexploited due to some reasons such as: poor mobilization, lack of political will, and shortage of re policy and law. other challenges include poor participation of local governments, limited coordination and connectivity between sectors and energy stakeholders and lack of long-term policymaking [13]. despite these challenges, tanzania has made progress in electricity production and supply in urban and rural areas. the government facilitates an enabling environment for solar systems in households and institutions such as schools and health centres. different households and institutions in rural and urban areas use solar panels to generate electricity for lighting, phone charging and watching television. societies favour using solar panels to improve life rather than using diesel generators which are noisy, dirty and intrusive [14]. furthermore, the government and other energy stakeholders in tanzania collaborate to encourage and invest in the use of the re. for instance, under the tanzania development vision 2025, hydropower projects with a capacity of approximately 4,765 gw have been identified and proposed to meet the demand for reliable and affordable energy in tanzania [15]. this initiative has started by constructing the nyerere hydropower project which will be able to generate 2,115 mw of electricity soon after its completion [16]. moreover, the country has a plan to generate 650 mw from geothermal potential, 100 mw from wind, 60 mw from solar, and 11 mw from small hydropower plants by the end of 2020 [17]. in addition, it is projected that 53%, 75% and 100% of the tanzanian total electricity will be generated from re sources by 2020, 2030 and 2050, respectively. the total installed capacity of re will reach over 20 gw and 60 gw by 2030 and 2050, respectively [18]. over the decades, there has been much debate development and debate on ways to conceptualize meaningful cp in the energy sector [19]. the use of community participatory approaches promotes the effectiveness of implemented projects or programs. effective involvement of the communities has positive impacts on social and economic capital, leading to enhanced community empowerment and ultimately improved energy production and consumption. this facilitates the capacity of the community to meet its energy demand [20], [21]. tanzania practices cp in the development of various sectors and projects [22]. local communities are considered in the projects which are implemented and beneficial to local areas. re projects require the full participation of the communities. despite the efforts done to ensure that cp is realized in the development of the re sector, there are still some cases in which the local communities are not fully involved from designing to the implementation of the projects [23], [24]. the community needs to have enough information regarding re especially on technologies and sources; knowledge and awareness on the re related technologies, policies, laws and regulations. moreover, there is a need to discuss how the re sector benefits local communities in terms of employment opportunities and poverty alleviation. however, despite the wide acceptance of cp in theory and practices, there are still many challenges on how cp is implemented in the energy sector and projects in developing countries such as tanzania [25]. previous systematic reviews and studies of cp outcomes on energy sector have focused on hydrocarbon extractions such as natural gas and petroleum in tanzania [11], [26]. thus, to our knowledge, there is no review of existing systematic approaches that examine the international journal of sustainable energy planning and management vol. 28 2020 123 obadia kyetuza bishoge, godlisten gladstone kombe & benatus norbert mvile outcomes of community involvement in re sector planning, implementation, monitoring and evaluation in tanzania. hence, the objective of this paper is to address the shortcoming in literature and provide a better understanding of how communities participate in the development of the re sector in tanzania. 2. the concept of cp and its relation to the renewable energy sector cp globally refers to the involvement of local people in decision-making processes and developmental projects’ implementation [27]. it is closely related to the concepts of empowerment, local knowledge and awareness. cp offers local people with the opportunities, experience and insights to projects’ designing, implementation, monitoring and evaluation [24]. cp in the management of sector or project has a long-standing and constructive tradition. the lack of work at the grassroots level and investment in the capacity building are system barriers towards full cp [28]. in a real sense, achieving full representation of a community can be difficult in practice. cp can be considered into two approaches which are either top-down or bottom-up [29]. the top-down approach involves the use of experts at the top to plan development initiatives and lead the process [30]while in the bottom-up approach the local community is the one that pledges the development initiatives to allow them to select their own goals and means of achieving them [31]. full cp provides the active, efficient and effective involvement of the community in all stages and aspects of the project or sector, as shown in figure 1. the involvement of the community in all levels of the project increases the legitimacy of the decisions made and minimizes the level of conflicts which are likely to occur during the implementation of the project [32]. through cp, communities learn how to solve environmental, socioeconomic, technical and political problems which are likely to affect the sector or project or the society and hence change their behaviour. moreover, during the monitoring of the re policies, local communities must be involved to identify the new needs and opportunities related to the re sector in their areas [33]. re policies’ monitoring helps to identify changes which are associated with the re sector during its development or implementation [34]. 2.1. cp in sustainable re development as explained earlier, cp is a necessary strategy for the sustainable sector or project development including the re sector in any country. community-based re has been growing as a global movement [35]. the community especially local societies need to be involved fully in the planning, implementing, monitoring and evaluating of re projects [36], as indicated in table 1. through cp, re sector development incorporates the opinions of the local community which assist to fulfil their expectations and benefits of the project [27]. the local community will be more supportive of re sector development if they have a chance to participate in all full community participation active involvement in all stages self mobilization and determination shared decision-makingcontribution of resources sense of ownership right to participate figure 1: aspects of full cp 124 international journal of sustainable energy planning and management vol. 28 2020 community participation in the renewable energy sector in tanzania aspects of the project. however, in some cases, local communities are only involved in the implementation process of the project, and the planning stage remains a responsibility of the proponent. this may be a hindrance to the development of the project. in other cases, according to oji and weber [37], the structure and design of the numerous re programs can influence the rational participation in the program and capacity of re programs’ developers to raise finance through community involvement and to fund capital costs of re programs. for example, in canada, local citizens were involved in the re programs whose overall designs had a section to address greenhouse gas emissions at household levels. citizen participation helps to accelerate the transition towards low-carbon energy systems. moreover, romano et al. [38] demonstrated that different energy models are designed to allow the users’ sharing of data and information within and outside their areas and to increase residents’ sense of ownership through community involvement. this provides them with new forms of interaction. the successful implementation of re projects through cp has also been well demonstrated by a local community in sagar and mousuni islands in india, whereby, the community contributed half of the total cost of the renewable power project [18]. they provided their land, labour at reduced cost and assisted government officials by arranging food and shelter during the power construction period. also, it is interesting that the local community was trained for routine maintenance of the project [18]. the provision of the land and cheap labour had a positive impact on the speed of the project implementation and it also increased the share of the community in the project. the increased share enhanced a sense of ownership among the community members. moreover, the provision of training in routine maintenance increased the effectiveness and efficiency in operations and line maintenance, distribution of connections and security of the project. according to plummer and taylor [39], china has been successful in the development of re projects because it has increased the trends which create the possibilities for increased participation by chinese people in making decisions affecting their daily lives, especially in rural areas. the new reforms in some areas, appear to change how power is exercised at local levels. the energy efficiency is currently high in rural areas of china. in addition, the poverty rate has gradually decreased [40]. besides china, many other countries with re constructions have experienced an improvement in livelihood. for instance, the construction of mini-power plants in zambia, have created jobs and economic opportunities to local people [41]. most of the local people’s homes are powered with solar pv systems by which the residents benefit in different ways such as relieving women and children of the time spent in completing household activities manually without the aid of electricity [42]. solar powering the health centres especially the maternity rooms and laboratories have improved health services in rural areas by ensuring effective and safe healthcare [43]. moreover, solar-powered lightening in schools and other learning places in rural areas has enhanced the children to study for a longer time in safely-lit classrooms and teachers have a longer time to plan, mark and assist students with their home works, raising education standards [44]. besides, furuya [45] reports that in japan, after the great east japan earthquake and the fukushima nuclear disaster in 2011, tama empower (a tokyo based community solar startup) initiated a new participatory installation model for rooftop solar, named “do it ourselves” in 2016. this model offers customers with power from photovoltaic (pv) and enhances the community to have a deep understanding and feeling on the pv systems installed in their places. this creates a sense of ownership of the solar pv systems among the customers or local communities. this model insisted on the participation of building owners and table 1: role of the community at various stages of re project management no. stage role 1. planning and designing the proposition of particular sites and resources for feasibility studies 2. financing provision of cheap labour and land 3. operation and maintenance line maintenance and distribution of connections 4. administration tariff collection, account maintenance, and ensuring security and handling of the project international journal of sustainable energy planning and management vol. 28 2020 125 obadia kyetuza bishoge, godlisten gladstone kombe & benatus norbert mvile tenants in the installation; breaking down cost and role sharing; carefully solar pv selection; and support for institutional operations and maintenance. this project achieved the installation over a total of 610 kw distributed solar pv in 13 places around the city. the beneficiaries were mainly university building, schools, a house for elderly people, a community centre, a private company’s building and a museum. likewise, according to the institute for sustainable energy policies [35], samsø island in denmark, realized 100% community-based re in 10 years since the 1990s. this was achieved through holding the series of workshop named “next practice”. in this workshop people shared the island’s life experiences and knowledge on energy sector development and challenges with communities and experts around the world, enriched mutual inspiration and sightsaw next practice. next practice is among the initiatives which have made denmark being the pioneer of clean energy in the world. currently, over 30% of all energy is from re sources. the interesting issue about denmark is that half of its electricity was from wind and solar power in 2019 [46]. that’s the highest number ever. this practice was later adopted by japan to achieve the cp in re sector development in local communities [35]. on the other hand, in kenya, as reported by comer [47] the baharini electra wind farm, a 90 mw wind project in lamu faced the opposition from residents throughout its development process because over 80,000 residents were not prior informed of the project’s intention to acquire their land. also, in the same country, a proposed kinangop wind park with 60.8 mw was cancelled before it could go online as scheduled in 2015 because the community landowners were not involved during the planning process. the community willingness is a key element by which the community is to be imparted to assist the full cp in the re sector management. the study conducted by nakano et al. [48] revealed that social acceptance of the re projects and willingness to pay for re services in east japan is influenced by the communities’ strong concerns about the global change and willingness to participate in policymaking. this has enhanced the achievement of effective and efficient re development in japan. alternatively, akinwale et al. [49] pinpoint that less than 6% of the respondents who were involved in a study about public understanding and attitudes of re resources towards energy development in nigeria argued for the use of biomass and wind energy due to poor knowledge and awareness of the efficient utilization of their technologies. moreover, the study conducted by karatepe et al. [50] on the levels of awareness about the re sources of university students in turkey revealed that there are poor awareness levels on the re among the communities especially students and no enough information about policies and laws on re. it is evidenced, therefore, cp is a crucial element in the development and sustainability of any re project. 3. methodological framework this study is the systematic review (sr) which overviews the existing evidence pertinent to cp in the re sector in tanzania. sr refers to the strict approach used to pinpoint relevant studies which address the study topic with an established inclusion or exclusion criteria and a well-defined methodological analysis and dissemination of the themes from the selected studies [51]. sr is précised and standardized methods to identify and critically appraise the previous relevant studies relating to cp and re sector by focusing on very specific questions or themes. in general, sr aims to deliberately document, critically evaluate and summarize scientifically all of the previous studies about a clearly defined research problem [52]. the seven-step model was used to conduct a comprehensive literature review [53] as summarized in figure 2. in which, the researchers initiated the identification of the problem, beliefs and interests of the study by selecting major themes such as cp, re, re sector management, community knowledge, awareness, willingness, and information flow. an extensive literature search for information from different bibliographic sources such as google scholar, web of science, and scopus, and government and non-government reports was conducted from 2010 to 2020. the obtained studies were then filtered to allow detailed study which provides main concerns relevant to the study topic. the list of selected studies was filtered down to 42 out of 54 studies. the selection process revealed further, the unsuitability of some studies which lacks a clear information on cp in the re sector. thus, out of 42 studies, 35 studies were finally selected, as indicated in table 2. 126 international journal of sustainable energy planning and management vol. 28 2020 community participation in the renewable energy sector in tanzania then, data were organized, analyzed, synthesized and finally reported according to the research questions. 4. the concept of cp in renewable energy sector in tanzania this study revealed four major evaluation themes which are related to cp in the re sector development in tanzania. these themes were obtained after a systematic review through seven-step model in section 3. the outcomes for each step of the seven-step model are presented in table 3. moreover, main themes are access to information on re resources and technologies, community awareness of the re technologies and related regulatory and institutional framework, re as the source of employment opportunities, and re sector and improvement of life quality. 4.1. access to information on re resources and technologies tanzania has an abundance of re resources by which largely are unexploited. the country’s total energy capacity from re resources excluding hydropower is about 5% [54]. hydropower is the major re resource of electricity contributing about 652.5 mw out of 1,450 mw of the total capacity [13]. the potential available re resources in tanzania [55], [56] are summarized in table 4. problem identification with researchers’ beliefs and interests a literature search of the relevant studies and materials from various bibliography sources selection of the relevant studies to the intended study a detailed study of the selected studies with relevant themes and questions to be dealt presentation of the final report on the findings and results in relation to the research questions critical analysis and synthesizing the information the selected themes organization and keeping the major themes from the relevant studies 1st step 2n d step 3rd step 4th step 5th step 6th step 7th step figure 2: the seven-step model used in the study table 2: potential studies used for themes analysis no. variable no. of relevant studies percentage 1. access to information on re resources and technologies 14 40 2. community awareness of the re technologies and related regulatory and institutional framework 11 31.4 3. employment opportunities in the re sector 5 14.3 4. contribution of re in quality of life improvements 5 14.3 total 35 100 table 3: the outcomes of each step in the seven-step model step outcomes 1. explored worldwide beliefs on the topic of interest and highlighted its contents to create the aim of the study 2. the initial list of relevant studies from various sources such as google scholar 3. relevant studies after searching keywords related to the study topic were filtrated from the initial list in step 2 4. examined list of filtrated studies and themes 5. identification of major themes such as access to information, community awareness and knowledge on re technologies and resources, employment opportunities and improvement of life quality through re sector 6. comprehensive reading and evaluation of the major themes to produce a deep discussion 7. presentation of the results in terms of summaries international journal of sustainable energy planning and management vol. 28 2020 127 obadia kyetuza bishoge, godlisten gladstone kombe & benatus norbert mvile access to information is important for promoting and protecting resources. it is among the human rights [57]. it collects the voice of the people to participate in various activities at all levels and set priorities for action. information can be accessed through different ways such as media, workshop, training and seminars. the government and other stakeholders are responsible for information dissemination to society. moreover, kichonge et al. [58] suggest that the use of re for electricity generation requires sufficient information regarding their economic and social convenience to the government, experts, communities and other energy stakeholders. in tanzania, various ways such as media, and seminars, conferences or training conducted by various institutions are used to disseminate information of re to the community [59]. one of the organizations which promote sustainable development of re through information dissemination is tanzania renewable energy association (tarea). this non-government organization is not only responsible for information dissemination but also responsible for training, policy influence, research, volunteer programs, and consultancy services [60]. moreover, there are other private organizations like palmetto which facilitates the access of information and finance on re technologies such as the installation of solar panels to the rural areas especially in the iringa region [61]. despite the initiatives which are undertaken, there is still a shortage of some data and information on re. for instance, the study conducted by aly et al. [62] through stakeholders’ based approach revealed that there is lack of information, data and studies on re technologies to some communities, especially in rural areas. similarly, katikiro [63] while studying the prospects of re technologies in tanzania, a case study of mtwara district, revealed that rural people have no appropriate information on the re technologies. such gap on re information has hindered rural people from seeking for the re alternatives to replace the use of unclean fuels like charcoal and firewood. based on general observation from studies, the lack of access to information on re resources and technologies calls for more efforts to improve the accessibility of information on modern energies to rural residents. this will facilitate the achievement sets on energy targets by 2030 as stipulated in 2015 energy policy [64]. thus, there is a need for establishing a designated unit which will comprise all relevant statistics and resource information on re resources [65]. moreover, the government and other stakeholders through various ways such as media should disseminate timely and correct information on re to the communities to realize sustainable energy development. 4.2. community awareness of the re technologies and related regulatory and institutional framework awareness and knowledge among the community is a key tool in achieving sustainable energy development in any country [50]. various studies show that societies, especially in developing countries, have low-level awareness and knowledge about re use in energy production [66], [67]. however, it is suggested that every individual needs to have knowledge and awareness about issues related to environmental conservation in energy sources, production and effective use. in tanzania, there are various institutions and policies which are responsible for table 4: potential and development status of re resources in tanzania no. source estimated resource potential status of development 1. hydropower 4.7 gw 12% 2. small hydropower 485 mw 2% 3. solar >200 wp/m2 average insolation 215 w/m2. up to 3,000 h sunshine/year 4. biomass >500 mw 34 milm3/year 5. geothermal 5,000 mw – 6. biofuels presence of various crops such as jatropha, oil palm, algae, soybean for ethanol and biodiesel production – 7. wind power speed: > 8m/sec – 8. tidal and wave under an assessment – 128 international journal of sustainable energy planning and management vol. 28 2020 community participation in the renewable energy sector in tanzania re sector development. the ministry of energy is the custodian of energy sector development in tanzania. it oversees policies, strategies, and laws within the areas of energy resource management. it furthermore sets plans, develops capacity building and mobilizes financial resources. the national energy policy of 2015 is among the regulatory documents that ensure an efficient and sustainable energy value chain which includes production, procurement, transportation, and distribution and enduse systems. it aims at ensuring the provision and development of reliable and affordable energy in tanzania. the policy calls for a better way and scaling-up of the utilization of re resources [68]. also, the national environmental management act of 2004 emphasizes the promotion of the use of re sources for which more incentives, policies and measures should be taken to encourage the development of re [69]. this act encourages the use of re resources to replace the utilization of non-renewable energy resources such as charcoal, firewood, and fuels which are depleted and detrimental to the environment [70]. in tanzania, the government and other energy stakeholders have been providing awareness of the re technologies to the community. the awareness has been provided through different ways including media, training, conference, workshops and seminars. most efforts are directed to implementing awareness through demonstrating campaigns on the use of solar systems for domestic and industrial use as well as supporting direct installation in public and privates institutions such as health centres and schools [71]. despite these efforts, only a few communities have benefited and reacted positively to the re technologies, policies and regulations. the majority of the population remains with poor or lack of awareness and understanding of the re sector development. for instance, the study by katikiro [63], revealed that there are poor awareness and low skills on re technologies due to lack of displays and activities relating to re in village areas. this is justified by aly et al. [62] while studying the barriers to solar power in tanzania. aly et al. [12] reported that a lack of awareness on re technologies hinders the development of small-scale solar power in rural societies of tanzania. moreover, bauner [72] reported that limited awareness of available solutions and ability to pay are the major issues which affect the small scale power development in tanzania. this affects the organization of effective and efficient operations and maintenance of the development of small scale power especially in rural areas where electricity is a problem. besides, the reporter of tanzania daily news (dar es salaam) interviewed mr mahimbo (a young managing director of a re company) who pinpointed out that the lack of awareness on re potential among the communities hinders their activities of developing, procuring and constructing re projects across tanzania [73]. thus, more efforts are required for the community to acquire knowledge about the energetic requirements and the potential of re sources and previous experiences to develop the most efficient and sustainable technology system which may allow better use of re sources available. the interest of local stakeholders should be taken care to guarantee a common acceptance and widespread of the knowledge about the benefits for the adoption of re and fulfil the sustainable development goal number 7. besides, the knowledge, best practices, and solutions must be transferred to various energy actors when facing common problems relating to re sector development. 4.3. re as the source of employment opportunities re sector plays a central role in assisting to offset the impact of climate change. it is at the forefront of technological development, which has opened up various career routes for graduates at down and up the supply chain. re sector needs casual, semi-skilled and skilled labour to operate re technologies. re sector can provide direct job opportunities to experts such as mechanical, design and environmental engineers, policy analysts, managers, sales representative, accountants, and economists. according to the international renewable energy agency [74, the re sector employed 11 million people directly and indirectly at the end of 2018 globally. there are factors which shape how and where employees can be generated in re production and supply chain. these factors include government policies and laws; the variation of supply chains; trade forms; industry restructuring; and consolidation leanings [74]. in tanzania, the re sector is among the sectors which provide employment opportunities. for instance, during the site visit of the parliamentary committee on energy and minerals in 2019, the minister for energy told the committee members that over 5,400 people would be employed at nyerere hydropower project (biggest international journal of sustainable energy planning and management vol. 28 2020 129 obadia kyetuza bishoge, godlisten gladstone kombe & benatus norbert mvile hydropower plant in east africa) which will be able to generate 2,100 mw. out of 5,400 people, 5,000 and 400 will be employed under temporal and permanent contracts, respectively [75]. moreover, other re related projects such as solar power projects provide opportunities such as technicians, contractors and drivers [76]. currently, there are a lot of companies (about 40) which deal with solar power production especially in selling, installing, and maintaining solar pv systems in urban and rural areas. all of these companies offer various job opportunities among the communities. despite this re benefit to the community, the society still lacks the awareness on the use and development of re technologies in tanzania [13]. the local communities tend to look for technicians from the other areas far from their areas. however, the government and other stakeholders have been providing various training and education programs for re technologies to help the local communities build their skills. 4.4. re sector and improvement of life quality energy access is among the driving forces for poverty alleviation for sustainable development in any country. the promotion and supply of modern energy encourage the improvement of human living conditions and the sector’s productivity [77]. extremely poor people cannot lift themselves out of poverty without access to reliable and modern energy. in tanzania, the use of re improves the living standards of the people in rural and urban areas. this facilitates the running of the business, provision of good health and education services as well as lighting homes and enhancing cooking meals. for instance, the world future council [78] pinpoints that health centres, especially in maternity wards, microscopes and vaccine storage, are now powered with solar pv systems. this helps to improve the quality of health services especially the labour and delivery process. solar pvs are installed in various schools, classrooms, and laboratories, something which promotes long hours for the students to study, and for teachers to prepare and plan for teaching. moreover, most of the individual households, businesses and hostels install solar pvs which are used for lightening, water heating, cellphones charging, and televisions running. malaki [79] revealed that local communities use existing solar driers to increase productivity and improve their livelihoods through using solar power in food drying, heating homes, eggs incubation and powering electrical appliances. re and farming are a winning combination. for example, wind, solar, and biomass energy can be harvested forever, providing farmers with a long-term source of income [80]. re improves the value chain of agricultural products. for instance, the study conducted by efd tanzania [81] in 2015 on the management of hydropower plants in the southern highland region indicates that the hydropower projects have provided more energy which has increased and improved the processing and value addition of agricultural products. 5. conclusion and policy recommendations increased access to energy in developing countries including tanzania needs systematic planning based on comprehensive stakeholders’ cooperation on all aspects of the energy sector. it furthermore brings a huge difference in the people’s quality of life and enhances the development targets of the country. there are scenarios which are important to explain possible future development paths, and giving the planners, decision-makers and implementers a broad overview of various options toward energy sector development. changes to energy markets need long term planning which should be specific and focus towards better decision making incorporating cp at all levels of the development. this review provides an overview of community-related issues on the re sector development. these issues include access to information; community awareness and knowledge on re technologies and resources; employment opportunities and poverty alleviation through re sector development. it is therefore important for experts such as economists, electrical and environmental engineers and journalists to theoretically and practically test these issues to realize the achievement of re sector development through cp. various studies, policies and laws insist on the cp in the project or sector development in tanzania. experts can be on the front line to discuss and provide more clarification on the theories, policies and regulations on this aspect to appreciate the development of the re sector. 130 international journal of sustainable energy planning and management vol. 28 2020 community participation in the renewable energy sector in tanzania this review concluded with the following recommendations:• re related policies and regulations have to be amended at both national and regional levels. setting clear policy priorities across policy areas is essential to provide investment security, mobilize stakeholders as well as improve the allocation of re resources. there should be the policy and law which is specifically for re in tanzania since re issues are discussed in the general policy “national energy policy of 2015”. • more efforts are required to provide timely information on the re resources and technologies available in tanzania. this information should be provided to all communities and other stakeholders who are and interested in investing in the re sector. the dissemination of these will increase the capacity of the community on how to manage and utilize these resources and technologies. • the government and other energy stakeholders should cooperate to offer awareness on the re technologies to the community through various ways including training at primary to university levels, media, workshops, seminars and conferences. acknowledgements the authors thank the african union commission for funding the studies at the pan african university of life and earth sciences, the university of ibadan in nigeria. references [1] a. s. momodu, “energy use : electricity system in west africa and climate change,” int. j. sustain. energy plan. manag., vol. 14, pp. 21–38, 2017, http://doi.org/10.5278/ ijsepm.2017.14.3. 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planning and management vol. 31 2021 23 *corresponding author e-mail: rl@planenergi.dk international journal of sustainable energy planning and management vol. 31 2021 23–38 abstract in the development towards smart and renewable energy systems with increasing supply of electricity from fluctuating sources there is an increasing need for system flexibility. in this context the role and need for grid-level electricity storage is debated. ideally, there would not be a need for storage, but the alternative system flexibility solutions may not cover all the flexibility needs, which will leave a potential for the storage of electricity. in this study, a compressed heat energy storage (chest) is assessed. it combines electricity and thermal storage in one system and can simultaneously benefit electricity and district heating (dh) systems. in a technical energy system analysis with the energy system of germany as a case, a chest system is analyzed in different configurations with and without dh integration. the results indicate that electrochemical storage is more effective than chest if dh integration is not present. however, if dh integration is assumed, the chest technology can be more effective in reducing the primary energy supply. this applies, however, only for dh systems based on electrified heat sources, whereas in dh supplied by combined heat and power plants and fuel boilers, the chest system do not show more effective. energy system benefits of combined electricity and thermal storage integrated with district heating rasmus lund* planenergi, vestergade 48h, 8000 aarhus, denmark keywords energy storage; district heating; carnot battery; energy system analysis; renewable energy; http://doi.org/10.5278/ijsepm.6273 1. introduction in the development towards a smart and renewable energy systems, there is an increasing supply of electricity from fluctuating sources and at times the production exceeds demand which results in the curtailment of excess electricity production in critical hours. curtailment is a lost opportunity to replace other forms of energy use, e.g. fuel consumption in a thermal power plant (pp). at other times with excess production, the excess electricity may be exported, avoiding curtailment, however often at a low price. here, the excess electricity is a lost economic opportunity because the electricity might have been used more efficiently. the challenge of excess electricity can be expected to grow in the future and the need for efficient solutions will continue to grow as well [1]. 1.1. system flexibility measures various solutions can contribute to balance supply and demand of electricity, which in the following are referred to as flexibility measures [2]. these can be seen in many places already today, for example in mountainous regions, where rivers are dammed to release the water through turbines when there is a demand, or pumping water back into the dam using excess electricity, and there by storing it for a time with a demand [3]. this technology has worked for several decades but is in the current development gaining additional value for balancing of demand and supply of fluctuating renewable sources of electricity production [4]. other flexibility measures are also emerging as solutions to the challenge. flexible demand of electricity at the consumer side can be an option of how to move 24 international journal of sustainable energy planning and management vol. 31 2021 energy system benefits of combined electricity and thermal storage integrated with district heating demand to times with excess electricity from times with less renewable electricity [5]. this could be a laundry machine able to postpone its start during a night based on a signal from the electricity market [6]. another potential solution is to have battery electric vehicles being able to postpone a share of the needed charging time flexibly during the night [7]. in addition, the battery of the electric vehicle could supply power back into the electricity grid at a time of need for balancing support at the grid level. a third flexibility measure can be to couple the electricity sector to dh though flexible units that can operate on both markets, e.g. combined heat and power (chp) or heat pumps (hp) [8]. another option, that is still in development and demonstration, could be to produce hydrogen using electrolysis to consume electricity at times of excess production and store the hydrogen for later use [9]. 1.2. storage of electricity increasing attention is drawn by large scale grid-connected electrochemical batteries, as lithium-ion (li-ion) battery technology [10]. the technology is well proven, has a round trip efficiency of up to 95% and it can be placed almost anywhere needed. several studies have found this type of batteries or similar, to have an important role in a future renewable electricity supply, and that it may even be a necessity for a fully renewable electricity supply, e.g. in [11] and [12]. others find that electricity storage is particularly important in isolated areas, such as islands suggested in [13] and [14]. however, traditional batteries have a significant cost of investment and the chemical compounds derived from the production and end-of-life disposal may have some environmental consequences [15]. 1.3. smart energy and 4th generation district heating other studies, using a smart energy system approach, find that large-scale grid-connected electricity storage is not feasible in general in an integrated energy system [16]. a smart energy system is a concept of the design of an energy system, that focuses on coupling of energy sectors, i.e. electricity, heating, cooling, transport and industry [17]. the argument is that other flexibility measures are more efficient and cost-effective than electricity-only storage. for example, an integration between the electricity system and district heating (dh) systems is mentioned as an important feature [18]. this enables the utilization of thermal energy storage (tes) capacities in the dh system to balance the electricity supply, e.g. with chp or electric vapor compression heat pumps (hp). the 4th generation of dh can be understood as the dh side of a smart energy system and has a focus on utilizing synergies in various energy infrastructures, as described in [19] and [20]. low temperature excess heat occurs several places in the energy supply systems [21], and via low temperature dh systems and heat pumps the excess heat can be used as a source for dh production [22]. 1.4. compressed heat energy storage (chest) in the chester-project the so-called compressed heat energy storage (chest) concept is analyzed through modelling and simulation of the possible technological options and a prototype chest unit is demonstrated in the project as well. based on the findings the technology will be developed further [23]. in the effort of the present study, an emerging technology that can work as a flexibility measure is considered – the chest. the technology, presented by steinmann in [24], consists of a power-to-heat unit, a thermal storage and a heat engine driving a generator. the concept is also referred to as a carnot battery, e.g. by dumont et al. in [25] and pumped thermal electricity storage by benato and stoppato in [26]. the chest technology can use electricity at times with an excess production to convert it to thermal energy which can be stored, to release the thermal energy through a heat engine to generate electricity back to the electricity grid. see an illustration in figure 1. in that sense it is like conventional electricity storage, however, the chest can also work as combined electricity and thermal storage as indicated in the title of the present article. if a abbreviations chest compressed heat energy storage chp combined heat and power cop coefficient of performance dh district heating eep excess electricity production hp heat pump orc organic rankine cycle pes primary energy supply pp power plant pv photo voltaic res renewable energy source tes thermal energy storage international journal of sustainable energy planning and management vol. 31 2021 25 rasmus lund heat pump is used as the power-to-heat unit to charge the chest, the heat source for the heat pump can be a dh system. similarly, the excess heat from the operation of the heat engine here assumed to be an organic rankine cycle (orc), can be fed back into the dh system. in that way heat and power is stored together and discharged together. this can potentially reach a higher total efficiency than conventional electrical storage, but a lower power-to-power ratio. figure 1: conceptual illustration of system integration of chest with its main components; heat pump (hp), thermal energy storage (tes) and an organic rankine cycle (orc). the chest technology can be understood as a part of a smart energy system when connected to a dh system, because this will allow the utilization of synergies between the operation of the heat and electrical sides of the storage. 1.5. the objective of the study the objective of the analysis is to uncover the technical potential of introducing large-scale chest storage capacities on a national energy system level, in the perspective of the transition towards an energy supply based on sustainable resources. a large-scale system integration of chest storages is analyzed in the context of the german energy system as a case. a smart energy system approach is assumed, and energy system models of germany in a future scenario representing 2050 are used. the study includes a technical analysis of the system and the influence on the overall system dynamics by introducing a large capacity of chest into the supply. two different configurations of chest are analyzed, with and without dh integration, and compared to li-ion storage of the same capacity and a situation without any additional storage. a central part of the analysis is two different scenarios for the dh supply in the 2050 situation are considered. one that represents the current supply based on mainly chp, and an alternative where dh supply is based mainly on large-scale heat pumps. 2. national energy system model development for the analysis, a set of models is developed, where germany in 2050 is used as a case. two variations are derived based on alternative development pathways of dh supply. 2.1. germany of 2050 as a case germany is chosen as a case for the analysis because it is a relatively large country, centrally located in europe. in sensitivity analyses, the representativeness of this choice will be discussed. an energy system model of germany is developed with the reference year 2050. the exact year of 2050 is not essential to this analysis, but it is to denominate a point in time where it is expected that a large share of renewable energy in the form of wind power and solar photo voltaic (pv) could be operating and the overall energy system has been electrified much further than today. 2.2. data foundation and system assumptions the energy system model is designed to represent the energy system of germany in 2050, with large shares of renewable energy, a high degree of electrification and with a smart energy system approach. the data inputs for the model of the energy system of germany used as a starting point for the analysis are partly adapted from an existing model, developed in the framework of the iea technology collaboration programme of energy storage. the project annex 28 desire focused on decentralized energy storage, and in connection to this an energy system model was developed [27]. this was based on the energy system of germany in 2015 and designed to analyze the feasibility of different energy storage technologies and configurations. the model used in the analyses of the current study is a revised and adjusted version of the model developed in the desire project. the implemented adjustments are mainly to reflect the transition towards 2050, including more renewable electricity production, reduction in fossil fuel consumption and general electrification of all sectors. a list of the key parameters adjusted in the development can be found in table 1. later, in table 2, a list of a few additional adjustments related to the two scenarios for dh can be found. 26 international journal of sustainable energy planning and management vol. 31 2021 energy system benefits of combined electricity and thermal storage integrated with district heating the conventional electricity demand includes the electrical demands which are not assumed to change towards 2050, such as lighting, appliances, cooling and existing industrial process. the end demand of these categories may increase, but improved efficiencies are assumed to balance out this effect and therefore this demand remains the same in 2050. the capacities of onshore wind, off-shore wind and solar pv for the 2050 models are scaled proportionally based on the development trend projected in the desire project [27], to a level where the excess electricity production (eep) (see more in section 3.2) is equivalent to 10% of the total annual electricity demand in an island mode analysis. the excess electricity is the amount of electricity, usually produced by inflexible production units, which cannot be utilized at the time of its production. the level of 10% is to keep a comparable level of fluctuating renewables in the future models. thermal power plants are assumed to be converted towards 2050 so that 50% use natural gas and 50% use biomass. in [28], mathiesen and hansen have made a study on the future energy supply in germany, including an assessment of how the transport demand will be covered in 2050, and values for the transport sector have been adopted from this study. there is a strong focus on electrification of the transport sector, and the remaining fuel demands of petrol, diesel and jet petrol is in the current study covered with 50% fossil fuels and 50% electrofuels produced using biomass gasification, hydrogenation and synthesis to liquid fuels. in the project heat roadmap europe, which focused on the future (2050) of heat supply in europe, it was found that heat demands in europe should ideally be reduced by 30-50% and 40-50% of the total demand should be covered with dh [29]. in the present study, it is assumed that the overall heat demand in buildings in 2050 to be reduced by 25% of the 2015 demand. at the same time, it is assumed that the dh coverage of the total demand is increased from 15% in 2015 to 30% in 2050. these values are a bit lower than what was found in heat roadmap europe because the values of that project are an expression of the ideal levels from a system perspective. the consequence of higher or lower dh demand is discussed in connection with the presentation of the results in section 5 of the present article. in the individual heating supply in the 2050 scenarios, the fossil fuels in the supply are replaced completely with biomass, heat pumps and electric heating in a ratio of 17.5/80.0/2.5 based on [28]. the dh supply will be described further in section 2.3. table 1: key energy system parameters defining the germany 2050 model compared to the original model of the desire project. parameter unit germany 2015 germany 2050 electricity conventional electricity demand twh 596.3 596.3 onshore wind gw 41.7 201.9* off-shore wind gw 3.3 108.9* solar pv gw 39.6 297.0* nuclear power capacity gw 8.0 0 power plant capacity (thermal) gw 85.6 200.0 transport petrol twh 220 42.8 diesel twh 332 189.0 jet petrol twh 100 77.8 electricity for transport twh 12.1 83.7 electrolysis for fuel production gw 0 9.7 biomass gasification twh 0 126.0 liquid fuel production twh 0 162.5 heating coal, individual boilers twh 28.3 0 oil, individual boilers twh 263.2 0 natural gas, individual boilers twh 466.0 0 biomass, individual boilers twh 90.8 121.0 heat pumps, individual units twhth 6.7 359.5 electric heating, individual units twh 34.2 11.2 district heating production twh 159.6 234.6 industry coal twh 115.0 15.0 oil twh 258.4 108.4 natural gas twh 281.8 32.0 biomass twh 39.0 39.0 electricity (to replace fuelbased processes) twh 0 150.0 hydrogen twh 0 200.0 *the values of wind and solar capacities are adjusted in alternative scenarios for dh supply, described in section 2.2. international journal of sustainable energy planning and management vol. 31 2021 27 rasmus lund the resulting energy system is highly electrified and based on renewable sources to a much larger extent than the current system. the electricity supply, which can be seen in figure 2, in the 2050 model is about three times the corresponding supply of 2015. at the same time, there is a substantial amount of excess electricity production in 2050, which is due to the fluctuations in the supply and the mismatch with the demands. the proportions and mix of resources are like those found in heat roadmap europe for the country study of germany [30]. -500 0 500 1000 1500 2000 2015 2050 )raey/h wt( noitcudorp yticirtcele nuclear wind solar hydro autoproducers chp power plants excess electricity figure 2: electricity production divided into sources in 2015 and 2050 fuel scenario. 2.3. future district heating: two scenarios in the future development of energy systems, it is uncertain how dh supply will develop, particularly if the dh coverage of the total heat market will double. for this reason, two different scenarios for how the dh can develop has been analyzed; a fuel scenario and an electric scenario, referring to the main source of heat production. these two can be expected to show different results because of the inherent system functions of the technologies; chp, heat pumps and chest. see figure 3 and figure 4 respectively for the two system designs. an electrified dh supply is not completely unlikely, as heat pumps for dh can already be found economically feasible today [22]. in figure 3, showing chest integrated into a fuelbased system, in a situation with high res production, the heat source for the chest when charging will be based on fuel boilers because the chp will only be operated, thus producing excess heat, when res is not covering the demand. in the case of low production of res, the chest will discharge and supply electricity and replace fuel-based pp production. however, when chest is discharged and making excess heat available to the dh system, there is at the same time excess heat from the operation of the chp. in figure 4 showing chest integrated in an electrified system, the chest is charged with electricity from renewable sources, but also with heat from renewable sources, indirectly through the power-to-heat units. in that way, no additional fuel will be consumed charging the chest, opposite to the chp system. in the situation with low res production, chest will be discharged and reduce the need for fuel-based production both in the electricity supply, in power plants, as well as in the heat supply, in fuel boilers. in that way the chest may generate an added value compared to an integration in a chp system. the exact parameters where the scenarios differ can be seen in table 2. in general, coal and oil supply are replaced with biomass and gas, so the total fuel mix is two-thirds gas and one-third biomass in boilers and chp. there is in both scenarios also a share of industrial excess heat and solar thermal heat. the excess production is larger in the 2050 scenarios due to assumed heat recovery of electrolysis and electrofuels production. in the fuel scenario, the supply system for dh is like the one of 2015. in the electric scenario, the capacity of chp plants is reduced and supplemented with a capacity of heat pumps with a capacity of 9 gwe. with an average coefficient of performance (cop) of 3 assuming ambient heat sources, this is equivalent to a total output of 27 gwth. in the electric scenario, there is a bit higher electricity consumption in the model, which reduces excess electricity production. to reach the same level of excess electricity again the capacities of renewable power production has been slightly increased. 28 international journal of sustainable energy planning and management vol. 31 2021 energy system benefits of combined electricity and thermal storage integrated with district heating in figure 5 it can be seen how the total dh production increases from 2015 to 2050, due to the doubling of the coverage of dh to 30% of the total demand. the total production has not doubled because end-use heat savings have also been included. it can also be seen that the mix of heat sources in the 2050 fuel scenario is like the supply in 2015. in the 2050 electric scenario, however, electric heat pumps have taken up more than half of the total production, replacing fuel-based chp and boiler production. 3. model analysis approach for the simulation of the models and later the impact of integrating chest into the models, the energyplan tool is applied, and the results will be measured in primary energy supply, excess electricity and discharged electricity. 3.1. the energyplan simulation tool the energyplan tool simulates the specific energy system given by the user. the energy system is modelled by providing a list of inputs in the user interface of energyplan. in this case, the energy system is the energy system of germany. figure 6 illustrates the basic principles of the energyplan model simulation. when the system simulation is run, energyplan seeks to meet all the energy demands (orange) using the available resources (white), storage (blue) and conversion capacifigure 3: chest integrated in a chp-based dh supply system in a situation with high production of wind and solar power (top) and one with low production (bottom). figure 4: chest integrated in an electrified dh supply system in a situation with high production of wind and solar power (top) and one with low production (bottom). table 2: key parameters defining the differences between the fuel scenario and the electric scenario. parameter unit germany 2015 germany 2050 fuel germany 2050 electric combined heat and power gwe 50.1 50.1 10.0 heat pumps gwe 0 0 9.0 onshore wind gw 41.7 201.9 208.0 off-shore wind gw 3.3 108.9 112.2 solar pv gw 39.6 297.0 306.0 international journal of sustainable energy planning and management vol. 31 2021 29 rasmus lund ties (yellow). chest and li-ion batteries are here represented in the blue box “electricity storage system”. see full documentation of the tool in [31]. the simulation of the modelled energy system is done on an hourly basis for one full year. this enables a dynamic account of how for example electricity production from wind or solar pv is used or how peaks in energy demand or production are accommodated in the system [32]. this hourly-based approach is particularly important when modelling storages because it enables control of how storages are charged and discharged each hour when these are operated as a part of the overall energy system. the result of a simulation is a quantitative description of how the system operates under the given assumptions and conditions. this can be generated as annual, monthly, or hourly values for a range of different parameters including energy system flows, primary energy supply, cost components, fuel distribution and more. 3.2. key resulting indicators three indicators are used to compare the simulation results. energyplan is commonly used in analyses comparing several parameters in the same study [33]. figure 5: dh production divided on sources of heat for 2015, 2050 fuel and 2050 electric 0 50 100 150 200 250 2015 2050 fuel 2050 electric )raey/h wt( noitcudorp gnitaeh tcirtsi d solar thermal excess heat heat pump chp boiler figure 6: overview of resources (white), conversion (yellow), storage (blue), supply infrastructure (arrows) and demands (orange) included in energyplan [32]. 30 international journal of sustainable energy planning and management vol. 31 2021 energy system benefits of combined electricity and thermal storage integrated with district heating in the following the three main indicators for the comparison of results are presented: the primary energy supply (pes), is a sum of all resources used in the energy system through one year to supply the energy demands. it includes fluctuating renewable sources, such as wind and solar energy, as well as fossil and low-carbon fuel-based energy, such as oil, natural gas and biomass. this value indicates how effective the energy system is to cover the demands in comparison to other alternatives. the excess electricity production (eep), is the amount of electricity that cannot be used in the energy system at the time of production. in some cases, the electricity can be exported, but in other cases, there is no possibility to export and then it will require curtailment of production. in energy systems with a large share of inflexible electricity production, such as wind power or nuclear, there will be almost always some eep. this is a good analytical indicator of how well a certain measure, e.g. storage, can increase the flexibility of the electricity system and thereby the ability to accommodate more renewable electricity. discharged electricity, is the amount of electricity that can be fed into the power grid, after a period of storage. if the loss from the storage is high, the discharged electricity can be significantly lower than the electricity charged into the storage. in this way, the discharged electricity can indicate the utilization rate of the storage as well as the efficiency of the storage use. 3.3. parameters and assumptions for sensitivity analyses in the following the assumptions for the sensitivity analyses are listed: a. wind to pv: 1/3 of the annual electricity production from wind power is replaced with a capacity of pv producing a corresponding amount of electricity. b. pv to hydro: 1/3 of the annual electricity production from solar pv is replaced with a capacity of hydro power producing a corresponding amount of electricity. c. flexible demand: 25% of the conventional electricity demand can be flexible if needed, meaning that it can be moved within one day. d. smart charge evs: 25% of the electric vehicles are allowed to charge using a smart charging scheme. e. electric boiler: 10% of peak dh demand, equivalent to 6.3 gw of electric boiler capacity in total is installed in the national dh supply. f. chest efficiency: the electric output efficiency of the chest orc is reduced from 15% to 12%. g. existing batteries: 1 gw of electrical storage, identical to the li-ion storage presented in table 3, is introduced before implementing the analyzed configurations. 4. energy storage assumptions the analysis of chest is based on characteristics for the technology found in the chester project ( [34], [35] and [36]). two different ways of implementing chest is investigated; one where chest uses a free heat source, and one where chest is integrated with a dh system. the chest storage is compared to an alternative of a lithium-ion (li-ion) battery. 4.1. technical assumptions in the modelling of scenarios with chest integrated a few technical assumptions have been made to represent its characteristics. table 3 presents the key technical assumptions for chest and the used alternative in li-ion. the charge, discharge and energy storage capacity of chest and li-ion batteries are assumed to be the same when compared. the assumed cop of 4.0 in the chest heat pump for charging the thermal storage means that one unit of electricity is consumed for every three units of heat from the heat source. this means that 25% of the energy input is from electricity and the remaining 75% is from heat sources. in the discharge of the storage, 15% of the energy content is delivered as electricity and 85% remains as heat. in the scenarios with district heating exchange, it is assumed that all the remaining heat can be recovered, even though it may be difficult to reach in practice. however, the exergy level is reduced through the storage, as the amount of electricity produced by the orc is lower than what consumed by the heat pump. a sensitivity analysis covers a drop in the orc efficiency. there will also be a heat loss connected to the storage of heat, piping etc. but it is not a large share of the total and it is disregarded in this analysis. these assumptions are based on a heat source of 65 °c and a heat sink of 35 °c, corresponding to a relatively low temperature level of dh systems. the thermal international journal of sustainable energy planning and management vol. 31 2021 31 rasmus lund temperature storage level is assumed to be 160 °c. if the heat source temperature is higher, the cop of the chest-heat pump could be higher when charging the storage, but that would also reduce the efficiency of the heat recovery of the orc in the district heating scenarios. the capacity of 1 gw is set due to the limitation in the dh demand. with this dimensioning, the district heating output recovered from the orc is about 60% of the average summer district heating demand. if the dimension gets bigger than this, the benefit of the heat integration will decrease. regarding the li-ion battery, the assumed round trip efficiency is 95%. the charging, discharging and energy storage capacities are assumed to be the same as for the chest, where thermal storage capacity for the chest was converted to an equivalent electric capacity of the electric battery. table 3: technical assumptions for chest and li-ion energy storage. parameter unit value charge and discharge capacity (chest and li-ion) mwe 1,000 energy storage capacity (chest and li-ion) gwhe 50 chest electrical efficiency of heat pump (cop) 4.0 chest electrical efficiency of orc 0.15 chest thermal recovery efficiency of orc 0.85 li-ion round-trip efficiency 0.95 4.2. system integration and operation strategy two different strategies of system integration are assessed. they represent the relevant integration in two different situations: 1) where dh is not present or relevant for chest integration 2) where dh is present and available for chest integration these are discussed and elaborated in the following sections 4.2.1 and 4.2.2. 4.2.1. free eeat – electricity only this implementation strategy is to use the chest as electricity storage only. it assumes that the chest is in a place with an available excess heat source. the heat source is assumed to be an excess product of another activity, for example, an industry, where all the heat would otherwise be dissipated into the environment, and thereby do not result in additional fuel consumption when utilized by a chest system. the heat source is also assumed always to be available and at enough quantity and temperature level. in this case, the operation of chest will have a free heat source for the heat pump, but there will also not be a revenue of the heat production of the orc because there already is an excess of free heat at the location, so the heat will be dissipated. hence, the chest will only be exchanging electricity in this setup, and the operation strategy will be to only optimize against the electricity system. 4.2.2. electricity and district heating exchange this implementation strategy is to use the chest as electricity storage but with an exchange of heat with a dh system. in this strategy, it is assumed that heat for the heat pump of chest will be drawn from the dh system and that the heat production from the orc will be injected back into the dh system. this means that there will be an additional heat demand in the dh system associated with the charge of the chest, but also a potential reduction in the need for heat production when chest supplies heat back into the dh system. the additional consumption and potential reductions will depend on the time of the operation of chest because the marginal production unit in the dh system changes from hour to hour, and they have different energy consumption profiles associated with them. in this case, the operation strategy of chest is mainly to work to balance the electricity system, and the exchange of heat will be a secondary product of the operation. this is seen as a reasonable assumption because short-term balancing of the electricity system is typically more challenging than in dh systems, and it is not expected that price margins in dh production will be enough to charge the chest at high electricity prices or discharge at low electricity prices in many hours during a year. even though chest is operated with a focus on the electricity system, the excess heat may be feasible to utilize in dh, possible with a thermal storage connected to it. 5. results and discussion in this section, the results of the analysis are presented. first, the main results are presented, followed by several sensitivity analyses of the key results. 32 international journal of sustainable energy planning and management vol. 31 2021 energy system benefits of combined electricity and thermal storage integrated with district heating 5.1. results of energy system analysis the results of the analyses of the 2050 scenarios are shown in figure 7. the results for the two scenarios for the german energy system, 2050 fuel and 2050 electric can be seen for the three storage configurations. the configurations li-ion and chest el-only perform almost identically respectively in 2050 fuel and 2050 electric. this means that they are not affected significantly by the way dh is supplied. it makes sense as they are not directly integrated with dh. it can also be seen that in both cases chest el-only consumes the same amount of excess electricity as for the li-ion configuration (~1.7 twh), but at the same time the chest el-only configuration results in a lower reduction (~2.4 twh) in pes than the li-ion (~3.7 twh), caused by the lower power to power ratio. this means that from a technical energy system perspective, chest el-only is less attractive than a li-ion battery in this sense. if chest can come with a lower investment and/or operation cost compared to the li-ion battery, it might be economically competitive, however, thatis is not analyzed here. when it comes to the results for the chest dh-exchange configuration, the conclusions are different. the amount of electricity charged into the storage and the electricity discharged and supplied into the electricity grid remains the same as in the chest el-only configuration. the change in eep is the same in the 2050 fuel scenario (~-1.7 twh), whereas in the 2050 electric, it is significantly higher (~-3.1 twh). this indicates that the chest implementation enables the system to utilize more eep than in other cases. the reduction in pes shows a large difference between the scenarios for the chest dh-exchange configuration. figure 7: main results of the three storage configurations in the fuel-scenario and the electric scenario. results expressed as the change from the reference model without storage. international journal of sustainable energy planning and management vol. 31 2021 33 rasmus lund in the chest el-only configuration, the reduction is negative (~-2.4 twh), which means that the system has a larger primary energy supply than without the storage. this indicates a mismatch between the electricity side and the heat side of the storage operation in terms of the energy system dynamics and balancing. the reason will be discussed further below. on the other hand, in the 2050 electric scenario, the reduction in pes is positive (~4.1 twh), and it is even larger than the resulting reduction in pes in the li-ion configuration. in table 4 the changes in the energy supply caused by the implementation of the chest storage configurations can be seen. the el-only configurations in both scenarios only result in changes to the electricity supply, whereas the dh-exchange configuration results in changes in both electricity and dh supply. in the 2050 fuel scenario, the el-only configuration has a positive impact as eep is utilized to replace thermal power plant (pp) production. the negative contribution from chest (0.7 twh) is the loss in the power to power conversion, which to some extent is recovered when implemented into dh. only to some extent, because the dh-exchange configurations also generate a surplus heat. in the dh-exchange configuration of the 2050 fuel scenario, chp production is replaced (-6.2 twh) but pp production increased (5.2 twh). as the chp plants have a better system efficiency than pps, this is not an effective shift. in the dh balance, the heat production from the chp plants at the same time is replaced (-5.3 twh) with fuel boilers (5.2 twh). this means that there is almost no saving in fuel in the electricity supply and an increase in fuel consumption for the dh supply. this is the reason for the result seen in figure 7, that the introduction of the chest el-only configuration in the 2050 fuel scenario causes an increase in pes. in the 2050 electric scenario, eep is utilized to replace chp production (-2.1 twh) but without an increase in pp production. in the dh supply, the corresponding reduction in heat production from chp (-1.8 twh) is replaced with heat pumps (0.6 twh) using electricity instead of fuel, and fuel boilers (1.0 twh). this means that fuel-consuming production has been replaced in the electricity supply, and in the dh supply, the chp production is only partly replaced with fuel boilers. this is the reason for the large positive effect of the chest dh-exchange in the 2050 electric seen in figure 7. table 4: resulting changes in the energy supply for electricity and dh when implementing the two chest storage configurations in each of the 2050-scenarios. 2050 fuel 2050 electric (twh/year) el-only dh-ex el-only dh-ex electricity supply chp 0 -6,2 0 -2,1 pp -1,1 5,2 -1,1 0 eep -1,8 -1,8 -1,8 -3,0 chest -0,7 -0,7 -0,7 -0,7 district heating supply heat pump 0 0 0 0,6 chp 0 -5,3 0 -1,8 fuel boiler 0 5,2 0 1,0 surplus heat 0 -0,6 0 -0,5 chest 0 0,7 0 0,7 these results point in the same direction as the theoretical discussion presented in 2.3, than a chest system might not be feasible in the current dh supply, however, in a future electrified supply, the combined electricity and heat storage might be beneficial. 5.2. sensitivity analysis results in figure 8 the main results of the sensitivity analyses can be seen. the assumptions for these can be found in section 3.3. the figure shows the reduction in primary energy supply after the implementation of the storage configuration. the positive result of the chest dh-exchange in the 2050 electric scenario, is assessed for its sensitivity to some uncertain parameters and system assumptions. the first two columns in the figure are identical to the ones of figure 7 for reduction in pes for li-ion and chest dh-exchange respectively in the 2050 electric scenario. for the “wind to pv” and “pv to hydro” columns the tendencies are like the ones of the reference as the chest alternative remains with the highest reduction in pes. the overall level of the savings, however, is affected in both cases. when the wind-based electricity production is replaced with a corresponding amount of electricity production from pv, the potential increases due to the hourly distribution of the two sources over the year. a change towards pv creates more eep, and therefore a larger potential for electricity storage. similarly, a change from pv towards hydro reduces the eep, and thus the potential for electricity storage in general. this indicates that the feasibility of chest, and electricity storage in general, is dependent on the regional location and its dominating resources. 34 international journal of sustainable energy planning and management vol. 31 2021 energy system benefits of combined electricity and thermal storage integrated with district heating for the “flexible demand” and “smart transport” the changes from the reference are relatively small, but the introduction of flexible demand reduces the potential slightly. the introduction of “existing batteries” in the system before implementing chest, can also be a competing flexibility measure, which has a slightly negative influence on the savings because it reduces the eep and hence the foundation for additional electricity storage. this indicates that the feasibility of chest is only moderately sensitive to the presence of other flexibility measures. of course, it will also be a matter of how far alternative flexibility measures will be able to be upscaled. the “elec. boiler” shows that introduction of electric boilers in dh will result in a larger reduction of pes for chest, even though it will also reduce the eep. this means that a further electrification of a dh system in which chest is integrated, will increase the potential benefit of chest. when looking at the chest efficiency, if chest achieves a lower efficiency than assumed in the main analysis, from 15% to 12% electric efficiency output of the orc, the reduction of pes is no longer larger than the li-ion battery alternative. this show that the results are sensitive to the efficiency. a lower efficiency will make the competition with li-ion batteries and other flexibility measures harder but not necessarily mean that the technology does not have a role to play. 6. future perspectives for chest technology the results indicate that chest can hardly compete with conventional electricity storage in the short term. both because chest is at an early development stage compared to e.g. li-ion batteries, and capital costs are still significantly higher [36]. at the same time, the present results show that chest is not effective in the integration with chp-based dh, which covers most of the current dh [37]. in the longer-term future, however, costs of the chest components may have decreased with the commercialization of the technology. the costs will have to be reduced significantly because at the current levels the chest system is far from being directly economically competitive [36]. at the same time, the current political development in the eu indicates that dh systems might be developed more broadly in europe [38], as well as electrification of the supply. figure 8: results of sensitivity analyses to the 2050-electric scenario for li-ion and chest dh-exchange 0 1 2 3 4 5 20 50 e le c w in d to p v pv to h yd ro fl ex ib le d em an d sm ar t tr an sp or t el ec b oi le r ch es t effi ci en cy ex is �n g ba � er ie s reference sensi�vity analyses )raey/h wt( ylppus ygrene yra mirp li-ion chest dh international journal of sustainable energy planning and management vol. 31 2021 35 rasmus lund from an environmental point of view, there might be some benefits of using chest compared to conventional batteries [15]. chest is not necessarily free from chemicals, but there are many options in the choice between e.g. refrigerants or thermal storage medium, which can be included in the assessment. the analyzed scenarios for 2050 is highly electrified, but assumes an increased share of biomass consumption, even though the sustainability of biomass consumption for energy purposes is controversial [39]. on the long term, the biomass consumption may be reduced with increased electrified demand and production of electrofuels and other hydrogen-based supply, but it is uncertain when the current development towards more biomass consumption for energy purposes will change. further electrification with a larger production of fluctuating renewable electricity can be expected to increase the potential for electricity storage and chest systems. 7. conclusions and future works the study has investigated the technical energy system potential of chest technology in a national energy system context. through the analyses, germany has been used as a case, where a possible energy system of 2050 has been developed for the country. two scenarios, with different dh supply, have been analyzed, comparing two different configurations of chest with li-ion battery storage. the results show that if chest is integrated as electricity-only storage, it can reduce pes, however not as much as the li-ion alternative. if chest is integrated with a dh system, mainly supplied with chp plants, the chest cannot effectively reduce pes due to the operation dynamics of chp units and chest. however, if the dh system is supplied mainly using heat pumps, the system can reduce pes by 4.1 twh/year compared to 3.7 twh/year in the corresponding li-ion alternative. this indicates that if the dh supply is electrified using large-scale heat pumps, chest might be a better alternative from a technical energy system perspective than conventional electricity storage, such as li-ion. a sensitivity analysis shows that the chest system is sensitive to the assumed electrical output efficiency of 15%, where a reduction to 12% efficiency reduces the benefit of the chest to a lower level than the li-ion case. on the other hand, it was also found that introducing electrical boilers in the dh supply will increase the potential for chest. based on the analysis chest is considered a potential competitor to conventional electric storage, in places with dh based on electrified sources, if the investment costs can be significantly reduced from the current short-term expectation of the development of the costs. there are several issues that could reveal a larger potential for chest integration in dh systems, including an optimization strategy of the system operation in the electricity and dh markets. it might also be possible to reduce the system costs further if the system could be more directly integrated with an existing dh plant with heat pumps and electric boilers on site. 8. acknowledgements this article is published in the special issue [40] which presents 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management vol. 34 2022 5 *corresponding author – e-mail: dfbusto@fcirce.es international journal of sustainable energy planning and management vol. 34 2022 5–18 abstract eu islands face vast challenges to cope with climate targets while handling complex stakeholders’ networks. this study aims to propose a participatory process protocol to enhance the output of energy plans and projects through the effective engagement of local stakeholders. a knowledge transfer methodology is set to build on a successful experience of the mediterranean port-cities of málaga, cádiz and sète, now adapted into the case of european union’s islands advancing with energy developments. first, a clustering analysis is carried out for inhabited islands, resulting in 4 clusters that serve as the classification for the calculation of energy transition key performance indicators according to information received from 70 islands. based on this, the original protocol is restructured as a complement for the sustainable energy and climate action plan methodology, the one most adopted by european islands. finally, how the protocol might be implemented depending on the particularities of each cluster is discussed, as well as for the case of spanish islands (gran canaria, tenerife, and la palma). specific suggestions and key recommendations for the implementation of the participatory process protocol are mentioned, as an instrument that could raise strategic suggestions from stakeholders to enhance the results of decision-making processes. participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain felipe del-busto*, maría d. mainar-toledo, víctor ballestín-trenado research centre for energy resources and consumption circe, 50018, zaragoza, spain keywords energy transition; sustainable island; energy planning; participation process; stakeholder’s engagement; http://doi.org/10.54337/ijsepm.7090 1. introduction participation in decision-making processes is core to the concept of sustainable development [1,2] and has been strengthened since the adoption of the sustainable development goals (sdgs) framework. ‘goal 11: sustainable cities and communities’ [3] states the need to enhance participatory capacity for the planning of inclusive human settlements. additionally, the requirement for multi-stakeholder engagement as a complement to support the achievements of sdgs, allowing the share of knowledge, expertise and technologies, is key for ‘goal 17: partnership for the goals’ [4]. the european commission [5] has even identified the insufficient involvement of the relevant stakeholders as one of the weaknesses in the implementation of the europe 2020 strategy. high-expertise stakeholders, together with other less skilled ones, as citizens or consumers should be engaged in decision-making processes [6] by exploiting the available tools and methods on participation fostering [7], to achieve successful attainment of strategies, plans and projects. evidence suggests benefits of involving a diverse range of actors through participation processes, such as mutual learning and ownership sense increase [8]. other benefits are the achievement of a wider consensus over new strategies and priorities [9] and the facilitation of policymaking processes [10]. nonetheless, the adoption of participation processes also raises a series of challenges, such as defining the most effective number and type of stakeholder to involve [11], selecting the most meaningful exchange 6 international journal of sustainable energy planning and management vol. 34 2022 participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain ferring the knowledge gathered from touristic port-cities dealing with sustainable planning. the rationale behind this approach is to cope with the covenant of mayors’ (com) recommendations [20] so that the effective involvement of local and non-local key agents might secure a short-term implementation, ease financing mobilisation, and reduce risk mitigation of energy plans. although the ppp is conceived as a tool for eu islands in general, the scope of this research focuses on the mediterranean cities of málaga, cádiz and sète, from the port-cities side, and the canary islands from the island side. this research expects to contribute to the understanding of the following interrogations: what is the most frequent approach islands are following in order to comply with the 2030 energy objectives? what might islands learn from peninsular cities facing similar challenges such as seasonality due to coastal tourism? how can energy planning methodologies be enhanced by structured participation approaches? after the introduction, the following section describes the evidence about the importance of participatory approaches for energy transition planning in islands [15]. the previous experiences on participation in decision-making processes in the case of port-cities is also presented. the third section presents the methodology that includes the data collection, the revision of the status of energy transition in eu islands, and the layout of the ppp. its implementation results in the identification of 4 clusters for eu inhabited islands, and the calculation of 4 energy transition kpi (et_kpi) to compare the energy status of islands on each cluster. based on this information, the ppp is later detailed and discussed by examining the experiences of the three study cases from the mediterranean port-cities. finally, the conclusions are presented according to the expected contribution from the authors. 2. framework for energy planning the following section establishes the framework in which islands are progressing with their energy plans and projects. later, the case studies on which this research is based are showcased. 2.1. eu islands needs for an energy transition the adoption of the european green deal [21], which raised the 2030 greenhouse gas emission’s reduction target to at least 55% compared with 1990, requires mechanisms [12], or managing stakeholders participation within vertical power structures [13]. in the case of energy transition planning on islands, the effective implementation of low carbon solutions is likely to depend on the proper understanding of the governance processes occurring within limited spatial and political settings [14]. instead of approaching islands from outside, as in “planning of islands” or “planning for islands”, it is crucial to include perpectives such as “from islands” and “working with islands”, so bottom-up governance, self-sufficiency and cross-border developments may be internilized both by planners and citizens [15]. the local ownership sense towards a proposed energy transition, as well as the different institutional structures, and the differing priorities of actors are also key to understanding the context in which such planning processes take place [16]. public acceptance also plays a key role in the introduction of new technologies or systems. addressing public acceptance may require dealing with divergent attitudes toward specific clean energy plans or projects [17]. this might vary in terms of (i) the political acceptance regarding the opinion of key stakeholders; (ii) the social acceptability, understood as the wider social opinion towards green energy solutions [18]; (iii) the community acceptance of those physically or spatially affected by new developments; and (iv) the market acceptance of big consumers and investors [19], as could be the tourism industry. within this context, the main objective of this study is to propose a participatory process protocol (ppp) for energy transition planning processes in islands by transabbreviations bei: baseline emission inventory ceta: clean energy transition agenda et_kpi: energy transition key performance indicator fg: focus group gis: geographic information system lec: local energy community nesoi: new energy solutions optimized for islands nuts: nomenclature of territorial units for statistics pim: power-interest matrix ppp: participatory process protocol pv: photovoltaic res: renewable energy sources rva: risk and vulnerability assessment sdg: sustainable development goals secap: sustainable energy and climate action plan si: semi-structured interviews swot: strengths weaknesses opportunities and threats ws: workshops international journal of sustainable energy planning and management vol. 34 2022 7 felipe del-busto, maría d. mainar-toledo, víctor ballestín-trenado cities and regions to adopt actions towards climate mitigation and adaptation. this study focuses on islands with high touristic seasonality and their needs to effectively involve stakeholders, citizens and visitors in their energy transition and climate planning. this is done for the reasons exposed hereafter. first, the european union (eu) possess more than 2,200 inhabited islands that rely heavily on fossil fuelbased energy systems [22], even more so in remote islands [23]. however, their geographical location endows them with key attributes, such as high renewable energy sources (res) availability, mainly solar and wind, and isolated transport systems for electric mobility deployment [24]. other unique challenges that energy systems on eu islands face are supply constraints due to lack of electricity and gas interconnections with the mainland, higher energy costs above average eu levels, increased difficulty to perform supply-demand balancing and, as mentioned, high seasonality of demand [22]. second, the economy on islands tends to heavily rely on the tourism sector, a situation that imposes extra planning challenges. eu islands are destinations of mass coastal tourism, and, as they become complex multifunctional activity centres, their planning needs tend to go beyond traditional approaches [25, 26]. urban expansion due to tourism [27] or significant increments in energy demand due to seasonality [22] requires the development of efficient and flexible planning methodologies. besides this, tourism on islands is mainly developed around the quality of coastal and marine environmental services [28], so tourism might act as both an economic promotor and sustainability issues source. for example, in 2017, the cruise industry contributed more than €47 billion to the european economy, a 16% increase against 2015 data. also, around 403,000 direct jobs are promoted by cruise and cruise-related activities in europe [29]. however, according to residents, most of the profits are not only seized by nonlocal firms, but the focus on cruise tourism also produces a crowding-out effect on other relevant projects [30]. furthermore, islands are sensitive areas, home to an estimated one-third of globally threatened species, including many endemic ones [31]. the overcrowding of sensible spaces multiplies the magnitude of immediate impacts. this might cause long-term degradation of the very same cultural heritage or environmental richness that attracted visitors in the first place [32]. once this state is reached, visitors’ and developers’ response is often to relocate their activities to more attractive areas elsewhere [33], hence, leaving behind the affected communities and resources. therefore, for islands experiencing such scenarios, there seems to be an imperative need for effective planning. well-defined participatory processes might improve energy transition plans and projects, by ensuring the involvement of all decision-making levels of individual island municipalities, multi-municipal islands, or archipelagos. in this sense, this study is enclosed within the new energy solutions optimized for islands (nesoi) project, that grants economic and technical assistance to accelerate the implementation of energy projects in islands. despite nesoi’s eu-wide approach, this research is constrained in terms of scope, focusing only on case-studies’ mediterranean cities and subtropical islands in which the authors are directly involved. although results should be evaluated with this limitation in mind, literature suggests that approaches, like the proposed ppp, could also prove useful in other, non-tropical territories [15]. 2.2. case studies: touristic port-cities and spanish islands this knowledge transfer binds together two experiences in sustainable planning mainly in spanish municipalities. the study builds on the experience of mediterranean port-cities with increasing cruise activity developing sustainable mobility plans, to provide spanish islands with an energy planning methodology with an emphasis on participation. on one hand, the case studies from the port-cities side are composed by málaga, cádiz and sète. together with other 15 mediterranean port-cities from 10 european countries, these cities were subject to a decision-making process with a high rate of stakeholder participation for the adoption of innovative transport solutions [34,35]. on the other hand, three spanish islands selected as beneficiaries of nesoi complete the rest of the case studies. located in the islands of la palma, tenerife, and gran canaria, all from the canary islands archipelago, these islands were selected together with other 25 eu islands (28 beneficiaries out of more than 100 applicants) to receive technical assistance and economic support to develop energy transition projects. these three island case studies aim to establish local energy communities (lec) based on photovoltaic (pv), in public buildings for la palma and tenerife and within an industrial park for gran canaria. as a summary, table 1 presents the location, demography, and touristic indicators for both types of case studies. 8 international journal of sustainable energy planning and management vol. 34 2022 participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain within this framework, the experience on málaga, cádiz and sète serves as a precedent for islands due to seasonality-related challenges and the complex stakeholder network they share as coastal tourism destinations. although tourism is a key feature tool for local destination development e.g. around 30% of canary islands’ gdp, seasonality might be the source of energy demand forecasting errors usually covered by fossil fuel-based power plants [36] or might provoke economic competitivity risks for energy projects [37]. furthermore, touristic destinations display a complex network of stakeholders with divergent and unbalanced power relationships that need to be channelled to gather consensus. tourism industry’s stakeholders, for instance, seem to have the ultimate expression of power [38], but they are constantly counteracted by local authorities managing local services and attractions [39]. another example are residents, who could act as risk generators or even as funding sources, depending on how their attitudes towards new developments are correctly acknowledged [40,41]. participation opens a positive path towards public acceptability for innovative energy developments, such as marine res [42], and towards better-informed consumers supporting long-term investments in energy efficiency [43]. 3. ppp transferring methodology as commented in table 2, the following section describes the 3-stage methodology performed to transfer the ppp between case studies, from port-cities to islands. 3.1. data collection to assess the status of islands regarding energy transition, two datasets are constructed. the first one includes available macro indicators for a total of 1,138 eu islands, such as population, area, annual tourism nights, climate zone, and electrical interconnection with the mainland [22,44,45]. variables’ merging is done via geographical information systems (gis) when joining based on nuts2 code is not feasible. the second database corresponds to energy transition key performance indicators (et_kpis) calculated over the responses from over 70 islands through an online survey launched by nesoi [46,47]. this information is organised, prepared, and processed to generate the mentioned et_kpis. although the survey covers several topics, for purposes of this study, only those directly connected to the status quo of energy planning of islands are selected. table 1. case study from mediterranean port-cities case study (type) nuts2 region* population annual cruise passengers, 2018 annual nights per 1,000 inhabitants at nuts2, 2017 málaga (port-city) es61andalusia 596,000 510,000 8,172 cádiz (port-city) 117,000 430,000 sète (port-city) fr81 languedoc-roussillon 43,620 50,000 12,289 gran canaria (island) es70 -canary islands 894,636 676,000 48,437tenerife (island) 843,158 660,000 la palma (island) 81,350 256,000 * nomenclature of territorial units for statistics level 2 (nuts2). table 2. summary of the ppp transferring methodology stage description data collection • database construction for the segmentation of eu islands based on demography, tourism, and energy indicators (1,150 islands). • energy transition key performance indicator calculation for 70 islands collaborating within nesoi. island energy transition revision • island segmentation based on a k-means clustering. • assessment of energy transition status of spanish islands based on resulting clusters. • comparison of case studies with the resulting island clusters. participatory process protocol layout • transferring of the source protocol into energy transition planning at insular context. • recommendations and insights from the ppp implementation at cluster level, focusing on case studies of islands. international journal of sustainable energy planning and management vol. 34 2022 9 felipe del-busto, maría d. mainar-toledo, víctor ballestín-trenado 3.2. island energy transition revision with the first database, the segmentation of islands is done by applying a k-means clustering. this data mining technique splits a group of n objects – eu islands into k classes, such that the intraclass similarity is high and the interclass similarity is low. this iterative process first randomly groups the objects in k classes. from this point, it calculates the average value for each class, and rearranges the objects according to their distance from this value, always seeking the most similar class [48– 50]. with the result, the et_kpis are calculated to perform a comparative assessment among clusters. this is done to understand the different starting points of spanish islands to plan their energy roadmaps and comply with eu climate targets. the topics revised through the selected et_kpis are the distribution of islands according to the status of energy planning (adopted, in development, or none); the level of development of projects related to energy transition fields as res generation or sustainable transport; the existence of supporting energy agencies; and the key drivers behind the adoption of energy transition plans. with these insights, a comparative assessment between case studies, port-cities and islands, is done to identify common points towards the transferring of the ppp. 3.3. participatory process protocol layout based on the results of the previous stages, the ppp successfully tested in port-cities is transferred into the context of the sustainable energy and climate action plan (secap) methodology [51]. the development of an energy transition plan implies a continuous decision-making process, in which the level of stakeholder’s engagement could impact its future acceptance and implementation. according to bertoldi et al. [51], the mobilization of all municipal departments and the engagement of citizens and stakeholders are crucial elements for successful secap, the international standard from the covenant of mayors. since the initial steps of the planning process [52], it is necessary to ensure, on one hand, strong horizontal cooperation among policy sectors that usually comply only with their sectoral agenda. on the other hand, the recommendation is to create participatory spaces to incorporate local specificities and problems, meet end-user expectations, and prepare the road for a full uptake of the main outcomes. although all the original structure of the ppp is maintained [53,54], its intermediate and final outcomes are revised to better correspond to the secap methodology. finally, the application of the ppp on málaga, cádiz and sète is discussed to exemplify the differences and challenges that each cluster of islands might face during their secap elaboration. the case studies are once again compared to generate recommendations and insights from the ppp implementation. 4. ppp proposal for energy transition planning in the following section, the results from the execution of the methodology are presented. the main outcome is the alignment of the ppp with the secap methodology. possible implementation scenarios for islands are discussed later in section 5. 4.1. island segmentation and energy planning status the variables selected for the segmentation of the islands are population, electrical interconnection with the mainland (a dummy variable), and seasonality. the latter is measured as the annual nights spent by tourists per thousand inhabitants in the region. from the 1,142 islands in evaluation, sardinia (it), sicily (it) and sjaelland (dk) are signalled as outliers since their population is statistically too high, as well for 691 islands with less than 100 habitants. the database is finally composed of 448 eu islands. the classification technique considers 1 to 10 clusters and then computes the average distortion score (the sum of square distances from each point to its assigned centre) for each of them. the ten distortion scores are plotted as a function of the number of clusters. as shown in figure 1, the optimal number of clusters is between 4 and 6 according to the elbow of the curve. afterwards, the optimal number of 4 is selected based on the differences among clusters. large-sized islands and medium-sized islands are grouped in two clusters (c1 and c2 respectively). all these islands present high seasonality. small islands are divided into two clusters. one for those with high seasonality (c3) and another for small islands with low seasonality (c4). a summary is presented in table 3. despite c2 and c4 showing a similar seasonality level, c2 is indeed composed of touristic islands. the difference relies on the normalization per population at the regional level (nuts2). in this classification, tenerife and gran canaria case studies are part of c1, whereas la palma is included at cluster c3. a total of four et_kpis are assessed for each cluster based on the responses from over 70 islands. insights about the availability of strategic plans, the type of proj10 international journal of sustainable energy planning and management vol. 34 2022 participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain ects implemented, the drivers and support agencies behind energy planning are shown in table 4. results demonstrate how more than half of eu islands are still developing their energy plans, except for c1. for the rest, the percentage of islands with adopted plans decreases from 45% (c2) to 27% (c4). the development of secap is the most selected approach by islands, as is the case of many municipalities from gran canaria and tenerife, whereas la palma would be on the 13% of c3 with a clean energy transition agenda (ceta) in force. regarding the type of projects implemented, public-dependent assets, such as public buildings and lighting and res installations are the most common. although the latter would be the base for the establishment of energy communities, special attention should be given to the involvement of citizens to generate a positive planning environment, integrate equity and justice factors, and increase public acceptability [42]. in medium and small islands (c2, c3 and c4) other multi-stakeholder fields such as mobility and transport seem to be slightly behind. in terms of institutional support, islands seem to depend more on regional and national energy agencies. so, besides a horizontal approach that brings together local stakeholders from diverse fields related to energy planning, public administration’s vertical power structure needs to also be considered. for those with no support at all, as in c2 and c4, the requirement is also reaching the support of entities at regional or national level, or demand more commitment from non-public local actors, as a solution to acquire expert knowledge in the energy transition. 4.2. participatory process protocol layout based on the et_kpi1 results, the ppp is aligned with the secap methodology. this highly recommends the involvement of municipal departments and stakeholders to enrich the result of the technical activities, such as the figure 1. optimal number of clusters table 3. eu islands clusters cluster description nº of islands population range annual nights per 1,000 inhabitants at nuts2, 2017 c1 large islands. 5 597,823 – 894,636 48,437– 77,691 c2 medium-sized islands. 12 149,942 – 467,352 1,617 – 33,085 c3 small islands with high seasonality 97 102 – 147,023 42,659 – 77,691 c4 small islands with low seasonality 333 137 – 137,699 0 – 31,196 international journal of sustainable energy planning and management vol. 34 2022 11 felipe del-busto, maría d. mainar-toledo, víctor ballestín-trenado table 4. energy transition kpis per cluster c1 c2 c3 c4 et_kpi1. island’s planning process on energy transition and decarbonization no plan or strategy developed 20% 20% 26% 37% an energy strategy in development 0% 35% 33% 36% sustainable energy and climate action plan (secap) 80% 40% 27% 27% clean energy transition agenda (ceta) 0% 5% 13% 0% et_kp2. status of energy transition projects implemented* electric mobility and charging infrastructure 46% 21% 31% 12% energy efficiency in public building 20% 25% 33% 27% energy efficiency in public lighting 40% 30% 41% 32% storage systems on carbon fuel driven power plants 20% 0% 3% 2% storage systems on renewable energy power plants 40% 12% 9% 8% renewable energy power plants 53% 45% 42% 34% et_kp3. existence of an energy agency or similar institution to support the energy transition none 0% 41% 19% 21% local agency, part of local authority 20% 12% 46% 11% local agency, independent of local authority 0% 6% 10% 12% regional agency 60% 0% 18% 13% national agency 20% 41% 7% 43% et_kp4. main drivers to implement energy programs/plans/projects (average of level of importance between 1 to 3) comply with regulation/national objectives 0.8 0.1 0.65 0.12 economy competitivity 0.6 0.3 0.29 0.13 energy production cost reduction 0.25 0.75 0.76 0.56 environment benefits 1.2 0.85 0.78 1.18 improve island image 0.75 0.25 0.33 0.41 improve the quality of energy supply 0.75 0.1 0.31 0.23 job creation 0.25 0.4 0.44 0.53 living cost reduction 0 0.05 0.20 0.29 * breakdown per cluster considering a scale between 33% as marginally implemented, 66% as significantly implemented and 100% as completed. emission inventory, the assessment of risks and vulnerabilities, and the design of the action plan. as implemented in málaga, cádiz and sète, the ppp is composed of three main phases. first, the identification and analysis of stakeholders and their interests, including the selection of the appropriate participatory techniques. second, the first round of stakeholder’s gathering for the elaboration of a participatory diagnosis. third, the second round for the final validation of the plan measures [53]. these phases are, then, organized to complement the secap core recommended steps [51] as depicted in figure 2. in this sense, the identification of three kinds of stakeholders is recommended: (1) institutional field experts, public bodies with knowledge about regulation, barriers and financing instruments; (2) non-institutional field experts: entities with high skills and interest at the territorial level who can often suggest concrete solutions; and (3) residents and floating population, final users who might perceive system flaws in a practical way and from a territorial perception (i.e. neighbourhood associations). special attention should be granted to achieving the engagement from municipal departments and the main energy actors for the collection of primary data for the baseline emission inventory (bei). concerning the risk and vulnerability assessment (rva), the involvement of emergency bodies and the local population is required to identify the most relevant climate hazards and the current exposition level. then, the identified stakeholders should be located into a power-interest matrix (pim) to classify 12 international journal of sustainable energy planning and management vol. 34 2022 participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain them as key players, potential supporters, potential objectors, and secondary players. for the first round of the ppp, two main contributions are expected from stakeholders. first, a qualitative participatory diagnosis in the form of a strength-weaknessopportunity-treat (swot) analysis. the swot would complement the bei and the rva, regarding issues such as willingness towards lifestyles modification, socioeconomic barriers, energy poverty, vulnerability towards climate, and the perspective of dominant economic sectors such as tourism. second, preliminary suggestions towards the co-creation of the action plan and to start balancing the perspective between key players and potential supporters and objectors. for the former, it is recommended to perform semi-structured interviews (si) to get specific insights and deeper understanding from field experts, whereas the latter might be involved through focus groups (fg) to learn from the interaction and dialogue among different entities with common or contrasting challenges and solutions. once the draft of the secap is shared, the ppp’s second round starts with the twofold aim of giving feedback to stakeholders and receiving their validation on the proposed measures. the former to demonstrate that their contributions are valued during the decision-making process, the latter to increase public acceptance and ownership sense towards the plan. this last part could involve improvements, changes, eliminations, or further development of each measure. the target is to fine-tune the technical aspects with the most updated knowledge from relevant agents, so the execution of workshops (ws) is suggested as they allow the performance of interactive activities like voting and mapping. 5. learnings for future ppp implementations as a knowledge transfer process, it is worth describing the result of the ppp implementation on the port-cities cases, to extract useful lessons learnt for islands developing energy plans or projects. although the same ppp structure is implemented in málaga, cádiz and sète, the size of involved stakeholders, and the number of participatory activities vary according to the complexity of each case. málaga is the 6th largest city in spain, second to sevilla in the andalusian region. its metropolitan area accounts for over 1 million inhabitants and possesses a direct road and rail infrastructure connecting with other capitals such as sevilla, granada and cordoba. this level of complexity might be the case of c1 islands that are composed of several municipalities with one capital city: santa cruz de tenerife in tenerife and las palmas in gran canaria. besides population, the surrounding geography of cádiz and sète set a physical constraint that also reduces their complexity. cádiz is located in a narrow figure 2. participatory process protocol for secap elaboration. international journal of sustainable energy planning and management vol. 34 2022 13 felipe del-busto, maría d. mainar-toledo, víctor ballestín-trenado peninsula with only three communication roads: two bridges and one avenue over a tombolo to the mainland. other transport connections are available by sea to close municipalities. still, cádiz is a province capital and an important touristic destination, so its case might be useful to c2 islands. sète is a small city also geographically constrained due to its location between the thau lagoon and the mediterranean sea. its case might be similar to c3 and c4 islands like la palma. during the stakeholders’ identification, the same type of interested agents is singled out in all cases: related policy sectors for horizontal cooperation and interested agents for a wider participatory process. the first group is composed of city managers with deep knowledge of the local status. their initial involvement through si is the most effective approach to learn about the current situation in fields like energy, mobility, buildings, tourism, industry, and the environment. these insights are the foundation for the participated diagnosis, given that municipal technicians focus more on objective information and tend to avoid conveying personal preferences. on the contrary, the involvement of the second group would depend on the elaboration of the interest power matrix, to evaluate their pro-or-con positions towards the planning process. as experienced in séte, c3 and c4 islands might expect to involve around a dozen stakeholders in total, all with high interest and constructive motivations. all parts might consider clean energy developments as opportunities to improve the image and branding of the island. this is coherent with the results of kpi_et4, as c4 islands seem to consider environmental improvements as a strategy to boost the local economy, create more jobs, improve the image and, perhaps, consolidate their tourism industry or create new ones around renewable energy. so, all stakeholders should be treated as key players and be involved through si for the first round. for the second round, a unique workshop open to all the interested agents is recommended, given the expected convergence of their opinions and expectations. in the case of málaga and cádiz, a more diverse stakeholder network is found, identifying both potential objectors and supporters. c1 and c2 islands might deal with agents whose motivation may restrict the access to relevant data, the smooth adoption of measures, or even the plan’s approval from the political parties. the recommended approach is to divide these stakeholders into several fg, gathering those agents with similar interests. this strategy allows the reduction of biased discussions among opposite counterparts and encourages the contribution of all participants by generating safe spaces for debate. all fg should be informed about other meetings planned, as a motivation for all stakeholders to communicate their perspectives and suggestions as clearly as possible, and, in this way, construct the most inclusive and balanced diagnosis possible. although no secondary players are identified for the port-cities, the non-engaged residents and floating population should be informed and monitored. during the first round, the suggestion is to launch online surveys as was done in málaga to convey straightforward information about the decision-making process and to gather some statistical information about population awareness and willingness towards new scenarios. regarding the second round, c1 and c2 islands might implement one or more workshops. the number of events will depend on the expected number of participants and the level of consensus achieved during the first round. although workshops could vary in their design, the general idea is to revise each proposed measure and end with a voting exercise. the aim is to ratify (high consensus and no adjustment required), improve (well-conceived proposal, but minor changes required), modify (major changes should be taken), or eliminate (total removal) each measure. in case of a reduced number of attendees, one session with an open debate of the measures should be enough. the voting results should be delivered at the end. if more than one workshop is required, a standardised activity should be put into work. in málaga, for example, participants are asked first to classify the measures between publicor private-driven and between strategic or infrastructure measures. this allows stakeholders to revise the measures and prepare the voting portion. finally, an extra informative session should be also considered to give feedback to all participants. 5.1. final recommendations for islands despite differences, the decision-making processes of málaga, cádiz and séte end with the adoption of a local plan by the involved municipalities. given that the ppp successfully involved a diverse spectrum of stakeholders since the beginning, more than half of the measures in the drafts are ratified and no measure is eliminated. the proposed ppp seems to be a constructive instrument for other similar processes in diverse contexts. based on the described experiences on port-cities, table 5 presents a specific suggestion to implement the ppp in each cluster. as experienced in port-cities, another key element is the identification and appointment of a leader from the 14 international journal of sustainable energy planning and management vol. 34 2022 participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain table 5. suggested ppp implementation for clusters clusters large islands (c1) medium-sized islands (c2) small islands (c3 y c4) based on málaga cádiz sète suggested to gran canaria, tenerife la palma stakeholder identification and classification key players: local/regional/national field experts of com key sectors (energy, housing, tertiary sector and transport), private and public. potential supporters/objectors: representatives from other sectors (industry, waste, tourism, agriculture, etc.); local associations (neighbourhoods, commerce, education, etc.); labour unions; universities; transport operators. secondary players: non-engaged residents. expected number of stakeholders between 15 and 25 between 10 and 20 around 10 informative session inform stakeholders and citizens of the decision-making process. start engagement towards next round. ppp first round activities for key players semi structured interviews: collect first-hand information to feed the bei and the rva semi structured interviews: collect first-hand information to feed the bei and the rvaactivities for potential objectors/supporters 1 or 3 focus group: divide stakeholders based on their location in the pim activities for secondary players survey for residents survey for residents (optional) ppp second round workshops 2 or 3 sessions 1 or 2 sessions 1 session open to all structure of the session classification of measures and debate voting open debate on measures voting measures validation might require an extra session to provide feedback on the voting process. results to be presented during the workshop local government, whose role is to support the technical team behind the plan elaboration. this is also recommended for the case of islands, as these leaders, besides reaching out to strategic stakeholders, might also serve as advisors to ensure the resulting plan is aligned with local policies and national climate targets. achieving such success should be the aim of islands planning their energy transition as frameworks, like the secap, are intended for long-term horizons (2030 and 2050). they require the assessment of multiple sectors (buildings, transport, energy generation, industry, waste and agriculture) and the establishment of a monitoring system based on baseline revision and measures progress reporting every two years. feedback from stakeholders involved in port-cities emphasize the high level of acknowledgement that the final version of measures shows regarding their inputs, as well as the consensus achieved about the opportuneness from the plans and the consequent increase in terms of social acceptance, that could ease the path for further measure implementation. 6. conclusion from a lessons learned perspective, the most advantageous result from adopting the ppp is the quality improvement of the decision-making process on energy planning, caused by the effective involvement of the citizens and local stakeholders. the ppp should not be understood as an independent method, but as a complement to international standards for energy transition planning, such as the secap methodology, or as a supportive tool for community-related developments like the canary island’s projects. the ppp allows enough flexibility to adjust its implementation for different socio-political contexts. in this sense, the ppp could serve as a starting point for a decision-making process requiring the engagement of international journal of sustainable energy planning and management vol. 34 2022 15 felipe del-busto, maría d. mainar-toledo, víctor ballestín-trenado numerous and diverse stakeholders. in the framework of this research, this is identified both as a challenge and an opportunity. the revision of the port-cities cases suggests that the ppp approach might provide agents with a forum to approach a common challenge and raise questions for the sustainable development of their sector. the early identification, analysis and classification of local stakeholders seem to be an effective way to select the most appropriate participatory technique, improving the chances of involvement of stakeholders with divergent interests, an adequate strategy to balance the opinions and insights of stakeholders, despite their power and influence [15]. similarly, establishing what is expected from each kind of stakeholder before each stage of the decision-making process might help to equilibrate their involvement. if the requirement is expertise-related insights, higher-profile stakeholders could be engaged earlier than others through individual approaches like semi-structured interviews. if the objective is to achieve consensus, giving the same level of opinion to each stakeholder, through participative workshops, might conduct better results. further research lines could deepen these points by working together with islands from each of the 4 clusters. not only for the development of secaps but also other decision-making processes such as electric mobility planning or offshore wind or marine energy plants design. also, the effective coordination between public authorities and technical experts, based on the figure of an energy transition leader, could be examined to get more evidence on its influence for a final plan or project tailored to local expectations. finally, it is worth highlighting the great potential of eu islands to become pioneers in achieving climate targets, as well as the opportunity that projects, such as nesoi, might be to accelerate this process. the support from nesoi technical experts, together with the implementation of the proposed ppp, could have a catalyst effect for islands that currently lack an energy transition plan, as is the case of more than half of the surveyed islands. their geographical constraints and the availability of res should be exploited to go beyond european climate targets, and even to be the first territories to achieve carbon neutrality before 2030. acknowledgments this contribution has been developed in the framework of the h2020 nesoi project “new energy solutions optimised for island”. this 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abstract photovoltaic (pv) experiences significant growth and has been installed in many locations worldwide over the past decades. however, selecting the best alternative of pv system remains a problem in developing countries, often involving both stakeholders’ interests and multiple objectives. this research proposes a multi-criteria decision making (mcdm) taking into account best-worst method (bwm) and vikor method for suitable pv alternatives. the combination provides high accuracy, faster data collection, and reliable performance compared to other methods. a case study in tomia island in indonesia is used to evaluate the effectiveness of these approaches. the result shows that the best scenario is a full pv installation by combining two villages into one system. it offers the highest power and can be used not only for daily access to electricity but also to support economic activities such as tourism and aquaculture. despite offering some economic benefits, hybrid alternatives that incorporate non-renewable energy as the main source of energy are less preferred by decision-makers due to low power generation and insignificant carbon reduction. multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country perdana miraj.1,3,*, mohammed ali berawi2 1 department of civil engineering, pancasila university, jakarta 12640, indonesia; 2 department of civil engineering, universitas indonesia, depok 16424, indonesia; 3 center for sustainable infrastructure development, universitas indonesia, depok 16424, indonesia keywords best-worst method; multi-criteria decision making; photovoltaic; renewable energy; vikor method; url: https://doi.org/10.5278/ijsepm.5897 1. introduction the world projected an increase in energy demand of 28% by 2040 [1]. from this figure, renewable energy consumption shows a progressive increase but is still far from catching up with petroleum and similar liquids as the highest energy consumption. as non-renewable energy is predicted to deteriorate soon, countries in asia and africa that are heavily dependent on fossil fuel need to seek alternative resources to accommodate growing energy demand. indonesia has abundant resources of renewable energy such as micro-hydro, geothermal, biomass, wind, and solar. the country’s location in the equatorial area allows for a high intensity of daily solar energy production. it reaches approximately 4.8 kwh per square meter in the western part of the state and 5.1 kwh per square meter in the opposite area with a monthly variance of 9% [2]. based on this condition, solar-based power plants are potentially installed in many isolated islands scattered across the country where some people are unable to access the electricity network grid provided by the government. one of the potential locations for photovoltaic (pv) installation is tomia island in the province of southeast sulawesi. it is part of the wakatobi national park listed in the unesco world network of biosphere reserve mailto:perdanamiraj@ui.ac.id https://doi.org/10.5278/ijsepm.5897 62 international journal of sustainable energy planning and management vol. 30 2021 multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country (wnbr) for coral and sea faunas [3] and the unesco world heritage tentative list [4]. currently, the electricity in the area is supported by independent small diesel generators that have been purchased and maintained by local people. the generators can only supply electricity for approximately 5 hours per day, which is insufficient to accommodate daily activities. considering the significance of the area and the urgency of electricity supply, pv installation may become one solution to the power shortage problem. in the longer term, pv development is expected not only to improve social welfare but also to support the area as a world-class research center and a laboratory for sustainability and marine life. prior to installation, a feasibility study is required, taking into account technical, financial, economic, and social considerations, to propose the best alternative to pv development. the process of decision-making should involve different stakeholders to address various issues including local regulation, technology adoption, social impact, and environmental issues [5] collaboration between the parties aims to minimize conflicting objectives [6] and to provide an acceptable solution and a compromised framework for successful project delivery. there are decision-making models that specifically adopt multi-criteria operations in different fields from engineering, mathematics, environment, and many others. multi-criteria decision making (mcdm) aims to cope with a set of problems by generating the best possible alternative through structuring operations and trade-offs. this research evaluates the ideal pv model by combining two mcdm models, the best-worst method (bwm) and vikor technique. the objective of bwm is to produce a relative weight of the criteria, while vikor technique ranks the criteria for generating the best alternative. the aim of integrating these methods is to improve the weighting score, reduce the set of pairwise comparisons that result in fewer questionnaires, and improve ranking accuracy [7]. this multi-criteria optimization, through a combination of bwm and vikor technique, proposes novelty in decision making and fills the gap in the body of knowledge that remains uncovered in previous studies. this combination can be adopted in similar context studies or across fields due to its general characteristics and straightforward implementation. the rest of this paper is organized as follows: section 2 will discuss mcdm and its relationship to the selection of renewable energy models, section 3 will further examine the condition of the case study in tomia island, section 4 will show the operation of the method in this research, and section 5 will elaborate on the operation of the bwm and vikor technique in detail. last, a conclusion and a recommendation will be provided for further research development. 2. multi-criteria decision making mcdm is a technique used to decide multiple alternatives by considering qualitative and/or quantitative criteria. some researchers have categorized mcdm into two abbreviations ahp analytic hierarchy process anp analytic network process bwm best-worst method dematel decision making evaluation and laboratory electre elimination et choix traduisant la realité grey rational analysis (gra) madm multi-attribute decision making mcdm multi-criteria decision making modm multi-objective decision making promethee preference ranking organization method for enrichment of evaluations pv photovoltaic saw simple additive weighting stepwise weight assessment ratio analysis (swara) topsis technique for order of preference by similarity to ideal solution vikor vlse kriterijumska optimizacija i kompromisno resenje wpm weighted product model international journal of sustainable energy planning and management vol. 30 2021 63 perdana miraj, mohammed ali berawi types, including multi-objective decision making (modm) or multi-attribute decision making (madm). the definition of alternatives distinguished the two approaches [8]. nowadays, many academics and researchers are trying to combine both mcdm categories in order to find the optimum method for a specific case study context. this research adopts a categorization that has been published in previous literature [9,10]. the details of this mcdm are shown in table 1. madm processes predetermined alternatives by comparing each alternative attribute. literature shows the classification of madm methods which considers pairwise comparison, scoring, and outranking [11,12]. madm is highly dependent on the judgment of experts or decision-makers in presenting their preferences against criteria and gain a fair perspective plays a significant role in achieving the minimum reliability score for further processing [13]. modm suggests that a set of unbiased functions must be optimized prior to the identification of alternatives [8]. methods in modm use extensive mathematical modeling for optimization and involve a wide range of alternatives. modm offers the best continuous alternative, close to decision-maker aspiration [14]. some academics have attempted to combine madm and modm methods to generate a comprehensive decision-making result [15]. the madm approaches discussed in this paper have been successfully adopted in various sectors and research fields, including the energy sector, as one of the most suitable methods for problem-solving. saaty [16] firstly introduced the analytical hierarchy process (ahp) which proposes a hierarchical structure and a pairwise comparison to evaluate the project and the complex decision making, taking into account multiple criteria. mastrocinque et al. [21] has adopted ahp to develop a sustainable supply chain in the renewable energy sector, particularly related to pv installations. many publications also use this method in various fields, including technology selection in renewable energy [22], renewable energy alternatives [24], and energy policy [23]. recently, ahp combined with geographical information systems (gis) was used to determine offshore wind farms’ location in turkey [25]. the analytic network process (anp) was further developed by saaty [37] to cope with the mutual dependence of attributes. similar to ahp, this method works well when combined with other mcdm approaches such as decision making trial and evaluation laboratory model (dematel), technique for order preference by similarity to ideal solutions (topsis), and vlsekriterijumska optimizacija i kompromisno resenje (vikor). for instance, both anp and dematel combined to select renewable energy resources in turkey from the investor perspective [17]. while fuzzy anp and fuzzy vikor adopted to select the optimal location of the pv system in china [38]. nowadays, the bwm becomes the latest mcdm approach, capable in minimizing the inconsistency of previous techniques and reducing the number of pairtable 1: adoption of mcdm in energy research project type of mcdm category method references multi-attribute decision making pairwise comparison-based method ahp, anp, dematel, bwm [17–25] outranking-based method promethee, electre [26–30] scoring-based method topsis, vikor, saw, wpm [31,32] multi-objective decision making e-constraint, goal programming, weighting method [33,34] combination of madm and modm goal programming-topsis [15] ahp-goal programming [35] vikor-linear programming [36] 64 international journal of sustainable energy planning and management vol. 30 2021 multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country wise comparisons [7]. by performing this method, participants will complete the survey in a shorter time. this method also allows for easier data processing to generate a weighting score for research team members. previous research conducted by kheybari et al. [19] has attempted to locate the best site for bioethanol production facilities in iran using this technique. the outranking model in madm may include elimination and choice expressing reality (electre), and preference ranking organization method for enrichment of evaluations (promethee). both methods propose a broad perception for decision-makers by processing cases involving multiple alternatives but limited criteria. these concepts have been widely used to evaluate options in the energy sector. wu et al. [27] has adopted promethee to determine the optimal selection of the parabolic trough concentrating solar power (pt-cspp) in china. the author suggested a sensitivity analysis and a comparative analysis ensure the feasibility of the proposed framework. on the other hand, electre was used in the selection of site for renewable energy sources in turkey considering geographical conditions and energy production [29], the selection of offshore wind power stations [26], investment analysis for energy resources [28], and policy assessment of renewable energy [30]. in the scoring-based method of mcdm, vikor and topsis are two approaches extensively used in the energy sector as alternatives for decision making. these methods adopt aggregating functions but use different ranking and normalization techniques to delete units of criteria [39]. vikor adopts linear scaling, and the normalized values do not correlate with the evaluation unit of criteria, while topsis utilizes vector scaling and the normalized values may differ from the assessment unit on the investigated criterion [40]. some scholars used the vikor method for hydro energy storage plants [40]. some scholars have used the vikor method for hydro energy storage plants [41], or the selection of renewable energy sources. academics have used the topsis method to rank renewable energy supply systems [31] and to prioritize low-carbon energy sources[42]. some researchers have even proposed a combination of topsis and vikor or taguchi [32,43]. despite extensive methods of mcdm applied in the energy sector, some limited scholars combine bwm and vikor method to evaluate the best alternative for pv installations. in this paper, the author will show how to assign the weighting of the criteria using bwm and perform scoring with vikor method in order to gain the ranking of alternatives for the pv installation in the case study. many other disciplines can adopt this combination to provide an alternative solution during the initial and planning stages. 3. the case study tomia is located in the center of wakatobi national park, part of the wakatobi regency. it is located approximately 100 km southeast of the sulawesi mainland (see table 2). wakatobi area is one of the centers of marine biodiversity in the world, comprising indonesia, malaysia, the philippines, and stretching until the solomon islands. more than 70% of the world’s coral species, six species of marine turtle, and over 2,000 species of reef fish are found in this area. this location is one of the ideal places for renewable energy installations, not only to improve people’s well-being by increasing access to electricity, but also to lower the risks of transporting and storing liquid fuel that could harm the environment. according to the solargis database, the location shows a high level of solar irradiation reaching 2,016 kwh/m² of annual global in-plane irradiation. the pv installation focuses on five villages in tomiaisland (see figure 1). four villages consist of kahianga, wawotimu, kulati, and dete are in tomia timur district, while the village of lamanggau is in tomia induk district. a primary daylight survey showed that most of the villages have minimum access to electricity ranging from four to twelve hours per day and are supplied by either self-owned diesel generators, a communal diesel generator, or private resort nearby the village. self-owned diesel generators and a communal diesel are in decent condition, but lack maintenance due to limited equipment and technical knowledge. people are required to pay a subscription fee for accessing electricity table 2: a general description of the case study regency wakatobi province southeast sulawesi size 47.10 km² population ± 15.789 inhabitants social condition low-income households main activities fishing topography low-slope and some hills average rainfall 0,4–288,2 mm international journal of sustainable energy planning and management vol. 30 2021 65 perdana miraj, mohammed ali berawi at us$4.5 per cycle. some of the cycles are thirteen days, while others may be up to one month per cycle. based on the primary survey by the research team members, three villages (wawotimu, kulati, and lamanggau) out of five villages, have a sufficient electricity supply for each house. in contrast, less than 97% can only access electricity in the other two villages due to limited generator capacity. the average daily energy consumption for each village is estimated at 87.6 kwh for kahianga (available for 6 hours), 65.92 kwh for wawotimu (available for 4 hours), 49 kwh for kulati (available for 4 hours), 52.36 kwh for dete (available for 4 hours), and 350 kwh for lamanggau (available for 12 hours). however, the primary survey found complex troubleshooting with the existing transmission network in kahianga that could disrupt future pv installation and interconnection. therefore, an alternative installation by taking into account the integration of the distribution network between kahianga and wawotimu as a nearby village considered as one of the pv scenarios. 4. research methodology this research follows three-stage approaches, taking into account the bwm and vikor approach to achieve the research objectives. first, alternative pv installation is generated before identifying the criteria for evaluation. the research carried out a decision matrix to provide a weighting score for each criterion based on expert judgment. vikor technique will then test the criteria and rank the best alternative pv installation in the case study. the research framework is illustrated in figure 2. figure 1: location of the case study source: stacey [44] alternative pv installation criteria evaluation using bw method weighting score of each criterion performed vikor method rank pv alternatives figure 2: research framework 66 international journal of sustainable energy planning and management vol. 30 2021 multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country 4.1. best-worst method this method aims to reduce some issues from the previous pair-wise comparison method including ahp, anp, and other approaches related to inconsistency, data comparison, and timely completion. researchers and academics have adopted this method in various contexts and sectors, such as energy efficiency building [45], airport evaluation [46], port performance [47], and residential grid storage technology [48]. based on rezaei [7] formulation, the bwmis performed by carrying out the following steps. step 1. establish a set of criteria for evaluation as (c1, c2, c3 ... cn) step 2. determine the best and worst criteria by taking into account expert judgments without conducting a comparison. step 3. best-to-others vector which is generated based on a number from one to nine determining which one is the best criterion among any other criteria. where abj denotes the preference of the best criterion b over criterion j and abb = 1. step 4. others-to-worst vector is regulated based on similar treatment on step 3 using a number from one to nine to produce the other criteria over the worst criteria: where ajw denotes the preference of the criterion j over the worst criterion w and clearly that aww = 1. step 5. optimal weights will be obtained (w1 *,w2 *,…, wn *) by calculating the following optimization problem. it aims to find the weights such that the maximum deviation for all j is minimized. the min-max model from the previous equation proceeds into the following formula: using the model (4), the optimal weights ((w1 *,w2 *,…, wn *) and optimal objective function value from minξl* are generated. based on rezaei [49], the value of minξl* can be used to show the consistency level of pairwise comparisons, if it is far from zero, then it denotes a low level of consistency. 4.2. vikor technique vikor was developed in 1998 to optimize complex decision-making by taking into account a multi-criteria analysis [50]. this technique evaluates alternatives according to the available criteria and also provides a compromise ranking based on the measure of “ closeness” to the “ideal” solution. the research expands the compromise ranking of multi-criteria measurement using aggregate funct ions [39]: where l1j (as sj in eq. (6)) and l∞j (as rj in eq. (7)) are used to formulate ranking measures. vikor technique uses the following steps [50,51]. step 1. determine the best fi * and the worst fi – values of all criterion functions, i = 1,2, ..., n. if, the ith function represents a benefit then * and i ij i ijj jf max f f min f −= = . on the other hand, when ith function represents cost then * and i ij i ijj jf min f f max f −= = . this study selects attributes of benefits and cost based on stakeholders’ input. benefit attributes consist of power, economic rate of return, and co2 reduction, with the higher value is more desirable. on the other hand, cost of energy and operation and maintenance as cost attributes expected to have lower values. step 2. compute the values sj and rj, j = 1,2,...,j by the relations where wi denotes the weight of each criterion and fij is the score of alternative i based on criterion j. step 3. when the value sj and rj have been obtained, the values qj, j=1,2,3,...,j will be evaluated based on the following formula: (1)( )b b1 b2 b3 bna = a , a , a ,…, a (2)( tw 1w 2w 3w nwa = a , a , a ,…, a ) (3) { } j , s.t. 1 w 0; for all j b bj j j jw wj j j min max w a w w a w w ≥ − − =∑ (4) l j j j minî , for all , for all w =1 w 0; for all l b bj j l j jw w w a w j w a w j j ξ ξ ≥ − ≤ − ≤ ∑ (5) ( ) ( ) 1 * * 1 / 1 , 1, 2, , n pp pj i i ij i i i l w f f f f p j j − =    = − −    ≤ ≤ ∞ = … ∑ (6) ( ) ( ) * * 1 n i ij j i i i i f f s w f f −= − = − ∑ (7) ( ) ( ) * * i ij j ii i i f f r max w f f −  −  = −   (8) ( ) ( ) ( ) ( ) ( ) * * * * 1j jj s s r r q v v s s r r− − − − = + − − − international journal of sustainable energy planning and management vol. 30 2021 67 perdana miraj, mohammed ali berawi where, * *, , ,j j j jj j j js min s s max s r min r r max r − −= = = = and v is proposed as the majority of criteria. the value of is ranging from 0 to 1, but 0.5 is taken in this study. step 4. alternatives will be ranked based on the values of s, r, and q which are structured in decreasing order. the best rank (alternative a(1)) is selected based on the measure of q when two conditions are met: a. acceptable advantage. q (a(2)) (a(1)) ≥ dq, where alternative a(2) is placed second by q; dq = 1/ (j – 1); j is the available alternatives in the project. b. acceptable stability. alternative a(1) placed first by s or/and r. this strategy provides a stable outcome when voting occurred by majority rule (when v > 0.5 is needed), or by consensus (v ≈ 0.5), or by veto (v < 0.5). when the process fails to fulfill satisfying conditions, a set of compromise solution will be proposed as follows. c. alternative a(1) and a(2) when condition number (b) is failed, or d. alternative a(1), a(2),..., a(m) when condition number (a) is failed. a(m) is measured through the relation q (a(m)) – q(a(1)) < dq for maximum m. 5. result and discussion in this section, each alternative scenario is evaluated based on bwm and vikor methods to determine the optimum alternative for installation. subsequently, sensitivity analysis will be used to evaluate certain parameters that could contribute to the research output. research findings will then be compared with previous literature studies and suggested recommendations for future research direction. 5.1. alternative scenario for pv installation the pv scenario in this research was developed by considering the electricity demand of the current households and the future energy usage of approximately 400 kw for all villages. this research generates four alternative scenarios including full pv installation on every five villages, hybrid installation, full pv installation with two integrated villages, and hybrid installation with two integrated villages. in the first scenario, the research will install pv system in each village. this scenario proposes low emission because of unused diesel fuel, offers clean energy usage, and suggests the lowest operation and maintenance cost compared to other scenarios. however, this scenario requires a large area, leading to higher initial costs and cost of energy. in the second scenario, the pv system will only be installed in kulati and dete villages, while the rest of the villages will combine both pv and diesel generators. this scenario offers the lowest cost of energy but compromises the operation and maintenance by more than 100% of the previous one due to the enormous consumption of diesel generators. however, this alternative provides the lowest reduction in co2 among other scenarios. the third scenario suggests that pv is only installed in four villages (kahianga, dete, kulati, and lamanggau). unlike the first scenario, wawotimu electricity will be supported by pv in kahianga due to their proximity, to reduce investment costs. this scenario offers the highest power and potentially be used beyond daily activities including but not limited to tourism and aquaculture. last, the fourth scenario suggests pv in kulati and dete villages while electricity from the remaining villages supplied by the hybrid system. this system generates adequate power for daily activities with minimum cost of energy and offers a high economic rate of return. however, this alternative consumes the highest operation and maintenance costs. the details of the pv alternatives and the attributes are shown in table 3. 5.2. criteria weighting based on best-worst method this research proposes five criteria to evaluate the best alternative for pv installations in the case study. these criteria (see table 2) were generated on the basis of a similar case study conducted by [40] and adopts indonesian experts’ judgment. it comprises power (p), cost of energy (coe), operation and maintenance cost (o&m), economic rate of return (err), and co2 reduction (cr). the study developed a questionnaire survey in a structured manner by taking into account pairwise comparison and deploy through an online survey system. nine responses returned to weight the score for each of the available criteria. respondents have a variety of occupations, such as academics, private contractors, government institutions, and professionals. they have been involved in energy projects in indonesia for 2 to 16 years. each respondent pointed out their preference for the best criterion to other criteria and other criteria over the worst criterion. each participant has chosen a different preference as the best and the worst criteria. most of them argued that the cost of energy and co2 reduction are the best criteria that should be considered when 68 international journal of sustainable energy planning and management vol. 30 2021 multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country selecting an alternative. this result shows a different perspective between the participants. those involved in investment and project planning will select “cost of energy” due to their ability to change the course of the project. on the contrary, those who work closely with the environmental sector and regulation have preferred “co2 reduction” as the best criteria. clearly, these participants expected the energy project to reduce a significant amount of greenhouse gas emissions rather than address the investment issue. institutions of the indonesian government, such as the ministry of environment and forestry, ministry of energy and mineral resources, and other related ministries, also prefer to support a project with environmental issues and global emissions as the main concern. table 4 shows the preference for best-to-other criteria. most of the respondents suggested that operation and maintenance as the worst criteria in the energy project, followed by co2 reduction. renewable resources such as solar, wind, geothermal, hydro, biomass, bio-fuel, wave, and tidal have been expected to have low operation and maintenance costs. for instance, the pv system, as part of renewable energy, only required 2% of the initial budget for incidental expenditure [52]. sen and bhattacharyya [53] suggested pv maintenance cost of approximately us$10/year. other types of renewable energy projects have similar costs for operation and maintenance. the findings suggest that the respondent preference from other criteria over the worst one is shown in table 5. based on previous evaluation of best-to-others (see table 4) and others-to-worst (see table 5), each criterion was processed by taking into account equation (4) to generate the value of ξ l* for each respondent. however, limited literature found to be related to acceptable value in the bwm, therefore this research uses the value often adopted in the comparison matrix realm. as suggested by rezaei et al. [54], the consistency ratio adopts the value of pairwise comparison matrix from 0.1. based on this output shown in table 6, the value of from three respondents (r1, r2, and r3) was used for further analysis out of nine respondents. these findings confirmed the work of mi et al. [55], which components argued to be low credibility when found above 0.1, thus excluded from the decision-making process. table 3: pv alternatives and attributes for installation in tomia island code alternatives p coe o&m err cr kw us$/kwh us$/year % ton co2 /year a1 full pv installation 710 0.83 14,520 20.69 491.405 a2 hybrid installation (pv+diesel generators) 642 0.67 92,904 31.04 178.175 a3 full pv installation (two integrated villages) 740 0.82 19,227 22.7 491.405 a4 hybrid installation (pv+diesel generators with two integrated villages) 488 0.68 113,094 33.31 287.738 table 4: respondent preference from best criterion to other criterion respondent best criterion c1 c2 c3 c4 c5 r1 power 1 2 3 5 3 r2 cost of energy 2 1 5 3 4 r3 cost of energy 3 1 5 2 4 r4 cost of energy 1 5 3 4 2 r5 economic rate of return 1 4 3 5 2 r6 co2 reduction 4 2 1 3 5 r7 economic rate of return 4 3 2 1 5 r8 co2 reduction 3 1 2 4 5 r9 co2 reduction 4 3 2 1 5 international journal of sustainable energy planning and management vol. 30 2021 69 perdana miraj, mohammed ali berawi although inconsistency may appear in the initial judgment matrix provided by decision-makers when using comparative methods, this research will not perform another round of evaluation to re-assign the weighting and ranking scenario due to time constraints and decision-makers’ availability. as a result, the weighting value for power, cost of energy, operation and maintenance, economic rate of return, and co2 reduction (see table 5) were generated based on the mean score of three respondents which denotes by 0.2707, 0.3509, 0.0943, 0.1507, and 0.1334, respectively. 5.3. alternative ranking based on vikor method ranking of pv for the case study consider alternatives (see table 7), benefits and cost attributes, and weighting score (see table 5). the analysis firstly adopted a normalized decision matrix before producing utility measure (sj), regret measure (rj), and rank measure (qi). a balanced weighting value expressed in v = 0.5 was used to calculate the ranking of available scenarios. the result (see table 7) shows three rankings of s, r, and q. the best alternative should meet “acceptable advantage” and “acceptable stability in decision making” conditions. an “acceptable advantage” takes into account the second-lowest score of q minus the lowest one, and the result should be greater than dq = 1/(4-1) = 0.33. although a3 ranked first by s and r, the first condition is not met as 0.191 is less than 0.33 of dq. therefore, a compromise solution is proposed where q (a2) – q(a3) < dq. this sequence suggests a3 or full pv installation (two integrated villages) as the best solution for pv installation in the case study. table 5: respondent preference from other criterion to worst criterion respondent worst criterion c1 c2 c3 c4 c5 r1 co2 reduction 5 5 2 1 3 r2 operation and maintenance 4 5 1 2 3 r3 operation and maintenance 4 5 1 2 3 r4 operation and maintenance 4 5 1 3 2 r5 power 1 4 2 3 5 r6 operation and maintenance 4 2 1 3 5 r7 co2 reduction 3 1 5 4 2 r8 cost of energy 1 2 3 4 5 r9 economic rate of return 3 4 2 1 5 table 6: criteria weights from participant responses respondent c1 c2 c3 c4 c5 r1* 0.4000 0.2276 0.1517 0.0690 0.1517 0.0551 r2* 0.2426 0.4081 0.0661 0.1618 0.1213 0.0772 r3* 0.1693 0.4169 0.0652 0.2215 0.1270 0.0912 r4 0.3848 0.1163 0.0626 0.1454 0.2908 0.1969 r5 0.1630 0.1630 0.2174 0.1304 0.3260 0.4891 r6 0.1685 0.3371 0.1348 0.2247 0.1348 0.5393 r7 0.1362 0.0839 0.2725 0.3983 0.1090 0.1468 r8 0.0693 0.3663 0.2970 0.1485 0.1188 0.2277 r9 0.1685 0.2247 0.3371 0.1348 0.1348 0.5393 mean weights 0.2707 0.3509 0.0943 0.1507 0.1334 notes: value of criterion from * is used to generate mean weights 70 international journal of sustainable energy planning and management vol. 30 2021 multi-criteria decision making for photovoltaic alternatives: a case study in hot climate country 5.4. sensitivity analysis in each decision-making process, decision-makers may have different opinions and lead to different orders of alternative priority. therefore, it is crucial to examine the findings by taking into account the sensitivity analysis to present the validity of the results. in the vikor method, parameter v can be used to provide research validity. normally, a 0.5 value is used to produce a significant result, but it can range from 0 to 1. this value may generate different results depending on the parameters of each research and the data used in the research evaluation. based on the v value assessment (see table 8), the result showed that the ranking remains the same from v value between 0.4-1.0. in the range of 0 and 0.3, this research found that there were slight changes between the second and third spots, while the best and the worst alternatives have not been altered. these findings show that a2 will be superior than a1 when decision-makers vote by veto, but not with consensus or majority rule scenario. from this analysis, a3 becomes the most potential alternative, followed by a1, a2, and a4 respectively. despite the high economic returns that could be achieved from hybrid installation, the findings have shown that the installation of pv without taking into account non-renewable energy is still the best alternative for development. sensitivity analysis supported this argument, where a3 and a1 (through consensus or majority rule scenario) became the top priority for implementation. 5.5. comparison with other methods this research combines bwm and vikor methods to select the best alternative for pv installations in developing countries located in equatorial area. despite the alternative proposed by this combination, comparisons with other outranking methods, such as topsis, promethee ii, and electre iii, are required to indicate the validity and reliability of the research findings. the comparison of each method is summarized in table 9. based on a comparison of the other three outranking methods, the result showed that alternative a3 is the closest to the ideal solution, produces the maximum flow, and generates the highest net superior, which is similar to the findings of the vikor method. topsis method indicates the same sequence as the vikor method. while promethee ii and electre iii offer table 7: ranking by vikor method a1 a2 a3 a4 sj 0.278 0.340 0.220 0.488 rank by s 2 3 1 4 rj 0.151 0.133 0.127 0.271 rank by r 3 2 1 4 qi 0.191 0.249 0.000 1.000 rank by q 2 3 1 4 table 8: sensitivity analysis v 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 a1 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.20 0.21 0.21 0.22 a2 0.05 0.09 0.13 0.17 0.21 0.25 0.29 0.33 0.37 0.41 0.45 a3 – – – – – – – – – – – a4 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 table 9: result comparison with other methods a1 a2 a3 a4 ranking vikor qi a3>a1>a2>a4 0.191 0.249 0.000 1.000 topsis pi a3>a1>a2>a4 0.884 0.528 0.986 0.020 promethee ii φ a3>a2>a1>a4 0.015 0.051 0.071 –0.137 electre iii ci a3>a1>a4>a2 0.855 –1.478 1.184 –0.561 international journal of sustainable energy planning and management vol. 30 2021 71 perdana miraj, mohammed ali berawi different rankings. the first swaps alternative in between the best and the worst alternatives, while the latter changes the third and the last alternative. the difference between the two methods is that promethee ii involves maximum group utility, but excludes individual regret. while electre iii considers individual regret but does not take into account group utility. therefore, it is understandable that these methods provide a slightly different recommendation of alternatives compared to vikor and topsis. based on these findings, the result of vikor method is valid and feasible for the decision making process. the results of this research also confirmed previous literature suggesting the benefit of vikor method and its ability to calculate close to ideal solution, taking into account thebalance between maximum group utility and minimum individual regret [38,40,51]. 6. conclusion decision-making in an energy project, particularly a renewable one, requires complex decision-making due to different interests of stakeholders, social-economic impact on the community, and environmental issues. several researchers attempt to adopt mcdm in the energy sector in order to have accurate options for decision-makers. to the best of the authors’ knowledge, there is limited research that takes into account the bwm and vikor methods for the selection of pv projects in developing countries. as a result, this research output is expected to fill the gap of knowledge both in the energy sector and decision-making model. the bwm combined with the vikor method, argued as one solution to integrate quantitative data between alternatives and expert judgment concurrently. this method also significantly reduces the exhaustive questionnaires and complex computational models. however, some limitations of this research should be addressed for future work. first, this research only involved indonesian experts to gain a similar understanding and knowledge about the case study. this study suggests involving international participants to produce alternative perspectives and more insight into the broader research context. second, national experts are still not familiar with this questionnaire, which affects low reliability of the returned questionnaire. an in-depth interview or focus group discussion was suggested as one of the data collections to increase the context of the study and offer adequate time for socialization. as this research focuses on technical, economic, and environmental aspects as the main consideration to determine pv selection, future research development encourages to involve other aspects, such as social, political, and policy and regulatory issues. subsequently, there are other methods in both multi-attribute and multi-objective decision making such as grey rational analysis (gra), dematel, anp, stepwise weight assessment ratio analysis 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planning and management vol. 32 2021 47 *corresponding author e-mail: ilija.batas-bjelic@itn.sanu.ac.rs international journal of sustainable energy planning and management vol. 32 2021 47–60 abstract just in the immediate neighbourhood of the european union (eu), the republic of serbia, one of the western balkan (wb) eu candidate countries, is lagging behind in the process of energy transition regardless of technological advances and policy instruments available. the eu created a momentum for energy transition acceleration with the european green deal, which has been forwarded to the wb through the energy community secretariat in the form of the green agenda; generally speaking, response in the form of national energy and climate plans (necps) is expected in the short term. the republic of serbia’s low carbon development strategy with action plan (lcdsa) and the current energy strategy will be analysed, commented on, and improvements will be suggested for the acceleration of energy transition, based on the newest findings from the simulation-based optimization techniques using the sector coupling approach to achieve ambitious variable renewable energy shares. the motivation of this research is to provide decision makers in serbia with the best available insights regarding sustainable energy system planning tools and possible shortcuts for delayed planning of activities. in addition, the purpose is to improve serbia’s chance of benefitting from adoption of these strategies in the country’s faster transition towards eu membership. the research compares two scenarios to illustrate a possible policy shift from small hydro power plants to photovoltaics (pv). a further increase in pv and wind power plants has been simulated using the energyplan to achieve expected scenarios of 40% renewable energy share and some more ambitious ones—up to 80%, which is realistic only with the sector coupling approach. national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? ilija r. batas bjelica*, nikola lj. rajakovicb a institute of technical sciences of sasa, knez mihailova 35/iv, belgrade, serbia b school of electrical engineering, university of belgrade, bulevar kralja aleksandra 73, belgrade, serbia keywords european green deal; energy transition; sector coupling; western balkans; national energy and climate plans; http://doi.org/10.5278/ijsepm.6300 the focus on smart energy systems, instead of particular sectors (electricity, gas, and heat) allows for cost synergies, but also the flexibility needed for moving the share of variable renewable energy sources in total energy consumption towards 100%, as it needs to be achieved by 2050 [3]. in addition, simultaneous redesign with technical measures on the supply and demand sides are also needed. there are many technologies, including the low-cost ones that have limited potential for contribution to 1. introduction the effects of climate change, also evident in serbia [1] and the region of western balkans (wb), have put into question the use of unsustainable economic development practices from 100 years ago, and call for a shift towards new smart energy principles. smart energy system principles [2] are seen as the enablers of 100% renewable energy systems, including transportation, with many scenarios to be considered in order to find the optimal energy mix. 48 international journal of sustainable energy planning and management vol. 32 2021 national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? energy transition using an efficient approach such as sector coupling. some recent studies of highly renewable energy systems including those from the republic of serbia are coming to the european researchers’ perspective [14], [15] and it is expected that this will help to speed up the transition. cost optimization of smart energy systems emerges from the sector coupling approach [9], [16], [17], which has been confirmed to have synergetic effects on completion of policy goals. this approach can therefore be used for necp preparation, since necps include all the national sectors, so the synergy effect would probably be the strongest. in the sector coupling approach [18], [19], heating and transportation sectors are usually coupled with the electricity sector, but industry demand and household heating demand sectors are not less important for decarbonisation. according to [20], seven stages that are analysed are: 1) reference, 2) introduction of district heating, 3) installation of small and large-scale heat pumps, 4) reducing grid regulation requirements, 5) adding flexible electricity demands and electric vehicles, 6) producing synthetic methanol/dme for transport, and 7) using synthetic gas to replace the remaining fossil fuels. energyplan may be used for serbian necp preparation since it has been used for modelling of serbia’s energy system and has advantages when coupled with other optimization tools [10], [21], [3]. the general purpose of this article is to present how smaller candidate counties perform self-governed on the daily basis with realistic politics (ger. real-politik) energy transition towards the eu in the presence of short deadlines, with unclear goals, insufficient or fragmented modelling capacity, influences of international modelling consortiums, and challenges of writing strategic documents. one example to illustrate this is the fact that for significant policy changes from a small hydro power plant to a solar cadastre, modelling background is needed to understand the changes in the balances and how insignificant they might be. ideas on how to decarbonise countries despite the impedance to decarbonisation, precede any practical energy modelling work. the prologue to serbian necp [22] explained these gaps and issues. the hypothesis of this research is that lagging behind in terms of energy transition was not the result of insufficient written background (articles, dissertations, and decarbonisation. it is therefore necessary to install not one but a set of optimally balanced technologies into smart energy systems. before this, simulations should be performed for technical feasibility and total cost minimization. when these costs are minimized under more than one constraint, e.g., a renewable target instead of decarbonisation only, the choice of optimal amounts (optimal sizing solution) is different from the solution of an unconstrained problem [4]. therefore, a smart energy system approach [5], [6] is suggested for necps. preparation and implementation of national energy and climate plans (necps) has been perceived as the main energy transition step in the western balkans (wb), covering the topics of energy efficiency, renewables, greenhouse gas, emission reductions, interconnections, research and innovation, and centralization trend in the eu energy policy [7] among member and candidate states. in the process of preparing necps, some eu member states have two out of three objectives calculated with a traditional in-house model, or through a procurement procedure organized by official authority if outsourced. this makes it possible to simultaneously reach several energy policy objectives, instead of only particular sectoral objectives, and has intrinsic synergetic effects from modelling [8]. therefore, goals should be set together and then modelled together using the sector coupling approach, rather than be treated separately [9]. a method for simulation-based optimization of the energy system structure under policy constraints has been presented [10] and continuously developed [11]. soft-link tools such as osemosys [12], times-dispaset [13], and energyplan-genopt [10] have the capability to provide a framework for necps. such tools make it possible to do modelling on most sectors contributing to abbreviations easme executive agency for small and medium-sized enterprises enc energy community ghg greenhouse gases iam integrated assessment modelling lcdsa republic of serbia’s low carbon development strategy with action plan lts long-term strategies necp national energy and climate plan rs republic of serbia wb western balkans international journal of sustainable energy planning and management vol. 32 2021 49 ilija r. batas bjelic, nikola lj. rajakovic books) to explain the method of finding optimal decarbonisation paths. in addition, lagging behind does not happen because there are no modelling tools, but due to country’s own characteristic impedance to energy transition. when enough stakeholders identified this impedance, including the ministry of energy (moe), the real work towards decarbonisation finally started. initially, there were bombastic media announcements, followed by actual political action of changing the legislation, and finally starting the necp preparation process and modelling. the final result is draft necp which is expected to be finished in september 2021. the novelty of this article is in using energyplan as an analytical tool to produce hourly simulations of the serbian energy system for the first time with significantly more than 40% renewable energy in its energy mix, which is currently seen as politically and technically highly ambitious, aligned with the green agenda and eu green deal. section 2 provides a non-technical introduction to the policy-oriented reader who wants to know more about the background of serbia’s increased ambition to produce the first draft necp. section 3 follows the expected analytical basis of serbia’s necp, with reflections of eu member states’ necps and analytics. section 4 discusses setting the ambition above 40% via sector coupling trough 6 scenario steps. 2. serbian necp in the wb context: a nontechnical introduction wb counties have shown various interest and methodology in the preparation of their necps. the energy community (enc) has recommended the preparation of necps from december 2017 and provided guidelines, but there was little progress in 2018, 2019, and 2020. some progress has been made in the naming of the teams that are carrying out the work, but preparation has not arrived to the technical annexes part until this day (september 2021). most success in the preparation of necps in the wb has been achieved in north macedonia, while this topic has not been addressed properly in other wb countries, with a possible pessimistic conclusion that none of the wb countries have perceived themselves as part of energy union any time soon. in the republic of serbia (rs), it could be ready by the end of 2021 under the auspices of the recently established and reformed moe. the necps proposed by the european commission are currently seen as an important political tool to steer energy systems toward decarbonisation. for the eu as a whole, it is legally binding to reach 27% of renewable energy in its energy mix until year 2030. as a european greens initiative, for the first time in the eu energy policy, member states are legally obliged to create plans with specific targets to be sent to the eu. the european parliament further clarifies this subject in its resolution from 25 march 2021 on the 2019-2020 commission reports on serbia (2019/2175(ini)) in paragraph 83: “urges the authorities to ensure alignment with eu standards and policy objectives on climate protection and environment as well as energy efficiency – in particular in the light of the sofia declaration on the green agenda for the western balkans – including but not limited to the introduction of carbon emissions pricing, the updating of energy efficiency legislation and the development and adoption of an integrated national energy and climate plan, in order to facilitate the transition to a circular economy and the adoption of the necessary measures to preserve and protect environmentally sensitive areas;” furthermore, necp methodology is created to enable constant monitoring and update, starting from the national ambition all the way to the delivery of planned investments. the four objectives of necps include: 1. energy union objectives (2030 targets and 2050 perspective) in 5 dimensions a. decarbonisation b. energy efficiency c. energy security d. internal market e. research, innovation, and competitiveness 2. promote better regulation and reduce administrative burden 3. enhance investor certainty and predictability 4. ensure compliance with the eu’s international climate commitments each necp is supposed to have an original vision of merging these four objectives. the structure of necp documents is divided into two sections: a. national plan which includes 1. overview and process for establishing the plan 2. national objectives and targets 3. policies and measures b. analytical basis 1. current situation and reference projections 2. impact assessment of policies and measures 50 international journal of sustainable energy planning and management vol. 32 2021 national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? the energy sector is one of the most important economic branches in serbia. the concept of today’s energy in serbia is still based on the economic paradigm of the 50s, characterized by sector decoupling, energy-intensity and inefficiency in the sectors of heating, transportation, and end use of electricity. in the production of electricity, serbia predominantly relies on low-efficiency thermal power plants that run on lignite—the local low-energy content coal. therefore, the energy sector is a major polluter of air, water, and soil at local and regional levels, and poses a threat to the environment and human health. the energy sector in the region also has a strong impact on greenhouse gas emissions (ghg), with over 70% share in total emissions. today’s energy structure of the region cannot meet the requirements of sustainable development in the 21st century. more broadly, it is clear that energy policy and energy crossroads have been one of the key issues of modern civilization for decades. the complexity of the challenges facing energy today is such that it requires regional connectivity and teamwork that is even more thoughtful, because the room for good solutions is limited primarily by climate change, but also by natural energy resources, economic constraints, and available technologies. the vision of an energy system without fossil fuels implies deviation from the previous approach and conventional energy; achieving energy without fossil fuels is the essence of energy transition. finding optimal solutions in a multidisciplinary energy sector in transition circumstances is definitely a very broad problem, for which even the borders of the continents are narrow. the conventional concept of the electricity sector (ees), which is economically the most important part of energy in serbia, has so far provided a secure supply of electricity for industry, households, commercial, and administrative categories of consumption. however, the power system operates under non-market conditions and is characterized by a high level of subsidies (both on the consumption side and within the thermal energy sector, especially within the lignite mine), which jeopardizes its long-term viability and ability to further develop. therefore, it is particularly important to immediately start the process of restructuring lignite mines, which includes diversification of the economy of mining regions. since the operation of the power system should be observed in the conditions of business in a liberalized market, the introduction of competition and setting electricity prices on an economically sustainable level is a prerequisite for its transformation and further development. designing the development of the thermal energy sector has a special significance and urgency because a large number of thermal power plants (tpps) in serbia are at the end of their working life with high direct and indirect costs of operation. it is necessary to make significant investments in new production capacities, which could be viable with 200300 m€ per year. since serbia possesses economically viable potential for renewable energy sources (solar energy, wind energy, hydropower [23], biomass energy, etc.), the future development of the production portfolio in the power system should logically be based on renewable energy sources (res). today’s electric power systems function in the conditions of business in a liberalized market with the introduction of competition and setting electricity prices which need to be economically sustainable. these are all prerequisites for transformation and further development of serbia’s energy system. since the current level of support for renewable energy for household consumers does not ensure full recovery of the support costs, the government closed the space for further increase of this support mechanism above 500 mw for wind and 10 mw for photovoltaics, which was needed. an ambitious step towards a more variable renewable energy scenario [20] could be a significant increase in the production from photovoltaics: it is currently around 20 mw and it should be 10, 100, and 1,000 times higher. the eu is determined to become the first climate neutral continent by 2050, which also includes the wb. this is stated in the green deal, which projects that electricity sectors will use 100% renewables in 2050. this is even more important with the green agenda for enc contracting parties, including serbia. finally, after signing the sofia declaration, ambition for decarbonisation grew in the serbian parliament, which finally adopted the law on climate change earlier this year. in addition, in the period 2014-2021, there has been a visible policy shift from small hydro power plants and wind to photovoltaics and medium and large hydro plants. 2.1. background on state of play, already published strategies, and plans for new ones although renewable and efficient energy technologies are available, they have so far been applied under strict serbian government control and thus not benefitting society in a wider sense. energy transition has not occurred so far, and serbians are at the moment brought international journal of sustainable energy planning and management vol. 32 2021 51 ilija r. batas bjelic, nikola lj. rajakovic to the fait accompli with energy policy and they are in a situation when they have to choose between higher energy costs and polluted environment, which is a false dilemma. instead, from the beginning of the planning process, there should be a broader consensus with clear responsibilities and projections for all future scenarios. this can start by raising awareness of the actual costs of electricity produced from lignite. despite available technologies, transition has not occurred as in e.g. germany, where households have visible economic and environmental benefits of energy transition, and where instead of lignite production, the government supports phasing out of lignite thermal plants [24]. as a result, serbia is behind other countries when it comes to energy transition, including necp preparation and energy and climate planning methodology in general. although there are several officially ratified documents (plans and strategies) covering the years 2030 and 2050, the commitments accepted from these documents are not ambitious. according to their most ambitions scenarios, serbia should achieve decarbonisation of up to around 40% by 2030 and around 80% by 2050 according to lcdsa. serbia adopted a package of energy laws and started working on necp in april, aiming to finish necp by the end of 2021. similarly to the delayed necp, lcdsa has been published, presented, and debated but it has still not been adopted by the government. lcdsa has two scenarios—m3 and m4—with more ambitious decarbonisation targets than claimed by the highest government officials last year (m2); these might be used for necp scenarios. scenario m3 goes further from the mentioned 33.3% reduction in 2030/1990 to 45% in 2030/1990 and to 69% in 2050/1990. scenario m4 goes even further in decarbonisation aiming for 43% in 2030/1990 and 76% in 2050/1990. further comparison may be achieved upon presentation of the whole modelling part by the modelling consortia led by gfa to the authors of this article. with the goal of opening chapter 15 of negotiations with the eu at the beginning of 2022, serbia’s parliament adopted the negotiating position in june 2021, with the timing after necp has been finished. regarding transition periods, it is not clear what might be asked and granted in this case, but no long-time provisions (20-30 years) are to be expected, since this has not been asked from or granted to a single candidate country. the moe has a difficult role to prepare serbia for membership and acceptance of the entire acquis from 1 january 2021, which is much more ambitious than ever before. the position of serbia should therefore be based on the responses from member states to the plans developed by the european commission. transition periods are not new in the energy sector, which is characterized by long-term payback periods. some delays may be expected if economically justified; in other words, the utilization of assets should prevent significant negative impacts on investments [25]. for sure, long-term delays or even further market distortions should be avoided in general. in the case of croatia, a minimal energy tax exemption (chapter on taxes) has been asked for electricity and the gas carriers for 10 years after the country joined the eu (1 july 2013), which is important for serbia as a way of keeping final energy prices lower than in other countries, and ensuring they are comparable to the average salary. for the implementation of 2001/80/ez emission directive, transition has been granted until 31 december 2017. neither romania nor bulgaria asked for transition periods regarding the energy chapter. the member states who joined the eu on 1 may 2004 have been granted transition periods regarding minimum oil and petroleum stocks for 1.5-4.5 years, which may also be interesting for serbia. additionally, moe has committed to update the energy strategy for 2040 with projections for the period until 2050 in the near future. therefore, alternative ambitious scenarios have to be explored using energyplan [20] and scenarios from previous research for years 2030 and 2050 [26] also have to be updated. 3. energy planning methods used for necps the european commission assessed each of 27 member states’ necps on a two-page document, finding that: • estimated renewable energy commitment is at 33.1%-33.7%, which is above the target of 32%; • emission reduction is 41%, which is above the target of 40%; • energy efficiency net savings are 29.4%-29.7%, which is below the target of 32.5%. examples of selected necps objectives and perspectives with energy planning tools used are shown in table 1. the main findings from the section a of existing necps related to their five dimensions [27] are: • bilateral cooperation among member states will allow the eu to achieve its ambitious 2030 objectives in a cost-efficient manner. 52 international journal of sustainable energy planning and management vol. 32 2021 national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? • efficiency measures that would achieve costefficient emission reductions, while reducing energy bills for households and increasing employment in the construction sector could be exploited more rapidly in some member states. • the role of flexibility instruments, such as demand response and storage, is key to ensuring energy security. • it is necessary to use more forward-looking concepts of energy system integration and sector coupling, including further integration of the power, gas, and heat sectors, as they become central for a decarbonised energy system. • additional efforts should be made to integrate research, innovation, and competitiveness into necps. • efficient investments in infrastructure should be encouraged in alignment national energy security goals, while taking into account synergies across different dimensions of the plans. some practices of eu member states include: • austrian and spanish draft necps provide good examples of how to combine quantified emission reduction objectives for the transportation sector with the underpinning policies and measures to achieve them. • the following countries are phasing out coal for electricity generation: france by 2022, italy and ireland by 2025, denmark, spain, netherlands, portugal, and finland by 2030. • the czech republic and ireland include contributions to national objectives for each sector and the respective technologies on a yearly basis and in absolute values. • it is helpful to have a systematic description and quantification of all types of energy subsidies (grants, support schemes, tax benefits, subsidies resulting from regulatory obligations), based on existing definitions used internationally. • eleven member states have estimated either overall investment required to achieve their objectives (france, italy and spain) or parts of their investment needs (greece, finland, hungary, ireland, italy, latvia, poland, and romania), while providing varying levels of detail on the sources of funding. • denmark, spain, france, netherlands, portugal, and sweden aim for climate neutrality by 2050 table 1: necp objectives and perspectives for selected countries with analytical basis % objectives 2030 (perspectives 2050) country/ region ghg emission reduction (vs. 1990) renewable energy penetration increase of energy efficiency analytical basis and responsible bodies slovakia 20 19.2 30.3 primes/envisage/ message spain 23 (90) 42 (100) 39.5 markal times denmark 70 (100) 55 (100) denmark’s energy and climate model, danish energy agency slovenia 15 27 35 gem-e3, rees-slo croatia 7 36.4 35 ministry of the environment and energy /maed, message, plexos cyprus 24 22.9 republic of cyprus / primes, potencia, osemosys greece 16 35 38 hellenic republic ministry of the environment and energy/ primes, times romania 2 30 45.1 ministry of economy, energy and business environment, deloitte/ excel bulgaria 0 27.09 27.89 (b)est north macedonia 66 (82) 38 34.5 markal times poland 7 21 23 message-pl, primes, steam-pl, other international journal of sustainable energy planning and management vol. 32 2021 53 ilija r. batas bjelic, nikola lj. rajakovic at the latest. france and the united kingdom have established legally binding 2050 targets in their domestic legislation and use carbon budgets as mechanism to ensure consistency of medium and long-term objectives. • poland has been an example of delayed transition on the road towards the european green deal [28]. more findings that are interesting for section b of necps are presented in terms of models used as analytical basis of the findings in the last column of table 1. other tools from the open source code with national geo-resolution, covering all sectors [29] potentially suitable for necps are the following: energyscope, energy transition model, backbone, oemof, medeas, desstinee, and opentumflex. another applicable modelling tool was developed by focus group 6 within emp-e 2020 at the conference on 8 october 2020. it is called “how can energy modelling tools from h2020 projects contribute to national energy and climate plans?” and it is shown in table 2. 4. a prologue to serbian necp the necps method that will most probably be used for serbia is called “sems”. it is based on times and this choice could be justified by harmonizing the planning procedure with north macedonia and spain. the second choice for serbia could be the use of the primes model, which has recently been used for developing lcdsa, and probably practiced right now. in addition, leap was used some years ago in serbia for the preparation of “energy sector development strategy of the rs for the period by 2025 with projections by 2030” (esdsrs). the tool such as potencia [30] or any other of the mentioned tools are not likely to be used by the serbian ministry of energy and mining. 4.1. policy shift scenario for serbian necp 2030 and beyond the outline of the serbian necp should be more ambitious than the current strategy in order to achieve harmonization with the green agenda. the current esdsrs places a significant focus on small hydro power plants (shpp), based on an outdated study from the 1980s (written amendments of the study are still expected to appear), where they are treated as medium capital-intensive investments. this idea led to environmental protests and events of the political importance, stopping many projects in the development and commission phase. some critics of shpp claim that the benefit of their dispachability has unjustly been put forward in front of other resources such as wind and photovoltaics. the fact is that streams are very variable and therefore mostly operated as run-off river hydro power plants with insignificant storage capability, which makes them unprofitable at current investment cost levels in current market conditions [31] without significant government support. therefore, shpp can be replaced by many small pv plants with equal yearly production, with different hourly production curve, without dispatchability, and table 2: modelling tools suggested for necps based on h2020 ongoing projects model name features focus h2020 project genesys mod energy pathway, costs, emissions, employment, sensitivity analysis open code, exact modelling of energy system open entrance multi carrier market design tool energy volumes and prices market operation, multienergy vectors magnitude plan4eu generation/transmission/distribution optimal sizing, different climatic scenarios, costs of generation and moderation optimal operation (uc), demand response, technical feasibility plan4res opentepes generation/transmission optimal sizing, least-cost investment plan optimal operation (uc) open entrance fresh:com and gusto social welfare maximization, cost minimization, peer-topeer, multiple agent based modelling open code, urban neighbourhoods and local energy communities, rooftop pv and batteries open entrance exiomod macro-economic approach (energy, employment, trade, fuel prices) economic impact of measures open entrance remes eu energy volumes and prices, markets, value added, employment economic impact of measures open entrance 54 international journal of sustainable energy planning and management vol. 32 2021 national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? table 3: scenario assumptions for year 2030: base and alternative variable unit base 2030 alternative 2030 difference pv (res34) mw 200 1,200 1,000 shpp(res12) mw 750 300 -450 correction factor for res2 in energyplan 0.73 0.73 0 energypv twh/a 0.31 1.85 1.54 energyshpp twh/a 2.5 1 -1.5 energypv+shpp twh/a 2.81 2.85 0.04 thus some additional flexibility requirements. these flexibility requirements should be simulated in order to check the feasibility of a policy switch. for that purpose, the energyplan tool has been used as the analytical basis for creating two scenarios. according to the current serbian energy strategy for 2030, a base scenario has been created, while alternatives have been suggested to switch from shpp to pv power plants in the same energy amount as shown in table 3: according to these assumptions, two hourly scenarios have been modelled for one year using the energyplan tool: base 2030 and alternative 2030, which is shown in figure 1. comparison between yearly and daily levels shows differences in operation of the two scenarios: base2030 and alternative2030. the main difference at the yearly level is visible in the first row, originating from the photovoltaic production during summer months. the contribution from increased pv capacity is visible in the second row for some days at the beginning and at the end of october, but it is more obvious at the weekly level in the third row. it is also visible that pv generation prevents or decreases import for a few days during peak hours. the fourth row shows how pv generation pushes storage use to the peak hours and prevents import during peak prices. further results, which are not visible from the previous figure, are the environmental and economic benefits of the alternative scenario. these are shown in table 4. alternative2030 scenario has more benefits than base2030 (current energy strategy) regarding decreased yearly co2 emissions for 0.27 mt, primary energy savings of 0.72 twh, mostly due to decrease in lignite consumption in thermal power plants of 0.74 twh. since the energy strategy (base2030 scenario) has not been superior to alternative2030 scenario, it should be amended trough necp preparation. this illustration has only symbolic contribution to decarbonisation, but provides directions how once suggested policies may be updated. the comparison of two fringe alternatives only covering a very small part of the serbian energy system, and thus insignificantly affecting it, although they have different policy perspectives and feasibilities. therefore, much ambitious alternatives must be pursued either from political [32] or from technical points of view. 4.2. raising the political and technical ambition for serbian necp based on the previously shown benefits of pv, a more politically and technically ambitious necp for the republic of serbia could be: • significant increase in renewable production power plants o new solar (cca. 2,000 mw) o new wind (cca. 2,000 mw), • improved energy efficiency, • wide flexibilization portfolio on supply and demand side, • increased level of electrification in the sectors of transportation and heating/cooling, • precise timing for thermal power plants phase out (cca. 1,500 mw). even more ambitious political goals regarding the share of renewables in the total production mix are realistic. on the other hand, the contribution of shpp is very small, but the contribution of new medium and large hydro power plants such as buk bijela (river drina, 95 mw, 330 gwh) is more relevant. the media announcements of the moe about 40% of res share in tpes until 2040 were followed by expectations of 8-10 gw until 2050. having in mind the study about the potential [33], there is cost-competitive potential in the amount of 6,890 mw (9,298 gwh) for rooftop areas (household and commercial). some first estimates show that 4-6 gw is possible in the roof area, while an additional area can be found in abandoned mines [34]. technical measures can include a large number (e.g., 1,000,000) of pv roofs, storage batteries, and individual efficient heat boilers. study [35] showed that 61 km2 is a suitable area for pv in residential and commercial/ government buildings (122 km2 in total), with the potential capacity of a suitable area in 2050 (dc-peak) being 29,331 mw (dc-peak), out of which 22,399 mw has been proposed. this is aligned with some studies of utilizing 33twh of photovoltaic energy production [36]. international journal of sustainable energy planning and management vol. 32 2021 55 ilija r. batas bjelic, nikola lj. rajakovic electricity production: yearelectricity production: year electricity production: month in october electricity production: month in october electricity production: week in octoberelectricity production: week in october electricity production: day in october electricity production: day in october import import pp+ pp+ 6.580 6.585 6.590 6.595 6.6006.580 6.585 6.590 6.595 6.600 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 m w 8.000 6.000 4.000 2.000 0 res12chp chpres34 res12 res34storage import pp+res12chp res34 storage storage import pp+chp res12 res34 storage import pp+chp res12 res34 storage import pp+chp res12 res34 storage import pp+chp res12 res34 storage import pp+chp res12 res34 storage 6.580 6.600 6.620 6.640 6.660 6.680 6.700 6.720 6.7406.580 6.600 6.620 6.640 6.660 6.680 6.700 6.720 6.740 6.600 6.700 6.800 6.900 7.000 7.100 7.200 7.300 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 6.600 6.700 6.800 6.900 7.000 7.100 7.200 7.300 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 figure 1: base2030 (left) and alternative2030 (right) scenario comparison at the level of a: year (1st row), month (2nd row), week (3rd row), and day (4th row) in october electricity production. legend: chp – combined heat and power, res12 – run-off hydro and small hydro power plants, res34 – wind and photovoltaic power plants, pp+ – thermal power plants and (reservoir) hydro power plants, storage – pumped storage hydro power plant and electric transport (source: energyplanv11.2). assuming perfect interconnection conditions (no export constraints, in addition to energyplan), fig. 2 presents the effects of increasing serbia’s currently installed pv power 1,000 times, from 20 to 20,000 mw. with such increased pv power, serbia will be able to reach only 23% of res share in tpes. this is equal to the huge 94% of res share in electricity production. this is a significant share having in mind the present one, which is around 30%. however, the contribution to decarbonisation is still limited due lignite tpps and reaches only 20 mt of co2 per year. increasing wind up to the full potential of 30,000 mw is also possible, but 56 international journal of sustainable energy planning and management vol. 32 2021 national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? 0 10 20 30 40 50 0% 10% 20% 30% 40% 0 5,000 10,000 15,000 20,000 co 2 m t pv penetra�on mw figure 2: increasing pv power in the serbian energy system: effect on the co2 emissions. table 4: environmental and economic benefits of the alternative scenario variable unit base 2030 alternative 2030 benefit co2 emission mt/year 45.47 45.20 0.27 tpes twh/year 185.89 185.17 0.72 lignite consumption twh/year 91.21 90.47 0.74 lignite costs m€/year 607 602 5 emission costs m€/year 1,364 1,356 8 there is a need for the sector coupling approach in decarbonisation. 4.3. sector coupling approach for ambitious serbian necp the authors’ own approach for serbian necp is based on six flexibility options for large-scale integration of vres technologies: 1. electricity demand electrification and response (household and industry) 2. thermal/nuclear power plants and combined heat and power (chp) flexibilization 3. power to heat coupling (chp, heat pump (hp) district/individual) 4. transport coupling (vehicle to grid + smart charge, synthetic fuels) 5. interconnection 6. storage (batteries, pumped hydro, rock bed, compressed air, hydrogen, etc.). to start with, half of the household electricity demand has been assumed as either inflexible or flexible within one day, for one week, and for one month (each 25%), while half of the industry demand has been electrified, and half of the household heating demand has been replaced with a heat pump (cop=5). as the second step, all tpps and chps are assumed flexible (0-100%) and grid stabilization services are provided from the grid, batteries, etc. in the third step, large hps are added to district plants (1,000 mw, cop =5) to replace fuel boilers, so fuel consumption is halved simultaneously. in the fourth step, fossil fuel used for transportation is halved and replaced with electricity, 1/2 smart, 1/2 dump charge, with storage of 30 gwh and no charging limits in the grid. in the fifth step, the interconnection capacity is doubled. in the last, sixth step, the demand of remaining industry switches to hydrogen; natural gas for individual heating is replaced with hydrogen, while other fuels are replaced with biomass. district heating demand switches from natural gas to hydrogen. the resulting final scenario (6th step) with 80% res in tpes and with 83% res electricity production is shown in fig. 3. a significant part of the demand is flexible, while additional demand is created from electrolysis of excess electricity from vres. excess electricity is still visible, even with significant exports. on the production side, res34 is the dominant source (10 gw wind and 30 gw pv), in addition to hydro res12. electricity production from lignite (pp+) is still significant and only fossil fuel remains in the fuel mix. the use of storage is significant and shall be analysed further. heat production and demand is shown in fig. 4. district heating demand is dominantly met via chp, hp, and boiler heat production. additional res shares might be increased with more waste heat and geothermal or solar heating. finally, grid gas demand and production are shown in fig. 5. international journal of sustainable energy planning and management vol. 32 2021 57 ilija r. batas bjelic, nikola lj. rajakovic consumption electroysors flex. storage hp export chp import res12 res34 pp+ storage 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 60.000 50.000 40.000 30.000 20.000 10.000 0 60.000 50.000 40.000 30.000 20.000 10.000 0 m w m w figure 3: electricity demand (upper) and production (lower) in the final scenario for 2050 legend: chp – combined heat and power, res12 – run-off hydro and small hydro power plants, res34 – wind and photovoltaic power plants, pp + – thermal power plants and (reservoir) hydro power plants, storage – pumped storage hydro power plant and electric transport (source: energyplanv11.2) 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 6.000 5.000 4.000 3.000 2.000 1.000 0 m w m w 6.000 5.000 4.000 3.000 2.000 1.000 0 solar hpdh for biogas dh for heating dh for cooling wasteheat/geo boiler chp elect. figure 4: district heating demand (upper) and production (lower). pp/caes 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.0001.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 m w m w 10.000 8.000 6.000 4.000 2.000 0 10.000 8.000 6.000 4.000 2.000 0 biogas co2hydro boilers chp indv+indu transport storage gasificaton storage hydrogenation import figure 5: grid gas demand (upper) and production (lower). as shown in the gas grid, demand is coupled with low temperatures during the heating season, while on the production side there is a significant amount of green hydrogen obtained from co2 hydrogenation. the result of increased res share in tpes and co2 hydrogenation, co2 equivalent emissions decline to 12 mt, which is 25% of base scenario emissions (75% decarbonisation). these results are comparable with lcdsa where 81% of emission reduction has been achieved in energy industries, 45% in manufacturing, and 37% in transport. therefore, at first glance one may say that this is less ambitious than the results of this study, but significant reductions are achieved in the sectors not covered by the energyplan model (forest, agriculture, etc.). comparing the republic of serbia to a recently published report “d7.4 modelling variability, eroi and energy intensity” shows that energy structure is similar to the russian federation due to the significant share of district heating and sector de-coupling, in which main breakthroughs might be achieved. in comparison to other developed countries and regions, serbia has a more comprehensive method of flexibilization—up to 100% res can be found in [3]. further comparisons in economic terms are possible with lcdsa but also with a study by agora-energiewende (and many others), which conclude that carbon taxing is a relevant measure for decarbonisation. this economic comparison should be based on the real cost of electricity from lignite mines and economic reality of their further operation. 58 international journal of sustainable energy planning and management vol. 32 2021 national energy and climate planning in serbia: from lagging behind to an ambitious eu candidate? those are the first published results, which have to be improved especially in the part regarding geothermal energy utilization [37], green hydrogen production [38], etc. other improvements are viable in the direction of better spatial allocation of pv rooftop resources. significant improvements are to be achieved through energy efficiency measures simulation and the synergetic effect between all of them [9]. 5. conclusions the most populated wb country, the republic of serbia, has been lagging behind the region in energy transition, failing to start the energy planning process in terms of necp, despite the numerous preparation tools available in-house, or at a request by official authority (moe). however, ambition for energy transition has recently increased and serbia adopted a negotiating position with the eu. the expected starting contribution of renewable energy in the total primary energy supply has to be raised from around 20% to around 40%. to achieve more ambitious contributions (above 40%), the sector coupling approach has been suggested on top of the currently available experiences. for the first time, a larger renewable energy share of up to 80% in the total primary energy supply scenarios was presented using energyplan for hourly simulations, and it proved to be applicable. it firstly showed a possible benefit of switching from the small hydro power plant energy policy to solar photovoltaic plants. the results suggest that there is a vast opportunity in photovoltaic integration in the vision of serbian draft necp. the next steps should be to find the optimal set of measures (including efficiency) to reach the policy objectives set in necp by comparing the costs of numerous alternative scenario simulations. furthermore, serbia has an opportunity to develop and apply a highly ambitious renewable energy action plan (even beyond 80% res in tpes), based on its own potential (solar, wind, water, biomass), which is not possible for major industrialized countries of g8 or china. the electricity currently produced from large lignite power plants, the heat produced from natural gas, transport based on oil, and industry processes demanding fossil fuels can be replaced with sustainable energy carriers. therefore, serbia, who was once an example of lagging behind in energy transition, could become the leader of energy transition in the western balkans region. a possible shortcut for the republic of serbia is to look for the low cost options in the integrated western balkans power market and regional complementarity and interdependence, rather than traditional self-sufficiency and restraint from exchanges. another shortcut could be searching for synergies among sectors using the sector coupling approach. the whole region of wb except north macedonia is lagging behind in necp preparation due to several reasons grouped around the fact that energy planning capacity was divided after the dissolution of former yugoslavia. therefore, there is a chance that if these countries work together to solve the regional problem, national necps could be created as a by-product, with significant quantifiable benefit from regional complementarities. for serbia, which is centrally positioned (comparative advantage) and has a developed electricity exchange market, this approach is highly attractive. in addition, the regional approach prevents carbon leakage, which is an expected outcome of gradual integration of contracting parties into carbon taxing schemes. 6. acknowledgment funds for i.b.b. are provided by the ministry of education, science and technological development of the republic of serbia according to the agreement on the implementation and financing of scientific research of the institute of technical sciences of sasa in 2020 (registration number: 451-03-68 / 2020-14 / 200175). the authors acknowledge the support of the “locomotion” horizon 2020 project from easme grant nr. 821105. this paper has been developed from the paper entitled “national energy and climate planning approach for the western balkans: case study republic of serbia”, presented online on tuesday june 30th 2020 during the 4th sdewes see conference in sarajevo. references [1] a. j. vuković et al., “global warming impact on climate change in serbia for the period 19612100,” therm. sci., vol. 22, no. 6, 2018. 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metres in district heating systems on energy savings and emission reduction by applying machine learning algorithms and predict how this particular system upgrade measure would affect energy consumption and emissions. the research focuses on hot water systems in croatia. the results show that the dominant variable is the installation rate of individual metres (i.e. heat cost allocators hcas) and that for maximum energy savings, a rate of 100% should be targeted within a building. in this case, a decrease in annual specific heat consumption in an average building connected to a district heating system in croatia is expected to exceed 40 kwh/m2. the developed regression models show that apartments with installed hcas could achieve a reduction in heat consumption of about 40% compared to apartments without hcas. a step towards decarbonised district heating systems: assessment of the importance of individual metering on the system level igor balena*, danica maljkovićb a faculty of mechanical engineering and naval architecture, university of zagreb, ivana lucica 5, hr-10000 zagreb, croatia b department of energy r&d, doking ltd, slavonska av. 22g, zagreb, croatia keywords district heating; decarbonised energy systems; heat cost allocators; machine learning; http://doi.org/10.54337/ijsepm.7088 1. introduction the building sector in the european union consumes about 40% of the total final energy in the eu, with about 80% of the energy in this sector being used for heating and hot water (the rest being cooling at 0.6% and electricity at 19.4%)[1]. the first major push to increase energy efficiency and reduce energy consumption came after the signing of the kyoto protocol, which produced various approaches and methods to increase energy efficiency in buildings, especially residential buildings [2]. to date, a number of models have been developed to assess the impact of applying energy efficiency measures and consumption projections in the building sector based on traditional regression methods [3] and various simulation methods [4]. in the eu, the bottom-up energy consumption model [5] is mainly used in setting legal incentives for energy efficiency. however, the main drawback is that such models are not suitable for describing non-technical impact parameters and introduce many model assumptions related to behavioural aspects of energy consumption such as demographic factors, age of users, daily schedule of space use, consumers’ willingness to pay, etc. [6]. recently, researchers have focused more on numerous non-technical factors that influence energy consumption. for example, yang et al. consider user behaviour and the level of thermal comfort [7]. in addition, nguyen et al. analyse intelligent systems for monitoring usage and controlling energy consumption in buildings [8]. cholewa et al. confirmed that the energy efficiency of existing buildings can be significantly increased by installing energy consumption control systems [9]. general mathematical techniques used for optimization under uncertainty in energy market analysis 20 international journal of sustainable energy planning and management vol. 34 2022 a step towards decarbonised district heating systems: assessment of the importance of individual metering on the system level in the analysis and simulation of heat consumption in buildings, data on the physical properties of building materials are usually available, while information on other factors influencing consumption and behavioural parameters is usually not available [16]. to date, there is no universally applicable and fully applicable method for creating an energy model for the building [17]. monicair, a dutch research project aimed at developing a model to accurately predict energy consumption in buildings, has shown that the results of models commonly used to predict consumption actually differ significantly from measured values, partly because of incorrect data on both building and heating system characteristics and partly because the influence of behavioural parameters was not taken into account in the models [18]. in poland [19], an experimental study was conducted over a seventeen-year period to assess the impact of the use of single measurement of thermal energy consumption with hca. consumption was measured in two identical groups of apartments (same entrances within the same building), so that in one group hcas were installed and in the other not. in the group with hcas installed, annual heating cost savings of about 27% were achieved. this level of savings cannot be clearly attributed solely to the impact of installing hcas, as heat consumption is influenced by a number of factors. given the increasing use and good results of energy consumption prediction analysis with certain machine learning algorithms, such as the support vectors machine [20], this paper analyses the impact of energy efficiency measures on reducing energy consumption using machine learning methodology. the specific energy efficiency measure analysed in this paper is the installation of thermostatic valves and hcas on radiators. 1.2. forecasting of heat consumption with machine learning mehmood et al. believe that artificial intelligence (ai) and big data processing (bd) will play a dominant role in future energy systems and show how ai and bd can be applied to energy efficiency in buildings to make them more energy efficient, while maintaining high levels of indoor thermal comfort [21]. previous research has shown that machine learning methods (ml), an interdisciplinary field used in the study of certain scientific phenomena using computers and statistical methods, are suitable for estimating energy consumption in buildings [22]. since the accuracy of algorithms also depends on the expertise of the person performing the modelling, an are the deterministic approach (usable within a rolling horizon scheme), stochastic programming, and robust optimization [10]. with the increase in available data on non-technical parameters of consumption, as well as the development of technologies to collect this data, the field of big data analytics has the potential to enable better understanding and modelling of energy consumption based on a large number of non-technical factors. big data analysis uses machine learning methods with base coordinate analysis and partial least squares regression methods to identify the key factors influencing energy consumption in district heating systems, electricity consumption, potable water consumption and heat losses. machine learning algorithms, especially a support vector machine, have been shown to be suitable for estimating energy consumption in buildings [11]. when looking towards the next generation district heating system (4th generation – 4gdh), the building’s heat demand must be reduced and the operation of the heating system and consumer behaviour must be adapted to be compatible with lower supply temperatures. for this to become a reality, it is necessary to study and understand how consumers can meaningfully and strategically contribute to the transition to 4gdh [12]. 1.1. individual heat metering the installation of heat cost allocators (hcas) in hot water systems is expected to reduce heat consumption because end users have the ability to control their consumption after installation [13]. according to the standard en 834: 2014, the heat cost allocator, i.e. the virtual heat sensor, is an instrument attached to a radiator to record the heat output in apartments. the hca determines only the heat consumption of each radiator as a share of the total heat consumption of the common heating system of the building. the consumption value is expressed in dimensionless “pulses” over time, recorded at each radiator. this value, divided by the total number of “pulses” of all radiators in the system over the same time period, represents the share of total consumption. although hcas do not produce direct savings, the introduction of individual consumption measurement has been shown to have a significant impact on users’ behaviour, leading them to change their habits and reduce energy consumption [14]. in contrast, users with negligible impact on their heating bills (apartments without individual consumption metering) do not consider energy savings at all. even some users with metered consumption make savings at the expense of thermal comfort and indoor air quality [15]. international journal of sustainable energy planning and management vol. 34 2022 21 igor balena, danica maljković analysis of the accuracy of models based on linear regression, artificial neural networks (ann), support vector machine, and regression trees for predicting heat use in hot water systems was performed. linear regression models were found to provide the least accurate predictions, followed by support vector machine, while ann and regression trees provided the most accurate prediction models [23]. in addition to the expert knowledge required to build models, the data sets on which the models are developed are also important for accuracy. for example, using the example of the heat consumption of a residential building in canada, high prediction accuracy was demonstrated based on the input data of outdoor temperature, solar radiation, time of day of the tenants and days of the week (weekend or workday) [24]. in addition to predicting heat consumption in water heaters in the energy sector, machine learning algorithms are also used to predict electricity consumption, with the random noise algorithm proving superior due to its robustness and low data preparation requirements prior to modelling [25]. previously published work has not evaluated the influence of user behaviour on energy consumption in district heating systems. also, the factors influencing energy consumption at the apartment-level have not been evaluated. this paper attempts to answer these questions and contribute to the general knowledge of energy planning in district heating systems. the scientific contribution of this research is the development of models to predict energy consumption and evaluate the impact of energy efficiency measures in district heating systems based on machine learning methods. the article is divided into 1. introduction, followed by elaboration of 2. materials and methods, presentation of 3. results and discussion, and ends with 4. conclusions. 2. materials and methods in this research, data on actual heat consumption in buildings were collected from the billing system of district heating companies for two distribution areas in croatia in a period of seven years (from 2011 to 2017) for households. based on the collected data and according to the researchers’ assessment, the influencing factors were defined and processed into special datasets on which the modelling of consumption was performed using machine learning methods. the experimental study was carried out with the actual data on outdoor conditions, building characteristics and thermal energy consumption. the collected parameters were analysed and their mutual influence as well as the influence of each parameter on heat consumption in hot water systems was interpreted. given the nature of the data available for this analysis, models were developed using machine learning methods, namely regression analysis and regression trees. data processing, descriptive analysis, grouping and modelling were made in the programming language r [26], using the software rstudio [27]. the models obtained in this way can be used to predict, but also to quantitatively evaluate the application of energy efficiency measures, in this particular case the installation of individual heat metering, in such a way that the effects can be accurately expressed. the analysed quantitative variables from the utility billing system in the two selected service areas consist of 20 variables in 3,845,310 observations. the dataset was reduced by regularization, that is the process of selecting a subset of variables to reduce the variability of the parameters to zero. by using regularization, a certain consistency and reproducibility is achieved in the reduction of the parameters [28]. when analysing large data sets with many variables, it is optimal to find the smallest possible subset that provides the same or similar level of accuracy. in other words, the goal is to find the smallest subset of independent variables that has an effect on the dependent variables. in this way, the model is simplified and the parameter space in which the analysis is performed is reduced, which consequently reduces the variance of the regression parameters obtained by the least squares method. simpler models are always preferred and an additional advantage in determining the smallest possible subset is the better interpretability [29]. a specific problem with the introduction of hcas in croatia occurred when some apartment owners refused to install hcas as required by law. they demanded that the old cost allocation method based on apartment area be retained. this resulted in the national law being amended so that the area of such apartments without hcas must be deducted from the total area of the building and in the cost allocation formula such apartments are entered with the surface area multiplied by 2. for the development of predictive models and the analysis of heat consumption in dwellings on an annual basis, the data subset for dwellings is selected from the entire data set and consists of the following basic variables (table 1):areaap, areabuild, temp, model. 22 international journal of sustainable energy planning and management vol. 34 2022 a step towards decarbonised district heating systems: assessment of the importance of individual metering on the system level these variables include the impact of building (and apartment) size, outdoor temperature conditions, and heating cost distribution for individual dwellings on energy consumption and thus emissions from fossil fuelbased water heaters. in addition, the data set includes the following derived variables from several basic billing system variables (table 1): specheatap,, specheatbuild, installrate, imp. it is assumed that the specific heat consumption of an apartment is strongly related to the consumption of a building, the installation rate of individual meters and the assigned number of “pulses” (if hcas are installed). previous research [11, 12, 15] indicate that enabling the end consumers to control their energy consumption leads them towards cost (energy) savings. 3. results and discussion results and discussion are presented, based on developed models and input data sets. 3.1. results the developed models enabled assessment of the individual metering installation on both apartmentand building-level. 3.1.1. influence of hca installation in apartments development of the model on apartment-level was carried out for two data sets, as follows: 1. set of all apartments (with and without hcas), 2. set of apartments only with installed hcas the linear regression model for the first data set provides heat consumption forecasts for the apartments without prior grouping according to the installation of hcas. the final regularized regression model for allocated specific heat consumption in this group of dwellings is given by: specheatap = 29 – 123 · model + 640 · imp + + specheatbuild + 80. installrate – 3.4 · temp – (1) –0.3 · areaap + 0.002 · areabuild according to this model, the most dominant variable is imp, which is the ratio between the counted “pulses” in a single apartment and the sum of all “pulses” in the building in the accounting period. the next important parameter is model. the value of this variable can be either 0 or 1, where 0 represents that the apartment has no hcas installed and 1 represents the apartment that has hcas installed. the predictive accuracy indicator r2 (a statistical measure that indicates the proportion of variance in a dependent variable that is explained by one or more independent variables in a regression model) is 0.791 for all apartments, meaning that 79% of the observations are described by this model. this level of accuracy is considered to be at the high end for predicting energy consumption. in addition to the predictions for the universe of homes, it is of interest to identify separate models for those homes that have installed hcas and those that have not. the final regularized regression model for homes with hcas installed is represented by the following equation: specheatap = –159 + 794 . imp + 0.7 . specheatbuild + +156 . installrate – 0.9 . areaap + 0.006. areabuild (2) the variables are similar to the previous model (for all dwellings), but without the variable model, since in table 1: overview of the variables used variable type unit description areaap continuous m2 surface area of an apartment areabuild continuous m2 total building surface area temp continuous °c average outside temperature over a billing period model discrete dimensionless heat cost allocation model defined by the national law; value is 0 if an apartment has not installed hcas; value is 1 if an apartment has installed hcas. specheatap continuous kwh/m2 specific heat consumption of an apartment per year specheatbuild continuous kwh/m2 specific heat consumption of a building per year installrate continuous 0% to 100% the rate of installation of hcas in a building; values from 0 (without hcas) to 1 (with 100% hcas installation) imp continuous dimensionless share of “pulses” from hcas in one apartment to the total number of “pulses” (from all hcas) in a building over a billing period, usually a month international journal of sustainable energy planning and management vol. 34 2022 23 igor balena, danica maljković this case it is a singularity. the indicator r2 for all apartments with installed hcas is slightly lower, as expected, which is the result of greater variability in the data due to behavioural influences. it is 0.759, or 76% of the accuracy with which the observations are described by this model, which again is considered to be at the high end of accuracy for energy consumption forecasting. from the predictive model in eq. (1) the following is determined: 1. in the model for the whole set of apartments, eq. (1), the regression parameter in front of the variable model reduces consumption by -123 kwh/m2 for dwellings that have installed hcas. on the other hand, at first glance unexpectedly, the regression parameter in front of the variable installrate has a positive sign and it amounts +80 kwh/m2. the resulting difference between these two variables for dwellings fitted with hcas is -53 kwh/m2, i.e. this amount is the minimum absolute difference of the specific consumption between dwellings that have and have not installed hcas, as long as the number of “impulses” for a single dwelling with hcas is under 20% of the total number of “impulses” for the building. if an apartment has allocated more than 20% of the “impulses” recorded in the building, that apartment will register an increase in consumption costs, compared to one that had not installed hcas. obviously, if the specheatap is calculated for an apartment with installed hcas, when the imp variable is over 20%, the benefit from the -123 factor next to the model is cancelled. 2. if the allocated heat consumption for two apartments of equal size (areaap) in the same building is compared, one with and one without hcas, the savings are predicted for the apartment with installed hcas. according to the model for all apartments with the forecasting accuracy of root-mean-square error (rmse – represents the square root of the difference between predicted value and the real value) that is ±16 kwh/m2, the specific annual consumption of heat energy is: • for an apartment with installed hcas 84 kwh/m2, • for an apartment without hcas 181 kwh/m2. if the largest positive error rmse for the apartment that installed hcas is +16 kwh/m2 and the largest negative error for the apartment that did not install hcas is -16 kwh/m2, the forecast of annual specific consumption for these two apartments is: • for an apartment with installed hcas 100 kwh/m2, • for an apartment without hcas 165 kwh/m2. thus, comparing these two apartments, the savings are at least 40% in favor of the apartment with hcas installed. for further interpretation, the regression tree model was used as a machine learning procedure, which, like the linear regression model, is characterized by a high degree of interpretability. from the analysis of the regression trees for the whole data set for all apartments (figure 1), it can be seen that the division variable at the root is specheatbuild with a value of 129 kwh/m2, which is interpreted as the most influential variable on the heat consumption of each apartment. if the heat consumption is below 129 kwh/m2, the second internal node is branched according to whether the apartment has built-in hcas or not, making the model variable the second influential variable for apartments with specific consumption below 129 kwh/m2. if the apartment has built-in hcas, another branching occurs depending on the value of the imp variable, which is to be expected, since a lower heat consumption is assigned for the apartments that have a low number of “pulses” in relation to the total number of “pulses” in the billing period. the annual specific consumption for apartments with installed individual meters, located in buildings with an annual specific consumption of less than 129 kwh/m2, ranges from 35 to 125 kwh/m2, with the largest number of apartments having an average annual consumption of about 99 kwh/m2. in this model, savings in apartments with hcas are also around 40% if they have no more than 4% of the total number of “pulses” within a building per year. if we consider the second branch after the division in the root, with the building-specific consumption above 129 kwh/m2, as expected, there are apartments with higher specific annual heat consumption values, ranging from 136 to 271 kwh/m2. other internal branches develop only according to the specheatbuild variable, indicating that they are most likely apartments in buildings where the hca installation rate is low or non-existent. the developed regression tree for apartments is shown in figure 1. 24 international journal of sustainable energy planning and management vol. 34 2022 a step towards decarbonised district heating systems: assessment of the importance of individual metering on the system level 3.1.2. influence of hca installation on building-level the development of the regression tree model to determine the influence of hca installation in buildings was made for the set of 350 analysed buildings. in addition to the descriptive statistics showing the difference in heat consumption at the building level before and after hca installation, it is of greatest interest in the predictive models to investigate how the installation rate (installrate) affects total building consumption. as can be seen from figure 2, the mean values of specific heat consumption for buildings that have not installed hcas are invariably higher than those for buildings that have. at the same time, in 2014, 2015 and 2016, there is a possibility that some buildings that have not installed hcas and are in the lower quartile have lower consumption than buildings with hcas. but in 2017, there are no such occurrences anymore and almost certainly all buildings that have individual consumption metering installed have lower consumption than buildings that do not. experience from the field shows that a certain adaptation and learning phase is required during which end users get used to the new way of heating operation, which usually takes up to 3 years. the impact of hca installation in buildings compared to installation in homes can be seen in figure 2 and figure 3. looking at the values in 2015, 2016, and 2017, most buildings that installed hcas reduced their heat consumption compared to those that did not (figure 2). however, when looking at the consumption of individual apartments in the same years and comparing those figure 1: resulting regression tree for all apartments in the dataset figure 2: comparison of specific heat consumption in buildings with hcas vs. buildings without hcas international journal of sustainable energy planning and management vol. 34 2022 25 igor balena, danica maljković that installed hcas to those that did not, we find that there are large outliers in the apartments with hcas installed (some apartments with high allocated consumption). this phenomenon is extremely negative for the reputation and acceptance of hcas by end users. consumers in the apartments with high allocated consumption express their dissatisfaction and desire to opt out of the district heating system. the linear regression model for the buildings was obtained without regularization and is shown with: specheatbuild = 172,89 – 5,21 · temp – 46,16 · installrate – 0,001 · areabuild (3) this model covers only those buildings that have gone through the hca installation process. the predominant influencing variable is installrate, which emphasizes the importance of a full hca installation in a building (on all heaters) to achieve maximum savings. it is also the only variable in the regression model that can be changed, and with a negative sign, its increase lowers the specific heat consumption of a building. for example, comparing two buildings of the same size, one with an hca installation rate of 0% and the other with an installation rate of 100%, the latter has a lower specific heat consumption of about 46 kwh/m2 per year (about 30%). the regression tree model allows us to interpret what to expect in a building after hca installation. the results again show that installation rate is the most influential variable affecting heat consumption in a single building (figure 4). this confirms the assumption that the installation of individual metres leads to energy savings at the building level. in the group of analysed buildings, the specific annual consumption of buildings with an installation rate of less than 7% ranges from 112 to 149 kwh/m2, depending on the average outdoor temperature during the heating season. on the other hand, buildings that have installed hcas can expect specific annual heat consumption between 93 and 112 kwh/m2. the consumption is at the lower limit when the installation rate is higher than 62%. figure 4 shows the developed regression tree for buildings with results. 3.2. discussion determining the influence of different parameters on heat consumption (e.g., temperature or installation rate) is important from an energy efficiency perspective in order to identify the most influential parameters and, based on the identified parameters, develop methods and strategies to achieve greater energy savings in a cost-optimal manner. the indications of the influence of the different parameters can be summarized as follows: • the installation of individual consumption metering (variable model) has a dominant influence on the specific heat consumption of a dwelling, which is in line with the assumptions and objectives of the energy efficiency directive [1]. • another influential parameter is the number of “pulses” of hcas in the homes where they were installed (variable imp), which is consistent with the assumptions and goals of the energy efficiency directive [1]. • next influential parameter is the installation rate at the apartment-level and at the building-level. the regression factor in front of the variable figure 3: comparison of specific heat consumption in apartments with hcas vs. apartments without hcas 26 international journal of sustainable energy planning and management vol. 34 2022 a step towards decarbonised district heating systems: assessment of the importance of individual metering on the system level installrate is +80, which indicates that if the installation rate is 100%, it will increase consumption. in that case, the regression factor in front of parameter model which is -123 multiplies 1. so, with 100% hca installation, the benefit for an apartment would be about 53 kwh/m2 and for a building about 46 kwh/m2 (30%) per year. • the last influential parameter that can be acted upon is the specific heat consumption of the building (variable specheatbuild). by applying energy efficiency measures, such as improving the technical characteristics of the building, the consumption is lowered for all apartments in the building. • for apartments with installed hcas, the apartment surface area (variable areaap) and the building surface area (variable areabuild) additionally appear as influential parameters. • when comparing apartments with installed hcas to those without them, reduction of heat consumption of 40% is expected. this is partly due to the allocation formula defined in national law and partly due to the change in behaviour of final consumers (reduction of heating temperature, switching the system off when not at home etc.). when selecting a model, a compromise should be made between the degree of interpretation and accuracy. if the goal of modelling and prediction is to obtain the most accurate model possible with some degree of interpretability, then the use of a regression tree method is suggested. looking at the influence of each variable, it is concluded that the variables related to the measurement of energy consumption in the apartments (ratio between the counted “pulses” in the apartment and the counted “pulses” in the building, measured heat at the building level) are dominant, together with the variables describing whether the flat has installed hcas and what is the installation rate in a building. if the goal is to reduce average heat consumption in all apartments, these variables should be influenced. to maximise energy savings, it is recommended that hcas be installed in all apartments and that cost-effective improvement measures be implemented on the building envelope and heating system. the parameters/variables analysed in this article were based on billing data (data from the district heating company’s bill) and weather data, and the results have a high degree of accuracy according to the methodology used. it was also found that some additional data contribute to the prediction accuracy, such as the time of reconstruction of the building and this should be evaluated in further studies. 4. conclusions in this paper, the impact of hca installation on energy consumption in homes and buildings connected to the dh system is evaluated by applying machine learning algorithms. moreover, the developed models based on machine learning methods multiple linear regression and regression trees are used to identify the most influential parameters for consumption at the flat and building level. the developed models have high prediction figure 4: resulting regression tree for the all buildings in the dataset international journal of sustainable energy planning and management vol. 34 2022 27 igor balena, danica maljković accuracy for energy consumption, compared to the classical simulation models and software. thus, these models have provided accurate quantification in evaluating the impact of individual consumption metering on reducing energy consumption in multi-occupancy buildings due to changes in occupant behaviour. positive impacts of hca installation are generally found at both the residential and building levels, but the occurrence of large outliers is possible in some cases due to behavioural aspects or technical malfunctions. individual consumption metering is most commonly implemented in buildings connected to hot water systems where multiple occupants are connected to the central heat source, which is typically equipped with a single heat metre. this central heat source can also be of a different type, such as a central boiler system or a central heat pump. in such systems, attention should be paid to the correct distribution of heat energy costs to the end users in the buildings, based on their individual metered consumption, as this motivates them to reduce their bills by controlling their energy consumption. this is complementary to other possible decarbonisation measures such as thermal retrofitting of the building envelope and the use of renewable energy sources. the models developed in this research can be used as a basis for predicting energy consumption in multifamily buildings. due to their high accuracy, they can also be used as a tool to evaluate the impact of energy efficiency measures on consumption. acknowledgements this work was presented at the 16th conference on sustainable development of energy, water and environment systems, held in dubrovnik, croatia, in october 2021. references [1] european parliament and council. directive 2010/31/eu of the european parliament and of the council of 19may 2010 on the energy performance of buildings. official journal of the european union 2010; l153:p. 13–35. 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public and industrial customers. district energy systems have flexibility in using a wide variety of energy sources as feedstock. the energy source for district heating systems is usually a steam boiler, typically fired by natural gas, although other sources are possible. hybrid systems, using a combination of natural gas, wood-waste, municipal solid waste and waste heat from industrial sources are possible, and often more economical [1]. using forest biomass, namely residues from logging activities, primary and secondary mill residues, urban wood wastes, and energy crops, in district energy systems provides the opportunity to produce heat and/or power with limited environmental impacts by utilizing renewable source of energy and increasing conversion efficiency simultaneously. district energy systems have international journal of sustainable energy planning and management vol. 04 2014 43 higher efficiencies than individual energy systems as they minimize energy wastes [2]. gustavsson and karlsson, in an investigation to choose the best energy system to heat detached homes in sweden, showed that district heating was a more efficient and less expensive system with less environmental impacts than decentralized and electric heating systems [3]. generally, differences in primary energy use, emission and cost between the energy systems analysed depend less on the fuel used in the system than on the type of system chosen. refined wood fuels lead to very high production costs and therefore are not cost-competitive with other energy sources. however, although the cost of the pellet boiler systems is higher than the cost of fossil-fuelbased local heating systems, the district heating systems and the heat pump systems, they may still be a cost-efficient alternative with low impact on global warming for houses where the use of district heating 1corresponding author e-mail: margaritis@lignite.gr international journal of sustainable energy planning and management vol. 04 2014 43–56 introduction of renewable energy sources in the district heating system of greece �������� ������ ���� ���� ���� ����������� ��������� ����� ��� ������� �� ��������� �������� �� ����� �������� �� � ���������������� ����� ��������������� �� �� ���������������� ������ �� ��� ����� ������� !" � ��#�� ��$��� ���� ��%�&'(''��� �������%�)��� � abstract the dh system of greece, mainly supported from lignite fired stations, is facing lately significant challenges. stricter emission limits, decreased efficiency due to old age and increased costs are major challenges of the lignite sector and are expected to result in the decommissioning of several lignite-fired units in the coming years. as a result, managers of dh networks are currently investigating alternative scenarios for the substitution of thermal power that it is expected to be lost, through the integration of res into the system. in this paper, the dh systems of kozani and ptolemaida are examined regarding possible introduction of res. the first study examines district heating of kozani and alternative future options for covering a part of city’s thermal load whereas the second study refers to a biomass chp plant (orc technology, 1 mwe, 5 mwth) to be powered from a biomass mixture (wood chips and straw). keywords: chp, biomass boiler, wood pellets, straw, economic analysis, feed in tariff, sensitivity analysis url: dx.doi.org/10.5278/ijsepm.2014.4.5 44 international journal of sustainable energy planning and management vol. 04 2014 introduction of renewable energy sources in the district heating system of greece or the availability of heat sources for heat pumps is constrained [3]. in europe, the share of renewable energy used in dh is constantly increasing, while the use of coal, oil and their derivatives decreases. due to the need for rationalized energy consumptions, biomass use in industrial power plants and district heating & cooling is expected to roughly double, reaching 105 mtoe in 2020, which represents about half of the gross inland consumption [4]. projections for 2050 are even higher, as high temperature industrial process heat will highly rely on biomass and industries will need to produce energy in a more environmental friendly way. the above, combined with the use of cogeneration technologies make the dh as one of the most popular sources for heating. furthermore, the obligation of reducing co2 emissions and increasing the share of renewable energy to meet european requirements is considered as one of the main driving forces for the development of the dh sector. several studies can be found in the literature, concerning feasibility and efficiency of dh systems based on biomass and natural gas. lazzarin and noro [6] analyzed the major dh natural gas based technologies (steam and gas turbines, internal combustion engine, combined cycles). they compared the cost of heat and power produced in these plants to the cost of producing the same quantity of electrical energy by a reference gas turbine combined cycle (gtcc) and the cost of heat production by modern local heating technologies using natural gas as fuel (condensing boilers, gas engine and absorption heat pumps).the conclusion of this study was that district heating cannot always be considered as the most efficient system available for producing heat and power. when using natural gas as fuel, chp systems are really the best only when the most efficient technologies (gtcc) are employed. in a study of difs et al. the economic effects and the potential for reduced co2 emissions when biomass gasification applications are introduced in a swedish district heating system are evaluated. the study shows that introducing biomass gasification in the dh system will lead to economic benefits for the dh supplier as well as reduce global co2 emissions. biomass gasification significantly increases the potential for production of high value products (electricity or synthetic natural gas, sng) in the dh system. however, which form of investment is most profitable depends highly on the level of policy instruments for biofuels and renewable electricity. biomass gasification applications can thus be interesting for dh suppliers in the future, and may be a vital measure to reach the 2020 targets for greenhouse gases and renewable energy, given the continued technology development and long-term policy instruments [6]. fahlen and ahlgren [7] study refers to the options for different levels of integration of biomass gasification with an existing ngcc chp plant, both for chp production and for production of biofuels. the economic robustness of different solutions is investigated by using different sets of parameters for electricity price, fuel prices and policy tools. in this study, it is assumed that not only tradable green certificates for electricity but also tradable green certificates for transport fuels exist. the economic results show strong dependence on the technical solutions and scenario assumptions but in most cases a stand-alone sng-polygeneration plant with district-heat delivery is the cost-optimal solution. its profitability is strongly dependent on policy tools and the price relation between biomass and fossil fuels. marbe et al. [8] compare biomass based chp based on conventional steam turbine technology with biomass integrated gasification combined cycle (bigcc) chp. the results show the clear economic advantage of this type of co-operation. under the assumed conditions for the study, an optimally sized conventional steam turbine chp unit achieves the lowest cost of electricity. however, gasification-based chp technologies generate significantly more electricity than conventional steam cycle technology, which results in higher net chp plant revenue for a pressurised gasification chp plant. in the study of borjesson and ahlgren [9], the costeffectiveness of different applications of biomass gasification is analysed. the study investigates whether, and under what conditions, combined heat and power (chp) generation in biomass integrated gasification combined cycle (bigcc) plants, as well as production of biofuels for transport in biomass gasification biorefineries, could be competitive alternatives to conventional technology options in district heating (dh) systems. results from the study indicate that biomass gasification can be cost-competitive in dh systems, but that electricity prices and subsidy levels have large influence. stoppato [10] presented the results of the energetic and economic analysis of an orc plant with nominal electric power of 1.25 mw which also produces 5.3 mw of heat. this plant is connected to the electric grid and to the local dh grid. the emissions have been evaluated and compared with those of the pre-existing situation: domestic boilers fed by natural gas or diesel oil. the analysis has shown that the present incentives lead to a not rational use of energy, since it is convenient to maximize electric production, with a total efficiency of about 15%, instead of cogenerating heat and electricity, with a total efficiency of about 80%. this is in agreement with the regulations, whose goal is only the production of electricity by renewable sources instead of fossil fuels. uris et al. [11] presented a techno-economic feasibility assessment of a biomass cogeneration plant based on an orc. from the results obtained in this paper it is possible to conclude that subcritical recuperative orc systems are technically and economically feasible in spain when selling electricity to the grid at market prices (without subsidies) and thermal energy to the consumer below market prices. in another study, of erikssona et al. [12],a consequential life cycle assessment (lca) was performed in order to compare district heating based on waste incineration with combustion of biomass or natural gas. the study comprises two options for energy recovery (combined heat and power (chp) or heat only), two alternatives for external, marginal electricity generation (fossil lean or intense), and two options for the alternative waste management (landfill disposal or material recovery). the results indicate that combustion of biofuel in a chp is environmentally favorable and robust with respect to the avoided type of electricity generation and waste management. a natural gas fired chp is an alternative of interest if marginal electricity has a high fossil content. however, if the marginal electricity is mainly based on non-fossil sources, natural gas is in general worse than biofuels. truong and gustavsson [13] found that with smaller district heat production systems the district heat production cost increases and the potential for cogeneration decreases. district heat production units are chosen based on the scale and variation of heat demand, the local availability and costs of energy sources, the investment cost of each technology, etc. district heating production systems (dhss) with co/polygeneration of products other than heat, provide primary energy as well as environmental and cost benefits. in small-scale dhss, which are common in the existing swedish dhss, there are fewer technical options other than heat-only boilers due to the high specific investment cost under the small installed capacity of non-heat only boilers. of the considered costs and conversion efficiencies of analysed district heat production units, cogeneration options are less attractive if the value of coproduced electricity from these plants is equivalent to that from stand-alone power plants. this observation is due to the high specific investment these technologies require compared to heatonly boilers at a small scale. a renewable-based district heat production system can be feasible as long as socialpolitical contexts influence the use of non-fossil fuels. moreover, along with change in fuel price, technological performance and investment costs, changes in heat load profile may influence the selection of technology for new district heat production units and the overall district heat production cost. in this paper, two district heating networks of greece based on fossil fuel (lignite) are examined regarding alternative options for covering a part of the nearby cities’ thermal loads (kozani and ptolemaida). dh managers in greece are particularly interested in heat and/or chp production from renewable energy sources, which will allow the companies to continue to provide services to their customers with a minimum environmental impact. so, different technologies and alternative fuels are assessed in order to choose the most cost efficient solution for these networks. the investigation begins with the calculation of the technical parameters through the commercial thermodynamic simulation tool ipsepro [14] and continues with the financial assessment via common economic indices. the novel feature which completes the analysis and pushes it one step further than the available literature is the consideration of a highly mutable politico-economic environment such as the greek one, by examining the impact of new (dramatically lower) fit values to come unexpectedly into force by a new bill on the examined cases. 2. methodology in the next paragraphs the techno economic data for both dh systems are analysed and the basic assumptions are international journal of sustainable energy planning and management vol. 04 2014 45 nikolaos margaritis, dimitrios rakopoulos, evangelia mylona and panagiotis grammelis given according to the requests of dh managers. in the analysis of ptolemaida dh system, the power plant simulator ipsepro was used in order to yield the critical technical parameters, whereas in the examined scenarios of kozani dh system typical technical parameters values were taken due to being in a much more preliminary stage. the commercial simulation tool ipsepro enabled the optimization of the thermodynamic cycle of ptolemaida’s case. 2.1. techno economic data for dh in kozani three different scenarios for covering a total thermal demand of 70 mwth are analyzed: • scenario k1: natural gas a natural gas boiler, producing useful thermal energy of 70 mwth. • scenario k2: biomass chp two chp biomass boilers (of 70 mwth fuel thermal input each) with steam turbine unit, producing a total of 70 mwth and 35 mwe. useful thermal efficiency is taken equal to 50%, while electric efficiency is taken equal to 25%, typical values for this kind of installations [15]. • scenario k3: biomass boilers -two biomass boilers of 35mwth useful thermal output each, producing useful thermal energy of 70 mwth in total. in both biomass scenarios k2 and k3, the boilers are fed by a fuel mixture of 70% wood pellets and 30% straw (on a thermal basis).this specified biomass mixture was an assumption dictated by dh company of kozani due to expected favorable access to this kind of fuel. on the one hand, it is a common practice to combine 70–80% woody biomass with 30-20% herbaceous one, in order to lower the mixture price with the latter, but without posing extreme boiler requirements as e.g. in a 100% straw-fired boiler. on the other hand, pellets were chosen as the base woody biomass fuel (instead of e.g. chips) because the chp plant of kozani will entail large quantities of biomass, impossible to be covered by the local market, so the import of pellets seems more feasible. biomass and natural gas were the two most favourable fuels according to the requests of dh managers. although lignite will keep on being the main fuel option in greece in the near future, this study focused on environment-friendly alternatives with no lignite at all, such as biomass and to a lesser extent ng. regarding scenario k2 (biomass chp plant), the dimensioning and running are based on the heat demand, which after all is by default the main objective of both dh companies under examination, that have a social character and are connected to the respective municipal authorities. in summer, when there is no heat demand, the chp plant will run as only power producing plant, getting solely the revenues from the electricity production. two financing schemes are being examined. the first one consists of 20% own capital and 25% loan. the second one includes 30% own capital and 15% loan. in both of them, the subsidy is 55%. the construction time is assumed to be 2 years, while subsidy’s payment is made in two installments: 50% during the first year of the construction phase, and rest 50% during the second year. the project life is assumed to be 25 years, while the residual value of the investment is not included in the analysis, as there will be no liquidation at the end of the analysis period. main financial parameters and fuels cost reduced to thermal energy are presented in table 1. natural gas price accounts for 13.12 € /gj [16] while average prices for wood pellets and straw are 185 and 75 € /tn respectively (dictated by the dh company of kozani, according to budgetary tenders from various biomass suppliers). regarding loan duration and loan, tax and depreciation rates, typical values (dictated by the dh company of kozani) are selected for the scenarios. main income due to the operation of the new dh plant comes either from heat sale (k1: natural gas and k3: biomass boilers) or from heat and electricity sale (k2: biomass chp). selling prices are given also in table 1. the selected three scenarios are assessed concerning crucial economic indices such as net present value (npv), internal rate of return (irr) and payback period. a sensitivity analysis is also conducted regarding the selling price of thermal energy to citizens and the cost of biomass fuel. according to the dh company, the main criterion for the investment to be sustainable is the expected irr values to be above 12%. 2.2. techno economic data for dh in ptolemaidas the scenario examined for ptolemaida city is a biomass fired boiler, for the cogeneration of heat near to 5 mwth and power marginally lower than 1 mwel (p: biomass orc chp). the heat is supplied to the district heating network of the city, with supply/return temperatures equal to 95/65 °c respectively and pressure equal to 25 bar. the magnitude of power output was chosen in order to achieve favorable feed in tariff 46 international journal of sustainable energy planning and management vol. 04 2014 introduction of renewable energy sources in the district heating system of greece (fit) and easier licensing procedures. the most favorable technology for this order of magnitude small scale industrial application has proved to be the organic rankine cycle (orc) [17, 18, 19] a clausius-rankine cycle is adopted, using an organic working fluid instead of water-steam, while thermal oil is used as heat carrier between the boiler and the heat&power production circuit. the heat is supplied to the dh network during the 200 days of winter, while electricity is sold to the power grid operator during the whole year. the availability of the plant is considered to be equal to 90%. the fuel is a biomass mixture of 80% wood chips and 20% straw (on a thermal basis). wood chips are chosen as the base woody biomass fuel, because unlike kozani biomass cases, ptolemaida chp plant is a small scale plant, entailing much smaller biomass quantities than the kozani one, therefore the local market has the capacity to cover the needs for wood chips.the properties of the 2 fuels are provided in table 2. the biomass chp plant is financially evaluated by economic indices, i.e. npv, irr and payback period, taking into account the income from electricity and heat, the fuel cost and various operating&maintenance costs. the detailed parameters used in the techno-economic analysis are presented in table 3. it is to be noted that the table data were derived from official budgetary technical and financial quotations by several manufacturers, while the table assumptions for fuel costs and financing parameters were dictated by the dh municipal company of ptolemaida after diligent market search. 3. results 3.1. dh network of kozani 3.1.1. economic evaluation based on the techno economic data presented in paragraph 2.1, the economic evaluation of the three scenarios was conducted. in table 4 total investment international journal of sustainable energy planning and management vol. 04 2014 47 nikolaos margaritis, dimitrios rakopoulos, evangelia mylona and panagiotis grammelis table 1: financial parameters and fuels cost for kozani dh system. parameter value unit loan duration 15 years loan interest rate 6.5 % depreciation rate for equipment 10 % depreciation rate for infrastructures 5 % tax rate 26 % discount rate 5 % fuel cost unit natural gas 47.23 € /mwh-th biomass (70% wood pellets + 30% straw) 31.34 € /mwh-th sources of income (official values) cost unit electricity selling price-fit 150 € /mwh-th heat selling price (current price of company) 43.50 € /mwh-th table 2: fuels properties for p: biomass orc chp. wood chips straw proximate analysis ash % w.t. (ar) 1.62 7.55 moisture 40.00 8.45 volatiles 49.20 5.55 fixed c 9.18 8.45 net calorific value ncv kj/kg (ar) 10,63 6,03 ultimate analysis c 53.13 7.76 h 5.96 5.75 n 0.31 0.46 o w.t. (daf) 40.54 5.64 s 0.04 0.12 cl 0.02 0.27 48 international journal of sustainable energy planning and management vol. 04 2014 introduction of renewable energy sources in the district heating system of greece table 3: economic parameters for p: biomass orc chp. value unit 1. fuel wood chips price 80 € /tn straw price 60 € /tn mixture price reduced to ncv 24.37 € /mwh-th 2. techno-economic total investment cost 6.0 thousand € investment lifetime 20 years residual value 0 thousand € various annual operating costs: personnel 160 thousand € general o&m costs 1 % of capex expendables 1 % of capex insurance 0.5 % of capex contigencies 2 % of other costs 3. energy market (official values) electricity selling price fit 230 € /mwh-el heat selling price (current price of company) 37.74 € /mwh-th 4. financing own capital 40 % subsidy 0 % loan 60 % loan duration 10 years loan interest 8 % type of loan dose constant constant/variable grace period 0 years 5. general financial information inflation 2 % discount rate 8 % tax rate 30 % vat not included depreciation rate 10 % table 4: investment, operating costs (plant’s lifetime) and investments indices. irr payback period scenario investment cost operating cost npv (%) (years) loan 25% (a scheme) k1 −47.10 mil. € – >25 k2 88.85 mil. € 16.15 9 k1 natural gas 16.14 mil. € 15.66 mil. € k3 18.16 mil. € 18.18 8 loan 15% (b scheme)k2 biomass chp 186.97 mil. € 39.10 mil. € k3 biomass boilers 26.60 mil. € 10.35 mil. € k1 −46.59 mil. € – >25 k2 92.59 mil. € 14.89 9 k3 18.69 mil.€ 16.79 8 and operating costs are presented and also results of financial analysis are given in terms of npv, irr and payback period for two loan shares (25% and 15%). in scenario k1: natural gas boiler, all financial indicators are negative, so this scenario cannot be considered sustainable. in scenariok2: biomass chp, irr and npv values indicate a promising investment even though its high cost. similarly, in scenario k3: biomass boilers, all indices are positive and make a viable investment. so, according to dh company of kozani requirements, scenario k2: biomass chp and scenariok3: biomass boilers are considered profitable, presenting irr values that exceed the desirable threshold of 12%. 3.1.2. sensitivity analysis a sensitivity analysis was also conducted in order to have a complete picture of these investments. the sensitivity analysis examines two critical variables: the selling price of thermal energy and the cost of biomass fuel, as they have direct impact on the investment characteristics. a. selling price of produced thermal energy initially the cost of thermal energy produced by a domestic oil boiler with an efficiency of 92% is calculated in order to have an idea of the current cost benefit for citizens using the district heating system. the specific production cost per unit of thermal energy, increased by 3% due to boiler maintenance costs, amounts to 143.81 € / mwh-th, taking into account that average oil price in greece is about 1.28 € /lt (may 2014). according to the pricing policy of the company a discount rate of at least 25% compared to the equivalent costs of heat production from oil is mandatory. the selling price of thermal energy today is 43.50 € / mwhth, so the discount rate in relation to the specific cost of domestic production from oil is 69.75%.the dh company of kozani wishes to maintain its pricing policy, which takes into consideration the social nature of the project. through this policy, it became possible the penetration of district heating during the first years of its operation and the maintaining of its client base throughout the duration of its operation. for discount rates from 69.75% to 25%, a full financial analysis for the three scenarios of the study was made keeping fuel cost unchanged. for scenario k1 – natural gas boiler, the sensitivity analysis indicated that the selling price of thermal energy should increase in order for the investment to be profitable. for financial scheme a, the selling price of thermal energy for which irr takes the value of 12% is 58.06 € /mwh-th (see figure 1). this means a price increase of 33.47% compared with the current price (43.50 € /mwh-th).similarly, for financial scheme b, the selling price of thermal energy for which irr takes the value of 12% is 58.13 € /mwh-th. this means a price increase of 33.63% compared with the current price (43.50 € /mwh-th). for scenario k2 – biomass chp, it is noticed that the investment is profitable even for the current selling price of thermal energy (see table 4). for both financial schemes, there is no need for price increase of thermal energy as long as irr is above 12%. for scenario k3 – biomass boilers, it is noticed that the investment is profitable even for the current selling price of thermal energy, with higher irr and a bit lower payback period compared to scenario k2 (see figure 2 & table 4). b. cost of biomass fuel in this sensitivity analysis, the variation range of biomass and natural gas cost was set at ±20% of the baseline value (31.34 & 47.23 € /mwh-th respectively), keeping stable the selling price of thermal energy at 43.50 € /mwh-th. for scenariok1 – natural gas boiler, the results of the analysis showed that in case of an increase or decrease of natural gas price, the investment remains unprofitable with negative npv values. for scenario k2 – biomass chp, the results of the analysis showed (table 5) that in case of a potential increase in price of biomass up to 5% for financial schemes a and b the investment remains sustainable with irr above 12%. international journal of sustainable energy planning and management vol. 04 2014 49 nikolaos margaritis, dimitrios rakopoulos, evangelia mylona and panagiotis grammelis 2222335 14 25 0 20 40 p a yb a ck p e ri o d ir r % 60 80 100 120 140 160 180 −100 −50 0 50n p v 100 150 200 250 40 50 60 70 80 90 100 110 heat�selling�price (€/mwh‐th) financial�scheme�α npv (mil.€) payback period irr% figure 1: sensitivity analysis regarding heat selling price (k1: natural gas boiler). for scenario k3 – biomass boilers, the results of the analysis showed that in case of an increase in price of biomass up to 5%, the investment is sustainable with irr above 12%. in the opposite case of price reduction of biomass, the investment is getting of course even better. 3.2. dh network of ptolemaida 3.2.1. technical layout optimal thermodynamic cycle based on the technical demands presented in paragraph 2.2 and on the technical specifications of the major components (boiler, turbogenerator set, heat exchangers for heat recovery) as provided by manufacturers’ tenders, the optimal thermodynamic cycle configuration, in terms of (primarily) electrical and (secondarily) thermal efficiency, was elaborated and is presented in figure 3. the plant’s layout was simulated with the process simulation software ipsepro [14]. the basic equipment consists of the thermal oil boiler, the power generation circuit (orc) and the district heating section (i.e. the interface between the orc and the dh network). the thermal oil boiler circuit uses solutia therminol 68 as heat transfer fluid from boiler to orc and is composed of a high temperature thermal oil loop 260/315 °c and a low temperature thermal oil loop 155/260 °c. it also includes exhaust gas thermal oil heat exchangers, a biomass combustor and an air preheater with exhaust gas (luvo). the power generation circuit (orc) uses silicone oil (mdm) as organic working fluid and comprises thermal oil organic fluid heat exchangers, an organic fluid turbine (with inlet/outlet operational parameters: 6 bar + 248 °c / 0.23 bar + 217 °c), an asynchronous generator 999 kwel and a recuperator. the dh section (i.e. the interface between the orc and the dh network) includes a water – cooled condenser exploiting turbine outflow for the dh demands in wintertime and an air – cooled condenser for the surplus heat in summertime or in wintertime partial load demand. the main results of the plant’s heat balance are summarized in table 6. 50 international journal of sustainable energy planning and management vol. 04 2014 introduction of renewable energy sources in the district heating system of greece 2222233468 0 20 40 60 80 100 120 140 160 180 200 0 50 100 150 200 n p v 250 300 40 50 60 70 80 90 100 110 120 heat�selling�price��(€/mwh‐th) financial�scheme�a p a yb a ck p e ri o d ir r % npv (mil.€) payback period irr% figure 2: sensitivity analysis regarding heat selling price (k3: biomass boilers). table 5: sensitivity analysis regarding cost of biomass for scenarios k2: biomass chp and k3: biomass boilers. k2 biomass chp k3 biomass boilers financing scheme a payback payback cost of biomass period period irr (€ /mwh-th) npv (€ ) (years) irr (%) npv (€ ) (years) (%) 20% 37.61 −2.10 mil. € >25 4.72 −8.07 mil. € >25 −2.02 15% 36.04 20.68 mil. € 18 7.68 −1.50 mil. € >25 3.82 10% 34.47 43.45 mil. € 14 10.54 5.07 mil. € 17 8.80 5% 32.91 66.08 mil. € 11 13.34 11.59 mil. € 10 13.49 0% 31.34 88.85 mil. € 9 16.15 18.16 mil. € 8 18.18 −5% 29.77 111.62 mil. € 7 18.97 24.73 mil. € 6 22.95 −10% 28.21 134.25 mil. € 6 21.80 31.25 mil. € 5 27.82 −15% 26.64 157.02 mil. € 6 24.69 37.82 mil. € 4 32.88 −20% 25.07 179.80 mil. € 5 27.63 44.39 mil. € 4 38.09 heat selling price equal to 43.50 € /mwh-th 3.2.2. economic evaluation based on the techno economic data and assumptions of paragraph 2.2 and the technical results of paragraph 3.2.1, the overall investment indices are deduced and presented in table 7, while figure 4 depicts the evolution of the cumulative discounted cash flow over time. therefore this is a moderately profitable investment, eligible to jessica (joint european support for sustainable investment in city areas, [20]) funding mechanism. the application that ptolemaida dh company submitted for entering jessica included the financing scheme of table 8, which results in a quite profitable investment. 4. discussion recently in greece, the ministry of environment, energy & climate change (ypeka) published (7/3/2014) a bill entitled “provisions on the international journal of sustainable energy planning and management vol. 04 2014 51 nikolaos margaritis, dimitrios rakopoulos, evangelia mylona and panagiotis grammelis silo district heating air coole d biomass air mass(kg/s) p(bar) t (°c) h (kj/kg) economizer lt economizer ht oil boiler lt thermal oil loop ht thermal oil loop 1.2300 turbine and generator recuperator 193.795.523 1.05 180 156.794.929 1.05 154.34 32.334.929 1.05 3 1.948 −69.859 0 0.21 100.53 27.46 0.21 108.620 0.22 105.94 0 15.1520 1.007 40.4250 1.007 40 15 399.8638.98 25 95 274.1338.98 25 65 274.1338.98 25 65 274.1638.98 25.2 65.003 399.86 94.998 38.98 25 −1.201 1397.6 1158.6 5.523 1.05 −69.85927.46 0.21 100.53 −35.37 25.2974.929 1 25 −0.3399 280.14.423 1.5 155 3.274 650.336.6 2 315 280.14.423 1.5 155 275 304.865.523 1.05 280 491.85.523 1.05 442.66 650.236.6 1.5 315 549.936.6 1.5 732.315.523 1.05 642.6 48.50.609 25 133.8624.74 6.1 204.95 311.072.719 6.1 236.9 −68.7292.719 6.3 100.94 513.64.423 1.5 260 513.636.6 1.5 260 151.4127.46 6.1 212.95 1157 108.6227.46 0.22 105.94 291.1527.46 0.23 216.66 333.7327.46 6 248.17 −68.72924.74 6.3 100.94 333.7327.46 6 248.17 280 155 4.423 1 650.336.6 2 315 −69.859 100.53 table 6: overall heat balance results. value unit fuel biomass mixture consumption 2.19 t/h wood chips consumption 1.88 t/h straw consumption 0.31 t/h biomass mixture heat input 6.94 mwth power net power 0.99 mwel net electric efficiency 14.39 % dh useful thermal output 4.90 mwth thermal efficiency 70.62 % dh water mass flow rate 38.98 kg/sec figure 3: heat & mass balance diagram. table 7: investment indices. parameter value unit npv 639.28 thousand € irr 11.64 % payback period 12.3 years 1000 500 −500 −1000 −1500 −2000 −2500 −3000 0 0 1 c u m u la tiv e d is co u n te d c a sh f lo w ( th o u sa n d e u ro ) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 figure 4: investment evolution over the years. rectification of the special account of article 40 of law 2773/1999 and other provisions” [21]. according to this, a review of fits for electric power from operating res and cogeneration stations is foreseen. in the table 9 the new fit values are presented. 4.1. impact on kozani chp plant based on these changes, scenario k2: biomass chp must be reviewed, in order to see how the investment is affected by the change of the selling price of electricity. the old fit was 150 € /mwh-el and according to the new deal is reduced by 10%. the effect of this change is summarized in table 10. it is noticed that the investment is no more profitable for dh company of kozani, presenting an irr lower than 12% and a higher payback period in relation to the previous fit. moreover, the selling price of thermal energy for which the irr is set to 12%, was determined. for financial scheme a, the selling price of thermal energy for which irr takes the value of 12% is 48.25 € /mwh-th. this means a price increase of 10.92% compared with the current price (43.50 € /mwh-th). for financial scheme b, the selling price of thermal energy for which irr takes the value of 12% is 49.68 € /mwh-th. this means a price increase of 14.21% compared with the current price (43.50 € /mwh-th). 4.2. impact on ptolemaida chp plant. the impact of the new fit (198 € /mwh-el instead of the so far applied one, i.e. 230 € /mwh-el) on the investment of ptolemaida’s chp plant (with the financing scheme of table 8) is shown in table 11. thus, the investment is damaging under the current circumstances. in order for the investment to become profitable it is essential that a state subsidy is provided, e.g in the context of the forthcoming partnership agreement [22], although the subsidy will entail an even lower fit (i.e. 180€ /mwh-el). by keeping constant own capital and bank loan portions, the economic analysis was focused on the magnitude of the necessary subsidy and it was deduced that a subsidy of at least 52 international journal of sustainable energy planning and management vol. 04 2014 introduction of renewable energy sources in the district heating system of greece table 8: financing scheme and new investment indices with jessica. parameter value unit financing scheme with jessica own capital 20 % subsidy 0 % bank loan 10 % jessica loan 70 % bank loan interest 8 % bank loan duration 10 years jessica loan interest 3 % jessica loan duration 10 years investment indices with jessica parameter value unit npv 1,407.79 thousand € irr 21,92 % payback period 5.5 years table 9: latest review of fit values for chp stations. currentfit new fit variation (%) (€ /mwh-el) (€ /mwh-el) chp biomass _> 5 mw 150 135 −10.0 chp biomass _< 1 mw 230 198 −13.9 40% is needed in order for the investment to become satisfactorily profitable. such a financing scheme is presented and the corresponding overall investment indices are shown in table 12. 5. conclusion & outlook introduction of res in dh system of greece has much potential but each scenario must be carefully evaluated in terms of feasibility before final implementation. regarding dh system of kozani, the results of the economic evaluation indicated that all three scenarios international journal of sustainable energy planning and management vol. 04 2014 53 nikolaos margaritis, dimitrios rakopoulos, evangelia mylona and panagiotis grammelis table 10: effect of new fit in scenario k2: biomass chp. fit (€ /mwh-el) npv (€ ) irr (%) payback period (years) loan 25% (a scheme) 150 88.85 mil. € 16.15 9 135 36.33 mil. € 9.76 16 loan 15% (b scheme) 150 92.60 mil. € 14.89 9 135 40.01 mil. € 9.55 15 table 11: investment indices with new deal’s fit. parameter value unit npv −516.89 thousand € irr 1.87 % payback period – table 12: financing scheme and investment indices with 40% subsidy and jessica. parameter value unit financing scheme with subsidy and jessica own capital 20 % subsidy 40 % bank loan 10 % jessica loan 30 % bank loan interest 8 % bank loan duration 10 years jessica loan interest 3 % jessica loan duration 10 years investment indices with subsidy and jessica parameter value unit npv 206.15 thousand € irr 11.85 % payback period 10.6 years being studied to cover the future thermal load can potentially become viable. scenario k1 with natural gas boiler seems unattractive since an increase in heat selling price above 33% is required in order to become viable. moreover, a reduction up to 20% of natural gas cost won’t have any significant effect regarding sustainability of the project. scenario k2 with biomass chp, although it’s a high cost investment, can be profitable with an irr above 12% even in the worst case that cost of biomass is increased by 5%. however, if the new, lower fit is applied (135 € /mwh-el), then the investment becomes unattractive with irr lower than 12% and high payback period (above 15 years). in this case, in order for the investment to become satisfactorily profitable, an increase of the heat selling price at least 10.92% (48.25 € /mwh-th) is required. as far as scenario k3 with biomass boiler (only for heat) is concerned, it is considered a good alternative for dh system of kozani, because it’s a low cost investment and remains profitable even in the case that biomass price is increased up to 5%. finally, chp plant for dh system in ptolemaida seems a promising investment especially when using the jessica funding mechanism (irr = 21.92%, payback period of 5.5 years). unfortunately, the impact on this investment is high under the current circumstances and the new fit to be applied. in this case, in order for the investment to become satisfactorily profitable, a subsidy of at least 40% is required (irr = 11.85%, payback period of 10.6 years). in conclusion, introduction of res in dh system of greece is a challenging task that dh operators have to manage in the future in order to increase the low carbon heat production. this task is getting even more difficult when country’s economic conditions and motivation for development of res are highly unstable. therefore, the dh operators need to be always ready to use several financial tools, such as jessica or/and a state subsidy, being at the same time prepared for a possible change in their pricing policy (e.g. increase in the heat selling price). finally, they need to bear in mind a potential modification of their initial technical planning in order to reduce the risk, e.g. by going from the chp option to a solely thermal production option so as to decrease the capex, in case electricity fits are no more favorable. acknowledgements dh company of kozani and ptolemaida provided useful data regarding the operation of the networks and their future thermal needs. abbreviations ar: as received capex: capital expenditure chp: combined heat & power daf: dry and ash free dh: district heating fit: feed in tariff gtcc: gas turbine combined cycle irr: internal rate of return jessica: joint european support for sustainable investmentin city areas lca: life cycle analysis npv: net present value ngcc: natural gas combined cycle o&m: operations & maintenance orc: organic rankine cycle res: renewable energy sources vat: value added tax references [1] marc a. rosen, minh n. le, ibrahim dincer, “efficiency analysis of a cogeneration and district energy system”, applied thermal engineering 2005; 25:147–159. http://www.sciencedirect.com/ science/article/pii/s135943110400124. 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 33 2022 1 *corresponding author – e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 33 2022 1–2 abstract this editorial introduces the main findings from the 33rd volume of the international journal of sustainable energy planning and management. first madsen favourably reviews verbruggen’s book pricing carbon emissions: economic reality and utopia. this is followed by analyses of the role of islands in the energy transition taking a starting point in samsø, the orkneys and madeira and subsequently a strategic niche management-based investigation of the transition of a nigerian community. then the role of the discount rate is explored taking the example of power production expansion in ecuador. lastly, the feasibility of landfill gas is explored under ukrainian conditions. editorial international journal of sustainable energy planning and management vol 33 poul alberg østergaard* and rasmus magni johannsen department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords pricing carbon emission; landfill gas in ukraine community transition; energy islands; osemosys and ecuador; http://doi.org/10.5278/ijsepm.7103 1. book review madsen [1] introduces a new type of content to the international journal of sustainable energy planning and management – the book review. for this issue, madsen has reviewed verbruggen’s new book pricing carbon emissions: economic reality and utopia [2] which taps into the ongoing discussion of how to ensure the transition to carbon-neutral energy systems. is carbon pricing indeed a feasible means of ensuring that the correct steps are incentivised and taken? in his review, madsen concludes, that “if you wish to know more about why ‘pricing carbon emissions’ as a general policy is the wrong way to go, the book by verbruggen is required and indispensable reading”. 2. ordinary articles marczinkowski [3] investigates the role of islands in the energy transition. not specifically so-called energy islands, but rather in general how islands should be treated and how islands on the other hand can contribute on a wider scale. using three island cases – samsø in denmark, the orkneys in scotland and madeira in portugal – and drawing on the authors’ previous island work on conditions on islands as reported in [4] and [5], marczinkowski reflects on their role in the energy transition. butu and stracham [6] draw on strategic niche management to investigate the planning and implementation of a community-based energy transition project in a rural community of nigeria. based on interviews with a diverse selection of actors representing policymakers, developers, investors, and local community members, the work identifies a lack of engagement from all relevant actors, and in general a “fragmented effort” of the actors. heredia fonseca & gardumi [7] apply the osemosys [8] modelling system to assess the influence of applying separate discount rates when assessing power expansion and transition scenarios. they find, for instance, that renewable technologies can contribute significantly in the mediumand long-term, but this is mainly expected to be from hydropower, with only minor contributions 2 international journal of sustainable energy planning and management vol. 33 2022 editorial international journal of sustainable energy planning and management vol 33 transition of madeira island-electrification, smart energy and the required flexible market conditions. energies 2020;13. http://doi.org/10.3390/en13174434. [5] marczinkowski hm, østergaard pa, djørup sr. transitioning island energy systems—local conditions, development phases, and renewable energy integration. energies 2019;12. http://doi.org/10.3390/en12183484. [6] butu ai, strachan p. navigating pathways for community renewable electricity in rural areas: exploring stakeholders’ perspectives on shape community project. int j sustain energy plan manag 2022. http://doi.org/10.5278/ijsepm.6813. [7] heredia fonseca r, gardumi f. assessing the impact of applying individual discount rates in power system expansion of ecuador using osemosys. int j sustain energy plan manag 2022. http://doi.org/10.5278/ijsepm.6820. [8] howells m, rogner h, strachan n, heaps c, huntington h, kypreos s, et al. osemosys: the open source energy modeling system. an introduction to its ethos, structure and development. energy policy 2011;39:5850–70. http://doi.org/10.1016/j.enpol.2011.06.033. [9] kurbatova t. economic benefits from production of biogas based on animal waste within energy co-operatives in ukraine. int j sustain energy plan manag 2018;18. http://doi.org/10.5278/ijsepm.2018.18.5. [10] kurbatova t, sidortsov r. trash to hryvnias: the economics of electricity generation from landfill gas in ukraine. int j sustain energy plan manag 2022. http://doi.org/10.5278/ijsepm.6707. from other technologies such as pv and wind power. the authors furthermore conclude that the potential expansion of medium and large-scale hydropower stations in ecuador is not sensitive to the applied discount rate. kurbatove follows up on her 2018 paper on biogas [9] with a new analysis of the economic feasibility of electricity generation from landfill gas in ukraine together with colleague sidortsov [10]. the team finds good prospects for the technology with relatively low production cost for electricity. however, other renewable energy sources are still favoured over landfill gas for which the authors identify several potential areas for further investigation including access to investment capital, regulatory stability, incentives, current policy and the ongoing conflict on ukrainian soil. references [1] madsen pt. a review of “pricing carbon emissions. economic reality and utopia” by aviel verbruggen. int j sustain energy plan manag 2022;33. http://doi.org/10.5278/ijsepm.7056. [2] verbruggen a. pricing carbon emissions: economic reality and utopia. 2021. http://doi.org/10.4324/9781003173816. [3] marczinkowski hm. rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally. int j sustain energy plan manag 2022;33. http://doi.org/10.5278/ijsepm.6970. [4] marczinkowski hm, barros l. technical approaches and institutional alignment to 100% renewable energy system international journal of sustainable energy planning and management vol. 31 2021 79 *corresponding author e-mail: karl.vilen@chalmers.se international journal of sustainable energy planning and management vol. 31 2021 79–94 abstract on a national level, sweden has announced plans to have no net emissions of greenhouse gases in 2045. furthermore, gothenburg, a city in southwestern sweden, has plans to phase out the use of fossil fuels in its heat and electricity production by 2030. given that the development of a district heating (dh) system under dynamic and different climate policies and climate goals is a nontrivial problem, this study investigates two different policies of phasing out fossil fuels, either by introducing a fossil fuel ban, or by increasing the carbon tax to phase out the fossil fuel use in 2030 or 2045. the effects of the different phase out strategies on the future development of the existing dh system in gothenburg has been investigated. the study is based on a system-wide approach covering both the supply and demand side developments. a times cost optimizing energy system model representing the dh system of gothenburg was developed and applied for calculations. the results show that the total amount of heat supplied by the dh system is unaffected by the phase out policies. the amount of natural gas used to supply the dh system is however dependent on what kind of phase out policy is implemented. a yearly increasing carbon tax policy introduced in 2021 phases out fossil fuel use earlier than the target year, while a ban phases out the fossil fuel only from the actual target year. the impact of local climate policy on district heating development in a nordic city – a dynamic approach karl vilén*a, sujeetha selvakkumaranb, erik o. ahlgrena a division of energy technology, department of space, earth and environment, chalmers university of technology, hörsalsvägen 7b, se-41296 gothenburg, sweden b sustainable built environment, rise research institutes of sweden, sven hultins plats 5, se-41258 gothenburg, sweden keywords local climate policy; district heating; heating system; energy system modelling; times; http://doi.org/10.5278/ijsepm.6324 1. introduction sweden has formulated goals for greenhouse gas emission reduction where the goal for 2045 is to have zero net emissions [1]. apart from national goals, there are cities which have their own goals as to how much the emissions should be reduced. the combination of an almost entirely fossil free power grid and a decreasing share of fossil fuels used in the district heating (dh) sector has resulted in co2 emissions from electricity and dh accounting for only about 8% of the annual emissions in sweden. in the 70’s, the dh was an oil dependent heat source, but today is mainly a low carbon heat source [2]. between 1990 and 2018 the production of dh has increased by 50% while simultaneously the use of fossil fuels in dh and electricity production has decreased by 69% [3]. even though emissions from heat and electricity are relatively low in sweden compared to other countries, if the climate goals are to be achieved, the heating sector needs to continue its decrease of emissions in the future. energy efficiency measures have a role to play in reaching 100% renewable energy and dh systems have an important role to play in increasing the energy efficiency [4]. thus, exploring impacts of climate goals on future development of dh is essential. in a recent study published by irena [5], it is found that most countries do not have climate policies to address the transition to a sustainable and climate 80 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach neutral heating system. of the countries which do have climate policies, the majority are in the eu. policies supporting biomass use in the eu are investigated in [6], where it was found that there are several different support schemes in place promoting biomass use, but the schemes implemented are not similar across the eu countries. ref [5] also finds that some local climate policies are more ambitious than national climate policies. in [7], it is investigated how renewable energy incentive policies diffuse between countries. there has been a large increase of number of policies between 2005 and 2015 for many policy types, and the average number of policies in countries of all income levels has increased. the authors showed that international socialization, as well as learning, showed positive effects on policy adoption. they also found that domestic factors, such as energy security and interest groups, also play an important role. climate policies for the heating sector can be generally divided as financial/economic policies and regulatory policies. financial/economic policies include investment subsidies, grants, rebates, tax credits, tax deductions and exemptions, and loans. regulatory policies include solar heat obligations, technology-neutral renewable heat obligations, renewable heat feed-in tariffs, and bans on the use of fossil fuels for heating and cooling at the national or local level [5]. carbon tax on emissions is an example of an economic policy which punishes the use of fossil fuels. this type of policy has been used in sweden since the 90’s, and the tax level has increased severalfold since its introduction [8]. the european union emissions trade scheme (euets), introduced in the 00’s, is an example of a regulatory policy which does not directly punish carbon emissions economically, but instead it steadily decreases the emission allowed within the eu and this gives a shadow price of co2 emissions set by the market. when the allowances reach zero, no emissions of co2 are allowed, effectively banning co2 emissions in the eu. despite the understanding that climate policies are critical for the transition to a climate neutral heating system, there is scarce literature investigating the impact of introduction of climate policies aimed at reaching specific emission goals, and on the development of urban heating systems. studies usually do not have binding climate goals as requirements for analyzing their impact on the heating system. see for example [9], where the authors study the carbon emissions impact from low energy buildings where it is shown that individual heating options increase biomass and electricity usage, which in turn can increase carbon emissions in a broad systems perspective. the authors of [10] investigate the energy and environmental efficiency of the policies of the countries in the eu. the results show that there are large differences between countries. this indicates that different kinds of policies aimed at reaching the same emission goal could have different consequences depending on what kind of policy is introduced. future dh systems, usually named 4th generation dh, involves utilization of a more diverse mix of energy sources, but also increased integration of other energy sectors and integration of new housing with more energy efficient standards. the challenges and motivation for integrating more sectors together with new energy sources and efficient buildings are discussed in [4]. one of the motivations for 4th generation dh systems put forward is society’s transition to a sustainable energy system where dh will be based on fossil free energy. it is stated that the operation of dh supply plants in 4th generation dh system may be severely affected by the fluctuation of renewable energy sources. in a study [11] investigating the potential of 4th generation dh grids in norway with a high degree of electrification, it is shown that dh can increase the total system efficiency of the energy system. the authors of [12] show that integrating electricity and heating sectors can be economically beneficial on a system level. the concept of smart thermal grids, defined in [4], implies efficiency gains by smart thermal management, e.g. decreased supply and return temperatures to minimize losses and decentralized control and metering. according to [13], existing dh grids can deliver the same amount of heat while reducing losses if both the supply and return temperatures are decreased. in [14], it abbreviations chp combined heat and power dh district heating eh excess heat eu-ets european union emission trade scheme hob heat-only boiler hp heat pump msw municipal solid waste ng natural gas o&m operation and maintenance times the integrated markal-efom system international journal of sustainable energy planning and management vol. 31 2021 81 karl vilén, sujeetha selvakkumaran, erik o. ahlgren is demonstrated that decreasing the dh temperature to very low levels may be economically beneficial. the authors of [15] show that dh systems combined with energy savings can contribute to emission reductions in the eu with a lower cost compared to other alternatives. the authors also argue that dh is seldom disregarded in local and national studies but are, on the other hand, seldom the focus. also, the authors of [16] argue that energy system models are often designed for the electricity sector, which means that the role of the heating sector may be overlooked. in [17], the authors investigate the cost efficiency of different heating options for hypothetical low energy building areas. the general result is that large heat network options have lower system cost compared to individual heating options. this study compared scenarios when the whole area chooses the same heating option, but it could be of interest to investigate if it would be more cost effective to allow for different heating options within the same area, as well. the cost effectiveness of different heating solutions is also investigated in [18] where the authors investigated if dh is more economically viable compared to individual house-heating options by different means. the authors showed that in some areas, expansion of dh is not economical while in others it is. for the example of copenhagen given in the paper, it is shown that for large parts it is economical to expand dh from a socio-economic point of view while dh is not the cheapest option from a consumer economic point of view. this shows that answering whether it is economical to expand dh into new areas is not a simple or trivial problem. heating systems are closely connected to the electricity system since heating systems can both produce and consume electricity by use of different technologies such as co-generation and heat pumps (hps). this implies that future development of cost efficient heating systems could strongly depend on the future development of the electricity system. this has been shown to influence how heat is produced in dh systems. in [19], the authors analyzed how different electricity prices affect the future dh system in uppsala. this study included analysis of new multi-family buildings being added to the building stock, but also decreasing heat demand of existing multi-family housing due to energy efficiency measures. the authors showed that the use of hps is promoted with low overall prices with low seasonal variations in electricity price, while high winter prices increases heat and electricity production in combined heat and power (chp) plants. in [20] the fluctuations in electricity price is investigated and it is shown that increasing price fluctuations can change the merit order of hps and chp plants, and it is therefore of interest to investigate how different future electricity price profiles impact the heating system. there is however a lack of studies of policy impacts on future heating and a lack of studies taking a dynamic systems approach, simultaneously addressing both supply and demand side developments. thus, the aim of this study is to investigate impacts of climate policies on the cost efficient future development of an urban heating system by posing the following questions: • does an introduction of a local climate policy in the form of a fossil fuel ban or an increasing carbon tax policy impact the development of an urban heating system? • if it does, how do the different climate policies aimed at reaching climate goals in different years impact the development in terms of system cost, emissions reduction cost, heat production and heat production capacity? 2. method since this study is aiming at investigating future developments of cost efficient urban heating, a dynamic system approach is adopted implying a representation of the inter-related developments of both supply and demand sides of the heating system. this dynamic approach addresses the cost efficient optimum for the whole system, as opposed to studying either the supply or demand sides since these are inter-related. the study is focusing on the impacts of two different types of climate policies on system cost, heat production and capacity mix changes. in order to be able to simultaneously address both supply and demand side dynamics over the studied time horizon and answer the research questions, a cost optimizing energy system model was developed and applied. the city of gothenburg in south-west sweden was chosen as the case to be studied since the city is strongly expanding and its current dh system covers most of the city’s heat demand. the city has also adopted climate goals. data were collected for the construction of the urban heating optimization model. the impact of different cli82 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach mate policies on the system cost, heat production and capacity of different technologies under various scenarios is carried out assisted by the constructed model. 2.1. climate policies two climate goals target years are assumed and investigated; zero co2 emissions in 2030 and 2045, respectively. the results are compared to when no climate goal is present. the 2030 co2 emission phase out year is based on the climate plan of gothenburg, expressing an aim to phase out fossil usage fully for its heat and electricity production in 2030 [21]. the year of 2045 is based on sweden’s national goal of having net zero emissions in 2045 [1]. two different kinds of climate policy aimed at achieving the two climate goals explained above are investigated; a fossil fuel ban and a linearly increasing carbon tax starting from 2021. the carbon tax required to phase out the use of fossil fuels is not known beforehand and thus needs to be calculated. to calculate it, an iterative method is used as shown in figure 1. the carbon tax level is first set to remain constant throughout the whole modelling time period to see if that carbon tax is high enough. if not, the carbon tax is increased each year with an equal annual increase for all years, thus giving a linear tax increase. the increase of the carbon tax is not halted at the climate target year but continues to increase up until 2050. the model is rerun with this increased carbon tax to see if the climate goal is reached. if the goal still has not been reached, the annual carbon tax increase is increased by 1/3 €/ton co2, and the model is rerun again. this iterative procedure is performed until the climate goal has been reached. in this way the lowest carbon tax required to fulfill the climate goal is found. in both the fossil fuel ban scenario and the scenario with no climate policy, the tax on carbon emissions is set to 100 €/ton co2, which is approximately the carbon tax today in sweden, and remains unchanged until 2050, see. in the carbon tax scenarios, the carbon tax begins at the same level as in the other scenarios and increases from 2021 to 2050. table 1 policy pricing used in the model for the no policy-scenarios and fossil fuel ban scenarios. in the case of carbon tax scenarios, the carbon tax remains at the same level in 2019 and 2020 and is then increased by the same amount each year to 2050. 2019 2030 2050 carbon tax*, €/ton co2 100 100 100 electricity tax**, €/mwh 40 47 60 green certificates***, €/mwh 4 0 0 discount rate 5% * heating plants in sweden pay carbon tax at a reduced level since they must buy permits from the eu-ets. the value of 100 €/ton co2 is approximately the sum of the emission permits and the reduced carbon tax. **only paid by electricity users. ***only paid to electricity from renewable sources. revenue set to 0 from 2030 onwards due to the proposal that no new plants can be added to the certificate system from the end of 2030 [22]. 2.2. co2 emissions assumptions in this paper, electricity use, biomass use, municipal solid waste (msw) incineration and the use of industrial excess heat (eh) is assumed to be carbon neutral. although the swedish electricity system is not an isolated system and electricity, which may be of fossil origin, is regularly imported from other countries, in this paper it is assumed that use of electricity is carbon neutral since the generation mix consists mainly of hydro, figure 1. iterative method for determining carbon tax required to phase out fossil fuel use at a specific year when using an increasing carbon tax policy international journal of sustainable energy planning and management vol. 31 2021 83 karl vilén, sujeetha selvakkumaran, erik o. ahlgren nuclear and wind power and sweden is a net electricity exporter [23]. the carbon neutrality of biomass use is questioned but in this study we assume biomass to be renewable and carbon neutral referring to its large mitigation potential [24] despite that others, e.g. [25], stress that the biomass potential is constrained and, thus, it should not be considered carbon neutral. co2 is emitted due to waste incineration but since the incineration is primarily a part of the waste handling when recycling is not deemed as an option, these emissions are entirely allocated to the waste management [26]. further, co2 emissions from fossil fuels used to produce both heat and electricity in chp plants are allocated to the heating sector according to the power to heat-ratio. the electricity produced is also assumed not to substitute any other electricity production, potentially decreasing total co2 emissions by substituting other fossil production in the electricity sector. 2.3. model using an energy systems optimization model enables the investigation of the evolving heating system of gothenburg, given that even at present, traditional cost-benefit analyses underpins the decision of investment and heating choice. in this study, the times energy modelling framework has been used. this is a cost optimizing modelling framework finding the lowest total system cost over the chosen time horizon, from 2019 to 2050. the model is run for 9 time periods with shorter lengths in the beginning years. first there are two one-year periods for 2019 and 2020 which are followed by one two-year period for 2021-2022. from 2023 onwards the period length is 5 years. each year is divided into 12 time slices, one month in length each, to represent the seasonally varying heat demands. the times (the integrated markal-efom system) model framework was developed by the international energy agency (iea) [27]. costs, such as fuel costs and operation and maintenance (o&m) costs, and characteristics, such as technical lifetime and efficiency, for different kinds of technologies, both present and possible future investments are given by the modelers, and the model computes the optimal solution in terms of lowest total system cost. the model is driven by exogenously given heat demands which it must fulfill by supplying enough heat to meet all heat demands for all buildings. this forces the model to always be able to produce enough heat and have enough distribution capacity available. since the goal function of the model is to minimize the total system cost for the whole modelling period, the model is computing when to run which technologies and decide when it is cost optimal to invest in new production capacity as old technologies are dismantled when reaching their end of technical lifetime. the times model is based on perfect foresight and is implemented using mixed integer programming. the perfect foresight means that the model knows the exact heat demand and costs for everything at any specific time. the perfect foresight together with the dynamic approach makes it possible for the model to make optimal decisions regarding dispatch and investments in new technology since it knows the exact demands for all time periods. the mixed integer programming is based on linear programming but allows better representation of economies of scale by only allowing discrete investment levels into new heat production capacity. the discrete investment level aspect is of importance for the model, especially when considering investment in new chp plants since chp plants with a high power-to-heat ratio are generally required to be larger in size compared to chp plants with a low power-to-heat ratio. investments into new chp plants could therefore be affected by restricting new plants to certain minimum plant sizes. the times model developed in this study treats existing energy power plants as sunk costs and may at any time invest in new heating technology. all heat demands and prices for all time periods are exogenously given and there is no price elasticity for the heat demands or on the resource availability. this means that the price for each resource is independent of how much of it that is used and the heat demands are independent of the supply cost. except for electricity, there are no seasonal price variations, but the future price changes are assumed for several resources, see appendix a for details. the demand side development is represented by an annual addition of new housing to the system. the model is always required to meet the heat demand for all housing and a heating option must be chosen for each new housing type. in the model, two options are available for the heat supply to the new housing; dh (connection to existing dh including distribution piping and heat exchanger) or an individual heating option. also, a mix of both is allowed. 84 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach the setup of this dynamic approach where the model simultaneously treats both the supply and demand side developments is shown in figure 2. existing housing already connected to the dh system is assumed to continue to use only dh, and the heat demand of the existing housing is assumed not to change. 2.4. case data and assumptions input data used for the model is presented in this subchapter. the modelling case of gothenburg is presented first. this is followed by assumptions for the new housing and the heat demand profile used. 2.4.1. modelling case this study is carried out by constructing a model representing the present and assumed future heating demands of gothenburg, sweden’s second largest and populous city, situated on the western coast. gothenburg began using dh in the 1950’s as one of the first cities in sweden. today, almost 90% of the housing heat demand in gothenburg is supplied by dh and the annual dh production exceeds 3 twh. the dh system in gothenburg uses a mix of several technologies to produce the required heat. this mix includes msw incineration, industrial eh, sewage water hps, chp plants and heat-only boilers (hobs). the available heat capacity is presented in table 2. table 2 existing heat production capacity in gothenburg. values acquired from [9]. heat production capacity, mw msw incineration 143 eh 150 hp 160 bio chp 120 ng chp 411 bio hob 107 ng hob 325 oil hob 629 electric hob 8 2.4.2. housing data assumptions for the new housing is based on historical data and it is assumed that the same number of houses is built annually in the future and that this number is roughly the same as in recent years. the new housing of gothenburg is made up of different types of housing, such as apartment buildings of different sizes, and single-family houses of different sizes and energy demands. the data for the new housing built in gothenburg is presented in table a.2 in the appendix. it is assumed that the investment cost, in terms of k€/ mw, for individual heating options are the same for all housing types, see table a.1 in the appendix. this assumption comes from that individual heating options of different sizes and costs are widely available on the market. figure 2. schematic representation of the model setup for determining the cost optimal heating solution with different types of new housing. international journal of sustainable energy planning and management vol. 31 2021 85 karl vilén, sujeetha selvakkumaran, erik o. ahlgren however, the investment cost for new dh connections are assumed not to be the same for all housing types. this stems from that a new dh connection for a building requires both a new piping connection to the existing dh grid and a substation to be installed. the absolute cost for installing piping and a substation for a single-family house are assumed to be the same for all single-family housing types, while the absolute cost for an apartment building is somewhat larger. see table a.2 in the appendix for the calculated installation cost in terms of k€/mw. 2.4.3. heating profile for all housing types, the annual heat demand is exogenously given and distributed according to the heating demand profile presented in figure 3. the same profile is used for all types of housing. the demand profile is acquired from real measurements from a housing area consisting of both single family and multi-family housing built between 2011 and 2014. 2.5. sensitivity analysis a sensitivity analysis is carried out to investigate the robustness of the results with respect to different electricity price developments. since the dh system includes chp technologies, the electricity price and its development may have a major impact on the heating system development, and it is essential to investigate its potential impact. therefore, two electricity price cases are investigated: one where the price increases and one where it decreases. the increasing price case assumes that a fossil fuel power source sets the short-term marginal electricity price which, apart from giving high electricity prices all year, results in a relatively flat electricity price profile. the decreasing price case is based on a future where there are large investments into intermittent renewable electricity sources resulting in low electricity prices and a price profile with large seasonal variations. both electricity prices are presented in appendix b. 2.6. modelling the development of an urban heating system the research questions formulated guiding this study are focusing on two different types of climate policies and how they would impact cost efficient heating choices and the development of an urban dh system. the energy system model is used to investigate the impact on the development of an urban heating system by introduction a local climate policy in the form of either a ban or an increasing carbon tax. there is an important distinction between the two policies: while the fossil fuel ban will ban the use of fossil fuels from a certain year, in our study, the carbon tax should be just sufficient to result in a phase out of all fossil fuel in the dh system at the fossil phase out target year. as explained above, the required carbon tax is not known beforehand and thus has to be calculated by the energy system model. the carbon tax does not only depend on the fossil phase out target year but also on the future electricity price level and must therefore be calculated for both electricity price cases. thus, after determining the carbon tax required to reach the climate goals, in order to enable comparisons of the impact of the different climate policies, the model is used to calculate the dh system heat production and the dh system capacity mix for the different policy scenarios and electricity price cases. the overall system cost and the total co2 emissions are important system impacts and calculated by the model. in summary, to answer the research questions, the model is used for the following calculations: • required carbon tax needed for fossil phase out. • total system cost and total emissions. • dh system heat production for future years. • capacity mix of installed heating technologies. 3. results and analysis the modelling results (required carbon tax, heat production from different technologies, heat production figure 3 heat demand distribution throughout the year. values acquired from [28] 0 0.05 0.1 0.15 0.2 noitubirtsid dna med tae h month 86 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach capacity and the impact on the system cost and co2 emissions by the different policies) are presented in the following subsections. 3.1. carbon tax the carbon tax required to phase out co2 emissions obtained from the model is presented in table 3. for both target years it was found that a higher electricity price requires a higher carbon tax to reach the fossil fuel phase out target since, in both electricity price cases, natural gas (ng) hobs substitute hps, and the required carbon tax is therefore higher at high electricity prices. table 3 carbon tax, in €/ton co2, required to phase out fossil fuel use at target year. * highlights the climate goal target year 2020 2030 2045 carbon tax increase per year tax policy 2030, low electricity price 100 223* 408 12.3 tax policy 2045, low electricity price 100 150 225* 5 tax policy 2030, high electricity price 100 263* 508 16.3 tax policy 2045, high electricity price 100 187 317* 8.7 3.2. heat production the dh system heat production for the different policy scenarios is presented in figure 4 heat production by dh plants. the eh and msw incineration remain unchanged and have been left out in the figures to improve readability. a fossil ban has an effect only from the actual year when it is introduced (for both electricity cases) while in the carbon tax scenarios, all fossil fuel use is phased out by 2025 for both electricity prices for the phase out target year 2030 (while for the phase out target year 2045 the actual fossil phase out depends on the electricity price. in the high electricity price case, the fossil fuel use is phased out already in 2025, but in the low electricity price case there is some use of ng hobs up until 2030. regardless of whether a climate policy is introduced or not, almost no difference in the amount of heat that is produced by dh is found. introduction of either climate policy substitutes production from ng hobs by increasing the production from hps after 2030 (for both electricity price cases). 3.3. heat capacity in the case of a fossil fuel ban in 2045, investments in new capacity are made into ng hobs up until 2045 which is used for peak power during winter, see figure 5. due to a lack of non-fossil alternative peak power technologies in the model, investments into ng hobs are made since the total system cost decreases even though they have not reached their end of technical lifetime in 2045. for both electricity price cases, the new ng hob substitutes hp capacity. in the carbon tax scenarios, there is no investment into fossil fuel capacity regardless of the target year, but the capacity mix differs depending on the electricity price. with a low electricity price, there is only investments into hps, while in the high electricity price case, there is a mix of biomass chp plants and hps. for all policy scenarios, there is a large drop in total heat capacity after 2030, see figure 5, with no corresponding drop in the heat production, see figure 4 heat production by dh plants. the eh and msw incineration remain unchanged and have been left out in the figures to improve readability. this result stems from that the modelled system is based on the real heating system which exists in gothenburg today which includes a large reserve capacity but reserve capacity is something which the model does not consider, as investments into unused capacity would be an economic burden due to the exogenously given heat demand and perfect foresight of the model. 3.4. system cost and cumulative co2 emissions impact of climate policies the total system cost increase together with the cumulative co2 emissions for the whole modelling period is presented in figure 6. on the primary (left) y axis the cumulative co2 emissions, allocated to the heating system, is presented, while on the secondary (right) y axis the total system cost increase, compared to when no climate policies are implemented, is presented. for both electricity price cases, the carbon tax scenarios have higher cost increases compared to the ban scenarios for the same year. for both climate policies, the cost international journal of sustainable energy planning and management vol. 31 2021 87 karl vilén, sujeetha selvakkumaran, erik o. ahlgren increase is higher in the high electricity price case than in the low electricity price case. the reason for this is similar as with the required carbon tax in the previous subsection; ng hobs substitute hps in both resulting in fossil fuel use is more competitive at high electricity prices. for both electricity price cases, the system cost increase is significantly lower in the fossil ban 2045 scenarios compared to the carbon tax scenarios. even though there are investments into new ng hobs which are not used to their full technical life time in the fossil ban 2045 scenarios, the total system cost is decreased by using these for less than their technical life time. the co2 emissions are however significantly larger compared to the other climate policy scenarios. it is important to note that due to a lack of alternative co2 free peak power investment options and no heat storage, the computed system cost increases for the different scenarios are likely overestimates. figure 4 heat production by dh plants. the eh and msw incineration remain unchanged and have been left out in the figures to improve readability. 0 500 1000 1500 2000 2500 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 2020 2025 2030 2035 2040 2045 h ea t p ro du c� on , g w h new hp hp new bio chp bio chp ng chp bio hob new ng hob ng hob 0 500 1000 1500 2000 2500 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 2020 2025 2030 2035 2040 2045 h ea t p ro du c� on , g w h new hp hp bio chp ng chp bio hob new ng hob ng hob (a) high electricity price (b) low electricity price 88 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach 3.5. summary in summary, the climate policy goals affect the investment choices of heating supply technologies, but the amount of produced heat in the dh system is unaffected. furthermore, the climate policy target year also affect when different investments are made. a fossil fuel ban only completely forsakes fossil fuels in the dh system from the year of the ban, while a carbon tax induces a forsaking of fossil fuels in the earlier years. given these results, a tax on carbon emissions is more effective in divesting investments from fossil fuels than a ban on fossil fuel use but do have a somewhat higher increase of the total system cost. 4. discussion the modelling results shows that there is a small, if any, impact of the tested climate policies on how much of the heating demand, including new housing, that is supplied by dh when the total system cost is minimized. figure 5 capacity of dh supply plants. eh and msw incineration remain unchanged and have been left out in the figures to improve readability. also, oil hob and electric hob available from the starting year but are never utilized are left out to improve readability. . this result stems from that the modelled system is based on the real hea�ng system which exists in gothenburg today which includes a large reserve capacity but reserve capacity is something which the model does not consider, as investments into unused capacity would be an economic burden due to the exogenously given heat demand and perfect foresight of the model. 0 200 400 600 800 1000 1200 1400 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 2020 2025 2030 2035 2040 2045 w m ,yticapac noitcudorp tae h new hp hp ng hob 0 200 400 600 800 1000 1200 1400 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 n o po lic y ba n 20 30 ta x 20 30 ba n 20 45 ta x 20 45 2020 2025 2030 2035 2040 2045 w m ,yticapac noitcudorp tae h new hp hp bio chp ng chp bio hob new ng hob ng hob (a) high electricity price (b) low electricity price international journal of sustainable energy planning and management vol. 31 2021 89 karl vilén, sujeetha selvakkumaran, erik o. ahlgren introduction of a climate policy does, however, impact how the dh supply system evolves in the model. depending on what type of climate policy that is introduced, the year in which fossil fuel usage in the dh system is phased out is affected, but without a climate policy, use of fossil fuels is not phased out. a carbon tax policy does phase out the use earlier than the target year, while a fossil fuel ban only has an effect from the target year onwards. this implies that different climate policies do have different consequences even though they are aimed at phasing out the use of fossil fuels at the same year. important to note is that the applied model has perfect foresight which enables it to take costs and prices into account for all years without any uncertainty to find the most cost optimal system. further, the model does not include the possibility of recovery of scrap value before the modelling end year due to dismantling plants before their end of technical lifetime. the system cost does increase when implementing a climate policy, with taxation leading to a higher increase than a fossil fuel ban. however, while the tax is taken out of the heating system it could be regarded as an additional income for the local authority, the municipality. further, the system cost increase is larger at higher electricity prices. the system cost increase when implementing a climate policy is however relatively small. the increase is below 5% for all scenarios at high electricity prices and below 3% for all scenarios at low electricity prices. important to note here is that the cost increases likely are overestimated, as neither heat storage nor renewable gas are included as alternatives in the model for co2 free peak power production. the results also show a large drop in dh capacity after 2030, but no corresponding drop in heat production. this effect is due to the optimizing nature combined with the perfect foresight of the model. the reserve capacity present in any real system, to deal with unforeseen events and relative fuel and electricity price changes, is also present in the existing modelled dh system, and it remains in the modelled system until its technical lifetime has been reached. though, as the model knows the exact future heat demand, it does not have any need for any reserve capacity and therefore there are no reserve capacity investments. the development of the heating system due to changing future electricity prices could have a severe impact on how an interconnected energy system where other energy sectors are integrated, such as the electricity and transport systems, develops. as the results show, a future with low electricity prices benefits investment into hps while for a high electricity price, the model results that a system with both chp plants and hps. further, the results show that an implementation of a fossil phase out policy increases the capacity and production of heat from hps, but no significant changes in chp capacity or production, in both the high and low electricity price cases. as stated in [4], further interconnections with other energy sectors, especially the electricity sector, is of great interest as large scale introduction of intermittent renewable electricity sources could have a large impact on the development of local heating systems as chp and large scale hps could have a role in balancing in such an energy system. whether the local heating system is dominated by hps or if there is a mix of hps and chp plants would affect the local heating systems’ ability to shift between consumption and production of electricity. figure 6 increase of total system cost and co2 emissions for the local heating system for entire modelling period by introduction of different climate policies. 0 1 2 3 4 5 6 0 50 100 150 200 250 300 no tax change ban 2045 ban 2030 tax 2045 tax 2030 s ys te m c os t in cr ea se , % co 2 em is si on s, k to n emissions system cost increase 0 1 2 3 4 5 6 0 50 100 150 200 250 300 no tax change ban 2045 ban 2030 tax 2045 tax 2030 s ys te m c os t in cr ea se , % co 2 em is si on s, k to n emissions system cost increase (a) high electricity price (b) low electricity price 90 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach the heating profile used was acquired from real measurements from a newly built housing area with low energy demands and was used for every kind of housing in this study. this gave a relatively flat heat demand profile compared to e.g. [29] based on dh heat load in the past in gothenburg. a heat distribution profile with a more pronounced winter demand would require more peak heat production. ng hobs are found in this study to fulfill that role when permitted to do so, but it was also found that when fossil fuels are phased out, there were no significant changes in the amount of heat produced by and distributed by dh. also, in both electricity price cases, ng hobs are replaced by hps in the case of fossil fuel phase out. this indicates that a less flat heat demand profile would not have a significant impact on the results presented in this study. further studies using the dynamic approach, simultaneously addressing both supply and demand side developments, used in this paper could be of great interest. as studies using a dynamic approach on local heating systems are scarce, there are several aspects which is of interest to investigate at a local level. the role of both long term and short term thermal and electricity storages could give insights into how an interconnected energy system can be achieved in a cost efficient way where the characteristics of both the local heating and electricity sectors are utilized. the authors of [12,29] investigated impacts of thermal energy storages and found that it can be economically beneficial, but not by using a dynamic approach. it would therefore be of interest to investigate the combination of using a dynamic approach, possibility of thermal storage and interconnected electricity and local heating systems, to see how new housing can be heated cost efficiently. 5. conclusions in this study the impact of introduction of two types of local climate policies, a co2 tax and a fossil fuel ban, on the future development of an urban heating system is investigated. it is found that the two types of investigated climate policies do have an impact on the production of heat in a future heating system and what kind of policy is introduced does affect the development of the heating system, but no significant changes in the amount of heat produced by dh is found. if no climate policy is introduced, the heating system invests in new capacity of dh ng hobs to cover the peak demand during winter. this indicates that the use of fossil fuels is economically beneficial for the system, but the system cost increase of phasing out fossil fuels by introduction of a climate policy is found to be relatively low. this is regardless of electricity prices since this is occurring for both high and low electricity prices. the introduction of a fossil fuel ban only influences the heating system from the actual year of its introduction, while an increasing carbon tax phases out fossil fuel use earlier than the target year. this result holds for both high and low future electricity prices. regardless of high or low 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[36] world energy outlook 2018. oecd; 2018. https://doi. org/10.1787/weo-2018-en. https://ens.dk/en/our-services/projections-and-models/technology-data/technology-data-individual-heating-plants https://ens.dk/en/our-services/projections-and-models/technology-data/technology-data-individual-heating-plants https://ens.dk/en/our-services/projections-and-models/technology-data/technology-data-generation-electricity-and https://ens.dk/en/our-services/projections-and-models/technology-data/technology-data-generation-electricity-and https://doi.org/10.1787/weo-2018-en https://doi.org/10.1787/weo-2018-en international journal of sustainable energy planning and management vol. 31 2021 93 karl vilén, sujeetha selvakkumaran, erik o. ahlgren appendices appendix a table a.1 cost of individual heating options for new housing. acquired from [31] efficiency 2019/2030/2050 investment cost (k€/mw_heat) 2019/2030/2050 o&m fixed (k€/mw_heat) 2019/2030/2050 lifetime (years) fuel biomass boiler 0.82/0.86/0.88 697/665/603 41/39/35 20 pellets hp 3.45/3.6/3.75 2750/2500/2250 68/61/56 20 electricity electric boiler 1/1/1 967/933/833 8/7.7/7 30 electricity table a.2 data for new housing used in the model including calculated investment cost for installing dh in new housing. efficiencies and lifetime acquired from [9]. energy use of housing and annually built is based on [32,33]. investment cost for connecting to the dh network (k€/mw_heat) distribution efficiencies summer/spring & autumn/winter/ cold winter energy use, kwh/(m2*year) house size (m2) built annually dh connection lifetime apartment large 477 0.63/0.85/0.9/0.915 70 2800 40 50 apartment small 955 0.63/0.85/0.9/0.915 70 1400 80 50 single family large 2393 0.63/0.85/0.9/0.915 95 175 200 50 single family large passive 4785 0.63/0.85/0.9/0.915 47.5 175 20 50 single family small 3987 0.63/0.85/0.9/0.915 95 105 150 50 single family small passive 7975 0.63/0.85/0.9/0.915 47.5 105 15 50 table a.3 cost of new dh technology which has heat as only output. based on [34] total efficiency inv cost (k€/ mw_heat) o&m cost fixed (k€/ mw_heat) o&m variable (k€/gwh_heat) lifetime (years) size (mw_heat) fuel bio hob 1.15 700 33 1 25 biomass (woodchips) hp small/ large 3.5 700/600 2 3.3/0.9 25 4-12/12-500 electricity ng hob 1.03 60 2 1.1 25 ng table a.4 cost of new chp plants. based on [34] total efficiency (electrical) inv cost (k€/mw_el) o&m cost fixed (k€/mw_el) o&m variable (k€/gwh_el) lifetime (years) size fuel bio chp small/ medium/ large 1.12(0.14)/ 1.09(0.27)/ 1.10(0.28) 6700/3700/ 3500 293/158/101 7.8/3.8/3.8 25 2.9-23/ 23-177/ 177-500 biomass (woodchips) ng cc chp 0.90(0.55) 900 30 4.5 25 ng ng gt chp 0.90(0.47) 1300 30 4.5 25 ng 94 international journal of sustainable energy planning and management vol. 31 2021 the impact of local climate policy on district heating development in a nordic city – a dynamic approach table a.5 cost, in terms of k€/gwh, for different fuels available. costs for bio oil, eh and msw are based on [17], biomass and pellets price is based on [35] together with own calculations. ng price is based on [36] together with own calculations. 2019 2030 2050 biomass (wood chips) 25 30 40 pellets 40 45 55 bio oil 42 50 60 ng 18.4 26.5 41.2 eh 0.56 0.56 0.56 msw -14,5 -14,5 -14,5 appendix b 0 20 40 60 h w m/€ ,ecirp yticirtcele month 2019 2050 0 50 100 el ec tr ic ity p ri ce , € /m w h month 2019 2050 (a) low electricity price (b) high electricity price figure b electricity price cases. the prices per month for each year in between 2019 and 2050 are linearly interpolated from the 2019 and 2050 monthly price levels. international journal of sustainable energy planning and management vol. 32 2021 155 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 32 2021 155–166 abstract despite high expectations for the sector, most marine energy technologies remain in the research and development, or at best demonstration, phase. the industry is in a period of stagnation, and requires new approaches to overcome the challenges that inhibit widespread deployment. smallscale initiatives have proven to be a successful means of developing other renewable technologies but their role in supporting marine energy is not well researched. this paper provides a review of the barriers and opportunities presented by different policy landscapes, financial support mechanisms, markets, key actors, and wider regulatory and governance issues. semi-structured interviews with marine energy stakeholders from the uk, canada and denmark were used to explore the role of small-scale marine energy projects, and were supplemented by interviews with the general public in england. this showed that while marine energy is appropriately scalable for local projects, financing remains a major hurdle. discretionary local authority finance, as well as other novel options such as crowdfunding, tends to be relatively modest, supporting the argument for small-scale projects. a market for smaller devices exists, particularly for remote communities currently dependent on expensive energy from oil-fired generators. there remains a significant role for small-scale projects in testing the technology, contributing to reductions in cost and environmental risk. current processes for environmental impact assessment can present a significant hurdle for small projects, but proportionate, adaptive assessments are evolving. finally, community ownership and public participation have the potential to increase advocacy for the industry, with multi-actor partnerships presenting a positive way forward. the role of small-scale and community-based projects in future development of the marine energy sector nikolaos proimakisa,b, tara hoopera and poul alberg østergaardb* a plymouth marine laboratory, prospect place, the hoe, plymouth, pl1 3dh, uk b aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords tidal energy; policy; governance; financial mechanisms; europe; canada http://doi.org/10.5278/ijsepm.6657 1. introduction in 2018, the principal renewable energy source globally was hydro-power with a capacity of 1,132 gw, followed by wind and solar, which accounted for capacities of 591 gw and 505 gw respectively [1]. wave and tidal power technologies stand out with the lowest capacities (below bio-energy, geothermal and solar thermal), reaching only 532 mw [1]. the 2009 national renewable energy action plans by the eu member states, foresaw wave and tidal energy reaching 2.25 gw by 2020 and 100 gw by 2050 [2]. there has been significant downward revision of these estimates recently, with ocean energy europe [3], predicting a more modest capacity of 0.85 gw by 2021. nonetheless, ocean energy remains a main focus area of the european commission’s blue growth strategy [4], and for the planning of a transition towards sustainable, renewable energy-based energy systems, offshore is also seen as pivotal also in research [5–7]. one study suggests 2750 gw of offshore wind power in the european union including the united kingdom [8]. numerous factors inhibit the widespread deployment of marine energy, however. these include technical challenges [9] and good resource assessments[10], but non-technical constraints are also significant. these relate 156 international journal of sustainable energy planning and management vol. 32 2021 the role of small-scale and community-based projects in future development of the marine energy sector development and their varying governance arrangements, while denmark provides a unique perspective on community-based renewable energy initiatives more generally, particularly through the case of samsø island [23,24]. individual participants were identified following determination of the appropriate agencies and stakeholders within each country and through the “snowball” effect of recommendations made by previous interviewees. a total of 22 semi-structured interviews (face-to-face or by video conferencing or telephone) were conducted with technology and project developers, community energy groups, regulators and seabed leasing authorities, environmental agencies, statutory nature conservation bodies, local authorities, marine energy associations and academics. predominantly, the interviewees had experience of multiple renewable energy sectors (including onshore), although four participants specialised particularly in tidal energy and one in wave. in addition, face-to-face interviews were carried out with 963 members of the public resident on the north devon/somerset coast of the bristol channel in south west england to determine their perspectives on ownership of, and investment in, local tidal energy developments interviews were part of a wider project that required respondents from very specific postcodes. for this reason, a market research company was hired to carry out the face-to-face interviews. further details of the specific case study sites and questionnaire content are given in [25]. 3. results in this section, the results from the conducted interviews are presented. the results are categorised in the subsections: technological development, national policy landscape, financial mechanisms and cost issues, wider regulatory and governance issues, key players and motives including role of local government, and public attitudes to ownership of, and investment in, local tidal schemes. 3.1. technological development interviewees did not perceive specific technological impediments to the development of small-scale devices, noting that the technologies are scalable and, as one developer stated “we see them as perfect for community scale.” the potential, and importance, of starting at the smaller scale was emphasised by technology developers and by an academic in denmark who said; “with wind to rules, regulations, support mechanisms and decision-making processes, and include funding programmes, technology market establishment, infrastructure support, administrative and environmental issues, social engagement and acceptance, ownership and legal aspects [1,2,11–16]. the issue of governance is central to these non-technical challenges [17], and the need to examine and implement governance changes, which would result in a more advantageous strategy able to accelerate marine energy deployment, has also been identified as a key priority by the european commission [4]. as with energy infrastructure elsewhere, based on analyses using scotland as a case, wright concludes among others that “certainty and stability are crucial for supporting investment” [18] when seeing the development in offshore energy from an industry perspective. at present, the prevailing governance model for marine energy systems focuses on centralized largescale developments and has had only limited success in delivering viable projects. the marine energy sector has thus reached a stagnation point [2]. the efficiency of governmentor business-driven developments in initiating new diversified energy routes have been called into question [19], and there is growing interest in the role of alternative governance models in achieving a transition to low-carbon societies [20,21]. local initiatives have proven to be an alternative means of developing renewable energy strategies and enacting sustainability transitions [19–21]. in the case of marine energy, limited academic research has been undertaken to investigate the bottom-up approach from the perspective of crucial institutional actors and their potential influence in the implementation of renewable energy systems [22]. therefore, in this paper we seek to explore the key barriers and opportunities for small-scale locally-focussed marine energy initiatives. the research examines the ways in which different countries within europe manage these issues, to compare and contrast the enabling and obstructing features within each political context. 2. method a qualitative approach was taken using interviews with stakeholders from the united kingdom (uk), canada and denmark to identify the challenges and opportunities for small-scale and community-led initiatives in the development of the marine energy sector. the uk and canada were selected due to their progress in technology international journal of sustainable energy planning and management vol. 32 2021 157 nikolaos proimakis, tara hooper and poul alberg østergaard they implemented hundred smaller devices, got all the learning and the development stage from that before going up to mw scale and multi-mw scale. that is what we’ve got to balance up in the tidal industry.” however, wider technological obstacles were identified, particularly around grid capacity constraints and connection costs. 3.2. national policy landscape the term ‘national’ is applied broadly, as in the uk aspects of energy regulation have been devolved to the administrations in scotland and wales, and canada also has a decentralized approach. however, the national-level policy landscape continues to be important in canada, and the shift to a liberal government in 2015 was considered by interviewees to have favoured marine energy deployment. the national government has implemented clean energy initiatives to support technology development and demonstration, aiming to accelerate the commercialisation of marine technologies. an interviewee stated that “the federal government had played an umbrella role providing the funding and helping to de-risk aspects of the sector”. however, concrete outcomes of this positive national policy arena have been limited: one interviewee commented “we are at the point now where this is kind of hopeful…but hasn’t made its way yet”. elsewhere, national governments are perceived to be failing to support marine energy. an interviewee from scotland noted that “the support needs to be from the centre, rock solid and long-term”, and in denmark “the wider policy does not favour marine energy at all at the current stage”. 3.3. financial mechanisms and cost issues the national policy landscape is particularly relevant from the perspective of financial support for the sector. interviewees made repeated reference to the way in which national energy subsidy schemes failed to differentiate between mature technologies already well-established in the market (such as offshore wind) and emerging technologies. in the specific context of small-scale community-based initiatives, one canadian respondent commented: “it really needs the provincial government to make a commitment and say that we want to fund small scale to develop and decentralize the systems”. feed-in-tariff (fit) schemes (in which the producers of electricity are awarded a fixed price per kwh of energy produced) were identified as crucial in assisting small-scale projects. however, these can be centralised and inflexible, as noted by a welsh respondent: “the fit scheme is national policy and there is no option in each country to establish its own”. in the uk, a recent closure of the fit scheme to new generating capacity created “a barrier for the advancement of the sector which struggles to balance its absence”. nova scotia introduced a targeted community feed-in tariff (comfit), which was perceived by canadian interviewees to benefit community-owned developments. however, “the comfit program lasted for a couple of years but then it has been recently cancelled, because it was oversubscribed and most of it was because of onshore wind. there isn’t any more comfit available for tidal”. devolved governments in the uk have the power to provide alternative financial support for emerging energy sectors, and this is often focussed on smaller projects. interviewees from community and marine energy associations referred to targeted financial aid from the welsh european funding office, which has included investment in a marine energy test area. conversely, interviewees in england noted that “there is no specific fund aiming for community-based renewable energy projects”, and “there is more and more evidence the projects will be successful in the uk only if they have access to the market which is probably one of the greatest challenges”. there were some positive perspectives on cost issues related to small-scale projects, including one developer who commented “i can certainly see the sense in putting in multiple smaller devices because the installation costs are so much lower it is much easier to take devices in and out of the water if anything goes wrong. the actual capital expenditure of the devices is significantly lower, so there is a lot of benefit in that approach as well.” however, others expressed doubt: “it’s challenging to identify how we can decrease the levelised cost of energy, because of all the construction and the huge installation costs”. a canadian interviewee commented that “developers have pulled out of small-scale marine energy projects, as there is no return on investment for putting a device in the water.” 3.4. wider regulatory and governance issues environmental compliance was described as a barrier for technology developers, with the associated economic burden (as a proportion of the project costs) perceived to be particularly significant for small-scale community-based projects. all interviewees from environmental agencies in england confirmed that they charge fees for 158 international journal of sustainable energy planning and management vol. 32 2021 the role of small-scale and community-based projects in future development of the marine energy sector discretionary advice, as part of their institutional requirements to seek income streams. they are aware that this might exclude communities from early engagement with the environmental screening process. “we charge for these types of projects and i think it will put some people off, and certainly these small projects where the money is tighter and they don’t have the background in marine licensing or any other type of consenting.” respondents from the industry and academic sectors considered the environmental impact assessment (eia) process to be rigorous, detailed and complex, with a high information burden but lacking specific guidance. however, regulators disagreed with this perception stressing that “smaller-scale projects may have smaller environmental impacts and the level of evidence required for this type of projects is less compared to large-scale projects.” one project developer confirmed this: “if you have one device and it is in an area that it is not considered as environmentally sensitive, in theory, you would get a consenting process quite quickly.” the current approach in scotland is perceived positively. one developer commented, “[marine scotland] look at the size of the project and the environmental risks that are specific to that project. after acknowledging that, they can use that to guide you on how much info you must provide, thus supporting the application.” like scotland, in canada “the principle that has been used is adaptive management”. the role of strategic environmental assessment was also raised in both canada and scotland, again as offering an approach where the key risks were identified in advance, making it easier to deploy devices as developments progressed. a member of an environmental agency in england similarly noted, “you can’t put the burden to one developer to sort out all the uncertainties for the whole industry. we try to work with the developers especially at the small scale as much as possible.” in the uk, the owner of the majority of the seabed is the crown estate, which has both a stewardship and commercial role. one participant expressed the opinion that economic profit was a strong motivator for the crown estate in issuing leases, and that community enterprises and small-scale projects are riskier prepositions than commercial projects with more certain economic results. interviewees further identified the challenge for community groups of competing against large developers of commercial projects, although “the leasing rounds favoured legitimate (big) developers with large-scale proposals, but in 2015 the crown estate changed approach and initiated a new programme of leasing for smaller-scale marine energy projects”. other leasing models may also improve opportunities for community projects. interviewees described the process in canada, where the leasing authority has certain socio-economic criteria for providing the lease contract, including requirements for utilizing the local supply chain and engaging local communities as much as possible, while in parallel providing proof of public consultation and wide stakeholder engagement. technology developers thus make partnerships with community organizations and local authorities to ensure social engagement and local benefits. 3.5. key players and motives, including the role of local government interviewees commented more widely on how key actors are trying to engage and involve communities in decision-making processes. as one technology developer noted “there are opportunities for local planning policy to be more favourable to [projects that are] community led or with community involvement”. however, respondents also identified the challenges faced by community organisations in the progression of marine energy initiatives due to lack of expertise, knowledge, and access to funding, particularly in the initial stages of a project. a range of organisations were identified that have been established (often by local authorities but also by the renewables industry) with mandates to support community projects, marine energy specifically or renewable energy more generally. the role of these agencies includes establishing partnerships and providing facilitation, linking communities with funding streams, and serving as a ‘one stop shop’ for licensing support. specific examples of cooperation between community groups and other actors include the danwec wave energy test centre in denmark, which “came into place after a co-operation with a university, the local authorities, the local community and local companies operating in the harbour”. this strategy of promoting and developing partnerships exists elsewhere including canada and in wales, where “win-win” partnerships exist with technology developers assuming responsibility for consenting and licensing processes, while community groups assist with stakeholder engagement and local supply chain management. several interviewees reflected on the ways in which local authorities can be instrumental and even pivotal in international journal of sustainable energy planning and management vol. 32 2021 159 nikolaos proimakis, tara hooper and poul alberg østergaard establishing a favourable environment that makes marine energy projects more attractive and feasible. in wales, the local government played a crucial role in getting community-based projects off the ground by providing financial support for early stage feasibility studies. local authority motivation (as perceived by respondents in scotland and denmark) is often around economic development, and they further recognise the benefits of building infrastructure that could be utilized both by the marine energy sector and other industries such as fishing. local development plans were explicitly highlighted as a key opportunity for addressing the challenge of balancing the needs and concerns of existing sea users with a marine energy agenda. however, local policies that could benefit marine energy often require support from national governments: “it would be very hard for the local government to write a policy which is in opposition from what the national policy says”; “you have got to get everything lined up”. 3.6. public attitudes to ownership of, and investment in, local tidal schemes overall, 78% of respondents to the public survey stated that would be likely or very likely to support a local tidal energy development. factors influencing this level of support (beyond those related to ownership and investment) are discussed in [25]. the likelihood that an individual would support a tidal development varied according to the ownership of the scheme. levels of support were maintained for projects owned by the national government (81%) or local communities (79%), but declined for turbine manufacturers (72%), local councils (71%) and, particularly, for large energy companies (63%). participants who initially stated that they would oppose a tidal scheme were asked if their decision would change depending on who owned the project, and 13% agreed that this could affect their objections to the proposal. nearly a quarter of respondents stated that they would probably or definitely consider investing in a tidal energy development in their local area. of those respondents, only 28% had invested in community projects before. this increase may suggest particular motivation related to tidal energy, but is perhaps more likely to represent a bias due to the presence of the interviewer. stated willingness to invest also varied depending on what type of organisation initiated the project. in keeping with their overall preferences for ownership of tidal schemes, 16% would consider investing in a tidal project initiated by the uk government or their local community; 13% in those managed by their local council or the turbine developer; and 11% by a large energy company. when the motivations for members of the public to invest in community tidal energy projects were explored, 54% agreed or strongly agreed with the statement “i would only invest in a community tidal energy project if i was sure i would get a good financial return.” sixty two percent agreed/strongly agreed that “the financial return on my investment would be less important to me than knowing i am supporting a project that is trying to reduce the use of fossil fuels”, and 58% that “the financial return on my investment would be less important to me than knowing i am supporting a community project.” 4. discussion the stakeholder interviews highlighted the important role of national governments (also provincial and devolved administrations) in providing the overarching framework for the development of marine energy, including the availability subsidies and policies such as marine spatial planning, but also in signalling high-level support for the industry. the situation in canada, wales, and scotland, where this support has been more apparent and greater progress is being made in the deployment of devices, contrasts with that of england and denmark. the international policy context is important even to local projects, as developers stage the location and timing of their investments depending on favourable jurisdictional conditions [26]. stability of policy support is also a factor, with the consistent support for larger developments in the canadian province of nova scotia considered influential in their progress, and contrasted with the fluctuating nature of policies applied to smallscale devices [27]. 4.1. addressing the high levelized cost of energy in the marine sector a key theme that emerged from the interviews with technology and project developers, members of marine energy associations and academics was that wave and tidal energy cannot compete with established technologies within the current structure of energy markets and so subsidies are needed. new mechanisms for financing marine energy at the national level in the uk have been proposed by the marine energy industry. these include an innovation contract for difference for utility-scale 160 international journal of sustainable energy planning and management vol. 32 2021 the role of small-scale and community-based projects in future development of the marine energy sector projects to create a dedicated mechanism within which all new technologies (tidal, wave and floating wind amongst others) would compete with each other rather than with established technologies such as fixed offshore wind [28]. however, ensuring value for money and reducing consumer energy bills continues to be a stated aim of the uk government [29,30]. the high relative cost of tidal energy has also been cited as a reason why research and investment for renewable energy at the national level in canada should focus on wind, solar and hydropower, as the cost of these known and tested technologies is steadily decreasing [31]. therefore, it will be a significant challenge to demonstrate why new forms of electricity generation should be subsidised when issues such as energy security, climate change mitigation, and economic development can be addressed by mature technologies, which require minimal state support. arguments for the wider benefits that could result from supporting the sector will need to be particularly convincing, especially in the uk where the industry has overpromised in the past [32]. arguments were made by developers that utility-scale projects are needed to impact significantly on the levelised cost of energy (lcoe), which echoed those in the existing literature [33]. however, these arguments stem very much from the context of a large-scale, centralised energy system. the dominance of such systems (and hence energy infrastructure and market-dependent support mechanisms that tend to favour large-scale, established actors) are particular barriers to change [34]. the existence of a centralised system dominated by corporate actors is one reason why countries such as the uk lagged behind those including germany (where levels of local ownership were high), during early deployment of onshore wind [35].the development path of the wind power sector shows the importance of a significant period (decades) of small-scale deployment in reaching the current stage of commercial deployment of large devices and arrays. wind turbines of 8mw are now commercially available, but in 1991 the average size of turbines was 224kw, and in 2001 this had only increased to 1mw [3]. furthermore, the device itself represents 33% of the project cost for tidal energy (just over 50% for wave) [36] so reducing the costs associated with installation, operation and maintenance, and decommissioning has the potential to impact substantially on lcoe. marine energy costs also link to device design, with significantly lower operating costs for surface-piercing and, particularly, floating tidal devices due to the opportunities for in-situ maintenance and reduced vessel requirements [37]. even modest changes in annual energy production can result in a significant decrease in lcoe, through improved reliability and availability of device components [37]. thus, it remains that the key to reducing lcoe is to deploy more devices, providing the necessary volume, experience, and innovation needed to reduce capital and operating costs [36]. small devices remain essential to this process, as learning-driven cost reduction is achieved quickly with smaller capacity per unit [33]. continued experience will also improve access to finance, by increasing understanding of risks [3]. 4.2. financing mechanisms for small-scale and community initiatives community energy representatives made less reference to the need for national subsidies, reflecting the alternative financial mechanisms available to smaller-scale projects. respondents did, however, note how regional authorities have played a significant role in providing both a supportive policy environment and discretionary finance. there is some evidence that the active support given to the industry by devolved administrations and local authorities has drawn significant investment into local economies, even at the small scale of current tidal energy development. direct investment of £46.8 million has been made into the welsh economy by tidal stream energy developers to date, an increase of £17.4 million since 2017 [38]. for scotland, it was further noted that even though major investment in consenting, construction and installation was short term, there would still be longer term positive impacts on the wider economy particularly where the expenditure was made locally [39]. in scotland and wales, schemes such as scotland’s community and renewable energy scheme and the welsh government energy service provide access to public funding and expertise for communities, with a particular focus on the early stages of project development, and have both supported small-scale community tidal projects [40,41]. however, interviewees highlighted how the removal of dedicated public financing for community projects can have significant negative consequences. england has seen a steep decline in the formation of community energy groups since feed-in tariffs and tax incentives were removed in 2015 [42]. innovation power purchase agreements (ippas) have recently been suggested as a mechanism for supporting smaller projects up to 5mw in the uk [28]. ippas international journal of sustainable energy planning and management vol. 32 2021 161 nikolaos proimakis, tara hooper and poul alberg østergaard would allow marine energy developers to sell their energy at above market rate, with the buyers of the energy (for example energy suppliers or large corporations) receiving tax rebates or credits for the difference between the cost of the energy and the market price [28]. marine projects could therefore be financed without the need to pass on costs to household consumers. ppas for marine energy are not themselves new and have already been used in canada to support development of the tidal industry in nova scotia [43,44]. investment from private individuals and organisations also has a role to play. communities can be seen as relatively high risk by mainstream lenders, making it difficult for them to secure affordable loan rates [42]. support from the public sector (via local authorities) remains crucial, as access to finance by community groups becomes easier once initial local investment capital has been secured. in denmark, for example, some community schemes like district heating are provided with low-interest loans backed by public guarantees [45]. after obtaining financing from sources including the scottish government, one tidal energy company recently secured a further £7 million through a crowdfunding initiative [46]. this model has the potential to be particularly applicable for community marine energy projects as it allows for small contributions from individuals and can draw on place-based motivations. investors in scotland, where the tidal turbine manufacturer is based, contributed on average 50% more than other supporters [46]. the outcome of the questionnaires with members of the public provides further evidence of the willingness of local people to consider investing in tidal projects. previous research shows that energy cooperatives have a different ownership model to conventional businesses, and the maximisation of return on capital may not be a key objective [45], which is supported by the findings of this study. this is potentially significant in situations where initial grant funding would be necessary for projects that would otherwise be unprofitable, as has been the case in some examples of small-scale hydro schemes [47]. also, community groups are motivated to establish energy projects for a wide range of reasons including climate change mitigation, contributing to local economic regeneration, and ideas of local autonomy, community empowerment, or the democratisation of control over the energy system [48]. the increase in the number of ‘ethical’ finance companies and products has improved the opportunities for small-scale community energy projects [48]. it has also been suggested that, for wales, local government pension funds should divest from fossil fuels and instead support local renewable energy projects [49]. support mechanisms such as the development of new instruments and the reallocation of existing investments require substantial momentum within the financial services industry to effect significant change. there is some evidence of the latter, with the analysis of environmental, social and governance factors becoming more common in investment decisions [50]. community initiatives will, however, still need to demonstrate financial feasibility [42]. access to market was identified by developers as a further challenge for the industry. markets may be different for smalland utility-scale devices, which affects the relative cost competitiveness. for example, in remote locations relying on oil-based generators electricity costs are high and so there is the potential for marine energy to be competitive and to provide a return on investment even with little subsidy [3]. in canada, there is a large market for small-scale and off-grid community schemes, and a growing number of tidal developers are involved in these projects, including in northern canada despite the particular challenges presented by harsh climatic conditions [36]. the united states (particularly alaska) and island states in asia are two examples of the wider global demand for smaller technologies to supply remote, off-grid communities [36], and a recent prediction was made that the potential marine energy export market will be worth £7 billion by 2050 [38]. again, there are parallels with the development of the onshore wind sector. despite the availability of large devices, there remains a substantial market for small and medium-sized wind turbines (up to 500kw). in the uk, over 2,200 devices were installed locally in 2014 and a further 2,600 exported [51]. however, as has tended to be the case across the renewable energy sector, the industry contracted following changes to feed-intariffs. globally, growth in the sector nonetheless continued as new international markets emerged, and demand for off-grid solutions in remote rural areas was sustained [52]. 4.3. the wider regulatory landscape industry bodies have called for a straightforward, clear, consistent and affordable environmental consenting process that takes account of, and responds proportionately to, the size and context of individual projects and 162 international journal of sustainable energy planning and management vol. 32 2021 the role of small-scale and community-based projects in future development of the marine energy sector supports the timely deployment of devices, particularly those of a smaller scale [3,36]. developers interviewed in this study similarly continued to assert that statutory requirements for environmental compliance may act as a barrier to even small-scale devices. however, this was disputed by other participants who noted that significant steps have been taken (particularly in scotland and canada) to develop frameworks for proportionate consenting and to increase focus on adaptive management and data gathering (with significant investment in environmental monitoring) in order to narrow down the crucial risk factors. a key factor in addressing risk is to reduce uncertainty around environmental impacts, but this remains high because too few devices have yet been deployed for sufficient continuous periods [29]. increasing the number of installations is therefore fundamental to understanding the interactions between devices and marine wildlife [3], and will be supported by the deployment of small-scale devices. project developments take place within the wider framework of marine spatial planning and also of strategic environmental assessment, which can have a significant influence on how the governance of new industries evolves [53]. the sectoral marine plan for tidal energy in scotland has been highlighted as offering best practice in its provision of a strategic siting process within a clear regulatory regime, which supported the implementation of tidal energy [54]. however, the effectiveness of strategic environmental assessment in canada has been limited due to its often ad hoc nature, the lack of mandatory provision for public engagement, and disconnection from larger, formal systems of integrated policy, planning and decision making [55]. 4.4. additional benefits of community involvement interviewees across the uk, canada and denmark referred to the positives of working in partnership with local communities, which included benefits to the developers of a favourable planning environment, and improved stakeholder engagement and supply chain management. partnership working also supports the community participants, as they may lack the in-house expertise to conduct feasibility studies, work through the planning process, and scope financing options [42]. this may be a particular problem for community groups without existing renewables schemes that are considering marine energy projects. new entrants face considerably greater barriers than those already engaged in the sector [42]. community involvement also has the potential to address issues of equity and justice within the energy system, which have been the subject of recent attention in the uk. the welsh government is seeking to ensure that local areas benefit from the process of cutting carbon emissions [56] and has established a target of 1 gw of locally-owned renewable energy capacity in wales by 2030 [57]. others have gone further and proposed that by 2020 all new renewable energy projects in wales with a capacity greater than 5 mw should have between 5% and 33% community and local ownership, suggesting that this could be funded by business rate [tax] relief on the proportion of the project owned by the community [49]. local ownership has also gained some interest in denmark as a motivating factor for wind power developments to ensure a better geographical balance between revenues and perceived environmental impacts [14,58], but also from the perspective of better integration into local smart energy systems [59]. broadly, it is to be expected that the interests of community groups would be a better fit to small-, rather than utility-, scale projects, although this may not always be the case. in seeking to set up a marine energy hub to benefit the local economy, a social enterprise working in north wales has obtained the lease agreement for the west of anglesey demonstration zone which has the potential to deliver up to 100mw of tidal energy [60]. ownership may also be a factor in public acceptability of tidal projects. denmark’s position as a leader in wind energy manufacturing and development has been attributed to the role of local and cooperative ownership of early wind farm projects, while the more recent shift to developer-led projects has seen a concurrent increase in public opposition [61]. similarly, community ownership or co-ownership was associated with positive attitudes to wind farms in scotland and germany [62,63]. respondents in this study showed a similar preference for community projects, although also for nationally-owned tidal developments – perhaps this engenders a feeling of ownership or reflects support for a wider renationalisation agenda. the particular distrust shown by respondents towards developer ownership may reflect similar attitudes to those expressed for other renewables, with developers perceived as being motivated by profit and lacking any real interest in local people [64]. the potential role of the wider public in the development of the marine energy sector is often overlooked. decision-makers respond to their constituents, and, as international journal of sustainable energy planning and management vol. 32 2021 163 nikolaos proimakis, tara hooper and poul alberg østergaard has been observed for onshore wind in germany, when large numbers of people become actively involved with a renewable energy technology this enlarges the lobby advocating that technology at both local and national level [35]. the level of public knowledge of marine energy is, however, limited; 5.9%, 6.5% and 14.8% of a uk-wide sample of 1000 respondents reported that they had never heard of, respectively, tidal current, wave, and tidal lagoon power, more than for any other renewable energy sector including biomass [65]. similarly, three quarters of people sampled in north devon and somerset described themselves as either not at all, or not very well, informed about tidal energy [66]. the development of small-scale, community-based marine energy projects provides the opportunity for the public to have first-hand experience, which will raise awareness of the advantages of these technologies, and, potentially, the level of advocacy for them. 5. conclusions the lack of both policy support and financial subsidy from national governments continue to be cited across stakeholder groups and countries as key barriers to the development of the marine renewable energy industry. opinions are mixed on the role of small projects in reducing the levelised cost of tidal energy, but they do provide options for novel financing mechanisms, and there is public interest in investment in local initiatives. a market for smaller turbines exists (beyond their role in the staged development of utility-scale devices) particularly for remote, off-grid communities. investment by local authorities remains key to attracting wider financing, and the removal of dedicated support for local projects has had significant impacts on community energy groups. developers retain the view that current processes for environmental impact assessment can present a significant hurdle for small projects, but progress (particularly in scotland) on proportionate assessment, and in leasing, has improved opportunities for community-scale schemes. however, marine spatial planning has not yet fulfilled its potential as a tool in the strategic development of the sector. multi-actor partnerships present a positive way forward, and ownership models may also have a bearing on public acceptability of new developments. finally, community ownership and public participation have the potential to increase advocacy for the wider industry. further research is required to understand in detail the potential ownership and financing models for smallscale marine energy projects, and how they integrate with wider green financing opportunities and the environmental, social and governance drivers for corporate investment, as well as the opportunities for local, spatial planning that identifies sites of low environmental risk. 6. acknowledgments we are extremely grateful to all the interviewees for giving up their time to take part in this research and for their considered and comprehensive responses. this work was supported by the natural environment research council through the addressing valuation of energy and nature together programme (advent, ne/m019640/1). further support from the erasmus+ student mobility (traineeship) grant was awarded to the lead author via the 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[67] østergaard pa, johannsen rm, duic n, soares i, ferreira pv. energy system sustainability. int j sustain energy plan manag 2021;32. http://doi.org/10.5278/ijsepm.6850. http://www.morlaisenergy.com/wp-content/uploads/2017/03/morlaisscopingreportr304464_finalv1.1.pdf http://www.morlaisenergy.com/wp-content/uploads/2017/03/morlaisscopingreportr304464_finalv1.1.pdf http://www.morlaisenergy.com/wp-content/uploads/2017/03/morlaisscopingreportr304464_finalv1.1.pdf http://doi.org/10.1016/j.enpol.2006.10.008 http://doi.org/10.1016/j.enpol.2006.10.008 _ref501811960 _ref501811967 _hlk523754907 _ref503482026 _ref503481699 international journal of sustainable energy planning and management vol. 32 2021 19 *corresponding author email: pawel.brusilo@ue.wroc.pl international journal of sustainable energy planning and management vol. 32 2021 19–36 abstract the chinese energy transition, as a shift from fossil fuels to renewable energy sources, involves the dynamic growth of wind power’s importance in a national energy mix. the development of the wind power industry in this country is intertwined with the implemented policies that translated to the significant increase in energy generation from this power source and the growth of trade volumes of wind power products. this research aims to review and analyse the china's policy that impacted wind power development in 2000-2019. the author aims to evaluate the efficiency of implemented policies and strategies from the perspective of the new structural economics assumptions and the revealed comparative advantage of the chinese wind energy products. in addition to the review of scientific literature and policy documents, as well as analysis of the relevant trade and energy indicators, the method applied in this research is a calculation of the revealed comparative advantage (rca) index. the results provide pieces of evidence that despite the substantial development of the chinese wind power industry on a national scale, this country still has not revealed a comparative advantage globally. however, the results also suggest that the chinese wind power industry is on the right track to achieve export specialisation soon. furthermore, the china's policy for wind power development matches the new structural economics assumptions. the presented insight into studied industry blazes the trail for other countries, which consider following the chinese development path by shaping the growth of leading-edge industries and the energy transition process throughout various state interventions. evaluation of china’s policy for wind power development from the new structural economics perspective paweł brusiło* department of international business, asia-pacific research centre, wroclaw university of economics and business, ul. komandorska 118/120, 53-345 wroclaw, poland keywords china; wind power; revealed comparative advantage; new structural economics; energy policy; http://doi.org/10.5278/ijsepm.6563 1. introduction as a shift from energy generation from fossil fuels to renewable sources, the energy transition is an effortful process for every government, society and economy worldwide. numerous countries have already implemented substantial policies and strategies to transform the national and regional energy sectors. these actions involve the changes in various areas like, for instance, investments in infrastructure and related facilities and the development of a national renewable energy industry that includes enterprises producing goods and those offering services related to renewable energy utilisation in energy generation. diversifying a country’s energy mix to increase the share of renewable energy sources at the cost of energy from conventional fossil fuels is a very capital-intensive and time-consuming process. however, after technical and economic analysis, some researchers, like conolly and mathiesen [1], have already demonstrated a feasible pathway to transform a national energy system entirely dependent on renewable energy sources. as a multidimensional issue, energy transition requires substantial changes in national policies in diverse aspects and on every level – from municipalities and regions to central authorities [2]. since the energy sector is an essential and critical part of a national econ20 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective nevertheless, this economy utilises half of the world’s annual coal consumption (primarily for district heating purposes in urban areas, directly translating to air pollution and poisonous smog formation, especially in the northern districts) [9]. the inclusion of renewable energy sources in the chinese energy mix has become an essential objective for the chinese authorities from the beginning of the 21st century. from that time, this process significantly and irreversibly increased the role of renewables [10,11]. it is important to acknowledge that among the non-hydroelectric renewable energy sources (like sun, biomass and geothermal power), wind power continuously gains its importance in the chinese energy sector. so far, it is a leading source in this particular group of renewables, which will be discussed in the following parts of this research article. for those reasons, this research paper aims to provide broad information and evaluate state policies that translated the most to the chinese wind power sector’s impressive development in 2000-2019. the author aims to study and illustrate the theoretical background and efficiency of implemented policy instruments from the perspective of the new structural economics (nse) assumptions. nse is a modern economic doctrine that combines the postulates of neoclassical economics and twentieth-century structuralism [12-14]. this approach requires a specific state-controlled industrial policy that either turns comparative advantages into competitive advantages of selected sectors or shapes a country’s economic development to gain the comparative advantages from the ground up. moreover, nse recommends applying detailed state actions suitable for advancing catching-up sectors and their distance to foreign competitors [15,16]. for this reason, the author broadens the scope of the research with the calculations of the revealed comparative advantage (rca) index, which allows to find out if a country holds an export specialisation in a given category of products [17]. regarding the author’s best knowledge, a similar analysis has not been conducted in recent years yet (especially in the context of the globally revealed comparative advantage of the chinese wind power industry). the results contribute to a better understanding of the role of central authorities in shaping the chinese wind power sector development and export specialisation in wind turbines. to comprehensively present research findings, this paper is organised as follows: the second part provides a literature review, while the third part presents the new structural economics assumptions, omy, less or more significant state involvement is required to shape the energy transition process. moreover, the increase in the utilisation of renewable energy sources is linked to a country’s economic growth, so the energy policies should be considered a vital part of national economic development and economic growth policies. the current analysis of the impact of renewable energy consumption on the selected economic conditions provides evidence that a 1% increase in renewable energy consumption will increase gdp by 0.105% and gdp per capita by 0.100%. in comparison, a 1% increase in the share of renewable energy to the energy mix of the countries will increase gdp by 0.089% and gdp per capita by 0.090% [3]. a recent study shows a dynamic relationship and causality of china’s financial development, economic growth and renewable energy consumption. besides, the study proved that chinese economic growth and financial development impact renewable energy consumption in the long run, but with a diverse significance at national and regional (eastern, central and western) levels [4]. on the other hand, over the last two decades, the chinese energy transition has been strictly linked with the growing energy consumption resulting from the rapidly growing economic development. the transformation of the energy sector in this country is shaped by numerous policies and strategies that aim to promote the reduction of carbon dioxide (co2) emissions by increasing the role of the renewable energy sector and adjusting its industrial structure [5]. among other renewable energy sources, wind power is one of china’s most essential one in mitigating climate change (together with hydro and solar power). furthermore, the development of the wind power sector in this country has become one of the critical components of the national comprehensive policy system for energy transition [6]. the energy transition process can also be driven by other factors, including increasing energy cost, raising awareness of the harmful impact of human development on climate change and depletion of traditional energy sources – fossil fuels [7]. in this context, china presents an example of an economy under intensive pressure to remodel its energy system and rely on fossil fuels to a lesser extent. for instance, just in 2019, this country emitted over 10,175 mt of co2 and was an absolute global leader among other emitters. however, it is worth emphasising that, over the last years, china has flattened and slowed down the growth dynamics of co2 emissions [8]. international journal of sustainable energy planning and management vol. 32 2021 21 paweł brusiło especially in the context of the leading-edge industries. they are followed by the overview of china’s wind power industry development in 2000 – 2019. the next section presents a revealed comparative advantage index calculations together with suitable analysis. the last section studies the chinese wind power development policy from the new structural economics perspective. conclusions and a summary are placed in the final part of the paper. 2. literature review the research focused on the chinese industrial policy for wind power development was the subject of numerous studies in the past. however, because this industry has undergone significant and dynamic changes over the last two decades and the chinese regional and central authorities constantly change relevant policy assumptions, it is crucial to review the most up-to-date literature. the recent studies of the chinese industrial policy for wind power development evaluate its overall assumptions and present detailed recommendations that may improve the functioning and efficiency of implemented policy instruments. li et al. [18] tracked and studied the evolution of china’s wind power development policy. they presented several pieces of advice, including improving the governmental performance assessment system, strengthening overall planning, improving the wind trading system, financial incentives and the level of wind power-related technologies. moreover, the researchers were proposing strengthening relevant technical standards, testing and certification system construction, as well as improving the supervision and evaluation system. most of the research focuses on onshore wind power since the offshore facilities are still marginal on a national scale. however, the chinese authorities vigorously promote this type of wind power facility, which translates to its increasing share in the national energy mix. the evaluation of the price policy for the offshore power plants, carried by wei et al. [19], presented a dynamically growing industry fueled by the constantly adjusted price policy. however, the critical challenge in shaping the policy assumptions for offshore wind power is a “capacity, price, subsidy trilemma”. this issue results in an impossible simultaneous increase in installed capacity, decrease in electricity prices and reduction of the offshore wind power subsidies. the authors proposed detailed recommendations to overcome this trilemma, including implementing the market-oriented competition price policy and mechanism and higher participation of foreign investors in the new offshore wind projects. in general, the wind power industry in china has undergone tremendous changes from the beginning of the 21st century. one of the key policy documents that substantially impacted wind power development was the renewable energy law issued in 2006. among numerous studies on the impact evaluation of these policy statements and legal regulations, the research carried by liu et al. [20] was focused on the empirical evaluation of the wind power industry in the framework of that law and related policies. that study revealed the significance of the three policy instruments that had the most significant impact on the growth of the wind power industry in china from the perspective of electricity generation and installed capacity – total target mechanism, feed-in tariffs mechanism and special fund mechanism. the other studies are also focused on the role of industrial policy in increasing the innovativeness of the chinese enterprises from the wind power industry. for instance, the effectiveness of the implemented policy instruments in the context of the innovation performance of the different ownership enterprises was studied by wang and zou [21]. their econometric study based on the 254 wind power industrial policies issued at the departmental and ministerial level and above in china from 1994 to 2016 indicated a significant positive effect on innovation performance, mainly for the core technological innovation. furthermore, they provided an in-depth analysis of the differences between the effect of the supply-side and demand-side wind power development policies, as well as differentiated the impact of the policies between the state-owned and the private-owned enterprises. besides, the effectiveness of the implemented wind power policy can be studied from the perspective of the individual instruments. the exemplification of this approach was research proposed by lin and chen [22]. their study revealed that the demand-pull policies through feed-in tariff policy stimulate innovation in this particular industry. more importantly, higher feed-in tariffs on wind power translated to the increasing number of patents related to wind power technology. the researchers also emphasised the vital role of technology-push policies through r&d investments in stimulating the technological innovativeness of chinese enterprises. 22 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective another critical aspect of evaluating the wind power policy in china is its effectiveness on the provincial (regional) level. for instance, the study carried by song et al. [23] has uncovered that the price-oriented wind power policy has a more significant impact on promoting the new installation of wind turbines on the national level than a quantity-oriented wind power policy. on the other hand, the price-oriented policy is more influential on the provincial level in the eastern, central and western regions. still, the quantity-oriented policy was more successful in the eastern regions than in the central and western regions in the long run. such multidimensional analysis of the wind power policy, both on the national and regional level, presents substantial heterogeneity of this power source development in china. dong and shi [24] evaluated the main factors that affect the performance of wind power in the chinese provinces. their research findings shed new light on the current wind curtailment in many chinese regions. furthermore, they proved that local power consumption capacity, level of economic development and the rate of wind abandonment are some of the critical factors that diversify the provinces in the context of wind power utilisation. simultaneously, the researchers have proposed promoting wind power consumption by renewable energy policy reform, including the increase in feed-in tariffs and the renewable portfolio standards, which are the highly efficient policy instruments in this matter. the policies for the wind power industry development in china can also be evaluated from the perspective of productive efficiency improvement. for instance, a study presented by jiang and liu [25], based on the micro-data of chinese wind power enterprises from 2006-2019, demonstrated that the overall productive efficiency of this industry is relatively low. the presented results reveal that the studied efficiency of upstream enterprises was the highest, in contrast to the downstream enterprises that demonstrated the lowest productive efficiency. that research also proved that the implemented economic policy has substantially stimulated the growth of productive efficiency, which increased in the studied period. however, it was still far lower than, for instance, in the us wind power industry. the effectiveness of the chinese wind power development policy was also studied from the perspective of trade relations and international competitiveness. leng et al. [26] conducted research aiming to evaluate the trade potential of wind energy products with the countries alongside the belt and road initiative (bri). the researchers, thanks to the gravity model approach, revealed that the chinese trade of wind energy products had been dynamically growing in the past. still, the market structure is concentrated among the neighbouring countries. besides, the gdp of importing countries, national energy consumption, and the growing chinese wind power installed capacity positively impacted the chinese export. in contrast, the distance between the trade partners negatively impacted the export volumes. the trade potential of the chinese wind energy products in the context of the bri was studied by the same researchers also from the perspective of the revealed comparative advantage [27]. that study considered a broad panel of harmonised system (hs) codes (categories of products) from the un comtrade database. it demonstrated a relatively low revealed comparative advantage (rca) of the chinese wind power products in the studied period. however, the results showed that the overall comparative advantage of the chinese wind energy products increased in 2007-2016, but only in 2016, the rca index exceeded 1.00. in other words, the chinese wind energy products demonstrated a comparative disadvantage and lack of export specialisation in the relations with the belt and road initiative countries (despite dynamically increasing export and import volumes). in conclusion, the presented literature review characterises the changes and challenges the chinese wind power sector faced in 2000-2019. the analysed studies provided a broad perspective on the implemented policies and strategies, which allowed the chinese wind power sector to grow thanks to various instruments, such as subsidisation, feed-in tariffs and stimulating price and r&d policy. interestingly, despite the dynamically growing wind power installed capacity and increasing volumes of wind turbine export, the studied sector presents low competitiveness and effectiveness. as a contribution to the existing literature, this research aims to evaluate the chinese wind power development policy in the context of global export specialisation and revealed comparative advantage of the chinese wind power products in the theoretical framework of the new structural economics assumptions. the following section presents a brief review of the nse postulates to demonstrate a theoretical background for the deliberations included in the next parts of the article. international journal of sustainable energy planning and management vol. 32 2021 23 paweł brusiło 3. new structural economics assumptions the rapid development of the wind power industry in china over the last two decades may be perceived from the perspective of new structural economics assumptions. as a combination of structuralism and neoclassical economics, nse recommends a state-controlled industrial policy approach [28]. new structural economics is founded on the following main assumptions: (1) economic development is a result of perpetual technological and industrial innovation, (2) a country’s economic structure is endogenous to the economy’s endowment structure, (3) transformation of a country’s economic structure stimulates economic development. moreover, nse postulates that the mentioned structural changes increase labour productivity and reduce transaction costs. furthermore, new structural economics underlines the critical role of states in transforming a country’s comparative advantages into competitive advantages by appropriate economic policies adjusted to selected sectors [15]. simultaneously, the structural changes should be associated with state actions that translate to infrastructure investments. lin [28] summarised the role of state interventions in new structural economics with this statement: (…) the role of the state in industrial diversification and upgrading should be limited to the provision of information about the new industries, the coordination of related investments across different firms in the same industries, the compensation of information externalities for pioneer firms, and the nurturing of new industries through incubation and encouragement of foreign direct investments. from the perspective of new structural economics assumptions, the chinese economy holds great potential due to a highly effective combination of an efficient market and facilitating state. in nse, a country’s national sectors are grouped considering their importance to the domestic economy, distance to foreign developed economies, competitiveness or hidden comparative advantage. the division of sectors into five categories allows the state to match the adequate, systematic and comprehensive industrial policy instruments to the economic necessities and business requirements. the ways of encouragement or economic incentives given by authorities to national enterprises operating within the industries can include special economic zones, direct subsidies, incubation programs, industrial parks, corporate income tax holidays, tariffs, preferential governmental spending or r&d grants. these stimulative state interventions aim to provide the most business-friendly environment for domestic companies to increase their competitiveness, innovativeness and development dynamics. nse recommends various fiscal, industrial or other policy tools towards specific recognised industries (which are synthetically summarised and presented in table 1). table 1: new structural economics recommendations towards industrial policy instruments for individual categories of sectors. based on [15]. catching-up industries state authorities start with the identification of potential catching-up industries. a state should then attract companies’ attention from more advanced economies to relocate to the country and strengthen its catching-up industries. furthermore, the state should support successful businesses in new industries and attract domestic and foreign companies through ‘special economic zones’. finally, the state ought to compensate pioneering firms for the externalities they generate. leading-edge industries the following instruments should support advanced modern technologies and product development: fiscal allocations to establish research funds, government subsidies for research institutions and r&d departments. authorities can also force the pace of returns to scale increase by public procurements, legal regulations and standardisation. comparative advantage-losing industries companies should be fit with advanced, modern knowledge about design, r&d and marketing. the state authorities should also establish ‘export processing zones’ to strengthen firms’ knowledge and higher volume of products transferred abroad. ‘corner-overtaking’ industries state authorities can support these industries by investing in the education of related human capital, setting up start-up incubators, reinforcement and protection of property rights, encouraging venture capital, providing preferential taxes, facilitating start-ups run by creative talents at home and abroad, and by using government procurement to support the production of new products. strategic industries for instance, a defence industry. these crucial industries can be assisted with subsidies, r&d grants, or possibly strengthened with products’ public procurement. despite the circumstances, the number of supported companies should be minimal. 24 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective w/m2 >1300 1300 1200 1100 1000 900 850 800 750 700 650 600 550 500 450 400 375 350 325 300 275 250 225 200 175 150 125 100 75 50 <25 figure 1: wind power density distribution in china in w/m2 at 100 meters height with a 100 km coastal and cross-border area. figure from [31]. catching-up industries are the businesses that have a lot of ground to cover, comparing to much more developed industries in other countries. moreover, this category is in the new structural economics spotlight since the domestic enterprises already operate in these industries and possess good comparative advantages to gain on foreign leaders. highly capital intensive businesses, categorised as leading-edge industries, typically operate in developed countries. still, it is possible to enter this technologically advanced business by increasing a country’s comparative advantage and competitiveness of individual enterprises operating in a national economy. the third category – comparative advantage-losing industries are an example of businesses that operate in developing countries, but due to economic growth and structural changes, they lose their comparative advantage (for instance, low labour costs in a particular sector). some of the businesses included in the corner-overtaking industries section represent a potential field of competition with foreign competitors because it refers to only just established modern industries. such a situation may occur when an innovative technology, commodity or service is introduced, and all competitors start at the same level. that last sector – strategic industries – refers to those businesses that are vital to a country’s national defence. it involves companies (usually partially or wholly state-owned) whose comparative advantages have secondary importance, but they represent a great value from the perspective of national strategic security [15,29]. 4. the chinese wind power sector development in 2000 2019 chinese territory holds much potential in electricity generation from wind power, estimated to be approximately 5500 gwh annually [30]. however, wind power resources are distributed unevenly among the regions. the richest in wind power resources are the northern and central districts, like xinjiang, gansu, ningxia and inner mongolia, tibet or qinghai province, and the southern coastal area. figure 1 presents the distribution of wind power density in the chinese territory (in w/m2 at 100 m above the ground level). the utilisation of wind power resources, both onshore and offshore, began at the beginning of the 21st century. the state actions, and especially industrial policy instruments, significantly impacted the process of increasing the exploitation of this specific power source [32]. from 2000 it is observed that the chinese wind power sector vitally increased its installed capacity, translating to the growing power generation from wind turbines. figure 2 presents the growing annual total installed capacity of wind turbines year-to-year in mw. the increasing volume of installed wind power capacity translated to the growing share of wind power international journal of sustainable energy planning and management vol. 32 2021 25 paweł brusiło in the chinese energy mix. it is substantial to acknowledge that over the last twenty years total annual energy supply increased from 10.467 mwh per capita to 26.749 mwh per capita, the annual total energy generation from coal increased from 7730.694 twh to 23021.864 twh and, last but not least, the electricity consumption increased from the 1 mwh per capita up to 4.9 mwh per capita annually [35]. these general energy sector indicators draw a clear picture of how this country’s demand and energy supply has changed within two decades. simultaneously, the share of wind power in the chinese energy generation mix was continuously growing, which is presented in figure 3. the growing importance of wind power in the national energy mix also involves other renewable sources. wind power development is also related to the construction of offshore facilities and has already become an essential part of this country’s energy supply system [36,37]. the success was also achieved in the field of photovoltaics, which accounted for 22 gwh in 2000 and 223 800 gwh in 2019 [35]. the change in the group of non-hydroelectric energy sources is presented figure 2: the cumulative wind power installed capacity in 2000 – 2019 (in a gw). data from [33,34]. figure 3: the share of energy generated from wind power in the total chinese energy mix in 2000-2019 (in %). data from [33,34]. 26 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective figure 4: energy generation from non-hydroelectric renewable sources and wind power in china in 2000-2019 (in gwh). data from [33,34]. in figure 4. the energy generated from wind power is continuously the leading energy source in this subcategory of renewable energy sources. indeed, the development of this sector is also noticeable in the context of private enterprises. by 2019, the chinese wind power industry became one of the global leaders in capacity, production and export. for instance, a chinese-based company – goldwind – was among the top-4 world wind turbine producers, together with vestas (denmark), siemens gamesa (spain), and ge renewable energy (united states). in 2019, those four enterprises were responsible for nearly 55% of the wind power capacity installed worldwide [38]. another example of the chinese wind power sector growth is its export volume in 2013-2018. in that period, chinese enterprises exported over 2882 mw of wind turbines abroad [39]. by 2019 the chinese wind market of original equipment manufacturers (oems) has been dominated and consolidated mainly by goldwind, envision and myse, which accounted for 62% of the national market share. besides these three companies, the other leading chinese-based oems are listed in table 2. the development of this particular sector can also be described from the perspective of the revealed comparative advantage. table 2: top 10 chinese original equipment manufacturers and their share in the chinese wind turbine market in 2019 (in %). data from [40]. ranking 2019 original equipment manufacturers in china market share 1 goldwind 27.7% 2 envision 18.8% 3 myse 15.6% 4 windey 7.1% 5 shanghai electric 5.9% 6 csic haizhuang 5.1% 7 dongfang electric 4.9% 8 united power 3.7% 9 xemc wind 2.7% 10 crrc 2.2% 5. the revealed comparative advantage of the chinese wind power sector in 2000-2019 this part presents the revealed comparative advantage (rca) index calculations in the context of chinese export specialisation in wind turbines and relevant components. 5.1. methods and data the concept to measure revealed comparative advantage was presented for the first time by balassa in 1965 [17]. international journal of sustainable energy planning and management vol. 32 2021 27 paweł brusiło it is based on the ricardian comparative advantage theorem, which states that an economy possesses the advantage when it can produce particular commodities or provide services at a lower opportunity (comparative) cost than its trading partners. from the first publication of the rca index assumptions and formula, this approach has become one of the key indicators to measure export specialisation, resulting from a country’s economy comparative advantages. however, there are many various alternatives to calculate the rca index [41,42]. the classical approach used in this research and applied by the united nations conference on trade and development (unctad) is founded on the concept that revealed comparative can be measure with equation 1 presented below [43]. rca x x x x ai ai j p aj wi j p wj � � � � � / / (1) , where: p – is the set of all exported products (with i∈p), xai – is the country a’s exports of product i xwi– is the world’s exports of product i ∑j∈p xaj – is the country a’s total exports (of all products j in p), and ∑j∈p xwj – is the world’s total exports (of all products j in p). the presented export specialisation index’s interpretation is as follows: a country has revealed comparative advantage for a given product when the rca index value exceeds 1.00. when such observation occurs, a country’s economy becomes a competitive producer and strong exporter of the commodity’s analysed category. in other words, the higher the rca index above 1.00 is, the stronger the comparative advantage a studied economy has. on the other hand, when the rca index value is below 1.00, a country’s economy has a comparative disadvantage in the analysed product category, meaning that this economy is producing and exporting that category of goods at or below the world average. the data used in the following rca index calculations are sourced from united nations comtrade database using the harmonized commodity description and coding systems (hs). the studied time covers the period between 2000 and 2019. the first category of considered goods is 730820 (hs) towers and lattice masts made of iron or steel, and the second category of goods is 850231 (hs) electric generating sets; windpowered [44]. 5.2. results of rca index calculations analysis of the chinese export of wind power products shows that this sector achieved dynamic growth from the beginning of the 21st century until 2019. table 3 presents the chinese and world export of selected hs categories and total chinese and global export in detail. the results of the rca index calculations for the chinse wind power industry are presented in table 3. in addition to table 3 and in the context of revealed comparative advantage index calculations, it is worth presenting the dynamics of the share of the wind power products (hs codes 730820 and 850231) in the total value of the chinese and world export. figure 5 demonstrates the fluctuating share of the wind power products export in the chinese and the global export in the studied period. regarding the rca formula, the chinese wind power industry could reveal an export specialisation if the national share of the wind power products in total chinese export is higher than the global share. as presented in the mentioned figure, the increasing share of wind power products export in china has not reached the global share in 2000-2019. interestingly, in contrast to the dynamic growth of export (presented in table 3) and the total installed capacity of wind turbines in china (demonstrated in the previous section), the rca index calculations results have shown that, so far, the chinese wind power industry has not revealed a comparative advantage on the global scale yet. moreover, this sector has a comparative disadvantage, even though in 2013-2018, chinese enterprises exported wind turbines whose capacity exceeded 2882 mw [45]. however, figure 6 demonstrates something more substantial – it proves that the studied industry slowly minimises the comparative disadvantage and can potentially reveal comparative advantage and export specialisation just in a few years from now. as shown in figure 6, the growing linear trend suggests a noticeable improvement in the export specialisation of the chinese wind power industry in 2000-2019. these research results are concurrent with the other researchers’ evidence, especially leng et al. [27]. this industry’s visible revealed comparative disadvantage could be explained by low innovativeness (compared to the foreign partners), which results in moderate learning rates and a relatively low number of international patents. as lam et al. [46] demonstrate, the chinese wind power industry managed to reduce production costs, successfully transfer technology and conduct substantial capacity-building thanks to generous and sustained government 28 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective figure 5: the share of the wind power products (hs codes 730820 and 850231) in the total value of the chinese export and world export in 2000-2019. table 3: revealed comparative advantage index of the chinese wind power sector and the values of the wind power products export in 2000-2019 (in usd). values of export were sourced from the un comtrade database. year chinese export of the wind power products (hs 730820 and 850231) total chinese export (all hs categories) world export of the wind power products (hs 730820 and 850231) total world export (all hs categories) revealed comparative advantages index 2000 $14 382 176 $249 202 551 015 $888 153 095 $6 280 702 497 936 0.40812435 2001 $13 029 634 $266 098 208 590 $1 536 578 002 $6 056 245 373 170 0.19299192 2002 $31 506 646 $325 595 969 765 $1 467 974 700 $6 373 196 608 367 0.42010892 2003 $13 040 179 $438 227 767 355 $1 637 368 949 $7 446 351 958 163 0.13532582 2004 $32 721 422 $593 325 581 430 $1 876 781 411 $9 011 170 119 162 0.26479306 2005 $107 998 187 $761 953 409 531 $3 031 793 954 $10 146 669 036 616 0.47436415 2006 $161 900 373 $968 935 601 013 $4 510 368 910 $11 378 199 907 885 0.42151636 2007 $399 888 132 $1 220 059 668 452 $5 987 276 880 $13 578 167 325 447 0.74330877 2008 $761 015 109 $1 430 693 066 080 $9 441 296 888 $15 646 491 905 431 0.88151992 2009 $439 838 164 $1 201 646 758 080 $7 904 716 653 $12 224 297 419 127 0.56604856 2010 $376 901 764 $1 577 763 750 888 $8 822 769 020 $14 901 646 239 425 0.40347398 2011 $658 564 000 $1 898 388 434 783 $9 783 503 784 $17 899 100 380 183 0.63467252 2012 $851 237 289 $2 048 782 233 084 $11 677 016 185 $17 837 300 282 821 0.63467601 2013 $861 677 165 $2 209 007 280 259 $11 475 649 487 $18 549 757 678 847 0.63053384 2014 $908 677 211 $2 342 292 696 320 $12 009 724 574 $18 459 858 924 450 0.59629862 2015 $984 660 609 $2 273 468 224 113 $11 039 132 177 $16 134 265 693 596 0.63301201 2016 $1 194 919 380 $2 097 637 171 895 $10 988 859 853 $15 669 570 969 659 0.81229299 2017 $947 729 792 $2 263 370 504 301 $8 194 080 845 $17 259 263 734 074 0.88196409 2018 $1 039 527 226 $2 494 230 194 966 $9 321 111 333 $18 927 562 878 030 0.84630389 2019 $1 374 997 965 $2 498 569 865 637 $11 204 525 366 $18 188 024 605 841 0.89331089 international journal of sustainable energy planning and management vol. 32 2021 29 paweł brusiło support. the growth strategy adopted by the chinese enterprises, based on undercutting the prices and increasing the wind turbine output, translated to the imbalance of supply and demand, together with the implementation of cost-reducing innovation. in addition, regarding the jiang and liu [25] results, the overall production efficiency of this industry is relatively low, for instance, comparing to the wind power industry in the usa. however, they also provided evidence that the implemented chinese industrial policy has significantly impacted production efficiency growth in the studied period. the explanation of the revealed comparative disadvantage can also be found in the research carried by zhang et al. [47]. they proved that china is currently a global leader in installed wind power capacity, and its wind power industry has undergone tremendous development on a global scale. however, as their results show, the chinese wind turbines have low international recognition. the chinese wind power industry has, therefore, a limited impact on the global wind turbine market. the chinese wind power industry presents a moderate competitive position because of the “quantity”, not the “quality” of wind turbines. it is visible in the lower than average power generation from wind and a lower technology level of the chinese wind turbines. as the researchers point out, the innovation and technological gap to the global producers are dynamically narrowing. the continuous development of the wind power industry in china may significantly improve the chinese enterprises’ global position. the shift from massive cost-reduction production of low-price wind turbines to the production of higher quality and more innovative wind turbines will likely increase the international recognition of chinese wind turbines. the previously presented literature review provided evidence that government measures and introduced policies shaped the chinese wind power industry development in the last two decades. the increasing export specialisation and growth of the rca index of wind power products are also intertwined with the implemented policies in 2000-2019. 6. chinese policies towards the wind power sector from the nse perspective. this part reviews relevant policy statements, strategies and other crucial documents that translated to the changes in the chinese wind power sector from the beginning of the 21st century in the context of the new structural assumptions. 6.1. policies for wind power sector development in china in the 21st century from the beginning of the 21st century, the chinese central authorities have strived to develop the wind power sector through various policies and instruments. considering the increasing values of the national energy sector indicators presented above and improvements in the private sector that translated to chinese wind turbine producers’ leading global position, these policies have the desired effects. simultaneous sectoral development and figure 6: presentation of the revealed comparative advantage (rca) index of the chinese wind power industry in 2000 – 2019 with the linear trend function. 30 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective the progressive energy transition towards electricity generation from wind power and other renewables have been associated with at least 27 crucial policy documents [48]. although the significant increase in electricity generation from wind power occurred around 2005, the governmental preparations already began with the first demonstration phase in 1986-2000. in 1986, the first wind farm was constructed in rongcheng shandong province. it was then followed by small projects mainly financed by foreign entities since the chinese wind power sector was still in a very preliminary development stage. the first targeted total wind power capacity of 1 gw was planned with the ride the wind power programme 1997-2001. as a result, for the first time, large wind power projects were accomplished with the involvement of foreign enterprises such as nordex balcke-durr gmbh, vestas and micon. at the same time, the following projects were gradually increasing the chinese enterprises’ participation while the new ones were established [49]. the demonstration phase was followed by the next, substantially more advanced and prospective policies, strategies and statements that shaped the sector’s growth and established the future energy transition process’s goals. table 4 presents the review of policies selected on the basis of their relevance to the wind power sectors development. the mentioned documents, including policy statements, detailed strategies, and legal frameworks, set china’s wind power sector development milestones. as shown in table 4, the first decade of the 21st century was the preliminary and the beginning phase, when the chinese central authorities laid the solid legal and economic foundations for the wind power sector’s development. among other crucial documents, the renewable energy law of the people’s republic of china, special fund for the industrialization of wind power equipment, and wind power concession programme contributed the most to establish basics for future growth. over the subsequent years, the authorities, including national development and reform commission, the chinese state council, china national renewable energy centre, china electricity council, together with respective ministerial and administrative institutions, were focused on the intensive industrial and market growth facilitation as well as on the wind power industry and market consolidation. the improvements in terms of standardisation, implementation of more efficient measures, such as feed-in tariffs and subsidies, and the introduction of suitable regulatory actions blazed the wind power sector’s trail in table 4: the review of selected chinese policy statements, strategies, and notices concerning the wind power sector’s development in 2000 – 2020. review based on [48]. the 10th five-year plan for economic and social development of the prc (2001-2005) 2001-2005 one of the first policy statements underlining the importance of energy transition towards renewable sources of energy. this document set the objectives to promote sources like wind and solar power and introduced several instruments, including preferential tax policies for renewable energy – from 2003, foreign investments in wind energy production benefit from a reduced income tax rate of 15%, as opposed to 33%. moreover, wind turbines and their main components were vatable with a reduced tax rate (8.5%, where standard vat was 17%). the plan set the targets to increase installed wind power capacity to 1.2 gw and wind turbines manufacturing capacity at 200 mw to meet domestic demand by 2005. these objectives were associated with public procurements to construct and develop wind farms across the country. wind power concession programme 2003 (ended) the programme was established to encourage foreign and national entities to invest in largescale wind power projects (100-200 mw of installed capacity). the criteria included the share of domestically produced components and the estimated electricity price per kwh. the programme resulted in the construction, for instance, the two 100 mw wind farms in rudong (jiangsu province) and huilai (guangdong province), as well as opening a vestas blade factory to increase the utilisation of their wind turbines in projects that they were given concessions. renewable energy law of the people’s republic of china 2006 (in force) the policy framework and the milestone for the development and popularisation of all renewable energy sources in china. this document regulated the most significant aspects of the utilisation of renewables, including resources investigation and development, industrial guidance and technical support, popularisation and application of renewable energy sources, pricing and cost compensation, economic incentives and supervisory measures and legal responsibilities. international journal of sustainable energy planning and management vol. 32 2021 31 paweł brusiło special fund for the industrialization of wind power equipment 2007 (ended) example of an action designated to allocate funding for investments in wind power projects and related technology development, r&d, as well as the construction of pilot projects. more importantly, this action supported domestic companies in wind turbines production with the subsidies of 600 rmb/kwh (87.41 usd/kwh) for the first 50 new wind turbines with a minimum capacity of 1.5 mw. offshore wind development plan 2009 (in force) the agenda published by the chinese national development and reform commission (ndrc) was obliging the coastal provinces to establish regional offshore wind power strategies and set the regulations regarding the localisation of wind farms in the three categories based on the water depth: the inter-tidal zone (0-5 m), the offshore zone (5-50 m) and the deep sea zone (50 m and more). this plan resulted in the construction, for instance, in jiangsu province, two offshore projects of a 300 mw capacity each and two inter-tidal projects of a 200 mw capacity each. feed-in tariff for onshore and offshore wind 2009 (in force) the feed-in-tariff policy was established by the chinese national development and reform commission (ndrc) and divided the country into four categories based on the natural regional wind power endowment, where the larger endowment is, the lower financial support was offered: category 1: eur 0.052/kwh, category 2: eur 0.055/kwh, category 3: eur 0.059/ kwh, category 4: eur 0.062/kwh. it was the first feed-in-tariff mechanism introduced to the wind power in china. market entry standards for wind equipment manufacturing industry 2010 (ended) this document introduced detailed regulations to improve the domestic wind power equipment manufacturing market’s efficiency and competitiveness. presented restrictions allowed manufacturing entities’ function with at least five years of experience in large-scale mechanical production and a minimum production capacity of 2.5 mw. besides, companies operating in this particular market were obliged to establish professional r&d teams that should develop the technologies meeting the highest standards described in the previously adopted environmental impact assessment law. china energy white paper and the 12th five-year plan for national strategic emerging industries for china 2012 (ended) these two documents set objectives for the national energy sector to increase renewable energy utilisation in energy generation. for instance, the white paper stressed the need to develop wind turbines projects in the northern provinces. to realise these expectations, the 12th five-year plan set the objective to continue constructing wind power plants to achieve the 190 twh goal by 2015. moreover, it recommended establishing a national wind power quota system, scaling-up commercialisation of the wind offshore equipment products, increasing the product quality to meet the international standards, continuing the r&d investments in offshore and onshore wind power and, last but not least, establishing effective grid operation and energy management system for wind power. china offshore wind power development plan 2014 – 2016 (ended) another example of a plan focusing on the construction of the offshore wind projects. this document resulted in the construction of 44 offshore wind projects with a total capacity of 10.53 gw by 2016 with the cooperation between central authorities and provinces in the field of management, planning, construction, and standardisation of the required components’ purchases. notice on provisional management measures for distributed wind power project development and construction for all provinces 2018 (in force) this document published by the chinese national energy administration provided the chinese manufactures and constructors with diverse technical and non-technical regulations to establish and develop wind projects covering the aspects such as technical requirements, grid connection models, land use and marketisation. china 13th wind energy development five year plan (20162020) 2016-2020 (ended) this agenda set the objective to increase the total targeted installed wind capacity to 210 gw (205 gw onshore and 5 gw offshore), accounting for 6% of total generated power in china by 2020. 32 international journal of sustainable energy planning and management vol. 32 2021 evaluation of china’s policy for wind power development from the new structural economics perspective this country to scale up and expand to the new markets. moreover, wind power exploitation became more facilitated by adopting the offshore wind development plan and the other development agendas. besides, it is worth emphasising that the chinese authorities adopted several documents to increase administrative control and management standards over the developing wind power sector in the last few years. it resulted in legal regulations such as the notices on the administrative measures for the development and construction of offshore wind power [50]. 6.2. the chinese wind power policies and new structural economics assumptions regarding the nse assumptions, it is observed that the chinese wind power sector could be categorised as a leading-edge industry. in this case, the most suitable recommended policy should support advanced modern technologies and product development throughout the measures such as fiscal allocations to establish research funds, government subsidies for research institutions or r&d departments, as well as direct or indirect fiscal incentives, such as feed-in tariffs for grid connection projects and preferential power pricing. authorities can also force the pace of returns to scale increase by public procurements, legal regulations and wind power products standardisation. comparison of the postulated by nse theoretical industrial policy measures with the historical evolution of the political documents, statements and legal regulations suggest that the actions taken by chinese state authorities match this development path. one of the most critical aspects of the new structural economics is the comparative advantage of a country’s industries and the entire economy in a broad sense. the analysis of the revealed comparative advantage has shown that the wind power sector is increasing its export specialisation. however, it is still producing and exporting wind turbines below the world average. in the context of the new structural economics, to accelerate the export growth and increase the export specialisation, the chinese authorities should continue the feed-in tariff policy for the wind power projects. as the previous studies show, this instrument was one of the most successful measures to stimulate the sector’s growth and allowed the chinese companies to dominate the national market and increase their share in the global market. the announced decrease and final cancellation of feed-in tariffs may potentially affect this sector’s growth and slow down the process of achieving export specialisation in wind turbines. however, the review of the policies implemented in 2000-2019 provided numerous examples of the other measures that shaped the growth of this sector, including standardisation, legal regulations, grid connection models, institutional support, fiscal policy instruments and direct r&d subsidies. in conclusion, the course of action adopted by the chinese authorities in recent years matches the new structural economics assumptions. 7. conclusions this study aimed to evaluate the role of chinese state authorities in shaping wind power development from the new structural economics perspective. the results revealed the wide range of policies and measures that have already translated to this sector’s dynamic growth in 2000-2019. development of this sector has its reflections in the energy indicators such as the growing installed wind power capacity, the share of this source in the chinese energy mix and the chinese manufacturers’ growing global position. however, the analysis of the rca index provided evidence that this industry has revealed a comparative disadvantage in wind power products for the last two decades, despite the significant increase in export volumes and installed capacity. the review of relevant literature proved that such low export specialisation could be caused by the relatively low innovativeness of this industry and production growth based on cost reduction. the reviewed literature has shown that the chinese wind power industry has a relatively low international recognition and an impact on the international wind power market. nowadays, a substantial challenge for this industry is a low production efficiency and decreasing support offered by the chinese state authorities – both in the context of supply-side and demand-side policy, including a decrease in feed-in tariffs. despite the demonstrated comparative disadvantage, this industry is on the right track to gain export specialisation in wind turbine manufacturing in a few years. despite circumstances, the chinese state authorities continuously support the growth of international competitiveness and innovativeness of the national wind power industry. the approach towards this industry represented by the authorities is constantly changing, but still, it presents a persistent pursuit of growth and continuous improvements in the applied energy transition international journal of sustainable energy planning and management vol. 32 2021 33 paweł brusiło policies. furthermore, the chinese wind power sector is at a new threshold since implementing the 13th fiveyear plan for energy (which demonstrated ambitious aims for 2016-2020). the potential chance for this sector is, among others, the pursuit of rapid development of offshore wind power plants. still, thanks to the recently adopted policies and strategies, the chinese wind power industry may increase its technological advancements in the wind turbines installed on the sea areas rich in wind power resources. the chinese wind power development policy, adopted at the beginning of the 21st century, went through dynamic changes that translated to its current global position for over twenty years. these policies were analysed from the new structural economics perspective. this study revealed that the state actions match the policy’s assumptions towards the leading-edge industries. additionally, the insight into the analysed policy-driven wind power industry blazes the trail for other countries, which consider following the chinese policy and state interventions on a field of shaping the growth of leading-edge industries and the energy transition process in general. since the wind power sector in china is newly formed, this field of research should be continuously developed. considering the simultaneous growth of the national wind power sector and the revealed comparative disadvantage of the chinese wind turbines on a global scale, the future research must be focused on studying the individual factors that affect chinese low export specialisation in this type of commodities and present the prognosis model of the future export specialisation in wind power products. in this context, the presented results contribute to a debate about the role of the chinese development policy in shaping the wind power sector’s growth by applying the new structural economics approach and the export specialisation perspective. acknowledgements the author would like to express his profound gratitude to the anonymous reviewers whose comments contributed to this research paper’s highest quality. besides, the author would like to thank for the opportunity to develop this research concept during the doctoral seminar organised by the european institute for advanced studies in management in brussels, belgium. the author’s participation in this event was financed from the interekon project financed by the ministry of science and higher education in poland under the programme “regional initiative of excellence” 2019 2022 project number 015/rid/2018/19 total funding amount 10 721 040.00 pln. this research’s preliminary results were presented during the apeen21 annual conference of the portuguese association of energy economics, held on 20th and 21st january 2021 and organised by the portuguese center for environmental and sustainability research. the 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https://comtrade.un.org/ http://www.cwea.org.cn/ https://doi.org/10.1016/j.enpol.2017.03.023 https://doi.org/10.1016/j.enpol.2017.03.023 https://doi.org/10.1016/j.rser.2020.109881 https://doi.org/10.1016/j.rser.2020.109881 https://www.iea.org/policies/ https://www.irena.org/ https://www.irena.org/ http://www.nea.gov.cn/ http://www.nea.gov.cn/ _hlk83571917 _hlk82181514 _hlk82181382 _hlk82181895 _hlk82182067 _hlk82182247 _hlk82182322 _hlk82182429 _hlk82182441 _hlk82182789 _hlk82183000 _hlk82183013 _hlk82183280 _hlk82183513 _hlk82183599 _hlk82183831 _hlk82183843 _hlk82183892 _hlk82183979 _hlk82251714 _hlk82251790 _hlk82251907 international journal of sustainable energy planning and management vol. 37 2023 5 international journal of sustainable energy planning and management vol. 37 2023 5–20 *corresponding author – e-mail: nedomah@pau.edu.ng abstract following decades of energy systems interventions, there has been growing concerns about the impact of historical interventions on-the-ground and how they shape changes in energy systems. who are the key actors and how have they shaped historical energy systems interventions? in this study, an analysis of stakeholders in nigeria’s electricity sector through a social network mapping lens was conducted. first, a stakeholder mapping based on an interest-influence matrix that shows the degree of various stakeholder interest and influence in shaping decisions and interventions in both centralized and decentralized electricity systems was developed. secondly, a stakeholder network grid that shows the relations between the various stakeholders (who knows whom) was developed. the study reveals that there are stronger network relations among stakeholders involved in issues and decisions on centralized electricity grid infrastructure which is influenced by the presence of stronger regulations/regulatory instruments. however, these stakeholder relations are weaker in decentralized electricity systems due to less stringent regulations in the decentralized electricity space. the study concludes by highlighting the impact of the stakeholder relations and the interest-influence tussle on the future of electricity systems development in nigeria keywords developing countries; energy governance; energy in africa; energy stakeholders; future energy; http://doi.org/10.54337/ijsepm.7246 1. introduction energy stakeholders are an essential group of actors that shape decisions in the energy market. these actors, often working as policy workers, help in addressing specific societal challenges through proffering solutions on issues related to policy formulation and implementation. indeed, energy plays a vital role in the global economy [1,2]. it is the prime mover of global economic activities [3,4]. all sectors such as transport, housing, agriculture and industry (at municipal, sub-national, national, regional and global levels) depend on it [5,6]. the need to provide energy that facilitates sustainable development, impact health and improve human wellbeing has been a major driver of energy demand and energy systems interventions [7,8]. addressing issues around increased energy demand also provides an opportunity to address the energy transition challenge. energy transitions broadly refer to processes that entail changes from one form, style, state, place or scale of energy system to another [9–13]. this change often occurs at different scales within different contextual norms. rojey argues that transiting to sustainable lowcarbon energy system helps in addressing three important threats [14]: first, to guarantee long-term availability of energy resources required for development; second, to address issues of security of supply; and lastly, to ensure the availability of the means to avert catastrophic climate effects. addressing the challenge of energy transition requires acting from a perspective of sustainable development [15], who triggers change? social network mapping, stakeholder analysis and energy systems interventions in nigeria’s electricity sector norbert edomah* school of science and technology, pan-atlantic university, km52, lekki-epe expressway, ibeju-lekki, lagos nigeria; and merian institute for advanced studies in africa (miasa). university of ghana, greater accra, ghana mailto:nedomah@pau.edu.ng http://doi.org/10.54337/ijsepm.7246 6 international journal of sustainable energy planning and management vol. 37 2023 who triggers change? social network mapping, stakeholder analysis and energy systems interventions which points to the need for global regulation and governance to mitigate climate risks [16]. the future of energy is of great concern to policy makers, industry players, end-users and other stakeholders. it is generally believed that future energy systems will be driven more by policy instruments and regulations in order to accelerate the speed of change to transition to cleaner and more sustainable energy sources [17,18]. this paper explores the nigerian case by addressing the following question: • who are the energy stakeholders and how does interaction among them shape energy systems interventions in nigeria’s electricity sector? in structuring this paper, we introduce intervention theory and energy systems interventions in section 2 while section 3 outlines the materials and methods used in this research. in sections 4, we present the regulatory contexts shaping stakeholder interactions and interventions while section 5 highlights the historical institutional and regulatory interventions in nigeria’s electricity sector. in sections 6 and 7, we present the stakeholder network grid (who knows whom) and the stakeholder mapping of key actors (with respect to interest versus influence in shaping energy decisions). the discussions and concluding thoughts are presented in sections 8 and 9 respectively 2. ntervention theory and energy systems interventions intervention theory entails the analysis of various decision making problems that involves effectively intervening in addressing specific issues in order to achieve a desired outcome [19]. this theory helps to probe the effectiveness of different forms of interventions and to question at what point it is desirable and appropriate to intervene in addressing a particular issue [20,21]. historically, policy makers and government institutions have addressed many systemic problems in different sectors through interventions [22]. this is also true with the energy sector. however, what dimensions have historical energy systems interventions taken over time? the energy sector, which is one of the sectors dominated by “hard infrastructure”, account for far more development investment than other sectors [23,24]. energy investments have become very complex, incorporating environmental, behavioural and social goals over time [25,26]. these also underpin the various forms of innovations and interventions provided. since energy is a major area for global development assistance expenditure, many development institutions see the need for various forms of interventions through: policy development [27,28]; infrastructure investments; energy access interventions for rural electrification [29]; improvement of cleaner fuels [30]; inclusive energy systems that addresses the needs of women [31,32]; and issues addressing sustainability [33]. indeed, energy systems interventions occur at different scales within different contextual norms. in highlighting successful energy policy interventions in africa, karekezi et al. argued that following the experiences of some projects already implemented, there is a need for adequate policy frameworks and financing schemes to improve the current energy situation [34]. they further argued that policy interventions in the areas of electricity generation (particularly geothermal energy in kenya and cogeneration in mauritius) and distribution (in south africa and ghana), liquefied petroleum gas (lpg – in senegal) and biomass for improved cook stoves across different parts of africa have yielded some results. karekezi et al. further argued that some factors are necessary in ensuring the success of policy initiatives within the electricity sector [34,35]. these include: • long term commitment of public and private sector actors. • focusing on initiatives that provide opportunities for increased income generation. • preferences given to specialized initiatives with a specific focus. • building energy initiatives around existing networks that minimizes setup cost for new networks and accelerate scale-up. • focus on local skill development in the case of new technologies. mapping interventions also requires a targeted approach. kok et al. argues that to ensure energy-related behavioural change, there are six important steps that must be followed in intervention mapping [36]: • needs assessment – which entails an analysis of the problem and its consequences. • programme objectives – which entail answering the who, why and what questions for individual and organizational agents. • methods and application – which entail defining methods and applications to meet the programme objectives. international journal of sustainable energy planning and management vol. 37 2023 7 norbert edomah • programme development – which entails actual development of the interventions. • planning for programme implementation – which entails a plan for the implementation of the interventions. • planning for programme evaluation – which entails the effective measurement of the intervention impact using some measureable indicators. 3. materials and methods the nigerian electricity sector was chosen for this study because of the inherent challenges in the sector [37,38]. nigeria’s electricity sector somewhat mirrors the worst sort of challenges one can experience within a global south context such as unreliable fuel supply for electricity generation, high grid (technical and non-technical) losses, among others [39,40]. indeed, with a population of over 200 million people, nigeria only generates an average of 4,500mw of grid electricity and still has about 45 percent of the population (amounting to over 90 million people) without access to electricity [41–44]. understanding historical interventions in nigeria’s electricity sector and the dynamics around such interventions can help shape current and future decisions around energy infrastructure provisions that address the need of people in society in a more sustainable way. the associated data used for the preparation of this article were primarily from secondary data sources. the research aimed at mapping the various stakeholders in nigeria’s electricity sector to ascertain how the various stakeholder interactions shape energy and electricity systems interventions. the following steps were used in establishing the stakeholder of focus and how data was collected. we have referenced some important data sources within each step. 1. to determine the various decision making and non-decision making stakeholders in nigeria’s electricity sector in both centralized grid and decentralized electricity sectors, we focused on obtaining secondary data from government (national) and multi-lateral agencies such as the rural electrification agency and the international energy agency [45,46]. 2. to determine the role of each stakeholder in electricity systems interventions and how they shape electricity systems decisions, we obtained data through interview of some stakeholders and data from published literature on stakeholder activities [47]. these data helped us to ascertain the various influence-interest dynamics among the different stakeholders. 3. the purpose of the interviews conducted was to confirm the actual activities and interactions among stakeholders whose activities were not so obvious in the public domain. some examples of such stakeholders include: some private generation companies; original equipment manufacturers (oems); electricity systems installers, traders and retailers; among others. 4. we obtained data from secondary sources on stakeholders whose activities are readily available in the public domain. examples are those stakeholders in centralized grid systems who are mandated (by regulation) to provide periodic data on their activities. indeed, materials and data (such as policy reports and archival documents) that aided the design of the stakeholder mapping were obtained from the following groups. 1. selected nigerian grid-connected generation companies 2. selected nigerian grid-connected distribution companies 3. transmission company pf nigeria (tcn) 4. nigerian electricity regulatory commission (nerc) 5. rural electrification agency of nigeria 6. international energy agency (iea) 7. energy information administration (eia) 8. world bank 9. african development bank in preparing the stakeholder mappings, the following procedure was followed [48,49]: • identify the relevant stakeholders in nigeria’s electricity sector: some stakeholders are leaders in shaping decisions, while others are better contributors and some act as just bystanders. • categorize/classify the relevant stakeholders based on their market presence and segment (centralized or decentralized electricity market) • analyze the relevant stakeholders and classify each stakeholder based on their influence (low, medium or high) and interests (low, medium or high) for both centralized and decentralized electricity space. 8 international journal of sustainable energy planning and management vol. 37 2023 who triggers change? social network mapping, stakeholder analysis and energy systems interventions • develop a power (influence)/interest matrix that situate each relevant stakeholder. the development of this matrix is influenced by interest, impact, motives, contribution and benefit of each stakeholder in shaping electricity policy and infrastructure decisions. these factors influence the level of stakeholder interest and influence. the archival record analysis was followed by semistructured (telephone) interviews of some stakeholders in the nigerian electricity sector to confirm the validity and reliability of some records obtained from the archives. the stakeholder groups represented in the interviews are as follows: 1. electricity generation companies (including independent power producers ipp) 2. transmission company of nigeria (tcn) 3. electricity distribution companies 4. the nigerian electricity regulatory commission (nerc) 5. electrical installation service companies 6. energy users. the semi structured interviews were conducted among selected stakeholders with relevant experience in nigeria’s electricity sector. the target participants were made up of people who work within organizations that are directly impacted by various forms of interventions. table 1 shows a summary of the experiences of interviewees and the date of interview. 4. regulatory context shaping stakeholder interactions and interventions in nigeria’s electricity sector in this section, we provide two important backgrounds that helps to provide an understanding of the context that shape interactions among stakeholders in the nigerian electricity sector. first, we provided a summary of some strategic policy documents prepared to help address some specific market challenges in the sector (in section 4.1). in section 4.2, we highlighted the important regulations shaping the on-grid and off-grid electricity space and the essential features of these regulations. 4.1 strategic policy documents and regulatory acts of parliament on electricity provision in nigeria the electric power sector reforms act (epsra) of 2005 is the only policy document (backed by an act of parliament) that governs the affairs of the nigerian electricity sector. this document provided the foundation for the establishment of two important institutions: 1. the nigerian electricity regulatory commission (nerc) whose mandate is to govern and regulate the affairs of stakeholders in the nigerian electricity industry 2. the rural electrification agency (rea), and by extension the rural electrification fund (ref) to aid the deployment and expansion of electricity infrastructure to communities without access to the grid, particularly in rural centres. table 1: summary of experiences of interviewees and the date of interviews interviewee sector experience within the electricity sector interview date a over 15 years’ experience working in the nigerian electricity sector in different capacities. initially worked with a multinational private oem involved in providing energy services and later moved to a government utility-scale company. november 2020 b over 15 years’ experience working in the nigerian electricity industry, spending a large part of that time working at a utility-scale electricity generation plant. november 2020 c over 5 years’ experience in the nigerian electricity sector working with one of the largest electricity distribution companies in nigeria december 2020 d an energy end-user who is very conversant with the developments in the nigerian electricity supply industry december 2020 e over 10 years’ experience in the nigerian electricity sector working with one of the largest electricity distribution companies in nigeria december 2020 f over 20 years’ experience in the nigerian electricity sector, working with a large utility-scale company. december 2020 g an independent consultant in nigeria’s electricity sector with over 7 years’ experience working and consulting in the sector. december 2020 h over 8 years’ experience working with the electricity sector regulator in nigeria. december 2020 international journal of sustainable energy planning and management vol. 37 2023 9 norbert edomah the epsra act provided a basis for the mapping and development of several national strategic policy documents targeted at addressing specific challenges within the sector. some of these documents include: 1. national renewable energy and energy efficiency policy (nreeep) (2015 – 2030) [50]. 2. national energy efficiency action plan (2015 2030) [51] 3. rural electrification strategy and implementation plan (resip) [7,52] indeed, the rea (as a strategy) have focused on using decentralized electricity sources to address the challenge of rural electrification, a large chunk of which include renewables (particularly solar energy solutions). table 2 provides a summary of the various strategic policy documents, the year enacted/initiated, the purpose of each document and the implementation status thus far. table 2: some strategic policy documents in the nigerian electricity sector policies/ regulations year enacted purpose implementation status 1 electric power sector reforms act 2005 to provide licensing and regulation for the generation, transmission, distribution and supply of electricity while enforcing performance standards, consumer rights and obligations this is the overarching document governing all regulatory and intervention activities in nigeria’s electricity sector. this act enabled the creation of the following: the nigerian electricity regulatory commission (nerc), which is the main regulatory body for the nigerian electrical power sector. rural electrification agency (rea) that focuses on rural electrification initiatives to increase electricity access. 2 national renewable energy and energy efficiency policy (nreeep) (2015 2030) 2016 this is the overarching policy document on renewable energy and energy efficiency in nigeria. it defines regional policy targets and national targets for renewable energy and energy efficiency. with the help of this document, nigeria have been able to set some targets for inclusive access to modern and clean energy resources to address energy security and climate objectives. 3 national energy efficiency action plan (2015 2030) 2016 sets out the implementation strategy for the national renewable energy and energy efficiency policy (nreeep) it provides an overview on concrete policy and regulations, laws, incentives and measures to be implemented to achieve nigeria’s energy efficiency targets a major outcome of this initiative is the development of the nigerian national building efficiency code in 2017 by the federal ministry of power. this code sets the minimum standards for energy efficiency requirements in buildings in nigeria. however, there is still a huge gap in the implementation of this policy 4 rural electrification strategy and implementation plan (resip) 2016 provides an implementation and measurement framework for driving rural electrification across nigeria using on-grid and off-grid energy solutions. the goal is to achieve electricity access of 75% and 90% by 2020 and 2030 respectively with renewable energy contributing at least 10% to the energy mix by 2025. this goal is currently implemented through a rural electrification fund (ref) using open competitive bids (for grid extension, stand-alone systems and minigrid projects) that is implemented by the rural electrification agency. some vital challenges to the implementation of this strategy include: central coordination (with a top-down government planning and coordination approach) at national level willingness and ability to pay for electricity by rural dwellers impacts on demand and supply dynamics. high cost of financing rural electrification and a scarcity of skilled technical personnel for energy projects. the current electrification rate in nigeria hovers around 55%. 10 international journal of sustainable energy planning and management vol. 37 2023 who triggers change? social network mapping, stakeholder analysis and energy systems interventions table 3: summary of existing regulations for on-grid and off-grid electricity infrastructure deployment (source:[53]) s/n type features regulations 1 captive generation generation of electricity exceeding 1 mw for the purpose of consumption by the generator, and which is consumed by the generator itself, and not sold to a third-party. a permit holder must apply for, and receive prior written consent of the commission before supplying surplus power not exceeding 1mw to an off-taker. off-grid power consumed by generating entity >1mw no distribution infrastructure required permit required from nerc nerc captive power generation regulation 2 embedded generation generation of electricity that is directly connected to (and evacuated through) a distribution system which is connected to a transmission network operated by a system operations licensee. plant directly connected to distribution network. > 1mw power sold directly to a distribution company through a bilateral contract. license required from nerc good for cluster of customers e.g., industrial estates nerc regulation on embedded generation 3 independent power plant – ipp (off-grid) plant is not connected to the national grid. power is sold to an off-taker (commercial or residential) through a bilateral contract. good for cluster of customers e.g., housing estates, industrial customers, large installations of telecoms equipment there may be a need to invest in distribution infrastructure requires license from nerc nerc generation procurement regulations. 4 independent power plant – ipp (on-grid) generation plant is connected to the grid power is evacuated to the national grid. suitable for large scale projects requires power purchase agreement (ppa) with the bulk trader (nigerian bulk electricity trading nbet) subject to capacity need and system constraints. requires license from nerc. nerc generation procurement regulations. 5 embedded independent electricity distribution network (iedn) for areas where there is presently no distribution network. will connect to existing distribution companies to be able to distribute power possibility of ring fencing a section of willing paying customers of a distribution company distribution companies will be responsible for installation and management of electricity meters independent electricity distribution regulation 2012 6 urban offgrid independent electricity distribution networks (iedn) iedn in an urban area but not connected to any licensed transmission network separate tariffs to be approved by nerc installation and management of electricity meters will be the responsibility of investor requires license from nerc independent electricity distribution regulation 2012 7 rural offgrid independent electricity distribution networks (iedn) isolated iedn in a rural area not connected to any licensed distribution or transmission network. rural area is defined as an area: (a) situated over 10km from the boundaries of an urban area or city with less than 20,000 inhabitants. (b) at least 20km away from the nearest existing 11kv line. will be required to purchase power from a generating company through a bilateral contract. can seek financial support from the rural electrification fund. requires license from nerc independent electricity distribution regulation 2012 international journal of sustainable energy planning and management vol. 37 2023 11 norbert edomah 8 mini-grids any electricity supply system with its own power generation capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a distribution licensee’s network. integrated local generation and distribution system with installed capacity below 1mw, capable of serving numerous end‐users independent of the national grid. it may be ‘isolated’ with no link to any other network or ‘interconnected’ with the main grid such that energy exchange is possible between them. may cater to power needs of either unserved or underserved areas. a tripartite agreement between the mini-grid licensee, distribution company and the community may be required may require license from nerc. however, for small projects (below 100kw) only a simple registration with nerc is required. nerc regulations for mini-grids 2016 4.2 existing regulations supporting the deployment of off-grid decentralized electricity solutions in nigeria – including renewables the nigerian electricity regulatory commission (nerc) developed different regulatory tools to enable the effective deployment of different on-grid and offgrid electricity infrastructure (including renewables). the important regulations include: 1. nerc captive power generation regulation 2. nerc regulation on embedded generation 3. nerc generation procurement regulations. 4. independent electricity distribution regulation 5. nerc regulations for mini-grids these aforementioned regulations were enacted to address specific market failures. table 3 presents a summary of these regulations highlighting their key features and the type of issues they aimed at addressing. 5. historical institutional and regulatory interventions in nigeria’s electricity sector historically, energy systems change within the nigerian electricity sector have been highly influenced by various forms of interventions in the forms of regulations or institutional establishments of agencies saddled with the responsibility of addressing specific energy related challenge(s) [4,47]. the archival analysis revealed that changes in energy systems within the nigerian context were highly influenced by two important forms of interventions: 1. institutional interventions (from 1896 to 2007) 2. regulatory interventions (from 2005 to 2020) these aforementioned forms of interventions were characterized by various government instruments and regulatory frameworks (in the forms of policy levers) targeted at achieving a set objective. the following subsections now delve into the dynamics of institutional and regulatory interventions and how they have impacted on energy systems change. 5.1 institutional interventions and energy systems change various interventions in energy systems change in nigeria (from 1896 to 2007) occurred through establishment of new institutions entrusted with the responsibility of achieving some set objectives. this was the case for over a century of energy systems development in nigeria [54]. the dynamic of institutional interventions impacted greatly on energy resource use, choice of technology and energy consumption patterns [21,23]. indeed, within the nigerian context, institutional intervention was a major determinant of energy infrastructure choices between 1896 and 2007. the establishment of the public works department (pwd) whose responsibility was the development of public infrastructure contributed to the provision of the first electrical power plant in lagos in 1896. the discovery of coal in 1909 aided the establishment of the nigerian electricity supply company (nesco) in 1922, whose focus was to develop various electrical supply infrastructure in nigeria. this led to the provision of various coal-fired electrical power plants from 1923 to 1948. the need to provide more electrical generation capacity to support industrialization led to the establishment of the nigerian government electricity undertaking (ngeu) in 1946. the ngeu was charged with the responsibility to improve electricity infrastructure provision by at least 200% to support industrialization efforts in nigeria. in 1950, the ngeu morphed into the electricity corporation of nigeria and 12 international journal of sustainable energy planning and management vol. 37 2023 who triggers change? social network mapping, stakeholder analysis and energy systems interventions was charged with the responsibility of developing and planning nigeria’s electrical energy potential in a manner that provides cheap and reliable electricity from various sources. the need to develop nigeria’s hydropower potential led to the setting-up of the niger dams authority in 1962, charged with the responsibility to develop hydropower in nigeria. however, the establishment and morphing of various institutions within the electricity sector led to some complications. there were cases of overlapping responsibilities and a lack of clarity on who takes responsibility for what [4,54]. in an attempt to address some of the institutional complications, the national electric power authority (nepa) was established in 1972. it was the result of a merger of the electricity corporation of nigeria and the niger dams authority. nepa had the responsibility for the provision, operations and maintenance of electricity infrastructure in nigeria. in 1978, the energy commission of nigeria was set-up to focus on coordination and strategic planning of national energy policies (including oil, gas, and electricity). to pave the way for the liberalization of the nigerian electricity market, the power holding company of nigeria (phcn) was set-up in 2005 as a holding company that would eventually break-up into eleven distribution companies, one transmission company and several generation companies. however, the phcn only catered for centralized grid electricity system. to address the needs of those without access to the grid, the rural electrification agency (rea) was formed in 2006 to coordinate and promote rural electrification programmes in nigeria. the establishment of the nigerian electricity regulatory commission (nerc) in 2007 marked a major milestone in ending an era of major institutional interventions in nigeria’s electricity sector. the nerc has the responsibility of ensuring regulatory compliance, issuing permits and licenses to market participants and ensuring consumer protection within the electricity sector [13]. table 4 dhows a summary of various historical institutional interventions in nigeria since 1896. table 4: historical institutional interventions in nigeria’s electricity sector s/n institutional interventions year key objectives of the intervention 1 public works department 1896 an agency of the colonial government that had responsibility for the provision and maintenance of public infrastructure including roads, rail, ports, electricity, etc. 2 nigerian electricity supply company (nesco) 1922 charged with the responsibility for developing electrical generation (supply) infrastructure 3 nigerian government electricity undertaking (ngeu) 1946 established as a holding company to pave the way for the formation of a corporation. its task was to address challenges limiting the accelerated provision of electricity infrastructure in nigeria. 4 electricity corporation of nigeria (ecn) 1950 charged with the task of planning and development of nigeria’s electrical energy potential in a manner that guarantees continuity of supply at the cheapest price. 5 niger dams authority 1962 charged with the responsibility for developing nigeria’s hydropower potential 6 national electric power authority (nepa) 1972 t7his is a result of a merger between niger dams authority and the electricity corporation of nigeria. it had the responsibility for the provision, operation and maintenance of electrical infrastructure across nigeria. 7 energy commission of nigeria (ecn) 1978 charged with the responsibility for strategic planning and coordination of national energy policies. 8 power holding company of nigeria (phcn) 2005 established as a holding company to pave the way for the liberalization and privatization of national electricity assets 9 rural electrification agency (rea) 2006 promote and coordinate rural electrification programmes in nigeria 10 nigerian electricity regulatory commission (nerc) 2007 a regulatory agency for the electrical power industry that is charged with issuance of licenses, permits to market participants and regulatory compliance 11 nigerian electricity management services agency (nemsa) 2015 enforcement of technical standards and regulations; testing and certification of electrical installations, meters and instruments, to ensure safety and reliability of electrical power supply in the nigerian electricity supply industry. international journal of sustainable energy planning and management vol. 37 2023 13 norbert edomah 5.2 regulatory interventions and energy systems change analysis of archival record shows that most energy systems interventions that happened after the establishment of the nigerian electricity regulatory commission (nerc) took the form of regulatory interventions. the nerc has been the major umpire responsible for the preparation and enactment of various regulations in nigeria’s electricity sector. the electrical power sector reforms act (epsra) enacted in 2005 empowers the nerc to intervene in addressing issues in nigeria’s electricity sector through various forms of regulations [40]. indeed, since 2007, most energy systems change experienced were influenced by regulatory interventions through the nerc. the first major regulatory intervention by the nerc was the provision of a framework for the issuance of permits to market participants interested in captive power generation. this regulation was enacted in 2008. captive power plants are plants of over one-megawatt (1mw) capacity whose generated power is consumed by the producer. in 2012, two important regulations were introduced to address some salient issues, the embedded generation regulation and the independent electricity distribution network regulation. embedded generation is simply electricity generation that is connected to the distribution network rather than the high voltage transmission grid. the embedded generation regulation paved the way for private sector participation in small scale electricity generation plants (mostly less than 20mw) that addresses the needs of some large residential estates, industrial hubs and business clusters. however, considering the possible bureaucracy in actualizing the aims of this regulation under the existing infrastructure ownership framework, the nerc enacted the independent electricity distribution network regulation. this regulation consists of a framework that enables the issuance of permits to market participants interested in the development and operation of independent distribution networks. in reality, most players in the embedded generation market also applied for permits to construct and manage their distribution network in order to ensure continuity of supply to their customers. in 2014, the nerc released two regulations that stipulate the local content requirements in nigeria’s electricity sector and a regulation that stipulates the requirements for the purchase of additional electrical generation capacity. this was shortly followed by four regulations in 2015 addressing some salient market issues. these are 1. electrical network investment regulations, which stipulates the procedures and incentives for investments in electrical network capacity expansion 2. electrical supply and installation regulatory standards, which defines the requirements and standards for electrical network equipment and installation procedures for nigeria 3. smart metering regulations, which outlines the requirements for metering systems in nigeria’s electrical supply industry 4. feed-in tariff for renewable energy sources, which stipulates the procedure for purchase of renewable energy by wiling off-takers and how to connect it to the grid. the minigrid regulation was released in 2016 with the aim of enabling the development of stand-alone (isolated infrastructure) or interconnected with existing electrical generation and distribution infrastructure. the permitted infrastructure capacity must be less than 1mw. in 2017, a regulation stipulating the conditions for eligibility of customers to qualify for a direct purchase of electricity from generation companies was enacted. with this regulation, large manufacturing plants could go into direct purchase agreements with electricity generation companies. in 2018, the metering asset provider regulation was enacted. this regulation was aimed at addressing the metering infrastructure deficit for most energy consumers. it also targets to eliminate the case of estimated electricity billing. the involvement of private investments in metering services was aimed at accelerating the rollout of meters to end users. as already outlined, regulatory interventions have been used more within the past decade to address evolving market issues in nigeria’s electricity supply industry. table 5 shows a summary of the various forms of regulatory interventions/policy levers used, year of promulgation of the policy levers and the targeted objectives from 2007 to 2018. indeed, institutional and regulatory interventions have been a dominant feature of the development trajectory of the nigerian electricity supply industry. 6. who knows whom? stakeholder network grid in nigeria’s electricity sector stakeholder relations play a very vital role in forging relationships of mutually beneficial connections of 14 international journal of sustainable energy planning and management vol. 37 2023 who triggers change? social network mapping, stakeholder analysis and energy systems interventions table 5: summary of historical regulatory interventions in nigeria’s electricity sector s/n regulatory interventions year key objectives of regulatory interventions 1 electric power sector reforms act (epsra) 2005 this is the primary legislation that governs the nigerian electricity supply industry and its entire value chain (generation, transmission, distribution and utilization of electrical energy). it also establishes the nigerian electricity regulatory commission (nerc) to take charge of licensing and regulation of market participants in the industry 2 permit for captive power generation regulation 2008 provides a framework for issuance of permits to qualified operators of captive electrical power in nigeria. also ensures compliance to set standards. 3 embedded generation regulation 2012 provides a framework for issuance of licenses and permits to qualified operators of embedded electricity generation in nigeria. also ensures compliance to set standards. 4 independent electricity distribution networks regulations 2012 provides a framework for the issuance of licences to qualified operators to engage in electricity distribution, independent of the already existing successor distribution companies, and to ensure compliance with set standards 5 regulations on national content development for the power sector 2014 targets the promotion and utilization of nigeria’s human and material resources, goods, works and services in the industry as well as building capabilities in nigeria to support increased investment in the industry 6 regulation for the pr8ocurement of generation capacity 2014 provides and defines the process to be used by a buyer in procuring additional electricity generation capacity. 7 regulations for the investment in electricity networks 2015 defines the procedures for investment in nigeria’s electricity networks. it aims to create incentives to encourage the transmission and distribution companies to make sustainable investments in electricity capacity expansion 8 nigerian electricity supply and installation standards regulations 2015 it contains a compendium of standards for the design, construction and commissioning of electrical infrastructure in nigeria’s electricity supply industry. 9 nigerian electricity smart metering regulation 2015 this is a technical regulation that applies to all licensees deploying smart metering. it outlines the requirements for a smart metering system in nigeria’s electricity supply industry. 10 feed-in tariff for renewable energy sourced electricity in nigeria 2015 this regulation estimates renewable energy tariffs. it allows for renewable electricity capacity to be bought by willing off-takers and connected to the grid 11 mini grid regulation 2016 it allows for the development of integrated electricity generation and distribution supply systems less than 1mw. this can be achieved either as an isolated infrastructure or connected to existing distribution infrastructure 12 eligible customer regulations 2017 this outlines the terms and conditions guiding direct purchase of electricity by end-users from generation companies 13 metering asset provider (map) regulations 2018 targeted at closing the metering gap, eliminate estimated billings and promote private investments by providing for meter asset providers (map) who offer metering services to assist in accelerated rollout of meters to end users. table 6: stakeholder network grid in nigeria’s electricity sector international journal of sustainable energy planning and management vol. 37 2023 15 norbert edomah common interests among industry players in a given sector. within the nigerian electricity sector, stakeholder relations are forged among groups with common interests to influence decision outcomes that favours those involved. table 6 shows a stakeholder network grid highlighting the stakeholder relations among stakeholders in the centralized and decentralized space of the nigerian electricity sector. the degree of stakeholder relations (as shown in table 6) ranges from low (weak) to high (strong). the strength of the stakeholder relations is dependent on the (complexity of the) common objective to be achieved and the role of the individual stakeholder in shaping the desired outcome. our study reveals that the stakeholder relations among industry players in the centralized grid electricity space in nigeria’s electricity sector are much stronger than the decentralized electricity space. a major factor responsible for this is that the centralized electricity space is more regulated, with well-defined regulatory tools and instruments governing the affairs of various stakeholders and mode of infrastructure interventions. indeed, to effectively complete a project in the centralized electricity space, there necessarily must be some sort of interface between at least two stakeholders which oftentimes results as an unintended consequence of the regulatory tools and policy levers in place. in the decentralized electricity space, stakeholder relations are weaker. this is partly due to the weak regulatory regime in place. there are less policy levers and regulatory tools governing the affairs of the various activities in the decentralized electricity space. indeed, the nigerian electricity regulatory commission (nerc) only provided guidelines defining the minimum requirements that must be met in order to proceed with certain decentralized electricity projects. a good example is the solar minigrid regulation, which defines the minimum requirements to deploy a solar minigrid of various capacities. in this way, projects may be executed by a single stakeholder as long as the minimum requirements are met. 7. interest vs influence: stakeholder mapping of key players in nigeria’s electricity sector in this section (following our analysis) we show and categorize the various stakeholders based on their degree of interest and influence in shaping decisions in nigeria’s electricity sector. this is done by creating an interest-influence stakeholder map of industry players in nigeria’s centralized (see figure 1) and decentralized (see figure 2) electricity sector. the mapping shows the dynamics and interplay between and amongst industry figure 1: stakeholder mapping of nigeria’s centralized electricity sector. 16 international journal of sustainable energy planning and management vol. 37 2023 who triggers change? social network mapping, stakeholder analysis and energy systems interventions players based on the degree of stakeholder interest and influence. within the centralized electricity space, stakeholder interest and influence is highly dispersed, varying from low to high. this interest-influence variation among different stakeholders is shaped by the regulatory regime governing their activities and the necessary procedures that must be adhered to in addressing grid-connected electricity infrastructure challenges. indeed, following our analysis and findings, there must necessarily be some sort of connection, interface or handshake between (at least two) stakeholders before any grid-connected infrastructure project/challenge can be addressed or completed based on the current regulatory regime for grid connected electricity infrastructure. our study and analysis reveals that the stakeholder interest-influence dynamics is quite different within the decentralized electricity space. it is more concentrated, with various stakeholders operating between medium to high on the interest-influence scale as shown in figure 2. the study also reveals that a major factor that increases the interest-influence appetite of stakeholders in the decentralized electricity space is that projects can begin and get completed by a single stakeholder without necessarily interfacing with another stakeholder. for example, a single stakeholder can design, install, market and sell solar home systems or complete a solar minigrid project without necessarily interfacing with other stakeholders in the process (as long as the minimum technical standards and guidelines are met). this is possible because there are no stringent regulatory tools in the decentralized electricity space as much as is currently available in the centralized grid system. 8. discussion from this study, it is evident that there is a need to ensure that approaches to addressing supply-side energy issues follows that path of participatory governance with key stakeholders and policy actors at various levels to achieve desired outcomes [55,56]. indeed, bell and gill argued that it is necessary to address technical, policy and regulatory challenges associated with delivering a highly distributed electricity system [57]. they further argued that: respect for the technical limits of systems to ensure their operability; developing well designed support mechanisms for innovation; and the proper assignment of risks to the different stakeholders and market actors are crucial challenges that must be surmounted [57]. the governance of power networks is being challenged by the ongoing energy transition which points to a need figure 2: stakeholder mapping of nigeria’s decentralized electricity sector. international journal of sustainable energy planning and management vol. 37 2023 17 norbert edomah to amend regulatory interventions to tackle innovation and transition [58]. within the nigerian context, government interventions have played a major role through institutional and regulatory interventions [22,34,59]. this also continues even after the partial liberalization of the electricity market [41]. the need to improve customer protection, facilitate sustainable development and address market failures, among others, are some reasons necessitating supply-side policy interventions in the electricity sector [60–62]. . indeed, some supply-side policies focus on product markets, designed in a manner to make them either more competitive or contestable which is geared towards stimulating a faster pace of invention and innovation [63]. this is important if we are to address some implementation challenges. for example, how do we reduce unintended consequences? can policies around electricity infrastructure be more decentralized and polycentric? how do we address the dangers of policy somersault for future electricity planning as is common in many developing country contexts? another factor to consider is the need to redefine the pattern and scale of interventions and the stakeholders required to achieve it [12,64]. this begins with the reconfiguration of scale and patterns of interventions which leads to a need to answer some important questions [12,65]. should policy and/or regulatory interventions be done at municipal, sub-national or national levels? indeed, there is a need to evaluate the role of policy interventions at different scales because implementation dynamics and stakeholders differ at different levels. culture and social ethos also affect the nature of interventions provided because some cultural practices pose some implementation challenges to energy infrastructure provision [66]. 9. conclusion and policy implications this study brings to the fore some important issues for consideration. first, many historical energy systems issues in nigeria’s electricity sector have been addressed through (institutional and regulatory) interventions shaped by different multi-level actors. secondly, since the needs of communities may vary, there is a need to consider the scale of interventions that addresses the energy needs at sub-national levels by exploring the policy, regulatory and stakeholder dynamics within different energy geographies to help address implementation challenges. thirdly, there is a need for a framework for deliberate stakeholder engagements to ensure that various interventions achieve its intended goals that yields multiple benefits in a sustainable way. fourthly, there is a need to reconsider energy systems intervention approaches that consider the role of technologies, fuels, scale and pattern of activities of energy users. lastly, the need to explore more options that addresses energy interventions issues on the demand-side is paramount for effective planning and provision of electricity supply infrastructure. acknowledgements the research leading to these results has received funding from the maria sibylle merian centres programme of the federal ministry of education and research, germany under the grant number (01 uk1824a). many thanks to the other miasa ifg4 fellows (september to december 2020) who provided support during the fellowship that led to this research. in particular are abena oduro, 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[66] furszyfer del rio dd, sovacool bk, griffiths s. culture, energy and climate sustainability, and smart home technologies: a mixed methods comparison of four countries. energy clim chang 2021;2:100035. https://doi.org/10.1016/j.egycc.2021.100035. https://doi.org/10.1016/j.enpol.2012.10.066 https://doi.org/10.1016/j.enpol.2012.10.066 https://doi.org/10.1016/j.egycc.2021.100035 international journal of sustainable energy planning and management vol. 31 2021 189 *corresponding author e-mail: r.a.alhasibi@umy.ac.id international journal of sustainable energy planning and management vol. 31 2021 189–210 abstract this article analyzes the role of renewable energy in producing sustainable generation expansion planning. the generation expansion planning is carried out using an optimization model which has two objective functions, namely the objective function of planning costs and the objective function of emissions. multi-objective analysis was performed using the epsilon constraint method to produce the pareto set. solution points are selected from the pareto set generated using the fuzzy decision making method. the process of determining the best solution points is based on three scenarios. furthermore, calculations were carried out to obtain 7 indicators of sustainability covering economic, social, and environmental aspects. the sustainability index is calculated based on several predetermined policy options. the model is implemented using data obtained from the electricity system in bali province, indonesia. from the analysis, the planning scenario by implementing renewable energy sources in the generation of electrical energy, namely scenario 3, results in an increase in the sustainability index with the highest value during the planning period. however, scenario 3 produces two sustainability indices from the economic aspect, namely the unit cost of generation and shared electricity cost to gdp, which is the lowest when compared to other scenarios. multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia rahmat adiprasetya al hasibi* department of electrical engineering, universitas muhammadiyah yogyakarta, jl. brawijaya, kasihan, bantul 55183, indonesia keywords generation expansion planning; multi objective; renewable energy; sustainability; global warming potential; http://doi.org/10.5278/ijsepm.6474 1. introduction the demand for electrical energy continues to increase in line with the increase in population and economic activity. fulfilling the demand for electrical energy at a good quality level of reliability at a minimum cost is a challenge for electrical energy supply companies. on the other hand, the issue of greenhouse gas (ghg) emissions as an impact on the environment resulting from the process of generating electrical energy using fossil fuels is getting more attention. the issue of the impact on the environment poses additional challenges for companies providing electrical energy. this problem must be solved simultaneously by the electricity supply company. the use of renewable energy sources can be optimized to obtain a balanced generation expansion planning (gep) between the planning costs and the ghg generated. in 2020, the total population in indonesia is estimated to reach 271 million people, experiencing a growth of 6.11% from the total population in 2015 [1]. in 2017, indonesia’s gross domestic product (gdp) at constant prices in 2010 reached 666.38 billion usd, which grew by 5.23% of the value of gdp in 2016 [2]. in 2017, the demand for electric energy in indonesia was 226.01twh with an average growth between 2012-2017 of 7.37% per year. the biggest demand for electrical energy is found in the java-madura-bali (jamali) electricity system with a demand for electrical energy of 167.96twh in 2017. the demand for electrical energy in the 190 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia jamali system is 74.31% of all electrical energy demand in indonesia [3]. n 2018, the installed power generation capacity in indonesia was 57.82gw with a fossil fuel power plant of 89.99%. renewable energy sources in the form of hydropower, solar radiation, wind power, and biomass only played a role of 10.01% [4]. bali province has a population in 2020 which is estimated to reach 4.38 million people, which is experiencing a growth of 5.49% when compared to the population in 2015 [1]. from the perspective of gross regional domestic product (grdp), bali province generated a grdp of 9.66 billion usd in 2017 or a growth of 5.57% when compared to grdp in 2016. population growth and grdp affect the growth in demand for electrical energy. the electricity system in bali province is part of the java-madura-bali (jamali) interconnection electricity system. some of the electricity demand in bali province is generated by power plants located outside bali province. in 2017, the electricity sold in bali province was 5.07twh or 3.02% of the electricity sold in the jamali electricity system. when compared with the demand for electrical energy in 2016, the demand for electrical energy in 2017 experienced a growth of 10.35% [5]. as one of the provinces with several renewable energy sources, providing electricity through an adequate, affordable, and reliable system in a sustainable manner is a challenge that must be overcome. in addition, the supply of electricity is currently very dependent on the supply of primary energy from outside the province. thus, the security aspect of energy supply is one of the factors that must be considered in producing a sustainable gep. gep is performed using optimization calculations to minimize investment costs and operating costs in both the dynamic model [6, 7] and the stochastic model [8]. the optimal planning costs can also be affected by the integration of renewable energy sources into the gep model. an optimization model is applied to analyze the advantages and disadvantages of several renewable energy integration mechanisms to achieve a zero-carbon power system [9]. by comparing the four mechanisms, the results of this study state that geographic aggregation is the most optimal mechanism. integration of the (renewable energy sources) res into the power system planning is one of the supporting factors to produce sustainable planning. the integration of renewable energy has been applied in a dynamic optimization model for multi-regions [10]. this publication presents an analysis of the integration of variable res on a large scale. the optimization model in the form of mixed integer linear programming (milp) has been used to determine the optimal power system planning with the res integration scheme and the co2 emission reduction targets with a case study in malaysia [11]. meanwhile, the res transition policy and nuclear energy in the gep model have been published with a case study in korea [12]. the integration of res with various types of technology into the gep model has been implemented into an optimization model that is solved by classical methods [13] and using genetic algorithmic methods [14]. in particular, the integration of the hydropower source into the gep model has been analyzed using the milp model [15]. res integration can be enhanced with policy support through incentive schemes for electric energy providers that use renewable energy [16]. in addition, techno-economy analysis should be carried out in the integration of res into gep [17]. the aspects of sustainability that are important to consider in the gep model are the security of electricity supply, the impact on climate change, and social aspects. by using long-range energy alternative planning (leap) software, sustainability aspects in the form of co2 emission reduction have been analyzed for case studies in indonesia and thailand [18]. the results of this publication indicate that co2 emission reductions can be achieved by 81% and 88% in indonesia and thailand, respectively, through the res integration scenario. using the same software, the impact on the environment of future electric energy generation is analyzed with a case study in iraq [19]. by using energyplan, power generation capacity planning has been carried out by taking into account the impact on the environment and the security of energy supply [20] with a high penetration of renewable energy [21]. a gep model has been developed by considering environmental, social, and economic aspects as a dimension of sustainability where the environmental aspects that are concerned are water pollution, land use, emission costs, radioactive impacts [22]. this model has shown that a country with large fossil energy reserves will inhibit the commercialization of res unless the country implements an incentive policy towards res development. the use of carbon capture and storage (ccs) technology has been analyzed in the gep model to reduce co2 emissions by taking into account uncertainty variables [23]. a model and algorithm to solve optimization problems in power plant planning have international journal of sustainable energy planning and management vol. 31 2021 191 rahmat adiprasetya al hasibi been developed based on the aspects of sustainability [24]. the model that has been developed uses a lifecycle assessment to analyze the impact on the environment. policies in the gep are determined by several important factors such as renewable energy targets, mitigation of climate change, and security of energy supplies. to accommodate all these parameters, the gep model was completed in a multi-objective form. for energy systems in general, the application of a multi-objective algorithm has been used with objective functions in the form of planning costs and co2 emissions in energy planning [25]. a gep model with multi-objective optimization has been published with a case study of the brazilian power system [26]. the model in the publication considers three objective functions, namely minimizing total planning costs, maximizing the non-hydro res contribution, and maximizing the generation of electrical energy during peak loads. by using the gep optimization model which has two objective functions, the wind power and solar panel penetration rates are evaluated for an isolated system [27]. apart from these two renewable energy sources, the model in this publication uses a diesel generator and a battery storage system. the intermittence nature of res has also been included in the analysis of the multi-objective gep model [28]. in this publication, the objective functions used are minimizing total planning costs and maximizing the contribution of res to the peak load during winter and summer. a multi-objective gep model has also been used to increase the return on investment against res in electric power systems [29]. the objective function used in this publication is to maximize profit by paying attention to res generation curtailment. the reliability of the electric power system is one of the objective functions that have been analyzed along with cost-optimization with respect to the res target [30]. an analytical procedure to complete the optimization with multiple objectives has been proposed to solve a mixed integer linear programming (milp) model [31]. integration of multi-objective analysis with energy plan software has been used to produce a pareto optimal that illustrates the relationship between planning costs and carbon emissions [32], energy efficiency in building [33], long-term energy planning with an hourly step [21], and energy planning at the regional level with several electric vehicle penetration scenarios [20]. the integration of electric vehicles in energy planning has been analyzed through a multi-objective approach with a high level of resolution [25]. however, these publications have not systematically included the sustainability aspect in the multi-objective analysis. thus, the contribution made through this research is 1. the integration of sustainability analysis in power generation capacity planning through a multiobjective approach. 2. in addition, the gep model and analytical procedures developed in this article focus on the optimization of locally available energy sources. this article aims to develop a gep model to support decision-making for power system planning by taking into account the aspects of sustainability by optimizing available renewable energy sources. the analysis carried out is a multi-objective analysis so that it can provide flexibility for decision makers to determine policies in planning power generation capacity. furthermore, the model is applied using data on the electricity system of a province, namely bali province in indonesia. the province of bali is used as a case study in this publication because the need for electrical energy in this province is met through power plants with primary energy sources imported from outside the province. on the other hand, renewable energy sources exist in this province and can be developed in the provision of electrical energy. the following sections of this article are organized as follows. section 2 describes the methods used in this study. the gep model, the algorithms used, and the sustainability parameters are described in detail in the sections. furthermore, section 3 describes the data and data sources used. the results analysis and discussion are presented in section 4. conclusions and further research are presented in section 5. 2. research method the research flow diagram is shown in figure 1. multi objective analysis is carried out to minimize the objective function of electricity generation costs and the objective function of emissions. the results obtained from the multi objective analysis are used as input for the sustainability analysis. furthermore, the results of the sustainability analysis are used to have the best scenario to be applied in the development of power generation capacity. 2.1. generation expansion planning model 2.1.1. objective functions the gep model in this study is an optimization model with two objective functions, the first is the cost 192 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia objective function and the second is the objective function of emissions. the objective planning cost function (zcost) can be expressed as investment costs and o&m costs, expressed as z r e lcoe e lcoe cost t t g g t g t ng g t new g t eg g t ex � � � � � � � ��� 1 1 1( ) ( , , , , tt ) (1) where eg t ng , and eg t eg , respectively represent electrical energy generated by new and installed power generation units (in mwh), lcoeg t new , and lcoeg t ext , respectively are levelized cost of energy (lcoe) for new and installed power generation units (in $/mwh), and r is the discount rate (in%). lcoe for new power plants is expressed as lcoe c crf o cf og t new gt new g gt fix gt gt var , ( ) � � � � �� � � ��� � 8760 (2) and lcoe for installed power plants is expressed as lcoe o cf og t new gt fix gt gt var , � � � � �� � � ���8760 (3) where cgt new is the investment cost for a new power plant (in $/mw ogt fix is a fixed operating cost (in $/mw), ogt var is a variable operating cost (in $/mwh), and cfgt is the capacity factor for each type of generating technology electricity. crfg is the capital recovery factor (crf) (in%) which is used to annualize the investment cost of a new power generation unit. a constant of 8760 is the number of hours in a year. crf is expressed as crf r r rg n n� � � � � ( ) ( ) 1 1 1 (4) where n is the number of annuities represented by the technology lifetime of the power generating unit. the index t is the index for the planning year and the index g is the index for power generation technology. emissions in the form of global warming potential (gwp) generated from each generating unit technology are directly proportional to the electrical energy generated from a generating unit. thus, the emission objective function used in the gep model is expressed as z ef e eemission t t g g e e g e g t ng g t eg� � �� �� � � � � ��� 1 1 1 , , , (5) where efg,e is the emission factor for the types of pollutants e produced by each generating unit technology g (in ton co2 equivalent). emission factors and conversion of emission factors to ton co2 equivalent units will be presented in the data and data sources section. 2.1.2. constraints functions overall, the electrical energy generated by all generating units must be able to meet the projected demand for electrical energy after deducting losses in the transmission and distribution network. fulfilling the demand for electrical energy is one of the constraint functions in the gep model which is expressed as g g g t ng g t eg t d tde e e l t t � � �� � � � � � � 1 1 , , ( ), ( ) (6) where et d is the demand for electrical energy in each planning year (in mwh) and ltd is the losses in the transmission and distribution network (in%). figure 1. the research flowchart international journal of sustainable energy planning and management vol. 31 2021 193 rahmat adiprasetya al hasibi the electrical energy generated by each generating unit must not exceed the available capacity and must exceed the minimum load allowed by each generating unit technology. thus, the generation of electrical energy by the installed generating unit can be expressed as 8760 8760� � � � � � � � p p e cf p t t g l g t eg g t eg g t g t eg , , , , , ( ) (7) where pg l is the minimum allowable load power (in mw) and pg t eg , is the installed power generation power for each technology g in year t (in mw). as for new generating units, the generation of electrical energy is expressed as 8760 8760� � � � � � � � � � � � � � �p p e cfgl t t t t t lt t g t ng g t eg g t t t g| , , ' , , | tt t t lt t g t ng g p t t , , , � �� �� � �� � (8) where pg t ng , ' is the new generating capacity (in mw) and ltg is the lifetime parameter for each technology of generating unit g (in years). in equation (8), the new power generation capacity for each technology g and in each year t, pg t ng , , is determined by p n p g g t tg t ng g g t option , , , ( ), ( )� � � � � � (9) where ng is the number of new generating units and pg t option , is the increase in the available capacity for each generating technology g (in mw). equation (9) s used to determine in an integer manner the additional capacity of the new power generation unit. for new power plants with renewable energy sources, the capacity that can be developed is limited by the availability of these renewable energy sources. thus, the power generation capacity with renewable energy sources cannot exceed the potential energy sources which is stated in the constraint function as p re t t re gre t ng t t t t t lt t re limit g ,| , , ( ), ( )�� �� � ��� � � � � � (10) where rere limit is the potential source of renewable energy available (in mw) and re is an index for generation technology with renewable energy sources. as a reference, the gep optimization model can be summarized as min ( ) , , , � z r e lcoe e lcoe cost t t g g t g t ng g t new g t eg g � � � � � � � � ��� 1 1 1 ,,t ext� subject to equations (6)−(10) where � �{ , , , } , , , e e p ng t ng g t eg g t ng g is the set of decision variables from the two objective functions. the resulting optimization model is a mixed integer linear programming (milp) model. this is the result of using a variablel, ng, which is an integer in equation (9). this optimization model produces output in the form of additional generating capacity needed to meet the demand for electrical energy each year. based on the objective function of planning costs that have been presented, determining the type and capacity of the power plant to be built is that the type of plant configuration has the lowest overall planning cost. as such, no priority is given to the specific types of power generation used in this gep model. 2.2. multi objective optimization lti objectives analysis for the optimization model that has been developed is carried out using the e-constraint algorithm. this algorithm will produce a pareto set of two conflicting objective functions. the e-constraint algorithm is shown in figure 2. the process of this algorithm is as follows: step 1: lexicographic optimization is performed to calculate the pay-off table. the pay-off table is a table with a size of m x m. the value returned by the objective function zi will be the element of the ith column of the pay-off table. step 2: the next step is to determine the interval for the objective function zi (i = 2,3, …, y) which is determined using r z zi i max i min� � (11) step 3: the intervals for the objective function y −1 are separated into equal intervals, namely yi (i = 2,3, …, y) where y is the index for the objective functions. step 4: analysis of multiple objective functions is carried out to solve the optimization sub-problem to produce a pareto optimal point. 194 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia the result obtained from the implementation of the e-constraint algorithm is a pareto set. the optimal points contained in the pareto set have not been able to show the level of importance of each objective function. thus, a decision cannot be determined based solely on this pareto set. a decision must be selected from the pareto set that has been obtained. one method that is often used is fuzzy decision making (fdm). determination of the solution point can be done by implementing fdm. the resulting pareto set is an input for fdm and the best solution point is determined based on the weighting factor for each objective function involved. the fdm method uses a linear membership function definition for all objective functions. for minimized objective functions, the membership function is defined by start model parameter pay-off table calcultaion determination of objective function range i = 1 j = 1 solution generation of single objective function z ij solve i-j sub problem and generate pareto optimal j ≤ x i ≤ y set of pareto optimal end j = j + 1 i = i + 1 yes no no yes figure 2. e-constraint algorithm. �i r i r i min i max i r i max i min i min i r i max i r z z z z z z z z z z z � � � � � � � 1 0 , , , ii max � � � � � � � (12) where zi r is the rth pareto optimal solution related to the membership function µi r . the total membership function, mr, is defined on the basis of individual membership values. mr determined by � � r i y i i r i y i w w � � � � � 1 1 (13) where wi is the weighting of ith objective function and y represents the set of the objective function. the value of mr obtained is then used to determine the solution point of the pareto set. the best solution point is determined with the highest mr value based on the weight that has been determined for each objective function. in detail, the application of the e-constraint algorithm combined with fdm has been described in [34]. 2.3. proposed scenarios in this study, the scenario used is a combination of weighting factors given to each objective function in determining the solution point using fdm. there are three scenarios analyzed, namely scenarios by giving greater weighting to the objective function of planning costs, scenarios by giving the same weighting to both objective functions, and scenarios by giving greater weighting to the objective function of emissions. the three scenarios are summarized in table 1. table 1. proposed senarios for multi objective analysis. scenario objective weight factor zcost zemission scenario 1 75% 25% scenario 2 50% 50% scenario 3 25% 75% 2.4. stainability indicators seven indicators are used to analyze the level of sustainability of the electric power system to be developed. these indicators represent three dimensions of sustainability, namely economic, social, and environmental. the sustainability indicators in this study are summarized in table 2. international journal of sustainable energy planning and management vol. 31 2021 195 rahmat adiprasetya al hasibi table 2. sustainability indicators. dimension indicator economic unit cost of generation (ec1) self-sufficiency (ec2) electricity cost to gdp (ec3) social electricity consumption per capita (s1) average employment index (s2) environmental gwp intensity of electricity (en1) gwp intensity of gdp (en2) the unit cost of generation indicator represents the amount of costs required to produce one unit of electrical energy. this indicator has a unit of $/mwh which is based on the lcoe value of each electrical energy generation technology and is expressed as ec e lcoe e t tg g g t ng eg g t g g g t ng eg 1 1 1 � � � �� �� � � � � � , , , , (14) self-sufficiency indicators are expressed as ec e e t tg g g t ng eg local g g g t ng eg 2 1 1 � � �� �� �� � � � � � , , , (15) where the numerator part in equation (15) is the production of electrical energy using local energy sources. this indicator states the percentage of energy production from local energy sources to the total electricity production in each year (in %). the electricity cost to gdp indicator is a comparison between the cost of generating electrical energy and the value of gdp in each year which is expressed as ec e lcoe gdp t tg g g t ng eg g t t 3 1� � � �� �� , , , ( ) (16) where the lower the value of this indicator the better the impact on economic growth. this indicator is expressed in%. electricity consumption per capita indicator states the consumption of electrical energy for each resident in each year (in mwh/capita). this indicator is a comparison of the total electrical energy produced compared to the population in each year. this indicator is expressed as s e np t tg g g t ng eg t 1 1� � �� �� , , ( ) (17) where npt is the total population in year t. this indicator is closely related to the human development index (hdi). in [35, 36], the generation of electrical energy using renewable energy sources can provide access to jobs, either directly or indirectly. the average employment index indicator states the average jobs generated for each power generation unit capacity, both conventional and those using renewable energy sources (jobs-yr/ mw). this indicator is defined as s e jf e t tg g g t ng eg g g g g t ng eg 2 1 1 � � � �� � � � � � , , , ( ) (18) where jfg is a parameter which states the number of jobs that can be generated for each mw capacity of a power plant unit with g technology. the indicator of gwp intensity of electricity states the amount of gwp emissions produced for each unit of electrical energy produced by all power plants (in ton co2 equivalent/mwh). this indicator is expressed as en e ef e t tg g e e g t ng eg g e g g g t ng eg 1 1 1 1 � � �� � � � � � � � , , , , ( ) (19) the gwp intensity of gdp indicator is a comparison between the amount of gwp emissions produced against the value of gdp (ton co2 equivalent/$). this indicator is expressed as en e ef gdp t tg g g t ng eg g t 2 1� � �� �� , , ( ) (20) then, the normalization process is carried out for each sustainability indicator. there are three normalization methods that are often used, namely min-max, distance to reference, and standardization. the advantages and disadvantages for these three data normalization methods are detailed in [37]. in this publication, normalization is carried out using the distance to reference method using the min or max values which depend on positive or negative orders. the mathematical equation used in this method is expressed as i i i � � 1 max (21) 196 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia for positive order, and i i i � � min 1 (22) for negative order, where i ∧ is the normalized value, i1 is the data to be normalized, max i is the maximum value of indicator i, and min i is the minimum value of indicator i. this normalization value is used to aggregate the sustainability indicators. the weighting method used is the equal weighting method [38, 39]. then to obtain the sustainability index, the aggregation method used is linear aggregation which is expressed as si ist j n j t j� � � � 1 , � (23) with � j j� �1 and isj t, is expressed as is ij t i i j t i j, , , ,� �� � � (24) with �i i j� , �1. in equations (23) and (24), sit is the sustainability index for each planning period t, wj is the weight for the dimensions of the indicator, isj,t, is the sustainability sub-index of the indicator group i, i i j t ∧ , , is the normalized itℎ indicator value in the indicator group j, and wi,j is the weight of each indicator i in the indicator group j. since the equal weighting method is applied in each indicator group j, wi,j, has the same value. 3. data and data sources in this section, the data and data sources used in this study are discussed. this section consists of three sub-sections, namely the first sub-section discusses the current state of the island’s electricity system, the second sub-section discusses available energy sources, and the third sub-section contains the characteristics of the power generation unit technology. 3.1. current situation of bali’s electrical systems in 2018, the total power of the household and commercial sectors in 2018 was 1,633.26mw and 1,524.12mw, respectively. meanwhile, the social, public, and industrial sectors are 130.8mw, 104.36mw, and 100.13mw, respectively. overall, the customer power that must be served by the balinese electricity system in 2018 is 3,492.67mw [4]. in 2018, the amount of energy sold was dominated by the household and commercial sectors, reaching 2.15twh and 2.63twh, respectively. the use of electrical energy for the social, public, and industrial sectors is 0.15twh, 0.18twh and 0.19twh, respectively. overall, the energy sold to meet demand in 2018 was 5.30twh [4]. to meet this energy need, the power plant capacity installed in the bali electricity system is 1,290mw consisting of a coal powered power plant with a capacity of 380mw and gas-powered power plants with a capacity of 910mw. because the bali electricity system is part of the java-madura-bali electricity system, a shortage of electricity supply is provided from outside the island of bali. the losses of transmission and distribution networks in the bali electrical system are 8.00% [40]. 3.2. energy sources the energy source used for electricity generation using coal and natural gas is obtained from outside the island of bali. the energy sources available on the island of bali are renewable energy sources consisting of geothermal energy, biomass, solar energy and wind. the technical potential for each renewable energy source is shown in table 3 [41]. table 3. the potential of renewable energy in bali. renewable energy type technical capacity (mw) geothermal 262 biomass 191.6 solar 1,254 wind 1,091 3.3. power plant characteristic the characteristics of the power plant used for analysis in this study consist of cost characteristics, technical characteristics, environmental characteristics, and social characteristics. cost characteristics consist of investment costs, fixed operating costs and variable operating costs. the technical characteristics consist of the capacity factor, the service life of the power plant and the minimum allowable load. the environmental characteristics used are the emissions produced by each generation unit technology for each unit of electrical energy produced. meanwhile, social characteristics illustrate additional employment opportunities resulting from the addition of power generation capacity. in detail, the cost and technical characteristics for each power generation technology are shown in table 4 [42] and the environmental characteristics are shown in table 5 [43]. international journal of sustainable energy planning and management vol. 31 2021 197 rahmat adiprasetya al hasibi the value of the capital recovery factor is calculated based on the cost characteristics using a discount rate of 5%. emissions shown in table 5 are then converted into units of global warming potential (ton co2 equivalent) using the coefficients for pollutants co2, ch4, and n2o, which are 1, 30, and 265, respectively. table 5. environmental characteristics of power generation technology. type co2 (ton/ mwh) ch4 (g/ mwh) n2o (g/ mwh) pc 0.33 9.88 13.8 pc ccs 0.05 13.3 18.6 ngcc 0.18 7.07 9.9 ngcc ccs 0.03 10.6 14.9 in addition to the cost, technical and environmental characteristics, each additional power generation capacity, for both conventional and renewable energy power plants, will result in additional jobs. additional employment for each type of power generation technology is shown in table 6 [44]. table 6. the potential job creation for each power plant technology. no. power plant type jobs-yrs/mw 1 coal power plant 0.14 2 natural gas power plant 0.14 3 pv utility scale 1.4 4 csp 0.6 5 wind onshore 0.3 6 wind offshore 0.2 7 biomass 1.5 8 geothermal 0.4 4 result and discussion 4.1. electricity demand projection the projection of demand for electrical energy is based on the elasticity of demand for electrical energy on gdp growth using the econometric method as described in the equation e e e gt t t� �� �1 1* (25) where e is electricity demand, g is the gdp growth, and t is year index. gdp data [2] and gdp growth projection [41] are shown in figure 3. the projection of demand for electricity is based on the projection of gdp. demand data for electric energy [3] and the projection results are shown in figure 4. during the projection period, the average growth in demand for electrical energy is 4.06%. this will result in the demand for electrical energy in 2050 to 18.95twh. the projection result of electric energy demand is used as one of the input parameters in the gep model. 4.2. optimization results 4.2.1. pareto optimal the pareto set generated by applying the e-constraint algorithm is shown in figure 5. this pareto set shows the trade-off between the two objective functions. at the time the power generation capacity development is based on the least planning costs will produce the most emissions. on the other hand, planning based on the least emissions will generate the greatest planning costs. this results in a pay-off table which is denoted as 1 60 80 43 12 81 25 66 . . . . � � � � � � (26) table 4. the cost and technical characteristics of power generation technology. type investment cost (usd/kw) fix om cost (usd/kw-yr) var om cost (usd/mwh) capacity factor (%) life time (yr) minimum load (%) geothermal 5,940 31 95 30 biomass 3,830 95 15 78 20 csp 4,540 50 45 25 wt onshore 1,980 60 34 25 pc 3,040 23 4 84 35 60 pc ccs 6,560 35 6 84 35 60 ngcc 1,230 6 4 90 35 50 ngcc ccs 3,750 18 10 90 35 50 solar pv 3,070 45 18 25 198 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia where the first column is the value of the objective function of planning costs and the second column is the value of the objective function of emissions. furthermore, the pay-off table in (26) is used as an input parameter to determine the best solution point using fdm. determination of the best solution point using fdm is carried out based on the membership values generated for the two objective functions. the value of this membership is very dependent on the weighting factor assigned to the two objective functions. fdm uses the maximum total membership value to determine the best solution point of each predetermined scenario. the maximum total membership value obtained for each scenario is shown in table 7. the best solution points for the figure 3. the gdp data and projection. figure 4. the electricity data and projection. 0 1 2 3 4 5 6 7 8 0 20 40 60 80 100 co st (b ill io n u sd ) gwp (million ton co2 eq.) scenario 1 scenario 2 scenario 3 figure 5. pareto optimal. international journal of sustainable energy planning and management vol. 31 2021 199 rahmat adiprasetya al hasibi pareto set that have been generated for each scenario are shown in the third column in table 7. these solution points are then used as the basis for planning the power generation capacity. table 7. maximum value of total membership for each scenario. scenario maximum total membership pareto’s number scenario 1 0.7651 38 scenario 2 0.7492 10 scenario 3 0.8248 3 4.2.2. power plant investment cost based on the fdm results, the investment costs in each year in the planning period for new power plants based on scenarios are shown in figure 6, figure 7, and figure 8 respectively for scenario 1, scenario 2, and scenario 3. investments in new power plants are strongly influenced by the scenario. for scenario 1 where the objective function of planning costs is more concerned with the objective function of emissions, investment is made to increase capacity by building natural gas combined cycle (ngcc) and ngcc with carbon capture and storage (ngcc-ccs) power plants. during the planning period, the investment costs for the ngcc and ngcccss power plant were 1.97 billion usd and 6.75 billion usd, respectively. scenario 2, where the planning cost objective function and the emission objective function have the same weight, resulting in different investment cost calculations as shown in figure 7. scenario 2, where the planning cost objective function and the emission objective function have the same weight, resulting in different investment cost calculations as shown in figure 11. the investment cost under scenario 2 is only used to increase capacity by building the ngcc-ccs power plant. the investment cost required in scenario 2 is 10.13 billion usd which is 16.14% higher than the investment cost for scenario 1. assigning equal weight values to both objective functions results in calculations in scenario 2 to increase the power generation capacity with cleaner technology when compared with scenario 1. this is the reason why the investment costs in scenario 2 are higher than the investment costs in scenario 1. figure 8 shows the results of the calculation of investment costs for scenario 3. the investment costs generated 1.00 2.00 3.00 4.00 2020 2025 2030 2035 2040 2045 2050 in ve st m en t co st (b ill io n u sd ) planning period ngcc ngcc ccs figure 6. investment cost based on scenario 1. 1.00 2.00 3.00 4.00 5.00 2020 2025 2030 2035 2040 2045 2050 in ve st m en t co st (b ill io n u sd ) planning period ngcc ccs figure 7. investment cost based on scenario 2. 200 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia by scenario 3 are used to increase capacity by building 5 types of power generation technology, namely ngccccs, geothermal, biomass, concentrated solar panel (csp), and wind turbine. overall, the investment cost generated by scenario 3 is 14.38 billion usd. scenario 3 results in 42.03% and 64.96% higher investment costs, respectively when compared to the investment costs generated by scenario 2 and scenario 1. it can be said that scenario 3 produces the highest investment cost. this is because the weighting of the objective function of emissions is higher than that of the objective function of planning costs. therefore, the power plant technology chosen by the optimization process is cleaner generation technology when compared to the technology selected in scenario 1 and scenario 2. 4.2.3. electricity generation the electrical energy generated by each power plant unit based on the scenario is shown in figure 9, figure 10, and figure 11, respectively for scenario 1, scenario 2, and scenario 3. the results of the generation of electrical energy by all scenarios produce the same value. and when compared with the projection of demand for electrical energy in figure 6, the amount of electrical energy generated is 8.00% higher due to losses in the transmission and distribution network. these three figures show figure 8. investment cost based on scenario 3. 1.00 2.00 3.00 4.00 5.00 6.00 2020 2025 2030 2035 2040 2045 2050 in ve st m en t co st (b ill io n u sd ) planning period wind turbine csp biomass geothermal ngcc ccs 0 5 10 15 20 25 2020 2025 2030 2035 2040 2045 2050 g en er at ed e le ct ri ci ty (t w h) planning period ngcc ccs ngcc pc figure 9. generated electricity based on scenario 1. figure 10. generated electricity based on scenario 2. 0 5 10 15 20 25 2020 2025 2030 2035 2040 2045 2050 g en er at ed e le ct ri ci ty (t w h) planning period ngcc ccs ngcc pc international journal of sustainable energy planning and management vol. 31 2021 201 rahmat adiprasetya al hasibi the amount of electrical energy generated from both the installed and newly built power plants. the installed power plants consist of ngcc, which will be retired in 2034, and pulverized coal (pc), which will be retired in 2044. based on scenario 1 in figure 9, electrical energy is generated by a power plant system with pc, ngcc, and ngcc-ccs technologies. however, the pc power plant will not be rebuilt after it is retired in 2044. the ngccccs power plant generates electrical energy in 2040. based on scenario 2 in figure 10, the ngcc-ccs power plant is built early in the planning period and starts generating electrical energy. in 2023. scenario 2 results in the ngcc-css power plant, which is an environmentally friendly power plant, contributing more dominantly when compared to scenario 1. this is due to the higher emission objective function weight in scenario 2 when compared to the weighted value in scenario 1. the source of electrical energy in scenario 3 is more varied when compared to the other two scenarios. based on scenario 3 in figure 11, electricity generation with renewable energy sources has a significant contribution to the supply of electrical energy. at the end of the planning period, renewable energy sources contributed 43.72% of the total electricity generated. the contribution of wind turbine and solar csp in supplying electrical energy was 17.34% and 13.46%, respectively. the contribution of geothermal and biomass in supplying electrical energy was 8.35% and 4.57%, respectively. 4.3. avoided global warming potential as explained in the previous section, electrical energy is generated from a combination of different power generation technologies for each scenario. as a consequence, each scenario produces a different amount of emissions from the process of generating electrical energy. scenario 1, where the cost objective function is more concerned with the objective function of emissions, produces the most when compared to the emissions produced by other scenarios. when compared with scenario 1, the avoided emissions generated by scenario 2 and scenario 3 are shown in figure 12 and figure 13. these two figures show the emissions produced in each year in the planning period. in figure 12, the emissions produced by scenario 2 are lower than those produced by scenario 1. this occurs during the planning period other than the first to the fourth year, where at the beginning of the planning 0 5 10 15 20 25 2020 2025 2030 2035 2040 2045 2050 g en er at ed e le ct ri ci ty (t w h) planning period wind turbine csp geothermal biomass ngcc ccs ngcc pc figure 11. generated electricity based on scenario 3. 0 0.5 1 1.5 2 2.5 3 2020 2025 2030 2035 2040 2045 2050 g w p (m ill io n to n co 2 eq .) planning period scenario 2 avoided vs. scenario 1 figure 12. avoided emission by scenario 2 vs. scenario 1. 202 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia period, electricity is still generated by the installed generator, namely the pc and ngcc. at the end of the planning period, the emissions produced by scenario 1 have decreased. this is due to the operation of a more environmentally friendly generating unit, namely the ngcc ccs. after the fourth year, scenario 2 could produce lower emissions than scenario 1. the emission reduction at the beginning of the planning period by scenario 2 resulted from the operation of the ngcc ccs generating unit. the average annual emission reduction that can be generated by scenario 2 is 0.95 million tons co2 equivalent. the emission reduction produced by scenario 3 against scenario 1 is shown in figure 13. the average annual emission reduction produced by scenario 3 is 1.17 million tons of co2 equivalent. the emission reduction produced by scenario 3 is higher than that in scenario 2 where this is due to the contribution of generation from renewable energy sources. cumulatively, the emissions resulting from the electricity generation process for each scenario are shown in figure 14. at the end of the planning period, scenario 2 and scenario 3 can reduce emissions by 46.11% and 56.49% respectively when compared to the emissions produced by scenario 1. 4.4. sustainability analysis the sustainability indicator in the form of unit cost of generation (ucg) for each scenario is shown in figure 15. during the planning period, scenario 1 produces the lowest ucg when compared to other scenarios. on the other hand, scenario 3 produces the highest ugc when compared to other scenarios. ucg in scenario 1 decreases until 2040 and then increases until the end of the planning period. the increase in ucg is due to the investment that must be made to replace the power plant that will stop operating in 2040. in scenario 2, the resulting ucg has decreased relatively during the planning period. most investments for new power plants are made at the beginning of the planning period. whereas in scenario 3, the peak of investment is carried out in 2040 so that the resulting ucg increases from the beginning of the planning period to 2040. after 2040, ucg in scenario 3 experiences a 0 0.5 1 1.5 2 2.5 3 2020 2025 2030 2035 2040 2045 2050 g w p (m ill io n to n co 2 eq .) planning period scenario 3 avoided vs. scenario 1 figure 13. avoided emission by scenario 3 vs. scenario 1. figure 14. cumulative gwp for each scenario along planning period. 0 20 40 60 80 2020 2025 2030 2035 2040 2045 2050 g w p (m ill io n to n co 2 eq .) planning period scenario 1 scenario 2 scenario 3 international journal of sustainable energy planning and management vol. 31 2021 203 rahmat adiprasetya al hasibi decrease due to reduced investment for new power plants. during the planning period, scenario 3 produced the highest ucg compared to other scenarios. this is because scenario 3 produces the highest investment cost to build the most environmentally friendly power plant. the self-sufficiency indicator is only produced by scenario 3 as shown in figure 16. scenario 1 and scenario 2 result in a power plant capacity planning using coal and natural gas, where both fuels are exported from outside bali island. thus, these two scenarios produce a self-sufficiency indicator that is worth 0. meanwhile, scenario 3 produces a power plant capacity plan that combines fuel from outside bali and local energy sources. between 2040 and 2045, scenario 3 produces the highest self-sufficiency indicator, which is around 65%. in the period 2045 2050, the self-sufficiency indicator based on scenario 3 has decreased. this is because the contribution of the ngcc-ccs power plant in generating electrical energy has increased (figure 11). the increase in the contribution of the ngcc-css power plant is due to the retirement of the coal-fired power plant (pc). in addition, renewable energy sources have reached their maximum production capacity. figure 17 shows the share of electricity to gdp indicator. scenario 1 and scenario 2 produce the value of this indicator which tends to decrease. this is because the installed power generation capacity is still dominant in the supply of electrical energy. different results are shown by scenario 3 where the value of this indicator has increased in the interval between 2025 and 2035. this is due to the investment made to build environmentally friendly power plants. however, the value of this indicator based on scenario 3 begins to decline from 2035 to the end of the planning period. this is due to the reduced contribution of coal-fired power plants in electricity generation and replaced by renewable energy generators that do not require fuel. the job creation indicator as a result of the power plant development is shown in figure 18. scenario 1 and scenario 2 produce the same value for this indicator. this is because the types of power plants used for these two scenarios are the same, namely pc, ngcc, and ngcc ccs. in addition, these three types of power figure 15. the indicator of unit cost of generation. 0 20 40 60 80 2025 2030 2035 2040 2045 2050u ni t c os t g en er a� on ($ /m w h) planning period scenario 1 scenario 2 scenario 3 figure 16. self-sufficiency indicator. -10 10 30 50 70 2025 2030 2035 2040 2045 2050 se lf su ffi ci en cy (% ) planning period scenario 1 scenario 2 scenario 3 204 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia generation technology have the same coefficient in terms of additional employment (table 6). the job creation indicator produced by scenario 3 has the greatest value when compared to the other two scenarios. this shows that the increasing role of renewable energy in the supply of electrical energy will generate bigger jobs when compared to power generation with conventional technology. from an environmental point of view, indicators that represent environmental aspects are indicators of gwp intensity of electricity and gwp intensity of economy. these two indicators are shown in figure 19 and figure 20, respectively. in these two figures, scenario 1 produces the highest value for the two environmental indicators when compared to the other scenarios. after 2040, the values of the two environmental indicators for 0 2 4 6 8 10 2025 2030 2035 2040 2045 2050 sh ar e el ec tr ic ity c os t t o g d p (% ) planning period scenario 1 scenario 2 scenario 3 figure 17. the indicator of share electricity cost to gdp. 0.00 0.10 0.20 0.30 0.40 2025 2030 2035 2040 2045 2050 a ve ra ge e m pl oy m en t f ac to r (j ob -y ea r/ m w h) planning period scenario 1 scenario 2 scenario 3 figure 18. the indicator of average job creation. 0 0.05 0.1 0.15 0.2 0.25 2025 2030 2035 2040 2045 2050 g w p in te ns ity o f e le ct ri ci ty (m ill io n to n co 2 eq ./ m w h) planning period scenario 1 scenario 2 scenario 3 figure 19. the indicator of gwp intensity of electricity. international journal of sustainable energy planning and management vol. 31 2021 205 rahmat adiprasetya al hasibi scenario 1 will experience a significant decline. this is because the old power plant has stopped operating and has been replaced by a more environmentally friendly power plant, namely ngcc-ccs. in the same way, the ngcc-ccs power plant plays a role in reducing ghg emissions in scenario 2 where the ngcc-ccs power plant starts providing electricity at the beginning of the planning period. based on scenario 2, the ngcc-ccs power plant has the most dominant contribution when compared to other power generation technologies in the provision of electrical energy. in fact, after the old plant stopped operating, all demand for electrical energy was provided by the power plant with ngcc-cc technology. this results in the environmental indicators produced by scenario 2 having a lower value when compared to the indicator values generated by scenario 1. the environmental indicator value generated by scenario 3 is the lowest when compared to the value generated by the other scenarios. the provision of electrical energy generated by scenario 3 consists of installed power plants, namely ngcc and pc, and new power plants, namely ngcc-cc and power plants with renewable energy sources. based on scenario 3, the type of power plant that has been installed does not experience additional capacity and the two power plants are operated at their minimum load limit. to meet the increasing demand for electrical energy, scenario 3 results in an additional environmentally friendly power generation capacity, namely the addition of ngcc-ccs power plant capacity at the beginning of the planning period and power generation with renewable energy sources from 2030 to the end of the planning period. when the power generation capacity with renewable energy sources has reached its maximum limit, the ngcc-cc power plant must be added again to meet the demand for electrical energy. this is why the environmental indicator value in scenario 3 has the lowest value when compared to the values generated by the other scenarios. the development of power generation capacity is determined by policies in giving weight to the sustainability aspects consisting of economic, social, and environmental aspects. the sustainability indicators that have been generated are normalized using equations (21) and (22). furthermore, the normalized value of sustainability indicators is used to produce a sustainability index using equation (23). in this study, three policies that give different weights to each aspect of sustainability are used as assumptions in determining the sustainability index during the planning period. the three policies with weight values for each aspect of sustainability are shown in table 8. table 8. weighting factor policy option economy social environment total policy 1 33.33 33.33 33.33 100 policy 2 40 40 20 100 policy 3 45 45 10 100 figure 21 shows the results of calculating the aggregated normalized sustainability index. the values obtained in this figure are weighted equally for each aspect of sustainability. if the weighting for the sustainability aspect has different values, the results of the calculation of the sustainability index are shown in figure 22. from figure 21, from an economic, social and environmental perspective, scenario 3 is the best scenario to be implemented. this can be seen with the highest sustainability index value during the planning period when compared to other scenarios. the value of 0.00 0.02 0.04 0.06 0.08 0.10 0.12 2025 2030 2035 2040 2045 2050 g w p in te ns ity o f e co no m y (m ill io n to n co 2 eq ./ bi lli on $) planning period scenario 1 scenario 2 scenario 3 figure 20. the indicator of gwp intensity of economy. 206 international journal of sustainable energy planning and management vol. 31 2021 multi-objective analysis of sustainable generation expansion planning based on renewable energy potential: a case study of bali province of indonesia the sustainability of scenario 3 is strongly influenced by the benefits obtained from social and environmental aspects. in figure 22, the sustainability index generated by scenario 3 has the highest value for each policy option in line with the implementation of renewable energy in electricity supply. on the other hand, the sustainability index generated by scenario 1 and scenario 2 did not experience a significant increase. this is due to the absence of the role of renewable energy generated by scenario 1 and scenario 2. meanwhile, scenario 3 produces the ec2 indicator value in the year in which local energy sources, namely renewable energy sources, begin to play a role in supplying electrical energy. currently, planning for generating capacity development carried out in indonesia, in general, and in the province of bali uses calculations that prioritize economic aspects, in this case, is to develop a power system with minimal costs to meet the growth of the electricity load. this is shown in document [5] where the planning of generating capacity is still dominated by the use of power plants with fossil fuels in the java-madura-bali (jamali) system. in addition, this document does not include the development of local energy in bali province. changing the power plant capacity planning policy from scenario 1, which prioritizes the objective planning cost function, to scenario 3, which is more concerned with the objective function of emissions, will result in benefits in every sustainability indicator except for ec1 and ec3 indicators. 5. conclusion this research has discussed the planning of power generation capacity through an optimization model which has two objective functions, namely the objective function of planning costs and the objective function of emissions. fuzzy decision making methods have been implemented to determine the best solution point from the three proposed scenarios. in addition, sustainability 0 0.5 1 1.5 2 2.5 sc en ar io 1 sc en ar io 2 sc en ar io 3 sc en ar io 1 sc en ar io 2 sc en ar io 3 sc en ar io 1 sc en ar io 2 sc en ar io 3 sc en ar io 1 sc en ar io 2 sc en ar io 3 sc en ar io 1 sc en ar io 2 sc en ar io 3 sc en ar io 1 sc en ar io 2 sc en ar io 3 sc en ar io 1 sc en ar io 2 sc en ar io 3 2020 2025 2030 2035 2040 2045 2050 a ve ra ge n or m al iz ed su st ai na bi lty in de x planning period economy social environment figure 21. aggregated normalized sustainability index. 0 0.2 0.4 0.6 0.8 1 po lic y 1 po lic y 2 po lic y 3 po lic y 1 po lic y 2 po lic y 3 po lic y 1 po lic y 2 po lic y 3 po lic y 1 po lic y 2 po lic y 3 po lic y 1 po lic y 2 po lic y 3 po lic y 1 po lic y 2 po lic y 3 po lic y 1 po lic y 2 po lic y 3 2020 2025 2030 2035 2040 2045 2050 a gg re ga te d n or m al iz ed su st ai na bi lty in de x planning period scenario 1 scenario 2 scenario 3 figure 22. the comparison of sustainability index based on various policy. international journal of sustainable energy planning and management vol. 31 2021 207 rahmat adiprasetya al hasibi indices have been analyzed for the three scenarios. the model and analysis procedure presented in this study have been implemented with real data, namely data on the power system in bali province. from the results obtained, scenario 1 results in planning the power generation capacity with the lowest cost. however, scenario 1 produces the highest emissions compared to other scenarios. on the other hand, scenario 3 produces the lowest emissions when compared to the other two scenarios, which is 56.49% lower than the emissions generated by scenario 1. however, scenario 3 requires the highest cost, which is 64.96% higher when compared to with the costs generated by scenario 1. from a sustainability perspective, scenario 3 has a better sustainability index throughout the planning period when compared to other scenarios. likewise, for several different policy options, scenario 3 produces the best sustainability index. the sustainability index produced by scenario 3 is mainly influenced by sustainability from social and environmental aspects. from the analysis results, there are two unfavorable sustainability indices generated by scenario 3, namely the cost of unit generation and shared electricity cost to gdp. the model and analysis procedure proposed in this study can be further developed by including several uncertainty variables such as the availability of primary energy, both fossil and renewable energy, variations in the electrical load that may occur, and variations in investment and operational costs of each power generation technology. the model that has been developed in this study can also be used for different areas. furthermore, a sustainability analysis can be carried out for the energy system as a whole. acknowledgement this research was conducted using research funds originating from a research grant from the universitas muhammadiyah yogyakarta in 2020. this article was accepted for publication in the ijsepm special issue “latest developments in 4th generation district heating and smart energy systems” [45]. references [1] bps-indonesia. “statistics indonesia-population projection by province,” october 22, 2019; https://www.bps.go.id/ 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https://opus.lib.uts.edu.au/handle/10453/43718 https://opus.lib.uts.edu.au/handle/10453/43718 http://doi.org/10.5278/ijsepm.6432 au_35.indb international journal of sustainable energy planning and management vol. 35 2022 27 *corresponding author – e-mail: bundit@siit.tu.ac.th international journal of sustainable energy planning and management vol. 35 2022 27–44 abstract thailand has a commitment to achieve net zero emissions. the roles of energy service demand reduction and hydrogen in the energy transition have not been sufficiently evaluated. this study analyzed energy and technological implications in the energy sector to attain net zero emissions in thailand by 2050. this study used the aim/enduse model, a bottom-up type energy system model, as an analytical tool. a business-as-usual scenario and a net zero emission scenario are analyzed. unlike other studies, this paper explored the energy transition in the absence of carbon, capture and sequestration (ccs) technology with a focus on energy service demand reduction and green hydrogen-based technologies. decarbonization of the energy sector and transition towards net zero emission by 2050 in thailand would require rapid deployment of renewable energy sources like solar, wind and biomass. in the net zero scenario, installed capacity of solar pv and wind for power generation in 2050 would reach 64 gw and 40 gw, respectively. in addition, green hydrogen will have a crucial role in achieving net zero emission target. the high carbon removals from lulucf sector in thailand will aid in reaching net zero emission without ccs technology in the energy sector. energy system transformation for attainability of net zero emissions in thailand bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai* sirindhorn international institute of technology, thammasat university, khlong luang, pathumthani 12120, thailand keywords aim/enduse; ccs; decarbonization; net zero emission; renewable energy; thailand http://doi.org/10.54337/ijsepm.7116 1. introduction achieving the net zero emission in line with the 1.5°c target requires net carbon dioxide emission to reach zero around mid-century and concurrent deep reduction in non-co2 forcers [1]. in the paris agreement, participating countries agreed to work jointly on reducing the emissions to keep the global temperature rise within 2°c and put effort to pursue a 1.5°c target. in addition, countries could set their own emission reduction targets in their nationally determined contributions (ndc). some studies have already analyzed effects of different countries’ combined ndc and intended ndc (indcs) targets on emissions [2-5]. van den berg et al. discussed various effort sharing approaches based on allocating national carbon budget and pathway-based effort sharing estimates [6]. the basic idea of effort sharing is to calculate the allowable emission limit over a period. the ipcc’s special report on global warming of 1.5°c states that the remaining carbon budget is ±420 gt co2 for a two-third chance of limiting global temperature rise to 1.5°c [1]. the bioenergy with ccs (beccs) and carbon removal from sink are considered as the two potential options for negative emissions i.e., carbon sequestration. in 2021, thailand submitted its ‘long-term low greenhouse gas emission development strategy’ document to the unfccc. thailand aims to achieve carbon neutrality by 2065 [7]. thailand, a country with high dependence on fossil fuel to meet its primary energy supply, faces big challenges to comply with the net zero emission target. the combination of theoretical and effective capacity of geological storage sites for 28 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand carbon dioxide storage through ccs technologies in thailand is 10.3 gt co2 [8, 9]. thailand has natural forest coverage of 16 million hectares, which accounts for 31.6% of the total land area. in its third biennial update report (bur3), carbon removal from natural forests, as well as commercial forests such as rubber plantations were taken into account. in 2016, the net sequestration from lulucf was about 90 mtco2. a report by international energy agency (iea) mentioned that behavior change, energy efficiency (including building envelope improvements), end-use sector electrification, renewables, hydrogen and hydrogen-based fuels, bioenergy, and carbon capture, utilization and storage (ccus) are key pillars of decarbonization. stafell et al. have conducted a comprehensive review on the potential role of hydrogen in power, heat, industry and transport services; and discusses the versatility and flexibility it offers in power sector and choices it offers in end-use technologies for decarbonization [10]. the stored hydrogen generated from renewables by electrolysis process can also be utilized to balance both seasonal variations in electricity demand and the imbalances occurring between the demand for hydrogen and its supply by off-grid renewable energies. demand-side measures such as reduction in the service demand through behavior change and building envelope improvements has not been considered in any of the previous studies of thailand. while demand side measures are challenging and require innovative solutions and policies as well as behavior change, they are deemed as viable solutions to meet the 1.5°c target [11]. several studies used integrated assessment models (iams) to analyze the role of energy demand reduction [12-15]. van vuuren et al. in their studies also considered the scenario focusing on the role of lifestyle changes and its impact on less reliance on carbon removal technologies [12]. a study by levesque et al. found that the adoption of energy saving practices including new behaviors could reduce global energy demand of building by up to 47% in 2050 [16]. the lifestyle changes assume changes in behavior that leads to lower cooling and heating demand, change in transport habits, and the way we eat, etc. oshiro et al. explored the role of energy service demand reduction through behavioral change and material use efficiency in achieving japan’s decarbonization goal [17]. the existing research in thailand considers the ccs technologies and renewables in the supply side and energy efficiency improvement and fuel switching in the demand side as the pathway to meet net zero emissions consistent with the 1.5°c target [18, 19]. the existing studies of thailand have assessed the potential of ghg emissions reduction considering only the technological changes, while leaving aside the impact of behavioral changes and building designs in energy service demand reduction. no studies in the case of thailand have considered the reduction in energy service demands from behavioral change and building envelope. in addition, the role of hydrogen in energy system transition have been overlooked. bioclimatic designs and insulation increase the building envelope performance which reduces the space cooling/heating and lighting demands of the buildings. the use of efficient air-conditioners is included in the earlier studies of thailand but reduction in cooling demand from improved building design will reduce the cooling service demand and thereby reduces the energy use upstream in supply side as well as ghg emissions. similarly, in the transport sector, shift to non-motorized transport, car sharing, avoided journeys and modal shift are actions of the behaviors change measures that mitigate ghg emissions from the transport sector [20]. the car sharing concept can be a simple yet effective solution to reduce the number of vehicles significantly. this study aims to assess the energy and technological transformation needed in thailand’s energy system during 2020-2050 identifying three gaps in the existing literature. first, this study has considered the impacts of energy service demand reduction in the analysis. second, the role of green hydrogen in the long-term energy transition has been included. third, the study explores the energy transition needed by mid-century to achieve net zero emission by 2050 in the absence of carbon dioxide removal (cdr) technologies i.e., ccs and beccs. furthermore, this study used effort sharing approaches to determine the emission pathways towards net zero emissions by 2050, which also added to the novelty of the research. this study first estimates the emission allowance pathways of thailand during 2020-2050 based on the effort sharing approaches following van den berg et al. this study then uses a bottom-up model based on asiapacific integrated model (aim) framework i.e., aim/ enduse model to analyze the technological and energy transition needed to achieve net zero emission by 2050. in addition, the study also calculates the carbon budget of thailand during 2020-2050. international journal of sustainable energy planning and management vol. 35 2022 29 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai thailand and the world are taken from world population prospects 2019 [35]. the global emission pathway in this study are in line with the global 1.5 °c target. the global emission pathway is based on results from the image (integrated model to assess the global environment) model obtained from the shared socioeconomic pathways (ssp) database [36]. the weighting factor in the pcc approach is assumed to be 0.3 [6] and the convergence year is 2050 [1]. 2.2 development of thailand energy system model the energy system model of thailand is developed using the aim/enduse model. the structure of the aim/ enduse model is presented in figure 1. the aim/enduse model is a bottom-up type technology selection framework to analyze ghg and local pollutant emissions. the annual end-use energy service demands in future are given exogenously to the model. the energy service demands mean the final services delivered by energy devices or technologies. for example, cooking is the energy service delivered by cookstoves (i.e., energy technology) which can be electric cookstove, biomass cookstoves or lpg cookstove. the types of energy and technology selection in aim/enduse model are made by minimizing the total system cost under given constraints using linear optimization. the total cost includes the annualized investment cost, operating cost and maintenance cost. the constraints include energy availability, maximum allowable emissions, etc. the aim/enduse is a recursive dynamic model that can simultaneously carry out computation for multiple years. more details on the aim/enduse framework can be found in kainuma et al. [37]. earlier studies have also used aim/enduse model to analyze low carbon development issues in case of thailand. shrestha et al. [30] and chunark and limmeechokchai [18] forms the basis for the development of aim/enduse model in this study. aim/enduse model consists of five demand sectors, i.e., the residential, the commercial, the transport, the industry, and the agriculture sectors. in addition, non-energy use of energy has also been considered in the final energy demand sector. the supply side consists of petroleum refineries, natural gas processing plants and the power sector. the study period is 2015-2050. the end-use service demands in various sectors are estimated using gdp and population as the drivers of the end-use services, similar to the methods used in earlier studies of thailand [18, 19, 30, 38]. the study first analyzes the carbon removal potential of thailand. in the case of forestry, annual carbon 2. methodology this section presents the emission pathway calculation, development of energy system model and scenarios description. energy system models are crucial for assessing the energy transition pathways [21, 22] and its impacts on ghg emissions. moreover, it provides an insight for energy planners, more than just giving numbers as the outputs [23, 24]. the numerical models for energy system analysis can be generally classified into two types: the model that examines the interaction within the energy system, also called the bottom-up engineering approach, and the model that examines the interaction between the energy sector and rest of the economy, also called top-down macroeconomic approach [22, 25, 26]. prina et al. classified bottom-up models into static or short-term model and long-term models based on time horizon in which analysis are done. static models analyze the energy system configuration in a fixed target year. short-term models make the analysis for one target year and can simulate up to hourly resolution level [27], whereas long-term models analyze the energy system over longer time horizon considering the transformation of the energy system until the target year [22]. this study uses a bottom-up type, long-term energy system model called the “aim/enduse” model for the analysis. the aim/enduse model is suitable for long-term energy analysis and is capable of quantifying ghg emissions. various national studies on low carbon scenarios analysis have been done using the aim/ enduse at sectoral level [28, 29] as well as economywide level [30-32]. 2.1 emission pathway calculations the emission pathways in this study are calculated following van den berg et al. [6]. three effort sharing approaches are used for emission pathway estimations; they are grandfathering (gf), immediate per capita convergence (iepc) and per capita convergence (pcc). the equations for estimating emission allowances using various approaches are available in table s1 of the supplementary document of van den berg et al. [6]. the start year is 2018 and the end year is 2100 based on ipcc [1] and van den berg et al. [6]. the data required for calculation are taken from various sources. global historical emissions and emissions in year 2018 are taken from cait climate data explorer [33]. the lulucf emissions in 2018 for thailand has been harmonized with the third national communication report of thailand [34]. population data projections for 30 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand removal is assumed to be increasing up to 2050 based on the government’s target. it is also assumed that the use of biomass for energy will reduce the carbon removal from the forestry sector. furthermore, it is assumed that co2 emission from biomass burning is canceled out by carbon absorption during the biomass production. in the case of ccs, there is a limit, as once the storage site is filled up it cannot be used. as ccs technology comes into effect, the sequestration potential is assumed to decrease. after estimating the sequestration potential of forests, the emission reduction pathway has been designed. in the analysis, emissions from energy use, agriculture, lulucf and industrial processes are considered to design emission allowance pathways. the emission reduction in the net zero scenario compared to the bau scenario will come from conventional mitigation measures such as energy efficiency improvement, fuel-switching and renewable energy. the emissions that cannot be reduced using the aforementioned measures would be offset using forests as natural carbon sink. the technologies and energy sources that would be required to achieve the net zero emission pathway will be identified with the use of the aim/enduse model. the reduction in the service demand in the model due to behavior change, impro vement in building envelope and material efficiency gains are estimated exogenously to input into the model. 2.3 scenario description this study includes one business-as-usual scenario, and one net zero emissions scenario. the description of each scenario design is as follows: business-as-usual scenario: the business-as-usual (bau) scenario is designed to show the baseline of energy use and ghg emissions when the present energy use and technology continues in the future. in the transport sector, the share of public and private vehicles is constrained to the present share. likewise, in the case of the agricultural sector, the technology and energy mix are constrained to be the same as in the present scenario. the service demand projection in the bau is estimated by using a linear regression approach assuming gdp and population as the main drivers following earlier studies in thailand [7, 18, 19]. the annual average gdp growth rate is assumed to be 3.21% during 2021-2037 and 2.71% during 2037-2050 [7]; and population is f igure 1: structure of the aim/enduse model (adopted from kainuma, matsuoka [37]) international journal of sustainable energy planning and management vol. 35 2022 31 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai assumed to grow on average at 0.19% during 20212030 and then decline on average at 0.31% annually during 2030-2050 [7]. net zero emission scenario: the net zero emission (nze-ghg) scenario is designed to achieve net zero emission of ghg by 2050. the net ghg emission pathways during 2025 to 2050 are estimated based on various effort-sharing approaches as discussed in the methodology section. nze-ghg scenario assumes that ghg emissions from all sectors, including agriculture, waste, ippu and lulucf, would become near net zero by 2050. this scenario is hereafter referred to nzeghg. the nze-ghg scenario allows the emissions from the energy sector to be offset by carbon removals from the lulucf. in addition, nze-ghg also incorporate the reduction in energy service demand due to behavior change, improvement in building envelope and material efficiency. these include a modal shift from car to public vehicles, car sharing, curbing excessive or wasteful energy use and material efficiency measures. these measures will lower energy service demand, thereby lowering the energy use and ghg emissions. iea stated that net zero co2 emission cannot be achieved without people’s participation and their willingness to change, as people drive the demand for energy-related goods and services [39]. this study assumes that in the residential and commercial sectors, the lighting and cooling service demands would be lower by 5% compared to the bau in 2025 and lower by 25% in 2050. the similar approach was also used by oshiro et al. [17]. the assumptions in this study are made based on existing literature that have estimated the final energy reduction potential from various measures. reduction in energy consumption by 5 % to 10 % could be achieved by feedback and more informative billing [40]. ananwattanaporn et al. evaluated the reduction in energy consumption by retrofitting existing buildings in compliance with thailand’s building energy code to achieve a net zero energy building and estimated that energy reduction up to 49.4% could be achieved [41]. gulati studied the cost effectiveness of hvac through step-by-step optimization of building orientation, window-to-wall ratio, roof, wall, glass, and shading devices [42]. the estimated heat load reduction through envelope was nearly 71%. in thailand, the use of low thermal conductance material for the building envelope can save up to 28% of cooling demand [43]. in the transport sector, it is assumed that the demand would be lower by 2.5% from the bau level in 2025 and by 15% in 2050. this assumption is based on reduction in transport demand due to avoiding unnecessary trips and a shift from motorized transport to non-motorized transport such as cycling and walking. introducing behavior change in the transport sector by internalizing external costs, investment in transport infrastructure and life style changes, and telecommunication could also reduce the transport service demand [44]. a study concluded from a survey that the modal share of non-motorized transport in bangkok would increase from the current level of 24% to 42% [45]. in the nze-ghg, it is also assumed that the occupancy in cars on average would increase to 2.8 by 2050 from the current occupancy rate of 1.4. this would be brought about by the car-sharing concept. carsharing can replace four to eight cars [46], increase nonmotorized transport such as bicycling and walking [47], reduce car kilometers traveled by 33-50% and increase the use of public transportation [48, 49]. due to unavailability of reduction in end-use service demand data, this study makes assumptions in the reduction in service demands which can be considered one of the limitations. in the nze-ghg, it is also assumed that the share of public transport would reach 60% by 2050 compared to 20% in the bau scenario. the public transport includes regular route public buses, water transport, inter-city trains and intra-city mass rapid transport. 3. energy and ghg emissions in the bau scenario this section presents the primary energy supply, final energy consumption and ghg emissions in the bau scenario during 2015-2050. 3.1 primary energy supply total primary energy supply (tpes) dropped from 5,673 pj in 2015 to 5,374 pj in 2020 (see figure 2). the drop in 2020 was attributed to the covid-19 pandemic. however, in the future the economy is expected to recover leading to an increasing energy supply. in the bau, tpes would be increased by more than 40% between 2020 and 2030. in 2050, tpes would reach 12,591 pj, an increase of 130% from the 2020 level. the increase in tpes in the bau scenario is led mainly by natural gas and oil. other energy sources, such as coal, 32 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand hydro, biomass, liquid biofuels, and other renewables (solar and wind), would also increase between 2020 and 2050. oil and natural gas would account for more than a 70% share in tpes during 2020-2050. the share of coal in tpes would increase from 12.0% in 2020 to 12.3% in 2050. the imported electricity from neighboring countries would be increased by 80% between 2020 and 2050. the shares of solid biomass, biofuels, hydro, and other renewables in 2020 were 16.1%, 1.9%, 0.3% and 0.5%, respectively. the use of solid biomass, biofuels and other renewables would more than double between 2020 and 2050; however, their shares in tpes would not increase significantly due to the dominance of natural gas and oil. the share of biomass, biofuels and hydro would drop in 2050; the shares would be 13.4%, 1.6 and 0.2%, respectively. the share of other renewables would increase to 0.8% in 2050. 3.2 final energy consumption the final energy consumption (fec) in the bau scenario was 3,732 pj in 2015 (see figure 3). the fec in 2020 was lower than the 2015 level, like the primary energy supply. the unprecedented pandemic led to a sudden drop in the fec in 2020 to 3,619 pj from 4,083 pj in 2019. the fec will continue growing in the bau scenario between 2020 and 2050. in 2030, the fec would increase by 30% from 2020 level, whereas in 2050 the fec would be 120% higher than the 2020 level. the fec in 2020 was dominated by oil followed by electricity, solid biomass, natural gas, coal, liquid biofuels, and other renewables. petroleum products will account for more than a 45% share in the fec in 2030, while electricity, solid biomass and coal will account for 19.4%, 9.6% and 9.2%, respectively. the share of biofuels in 2020 was 2.8%, while other renewables accounted for less than 1% in fec. in 2050, oil would still be the dominant fuel in the final energy accounting with nearly a 40% share. the increase in oil consumption is led mainly by increases in both passenger and freight transport demand. the share of electricity and coal in 2050 would be 17.3%, whereas the share of solid biomass and coal would be attributed to 14.3% and 6.9%, respectively. figure 4 presents the sectoral shares in final energy consumption in the bau scenario during 2015-2050. the transport sector and the industry sector are the two main consumers of final energy use, accounting for 34.2% and 33.4% shares in the final energy mix in 2020. the residential, commercial and agriculture sectors accounted for 11.4%, 7.7% and 2.7%, respectively, in the final energy mix. non-energy uses also accounted for more than one-tenth of final energy use in 2020. the 0 2 4 6 8 10 12 14 2015 2020 2025 2030 2035 2040 2045 2050 p ri m ar y en er gy s up pl y (e j) elec. import coal natural gas hydro other renewables liquid biofuels solid biomass and waste oil figure 2: primary energy supply in thailand in the bau scenario during 2015-2050 international journal of sustainable energy planning and management vol. 35 2022 33 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai 0 1 2 3 4 5 6 7 8 9 2015 2020 2025 2030 2035 2040 2045 2050 fi n al e n er gy c on su m pt io n ( ej ) coal natural gas electricity other renewables liquid biofuels solid biofuels and waste lpg oil figure 3: final energy consumption in thailand in the bau scenario during 2015-2050 share of the transport sector in the final energy mix would increase between 2020 and 2050, reaching 44.5% in 2050. the share of the industry sector in 2050 would drop to 29.0% in 2050. in 2050, the share of the residential sector would account for 11.3%, whereas shares of the commercial and the agriculture sector would account for 8.6% and 1.5%, respectively, in the final energy mix. the share of non-energy uses would drop to 5.2% in 2050. 3.3 ghg emissions the ghg emissions during 2015-2050 are shown in figure 5. the ghg emissions in 2020 are estimated to be 255.5 mtco2e in 2020. the emissions would increase by 149% between 2020 and 2050, reaching 635.0 mtco2e in 2050. the increase is driven mainly by energy industries and the transport sector. the emissions from energy industries mainly come from the power sector, while petroleum refineries and natural gas processing plants account for less than one-tenth of emissions in energy industries. in 2050, power sector would emit 248.3 mtco2e. the industry sector accounted for only a 19.4% share in 2020. emissions in the agriculture, the commercial and the residential sector would increase by 27%, 51% and 82%, respectively, during 2020-2050. in 2020, ghg emissions in the power sector and the transport sector accounted for 43.3% and 31.3%, respectively, in total ghg emissions, followed by agriculture (2.5%), residential (2.2%) and commercial (0.9%) sectors. in 2050, the share of energy industries in ghg emissions would reach 42.6%, while that of the transport sector would decrease to 36.6%. the industry, residential, agriculture and commercial sectors would contribute 17.3%, 1.6%, 1.4% and 0.6%, respectively, in total ghg emissions in 2050. figure 6 presents the decomposition of ghg emissions from the power sector i.e., the emissions are decomposed by electricity consumption corresponding to the end-use sectors and transmission and distribution (t&d) losses. in 2050, industrial and commercial sectors are attributed to the highest emissions in the power sector, both sectors accounting for 85.5 mtco2e which is 34.4% of the total emissions. the residential sector would account for 23.3% of the emissions whereas t&d losses would account for 7.7%. the agriculture and transport sectors would contribute to about 0.1% in the ghg emissions from the power sector. 4. emission allowance the ghg emissions allowances during 2018-2050 by different effort-sharing approaches are presented in figure 7. the ghg emissions allowances are time dependent, and depend on all sectors including emissions and sequestrations from land use, land use change and forestry (lulucf). it is found that the lowest ghg emission allowances occur in the iepc approach. the emission allowances would decrease from 2018 until 34 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand 0 20 40 60 80 100 2020 2030 2040 2050 se ct or al s ha re s in f ec ( % ) non-energy use agriculture commercial industry residential transport figure 4: shares of sectoral final energy consumption in thailand in the bau scenario 0 100 200 300 400 500 600 700 2015 2020 2025 2030 2035 2040 2045 2050 g h g e m is si on s (m tc o ₂e ) agriculture commercial energy industries industry transport residential figure 5: ghg emissions in thailand in the bau scenario during 2020-2050 2050. however, in the gf and pcc approaches, the emission would peak in 2020 and would drop continuously until 2050. in the three approaches (i.e., gf, pcc and iepc), nearly net zero emissions (nze) will be reached in 2050. it should be noted that thailand aims to achieve carbon neutrality by 2065 [7]. however, in the cop26, thailand announced carbon neutrality by 2050 and net zero emission by 2065. according to the effort sharing approaches considered in this study, thailand will have net ghg emission allowance of less than 1 mtco2e by 2050. therefore, in this study it is assumed that net ghg emission reaches zero by 2050. in the nze analysis in the subsequent section, the emission allowances in gf are adopted starting from 2025 onwards. 5. emission pathways in the nze-ghg the pathway of ghg emission allowance in the energy sector in nze-ghg scenario is presented in figure 8. this pathway represents the ghg emission pathway that is input to the aim/enduse model as the emission constraint. ghg emissions would peak in 2020, drop sharply from 2020-2030, and reach net zero emissions in international journal of sustainable energy planning and management vol. 35 2022 35 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai 248.3 57.8 0.3 85.5 85.5 0.1 19.1 0 50 100 150 200 250 300 g h g e m is si on s (m tc o 2e ) figure 6: decomposition of ghg emissions from power sector in thailand in 2050 in the bau scenario 0 50 100 150 200 250 300 350 2010 2020 2030 2040 2050 g h g e m is si on a ll ow an ce ( m tc o 2e ) gf iepc pcc historical figure 7: ghg emissions allowances in thailand in different effort-sharing approaches 2050. in 2020, the ghg emission in the bau scenario is lower than the emission allowance limit. in nzeghg, it is assumed that there would be net zero emission of ghg emissions in the energy, the afolu, the ippu and the waste sectors combined. the removals in the afolu sector are estimated to be 90 mtco2e in 2050 [50]. the emissions in the ippu and the waste sector during 2020-2050 are capped to be 19 mtco2e and 12 mtco2e, respectively, which are based on their historical emissions during 2000-2013 as given in thailand’s third national communication report [34]. there would be net sequestration in the afolu sector; therefore, the emissions in the energy sector could be offset partially or completely for the lulucf. the emissions in the nze-ghg scenario include the emissions from the afolu, the ippu and the waste sectors, as well as the sequestrations from the forestry sector. the deviation from the emissions pathway derived by the pcc approach is the emission allowance in the energy sector as shown in figure 8. 6. energy and ghg emissions in the nze-ghg scenario this section presents the ghg emissions by sector, primary energy supply, final energy consumption and 36 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand power generation by fuel type during 2020-2050 in the nze-ghg scenario. the ghg emissions reduction by sector in nze-ghg compared to the bau scenario has also been presented. 6.1 ghg emissions ghg emissions by sector during 2020-2050 in the nze-ghg scenario are shown in figure 9. following the ghg emission allowance limit, the emission would peak in 2024 reaching 265.9 mtco2e and then decline to 234.2 mtco2e in 2030. the ghg emission from energy sector would drop to 61.6 mtco2e by 2050 to achieve net zero emission. the transport sector would account for the highest emissions in 2030 having a share of 38.9%, followed by energy industries (36.6%), industry (20.3%), residential (2.5%), agriculture (1.8%) and commercial (less than 1%) sectors. the emissions reduction achieved is mainly due to energy efficiency improvement and partially due to the improvement in building envelope, reduction in energy service demand due to behavior change, switch from private transport to public transport mode and fuel switching. in 2050, energy service demand reduction and modal shift in the transport sector would reduce about 153 mtco2e, which represents 27.2% of the total ghg reduction in the nze-ghg scenario. the post-2030 ghg emissions reduction is mainly due to the fuel switching and the decarbonized power sector. in 2040, the transport sector will account for the highest contribution in ghg emissions, while by 2050 the energy industries, mainly the power sector, would account for more than half of the ghg emissions. in 2050, the share of ghg emissions in the transport sector would be 13.7%, whereas the industrial sector will emit ghg more than the transport sector contributing by nearly 23%. in 2050, the share of ghg emissions from the residential, commercial and agriculture sectors in total emissions would be less than 5%. the emission reductions in all sectors in the nzeghg scenario are presented in figure 10. 6.2 primary energy supply the primary energy supply (pes) in the nze-ghg scenarios is shown in figure 11. the pes would decline from 2025 until 2037 despite the increase in the end-use service demands. the decrease in the pes is mainly due to energy efficiency improvement. other factors that would contribute to the decrease in pes are reduction in energy service demands from behavior changes and improvement of building envelope, modal shifts in the transport sector, electrification in end-use services and increase in the share of renewable energy in the power sector. the primary energy supply decreases due to a higher share of renewables. the overall efficiency increases because the conversion loss of renewable electricity is not accounted for, and renewable electricity assumes that input energy equals output energy. the pes would increase after 2037 and would reach 5,890 pj by 2050. the consumption of 0 50 100 150 200 250 300 350 400 2020 2025 2030 2040 2050 g h g e m is si on a ll ow an ce in e ne rg y (m tc o 2e ) 2035 2045 figure 8: emission allowances in thailand in the energy sector in nze-ghg scenario international journal of sustainable energy planning and management vol. 35 2022 37 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai 0 50 100 150 200 250 300 2025 2030 2035 2040 2045 2050 g h g e m is si on s (m tc o ₂e ) agriculture commercial energy industries industry transport residential 2020 figure 9: ghg emissions in the energy sector in the nze-ghg scenario during 2020-2050 0 100 200 300 400 500 600 700 2020 2025 2030 2035 2040 2045 2050 g h g r ed uc ti on ( m tc o 2e ) agriculture commercial energy industries industry residential transport bau (emissions) nze-ghg (emissions) figure 10: sectoral ghg emissions reduction in thailand in the nze-ghg scenario coal, natural gas and oil would decrease, whereas the renewable electricity generation would increase dramatically. solar and biomass (solid biomass and waste) would have significant shares in pes by 2050. both solar and wind would account for more than 45% of pes by 2050. in the power sector, it is assumed that 10% of the solar pv in power generation is also equipped with battery storage. equipping intermittent renewable resources with battery storage would result in higher reliability and stability when integrated into the grid. in addition, the solar pv system is also used to produce green hydrogen for use in the industry, transport, and power sectors. the share of biomass in pes would be 27.4% in 2050, whereas biofuels would account for only 3.6% in pes. among the fossil fuels, the share of natural gas and oil would be nearly 20% and 10%, respectively, in the primary energy supply in 2050, whereas the share of coal would be lower than 1%. the imported electricity would account for 3.3% of the total primary energy supply. 38 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand 6.3 final energy consumption the final energy consumption would increase by 1.5% during 2020-2030 (see figure 12). after 2030 there would be significant drop in final energy consumption. then, the fec will increase after 2040. the decrease in fec after 2031 in the transport sector is mainly due to a modal shift from private to public transport, reduction in transport demand due to behavior change and carsharing. in addition, energy efficiency improvement and electrification also will contribute in final energy reduction. electrification of end-use technologies in the industry and the transport sectors would increase the overall efficiency, which is also attributable to the decrease in final energy consumption. the industrial heat pump technologies would need to be deployed for lowto medium-heat applications in industry. green hydrogen produced using renewable energy would have a crucial role in fec to replace coal and other fossil fuels in the industrial sector and the transport sector after 2040. fuel-cell based technologies would be essential in the transport sector. the fuel mix would notice significant changes during 2020-2050. the share of oil in final energy consumption would drop to 10.8% in 2050 from 41.5% in 2020. by 2050, the shares of coal, lpg and natural gas would be 0.6%, 1.3% and 9.3%, respectively. the shares of non-fossil energies in final energy mix would increase in the nze-ghg scenario. in 2050, the shares of electricity and solid fuels (including waste) would be 32.4% and 28.5%, respectively. the share of liquid biofuels would reach nearly 5%. in 2050, the share of hydrogen produced from renewable energy would be 11.3% in final energy consumption. 6.4 power generation electricity generation mix in the nze-ghg scenario during 2020-2050 is shown in figure 13. electricity generation would increase from 220 twh in 2020 to 233.2 twh in 2030, an increase of 6%. in 2040 and 2050, due to high electrification in end-use technologies, the electricity generation requirement would increase by 31% in 2030 from the 2020 level. in 2050, the electricity generation would be 88% higher than the 2020 level. power generation in 2020 was dominated by natural gas, followed by coal and imported electricity. thailand has long-term power purchase agreements with neighboring countries; therefore, imported electricity would contribute significantly to power generation. in 2020, electricity generation from natural gas accounted for more than 60% of generation mix, while coal and imported electricity accounted for 16.7% and 12.7%, 0 1 2 3 4 5 6 7 2020 2025 2030 2035 2040 2045 2050 p ri m ar y en er gy s up pl y (e j) electricity import coal natural gas hydro wind solar liquid biofuels solid biomass and waste oil figure 11: primary energy supply in thailand in the nze-ghg scenario international journal of sustainable energy planning and management vol. 35 2022 39 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai respectively. biomass and hydro power accounted for about 5.6% and 2.6%, respectively, in the generation mix in 2020. the generation mix would change dramatically by 2050. solar would contribute 40% in the power generation mix, while wind and biomass would account for 8.6% and 9.2%, respectively. the installed capacity of solar pv would be 64 gw, while that of wind would be 40 gw. the share of natural gas would drop to 16.4% in 2050. hydrogen based power generation would account for 10% in the generation mix in the nze-ghg scenario. the imported electricity would account for 13% in the generation mix in 2050. shares of coal and oil would be negligible by 2050. the share of solar in power generation is limited to 40% in the energy system model. the solar pv can generate only in the presence of sunlight; consequently, relying on solar pv might be doubtful. therefore, solar pv equipped with large battery storage is also considered in the model. stored hydrogen generated from clean renewables by an electrolysis process can also be utilized to balance both seasonal variations in electricity demand and the imbalances occurring between the demand for hydrogen and its supply by off-grid renewable energies. if clean renewables like solar and wind cannot be deployed to the desirable extent, alternative options like bioenergy based powerplants and ccs technologies would need to be employed. 7. opportunities and challenges this study finds that the development of hydrogen using renewable energy can be one of the viable solutions to the deep decarbonized transport and industrial sectors. hydrogen-based technologies can now replace coal in the steel industry and offers a greener pathway towards steel production. stored hydrogen generated from clean renewables by an electrolysis process can also be utilized to balance seasonal variations in electricity demand in the power sector. hydrogen can also be stored to avoid the imbalances occurring between the demand for hydrogen and its supply by off-grid renewable energies. however, there are several challenges that need to be addressed by the policy makers to promote hydrogen. firstly, new investments are needed to promote renewable energy along with hydrogen production, storage, and transportation infrastructure. secondly, the technologies in energy intensive industries like cement, iron and steel are longlived assets with a minimum lifespan of 20 years. these infrastructures, once built, are hard to replace without policy interventions and incentives. the transition from carbon-intensive electricity generation to lowor zero-emission electricity presents several challenges for the power sector. recently, the costs of solar pv technology and batteries have rapidly 0 1 2 3 4 5 2020 2025 2030 2035 2040 2045 2050 fi n al e n er gy c on su m pt io n ( ej ) hydrogen coal natural gas electricity solar liquid biofuels solid biofuels and waste lpg oil figure 12: final energy consumption in thailand in the nze-ghg scenario 40 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand decreased. although the cost of renewables and hydrogen-production is expected to decline further, the switch to renewables would require substantial investment in the power sector. do et al. used vietnam’s success story in rapid development of wind and solar power to provide policy insights to other member countries of the association of southeast asian nations (asean) and concluded that strong government commitment and public support are necessary for rapid take-up of renewable energy deployment [51]. the thermal-based power plants are usually long-lived assets with a minimum lifespan of 30 years. retiring the already built infrastructures in the power sector before their lifespan is over would be one of the challenges and is not possible without policy interventions and financial incentives to the power producers. incentives such as feed-in-tariff rates and a favorable investment environment would be the key drivers for renewable power development. the transmission grids must be upgraded and managed beforehand to make them compatible with the intermittency of the renewables like solar and wind. the uncertainty in government policies is one of the main barriers for renewable power development [51]. there are also controversies with the nuclear power development plans in thailand. nuclear energy offers higher stability in the power supply system compared to windand solar-based generation. achieving the net zero emission target without nuclear would require higher deployment of other renewable technologies such as biomass-based generation. there are also issues with biomass-based generation. in the net zero emissions scenarios, there is a substantial increase in the use of biomass fuel. higher dependency on biomass fuels would require more land designated for short-rotation forestry to meet the required biomass supply. there are issues related to high use of variable renewable energy sources such as solar and wind in the power generation. the uncertainty of variable renewable energy (vre) sources can be efficiently facilitated by using flexible energy resources such as flexible generation units, energy storage units, interconnectors and demand-side management [52, 53]. the hydrogenbased electricity generation, produced from clean energy, is also considered in the net zero scenario to maintain the reliability of the power system. this paper analyzed the pathway to achieve net zero emissions in an annual basis over a long-time horizon. however, it is important that analyses in daily and hourly basis would be required to have a deeper understanding during the transition to high renewable energy system. lund et al. presented state-of-the-art cross-sectoral smart energy system concept which would have crucial role in decarbonizing the energy systems [54]. smart energy systems offer efficient and affordable solutions by identifying the synergies between multiple sectors [54, 55]. 0 50 100 150 200 250 300 350 400 450 2020 2025 2030 2035 2040 2045 2050 el ec tr ic it y ge ne ra ti on ( t w h) hydrogen import biogas biomass other renewables wind solar natural gas oil coal figure 13: electricity generation by fuel types in thailand in the nze-ghg scenario international journal of sustainable energy planning and management vol. 35 2022 41 bijay bahadur pradhan, achiraya chaichaloempreecha, puttipong chunark, salony rajbhandari, piti pita and bundit limmeechokchai 8. final remarks this study assessed levels of energy use and ghg emissions in thailand over the period 2015-2050. the increase in ghg emissions is driven mainly by the power sector, the transport sector, and the industrial sector. this study also assessed the emission allowance pathways using various effort-sharing approaches. based on the emission allowance pathways, the study assessed the energy implications and the changes in sectoral emissions in the nze-ghg scenario. in the nze-ghg scenario, it is assumed that the emission from the energy sector is offset by sequestration from the lulucf. the study finds that the reduction of energy service demand would complement in achieving the net zero emission target of thailand. the use of green hydrogen and hydrogen-based technologies can contribute to achieving net zero emission without relying on ccs technologies. unlike existing literature of thailand that focuses mainly on ccs technologies in the power sector [18, 19], this study presents an alternative approach to achieve the net zero emissions focusing on energy service demand reduction and the use of hydrogen fuels. as the pathway to achieve net zero emissions is already narrow, it is crucial that deployment of renewable and low-carbon technologies be made immediately at massive scales. in the net zero scenarios, hydrogen fuel and electrification of end-use services using low-carbon electricity would be the game changer as they can substitute fossil fuels in the transport, the industry, and the power sectors. the power sector, which is currently accountable for the highest share in ghg emissions in thailand, will require radical changes in the generation mix in nzeghg scenario. the transformation of the power generation from emission-intensive fuels to renewable energies is crucial to achieve the net zero emission target. the renewable energy mainly contributes to the decarbonized power sector. electricity generation from renewables such as solar, biomass and wind would start to emerge in the power sector by around 2025. in the nze-ghg scenario, net zero emission is also possible for thailand without nuclear and ccs based generation. as the power sector is driven by end-use sectors, the energy service demand reduction in end-use sectors would lower the ghg emissions in the power sector. due to reliability and security issues of solar and wind, the study has limited the share of solar energy in power generation to 40%. green hydrogen-based electricity generation would also have key role in providing reliable and uninterrupted power supply. additional measures such as energy efficiency, behavior changes, a modal shift in the transport, and building envelope improvement would also have crucial roles in achieving the net zero emission targets. the behavior changes can play a vital role in reducing the energy demands and cutting co2 emissions [39]. this study assumed the reduction in energy service demand from behavior changes and building envelope improvement based on existing literature which is one of the limitations of the study. the role of behavioral change in reduction of energy consumption and ghg emissions are still in the preliminary stages and needs more robust analysis in the future. moreover, energy service demand reduction in the residential and commercial buildings are dependent on building designs. architects and building engineers also have crucial role in making the buildings more energy efficient and adopting efficient end-use technologies [56]. therefore, the net zero emission target needs to be achieved by integration of different fields and professionals. the study also assumed shifting from private vehicles to public modes of transport and non-motorized transport such as walking and cycling. finally, this study finds that deployment of renewables, and the use of advanced batteries and green hydrogen in end-use technologies and power generation could reduce or avoid the dependency on carbon capture, utilization and storage (ccus) technology including beccs. in conclusion, achieving net zero emissions target would be possible only with combined measures of energy efficiency, behavior change, electrification, renewables, hydrogen and hydrogen-based fuels, bioenergy and ccus. thailand’s government should strengthen the necessary policies to promote and deploy clean energy technologies and disincentivize fossil fuels and fossil fuel-based technologies. phasing out fossilfuel subsidies, carbon pricing, subsiding renewable energy and other market reforms would be needed to discourage the use of fossil fuels and shift towards cleaner energy and technologies. acknowledgement this study was supported by thammasat postdoctoral fellowship and thammasat university research unit in sustainable energy and built environment. authors also would like to thank national institute for environmental 42 international journal of sustainable energy planning and management vol. 35 2022 energy system transformation for attainability of net zero emissions in thailand studies (nies), japan for providing the aim/enduse model 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offshore wind turbines; colombian caribbean; k-means; silhouette analysis. http://doi.org/10.5278/ijsepm.6710 1. introduction the global increasing energy demand requires the increment of electricity generation capacity through low-carbon technologies such as offshore wind, which contribute to mitigate the effects of climate change because its cleaner production compared to fossil fuels [1]. the colombia`s energy matrix is integrated by 70 % of hydroelectric plants and the remaining percentage correspond to thermoelectric and a few non-conventional energy projects [2]. however, the high dependence of hydropower to the rainfall regime and its vulnerability to the effects of enso in warm (el niño) and cold (la niña) phases [3,4], demands the diversification of the colombian energy matrix. during 2015 and 2016 occurred an unprecedented combination of el niño, the warm phase of the pacific decadal oscillation (pdo) and the warmest period of the planet [5]. as a result, the impact of these combined climate events in colombia was identified by severe droughts that provoked a reduction of 20% of water reserves in dams and a rise of 4.5% of the electricity prices, what impacted a 0.6% of the gross domestic product [6]. that critical energy situation was reported by [7] who argued that the potential of the colombian offshore wind energy could complement the hydropower during drought events. the authors classified as i (strong wind) to barranquilla and santa marta cities according to the wind energy classification of the 140 international journal of sustainable energy planning and management vol. 32 2021 pre-feasibility assessment for identifying locations of new offshore wind projects in the colombian caribbean. (iea) published a report pointing potential wind offshore areas worldwide, considering the distance to shore, water depth and exclusion regions (wind speed < 5 m/s), among others [24]. the reviewed literature pointed that pre-feasibility studies become important because these assessments reveal unexpected potential areas for offshore wind despite of not-having high ws, nor infrastructure for supporting installation and operation activities. in the site-selection prevalence factors associated with climate, the environment and social-political constraints. then, the wind climate analysis is considered essential for the pre-feasibility assessments because a high-variability of the resource carries a low persistence, and unexpected future negative trends of ws generated by el niño and pdo could affect the electricity generation. the ws is considered the most relevant factor for the wind energy sector, accounting about 90% of the contribution for the site-selection [23]. however, some authors have evaluated dispersion criteria such as wind stability [20] or wind volatility [25] which reflect the impact in terms of power fluctuation. [26] indicated that barranquilla city area is better than la guajira north area, because of their weibull distribution of ws, however, they did not consider that a high ws variability affects significantly the suitability of a potential area. according with the categories presented by [23], three factors have the highest percentage (70%) of relevance for the site-selection such as, 1protected areas within the socio-environmental category, 2-ws in the climate category and 3-water depth in the geographic category. however, there are other secondary three factors with a less percentage of contribution (30 %) which ease the site-selection. the first is the distance to port/ industrial facilities, where the increment of distance to port facilities demands more investments for the electric transmission from the offshore substations and more resources for transportation. the second is the environmental loads, where recurrent extreme environmental loads as hydrodynamic and aerodynamics forces affect the structural health what increase the maintenance-repair costs and interrupt the electricity generation. the third is the bottom substrate, where unstable soils require further studies and complex geotechnical solutions. the bottom substrate assessment will ease the determination of the pile depth, then, a characterization of the soil layer composition, hydrography (bathymetry) and turbine material properties is necessary [27]. [28] developed several phased approaches abbreviations capex: capital expenditure ccc: colombian caribbean coast cllj: caribbean low level jet eclac: economic commission for latin america and the caribbean enso: el niño southern oscillation mpa: marine protected area opex: operational expenditures owt: offshore wind turbine owf: offshore wind farm pdo: pacific decadal oscillation ws: wind speed wd: water depth international electrotechnical commission; these high values of winds in the studied areas show an option for complementing the energy matrix in colombia [8]. colombia must intensify its efforts not only to increment the conventional renewables, but also to develop non-conventionals to reach the planned energy goals [9]. the caribbean sea including colombia’s has very good conditions to develop offshore wind energy due to the persistent northeast trade winds [10–12]. others studies reported the potential of the offshore wind resource using reanalisys data [7,13], multiple satellite data [14], projections using climate change scenarios [10] and long-term trends of the wind energy [15], the political and institutional barriers [16–18] and its contribution to the complementarity of the energy matrix [8,19]. the area classification of wind energy resources is necessary for identifying optimal turbine locations [20,21]. [22] recommended as first step at the macro level (regional scale), considering technical criteria as: wind resource, maximal depth, distance to coast, and constraints such as reserve and conservation areas. secondly, the author suggests evaluating different solutions at the micro level (local) considering the technical feasibility and cost evaluation: capital expenditure and operating expenses (capex-opex). some approaches consider quantitative and qualitative features: buffer exclusion zones (protected areas, national parks, historical sites, shipping routes, ports, military zones), wind speed (ws) threshold, slope, land uses, bathymetry, soil properties, distance to shore, among others. however, there is no consensus on the prioritization of specific criteria. [23] proposed six categories: climate, geographic, economic, location, political and socio environmental. in 2019, the international energy agency international journal of sustainable energy planning and management vol. 32 2021 141 martha bastidas-salamanca, juan gabriel rueda-bayona to offshore wind developments for the us considering the experience from the uk, [29] proposed a strategic planning for new offshore wind projects, and other studies provided economical and technical considerations for designing [30,31]. various criteria for site-selection of new offshore areas were identified, but their priority order is not bounded by specific stages such as pre-feasibility, feasibiliy and final decision.the review showed that international studies established ws < 5 m/s and distance to port as a restriction, hence, we shifted these factors into new values considering the recommendations of recent studies and wind turbine manufactures. considering the priority of colombia in diversifying the energy matrix and its high offshore wind potential, is opportune the development of accessible evaluation tools for the stakeholders and decision-makers. hence, this study proposes which criteria factor would be considered and when they could be analyzed and group them in three stages (prefeasibility, feasibiliy and final decision). also, we developed a methodology to perform a pre-feasibility analysis for the site-selection considering the colombian caribbean coast (ccc) as study case. within the methodology, three factors are considered (mpa, ws, and wd), where the ws is analyzed through space, time and frequency methods. the results reveal technical information of new locations with high potential to develop offshore wind projects, not reported in the open access literature before. 2. data and methods to identify best locations for offshore wind turbine (owt) in the study area (figure 1), were considered quantitative-qualitative factors and restrictions. a factor is a criterion that increases or decreases the suitability of candidate locations, while a restriction is a determining factor that allows or reject a candidate point because it did not fulfill a mandatory requirement [32]. this study gathered the recommendations retrieved from the literature review about the criteria and factors for site-selection and defined three main stages that could be present in the development of new offshore wind projects (figure 2). the scope of this research is limited to pre-feasibility and provides additional secondary information (literature survey) for a future second stage (feasibility). hence, the description of the three main factors and the used data in this study are: • marine protected areas (mpa). in colombia, the mpa are under administration of sub-system of marine protected areas (smpa), which provides the official cartography of the areas. this study considered the mpa as a restriction and it is defined by a boolean value = 0 for the presence and 1 for the absence of mpa, on a buffer exclusion zone (5 km) around the candidate station. figure 1: study area: the ccc indicating the main ports. 142 international journal of sustainable energy planning and management vol. 32 2021 pre-feasibility assessment for identifying locations of new offshore wind projects in the colombian caribbean. • wind speed (ws). ws below the 3 m/s cannot activate the turbine (ws cut-in) [21,33,34], then, the lowest annual ws mean values are verified before of rejecting candidate stations. the era5 reanalysis wind data was used (1980-2019) for the time, space and frequency analysis (https:// cds.climate.copernicus.eu/cdsapp#!/home). the nearest era5 wind data to the coast was selected to characterize the spatial and temporal distribution through hovmöller diagrams and clustering analysis (k-means) [35]. because the k-means requires specifying the number of groups, a silhouette analysis was performed to identify the distances among groups. once the groups were identified, the wind variability analysis was done through a statistical toolbox of matlab [36]. • water depth (wd). water depths over 50 m requires floating and specialized foundations increasing the capex and opex of the project. in this study, the bathymetry data was obtained from the colombian official nautical charts and the 50 m isobaths were evaluated to identify which stations were located < 50 m (boolean value = 1) and which were over (boolean value = 0). the proposed methodology for performing the pre-feasibility is depicted in figure 3 3. results and discussion this section begins with the identification of mpa in the study area. next, are described the ws characteristics and the restrictions for installing offshore wind farm (owf) considering the wd criteria. the section ends with secondary information related to distance to port/industrial facilities, environmental loads, bottom substrate, thecnical-economical information and recommendations for start data source: reanalysis data, cartography, nautical charts is mpa=1? n rejected stationend end rejected station n is ws > 3 m/s? y is wd=1? y selected station for feasibiliy stage n rejected stationend y analyze winds in the space, time and frequency domain figure 3: methodology for the site-selection of offshore wind areas at pre-feasibility stage. 1. pre-feasibility •mpa •wind speed •water depth 2. feasibility • distance to port/industrial facili�es. • environmental loads. • bo�om substrate. 3. final decision • cos�ng • supply chain • financing structure • microeconomics • macroeconomics • energy policies and state stability • social acceptance figure 2: stages of offshore wind projects and main criteria considered. future feasibility studies to promote the development of future owf in the ccc. 3.1. marine protected areas in colombia, the mpa regulation contribute to achieving the common conservation objectives in the marine https://cds.climate.copernicus.eu/cdsapp#!/home https://cds.climate.copernicus.eu/cdsapp#!/home international journal of sustainable energy planning and management vol. 32 2021 143 martha bastidas-salamanca, juan gabriel rueda-bayona figure 4: marine protected areas in the study area (nnp: national natural park, ffs: fauna and flora sanctuary, pw: park way, fs: fauna sanctuary) and coastal territory. currently, the mpa framework has 35 mpas which 25 are in the caribbean sea with distinct categories [37]. along the caribbean coast, the (figure 4): bahía portete, los flamencos, sierra nevada de santa marta (snsm), tayrona, isla de salamanca park way (ispw), corales del rosario y san bernardo (crsb), corales de profundidad (cp) and acandi, playon y playona. this study located 25 stations along the ccc for the assessment, and six stations were located within or nearby to a mpa, as a result, the stations 7, 8, 11, 19, 20 and 21 were discarded. 3.2. wind speed the ws fields generated in this study agreed with other studies [38–40], showing a gradient from northeast to southwest (ne-sw) direction, depicting the highest values in the north area (figure 5a) somehow, cross references of figure 5 added images within the paragraphs, please remove these images. in the offshore areas of la guajira and magdalena (the northernmost area), the ws exceeded 10 m/s, while in the sw area the wind was not over the 5 m/s. although in the ccc presents high ws for energy exploitation, this resource is not constant because of the high magnitude variability identified in front of the magdalena and atlántico (11-12 ºn and 74-75 ºw) (figure 5b). the north area (la guajira) showed the lowest direction standard deviation, what is profitable for the electricity generation, contrary, the high standard deviation of wind direction in the central and south area will demand a recurrent use of control systems (turbine reorientation) increasing the maintenance costs and the energy consumption (figure 5c). the aforementioned wind direction variability agreed with the findings of [41], who through reanalysis data identified that the higher dispersion in wind direction occurred at the 10.5° n. the hovmöller diagram (figure 6) validates the mean annual ws gradient (figure 5.a) along the ccc; the results evidenced a ws variation from north (maximum, 12.5 m/s) to south (minimum, 1 m/s). during the 2010 and 2011 was observed a significant decrement of ws (figure 6) generated by a strong enso la niña episode according to the report of oceanic niño index of the noaa climate prediction center. this la niña event in colombia affected four millions of people, causing economic losses of approximatively us $7.8 billion, related to destruction of infrastructure, flooding of agricultural lands and payment of government subsidies [42]. the k-means revealed three main groups (figure 7a), which the group 1 (red bars) is compound by the northernmost stations (1, 2, 3 and 4 in front of alta guajira and 9 in front of tayrona nnp). the annual cycle of group 1 is characterized by two peaks (first maximum in july and the second in february), except for the station 9, which the maximum occurred in february and showed a poor cohesion with the group 1 (figure 7b). similar to the findings of [11] and [40], the minimum ws were presented in october. this is in this way due to the influence of the caribbean low level jet (cllj), with a semi-annual behavior with two maxima during 144 international journal of sustainable energy planning and management vol. 32 2021 pre-feasibility assessment for identifying locations of new offshore wind projects in the colombian caribbean. a) b) c) figure 5: mean annual values for the period 1980–2019 in the colombian caribbean: (a) ws (m/s), (b) magnitude standard deviation (m/s), (c) direction standard deviation (°). summer (july) and winter (january), and two minima in autumn and spring, showing velocities upper to 11 m/s during the windiest season. the application of statistical methods as the hovmöller diagram, k-means and silhouette method seen in this study, provided detailed information of wind behaviour along the year and reveal spatial patterns that ease the planning of the new projects. [7] recommended owt class iii for the central and north area of the ccc, however, the applied methods of this study (figure 7, figure 8) revealed that in the north area and central area can be installed wind turbines class i and ii respectively (e.g. turbine model v117-4.2 mw [43]). as a result, the change of wind turbines from class iii to i-ii increases the available power and reduces the total area of wind farms. [26] analized the annual produced energy (ape), the levelized cost of energy (lcoe), the net present value (npv) with a capacity factor (cp) of 37 % of a theoretical owf (360 mw) in colombia. the farm is compound by 60 turbines of 6 mw, with 25 km of distance to shore (barranquilla city) and 15-100 m of water depth. that study reported that not only the npv was positive, but also the sensitivity analysis under a wide variety of conditions such as varying the discount rate, costs, and quantity of electricity generated. the owt (class i) analyzed in that research agreed with this study in utilizing owt higher than the class iii recommended by [7]. the stations of group 2 (green bars) are located in the central coastal zone (10, 11, 12, 13, 14 16 and 19) together with two stations in the northern zone (5 and 6) (figure 7c). same as group 1, the annual cycle was bimodal, but the maximum occurred in february (figure 7c). like group 1, the month with the lowest values is october (and september in some stations).the station 12 presented the lowest silhouette value and showed the highest average magnitude as well as the highest dispersion. according with [44], the cllj is present throughout the year and varies in strength semiannually: peak magnitudes in july figure 6: hovmöller diagram of ws (m/s) for the 25 stations of the ccc. international journal of sustainable energy planning and management vol. 32 2021 145 martha bastidas-salamanca, juan gabriel rueda-bayona a) b) c) d) silhouette value 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 w in d sp ee d (m /s ) w in d sp ee d (m /s ) s ta tio ns 1 2 3 4 9 13 14 10 16 19 6 11 5 12 22 23 25 21 20 24 15 17 7 8 18 15 10 5 0 15 10 5 0 15 10 5 0 w in d sp ee d (m /s ) months figure 7: (a) identified groups from the the k-means (in colors) and silhouette method, (b) annual cycle for group 1, (c) annual cycle for group 2, (d) annual cycle for group 3 of the period 1980-2019. the dotted line corresponds to the station with the lowest silhouette value for each group. are related to the seasonal cycle of the north atlantic subtropical high, and a second maximum in february caused by the heating in the northern area of south america. the group 3 (black bars) grouped the southern stations (15, 17, 18, 20, 21, 22, 23, 24, 25) and the two most coastal stations in the northern zone (7 and 8). this group has the lowest ws of the study area and its annual cycle was monomodal, with the maximum in february and the lowest in may (figure 7d). the months with the lowest ws (may, september, october) must be considered for planning maintenance and repair activities of the owt due to the lowest electricity generation. [40] delimited four wind regions in the colombian basin: south (urabamorrosquillo corner), west (san andres island), central (cllj) and north. then, the ws of group 1 of this study corresponds to the north region reported by [40], and the stations of group 3 would be compared to the south and central wind regions of that study. the wind roses showed that group 1 evidenced winds from the east-northeast, the group 2 winds from the northeast and group 3 showed predominance from north-northwest with some low-speed vectors from the south-southwest (figure 8 a, b, c). it was observed that all the three groups of this study exhibited a predominance from the east similar to the regional level reported by other studies [40,41] and at the local level [7]. the ws of group 1 seen in the boxplot was not symmetric with a bias towards values below the median (10.10 m/s) and outlier data below the 4 m/s (figure 8 d). the ws distribution of group 2 was more symmetric, close to the median (6.12 m/s) without outliers (figure 8 e), and group 3 showed a bias towards above the median (2.33 m/s) with no outliers (figure 8f). in this sense, the highest statistical dispersion of ws given by the interquartile range was found in the group 2 (5.52 m/s),what could trigger recurrent voltage variations, while group 1 and group 3 showed similar ranges of 3.04 m/s and 2.49 m/s respectively (figure 8 d, e, f). despite of [24] showed worldwide potential areas for new energy projects, it did not consider that ws cut-in 146 international journal of sustainable energy planning and management vol. 32 2021 pre-feasibility assessment for identifying locations of new offshore wind projects in the colombian caribbean. reported in the literature of owt [33,34], onshore turbines [21] and manufacturers [43] is 3 m/s. as a result, the iea report excluded zones around the world with ws < 5 m/s, what provoked in colombia the rejection of potential areas nearby to ccc such as the northmost zone (norht of la guajira), the central area (bolivar, atlántico) and the south area (córdoba). 3.3. water depth the capex is manageable within water depths between 20 and 50 m [45], where the foundations installation represent a 73% of the total cost [46]. the table 1 shows that 10 stations (3, 4, 13, 14, 10, 16, 6, 5, 24 and 17) are located below the 50 m isobath. at this stage, from the 25 stations of the study area, six were rejected (7, 8, 11, 19, 20 and 21) because they were located within or nearby a mpa, and four stations were discarded (15, 22, 23, 25) because their annual mean of ws was not over the 3 m/s. hence, this last pre-feasibility stage concluded that stations 3, 4, 5, 6, 10, 13, 14, 16, 17 and 24 should pass to a future feasibility assessment. the table 1 showed that there are two stations in bolivar, which could provide offshore wind energy to cartagena city considered the most touristic location in the ccc with and important commercial port. however, these stations belong to groups 2 and 3 which showed a high wind variability in the annual cycle (figure 8 e, f), then, control positioning systems are recommended.the magdalena and atlántico area have three suitable locations for owt (table 1), which could reduce the high electricity cost and intermittent service that have affected the social wellness and economic development of santa marta and barranquilla cities [47,48]. in la guajira were identified four locations (table 1) for new owf, because of the high ws, low variability and reduced environmental and technical restrictions, what agreed with other studies [7,49]. [50] showed that the northern area of la guajira is the most suitable for developing wind energy projects, because its high mean ws, is located far from highly populated urban areas and is away from protected natural areas. considering that a high percentage of the indigenous population (wayuu) f) c) b) a) e) d) figure 8: wind features of group 1 – red dots (a, d), group 2 – green dots (b, e) and group 3 – black dots (c, f) of the study area. international journal of sustainable energy planning and management vol. 32 2021 147 martha bastidas-salamanca, juan gabriel rueda-bayona do not have access to electricity service [51], new projects such as owt might provide the required energy that would promote their social and economic development. in places with deep-rooted cultural traditions, the development of small-scale and community-based projects could contribute to the improvement of living conditions, contributing to reductions in cost and environmental risk [52]. the tourism, which is an activity that has enormous potential and is constitutes as one of the main engines of the departmental economy, could attract green consumers, reduce costs and comply with national policies [53]. 3.4. remarks for future feasibility studies. this section provides secondary information of the three main factors and recommendations for futures feasibility stages: distance to port/industrial facilities, environmental loads and bottom substrate. [54] reviewed the logistics capabilities of ports for supporting installation, operation and maintenance activities for the owf. they used industry expert judgments and pointed that distance to port followed by the port’s quay loadbearing are essential for selecting a location. other secondary factors were reported by that study as follows: • port’s depth. • quay length. • seabed suitability. • component handling equipment (ro-ro, lo-lo, heavy lifting equipment i.e. cranes). • distance from the key component suppliers. • distance from road networks. • distance from heliports. table 1: evaluation of the candidate stations for placing owt. gray cells indicate that the station was not evaluated because a previous rejection. group station. department mpa ws (m/s) water depth (m) recommended for future feasibility assessments? 1 1 la guajira 1 10.37 0 no 2 la guajira 1 10.45 0 no 3 la guajira 1 9.60 1 yes 4 la guajira 1 8.25 1 yes 9 magdalena 1 8.96 0 no 2 13 atlántico 1 6.06 1 yes 14 atlántico 1 6.80 1 yes 10 magdalena 1 6.91 1 yes 16 bolívar 1 5.15 1 yes 19 bolívar crsb no 6 la guajira 1 6.55 1 yes 11 magdalena ispw no 5 la guajira 1 6.63 1 yes 12 magdalena 1 8.26 0 no 3 22 córdoba 1 2.46 no 23 córdoba 1 2.61 no 25 antioquia 1 2.53 no 21 bolívar cp no 20 bolívar crsb no 24 córdoba 1 3.21 1 yes 15 atlántico 1 2.85 no 17 bolívar 1 3.13 1 yes 7 la guajira snsm no 8 magdalena snsm no 18 bolívar 1 4.06 0 no 148 international journal of sustainable energy planning and management vol. 32 2021 pre-feasibility assessment for identifying locations of new offshore wind projects in the colombian caribbean. • storage space availability. • component manufacturing facility availability. • component laydown (staging) area availability. • workshop area (repairing of broken or faulty components). • office facilities. • potential for expansion. the future feasibility studies for the colombian ports must verify if the existent capabilities could be sufficient or expanded to attend a new demand of the offshore wind industry. a critical part of the offshore wind supply chain involves ports serving as an on-land base to support the installation as well as the operations and maintenance phases of the owf [54]. [55] mentioned that the cuts of electricity production generated by failures must be solved quickly, but [32,56,57] considered ports facilities as a restriction due to maritime traffic would be interrupted. then, this study agreed with [55] and recommends considering port facilities as a factor and not as a restriction, because owf need a equipped-fast accessing port for facing technical problems and reestablishing the electricity production. in 2018 the economic commission for latin america and the caribbean (eclac) commission reported that colombian ports are ranked fourth in latin america, due to the amount of goods that pass through them [58]. according with [59], the conversion of colombian ports to sustainable (green) ports should ensure the contribution to sustainable development considering the economic, social, and environmental dimensions, and through the achievement of the sustainable development goals. [60] reviewed the impact of major infrastructure projects on port choice decision in colombia, and mentioned that cartagena port is the most attractive for containerized cargo, what is in line with the required port facilities for handling containers, and santa marta port was considered less attractive for transport cargo but proper for handling bulk cargo. the port of cartagena has an important capacity for receiving big cruise liners from worldwide, as well as massive vessels with general cargo [60]. barranquilla port is in position 55 of the eclac ranking, which is located next to the mouth of magdalena river and it is home of the most modern liquid bulk facilities in colombia. in position 62 is santa marta, which handles multiple types of cargo from palm oil, fuels, mineral carbon as well as grain and containers [58]. la guajira is in the 108 position of the eclac ranking, and has two mineral solid bulk ports known as puerto bolivar and puerto brisa (figure 1). puerto bolívar is focused to export coal and its availability to support owf would be limited. puerto brisa port in 2021 received 10 onshore turbines of 2 mw [61], what revealed its potential of this port for providing services to the future owf. the environmental loads factor comprises the influence of the ocean waves, earthquakes, wind, tidal, and currents over the owf [62–64]. in the ccc there are studies about ocean waves, e.g. [65] describes mean and extreme wave behavior and its alterations during enso phases, while [66] revealed the influence of enso on the significant wave heights and peak period. other studies have considered the environmental loads for marine energy exploitation [67,68], as well as their evaluation for offshore applications [69]. some studies are related to wave climate [64], sea state modelling [70], and information of hydrodynamic forces and structural dynamic analysis for offshore structure designing [71– 73], however, understanding the effects of the environmental loads over owf requires more research. the open access information for bottom substrate factor is scarce. [74] mentioned that la guajira is characterized by a wide platform compound by carbonate-rich sedimentation, with facies predominantly organic (biogenic sands), in contrast the area of magdalena department has a narrow platform whose sedimentation is mostly terrigenous muddy. then, because of that strait platform the wd > 50 m causing the rejection of station 9 (table 1). the atlántico and bolivar also exhibits a narrow platform with a high detrital sediment (muddy to sandy-muddy) due to the magdalena river discharge and mud diapirism. considering that mud diapirism affects the soils stability of offshore foundations, the future offshore wind projects in the central area of the ccc (atlántico, bolivar) will require specialized geotechnical studies. the cordoba was the only department of the south area of the colombia caribbean coast that passed the three stages of the feasibility assessment, and the sea floor of this zone is characterized by lithobioclastic muddy sand due to the discharges of sinú river [74]. 4. conclusions this research performed a literature review and found various studies aimed to identifiying new offshore wind areas considering different factors or restrictions. among the variety of identified factors, it was not observed a international journal of sustainable energy planning and management vol. 32 2021 149 martha bastidas-salamanca, juan gabriel rueda-bayona priority order to know when they should be met, nor their classification in traditional stages of designing-execution projects. then, this study analyzed these factors and organized them within three main stages (pre-feasibility, feasibility and final decision) to suggest when they could be performed. the survey pointed that mpa, ws and wd are considered the most important factors for identifying new offshore wind areas at a pre-feasibility stage. other secondary factors were identified in this research, and we recommend to considered them for future feasibility and final decision stages. from the three main factors (mpa, ws, wd) this work developed a methodology for the site-selection of offshore wind areas at pre-feasibility stage, and selected the colombian caribbean coast as study case. the results pointed that 10 stations are potential offshore wind areas and are candidates for future feasibility assessments. the prefeasible 10 locations are distributed along the ccc: four locations are in la guajira (north), five in the central area (magdalena, atlántico, bolivar), and one in the south region (cordoba). this study proposes a wind speed factor = 3 m/s and to consider the proximity to ports as a factor and not as a restriction, to avoid rejecting potential areas as was observed in the literature review. also, we recommend a time, space and frequency analysis to characterize the wind resource through hovmöller diagrams and clustering analysis (k-means silhouette methods). these methods eased a detailed regionalization of the wind resource alongside the colombian caribbean coast, and allowed considering offshore wind turbines class i and ii when previous studies suggested less powered turbines (class iii). the reviewed information of the secondary three main factors for futures feasibility stages (distance to port/industrial facilities, environmental loads and bottom substrate), revealed that cartagena, santa marta and puerto brisa ports could support the future offshore wind projects because their capabilities and distance to the pre-feasible 10 locations, however, future feasibility studies are needed to analyze possibilites of enhancement-expansion of these ports. the environmental loads reported in the literature evidenced that future wind farms are not under extreme hydrodynamic and aerodyanmic forces, nor dangerous seismic activiy, however, some diapirism activity in the central region of the study area should be analyzed in the future feasibility assesments. the open acces information of bottom substrate is scarce, but the study area reported narrowed oceanic platforms and sediments compound by sands and mud. future feasibility assesments may validate the results of this study and will reveal if the 10 selected locations in this study would be candidates for developing new owf, then, as future research it is recommended new studies related to tehcnical factors (distance to port/ industrial facilities,environmental loads,bottom substrate) and technical-economical factors such as annual behaviour of cp, ape, lcoe, and npv. also, additional studies about social, environmental and economic factors will provide information for reaching final decisions of the stake holders to perform new offshore projects in the recommended locations. 5. acknowledgments the authors thank to universidad militar nueva granada for financial support through the research project imping-3121. references [1] edenhofer o, pichis-madruga pm, sokona y. fuentes de energía renovables y mitigación del cambio climatico. 2011. 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[8], there are two ways of looking at local and regional innovation: with a focus on the local community as a unit (including the area’s residents and other actors) or with a focus on the local government and its role as a political and administrative unit. in this paper, i have chosen the latter approach to focus on local governments’ role in harnessing the development of international journal of sustainable energy planning and management vol. 04 2014 57 sustainable bioenergy. in turn, this means to explore what i will call local governments’ technology policy, which is a broad term meant to cover the strategies employed to develop and embed technologies for public and industrial purposes in the municipality. potentially, local governments may support the development of renewable energy in their community as developers, regulators, planners, providers of knowledge, managers and initiators [9]. as owners of a large number of buildings−a role that challenges many local governments−they buy energy and are responsible for local government plans and regulations concerning emissions, energy efficiency, development of trade, and residential areas. local energy plans map local governments’ current status concerning energy use, emissions, and potential for energy savings and use of more renewable energy. further, they propose strategies to increase sustainability [10]. similar planning regimes are found * corresponding author e-mail:bente.johnsen.rygg@hisf.no international journal of sustainable energy planning and management vol. 04 2014 57–70 paving the way for heat. local government policies for developing bioenergy in norway �������� � ����� ��������� ������� ����������������������������������������������� ��!������ ��!������ �����������"��#���#������$�#%��������&�'���(�����"���������#�'���������)������"�#)��)����*+,��$����%��(�� ��!�� a b s t r a c t local governments play dual roles in developing renewable energy projects. they are the targets of many goals concerning energy and climate, set by national and international actors, and they are important actors in energy planning, regulation setting, and the development of infrastructure and residential areas. in this paper, i study how local governments’ technology policies affect the actual outcome of project development based on experiences from 14 local governments. technology policies are studied from the perspective of sørensen’s [1] four areas of concern:direct support of innovation, infrastructure, regulation (protection and standards) and public engagement. i find that local governments use policy instruments within all four areas, and that the way local governments involves in the process of bioenergy development are surprisingly similar despite differences in location and size of both the local government and the project. keywords: technology policy, sustainable development, local government, innovation, bioenergy url: dx.doi.org/10.5278/ijsepm.2014.4.6 58 international journal of sustainable energy planning and management vol. 04 2014 paving the way for heat. local government policies for developing bioenergy in norway in other countries, but their effects remain unclear [11, 12]. do such plans contribute to increased use of renewables? sweden has a long history of fairly successful energy plans, but swedish local governments concentrate on energy supply, not energy efficiency [13]. energy plans can also be seen as a tool for local governments when they develop local energy systems. however, nilsson and mårtensson [12] found considerable variations in the use of energy plans. many plans were vague and their major objective was often merely to describe the local energy system. in denmark, it has been observed that local governments have the most developed goals for areas in which national authorities impose specific tasks [14]. the danish local governments’ main objective is energy savings, particularly in buildings that they own [14]. still, the progress is slow [15]. this paper examines norwegian local governments’ technology policies in stimulating innovation in sustainable energy using examples from bioenergy developments. what strategies do local governments pursue? what kind of policy instruments do they use? what is achieved? i first introduce the concept of local technology policy as a backdrop to analysing these issues, before i present the findings from a study of 14 local governments. 2. understanding local technology policy local governments, whatever the size of the local community, play an important role in local innovation processes. their role seems to be affected by their developmental capacities and the financial instruments available to support innovative actions [4]. local conditions are important because innovation processes are based on context-specific conditions [16]. the advantages of the local level include a specialized local labour market and close cooperation between the involved actors [17]. local actors can take advantage of this. there are also important differences, which may be crucial for the success of a project in how developers cooperate and involve citizens [18]. mangoyana and smith [19] find that the main criteria for development of small-scale bioenergy are the participation and involvement of an active community. good local market conditions have also proved to be important for local bioenergy development [20]. local community participation helps secure a market for bioenergy, which is necessary for innovations to succeed. local, regional and national innovation contexts are fundamentally different [21], and the actors respond differently to national and international directions. those who respond fast will, in many cases, act as beacons for others. according to cooke [22], system initiatives often precede regional or local policies. at other times, local and regional conditions prompt local innovation processes before national and international policies are made [22]; local actors see a need or opportunity, and they act. hielscher, seyfang et al. [8] show that local community projects seem to be more effective in promoting renewable energy and behaviour changes compared to top-down initiated projects. that is, local projects can address social, cultural and economic barriers more effectively [23]. still, their success depends on informed and engaged citizens [24]. thus, when local governments want to support local innovation, they face challenges to be addressed through the development of local technology policy. sørensen [1] proposes that technology policies should be studied broadly by analysing not only the direct support of innovation but also efforts with respect to infrastructure, regulations (protection and standards), and public engagement. currently, at the national level, technology policy tends to focus on innovation, because innovation is considered key to economic growth. however, innovations need to be socially integrated in acceptable ways. as sørensen [1] argues, infrastructure is itself a concern because structures like roads, railways, grids, and pipelines are preconditions of a well-functioning society. at the same time, infrastructure may be a prerequisite for innovation; for example, the production of heat from bioenergy usually depends on the existence of a heat grid. regulations are needed, not only to protect against technological risks, but also to set standards that facilitate the interaction of various forms of technologies and make demands in terms of, e.g., what heating systems to introduce in new buildings. innovations might be spurred by regulations, such as more stringent requirements regarding the emission of climate gases. public engagement is important to secure democratic decision-making and to develop interest in, support of and demand for new technologies. all four of sørensen’s areas may be addressed by local governments. innovation support tends to be seen as the task of national governments and often includes public investment in research and development (r&d). this is probably less relevant at the local level, even though some communities might benefit from hosting r&d institutions. still, local governments can offer advice, encouragement and economic support. large local governments, mostly cities, have access to a larger variety of policy instruments than smaller ones. moreover, it has been argued that policy instruments specifically designed for local governments are needed, particularly increased funding for local governments to promote local innovation [25]. with respect to infrastructure, local governments are responsible for municipal roads, water supply, waste management and similar services. summerton [20] shows that the development of district heating involves considerable local infrastructure developments. historically, local governments have also played an important role in supplying electricity [26]. actually, local governments have many options for regulating land use and construction, including making demands about the energy systems being implemented in new buildings. not the least, local communities are important arenas for public engagement with new technology and technological development. for example, involving local inhabitants in the construction of wind farms has resulted in less controversial decision-making [27]. we know little about the shaping of technology policy in norwegian municipalities and the ensuing practices. to what extent do the local governments actually develop policies to engage with innovation, infrastructure, regulations, and public engagement to support local development of renewable energy? although there is little theory or research that allows for well-grounded expectations, it seems reasonable to assume that direct support of local innovation is difficult for most local governments and that building infrastructure and making regulation might be more pertinent to facilitate local innovation. in this respect, we assume that the previously mentioned energy and climate plans play an important role. public engagement may be legally required, at least when innovation is linked to large construction efforts, but this can be achieved in different ways [27]. so what might we learn when studying how local governments engage with bioenergy developments? to answer this question, i pursue a strategy inspired by bruno latour (2005) [28 p. 249] to re-assemble the activities by the local governments into what i consider to be a local technology policy. this means to be sensitive to controversies and uncertainties regarding the content of actions and the interaction of human and nonhuman objects, to analyse how actors work to stabilize uncertainties and what policy instruments that consequently come to be employed. 3. methodology this paper explores the development of bioenergy projects in norwegian local communities and the local communities’ experiences with this process. who initiated the projects, and who developed them? what kind of technology policy has been exercised by the local governments? to gain insight into these issues, qualitative interviews and document analysis have been used. many local governments are involved in bioenergy projects in some respect. i chose to examine a limited number of cases. since there is no existing database from which relevant cases could be identified, i developed my own. i started with the retriever database (www.retrieverinfo.com\no), where i searched for newspaper articles concerning local governments and bioenergy projects. the newspaper articles provided information about projects, actors, technologies and size of the local government involved in the projects. with this as a point of departure, i selected local governments and projects i found interesting. i wanted local governments with varying involvement in bioenergy projects using different technologies. i have also tried to select cases from different geographical areas, with varying levels of population. the local governments are located in different parts of norway, and include both cities and small local governments in rural areas. thus, the aim was to provide for variation to facilitate the identification of different technology policies. the cases are not a representative selection of local governments, but comprise a strategic sample to study variations with respect to technology policy. when i found interesting cases, i studied the local government energy and climate plan to see how they have described the actual situation concerning energy and climate, and how related goals for energy use, including energy efficiency, emissions, and transportation have been reviewed. the paper is mainly based on interviews with representatives of 14 local governments that have established bioenergy plants: averøy, bergen, harstad, levanger, nord odal, rissa, røros, stryn, sunndal, trondheim, trysil, ullensaker, vik and åsnes. they are international journal of sustainable energy planning and management vol. 04 2014 59 bente johnsen rygg located in different parts of norway and differ with respect to size, the initiative of the project, the local government’s role in the process and type of plant. bergen and trondheim are among the largest cities in norway, while the municipality of vik only has twentyseven hundred inhabitants. the interviews took place during spring 2011 and were conducted by telephone. the interviews have been semi-structured. i have used an open list of questions to be covered, not a strict interview guide. i asked for instance about who had participated in the local project, who initiated it, the development process and what problems the project had met during the process. i also inquired about the local governments’ relation to renewable energy. in most of the cases, i interviewed one person, usually the mayor, the project manager, the trade counsellor or the environmental counsellor. they were selected because they had worked closely with the bioenergy projects and could give information about them since their conception. in total, 16 persons have been interviewed. all interviewees were party to the development of a local bioenergy project. this is likely to have made them positively biased in their assessment of the process, possibly neglecting problems and disagreements. another potential weakness of the study is the fact that i interviewed only one or two persons from each local government. however, my main interests have been to collect information about motives and policy measures, information that is fairly robust with respect to the positive bias. furthermore, this information has been checked against news media coverage and the local energy and climate plans. in addition, possible conflicts with respect to the development projects have not been the focus of the paper. thus, i believe the data underlying the paper to be sufficient to address the research questions. the interviews lasted on average 30 minutes and were transcribed in verbatim. they have been analysed, inspired by grounded theory, through the writing of summaries and notes based on the interviews [29]. the purpose has been to discover new and interesting aspects of the development process, with a focus on innovation, infrastructure, regulation and public engagement as a point of departure. the interviews were conducted in norwegian, and i have translated the quotes used in the paper. in addition to the interviews, the paper is based on qualitative content analysis of local government energy and climate plans. energy and climate plans have been imposed on local governments by national authorities (with a 2010 deadline). today, most local governments have such plans, but there are large differences with respect to the specification of the goals and the degree to which the plans are actually followed through and used in the local governments’ renewable-energy work. energy and climate plans are one of the most important documents in order to describe the status of local energy and climate issues. they outline the current energy situation in the local community, and what plans the local government has to increase use of renewable energy and promote energy efficiency. in the content analysis, i have gone through the plans in detail, studying the goals they have, how they plan to achieve their goals and who they are going to cooperate with. i have used the plans both as an important document of information, and as a second source where i can compare the information given in the interviews. in the following, i will present an overview of the information collected about the 14 local governments and their projects, including the technology employed, the role of the local governments, and their motivation for participating in the projects. i then continue with a more detailed analysis of the local governments’ technology policies. this analysis has been structured using sørensens [1] four dimensions of technology policies. 3.1. local government enacting bioenergy development as noted, an important part of norway’s efforts to support sustainable energy and climate mitigation has been to require local governments to develop so-called energy and climate plans. by november 2014, 412 of 431 local governments had passed such plans [30]. thus, in theory, nearly all local governments in norway have adopted some kind of technology policy that focuses on sustainable energy and climate mitigation. in this paper, i analyse 14 cases concerned with bioenergy developments to study the content of such policies. table 1 provides a brief overview of the 14 local governments studied, with an emphasis on the technologies and policy instruments used, the role of the local government and its motives, and the importance attached to local resources as a reason for the engagement. the idea underlying the national government’s initiative to make local governments produce energy and climate plans was that these plans 60 international journal of sustainable energy planning and management vol. 04 2014 paving the way for heat. local government policies for developing bioenergy in norway international journal of sustainable energy planning and management vol. 04 2014 61 bente johnsen rygg table 1: overview of the bioenergy initiatives of the 14 surveyed local governments. local gov. technology policy instruments role of the local motives of the local use of local population in focus applied government government resources averøy1 production lg plans, easy case facilitator employment, climate. long-term 5600 of wood handling. info. about using local resources goal chippings renewable energy, energy in long-term. efficiency, phasing out fossil fuel. bergen, garbage lg plans and regulations. establisher in reduce climate local city incineration area planning. environmental coop. with emissions and solve garbage 263 000 producing heat requests in purchasing. private comp. garbage problem. harstad, district planning and building act. facilitator and increased local activity, local city heating area and transport planning, customer employment. climate. farmers 23 700 district heating, coalescing. involved levanger, district support local farmers. help customer and pol. interest in bioenergy on local city heating develop a local bioenergy supporter of local resources. increased farmers 19 000 company. area planning, local actors. activity, employment. involved alt. transport. nord-odal district use district heating. initiator and energy efficiency, energy not today, 5000 heating emphasizing environment customer alteration, reduce emissions. but future in area planning and in case reduce expenses to goal handling. heating. rissa district area planning and regulations. initiator and reduce emissions. alternative local 6500 heating cooperation with other lg customer use of the forest, new industry. splinters concerning energy efficiency. income. røros district planning and building act. initiator alternative ways of using future 5600 heating transport planning. produce together with local resources. produce goal more renewable energy. røros energy renewable energy stryn district planning and building act, initiator local resources, main 7000 heating. regulation plans. employment. sustain. goal biofuel gas dev. climate changes. station for use in lg cars. sunndal district establish expertise. area initiator environmental and local 7200 heating from planning, transport planning. climate focus. surplus inhabitants surplus heat produce hydro power, heating develop power stations. trondheim, district using area, parking and mainly environment and raw city heating transport planning. green involved in the emissions. focus on materials 177 000 tax to support environmentally area plan. climate and energy. from friendly transport. . sweden trysil district planning and building act. initiator. use excess heat. local 6600 heating. cooperation with other climate neutrality for resources gas station local governments. stationary energy use. and for biofuel. develop trade. contractors ullensaker, district transport planning. lg as no particular. climate neutral energy partly use of city heating eco-lighthouse certifier. for heating. local resources. 31 000 vik district lg involvement and support initiator, later reduced emissions. use of local 2700 heating + of local actors. lg use of participator. climate change. resources splinter prod. district heating in buildings. increased local activity. åsnes district energy and climate plan. initiator reduce emissions no plan of 7600 heating transport and area and owner combined with carbon using local planning. binding. financial savings. resources could be instrumental in encouraging local initiatives to achieve climate mitigation in the area of energy. that is, the main motive was related to climate change concerns. however, previous studies of local governments’ activities with respect to innovation and the use of new technologies highlighted economic motives, mainly related to local employment and income [19, 31]. while climate concerns would make reduced emission of co2 the main motive, worries related to local economy could be expected to be the main shaping force of the choice of projects to pursue. in the latter case, we should observe that local governments’ initiatives to help develop bioenergy in their community would reflect interests like use of local resources, increased income for farmers and other land owners, and increased local employment. so what did we find? first, table 1 shows that in most cases, the choice of technology to produce bioenergy seems rather standardised. most of the projects focused on district heating, and the bioenergy innovations seem to be about exploiting local conditions for the production of heat. the gradual development of the projects and in accordance with local resources enabled the participation of local actors. this was often vital, especially in smaller communities. also, the concept of district heating offers particularly good options for local governments to play a decisive role in preparing effectively for the development, since they may exercise control of the infrastructure – the heat grid – and to some extent also with respect to the demand for heat as a large building owner and as a regulator that may demand other building owners to use heat. second, most of these local governments have themselves taken the initiative to develop bioenergy, either on their own or in cooperation with other actors. this means that they actively chose to engage with a particular technology based on available resources. this contrasts with national governments, which tend to offer general support schemes for innovation, rather than becoming directly involved with concrete technological developments. third, the most important policy instrument for these local governments seems to be local government plans (mainly zoning plans) that are used to establish profitable district-heating markets. through housing and industry development that emphasizes density, the district heating net will have more customers within a smaller radius. local governments are also able to require connections to the district heating net for all new buildings or buildings over a certain size. these actions will in many cases be deciding for the cost-benefit of district-heating development. this means that the innovation activity mainly is related to making a new local market for heat as well as utilizing local bioenergy resources. in addition, the applied technology policy involves measures with respect to infrastructure development and regulatory actions. fourth, the motives of these local governments for developing their bioenergy projects were two-fold. the larger (often urban) local governments seem to have had a relatively strong environmental focus. their main motive was to reduce emissions and promote climate and environmental concerns. on the other hand, the smaller local governments seem mainly to have been concerned with developing local trade, employment, and increased economic activity, even though some of them also claimed to have had a clear climate focus. fifth and related to the fourth point, is the use of local resources. this was considered important, especially by the smaller local governments since the development of trade and employment related to bioenergy was seen to be intimately linked to putting local resources to use in a way that would benefit landowners as well as local industry. typically, local farmers and wood owners often want to deliver raw materials to the production of splinters, or actually themselves produce splinters to district heating. in most cases this is seen as an alternative use of forests and forest residues, and it does not require a lot of labour. still, it may be an important income for small farms. some of the local farmers and forest owners responded to the new market and demand for raw materials from forest residues by forming small companies either on their own or with the local government as a coordinator. in the next section, i analyse in greater detail these local governments’ technology policies to engage with bioenergy innovations and developments. i use quotes and examples from the interviews to illustrate the involvement of local governments in these four areas, and how their technology policies may look in practice. i start by addressing the local governments’ technology policy: i study their support of innovation and see if they contribute in developing infrastructure and how they act concerning regulations, then i study their participation in developing local bioenergy projects. 62 international journal of sustainable energy planning and management vol. 04 2014 paving the way for heat. local government policies for developing bioenergy in norway 3.2. technology policies to support innovation national and local technology policies have some distinct differences. at the national level, policies are technology neutral. thus, they are not specifically aimed at supporting particular projects or technologies. at the local level, there is more room for directing policies toward particular areas that the local government want to ensure further development. table 1 shows that the analysed local governments have technology policies; this is evident in how they support innovation. still, it is challenging to identify the different elements of their support, not the least because of the low level of deliberation with respect to such policies. to begin with, it seems that the most commonly used policy instrument was local government plans (or regulations). these policies instruments were used to ease the transition of the new technology and to make the projects more profitable for the innovators by establishing a market, for instance in passing mandatory affiliation to the district heating net. it is not clear how innovation happens locally, but it has been stated that it does [3]. we know that localgovernment innovation differs substantially from that of the national level [21] which often focuses on financial support as well as r&d; innovation in local governments has a different focus and more limited financial and human resources. so how does local innovation happen? who are the main actors and how do they act? in the case of levanger, the local government had for a long time wanted to replace the 1950s oil boilers in the community with environmentally friendly district heating. to do so, it established agreements with local actors to provide the local government’s buildings with district heat. further, levanger’s local government had a strong focus on using local contractors and raw materials and required the biomass used for the district heating to be delivered from local sources. this has been important to the politicians and has had a positive side effect: increased local activity. the manager at levanger’s department of construction and building stated that: “it has been one of the main concerns of our politicians that we are going to be able to build some local trade here, based on bioenergy.”2 today, the local government buys district heating from three different actors. together, they heat five buildings owned by the local government. the manager went on to say that bioenergy: “was part of the action list in the energy and climate plan from 2001. it says very clearly that the local government is going to place a priority on bioenergy, among other things. but also … the heat pump technology we are also going to start using, and we do that now in one building. we who work in the administration use the politically adopted climate and energy plan”.3 because the investment was too large for levanger’s local government to handle on its own, it was important for them to refrain from getting involved financially. instead, their strategy was to buy district heating by requesting bids from interested suppliers. in this phase of the process, all who wanted to deliver district heating was invited to take part. thus, the local government stimulated local bioenergy developments by buying district heating, but without any further involvement. the supplier is expected to take care of the delivery, maintenance, etc. the municipality of vik shares some of levanger’s background. this local government was one of the first in norway to establish a local bioenergy pilot project—15 years ago (in the mid1990s). the project started because vik had been selected as a reference local government in a national waste-sorting project. vik’s project leader disagreed with the local government’s waste treatment, in which all the waste was sorted and shipped out of the region. the suggestion was to use some of the waste locally, particularly paper, pasteboard, and some wood and production remnants from the furniture industry, to produce fire briquettes. at that time, this idea was rather innovative, and the establishment of the district heating plant was difficult politically, due to a constant shifting of the political majority. vik’s district heating plant was built, as well as the piping, and the electrical heating elements in the ventilation system were replaced with water-based heating. today, some of the local farmers have taken the initiative to develop a new bioenergy industry: producing wood chips or splinters from trees harvested from the local forest. after the farmers contacted their local government, there was a meeting of all interested parties, including representatives from the county administration who contributed information. after the meeting, a work group was established to explore the possibilities for small-scale production of wood chips or splinters. the already established wood-chips plant in the local community centre is the basis for the initiative and a customer of local wood chips and splinters. local governments have been shown to be a major actor in local innovation, either alone or in cooperation with others, such as farmers, local trade and business. as international journal of sustainable energy planning and management vol. 04 2014 63 bente johnsen rygg well as financial support, they offer information and encouragement and they help establish markets for new industry. typically, this would be via a mandatory connection to the district heating net or a political resolution to use district heating in local government buildings. local innovation is also characterised by its more “hands-on” approach towards local initiatives and innovation. often, in spite of limited resources, local governments are able to help actors who have a business idea; they have opportunities to contribute with information and employees who can help them further in the innovation process. 3.3. construction of infrastructure the construction of infrastructure is one of local governments’ most challenging tasks, both financially and politically. infrastructure development, both the development of the net and the related large changes to the landscape, affects substantial parts of the population. table 1 shows that the technologies used by local governments are diverse but usually they require fairly large infrastructure developments. how was this solved by the local governments? the cost of a net to distribute the heat to all users is expensive and can be difficult for any developer to handle financially, whether the developer is a private actor, local government, or public-private partnership. let us consider some examples and start by considering a district heating project started in the municipality of sunndal in 2004. for a long time, there had been discussions between the local government and hydro aluminium [a large factory producing aluminium] concerning cooperation, and both parties were interested in using the waste-heat from hydro to heat buildings in sunndalsøra. usually, a project like this would have been too expensive, but when hydro was ready to modernize its aluminium plant, the timing was opportune. the district heating net is between six and seven kilometres long, and today 30% of the district’s heating needs is covered by waste-heat, a percentage that is one of the highest in norway. the project received an investment grant from the norwegian energy directorate enova totalling about 12–13 % in 2004, approximately 7 mill nok of the total investment of 60 mill nok. the next step in the development is to connect the existing buildings, and to do this, financial support will be necessary, from either the local government energy fund or enova. in a second case, the municipality of åsnes, the district heating net has been extended gradually. its local government has established a district-heating company in partnership with two relatively large private actors: eidsiva district heating (33 %) and solør bioenergy (41 %). the company’s main purpose is to supply district heating to public buildings owned by the local government and the buildings of the county administration. further development of the project and the district heating net is planned; the licensing area is quite large, and the project’s cost-benefit ratio will determine how much of the licensing area that will be developed. åsnes’ project manager explained that the project will start with local government buildings and county administration buildings: “so public buildings, but also private buildings in what we call proximity, close to the city centre. in the more peripheral areas, farther from the city centre … characterized by single family homes … they will be involved in a later stage of the development. the economy of this is constantly considered, but the licensing area (at nve) is quite large and ambiguous. it’s not expected to be [fully] developed from day one. those who bring in most money, accordingly the big actors first; the nursing home, the city hall, junior high school, high school and so on”.4 it is obvious that infrastructure development to cater for local use of bioenergy is one of the most practically and financially challenging tasks for all local governments. infrastructure development often depends on cooperation with developers or on financial support from external actors such as national authorities. still, we have seen that many local governments have managed to develop the infrastructure needed to establish bioenergy production. 4. regulations local governments have several technology policy tools available, including local government plans, support in terms of financial grants or information, and direct involvement in projects. do they use these tools, and if so, which ones? table 1 shows that the policy tool most commonly used by the local governments in this study is regulations, exploiting local government regulation plans to their fullest extent to promote bioenergy development. how do they act to make it easier for bioenergy actors to establish in the local community? 64 international journal of sustainable energy planning and management vol. 04 2014 paving the way for heat. local government policies for developing bioenergy in norway the local government of the municipality of stryn decided not to pass mandatory connection to the heat grid but demanded that all the buildings used or rented by the local government should have environmentally friendly heating. while stryn’s local government and the work group were planning bioenergy production, much of the bioenergy mass in the municipality disappeared because some lumber companies had started to use the biomass themselves for splinter production. a local company in stryn, the olav tenden company, decided to produce splinters with the necessary degree of dryness themselves, which turned out to be a good solution. because the splinters had to go through a drying process to get the optimal humidity, the price of the district-heating energy was higher than the price of electricity. still, according to the local government, a surprisingly large number of companies chose to connect to the district heating net. a third case is the small city of røros, where large parts of the centre already were covered by its district heating net. recently, however, a new multipurpose hall was connected; the church, hotels, schools, nursing homes, other large buildings, and private industry were already linked to the heat net. røros’s district heating net also delivers some heat to the neighbouring local community. the mayor was very happy with the role the local energy company has taken on: “i have to brag about the local energy company, which our local government owns by two-thirds. it has its own woodchippings factory. unfortunately, we are not able to use our own birch trees in the plant, but research is being done to make this possible”.5 still, developing a large district-heating net can be a considerable challenge. in the municipality of trysil, a fourth case, the development of the net required a lot of work from its local government. as trysil’s mayor said: “when there is 10 kilometres of district-heating pipes, it is evident that it’s a case in itself. it has to be planned.”6 in addition to the cost, the district-heating project has faced other start-up challenges that the mayor commented on: “it has been a mix of idealism, using local resources and of course, making money. the district-heating company does make money, but we keep the money in the company for further development. we don’t pay out any profits”.7 the main policy tools of local governments with respect to regulations were the area and regulation plans of the local government. by using these, they could to a large degree develop both infrastructure and housing in a way that maximizes the profits from district heating development and reduces emissions. in addition, to secure the market for the district heating developers, some local governments have passed regulations for mandatory connection to the district heating net for new or rehabilitated buildings over a certain size. 5. public engagement several of the bioenergy developments in this study involve local actors (see table 1). did this result from a conscious strategy to secure local support for these projects? in some cases, involving local inhabitants has been important to building acceptance for the project; increased employment or business income for local actors seems to have had a positive effect on the attitudes. in the municipality of levanger, the bioenergy developers were invited to several public meetings during the process. besides involving the inhabitants in general, the local government set a condition that local farmers should have opportunities to deliver raw materials to the district-heating plant. as a result, several of levanger’s local farmers have established companies or cooperatives to deliver wood splinters or bricks to the companies that deliver district heating in the area. this meant a positive level of engagement. in the city of harstad, there was according to the interviewed mayor much debate concerning its district heating plant, both about the establishment itself and more practical problems like the excavation of ditches. a major focus of this debate was on the anticipated effect on air quality and the fear that the district heating plant would produce air pollution that exceeded the legal level, but there were other issues, too. the mayor said further that the plant was located in harstadbotn just outside harstad’s city centre, and this had also been an issue. a lot of people thought that the plant should have been located further from the city centre and were sceptic for this reason. a third example, the municipality of stryn, had a strong focus on using local resources and has involved its local inhabitants, in particular, local farmers, in the process of developing bioenergy. stryn’s energy and environment plan targets increasing the use, production and trading of biofuel or biogas, with an emphasis on local projects. one of its goals was the establishment of a pilot project with fjordane bioenergy to produce bioenergy from the forest in stryn. international journal of sustainable energy planning and management vol. 04 2014 65 bente johnsen rygg with respect to local trade development, the effect had not been great. according to the interviewee from stryn’s local government, the companies involved in the project would have existed anyway. but there has been increased employment at the olav tenden company; the local splinter producer. this company had used the opportunity to produce more splinters and now also serves the neighbouring county, møre og romsdal. the city of trondheim is probably the local government analysed in this paper that has had the greatest challenges regarding public engagement with respect to bioenergy developments. a large district heating plant has been under construction in a densely populated area with several other projects under development at the same time. local inhabitants have been critical to the lack of a coherent plan for the whole area, which in turn led to worries about further developments. the local government planner had also noticed the skepticism of the inhabitants: “we have had two or three public meetings with many attendees and high temperature. i was not surprised by the temperature. it was as i expected; people didn’t come to the meeting to get information about the plant, they came to let us know that this is something they didn’t want to be studied.8… their worries concern several issues, for example, how the traffic flow will develop. the raw materials need to be transported to the plant …. people are worried about increased traffic, noise and the potential emissions and pollution from the plant. they are also worried about the aesthetics; it’s a large plant and even though there is a factory there already … they are insecure, they think it will be a foreign element”.9 the public can participate in bioenergy development in several ways. some of the larger developments inform citizens via public meetings; this is often a condition in the license needed for large constructions. the smaller projects in this study, which often develop gradually, have not held any public information meetings. 5.1. conclusion: re-assembling local technology policy in this paper, i started out with a hypothesis that most local governments did not support innovation like national governments through r&d and market-based instruments. rather, i assumed local governments to build infrastructure and make regulations to facilitate local innovation, partly based on energy and climate plans. both these expectations have been confirmed. more generally, the paper has explored the strategies and policy instruments that were used to promote bioenergy by local governments. previous research has shown that local governments play an important role in local innovation processes, but also that this role seems to be restricted by their financial and developmental capacities. in addition, other, more specific local conditions like engagement of the community [19] and cooperation with local actors were expected to influence the outcome of the innovation process [18]. this has also been confirmed. further, all the 14 local governments studied is seen to exercise technology policy in the sense that they take steps to help bioenergy initiatives succeed. a striking feature of this policy is that it is direct in the sense that it supports specific technologies and actors. more concretely, nearly all projects analysed were concerned with developing district heating. perhaps unsurprisingly, given the findings of previous studies, none of the climate and energy plans passed by the analysed local governments was based on an articulated technology policy. thus, the technology policies implicitly used had to be re-assembled. the result is presented in figure 1. it shows that local governments apply measures along all the dimensions proposed by sørensen (2002): innovation support, infrastructure development, regulation, and public participation. further, the main overall instrument is to create local demand for heat in a way that secures a stable market and thus considerably reduce the risks involved in the innovation process. thus, figure 1 proposes a general model of the technology policy of local governments based on the empirical analysis of their engagement with bioenergy in the local community. clearly, it extends the reviewed literature with respect to how local governments engage with renewable energy figure 1 departs from sørensen’s [1] four areas of technology policy. however, his point of departure was national policies. still, the paper shows that his framework is fruitful also for analysis of local governments’ efforts even if national policies have a different emphasis through their use of general – usually market based – instruments. this is a contrast to local governments’ technology policy which is particular in terms of technologies and actors. this is evident from the prevalent effort to promote district heating. however, it should be noted that the findings in this paper emphasise that all four areas are important to local 66 international journal of sustainable energy planning and management vol. 04 2014 paving the way for heat. local government policies for developing bioenergy in norway governments’ technology policy, even if the content is different from what is observed with respect to national governments. does this reflect the policies of the norwegian government? only in a general way. the main instrument offered to local governments is contained in the planning and building act, which offers possibilities to regulate local construction efforts. the required local energy and climate plans are expected mainly to make local governments become more concerned with climate and energy issues, not to provide any substantial guidance about what to do. the national energy agency enova provides more advice but still at a general level. thus, local governments are given some important instruments with respect to local infrastructure and building projects, but not much direction. further, they do not have any effective financial instruments at their disposal, beyond the possibility of providing some economic support to projects. to some extent, this may explain the prevalent choice of supporting bioenergy for district heating. first, such initiatives utilize local resources. thus, they generate local income, maybe also employment. second, district heating is an objective that may be pursued by the regulation tools given to local governments by the planning and building act. this act allows the local government to require new building projects to make use of such a particular source of heat. further, since local governments own a lot of local buildings, it may itself decide to change the supply of heat to district heating. another common feature of all the district heating projects studied is the potential these projects have to make the local government involve local actors, a potential less obviously available to other kinds of bioenergy initiatives the model in this paper is based on data from norwegian local governments. we have seen that local governments analysed have had a “hands on” approach with respect to bioenergy developments, targeting particular technologies and actors. this form of technology policy may be as a result of the fairly autonomous role of local governments in norway, where considerable room for decision-making is delegated to the local community. if such autonomy of decision-making is present, there are good reasons to believe that the model in figure 1 is valid. this is because local governments usually lack access to nonspecific market-based instruments. such instruments are normally only available to large regions or nation states. references 1. sørensen, k.h., providing, pushing and 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 36 2022 3 international journal of sustainable energy planning and management vol. 36 2022 3–10 *corresponding author – e-mail: aviel.verbruggen@uantwerpen.be abstract physical oil and gas abundance, turned in market scarcity, do prices of oil and gas spike and cashed rents mount. for the years 1970-2020, the rents from crude oil and natural gas sales are expressed in us$-2020, revealing the magnitude and volatility of the money flows. peak rents coincide with turmoil implying particular oil & gas exporting countries. oil & gas geopolitics metamorphosed from conquering oil deposits to precluding oil & gas exports by ‘hostile’ nations. such preclusions turn physical abundance in market scarcity, boosting oil & gas prices [1,2] and rents (also called royalties, windfall, super profits). rent skimming is also a part of the 2022 ukraine war. climate change mitigation intensifies geopolitical efforts to curtail the exports of ‘hostile’ nations. the geopolitics of trillion us$ oil & gas rents aviel verbruggen* university of antwerp, prinsstraat 13, be 2000 antwerp, belgium keywords oil & gas abundance; geopolitical energy conflicts; fabricated market scarcity; climate change mitigation; ukraine war https://doi.org/10.54337/ijsepm.7395 1. introduction during oil crises, fluctuating prices attract most media attention. the high oil price volatility, its link to political upheaval and its impact on the economics of developing and developed economies, have been observed and described by several authors [3,4]. also is the price impact on money flows mentioned, yet proper and full quantification of the money flows left undone. oil money flows incorporate price and quantity, and inform about the assets which really count for people and business. price is ephemeral, cashed money is a lasting asset. and, as the maxim tells: ‘money makes the world go round’. firms, organizations, households, individuals decide on investments after having considered expected revenues and expenses of possible alternative projects. the considerations may imply explicit and extensive cash-flow analysis as practiced in the business world [5]. money is also an important factor in sustainable energy planning and management, be it at the supply side [6] or at the demand side [7]. too often is price used as a symbol of market performance, while at the same time concealing the related money flows. the eu emissions trading system is a salient example, deceiving politicians, the media, academics, and the public [8]. exposing the actual money flows in their sheer size is already a difficult task. agents fabricating the conditions to obtain huge super-profits (also called rents), conceal their practices, hence also the origin and destination of the billions of us$ implied. natural resources created by earth and sun, are the bedrock of rent creation and skimming. fossil fuels, oil and gas in particular, are natural sources generating excessive rents in a world ‘addicted to oil’. “natural resources give rise to economic rents – revenues above the cost of extracting the resources, because they are not produced. oil and natural gas rents are the difference between the value of crude oil and natural gas production at regional prices and total costs of production.” [9] world bank staff assesses the annual rents from crude oil, natural gas, and other resources. the world bank publishes the results as percentages of the annual wealth mailto:aviel.verbruggen@uantwerpen.be https://doi.org/10.54337/ijsepm.7395 4 international journal of sustainable energy planning and management vol. 36 2022 the geopolitics of trillion us$ oil & gas rents obtained by the world’s nations. to a high degree, oil & gas business is rent capturing business. to augment rents, oil & gas supply is manipulated by oligopoly power and by cartel actions [10]. however, excessive peak rents are boosted by political-military conflicts and their sequel of societal disruption, if not civil war. 2. trillion us$ oil rents: magnitude and volatility world bank’s data [11] allow the estimation of crude oil and natural gas rents for the years 1970-2020 in us$-2020 constant monetary value (figure 1). it requires two mathematical operations: multiply the percentage numbers with gdp (gross domestic product) values, and inflate the historical annual rent values to the us$-2020 price level. when this is done, the annual rents can be added over the 51-year period: the sum equals 52.54 trillion us$-2020, or on average 1.03 trillion per year rents, actually being ‘profit without effort’. the total of 52.54 trillion is composed for 86.4% of crude oil rents and for 13.6% of natural gas rents. the preponderant share of oil rents is due to the versatility of liquid petroleum and its many derivatives on the one hand, and, on the other hand, to incomplete natural gas distribution facilities to serve end-users, in particular during the first part of the [1970-2020] period. it is expected that the gas rents will be significantly higher in the year 2022, because the sanctions and embargos on russian natural gas exports play a prominent role in the ukraine conflict. the volatility of the assessed annual rents is significant: a mere 92 billion us$-2020 in 1970 and 2,620 billion us$-2020 in 2011. to comprehend the volume of annual rent money flows, compare, for example, to the annual world energy total investments [12], in 2021 being 1,531 billion us$-2019. figure 1: oil (dark areas of the yearly stacks) & gas (light areas on top) rents in billion us$-2020 constant price levels, for the 51-year period [1970-2020]. source: author’s calculation based on world bank data and bp statistical reviews. international journal of sustainable energy planning and management vol. 36 2022 5 aviel verbruggen the horizontal axis of the graph mentions the years, starting with 1970 and ending with 2020; the years are indicated via 5-year steps. the vertical axis shows the volume of the annual rents in constant prices of the year 2020 (us$-2020). the annual gas rents are stapled upon the annual oil rents. the labels are reminding of military conflicts with significant impact on the height of the annual rent volumes. for example, the invasion of libya in 2011 with immediately a high increase of the rents in 2011. data for comprehensive assessment of oil & gas rents after 2020 are not yet available. in 2022, oil prices again exceed us$ 100 per barrel [13], stirred by the ukraine war and the embargos on russian oil & gas exports, boosting revenues and profits from rent capturing. information for splitting the rents revenues of nations in shares obtained by public treasuries and by oil multinationals or oligarchs is lacking. one only can observe occasional, incomplete data, such as: twentyeight of the largest western oil & gas companies publish profits of us$183.9bn over 2021, and already us$93.3bn in the first quarter of 2022 [14]. rystad energy [15] reveals free cash flow of all publicly documented exploration & production companies of us$493bn in 2021 and us$719bn when downstream activities are added. if the average oil price in 2022 is us$111/barrel, rystad expects us$834bn from exploration & production and us$1,100bn with downstream activities. this information is partial, but announces total rents will again spike in 2022. 3. explicate magnitude and volatility of oil & gas rents since 1973, oil prices have been volatile by unpredictable combinations of market fundamentals and speculation [16]. oil supply encompasses exploration, winning, processing, and delivery for serving end-users. disruptions in supply chains cause price hikes. disruptions in demand for oil may cause price falls, like happened in 1998 (asian economic crisis), 2008 (global financial crisis) and 2020 (covid crisis). the abundant oil & gas reserves on earth can meet a large demand at low prices. low prices, however, mean omitting payment for the significant external costs caused by oil & gas use, for example as environmental damage, and as irreversible climate change mainly due to the combustion of fossil fuels. public economics advices levies on the negative externalities and subsidies for positive externalities. for the co2 and other emissions of fossil fuel combustion processes, applying environmental and climate economics would entail progressing higher levies on oil & gas use, installing stable, affordable price patterns for end-users. levies (which revenues are public rents) may compensate external costs and support technological innovation or other merit goods. however, the public economics’ advice is poorly followed, which offers room for private firms to cash the rents on oil & gas uses [17]. imf [18] shows that fossil fuels are heavily subsidized. low oil & gas prices also mean moderate rent capturing on these natural resources. yet, oil & gas market functioning is influenced by cartels like opec. by regulating its members’ supply quota, opec aims to maximize captured rents over time. such precarious regulations are more effective when trust among cartel members is high and robust. in 1960, iran, iraq, kuwait, saudi arabia, and venezuela founded opec. since that date, iraq invaded iran and kuwait, and serious animosity between iran and saudi arabia is protracting. nonetheless, opec/opec+ avoid mutual destruction of the members’ oil & gas business, while obtaining sizeable rents (figure 2), what could be called the baseload of the rents ‘load curve’ (figure 1). speculation is a general term for explaining high spikes in rent capturing. a cocktail of context factors need consideration, like climate change, technological advance, and mainly geopolitics. by the 1973 oil price crisis, oil depletion became a focal topic, anchoring beliefs in oil-related conflicts emerging for acquiring the dwindling oil deposits on earth. more militarized conflicts or ‘resource wars’ were expected [19]. the rio world summit (1992) adopted the unfccc, for avoiding dangerous global warming. energy use causes 76% of the greenhouse gas emissions [20]. climate change mitigation means abandoning fossil fuels to escape climate collapse [21,22]. building energy systems driven by electricity tapped from ambient energy currents (light, wind, water, geothermal) has become sound economics [23]. giving up fossil fuel winning and use is the greater challenge, unsettling oil & gas geopolitics. 4. oil & gas geopolitics in light of contracting business abundance of fossil fuel resources dissipates discourses on ‘depletion’ and ‘peak-oil supply’. growing probability of irreversible climate collapse requests urgent and 6 international journal of sustainable energy planning and management vol. 36 2022 the geopolitics of trillion us$ oil & gas rents drastic reductions in using fossil fuels. in a necessarily decaying industry, competition for market share intensifies. characterization of the coincidences between military conflicts and excessive rents alters over the 1970-2020 period. up to the 1990s conflicts seem mainly politically driven, with control over oil & gas resources on the back-seat. after 1992, climate change mitigation and the projection of reductions in fossil fuel use, changed the conflicts’ content and aim. sanctions, embargos, invasions, instigated civil wars, aim at precluding the sales by ‘hostile’ oil & gas exporting nations. conflicts are most severe in middle eastern and african countries, also spreading to south america and russia. the political context is sketched here, the economic rationale in the next section. disintegration of the ussr after 1989 expanded the superpower position of the us. it marked the triumph of neoliberalism, pushing economic growth with transnational corporations leading in economic globalization, helped by subservient politics. “a globalizing power wants military bases abroad, trading partners, markets, and consumers: suzerainty, not an old-fashioned empire” [24]. the us economy is built on opulent use of fossil fuels. since the 1970s, it pursued ‘energy independence’ by reducing oil imports. in 2016, d. trump launched ‘american energy dominance’, stimulated by the us domestic shale revolution [25]. in 2020, the us produced ca. 50% more oil than saudi arabia and russia. president trump coerced germany to dump nord stream 2, supported by a vote of 98% of the us senators (june 15, 2017) imposing new sanctions on russia [26]. acting as superpower, the us engages nato allies, and maintains friendly links with the gulf cooperation council among six arab gulf states (founded in 1981). this us-led alliance faces a dispersed array of other oil & gas exporting nations: many allow western oil companies to exploit their resources in diverse degrees of joint-venturea; some nations insist and keep a majority share in joint-ventures, or nationalize their oil assets, excluding foreign capital. the us typifies such nations as ‘hostile’, like iran, venezuela, russia, and iraq, libya before they were invaded. sanctions, embargos, and conflicts aim at paralyzing hostile oil exports, not at conquering resources. covert warfare and instigated civil wars are tactics to exhaust hostile opponents. 5. the economic rationale of curtailing oil supply figures 2 and 3 are graphs of a market (supply and demand) situation as commonly used in economics textbooks and journal articles. they show a one-day snapshot of global crude oil business in a market format. manufacturing crude oil, done by sun and earth million years ago, has zero cost. in large fields, winning oil at us$10/barrel + additional processing makes the expense around us$20/barrel. us shale oil is more expensive in a range around us$60/barrel. the mentioned prices are approximative to the real numbers; the graphs intend to show what rent capturing means and how spiky rent capturing is constructed by precluding a significant share of cheap-to-win oil and gas sources from the world market, which is ruled by daily notations in us dollars. the calculation of the actual historic rents (figure 1) is not based on the figure 2 and figure 3 numbers, rather the reverse is true: the numbers are chosen for didactic considerations, but not pointless. without curtailing access to the world oil market for ‘hostile’ oil supplies, a competitive price would fluctuate around us$20/barrel. since the 1970s, opec’s intervention pushes prices upwards. let us say by searching prices in the region of us$80/barrel, but often failing to reach that level. for the didactic explanation in figure 2, the us$65 crude oil price in 2019 and the us$42 price in 2020 are used [27]. the frail power of opec limits its rent capturing capability. the horizontal axis mentions the quantity of barrels in million barrels/day (a one-day market is shown). the up to 100 million barrels/day delivery capacity is shouldered together by all producers in the market. the basic supply curve is the horizontal line at $20, however pushed up to the above $40 height by opec/opec+ commitments for together reducing production via quota assignments. the vertical axis shows prices (=$/barrel). hence, a unit area in the first quadrant has $ as unit (barrel * $/barrel = $). area under the $20 horizontal is cost coverage (including return on invested capital). the area between the $20 and $42, viz. $65 horizontals are rents (super-profits). the rents areas are shown for two cases: the low case is when opec/opec+ performs poorly ($42 price); the high case when they perform good, however not superior ($65). for excessive rents, oil & gas reserves in abundance must be truncated to create delivery scarcity. so doing, afor example: oil change international (october 2021) reports that only a third of the african projected new gas production volumes were african-owned. multinationals like total, eni and exxonmobil tend to fly in their own workforces and reap the profits. international journal of sustainable energy planning and management vol. 36 2022 7 aviel verbruggen the market fundamentals of supply are reshaped. the us-allies do this successfully by sanctions, embargos, instigated conflicts, sometimes invasions. figure 3 (in the same format as figure 2) is the case where the supply of hostile sources is significantly truncated. the exclusion of hostile supplies has three effects. first, on the us$20/barrel horizontal supply a panhandle supply curve is fabricated, cutting the short-run inelastic [28] demand curve at a high price level (beyond us$100/barrel). for example, in the year 2011, the crude oil price stood at 128 us$-2020/barrel. second, the bulk of the rents occasioned by the high selling price, land mainly to the us-allies, the transnational oil companies, and friendly oil-exporting nations. also, hostile nations (russia, venezuela, …) profit from oil price hikes, however their share in sold quantities is truncated by sanctions, embargos, war or internal turmoil. by exclusion from the us$ trade area, the hostile nations tend to sell oil and gas at (far) lower prices to nations that are less subservient to us politics (like india, china, …). third, by stifled competition the us can export its shale oil & gas to europe, notwithstanding the higher prices and higher carbon emissions than natural gas imported from russia. by explosions at the nord stream 1 and 2 pipelines (september 26, 2022), the dash for lng imports provides more market opportunities for lng activities, mainly controlled by us allies, in particular the oil & gas multinational companies. most of the oil & gas rent bills are charged on european and far eastern energy users, driving internal combustion engine cars or living in poorly insulated dwellings. their industrial activities using intensely fossil fuels, lose competitive advantage. excessive rent bills extort their economies and finances, causing inflation and economic recession, if not crisis. poor people in the wealthy eu cannot afford the inflated oil, gas, and electricity bills. by the high energy (oil, gas, and electricity in suit) bills, the financial positions of a large share of european households, small companies, figure 2: one day crude oil market without sanctions & embargo’s: all nations are allowed to export. by the opec/opec + cartels all exporters share in the super-profits. 8 international journal of sustainable energy planning and management vol. 36 2022 the geopolitics of trillion us$ oil & gas rents national states, and more, are fully disrupted. the care for next winter survival is impairing investments in distributed renewable power supplies, the core of the low-carbon energy system to be deployed. 6. ukraine war geopolitics of exerting political-military power implies also political-economy interests. for example, the ukraine war with immense personal and economic outfall, most for the people directly involved, also for the rest of the world [29]. billion to trillion us$ in rents are cashed by transnational energy companies, which they can use to transit to low-carbon neoliberalist regimes. such regimes are characterized by three attributes [30]: 1. multinational corporates dominate the agenda and politics in case of strategic decisions; 2. economic growth is pursued, making the super-rich richer; 3. poverty is normal, and needs only charity to alleviate. the ongoing rent skimming on energy supplies accepts deep inequalities between winners and losers, and is quelling peoples’ financial resources to deploy more renewable energy and efficiency projects. money for investing in such projects is stripped from energy users, mainly by paying the rent bills and by diverting public funds to military spending. the military activities are exhausting significant volumes greenhouse gases, however not affecting the unfccc statistics, because the military is freed from reporting their emissions. in the perspective of conflicts for excluding ‘hostile’ oil & gas supplies from the world market, russia is the final nation with abundant resources to boycott. a positive insight, however choked by the figure 3: one day crude oil market with sanctions & embargo’s: hostile nations’ export is largely excluded. rents, oligopoly profits by geopolitical power via rearranging market basics international journal of sustainable energy planning and management vol. 36 2022 9 aviel verbruggen likely protraction of the conflict during many years. the fossil fuel business knows that their activities must shrink for succeeding in climate change mitigation. the more their sales of fossil fuels have to be reduced, the stronger they strive for excessive pricing of the last billion ton-oil-equivalents they may be able to sell. 7. a brief wrap-up the main point of the paper is to reveal the oil & gas rents in clear money terms. this is the first time the detailed world bank statistics have been shown in constant us$-2020, i.e., in the price level of the year 2020 (the last year of available statistics). the press, the academic world, and activists found this revelation of information astonishing and interestingb. it strengthened the attention for super-profits in the climate policy discussion [31]. since 1973, oil & gas rents (super-profits obtained without effort) have been an important objective of the major supply-side players in the business, the oil & gas exporting nations and the multinational companies like exxon, chevron, bp, shell, total, and more. seen from their side, they have been successful in extracting on average 1030 billion us$-2020 per year over the 51-year period [1970-2020]. opec/ opec+ nations want planned rent skimming over the long-term. huge rent spikes coincide with sanctions, embargos, invasions, civil wars in what the us labels as rogue states, ‘hostile’ nations. by precluding access for the hostile nations to the us-dollar based oil & gas exchanges, the fundamentals of oil & gas supply are changed: physical abundance is turned in market scarcity. the subject brought up here is not exhausted for theoretical and practical analysis, study and publishing. this contribution wants to limit the spotlight on the huge rent skimming problem. acknowledgements the author thanks the reviewers for the supportive comments and suggestions. it helped to make the article more didactic on how rents come to be. references [1] bp (2021) statistical review of world energy [2] montgomery, s.l. 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(2017) is energy ‘dominance’ the right goal for us policy? the conversation [26] new us sanctions threaten eu firms involved in nord stream 2. euractiv.com june 15, 2017 [27] bp (2021) statistical review of world energy [28] verbruggen, a., van de graaf, t. (2013) peak oil supply or oil not for sale? futures 53: 74-85. https://doi.org/10.1016/j. futures.2013.08.005 [29] farrell, h., newman, a.l. (2022) weak links in finance and supply chains are easily weaponized. nature 605: 219-22. http://doi.org/10.1038/d41586-022-01254-5 [30] verbruggen, a. (2022) quo vadis energy system transformation. essay [31] walsh, l., omond-skeaping, t. (2022). the cost of delay. why finance to address loss and damage must be agreed at cop27. lossanddamagecollaboration.org (endorsed by 24 organisations) https://doi.org/10.1016/j.enpol.2010.05.002 https://doi.org/10.1038/s41586-021-03821-8 https://doi.org/10.1038/s41586-021-03821-8 http://euractiv.com https://doi.org/10.1016/j.futures.2013.08.005 https://doi.org/10.1016/j.futures.2013.08.005 http://doi.org/10.1038/d41586-022-01254-5 http://lossanddamagecollaboration.org international journal of sustainable energy planning and management vol. 33 2022 19 international journal of sustainable energy planning and management vol. 33 2022 19–33 navigating pathways for community renewable electricity in rural areas: stakeholders’ perspectives on the shape community project, nigeria ahmed ibrahim butua*, peter strachanb a department of business administration, yobe state university, p/m.b 1044, damaturu, nigeria b aberdeen business school, robert gordon university, aberdeen ab10 7qe, uk abstract the transition to community-scale renewables is recommended as a panacea for the energy infrastructure challenges encountered by off-grid rural communities. government and development agencies are encouraging the acceleration of the transition process through pilot community projects. while relative success has been recorded in some of these projects, the transition pace is quite slow in developing countries. this raises several questions on various aspects of such an energy transition. of relevance to this paper is the governance approach through which community projects are developed. this paper draws on strategic niche management (snm) to investigate the planning and implementation of such a project in shape, a rural community in nigeria. data was gathered using face-to-face semi-structured interviews from 24 key actors. results reveal non-involvement of many important actors with potentially negative implications for future investments in community renewables. the findings highlight fragmentation in the efforts of transition actors and raises questions on their knowledge of transition management. the paper also raises questions on the level of awareness of local citizens and their impact on transition projects. findings reveal passive involvement and limited opportunities for skilled employment. the paper concludes by recommending further research on how poverty-ridden rural communities can get more involved in what is generally termed as a socially inclusive, transparent, and participatory model of energy provision. keywords off-grid rural community; community renewables; solar photovoltaic; energy transition; strategic niche management; socio-technical transition; sustainability transition. http://doi.org/10.5278/ijsepm.6813 1. introduction access to clean and affordable energy is fundamental to realising the united nations sustainable development goals [1]. it is, however, estimated that about 60 percent of the 196 million people in nigeria do not have access to basic energy infrastructure [2]. the majority reside in offgrid rural communities and rely on traditional fuelwoods [3-4]. the few who are connected to the grid often experience interruptions because of its insufficient capacity and state of disrepair [5]. those people who can afford it, generate their electricity using fossil fuel (i.e. diesel and petrol) generators [6-7]. strachan et al. [8] and haggett and aiken [9] have advocated for the transition to community-scale renewables to address energy infrastructure challenges, especially in remote off-grid areas. this is not only for its low-carbon benefits but also to address equity and justice concerns [10-11]. in what appears to be a positive response to this call, the nigerian government has enacted several policies and programmes to facilitate the shift from a centralised fossil-fuel dominated system to a more decentralised community-scale renewable energy system. moreover, agencies including some non-governmental organisations have equally responded with several of them carrying out pilot community renewable energy projects in rural locations [12]. *corresponding author e-mail: butuahmed@ysu.edu.ng http://doi.org/10.5278/ijsepm.6813 mailto:butuahmed@ysu.edu.ng 20 international journal of sustainable energy planning and management vol. 33 2022 navigating pathways for community renewable electricity in rural areas: exploring stakeholders’ perspectives on shape community project for such projects, the aim is to provide the context within which transition pathways can be piloted to trigger learning and stimulate the development of technology and practice. whilst relative success has been noticeable in some community projects, the transition process has been quite slow due to alleged transition inertia resulting mostly from governance and institutional-related bottlenecks [6-7]. this has raised questions on whether such projects can contribute to accelerating the transition envisaged in rural communities. transition scholars have pointed out that transition such as that in the electricity industry does not occur easily [13]. the reason is that electricity infrastructure is regarded as a socio-technical system which comprises a complex set of technology artefacts, market structures, user practices, regulatory regimes, and scientific knowledge, which are difficult to change [14-15]. nevertheless, many studies have shown that the transition pace can be influenced or accelerated through effective governance (i.e. effectively coordination) of actors, technology, and policies to achieve the desired set of objectives [15-20]. while significant literature is evident in the sociotechnical transition field, little is known of the governance of such an energy transition. in the context of nigeria see for example [20-22] where the emphasis has been on the: historical nature of transition governance [20]; role of public policy and its influence on transition [21]; and roles of incumbent actors and politics of transition [22]. whilst these studies laid emphasis on the nature and dynamics of transition governance at the regime level, little is known at the incubation or nurturing stage of a transition project. thus, this paper contributes to the literature by assessing the development of a community-scale renewable energy project in shape, a rural community in nigeria. the overarching aims of the paper are to firstly, assess the extent of stakeholder engagement in nurturing transition at the incubation stage. secondly, to evaluate the level of local citizen participation in the project. thirdly, to assess the level of efforts towards learning and communicating outcomes to a wider network. the outcomes of this study are intended to assist transition project developers in planning and decision making in formulating future projects. the paper is structured in five main sections. the first section has placed the paper within geographical context and outlined its aims and significance. section 2 presents an overview of the theoretical lens of the study. section 3 provides a snapshot of the nigerian electricity landscape as well as the shape community project and the attempts to place it within the realms of sociotechnical transition concepts. the methodology used is presented in section 4. it starts by explaining the reasons for selecting a case study and qualitative research approach. this section subsequently outlines the approaches employed for the selection of research participants, sample size, data collection as well as how the data was analysed. section 5 presents and discusses the evidence collected from the research participants. the last section provides the conclusion and offers important recommendations resulting from the study. 2. analytical lens transition scholars have argued that physical piloting or experimentation of projects is ideally carried out to explore new socio-technical pathways [23]. it is considered as a means where transition projects are put into trial to facilitate understanding of the interactions between the innovation and the real-world context [16, 23]. scholars such as raven [24], hellsmark [25], and karlström and sandén [26], identified different aims of a transition project, which include to: • facilitate the formation of knowledge networks; • facilitate learning that can be instrumental in decisions on technology choice; • create public awareness of technologies; • explore user preferences and possibilities for changing the innovation, as well as learning about how future experiments should be set up; • stimulate debate and assess the feasibility of innovations in different environments; • showcase innovation to potential adopters; and, • publicise tested techniques, methods, or models through replication. hoogma et al. [27] stressed that a pilot project could contribute to a transition when it helps in the process of niche building and intrusion into a market dominated by an existing regime. such transformation happens either because the current energy system started to adopt elements from the niche or because the niche competed head-to-head with the existing regime [26-28]. it has also been pointed out that experimental or pilot projects contribute to niche building when certain conditions such as the adequate presence of stakeholder networks and effective protection from the existing mainstream environment are evident [27-29]. scholars have maintained that market forces alone are not adequate to bring about stakeholder networks or effective protection for a niche that is capable to inspire transition. consequently, bugge et al. [30] and nylén [16] posited that a form of governance approach is required not only to bring the network of actors together but to amongst others steer the actors in the effective planning and implementation of a transition project. following the foregoing understandings, strategic niche management (snm) was formulated to serve as an analytical approach to guide the nurturing, development, and expansion of ahmed ibrahim butu, peter strachan international journal of sustainable energy planning and management vol. 33 2022 21 new innovative projects [29-33]. the proponents of snm claim that when new innovative technologies emerge, they are often characterised by low performance, high costs and absence of networks to support and move the innovations forward [34-35]. consequently, novelty projects are deprived of a level playing field when competing with an existing system that is favoured by path dependence and lock-in [3436]. the starting point of snm is that innovative projects are facilitated by moderating them in technological niches – a protected space that not only allows for nurturing and development of innovative technology, but also the co-evolution of user practices, and regulatory structures [31, 34]. this aspect in transition is important in that socio-technical projects require better support to advance the technological shift envisaged [15, 37]. drawing on snm this paper examines the impact of stakeholder participation and networking; assesses the importance of understanding and aligning the expectations of such stakeholders; and explores the role of local community engagement and the significance of learning, monitoring and communication on the shape project. forming the analytical foundation of the paper these key elements are now introduced. 2.1. stakeholders’ participation and networking schot and geels [38] pointed out that an important requirement for transition projects to contribute to niche building is the adequate presence of a stable network of actors. networks support the development of learningby-doing and learning-by-interacting [38]. given the fact that a niche is a “small network of dedicated actors” [38 pp: 4000], lopolito et al. [39-40] and meroni [41] have stated that powerful actors must be carried along in the network both during the design and development of the transition project. stakeholder networking and its analysis are useful in learning about the expectations of each actor [32, 42]. actor networks can lead to successful project development and the expansion of a transition project. transition scholars have argued that to achieve this task, such a network must fulfil the following conditions. one, the network must be comprehensive, that is, several kinds of actors such as policy makers, users, researchers, regulators, and other stakeholders from within and outside the existing regime must be involved. two, such actors need to have the capacity to present the outcomes of a transition project and be able to inspire the people within and outside their organisations [30, 34, 42-44]. weber et al. [45] stated that actors with a stake in the existing regime technology might not necessarily be interested in stimulating a new competitive technology. given this argument, bos and brown [46] suggested that key powerful actors who advocate and influence transition should purposely be involved in the network of transition projects. ceschin [47] outlined that such powerful actors might include regime outsiders and insiders. in the case of community-scale renewable energy transition, outsider actors can include civil society groups, scientists, non-governmental organisations and societal pressure groups. on one hand, these actors are required in a transition project network because they do not share the existing institutions and practices with an existing regime and therefore, may protect the innovation [38, 48]. insider actors, on the other hand, are, for instance, the electricity regulatory agency, policy, and development organisation, all of which are needed to provide support for scaling up the new practices and institutions [46]. insider actors may also include existing regime players such as current electricity generation and distribution companies. however, the dominance of such agents in socio-technical transition projects are often criticised because they tend to influence the trajectories in support of their vested interests [4749]. similarly, in community-scale energy transitions, other insider actors may include local authorities that can play a prominent role in building support for sociotechnical innovation at the grassroots level [50, 51]. gouchoe and larsen [51] argued that such actors are important stakeholders in transition projects because not only are local authorities in close contact with the people, but they can act as educators, customers, regulators, financiers, and investment partners in a localised energy system. therefore, both insider and outsider actors are required in transition not just because they provide the financial investment and technical expertise required, but they also provide the social legitimacy required for a transition to happen [52-54]. 2.2. articulation of stakeholders’ expectations business organisations, policymakers, entrepreneurs, users, and other relevant stakeholders partake in the development of transition projects based on their expectations [43]. snm scholars have established that articulating the expectations of these actors is crucial for the successful development of such projects [55]. when expectations are robust, precise, and shared by many actors, they can legitimise actions, and act as the driving force in social interactions as well as reducing the uncertainties actors have about innovation [32, 55-57]. articulating actors’ expectations, therefore, facilitates the creation of a shared agenda and attracts actors’ knowledge as well as their financial and managerial resources for niche building [32-33]. typically, articulating stakeholders’ expectations involves articulating technical navigating pathways for community renewable electricity in rural areas: exploring stakeholders’ perspectives on shape community project 22 international journal of sustainable energy planning and management vol. 33 2022 problem users’ requirements and experiences, as well as identifying ways in which technology diffusion barriers can be solved [55]. 2.3. local community involvement ceschin [47] posited that when designing a transition project, it is not only important to engage actors who can create the settings necessary to protect and support the project through a top-down process, but also those actors from the bottom who are crucial in triggering system change. this line of argument is further supported by meroni [41] who emphasised the engagement of local citizens or end-users not only in the development of a transition project but also in the design of the project from the onset. in nigeria, many rural communities still hold the view that community development projects such as renewable energy are exclusively the responsibility of the government [58]. on the governments’ part, community participation tends to be top-down in the form of communities receiving information via consultation [58]. abiona and bello [58] concluded that many rural community projects have been designed and implemented without truly involving local communities, and such projects often failed because they lacked commitments on the part of local people. studies have been conducted in nigeria to understand local community participation in rural infrastructure projects such as water supply, sanitation, health, education, and rural roads (see for example [5961]). these studies focused primarily on local community participation in infrastructure projects. apart from being limited in terms of the nature of the projects, the studies were not conducted to understand how a project can stimulate and accelerate societal transitions. 2.4. learning, monitoring and communication the purpose of developing a transition project is to change the perspectives of those actors required for a transition to happen through learning [62]. in snm literature, learning is viewed as a socially interactive process of gaining new knowledge, norms, values, or competencies [35-38]. learning experienced through piloting or experimentation is, therefore, regarded as crucial in socio-technical transition [43, 45]. the reason is that it allows adjustments to existing configurations and permits social embedding required for overcoming path dependence and system lock-in [35, 43]. sterrenberg et al. [57] stressed the importance and role of learning within and between transition projects. they argued that learning practice would lead to successful niche building if they were not only targeted at the gathering of facts and data but also when they can provoke changes in the perception and expectations of the actors involved. transition scholars argue that once a transition project commences, learning-by-doing is triggered to augment available knowledge [62]. the knowledge gained will typically be shared among the actors partaking in the innovation project for the further improvement of the innovation through a learning-byinteracting process [63]. thus, both learning-by-doing and learning-by-interacting are crucial in helping pilot projects reduce the uncertainties that characterise new socio-technical innovations; and therefore create opportunities for the project to develop further. according to morone and lopolito [64], this process is the last stage of generating a socio-technical niche capable of replacing an existing regime. however, effective social learning must follow reflexive monitoring and evaluation of the outcomes of the project in terms of activity, process, progress, and impact (see for example bussels et al. [65]). van mierlo et al. [66] set out that monitoring is used to document the inventory of the results of the experimentation project that allows project actors to learn from them. they suggested that it is important to start monitoring the project as soon as the first activities are undertaken regardless of their success. the authors further suggested that monitoring should reflect on four key aspects and their relationships: the current state of the project; the objectives already achieved; opportunities and barriers; and the extent to which activities and results contribute to the goal of inducing a change in practice and institutions. keeping an inventory of data through monitoring is considered by bussels et al. [65] as the basis of information upon which an evaluation can be made. rotmans and kemp [67] pointed out the importance of sound and transparent communications amongst parties. therefore, it is also crucial that the outcomes of project monitoring and evaluation be reported or communicated to all relevant actors to keep them abreast of what is happening at each stage of the transition project. these foregoing discussions will be utilised to access the development of the shape community renewable energy project. as mentioned earlier, the aim of this paper is threefold. first, to assess the extent of stakeholder engagement in nurturing transition at the incubation stage. second, to evaluate the level of local citizen engagement and participation in a project impacting their community. third, to appraise the level of efforts towards learning and communicating outcomes to a wider network. 3. the research context the nigerian fossil-fuel dominated centralised electricity regime started with the government overseeing the production, transmission, and distribution of electricity ahmed ibrahim butu, peter strachan international journal of sustainable energy planning and management vol. 33 2022 23 throughout the country [68-69]. the industry is characterised by a series of challenges that include low generation capacity; inadequate and weak transmission and distribution infrastructure; vandalism and acts of sabotage; inadequate maintenance; and lack of a costreflective tariff [6, 68-72]. it has witnessed a dearth of investment in infrastructure, with some efforts at times translating into disproportionate outcomes [71]. this has resulted in shortfalls in generation and transmission capacities, leaving a large expanse of the population without access to electricity [6-7]. thus, it became apparent that the public controlled electricity system was failing to provide for the electricity needs of nigerians. the situation is even more severe in remote rural communities, where people live at distant locations to the grid infrastructure. this in addition to other landscape forces including the concerns for sustainable economic development and environmental sustainability have put pressure on the system, requiring urgent action to be taken to transform the system. in response, nigeria has strengthened its commitment to liberalise the electricity market through the reform exercise which started in 2005 [72-76]. consequently, by the end of 2013, the generation and distribution segments of the industry were privatised and handed over to commercial developers [74]. the reform described above highlights attempts made to overcome the regime challenges especially in urban areas. rural communities however have been neglected in these policy developments [75-76]. to ensure an even development across the urban and rural areas, several other strategies and policies aimed at transiting to community-scale renewable energy in providing electricity to off-grid rural locations have been adopted [77-79]. however, the appropriate settings capable of attracting private investors, as well as distribution companies and communities to buy-in to the transformation has not been realised. to ensure diffusion and stimulate general acceptance, several demonstration projects were set up [12]. as mentioned earlier, the reason for such projects is to provide the context within which transition pathways can be experimented with to stimulate learnings that can contribute to the development of community renewable projects. one such pilot project of interest is the shape community renewable energy project. as the name implies, the project was situated in shape – a small rural community located 7 kilometres away from the federal capital, abuja. it represents one of the three rural communities selected by the federal government to trial community renewable energy projects under its programme tagged operation light-up rural nigeria [80]. the project which was funded and commissioned by the federal government has three substations that transmit electricity to various households through a minigrid system [80]. it provides 200-kilowatt of solar photovoltaic electricity for the community of about 1,300 people [80]. the project provides light points and sockets for the use of small energy-consuming appliances to most households. the project also utilises energy-efficient bulbs [80]. the inhabitants of the shape community are mostly farmers and generally live below the $2 per day income benchmark. most people carry out their farming and general business during the day and utilise electricity at night. the project, therefore, is equipped with batteries that allow for the storage of electricity generated to be used when it is needed. the shape community energy project represents a unique experience of a renewable energy mini-grid system that is still operating long after its commencement of operation. the reason for the selection of this single case study was to develop a deeper understanding of the socio-technical complexities involved in the development and implementation of an energy project which may not be feasible when studying multiple cases. notwithstanding the rationale outlined above for investigating this project, the paper acknowledges the limitations associated with a single case study research approach. that said, in terms of access to energy infrastructure and economic indices, it suffices to say that the shape rural community shares a similar outlook with other rural communities in nigeria. as such some of the paper’s findings can be generalised to other projects in rural locations. 4. methodology this paper aims to provoke a rich and in-depth understanding of the approaches through which transition projects are planned and implemented in rural areas. therefore, this research adopts a case study approach as outlined above. a case study is considered more appropriate for this research because it offers the researcher the chance to explain holistically and in a reallife context, the processes by which community renewable energy is being developed and expanded for off-grid rural applications. case study research has a unique strength in that it tries to explain or analyse contextual issues that a researcher has little or no control over [81]. in addition to the selection of case study research, a qualitative method was adopted for this investigation rather than quantitative approaches which might have been considered more suitable for a relatively stable socio-technical system where the parameters are well established. community renewable energy is not well established in nigeria. therefore, qualitative research was considered more appropriate for this investigation. navigating pathways for community renewable electricity in rural areas: exploring stakeholders’ perspectives on shape community project 24 international journal of sustainable energy planning and management vol. 33 2022 different groups of participants were identified as stakeholders for this paper. the identification was rooted according to transition theory which states that transition occurs through the dynamic interaction of social and technological factors at different levels, mediated by various actions of actors [81, 82]. those actors that greatly influence energy transition are identified and classified by scholars into three key stakeholder groups: policy makers (decision makers and regulators); market (consumers, financial providers, and developers); and other societal actors [82-84]. in arriving at the size of the research participant sample, the paper follows studies that argue that one occurrence of an event is potentially as useful as many in understanding a process behind a subject matter [8485]. here frequency is rarely important because in qualitative research the concern is understanding or giving meaning to a phenomenon rather than making a generalisation [86]. on this note, this paper is guided by data saturation [87]. the paper employed a purposive sampling technique. the justification for choosing the technique is that it offers the researcher the greatest chance of gleaning valuable information that can address the research questions [88]. scholars indicate that purposive sampling means sampling in a calculated way, with a purpose or focal point in mind [88-89]. this technique was then followed by a snowballing technique to identify additional participants via previous interviewees. this allowed the researcher to gain access to key individuals who were not considered at the initial stages of the research. semi-structured interviews were conducted across key actors who participated in the shape community project as well as members of the nigerian electricity industry including regulators, policy makers, investors, government development bodies, researchers, and community members who by their functions and impact formed the relevant stakeholders of the shape community project. the interview was tape-recorded and each interview lasted one hour to one hour thirty minutes. to ensure a more meaningful presentation of findings without disclosing the identity of research participants, they were assigned codes. such that members of the electricity regulatory body, the nigerian electricity regulatory commission (nerc), were assigned codes from nerc01 to nerc04. the energy commission of nigeria (ecn), the body in charge of advising the federal government on energy policies were assigned codes from ecn01 to ecn04. the representatives from the federal ministry of power who are responsible for formulating and implementing policies related to the generation, transmission and distribution of electricity were assigned codes from fmpower01 to fmpower03. this ministry is the developer of the project in shape. the rural electrification agency (rea) is the government body in charge of promoting and coordinating rural electrification. this agency is responsible for mobilising capital for private sector investment in addition to managing the rural electrification fund (ref). the representatives of the rea were assigned codes from rea01 to rea05. investors were assigned codes from investor01 to investor02. the single representative from the federal ministry of environment was assigned the code fmenvironment01. local community members are represented by their leaders and influential members of the community. the community group were assigned codes community01 to community04. lastly, the lone member from the research communities was assigned the code researcher01. the participants are top-ranking officials of their various fields of endeavours. the final distribution of participants is presented in appendix 1. the data is analysed using thematic analysis which allows for both the inductive and deductive interpretation of the transcript data [90]. this is carried out using a systematic classification process of coding and identifying themes and categories to draw descriptive or explanatory conclusions around the identified themes and categories [90]. the thematic analysis draws on both manifest and latent themes and even where the focus is on the manifest or recurring themes, the aim of thematic analysis is to understand the latent meaning of the manifest themes as attached to it by the research participants. data coding and analysis were carried out in two stages. in the first stage, the researcher began the initial coding by reading a few of the interview transcripts line by line and in detail without any theoretical assumptions. this step allowed the researcher to familiarise himself with the data. recurring and relevant passages or quotes were highlighted and coloured as they become worthy of attention. to become worthy of researcher attention, codes referred to substantive things (for example a particular behaviour or incident), values (for example those that inform or underpin certain statements), emotions (for example frustration or the like) and more impressionistic/methodological elements (for example the interviewee found something difficult to explain or became emotional or the interviewer felt uncomfortable). this follows the coding process suggested by gale et al. [91] and saldaña [92]. upon further reading of the transcripts, the reiterative process of aligning assigned codes to the highlighted or coloured passages continued. to check if a code was properly assigned, transcripts were compared line by line to see if previously assigned codes reflected the same concept throughout. as the process progressed, the codes became more refined, and some of the initial codes were ahmed ibrahim butu, peter strachan international journal of sustainable energy planning and management vol. 33 2022 25 subsumed by other codes while others were relabelled. the codes developed were subsequently grouped into categories. in the second stage, all the transcripts were imported into a computer-aided software programme, nvivo. the researcher repeated the same process of coding using the nvivo software. again, as the process progressed, the codes became more refined, and some of the initial codes were again subsumed by other codes while a few new codes emerged. as more passages were reviewed through this process, a conclusion was reached at the end of the 24th interview transcript that no new additional code or category was forthcoming, and the final coding sheet was developed. saturation point was reached and then a full coding sheet was developed reflecting the views and experiences of the participants involved in the research. 5. results and discussion the following sections present and analyse the research participants understandings as collected in the case study and are structured based on the literature to provide a more rounded feel. verbatim quotations are also presented in the main body of the text to highlight and illustrate key findings. 5.1. stakeholder participation the results derived from the interviews made clear that the shape community project was developed to put into practice the policy initiatives of the inter-ministerial committee on renewable energy and energy efficiency (icreee) headed by the federal ministry of power. confirming this, research participant fmpower01 stated: “having drafted the policy on renewable energy and energy efficiency, the ministry of power was recommended to carry out some pilot schemes on an off-grid basis. the ministry decided to conduct three pilot projects. shape [project] is one of these projects.” all research participants showed a level of consensus on the shape community project as a transition project aimed at trialling socio-technical innovations in a realworld context. evidently however most stakeholders were not involved in the planning and development of the project. illustrating this, research participant ecn01 said: “not all of them [actors] were involved, in fact, the way they do things in this country, even the energy commission of nigeria that is the policy maker of the government, were not informed, we only heard about it.” the comment above suggests that the shape transition project was conceived and designed more by a single actor – the federal ministry of power – without the participation of relevant stakeholders. the study found that the ministry, acting as the transition manager, implemented the project without the involvement of most of the frontrunner stakeholders that participated in the strategic development process. this is contrary to the recommendations put forward by studies such as [37-40] who argue that the involvement of network actors both during the design and development of a transition project is a critical success factor. 5.2. local community involvement on first inspection statements regarding local community participation in the shape project suggest that local community members seemed to be involved in different aspects and stages of the project development, even to the extent of employment opportunities arising. research participant investor01 stated: “… before we started the project… we had a series of meetings with them [the community]. the first thing we did was we called on the community leader to help us in recruiting technicians, welders, cement mixers and casters from the community. we recruited security personnel for the equipment from the community. we trained technicians on how to install the equipment.” the statement outlined above is supported by research participant community02: “… we had a series of meetings with them [developers]… they informed us about the intention of the federal government to carry out this [shape] project… also, two people from the village were trained to provide security cover to the project.” the view expressed indicated that consultation with the local community was made before the commencement of the project and that some employment opportunities in the form of security for the project did arise. the level of skilled employment opportunities does not seem to have been realised in practice contradicting the statement of investor01 above. the consultation process also centred on informing the community of the project and in seeking security protection in the construction stage. although the involvement of local people in a series of meetings and in some practical tasks is regarded as positive, nonetheless, such participation appeared passive. it reiterates the assertion by the literature that navigating pathways for community renewable electricity in rural areas: exploring stakeholders’ perspectives on shape community project 26 international journal of sustainable energy planning and management vol. 33 2022 community engagement and participation in transition projects are often in the form of communities receiving information via consultation [58] which it was in the case in shape, and this can be a barrier to the success of such projects. 5.3. learning, monitoring and communication it was posited that learning-by-doing is triggered once a transition project commences. research participants expressed different learning outcomes resulting from the shape community project. criticising the size or scale of the project, research participant fmpower01 said for example: “we have learnt that subsequent projects should be of higher capacity because shape's capacity is very low.” the view presented above can be regarded as first-order learning. however, this type of learning alone cannot contribute to niche building and subsequent regime change. therefore, it must be complemented by secondorder learning to effect changes to the dominant set of configurations. some research participants, generated what appears to be second-order learning outcomes as presented in the following statement by investor01: “and if you are going to up-scale: this project has shown or teaches the people the importance of energy management." whilst both learnings uncovered in this study are positive, it appears that little effort was being made to monitor and communicate such learning outcomes to the wider network. research participant rea02 expressed doubt about the efforts being made to monitor the shape project. the following statement illustrates this: “…it would have been wise if there was a deliberate effort to be logging information from the site. so that you will be able to assess the performance, the maintenance, the weakness of the system; whether there is a reason to increase the capacity; whether there is a reason for reorientation of the people, the usage and so on. but right now i don't think this is the case." research participant researcher01 stated that insufficient effort had been made by the actors in charge of the project to share the lessons learned from the implementation of the shape project: "the information is not easily accessible. when you go to the website of these organisations, some of them are not interactive neither are they engaging. so you need to make an extra effort… there has always been an information gap even on how success stories are being passed out. i am not satisfied because you have to go an extra mile to get some of this information." this finding shows insufficient effort at sharing knowledge gained in the shape project with stakeholders. this is despite the significance of learning-by-interaction in developing innovation projects as put forward in study [62]. 5.4. stakeholder expectations regarding the economic sustainability of the shape community project, the views of the research participants showed that the shape project did not meet the technical requirements of a commercial business project. according to respondents, the project had no electricity meters through which consumer usage could be determined and charged, and therefore, the local people obtained electricity free of any charge. research participant nerc02 stated: “of course, we have privatised the industry, and if we are to integrate that system with existing ones, no customer should take energy free. whether they were metered or not, they should pay for the electricity they consumed. that is the only way we can sustain the industry.” as noted, the shape project did not incorporate a commercial framework into the design of the project. the implementation, therefore, disregards the concerns of some stakeholders, especially financial investors. this view is shared by research participant investor01: “… but things like this are usually government-led, but we need to think of a model that will generate revenue for whoever invested his money. that is the missing element of the shape project… there is not much of thinking on the part of the return on investment for any investor that is coming in to invest.” this research participant believed that investors would not be attracted to make investments on future projects because there was no way of ensuring one could recoup the investment. the comments presented indicate the gaps in addressing the concerns of investor stakeholders in the design of the shape project. according to [32], such action can result in depriving transition projects of much needed financial and managerial support of ahmed ibrahim butu, peter strachan international journal of sustainable energy planning and management vol. 33 2022 27 investment network actors. 6. conclusion and recommendations this study found what seems to be a transition testing bed at the operational level in the shape rural community. there is a consensus that the shape community electricity initiative was helpful in trialling socio-technical innovation at the community level. however, the study revealed that the project was conceived, designed, and developed by a single actor – the federal ministry of power – without the active engagement and participation of most of the relevant outsider and insider actors, who are required for project success. the non-participation of these actors highlights some implications for the success of the shape community project and its chances of contributing to niche building. firstly, conducting a pilot project by a single actor limits the projects chances of getting the wider resources of actors who have the required experience and expertise that will bring legitimacy to the project. this is primarily because no single actor unilaterally has the power or resources to make a transition at the incubation stage to happen. secondly, it also limits the chances of developing wider second-order learnings which are also required for a transition niche to transpire. the study also revealed that the local community was not sufficiently involved in the design of the shape community project. this serves to highlight the passive involvement of local people in the development stage of the project and for the community to provide local labour for what was perceived to be unskilled security jobs. for a community that live below the $2 income per day threshold, this outcome is perhaps not that surprising. it opens an avenue for further research on how povertyridden rural communities can get actively involved in what is generally termed as a socially inclusive, transparent, and participatory model of energy provision. the study, nonetheless, has found that the project had instigated some first and second-order learnings. the project developers, for instance, have learned from the experiences of the project and have established from an investor perspective the need to incorporate financial considerations into the design of community projects. the project also highlights the need to educate local communities on community ownership models. the financial design of the shape project also came into question. this research revealed that the project supplied electricity without meters being installed in the various consuming units, thereby allowing end-users to receive free electricity. this indicated the absence of any mechanism to measure usage or charge individual consumers. the findings presented here showed that the concerns of actors for a commercial and sustainable business model were insufficiently articulated in the design of the shape project. this study has shown that several efforts were made by the project developer to monitor and evaluate the outcome of the transition project. however, the wider study also showed that it was difficult for stakeholders to know what was happening or taking place at the shape project and to access the right information that they required. this is because of the gap that existed in how information and/or the success of the shape community renewable project was being communicated. the paper also recommends engaging a wider network of stakeholders in the planning and implementation of future community renewable projects. of significance, this paper further recommends the active involvement of local authorities in future projects throughout their lifecycle. local authorities are believed to be closer to the rural set-up than central government and have responsibilities in areas that are pertinent for instigating social change. this recommendation follows strachan et al. 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(2021) ahmed ibrahim butu, peter strachan international journal of sustainable energy planning and management vol. 33 2022 33 appendix 1: research participants organisation designation code number of participants federal ministry of power government fmpower 3 nigeria electricity regulatory commission regulators nerc 4 nigeria energy commission policy advisor ecn 4 rural electrification agency development agency rea 5 private investors investor investor 2 community members community community 4 world council on renewable energy ngo researcher researcher 1 federal ministry of environment government fmenvironment 1 international journal of sustainable energy planning and management vol. 37 2023 41 international journal of sustainable energy planning and management vol. 37 2023 41–60 abstract in today’s scenario of increasing energy prices, new legislations, and rising consumer concerns regarding environmental issues, industries face an unprecedented challenge of reducing their energy consumption without negatively impacting their profit and productivity. based on this, companies are focusing on analyzing their energy efficiency, which has various criteria to be considered, and at least three organizational levels. to close this gap, this study developed an industrial energy efficiency assessment and prioritization model based on energy assessment literature. it utilized multi-criteria analysis for the prioritization of industrial energy efficiency measures. to achieve the goal, a literature review was conducted to map relevant energy efficiency practices from which an industrial energy efficiency assessment tool was developed through the lens of three organizational levels (plant, process, and machine). subsequently, an energy-efficiency project prioritization tool was proposed using the multi-criteria promethee ii method. the assessment and prioritization model was applied to an energy industry for refinement. it generated an overview of the company’s energy efficiency maturity and a ranking of the most recommended measures for the optimal use of energy resources according to established criteria and their weights. four subcategories (lighting, hvac systems, compressed air, and motors) were analyzed for the organizational levels, and lighting presented the higher result of a maturity of 2.77 on a scale from 0 to 3, also the maturity of the company was 2.01, which means that is still space for improvement. the improvements were highlighted according to each subcategory studied, pointing to actions that needed to be developed to improve energy efficiency. keywords assessment and prioritization model; industrial energy efficiency measures; multi-criteria decision making (mcdm); promethee ii; http://doi.org/10.54337/ijsepm.7335 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee bernardo keller richtera, gabriela hansen marcondesa, nathalia juca monteiroa,b*, sergio eduardo gouvea da costac, eduardo r. louresa, fernando deschampsa,d, edson pinheiro de limac aindustrial and systems engineering graduate program, pontifical catholic university of parana, rua imaculada conceição 1155, 80215-901 curitiba, brazil. bdepartment of engineering, state university of pará, travessa dr. enéas pinheiro 2626, 66095-015, belém, brazil. cfederal university of technology parana, via do conhecimento, 85503-390, pato branco, brazil. dmechanical engineering department, federal university of parana, rua xv de novembro 1299, 80060–000, curitiba, brazil. *corresponding author e-mail: nathalia2210@yahoo.com.br 1. introduction with new legislation and environmental policies such as the regulatory standard (nr) iso 50.001-energy management system [1], the rising price of energy and increasing consumer concerns constitute a critical challenge within the context of manufacturing to reduce energy consumption without negatively impacting profit and productivity [2,3]. given this challenge, there are a successive interest in energy efficiency (ee) measures and practices, both http://doi.org/10.54337/ijsepm.7335 mailto:nathalia2210@yahoo.com.br 42 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee from the academic community and practitioners, as these solutions can reduce the economic and environmental impacts that plague energy consumption [4,5]. in a mckinsey report [6] stated that investments in ee technologies could reduce energy consumption by up to 50% against a possible reduction of 10 to 20% if the same investments were aimed at operational improvements. the ee is also studied by perroni et al. [7], who investigated the relationship between ee practices of the us department of energy (doe) and enterprise efficiency in resource use. according to erbach [8], despite this statistic and promises of interesting results for increasing sustainability and reducing costs, many investment opportunities for energy efficiency measures (eems) are often not implemented, creating what is called the “energy efficiency gap.” although there has been a continuous increase in eem implementations in the industrial sector over recent decades, research indicates that considerable progress still needs to be made [9,10]. backlund et al. [11] and thollander and palm [12] also discussed the energy efficiency gap. backlund et al. [11] introduced the term as a discrepancy between the optimal and the current implementation of ee. thollander and palm [12] highlight that its full potential can be achieved by removing the barriers to ee. lack of incentives and problems with information are some of the obstacles identified by these authors. numerous barriers to implementing an energy management system and optimizing ee are found in the literature. trianni and cagno [13] list the scarcity of information about opportunities and the lack of methods to prioritize ee projects as two main impediments. these problems highlight the need to identify investment opportunities in ee and determine how to prioritize them within an organization. thus, assessment tools and multi-criteria models for decision-making support can be effective approaches to meeting these demands [14]. energy management problems, generally, are complex problems due to their multiple’s objectives, like social, technological, political, economic, and environmental [15]. multi-criteria decision-making (mcdm) is an alternative to this problem because it systematically combines benefits or costs with the stakeholder’s perspective to align options [15]. the mcdm is highly recommended for energetic planning and can be considered an adequate method to solve energy-related problems [16]. efforts to improve ee within companies should be based on energy measurement and monitoring at three organizational levels: factory, process, and machine [17–19]. although some assessment tools for energy management in manufacturing can be observed in previous studies [20–22], none of them have adopted the plant, process, and machine levels as model dimensions. furthermore, the existing models focus on evaluating energy management systems. they do not emphasize methods to determine the most suitable actions for an organization to increase its energy performance considering its specific context. the present study aims to fill this knowledge gap by proposing an industrial energy efficiency assessment and prioritization model from the three organizational levels mentioned above. moreover, it suggests a tool for prioritizing the implementation of manufacturing energy efficiency measures using multi-criteria decisionmaking, precisely the promethee ii method. the remainder of this paper is structured as follows. section 2 presents the theoretical basis for the research, in which key concepts of energy efficiency assessment tools are discussed. subsequently, section 3 describes the methodological approach proposed in this study. section 4 presents the proposed industrial energy efficiency assessment and prioritization model. the application of the model through a case study can be found in section 5, followed by the discussion in section 6. finally, the conclusions are presented in section 7 of the article. 2. literature review the decision process is a key component in structuring and evaluating complex decisions regarding the energy sector [23]. so, multiple criteria force decision-makers to apply multiple criteria decision making (mcdm) methods in energy problems [24]. decision-makers use mcdm techniques to organize and synthesize the information related to the problem, increasing confidence in the decision [15]. mcdm techniques are applied in different situations related to energy [24]. büyüközkan and güleryüz [25], for example, present an energy model of source selection with fuzzy preference relations. these techniques can also be applied in site selection problems for wind farms [26,27] or for solar power plants [28], geolocalization for photovoltaic farms [29], and for analyzing the energy efficiency of emerging economies [30]. fossile et al. [31] present an energy selection for brazilian ports using the flexible and interactive (fitradeoff) method, which international journal of sustainable energy planning and management vol. 37 2023 43 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima was also utilized by abreu kang et al. [32] for power generation selection for the brazilian electricity matrix. rigo et al. [23] divided the utilization of mcdm for energy problems into five classes: source selection, location, sustainability, technologies performance, project performance, and others. this article is included in the ‘others’ category since it focuses on process performance and developing measures. mardani et al. [15] emphasize in their systematic review that energy management is one of the thirteen fields of research founded and that it is the second area of study, losing only to environmental impact assessment. rigo et al. [23] also identified the mcdm’s methods in energy papers and in which step of the process they are applied. the authors utilized the promethee method during criteria weighting and evaluating alternatives. the promethee is also observed in the selection of energy sources for a city [33] and site selections for wind farms [34]. based on this scenario, it is possible to observe that energy management is an exciting field of research for society and that mcdm techniques are applied to solve these complex problems. another topic of interest for this paper is the study of energy efficiency, which has several applications [35,36]. the utilization of eems in manufacturing is already discussed in the literature [37–39]. worrell et al. [39] focus on the productivity benefits of applying energy efficiency improvement measures. fleiter et al. [38] propose a classification of eems used in industry for investigating its adoption and design. cagno and trianni [40] evaluate the barriers to implementing eems in small and medium enterprises. so, it is possible to observe that adopting eems in the industry is a subject of investigation. o’sullivan [41] highlights the advantages of implementing an energy efficiency assessment tool to maximize the impact of eems. lawrence et al. [42] presented a report that drew on the successful experiences of their partners to develop guidelines for an effective energy management program as part of the us government’s energy star® project. additionally, an evaluation matrix was designed to compare energy management practices described in the guidelines with those of the organization to be evaluated, thus allowing for self-evaluation. the first step in developing the proposed industrial energy efficiency assessment and prioritization model was a review of the main eems available to organizations in the current manufacturing context. consequently, the authors conducted a literature review to gather knowledge from articles that describe measures, practices, activities, or projects related to industrial energy efficiency. two primary documents were found to be a founding basis for the present study. the first is a guide proposed by the energy star® program, which aims to identify opportunities for energy savings in the industrial [42]; the second is the online database of the industrial assessment centers (iacs) [43]. the u.s. environmental protection agency and the us department of energy prepared the first guide through the energy star® program, which aims to promote the standardization of energy efficiency practices and provide information on the energy consumption of products and devices [44]. the iacs are research centers in several locations in the united states that seek to evaluate eems to reduce energy consumption and minimize waste. according to the data available on the website, the program has conducted more than 19,176 surveys, generating more than 144,604 recommendations from eems, with an average annual savings of usd 137,136 [43]. from the study and analysis of these two main sources, the industrial eems and their respective categories were raised; these components formed the basis for the assessment tool proposed in this study. the initial review of eems resulted in the listing of 168 measures. after excluding redundant measures, 107 unique efforts remained in the final model. more details on the tool construction process are presented in section 4. 3. methodology mcdm methods aim to simplify complex decisions, specifically those arising from combinations of high volumes of information, by ranking possible choices to support decision-makers [45]. the preference ranking organization method for enrichment evaluation (promethee) is a methodology for the multi-criteria decision aid technique [46]. within the known mcdm techniques, this study employed the promethee ii method to select the most appropriate eem within each factory category. the choice for the promethee ii method was based on its recommendation for problems where a limited number of alternatives are evaluated based on several conflicting criteria [47]. also, the possibility for the decision-maker to consider the non-compensatory 44 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee characteristics of the process and the opportunity to incorporate the incomparability relation in the analysis [46] are some benefits of choosing this method. in the present study, the range of eem is limited, and ten criteria, sometimes conflicting, evaluate its choice. two pieces of information are fundamental for constructing the promethee ii method: (1) the pairwise comparisons of the criteria and (2) the choice of the preference function, which represents the difference in preference intensity between the alternatives. the implementation of promethee ii is conducted in five steps, as shown in figure 1 [48]. in the first step, the criteria are compared pairwise, and a mudge diagram was used for this purpose, which is described in more detail at the end of this section. in the next step, the preference function is chosen. in the third step, the global preference index is calculated. in the fourth step, both positive and negative outranking flows are calculated for each alternative. a positive outranking flow (ɵ+) quantifies how an alternative is globally preferred over all others, whereas a negative outranking flow (ɵ–) represents the contrary. finally, the difference between positive and negative outranking flows is calculated by obtaining the net flow from which the alternatives are ranked. in step one, the mudge diagram was applied to calculate the weights of each criterion, which is a method of obtaining the degree of importance of particular criteria or numerical relations through a pairwise comparison between the alternatives [49]. the diagram is generated through this comparison, as shown in figure 5 (section 5.2), with scores assigned to each alternative. scores are based on a scale that generally has five levels [50]. the results allow the prioritization of each alternative based on its relevance and the analysis of its interrelations, as well as eliminating the alternatives dominated by others [51]. figure 1: promethee ii implementation steps [48]. international journal of sustainable energy planning and management vol. 37 2023 45 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima 4. industrial energy efficiency assessment and prioritization model the model proposed in this study consists of a combination of two methodologies: (1) energy management assessment and (2) energy efficiency project prioritization. figure 2 illustrates the composition of the model, the steps, the deliveries, and the tools employed. 4.1 energy management assessment tool to ensure the consistency of the energy assessment tool, only eems that would fit within the following categories were selected, as assigned by the guide for identifying energy savings in manufacturing plants from energy star®: motors, compressed air systems, lighting, heating, ventilation, and air conditioning (hvac) systems, pumps, boilers, furnaces, and steam distribution systems [42]. within these eight categories, it was decided to deepen the research in four of them, which were considered of maximum interest in the literature owing to three factors: (i) wide diffusion in industries of different sectors [52], (ii) improvements in such categories are easily replicable [53], and (iii) most are responsible for considerable energy not directly related to production processes [54]. these categories are: a) motors: although responsible for 69% of energy consumption in europe [55], they have the maximum potential for savings, from 11 to 18% [56]; b) compressed air systems: although considered the most expensive and inefficient way to obtain energy, these are responsible for 10% of the consumption of industrial electricity in europe [57]; c) lighting: even though it represents a low percentage of industrial energy consumption, lighting still shows a significant absolute number that has several easy-to-apply measures [42]; d) hvac systems: playing a fundamental role because they participated in both production processes and thermal comfort at the workplace, these systems have several easy-to-apply measures [58]. in this scenario, it was decided that the promethee ii multi-criteria decision-making model for prioritizing eems (explained in subsection 4.2) should be carried out for these four main categories. figure 2: proposed model composition, steps, deliveries, and tools. 46 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee the initial review of eems resulted in the listing of 168 measures. after excluding redundant measures, 107 unique measures remained in the final model. in this final version, the eems were categorized into four layers. the first layer seeks to classify ee practices between plants, processes, and machines following the recommendation of kara et al. [18]. the second layer concerns the energy efficiency categories (e.g., motors, lighting), whereas the third layer creates subcategories of the previous layer, grouping ee practices by affinity. the fourth and final layer presents the detailed eems themselves. the tool thus allows the evaluation of the overall energy performance of the factory and each specific layer. the distribution of these measures in the categories is shown in table 1, and the complete assessment tool with all its layers and eems can be found in appendix a. in sequence, an attempt was made to define an adequate response scale for the assessment tool. for this purpose, the reference used was from the energy star® evaluation matrix [42], which performs the assessment based on three levels of implementation: l1: little or no evidence of implementation; l2: implementation in process or partial; l3: full implementation. from the assessment tool, a microsoft excel® spreadsheet was developed in which users could score the implementation levels of each eem, and charts were automatically generated; this allowed for a visual representation of the assessment tool results through dashboards. more details of the visualization of the results are given in section 5. 4.2 energy efficiency project prioritization tool once the diagnostic evaluation of the eems is performed, the next step of the proposed model consists of applying the energy efficiency project prioritization tool. consequently, an mcdm method was used, precisely the promethee ii method. for the elaboration of the promethee ii method, in addition to the maturity levels of each category collected in the previous step, some additional data was required, as shown in table 2. the literature played a supporting role in determining the evaluation criteria of the ee projects. from the literature review, the framework proposed by trianni et al. [54] was of particular interest given its synthetization of attributes for choosing whether to implement an eem according to the view of the managers responsible for such decisions. owing to their relevance and suitability, nine attributes and their respective classifications of that study were used in the present study. in addition to the traditional criteria, the “maturity” criteria were adopted for this prioritization tool of ee projects, which in practice is the result of the implementation of the energy management assessment tool. all selected criteria are presented in table 3. it is understood that the lower the maturity of a given category, the greater its weight must be in the promethee ii prioritization method. thus, the maturity complement was used as a weight for the prioritization tool, and the objective of this criterion was to be minimized because a lower value indicates a higher table 1: final count of the maturity model eems. level category eems % plant ● lighting ● 14 ● 13% ● hvac systems ● 32 ● 30% process ● compressed air ● 14 ● 13% steam distribution 7 7% machine pumps 11 10% ● motors ● 17 ● 16% boilers 9 8% furnaces 3 3% total 107 table 2: required information to promethee ii analysis implementation. item determination a) definition of the criteria for the evaluation of the ee projects trianni et al. [54] b) objective of each criterion: maximization or minimization logical classification according to criteria c) definition of criteria weights mudge diagram d) definition of weight for each category (lighting, hvac systems, compressed air, motors) complementary value to the maturity of each category international journal of sustainable energy planning and management vol. 37 2023 47 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima maturity. the mathematical equation of the maturity criteria value is presented as follows: maturity of each category = 3 – 1 n ∑ xeems (7) where n is the number of eems of each category and xeems is the maturity score of each eem, ranging from 1 to 3. to prioritize the eems, four analyses were carried out using the promethee ii method, each one of the main categories of eem-lighting, hvac systems, compressed air systems, and motors. appendix b illustrates the decision matrix of the promethee ii method for the compressed air systems category. 5. implementation in a case study  the case study was conducted in a norwegian multinational company that operates in the energy sector, supplying products, systems, and services to the oil and gas sector. for confidentiality reasons, the firm will be referred to as the company “alpha” in this study. 5.1 energy management assessment tool before the application of the energy management assessment tool, verification was made of which categories were present in alpha. the authors interviewed three company employees: a maintenance manager and two other maintenance engineers. as a result, the categories “steam distribution systems” and “boilers” were removed because they were not present in alpha’s operations. the tool evaluated all other categories, and 91 eems were identified. notably, despite all eems being assessed, only the energy performances of 86 were considered for the calculation of the overall maturity score, which is the average of all eems identified; this is because the category “furnaces” did not reach 75% of eem response completeness because of the lack of applicability of some measures within the reality of that specific industry. regarding the results of the analysis, the results were compiled into a dashboard with the following information: (1) the maturity levels of all eems regardless of their category, (2) the distribution of maturity levels for each organizational level, and (3) the distribution of maturity for each energy efficiency category of the plant; this information is presented in figure 3. figure 4 shows in more detail the distribution for each subcategory for the four main categories considered in this study: lighting, hvac systems, compressed air systems, and motors. from the average maturity level of each category, the overall maturity score of alpha was calculated, being assessed at “2.01” out of a total of 3 (67%), as shown in table 4. as previously mentioned, the weight of this criterion is calculated from its complement, ensuring that a category with low maturity has a high weight and vice versa. based on this result, the categories “lighting” and “hvac systems”, which compose the “factory” organizational level and have a maturity level greater than 2, require less scrutiny than the other categories because they have a high level of maturity. thus, in the next step of prioritizing promethee ii, these categories will have less weight in the maturity criterion. in turn, the categories “compressed air system” and “motors,” had a greater weight within the prioritization tool because they were evaluated with a lower maturity level. the other categories, “pumps” and “furnaces,” were not considered in elaborating the promethee ii table 3: attributes used in promethee ii. criteria cluster scale objective payback period economic low | medium | high min costs of implementation economic low | medium | high min amount of energy savings energy low | medium | high max reduction of emission environment proven | not proven max reduction of waste environment proven | not proven max productivity production proven | not proven max costs of maintenance/operations production improved | worsened max easiness of implementation implementation easy | it depends | difficult min probability of success/acceptance implementation low | medium | high max maturity maturity low | medium | high min 48 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee figure 3: dashboard of the ee assessment tool. figure 4: subcategory level maturity results. international journal of sustainable energy planning and management vol. 37 2023 49 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima table 4: summary of maturity scores. category response rate maturity lighting 13/14 (93%) 2.77 hvac systems 25/32 (78%) 2.44 compressed air 13/14 (93%) 1.69 motors 15/17 (88%) 1.33 pumps 10/11 (91%) 1.40 furnaces 2/3 (67%) ▼ 1.00 organizational level response rate maturity plant 38/46 (83%) 2.55 process 13/14 (93%) 1.69 machine 25/28 (87%) 1.36 global response rate maturity company alpha 78/88 (86%) 2.01 method, as explained previously. however, the low maturity of “pumps” indicates that this category also requires additional focus from the company alpha. 5.2 prioritization of energy-efficient measures for the prioritization of these eems, the mudge diagram (figure 5) was first created to define the weights of each attribute related to energy efficiency projects in the company’s specific context. the goal of applying this tool is to prioritize the eems for the four main categories studied. with the calculation of the weights inputted into the promethee method, the prioritization analysis was customized for alpha’s context. table 5 presents the ranking of the eems for the “motors” category. ∑i total points of each function ∑i a b c d e f g h i i = ai → ii i = ai → ii % a payback period a a2 a2 a1 a2 a1 a1 a2 i1 = ∑a 12 23.5% b costs of implementation b b1 b2 b2 b1 b1 h1 i1 = ∑b 7 13.7% c amount of energy savings c c1 c1 c1 c2 h2 i1 = ∑c 5 9.8% d reduction of emission d d1 d1 g1 h1 i1 = ∑d 2 3.9% e reduction of waste e e1 e2 e2 i1 = ∑e 5 9.8% f productivity f f2 h1 i1 = ∑f 2 3.9% g costs of maintenance/operations g i2 i2 = ∑g 1 2.0% h easiness of implementation h i1 = ∑h 8 15.7% i probability of success/acceptance i = ∑i 9 17.6% 51 100%total points of the cross function's analysis (∑i = a → i) comparative importance scale: a=5, b=4, c=3, d=2, e=1 figure 5: mudge diagram for company alpha. through the analysis of the four main categories considered in this study, a series of recommendations for prioritizing eems for each was possible, as summarized below: • motors (maturity score: 1.33) 3.2.17 use optimally sized pumps and motors 3.2.4 refrain from rewind motors more than twice 3.2.8 prefer adjustable frequency drive over the throttling system • compressed air (maturity score: 1.69) 2.1.5 detect and repair leaks on compressed air systems 2.1.3 adjust the compressed air pressure to the minimum demand 2.1.10 keep only compressed air lines that are strictly necessary • hvac systems (maturity score: 2.44) 1.2.29 establishes air ventilation to the minimum possible while respecting safety guidelines 1.2.30 evaluate and develop a guideline of air conditioning use during non-working hours 1.2.23 utilize heat pipes instead of electric reheat • lighting (maturity score: 2.77) 1.1.3 install photocontrol devices 1.1.5 install automatic light timers in minimal utilized areas 1.1.2 use presence sensors these analyses carried out by the promethee ii method met the objective of providing the company a determination of which eems will provide the most significant benefit according to established criteria and weights. 50 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee table 5: ranking of eems for the category “motors” based on the promethee ii method. rank alternatives ɵ+ ɵnet ɵ 1 3.2.17 use optimally sized pumps and motors 0.3492 0.1429 0.2063 2 3.2.4 refrain from rewind motors more than twice 0.3236 0.1416 0.182 3 3.2.8 prefer adjustable frequency drive over the throttling system 0.3028 0.1807 0.1221 4 3.2.6 for inconstant loads on compressor, pump and blowers prefer adjustable frequency drive or multiple speed motors 0.3663 0.2674 0.0989 5 3.2.9 prefer adjustable frequency drive over the mechanical drive 0.2479 0.2112 0.0367 6 3.2.15 prefer energy-efficient belts and other components 0.2759 0.2491 0.0268 7 3.2.13 develop a preventative maintenance plan 0.2857 0.2747 0.011 8 3.2.3 refrain from rewind motors on unforeseen circumstances 0.2381 0.2357 0.0024 9 3.2.5 catalog motors and their spare parts in a standardized way 0.2711 0.2698 0.0013 10 3.2.14 develop a predictive maintenance plan 0.2308 0.3053 -0.0745 11 3.2.11 establish a policy for motor or spare part replacement 0.1893 0.2772 -0.0879 12 3.2.16 use ideal size of electric motors considering peak efficiency operation 0.1746 0.2991 -0.1245 13 3.2.10 prefer adjustable frequency drive with an isolation transformer 0.2344 0.4176 -0.1832 14 3.2.2 use a voltage controller on motors with low demand 0.2625 0.4799 -0.2174 6. discussion from the case study of the model, the adoption of the organizational lenses of “plant, process, and machine” was highly beneficial for several reasons: • it ensured that eems from all perspectives were considered. • it provided a precise classification of eems within the organization. • it helped energy managers to assign responsibility in cross-functional ee project teams. • it allowed analyses of energy management systems at different levels, from a macro level down to the detail of the eems. • it facilitated the identification of imbalances in performance across organizational layers. another important aspect of the proposed model is the considerable level of the results’ refinement as enabled by the combination of the assessment and prioritization tools. the delivered results can provide a more comprehensive understanding of a company’s energy performance and support investment decisions in ee projects. thus, this model reduces the barriers to energy efficiency and, consequently, the industrial energy efficiency gap. hasan et al. [59] highlight that energy management impacts the production resources like machinery and devices considered in this work. a similar classification of this paper is applied by cagno et al. [60], but without the division according to the company’s organizational levels. this scenario shows that the current work contributes to increasing the literature about how energy management impacts production resources. with the prioritization of the actions for improvement, it is possible to gain economy regarding the production costs and improve the company’s productivity. demirel et al. [61] also analyzed energy efficiency using promethee. still, the authors’ model focuses on analyzing only industrial steam boilers, differently from the model of this study that considers organizational levels. despite the differences, maintenance was an aspect that appeared in both models, showing that the machines must be in a good state of functioning not to affect energy efficiency. schulze et al. [62] mentioned that industrial energy performance could be highly complex because production systems and their related support process can vary widely between sites. this makes it challenging to create generalized solutions and requires each industrial site to develop a personalized energy assessment model based on the eems that are most suitable to its reality. this is a limitation of the proposed model as it must be adapted to every application. concerning the implementation of the model through the case of study, the three-level scale of maturity for each eem was proven acceptable as it provided an international journal of sustainable energy planning and management vol. 37 2023 51 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima adequate understanding to practitioners and offered a sufficient degree of detail for the generation of insights from the analysis performed. in addition, the model’s applicability was considered appropriate as the process was conducted satisfactorily in approximately two hours. however, it should be noted that despite the literature on maturity models regarded as models of five levels [63–66], the model presented in this work with three levels can provide good results for the described situation. the model, with its three maturity levels, gives more concrete objectives to be completed. notably, the contribution of the present model is focused on the operational aspect of energy management systems. however, for comprehensive energy management, organizations should address other dimensions such as strategy, culture, control, and organization [62]. finally, like the iso 50.001 standard, the proposed model should be an ongoing process where, in each cycle, the company is expected to achieve better performance and learn new possibilities for improvement. the proposed model can be included during the implementation of iso 50001 in enterprises since the standard does not present achievable goals. 7. conclusions with increasing global energy consumption, concerns arise about the sustainability of such an increase. for the industrial sector, which is the leading global consumer of energy, these concerns are of even greater proportions; any change in price or availability of energy significantly impacts competitive advantage, as competition occurs globally. therefore, energy efficiency is fundamental to achieving cleaner production goals, governmental regulations, and compliance with stakeholders’ needs. the present research contributed to these objectives by proposing an industrial energy efficiency assessment and prioritization model focusing on the organizational levels of “factory, process, and machine.” this focus was combined with a methodology for prioritizing eems in the industry through multi-criteria analysis tools. from applying the model in a case study, the present proposal offered several contributions to practitioners and the scientific community. for practitioners, classifying energy efficiency into three organizational levels identifies a possible imbalance of efforts between levels. in addition, the model achieves an important amount of detail from the perspective of different corporate criteria with different weights, i.e., guidance through prioritization of eems. regarding the scientific community, the model provides a methodological contribution to (i) the combination of a traditional energy assessment tool with a prioritization of measures procedure, thereby enabling a high level of refinement of the results and (ii) to the authors’ best knowledge, the unprecedented use of promethee ii tool to prioritize eems in the context of manufacturing. promethee ii was the mcdm method utilized, but others should be considered regarding the noncompensatory nature of the problem. despite its application, the model has some limitations, as the decision-maker interviewed during the research because they belong to the operational level, so their vision is limited to their current situation. some managerial should be included during the analysis of the criteria. this model was general, so the list of eems considered this scenario a guideline for future models in the area. some specialization is necessary for different types of industries. based on the results, further research is required in preparing energy management assessments and prioritization models tailored to different industry segments and their respective production processes. the model should include the managerial perspective to make it more viable at all organizational levels. additionally, using other multi-criteria methodologies for the prioritization of ee projects is suggested, as this approach could potentially compare the results and analyze the advantages and disadvantages of each method, providing more literature for the mcdm methods. acknowledgements this work was supported by the conselho nacional de desenvolvimento científico e tecnológico (cnpq) process 314140/2020-4 and fundação araucária. 52 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee appendix a energy management maturity model matrix 1st layer 2nd layer 3rd layer ref. energy efficiency measures maturity score (1 to 3) or n/a 1. p la nt 1 .1 l ig ht in g lighting controls 1.1.1 place more individualized switches that can be turned off when natural light is sufficient 1.1.2 use presence sensors 1.1.3 install photocontrol devices 1.1.4 install light switches in external areas 1.1.5 install automatic light timers in minimal utilized areas maintenance 1.1.6 ensure regular cleaning of reflectors and lamps improvements 1.1.7 use lamps with high energy efficiency conscious use 1.1.8 keep only the necessary lamps 1.1.9 get staff used to turning off unused lights 1.1.10 reduce outdoor lighting to a minimum level of security 1.1.11 avoid over-lighting areas 1.1.12 whenever possible, give preference to natural light instead of artificial light 1.1.13 when the ceiling is too high, decrease the height of the fixtures 1.1.14 utilize rooflight/skylight 1. 2 h va c sy st em s control 1.2.1 make use of thermostats and/or timers 1.2.2 enable manual shutdown of your hvac equipment 1.2.3 control humidity through a desiccant system management 1.2.4 use air conditioning system to keep compressor pressure low 1.2.5 keep the hvac system free of hot, humid and dirty air as much as possible 1.2.6 evaporate water from roofing to lower a/c load 1.2.7 optimize multiple-source heating schedule and arrangement 1.2.8 prioritize / install separate air handlers on hvac systems 1.2.9 optimize a/c efficiency by using water on a/c exchanger 1.2.10 choose radiant heater for localized heating 1.2.11 transfer heat through a heat pump for room conditioning 1.2.12 supply air directly to exhaust hoods 1.2.13 improve hvac performance through optimizations softwares 1.2.14 reduce the use of make-up airs to the minimum safe level international journal of sustainable energy planning and management vol. 37 2023 53 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima maintenance 1.2.15 perform maintenance and cleaning of refrigerant condensers and towers 1.2.16 smoke clean-up should be revised periodically improvements 1.2.17 improve or implement insulation on hvac systems 1.2.18 control outside air volume flow with a damper on hvac 1.2.19 utilize heat pipes to achieve setpoint temperature 1.2.20 implement different strategies to enhance air circulation such as underceiling air mixers 1.2.21 replace reheat coils to a variable air volume system 1.2.22 if necessary, change old hvac system to a high energy efficiency model 1.2.23 utilize heat pipes instead of electric reheat 1.2.24 implement a pre-cooling system in air conditioning system selection 1.2.25 make sure hvac equipment is properly sized concious use 1.2.26 lower the roof to decrease conditioned area 1.2.27 increase temperature in summertime and vice-versa 1.2.28 block the simultaneous use of heating and cooling systems 1.2.29 establishes air ventilation to the minimum possible while respecting safety guidelines 1.2.30 evaluate and develop a guideline of air conditioning use during nonworking hours 1.2.31 ventilate only spaces that are being used 1.2.32 reuse air for warming, ventilation, and cooling 2. m an uf ac tu ri ng p ro ce ss 2. 1 c om pr es se d a ir management 2.1.1 eliminate blowdowns on air pipes by using suitable dryers 2.1.2 install filters on air compressors 2.1.3 adjust the compressed air pressure to the minimum demand 2.1.4 decrease the compressor entering air temperature through a heat exchanger maintenance 2.1.5 detect and repair leaks on compressed air systems improvements 2.1.6 place the compressor air entrances in coolest areas 2.1.7 in safety systems, replace compressed air pressure systems with direct-acting units 2.1.8 improve controls on air compressors 2.1.9 standardized air compressors’ header usage reduction 2.1.10 keep only compressed air lines that are strictly necessary 2.1.11 use compressed air only for manufacturing purposes and not for cleaning or personal cooling 2.1.12 avoid using compressed air for drying, cooling and moving objects 2.1.13 whenever possible, use alternative cooling methods that do not use compressed air selection 2.1.14 make sure air compressor equipment is properly sized 2. 2 st ea m d is tr ib ut io n sy st em s 2.2.1 perform maintenance on steam traps regularly 2.2.2 make sure that steam traps are being monitored 2.2.3 make sure that the distribution system is thermally insulated 2.2.4 detect and repair leaks 2.2.5 upgrade/modernize the insulation of distribution system 2.2.6 upgrade/modernize steam traps 2.2.7 reuse flash steam 54 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee 3. m ac hi ne 3. 1 pu m ps 3.1.1 utilize high-efficiency pumps 3.1.2 use pump diameter size properly calculated 3.1.3 install properly sized pumps 3.1.4 use throttling valves as little as possible 3.1.5 install parallel system for variable loads 3.1.6 develop a maintenance plan for the pump system 3.1.7 make sure that pump system are being monitored 3.1.8 if possible, limit or cut down pump system load 3.1.9 apply trimming impellers into pumps 3.1.10 periodically perform drive belts replacement 3.1.11 utilize adjustable-speed drives into pumps 3. 2 m ot or s management 3.2.1 avoid unnecessary opening of the circuit protection device using softstart 3.2.2 use a voltage controller on motors with low demand 3.2.3 refrain from rewind motors on unforeseen circumstances 3.2.4 refrain from rewind motors more than twice 3.2.5 catalog motors and their spare parts in a standardized way adjustable frequency drive 3.2.6 for inconstant loads on compressor, pump and blowers prefer adjustable frequency drive (afd) or multiple speed motors 3.2.7 prefer afd over the motor-generator set 3.2.8 prefer afd over the throttling system 3.2.9 prefer afd over the mechanical drive 3.2.10 prefer afd with an isolation transformer maintenance 3.2.11 establish a policy for motor or spare part replacement 3.2.12 recruit certified repair shops exclusively 3.2.13 develop a preventative maintenance plan 3.2.14 develop a predictive maintenance plan selection 3.2.15 prefer energy-efficient belts and other components 3.2.16 use ideal size of electric motors considering peak efficiency operation 3.2.17 use optimally sized pumps and motors 3. 3 b oi le r 3.3.1 use optimally sized boiler systems 3.3.2 restrict air excess 3.3.3 restrict the amount of flue gases 3.3.4 perform control on boiler process 3.3.5 perform regular maintenance on boiler 3.3.6 upgrade boiler insulation 3.3.7 recover heat from flue gases 3.3.8 improve the condensate return rates to the boiler 3.3.9 perform boiler blowdown regularly 3. 4 fu rn ac es 3.4.1 monitor the air to fuel/power ratio 3.4.2 recover heat from flue gases 3.4.3 upgrade the heat retention and transferring on heaters international journal of sustainable energy planning and management vol. 37 2023 55 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima a p p en d ix b c om pr es se d ai r sy st em s de ci si on m at ri x c om pr es se d a ir m at ur it y c at eg or y w ei gh t: 1, 31 p ay ba ck pe ri od c os ts o f im pl em en ta tio n a m ou nt of e ne rg y sa vi ng s r ed uc ti on o f em is si on r ed uc ti on o f w as te p ro du ct iv it y m ai nt en an ce an d op er at io ns e as in es s of im pl em en ta ti on p ro ba bi lit y of su cc es s/ ac ce pt an ce m at ur it y c lu st er ec on om ic e co no m ic e ne rg y e nv ir on m en ta l e nv ir on m en ta l pr od uc tio nre la te d pr od uc tio nre la te d im pl em en ta tio n im pl em en ta tio n m at ur ity o bj ec tiv e m in / m ax m in m in m ax m ax m ax m in m ax m in m ax m in w ei gh t o f ea ch cr ite ri on ( fr om m ud ge d ia gr am ) 0. 24 0. 14 0. 1 0. 04 0. 1 0. 02 0. 04 0. 16 0. 18 n/ a e lim in at e bl ow do w ns o n ai r pi pe s by u si ng su ita bl e dr ye rs m ed iu m h ig h n/ a n/ a n o n/ a n o d ep en ds m ed iu m h ig h in st al l f ilt er s on a ir co m pr es so rs m ed iu m l ow l ow n/ a n o d ec re as ed n o e as y m ed iu m h ig h a dj us t t he co m pr es se d ai r pr es su re to th e m in im um d em an d l ow l ow l ow n/ a n o d ec re as ed n o e as y h ig h l ow d ec re as e th e co m pr es so r en te ri ng a ir te m pe ra tu re th ro ug h a he at ex ch an ge r m ed iu m m ed iu m l ow n/ a n o n/ a n o h ar d h ig h l ow d et ec t a nd r ep ai r le ak s on co m pr es se d ai r sy st em s l ow l ow h ig h n/ a n o d ec re as ed y es e as y h ig h l ow pl ac e th e co m pr es so r ai r en tr an ce s in co ol es t a re as m ed iu m l ow l ow n/ a n o n/ a n o d ep en ds m ed iu m l ow 56 international journal of sustainable energy planning and management vol. 37 2023 industrial energy efficiency assessment and prioritization model: an approach based on multi-criteria method promethee in s af et y sy st em s, re pl ac e co m pr es se d ai r pr es su re s ys te m s w ith d ir ec tac tin g un its m ed iu m m ed iu m n/ a n/ a n o n/ a n o d ep en ds m ed iu m h ig h im pr ov e co nt ro ls on a ir c om pr es so rs m ed iu m m ed iu m m ed iu m n/ a n o n/ a y es d ep en ds m ed iu m l ow st an da rd iz ed a ir co m pr es so rs ’ he ad er n/ a h ig h n/ a n/ a n o n/ a n o d ep en ds m ed iu m l ow k ee p on ly co m pr es se d ai r lin es th at a re st ri ct ly n ec es sa ry l ow m ed iu m n/ a n/ a n o n/ a n o d ep en ds m ed iu m l ow u se c om pr es se d ai r on ly f or m an uf ac tu ri ng pu rp os es a nd n ot fo r cl ea ni ng o r pe rs on al c oo lin g l ow l ow n/ a n/ a n o n/ a n o e as y h ig h h ig h a vo id u si ng co m pr es se d ai r fo r dr yi ng , c oo lin g an d m ov in g ob je ct s l ow m ed iu m h ig h n/ a n o n/ a n o d ep en ds m ed iu m m ed iu m w he ne ve r po ss ib le , u se al te rn at iv e co ol in g m et ho ds th at d o no t u se co m pr es se d ai r l ow m ed iu m n/ a n/ a y es n/ a n o d ep en ds m ed iu m n/ a international journal of sustainable energy planning and management vol. 37 2023 57 bernardo keller richter, gabriela hansen marcondes, nathalia juca monteiro, sergio eduardo gouvea da costa, eduardo r. loures, fernando deschamps and edson pinheiro de lima references [1] iso. “iso iso 50001 energy management 2019”, https:// www.iso.org/iso-50001-energy-management.html (accessed nov. 25, 2019). 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and when including perspectives from and working with the islands, it benefits both islanders and planners in the energy transition. the collaboration with and creation of model islands supports future research and the fight against climate change in a sustainable way. rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally hannah mareike marczinkowski* department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords smart energy systems; modelling islands; energy system analyses; sustainable energy planning; http://doi.org/10.5278/ijsepm.6970 1. introduction with the paris agreement from 2015 promoting the transition to cleaner energy, lower emissions and higher efficiencies, all backing countries are required to contribute in light of their circumstances to smarter energy production and consumption [1]. thereby to support the agreement, islands, who are at the edges of both maps and energy networks either as sub-national jurisdiction or independent island state, are to apply the same global trends. while being at the forefront of climate change due to predicted sea level rise [2], however, the global and national climate actions might not always be realisable at the island level. at the same time, the required shift for the energy transition is possible, especially for smaller economies, due to their rapid and dynamic ways of adapting their more compact territories [3]. while mainly discussed in the context of small nations, the same possibilities might exist with islands. with energy historically often supplied centrally, and future supply more decentralised, the explanation might be with local energy supply and system optimisation. furthermore, this enables local sector integration and coordination of the energy transition [4–6]. european and national policies define renewable energy and cross-border interconnection shares for countries as a whole [7] without the much-needed consideration of limitations found in their local municipalities or islands [8]. likewise, research has been done in cities and on regional or national level, reflecting on how they can follow and contribute to national and http://doi.org/10.5278/ijsepm.6970 8 international journal of sustainable energy planning and management vol. 33 2022 rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally islands and models, energy plans are suggested to be re-evaluated to contribute to energy planning approaches through better understanding and sensemaking [18]. smart energy systems can be modelled both in island mode and in interconnection with surrounding energy systems. the former modelling mode restricts energy trade to other areas and focuses on self-sufficiency and local system balancing. even though island mode causes a restriction in terms of electricity transmission, it is also described as informative regarding supply assessment, where balancing of supply and demand must be solved within system boundaries [19]. in order to further question the use of models, there is the potential that they may be misunderstood, undervalued or deemed irrelevant for various reasons, which limits the use of models and advises caution, for example when presenting them to municipal stakeholders [20]. despite the potential role of islands for smart energy systems and their understanding and development, islands face a certain neglect at the political level, not the least in denmark, a country with 52% of the population living on large and another 8% on small islands [21]. when further looking into the example of denmark, where the latest danish climate agreement on energy for 2021-2030 elaborates on the opportunities of artificial ‘energy islands’ [22], it does little to include actual islands in the national agreement – not as models, nor for testing or acknowledging potential differences [23]. the current research gap identified in literature and politics is supported by an advanced search of key terms in scientific publications on sciencedirect. it reveals that 13% of the search results for the phrase ‘danish energy system’ include ‘island’, while the same share is only 6% in the non-danish context, despite a global island population of 10% [2]. for ‘energy planning’, the results are 21% compared to 11%, which show a significance of islands in research, though a small discrepancy can still be made out here besides the lack of island inclusion on a political level. when looking further into the existing ‘danish island energy system’ literature, a trend can be noticed towards the use of ‘cases’, ‘models’, or ‘tests’ (97% of search results), as well as ‘technology’ (70%); this trend supports the claim that islands are often used for testing and modelling technologies. yet, we see less literature on the use of ‘strategy’, ‘implementation’, ‘market’, or ‘policy’ (avg. 43%). this indicates a lack in further use of potentials from island energy research and a misaligned role of islands in energy planning. [24] global guidelines [9,10]. this context implies that not one region should be viewed as being above another region but also that resources must be shared horizontally. in general, it has been argued that the different levels should aim at sustaining themselves while playing a part in larger plans, such as cities in a national perspective [10] or urban and rural regions collaborating [11]. the same applies to islands, but to some extent, they might be limited in this regard due to the natural isolation caused by water, which in contrast could offer a resource not only to the island communities. to address the integration of islands in a smarter way, strategic energy planning raises the issue of energy planning viewpoints and contextual inclusion by suggesting a re-evaluation of coordination needs [8,12]. institutional and regulatory framework conditions and central support are lacking, while expectations for local action persist. besides decentralising the framework conditions, there is a global trend towards the inclusion of more decentralised technical solutions like wind turbines, solar collectors, hydro or biomass energy as resources. examining this further, we must address not only the electricity sector but also heating, cooling, transport and industry. in light of the transition away from central, large-scale power production using on-demand fossil fuels towards decentralised, renewable technologies, the intermittency of the energy production from the latter is a recurring issue [13]. a resulting future energy system that strives to achieve high renewable energy shares is referred to under the concept of ‘smart energy systems’ [14]. the investigation of aligning islands with smart energy trends and planning practices can be approached through models and modelling. while islands themselves can be considered models of larger (energy) systems, most things can be illustrated in a theoretical way through modelling in island mode. examples where islands are used as case studies for energy planning include the use of la gomera island for weather analysis [15], tomia island for the evaluation of pv [16], or sulawesi island for hydropower planning [17]. the size of islands and their natural limitations provide an opportunity for testing these practices through observation and evaluation to examine both the alignment of islands with trends and their relevance for other regions. in particular, new technological additions to an energy system, such as renewable energy technologies and their impacts, could be studied through island models, as they provide a natural modelling setting. yet, similar to the use of international journal of sustainable energy planning and management vol. 33 2022 9 hannah mareike marczinkowski a potential light on the danish horizon in this regard is the appointment of samsø as the danish renewable energy island in 1997, when the minister for energy and environment stated, ‘through samsø, we can create a striking international demonstration project and exhibition window for danish energy technology’ [25]. how samsø became a pioneer community on energy projects despite its total population below 4,000 inhabitants has been elaborated in [26]. samsø has also been mentioned in recent publications in regards to reaching energy autonomy [27] and the importance of local characteristics prior to energy system analyses [28], but the trend of evaluating energy in a smart way applies to islands in general. this could enable a better energy democracy and help develop and understand energy systems better. finally, recent developments in renewable energy, efficiency, and infrastructure, as well as faster and overall smarter responses to the paris agreement indicate the need and possibility for global smart energy, in which islands are not to be left out and to which islands could contribute well [29]. 1.1. research objective in order to achieve the targets of the paris agreement through smart energy systems on a global scale and to continue developing our understanding of these systems, islands should not be excluded in energy planning, despite usually being located at the edges of the map. however, for islands to follow and apply similar energy developments as their continental counterparts requires a more detailed understanding of ongoing developments, possible challenges, and future opportunities of islands and their models as part of a holistic energy policy approach. a recent review identifying approaches in energy system modelling points towards advances but also increased complexity in the field, highlighting challenges in representation and understanding of models [30]. another review on bottom-up energy system models supports this trend by pointing out the discrepancy of insular applications applied on country level and vice versa [31]. this indicates insufficient understanding of advanced island modelling and suggests a rethinking of island models in sustainable energy planning. this paper addresses an investigation of islands that on the one hand follows, aligns with and learns from the global trends and national targets in energy planning. on the other hand, it looks in the opposite direction of islands as laboratories to contribute to energy planning. these two perspectives are evaluated along the line of publications by the author over the past three years [32–36], as well as recent developments and trends globally, as well as locally. this addresses the presented research and policy gap, not only in denmark, but globally, by emphasising the potential role of islands on the global scale by moving away from seeing a world with islands to a world of islands as part of sustainable energy transitions. this underlines the idea that islands ‘must have an important role to play in our society’ [37]. to solve the puzzle of transitioning to smart energy on both nation and global level, the resulting research objective addresses the following question: what role can islands and modelling of renewable energy on islands play in sustainable energy planning? in order to answer this, it is important to analyse how modelling renewable energy islands are understood, approached and potentially improved through perspectives on, from and with islands. section 2 addresses the research question by presenting the theoretical and analytical framework, including three case studies and related publications that are evaluated in particular and set into a novel theoretical context. the resulting perspectives for islands discuss and answer the research question in section 3, which presents the results of evaluating the role of modelling renewable energy islands. section 4 adds a discussion on current and future smart energy trends involving islands; and section 5 offers a final conclusion on the role of island in smart energy and energy transitions. 2. methodology the role of islands is evaluated in both a theoretical and analytical way, combined to answer the research objective in section 3. the first section presents the potential role of islands and island modelling in a theoretical approach and the latter presents the analyses conducted and their analytical meaning to reflect on it. 2.1. theoretical framework the combination of smart energy trends with models and planning is in the following referred to as smart energy planning. to introduce islands into this concept of innovation leads to the consideration of islands to represent a certain niche in energy planning research with a potential impact on a larger scale. a way to illustrate this is shown in the multi-level transition theory, as adapted in figure 1 [38], highlighting how island 10 international journal of sustainable energy planning and management vol. 33 2022 rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally figure 1: adaptation to multi-level transition theory and islands as a part of niche innovations, based on [38] figure 2: vertical (top-down or bottom-up) and horizontal coordination in multi-level governance between paris agreement (pa) and island level, based on [41] perspectives can be important pieces of the energy transition, not only in denmark but also globally. the underlying processes referred to in this theory that are happening across the globe have a common denominator in societal changes, such as climate change requiring action in energy planning, leading to socio-technical transitions [38]. with islands having potential for experimenting and modelling, niche innovations can be explored in transparent and controlled island settings. the transition to renewables and the potential role of islands therefore present a potential window of opportunity for novelties [38,39]. despite their individuality, islands are likely to succeed in the push for socio-technical transition, as they are ‘seriously engaging society based on place specific issues’ [40]. the resulting perspectives when seeing and modelling islands as niches are, firstly, from an outside view as ‘modelling of islands’, secondly, when looking close-up at the niches as ‘modelling on islands’, and thirdly, the insights into modelling through and ‘from islands’, as illustrated by the arrows in figure 1. the already established need to re-evaluate the coordination between different institutional levels to enable local experimentation and strategic energy planning might yet require additional consideration in regards to islands [8,12]. where transition theory frames the different levels of influence in innovation, multi-level governance allows for a qualitative analysis of governance. in the comparison of the different aspects of multi-level governance and influence, figure 2 emerges. through transition theory, islands can be considered local niches with currently little power or influence, following national and international top-down advice, such as resulting from the paris agreement. however, horizontal alignments and bottom-up action is limited despite their increased significance for strategic energy planning [12]. this happens in parallel across the globe or within the eu, with the same guidelines at the top-level influencing development on lower levels vertically and in various, often insufficiently coordinated ways. whether focusing on energy systems or islands, transitions or governance, modelling combines the trends and concerns above presented by contributing to niche innovation or governance decision-making in both quantitative and qualitative ways. the term ‘model’ refers to both something ideal to look up to and something used for experimentation and replication elsewhere. while the latter might initially be intended in energy research, the former appears with increasing frequency throughout the research on this topic. besides the potential of innovation in transition theory, the need for experimentation has also been mentioned in the literature, where local experiments are suggested and enabled through modelling, leading to the development of new understandings [42]. 2.2. analytical framework the discussion of modelling islands requires models to work with; hence, the use of case studies is discussed for that purpose. the case studies where renewable energy has been analysed within smart island energy systems are part of the horizon 2020 smart island energy system (smile) [43] project. the smile project involves a number of partners in investigating three international journal of sustainable energy planning and management vol. 33 2022 11 hannah mareike marczinkowski cases, namely samsø in denmark, orkney in the united kingdom and madeira in portugal, and their ways of transitioning to renewable energy through smart technology demonstrations. publications made during the project result in the research on modelling of renewable energy on islands, as it is based on related publications on samsø [32,33], samsø and orkney [34], on all three cases [35], and especially for madeira [36]; yet also questioning their role in global energy planning and transitions. in this research, case studies support modelling under specific conditions by providing living laboratories. while neither an evaluation of the 80,000 globally inhabited islands, nor the 2,700 european or 72 danish ones is done nor required, the evaluation on the specific case studies permit an evaluation to some extent nonetheless in the following, as similarities can be pointed out. creating models in island mode or testing technology in an island setting allows for a certain predictability and establishes boundaries for the model, which increases transparency and the potential for learning. there are two modelling types to discuss in the context of energy transition: optimisation and simulation. they are differentiated by their endogenous versus exogenous characteristics, as well as their computed versus user-chosen inputs to the model, respectively. unlike optimisation, where the solution is predefined, simulation models the various consequences of different additions to the system, resulting in user-specified – thereby controlled – scenario making. examples of optimisation models include homer or balmorel, while simulation models include energypro and energyplan. [44] hence, simulations can be understood as descriptive rather than prescriptive. decisions must be made consciously and potentially in dialogue with stakeholders, which makes the modelling process with simulation models more complicated, yet also more inclusive and contextual. the relevance of simulation is further established by addressing the innovative aspect of islands as niches, which thereby supports the analysis of the role of islands. energyplan is a suitable modelling tool for smart energy systems and the corresponding technological evaluations. the modelling tool is developed by aalborg university [45]. besides incorporating sustainable energy resources and the technical simulation strategy to address the efficient use of renewable energy, socio-economic costs including investments and operation costs are also analysed with energyplan. furthermore, environmental considerations can be reflected in its inclusion of co2 emissions, of which a reduction directly addresses the paris agreement. finally, in addition to including social perspectives in the simulations, energyplan enables individual units to be tested, including at household levels, completing the analytical framework for sustainable energy planning. [46,47] both the concept of smart energy systems, as well as specific research on islands has been studied with energyplan for the islands of samsø, orkney and madeira, which is put into the theoretical framework presented in section 2.1. furthermore, these analyses are re-evaluated on the base of the different perspectives through figures 1 and 2, leading up to the result in the following section. hence, besides the case studies being analysed in the publications [32–36] in regards to energy and environmental indicators, like co2, renewable energy the self-sufficiency shares, the development of the island models in regards to sustainable energy planning is qualitatively assessed. this is evaluated from low to high by the number of sectors integrated and the inclusiveness of island perspectives, as well as the overall complexity within the topics of the publications and their perception in comparison with each other. this goes in line with the suggestion that modelling of technical scenarios is not the final step in energy planning and that additional steps can be considered, for example, the use of the results and the related development of possible implementation strategies across different institutions. the purpose of modelling is to also highlight certain aspects of reality and ‘to assist in the design, planning and implementation of future energy systems’ [44]. this can be applied through energy market and policy design, which is addressed in the discussion of modelling islands in technical and institutional terms. islands may present suitable places for experimenting and learning. however, theories suggest a strategic alignment of innovation and governance across all areas and levels. this paper highlights the potentials and limits of modelling renewable energy for islands through energy system analysis and the case studies, as evaluated in the publications [32–36], as well as beyond. furthermore, the following combination with transition theory and governance adds new perspectives to the areas of investigation and contributes to the understanding of sustainable energy planning by rethinking the role of islands and their models within. 12 international journal of sustainable energy planning and management vol. 33 2022 rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally 3. resulting inclusion of islands in energy planning combined with the analyses in and of the publications [32–36], the theoretical framework indicates different perspectives when modelling renewable energy islands to further develop smart energy planning. the first one is illustrated through transition theory by landscape and regime influence on niches and top-down governance, resulting in ‘modelling of islands’. the second perspective can be found when addressing the innovation within the niches and horizontal governance, allowing ‘modelling on islands’. and the third perspective presents the influence of islands to other levels in transition theory through bottom-up action, which elaborates ‘modelling from islands’, as further discussed and illustrated in the following paragraphs and figures. ‘modelling of islands’ illustrates how islands are suitable for evaluating renewable energy technologies for various reasons and as done with energyplan in [32– 36], yet there are also limitations. the setting of islands simplifies the often complex energy system research through their natural borders, small scales and transparency. modelling renewable energy for islands not only addresses the need for decentralisation and local energy transition by evaluating technologies on islands as seen from an outside view, but it also provides information for other areas, on both national and global scale, hence, islands can be seen as laboratories. modelling renewable energy is addressed through the model of samsø in relation to evaluating pv and batteries [32], for heat pumps and storage [33], as well as for thermal and electrical storages in comparison [34]. however, replicability is critical, and the context of an island test setting usually shapes and defines the modelling and results; thus, island models are very location-specific and this requires special attention. the perspective of the modelling of islands explains this situation, as guidance and initiatives normally follow topdown processes aiming to experiment with and implement renewable energy technology locally, yet from a central viewpoint. the innovation potential is thereby limited, as illustrated by the multi-level perspective in transition theory, where landscapes overshadow niche innovation, and as shown through weaknesses in central governance without the often-claimed local coordination. while experimenting, testing and evaluating renewable technologies on islands still provide quantitative feedback, the suitability of the respective technologies for islands, and vice versa, must be considered; hence, more qualitative discussions are sought. ‘modelling on islands’ improves the modelling potential through its acknowledgement and additional inclusion of island conditions. hereby, replicability, which was previously limited by location-specific island models, can be addressed by comparing several case studies. furthermore, the quality of modelling improves by considering local conditions on islands, including two [34] and three [35] islands, as well as an increased level of details and scenarios. this introduces an additional understanding of how decentralisation can become more effective and how cross-border coordination in energy planning can be not only technical but also procedural and collaborative. the second perspective on modelling islands thereby illustrates how local conditions help understand and utilise what the island models are theoretically intended for, namely to test and show how decentralisation can be achieved and replicated. by modelling on islands, niche innovations become more explorative and competitive, while horizontal alignment strengthens vertical governance. additionally, local coordination helps islanders and others at the bottom level in terms of energy governance. the learnings from collaboration and coordination on islands support smart energy planning with qualitative inputs. also, the knowledge of the individuality and similarities between energy systems indicates that solutions to energy transitions are neither simple nor singular but depend on the context. ‘modelling from islands’ includes insights from the modelling of islands, as well as perspectives on islands, and thereby presents how to make modelling work from and through island perspectives, adding the third angle to the islands’ role in smart energy planning. the strategic context consideration is proven to be most helpful, whereby not only technical and local aspects but also institutional alignment with energy markets and policy gain importance for local energy system planning [36]. the complexity should be balanced with the simplicity of modelling. yet new qualitative knowledge can be best achieved by including most aspects, bringing the models to the highest level of quality and usability. while replication also becomes more complex, understanding certain aspects of individuality and transcendent solutions suitable for many islands offers a new way to use the learnings. in particular, self-sufficiency is a potential that should be explored not only in the context of islands but also to help other energy systems understand the value of local energy system optimisation. international journal of sustainable energy planning and management vol. 33 2022 13 hannah mareike marczinkowski figure 3: relative increase of complexity and content when adding perspectives of [32,33], on [34,35] and from islands [36]; based on [41] the resulting bottom-up influence from niche innovation and through vertical governance presents islands and their models with a wide-reaching impact and higher power than is initially attributed to them. the learnings from islands can thereby influence existing understandings and institutions on national and global levels and reconfigure current regimes and landscapes. thus, giving this power to islands through bottom-up action and coordination benefits not only islands locally but also central stakeholders through the knowledge gained and actions accomplished in a decentralised manner, when island are not only considered laboratories. the three perspectives and the development of the corresponding publications increase the complexity of island modelling as qualitatively assessed and overall perceived through increasingly complex data, as also other qualities and content increase relatively. as illustrated by figure 3, this covers the share of self-sufficiency, local focus, sector integration, co2 emission reductions, and renewable energy shares. while self-sufficiency is addressed only to a limited extent in the early publications, as shown in ‘modelling of islands’, it significantly shapes the publications when looking at ‘modelling on islands’, and especially when ‘modelling from islands’. furthermore, the initial focus is global or european in the first two publications [32,33], while the focus in the later publications is directed more directly toward the local islands and their conditions, like the specific local focus on madeira in [35]. also, smart energy system’s sector integration is not addressed much in the early publications (one out of five sectors in [31]), where the analyses focus rather on certain technologies and sectors; however, it gains more attention in the following publications and steps. where first the electricity sector was primarily addressed, adding heating/cooling enables better understanding of the energy system in later publications [34,35]. the final perspective presents a technically and institutionally feasible fully-renewable energy system, taking all sectors into account [36]. this development of the island modelling is also reflected in the co2 emission reductions, which are highest in the later publications, compared to earlier ones; cf. 27% in [32], 66% in [35], and 98% in [36], which is in line with the renewable energy share increases, thereby addressing the paris agreement better with elaborated modelling. figure 3 illustrates this relative share and the differences of the qualities of smart energy planning increasing throughout the addressed perspectives, as based on the evaluation and comparison of the selected publications. while it illustrates overall enhancements throughout the steps, it is further indicating areas for improvement, even when modelling with perspectives from islands. the analytical approach above is further supporting and used in the theoretical framework. with the increased complexity and various additional perspectives of modelling renewable energy islands, it can be concluded that modelling should be done with islands in future smart energy systems, as it provides qualitative value on top of quantitative data. for that, the other perspectives of, on and from islands and the overall learnings are acknowledged, combined and included. both quantitative experiments and qualitative knowledge on and from islands can influence and offer a benefit on the global scale. while some individuality must be recognised, similarities also support the understanding and help identify transcendent recommendations from the modelling. by doing so, the need for self-sufficiency as well as cross-border collaboration, either technically or theoretically, can be evaluated accordingly. concluding, islands in the context of modelling can be 14 international journal of sustainable energy planning and management vol. 33 2022 rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally figure 4: modelling with islands in transition theory – transformed understanding on all levels [41] figure 5: modelling with islands – through acknowledging multiple perspectives in multi-level governance in a danish example, based on [41] seen as lighthouses rather than only laboratories when approached in a smart way, by including the above-mentioned aspects and acknowledging their importance in the transition rather than merely for their capacity for experimentation. when put into the context of transition theory, figure 4 emerges, including the theoretical reflections on modelling of, on, from and with islands. existing socio-technical landscapes and regimes require and influence niche innovation, however, enabling the additional local inclusion and strengthening of the innovation can benefit them in return through qualitative learnings on and from islands, including individual social, environmental and economic aspects. the opportunities offered by ‘modelling with islands’ result in knowledge and adjustments for landscapes and regimes, which finally enables the transition towards future energy systems that combat climate change. therefore, the adjusted levels from this point onward can allow for a better inclusion of islands with increased influence and understanding on the landscape and regime levels, as well as an impact on future niche innovations to come. through figure 4, islands are presented as niches for innovation, but also the support, understanding and learning of islands transform the multilevel perspective of the energy transition. where control from higher levels once prevailed, the importance of supporting guidance and freedom is now presented. the summary of the multi-level governance perspectives results in figure 5, which combines all levels and directions of vertical and horizontal influence; cf. figure 2. instead of one-sided influence, a combination of topdown coordination, horizontal alignment and bottom-up action is suggested. this hybrid governance aligns with the requirement of central coordination and decentralised action in smart, strategic energy planning by addressing the similarities and differences, allowing for a better understanding of the results when working with islands in terms of tests, demonstrations and innovation. figure 5 shows the influence on islands from central governance and national plans, the options in between islands, and the influence of islands on the danish exemplary capitol. it also illustrates islands as central and corner pieces of a puzzle, which can become more transpart in this approach of sustainable energy planning for an island country like denmark. 4. discussion in light of the impending task of reducing fossil fuel demands and increasing sustainable energy shares, islands are not to be overlooked or disregarded as they play an important role in decentralisation. the contribution from each country to the paris agreement in light of their circumstances, hence, should be inclusive of their islands and perspectives. this also aligns with the centralised-decentralised coordination of locally available renewable energy sources and includes the environmental, economic and social aspects found locally. by re-evaluating and combining the options of both cross-sector and cross-border optimisation in a new way for islands, and by acknowledging the local needs and limits, islands can not only contribute quantitatively but can add new qualitative knowledge to smart energy planning and energy transitions. overall, the new understanding of islands contributes to better understanding of energy system modelling and energy impact analysis, where the different perspectives of modelling can be discussed. international journal of sustainable energy planning and management vol. 33 2022 15 hannah mareike marczinkowski island modelling addresses the geographical context not only by aligning the available resources with demands in other locations, but especially by including the remote areas of consumption at the edges of our energy networks. this makes islands a rather central piece in the energy system, despite being far from political centres. differences between islands and mainlands still need to be acknowledged, such as limited infrastructure and industrial energy demands, but also additional seasonal demands and resources particular to islands. if modelling is done with islands, it addresses these areas of concern and limits the continental view towards them, creating a more inclusive and strategic island-mainland relation. the case studies can be reconsidered with a limited representation of the world’s 80,000 islands, as generalisation as well as quantitative and qualitative insights were presented as targets for case study research. while the work with renewable energy islands as lighthouses provides these quantitative and qualitative insights, the generalisation and a common solution for islands cannot be presented. although samsø, orkney, and madeira provide insight, they do not represent global perspectives, or even danish, scottish or portuguese ones, completely. however, they do provide, along with the energy system analysis of, and the scenario work with, their different energy systems, three valuable perspectives on and from islands and within their limitations. where the energyplan models of current and shortterm scenarios should include the latest data to the best extent possible, also challenges and changes, for example in island demographics, should be included in future scenarios, indicating energy system impacts beyond the technical aspects. this can be summarised as a new way of strategic contextual energy planning that is especially relevant to islands due to their isolation; although others may also benefit from the approach through new understanding. instead of simply serving as test-beds to be exploited, islands might actually ‘lend credibility to innovation activities’ [40], where limitations result in resilience. this further investigation in the use of models and plans, by applying energyplan or other approaches, is hereby addressed and contributes to better understanding, as suggested [18]. the importance of self-sufficiency and resilience has also been highlighted in recent events with the barriers to international trade and reliance thrown up by the covid19 situation. this suggests that local resilience is important, especially, but not exclusively, for islands. while many areas of concern can be mentioned in this regard, smart energy planning and the importance of local energy system optimisation is one of them, ranging from optimising the current situations to future ones where more remote work may be seen on islands [48–50]. likewise, the understanding and presentation of islands as lighthouses, rather than only as laboratories, can support this in future energy policy. concrete research could be aimed at the island mode in energy policy, such as finding deviating policies for small or isolated markets. following the discussion on presenting renewable energy islands as lighthouses also in politics, a reflection of artificial ‘energy islands’ and the reconsideration of their definition and purpose is suggested. as introduced in the danish climate agreement [22,23], energy islands refer to the artificially yet-to-be-developed islands in the north and baltic seas. even though energy islands might not represent decentralisation in the perspective presented throughout the analysis of island models in this paper, similar conditions exist, including resource and research potentials. furthermore, limited research and development have been observed in the field of marine renewable energy [51] besides the development of offshore wind farms and future energy islands [23]. even though islands comprise only 1.5% of the earth’s surface [2], their potential for modelling and learning also suggests that future research should focus more on marine energy sources and demands. studies indicate marine energy to contribute up to 23% to the world’s electricity demand [52,53], additionally demonstrating the relevance of islands. however, it is not just coastal communities and islands that could benefit from both the resources and the understanding from modelling with islands emerging from this. while the share of the population living on danish islands is close to the global average, other countries, like germany, have a much smaller share; nevertheless, islands should be similarly included. programs on the international, regional or national level, such as small islands organisation (smilo), northsea interreg or the german island and hallig conference, are already making use of this and could be further researched and elaborated in energy planning [2,54]. this could result in not only a replication potential of renewable energy solutions on other islands but also an up-scaling of those to the mainland in the respective countries. this shows the global scale of the local possibilities and the value of islands, since it is the scale that ultimately matters [3]. 16 international journal of sustainable energy planning and management vol. 33 2022 rethinking islands and their models in sustainable energy planning: how inclusive local perspectives improve energy planning globally 5. conclusion understanding the potentials of islands is presented as a research gap in smart energy transitions and sustainable energy planning. while theoretical perspectives indicate a role in transition theory and multi-level governance, recent research shows different levels of understanding and new perspectives emerging. when analysing islands in past research, in ongoing political and local developments and in future needs of smart energy transitions, modelling renewable energy islands presents an important role for islands to play. modelling of islands enables the evaluation of renewable energy technologies in an island setting, but with an outside view of islands. modelling on islands addresses the limitations of the outside view and improves the modelling by including and comparing local conditions on islands. modelling from islands elaborates the potentials of island modelling by adding contextual and institutional aspects through perspectives from islands and islanders. discussing these three perspectives adds new reflections of the edges of both countries and research, concluding that modelling islands should be done with islands, from which both energy planners and islanders benefit. [41] this research thereby contributes to a new understanding of islands as places for niche innovation through transition theory by considering all perspectives, and adds transparency to energy planning coordination through multi-level governance, including horizontal and bottom-up actions. this changes the way energy planning can be understood and made more sustainable by discussing the quantitative and qualitative importance of islands and island models as well as the understanding of self-sufficiency and cross-border developments. this results in islands being given a role that is worth recognising and contributes to the coordination and strengthening of energy systems, collaboration across borders, innovation, and independence. this benefits energy planning by being inclusive of island views and limits, resulting in a reduction of emissions and limiting climate change through islands on a global scale. hence, not only countries like denmark, but also other nations with islands should see themselves as countries of islands, attributing more importance to their islands than them simply being seen as additions to these countries. the resulting recommendation of acknowledging the versatile role of islands answers the research question: modelling islands contributes to sustainable energy planning and energy transitions with potentials for coordination, collaboration, innovation, and island mode optimisation with a global impact. this is achieved when the modelling is done with islands. with the answer to the research question thereby given, it opens up possibilities for further research. therefore, modelling islands is discussed as contributing to research and new understandings of energy system modelling, energy policy, energy islands, marine development, and resilience. concluding, the energy of islands contributes to the understandings of smart energy and sustainable energy planning. this is achieved by islands playing a well-represented part in energy planning and energy being an important part of islands. islands provide a place for innovation and collaboration, as supported by theory, and overall, by improving the modelling of renewable energy. instead of only working with island models, we can see them as model islands. having a closer look at islands presents them as lighthouses on the edge and ready for the energy transition. including islands and their models in global energy transitions thereby addresses the paris agreement and the fight against climate change through greenhouse gas reductions and the decentralisation of sustainable energy in a smart way. acknowledgements this research is part of the phd stipend on modelling of smart renewable energy islands, as carried out by the author from 2018 until 2021 at aalborg university, and is recorded under the isbn 978-87-7210-883-4 [41]. this work has received funding from the eu horizon 2020 grant agreement no. 731249 as part of the smile project. references [1] united nation framework convention on climate change. conference of the parties (cop). report of the conference of the parties on its twenty-first session, held in paris from 30 november to 13 december 2015. paris: 2016. 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social dilemma; serious game; decision making. http://doi.org/10.54337/ijsepm.7549 1 introduction energy resource systems around the world are undergoing radical changes because of technological, institutional and political changes, the depletion of fossil fuel resources and climate change as well as because of global energy crises [1]. increasing distributed energy resources at the local level requires the reorganization of centralized energy systems [2]. due to the anticipated fundamental changes in energy supply technologies over the next few years, it’s crucial to coordinate investments in energy conservation initiatives with investments in the supply side. this will help prevent excessive investment in supply systems and ultimately reduce the overall costs of transitioning to smart energy systems [3]. in europe, 70% of the population lives in urban areas and consumes about 75% of the primary energy supply. to reduce the impact of energy consumption, energy communities can help address urban sustainability and energy security issues through local energy production and self-consumption. energy communities are associations voluntary established by citizens with a common interest in implementing energy efficiency measures and introducing renewable energy sources to reduce their consumption, and energy costs, and increase self-sufficiency [4] solar, biomass, and wind are the main sources of renewable energy commonly used in cities. [5]. further exploration from a single building to 2 international journal of sustainable energy planning and management vol. 38 2023 multiplayer game for decision-making in energy communities the community level allows for further improvements through sharing of energy technology and community management [6]. therefore, a single building is considered part of a sustainable and renewable community system [7]. buildings account for a large part of the world’s energy consumption and associated co2 emissions. for example, the construction sector accounts for 40% of energy consumption and 36% of co2 emissions in europe [8,9] in recent years, high-performance active and passive technologies have been developed to improve the energy efficiency and sustainability of the built environment [10]. for example, recent advances in sensor and tracking technologies have created opportunities to develop behaviour change systems because of human-computer interaction [11]. also, the recent rapid development of smart meter technology opened unprecedented perspectives in the monitoring of people’s behaviour in residential buildings and has diverse applications, for example, for modelling user behaviour, specifying design values or predicting possible loads [12]. due to the physical properties of thermal energy, information about the building’s thermal energy demand and its spatial pattern is useful for the development of climate protection measures this is evidenced by the fact that many cities in germany prepare “heat demand cadastres” thematic maps that depict the heat demand of buildings [13]. high energy efficiency can only be achieved if the impact of both technical strategies and household behaviour is considered [14]. people are a key component of a community’s energy system and therefore need to be widely involved to encourage their participation in energy efficiency and sustainability initiatives [15]. only a few publications have discussed how actions should be implemented at the consumer level to facilitate the transition of building mass populations to heat saving and energy efficient technologies in buildings [16].the “double invisibility” of energy consumption (the fact that it cannot be seen as well as it is related to daily activities) affects the effectiveness of feedback on energy consumption [17]. while energy literacy is often assumed to be a requirement for (effective) energy saving behaviour, there is little evidence in the literature on the impact of energy literacy on energy behaviour[18]. another of the prerequisites for achieving good results has been widely studied: the promotion of informing households about environmental issues, as this is an essential element in reducing emissions [19], in the adoption of technologies promoting energy efficiency [20] and in the development of sustainable transport systems [21,22]. research shows that energy literacy may be the most promising way to promote household energy saving behaviour [18]. from an energy efficiency promotion policy perspective, information programs can be useful in addressing behavioural gaps. providing more reliable information can reduce uncertainty in the decision-making process, leading consumers to make better decisions [23]. given the sociological nature of the energy community, it also faces the social dilemma of a conflict between selfish interest and the common good, since anyone who pursues the former ends up with lower results than when cooperating with the community. in strategic interactions with complex choices, the prisoner’s dilemma emerges, where individual and community gains must be decided. also, in the case of common interests, participants may face not only collective action, but also the instability of joint choice, which is affected by the heterogeneous profile of decision makers. therefore, bargaining as an element of interaction is characteristic of conflicting parties, and one of the ways to promote resource management in the energy community is through collective awareness-building platforms, through which innovative ways of citizen participation can be offered, while identifying their interests and giving them the opportunity to contribute to the solution of such sustainability issues. where a social dilemma occurs in an environment of many decision makers [24–27]. in many cases in resource management, where several interacting parties are involved, they create conditions when each user with his decision changes the environment of other users and affects his own expected results. a classic example of such potentially negative interdependence is the “tragedy of the commons” [28]. in recent decades, the world has become increasingly interconnected between nature, society, and technology, and the disciplines that manage them are also developing [29]. serious games are gaining increasing interest as a means of social learning that leverages the appeal of games and the value proposition of technology. recent technological advances have led to the introduction of realistic digital environments in which players can feel the spirit of adventure while gaining new knowledge, developing skills, and applying new competencies to achieve their goals [30]. therefore it is a relevant tool today to explore the knowledge, attitudes and behaviors international journal of sustainable energy planning and management vol. 38 2023 3 vita brakovska, ruta vanaga, girts bohvalovs, leonora fila, andra blumberga of individuals that influence energy consumption levels worldwide [31]. however, the main challenge of serious games is the potential transformation of passion and involvement into the acquisition and application of applicable knowledge decision-making. serious games must demonstrate transfer of learning while maintaining an engaging and entertaining format. a balance between fun and practical measures should be implemented throughout the game development stage [32-33]. this study focuses on testing an intervention strategy in multifamily housing blocks using a serious gaming approach, complemented by immediate player feedback in a final survey. the idea of using real-time data visualization and expressing the results in absolute numbers is a common approach. however, the integration of the social dilemma principle opened a new way of evaluating consumer behaviour, seeking a balance between selfish and communal interests. research has so far identified 34 games, of which four had aspects related to demand response and only five had aspects related to energy communities or shared energy resources. none of the games had both aspects, yet they had connections to real-life events, such as making the player’s home energy consumption affect the outcome of the game. this highlights the fact that the concepts are new and there is a demand for a serious game that covers it [34]. the research question of this study is whether the developed simulation tool a multiplayer game based on a physical system and an integrated model of role-playing elements provides its users with a gaming experience (convenience and transparency) and helps to identify and analyze players’ efforts in achieving a common goal. it is a new approach that offers a new perspective on knowledge dissemination to users, social learning, and new experience of participation in shared decision making, based on a serious game simulation model and tool. serious games are process simulations or simulations of real events designed to solve challenges and can be used to track and evaluate complex energy consumption behaviours of users [35]. research results already demonstrate that gamification significantly improves users’ knowledge, attitudes, behavioural intentions, and actual behaviour, as well as economic bill savings compared to control groups, while reward-based game design elements improve sustainable behavioural outcomes [36]. however, new ways to balance the methodological trade-off between simplicity and comprehensiveness are still being sought. a serious gaming approach can serve as an effective platform where, using interactive digital simulations, complex modelling results can be turned into information understandable to the everyday user, which stakeholders can share, discuss [28] and use as a basis for decision-making. to live up to the expectations placed on serious games, it is crucial that they reflect practice-based situations and their specific contexts. collaborative and participatory approaches are potentially useful for developing serious games that can help to express and translate existing contexts, social conflicts, and institutional responses into a game context [37]. although the benefits are recognized in the literature, researchers emphasize that collaborative and participatory design approaches to serious game development have still attracted only limited academic attention [38–40]. the essence of this study is to bridge the gap between academic and real-world approaches by rethinking game construction and suitability to the requirements of energy communities. serious games are widely studied in the literature and the energy sector is one of the areas where various serious games are implemented. while aspects of a power distribution system may seem self-explanatory to engineers, the concepts and system architecture can be difficult for non-specialists to grasp. therefore, many serious games focus on universal and simple concepts, such as energy conservation and optimal use of electricity in people’s homes. only a few games go far beyond entertainment-based approaches and focus on joint decisions, such as the use of a shared energy resource, so that the actions of each participant do not jeopardize the quality of life and the availability of resources. another major drawback of the developed games is their public availability after the conclusion of the research project studies have concluded that serious games are a viable solution to increase awareness of energy consumption habits, but the value of the tool decreases rapidly if it is available to a certain group of participants for a limited time [34]. empirical results from research to date show that people exhibit loss aversion when making decisions under uncertainty, assigning much greater importance to the loss than to an equivalent uncertain gain. in the context of energy efficiency, loss aversion can partly explain why consumers do not make profitable investments, as 4 international journal of sustainable energy planning and management vol. 38 2023 multiplayer game for decision-making in energy communities they weigh fixed upfront costs (losses) much more strongly than uncertain future benefits, even if they are of equal value in principle [23]. energy communities are mainly established with the goal of producing renewable energy resources this does not directly save energy but decarbonizes the necessary energy. residents can share an infrastructure that includes both solar panels and technologies for the production of thermal energy or hybrid systems [41,36] research demonstrates that social aspects integrated in system dynamic models considered include behaviour and lifestyle changes, social acceptance, willingness to participate in socio-economic measures [42]. the goal of the study is to develop a dynamic model to simulate energy efficiency measures and on-site renewable energy sources in an energy community located in multifamily buildings and develop a multi-player serious game prototype to serve as a basis for multiplayer game. 2. methodology within the framework of the study, an experimental game was developed a simulation tool based on a system dynamics model created in the stella architect program for playing the role of decision-makers involved in social dynamics [43]. it includes an internet-based interactive interface with the necessary functions, as well as functions for tracking and processing data. a system dynamics modelling approach is used to create a model structure of physical energy demand and supply systems that is individual to each energy community. the tool is developed based on the test results of a single-player simulation tool previously developed in this study, adding more output variables and input data needed to build an energy community. the player must make decisions in three areas of energy efficiency measures: energy saving, energy production, and transport usage patterns. energy-saving measures include insulation the roof, walls, and basement of buildings (specifying the thickness of a predefined thermal insulation material), replacing existing electrical appliances with more energy-efficient ones, building a ventilation system, replacing windows, as well as installing smart devices. users have the option to indicate that they are willing to change their behaviour by changing the room temperature as a minimum. energy production measures include the installation of solar panels on building roofs, defining their proportion and intensity of deployment. studies have found that the self-consumption ratio does not necessarily have to be close to 100% for the investment to remain economically viable [44], so the user has the option to change the area and proportion as he sees fit. as the final sector of decision making is the review and updating of transport usage habits, this level should also indicate the willingness to share your private vehicle with the community. the primary goal of developing the tool is to bring together participants and experimental systems to test hypotheses and learn about subjects’ mental (behavioural) models in decision-making tasks. the players must decide on measures from a list of proposed energy efficiency and renewable energy solutions based on their preferences. from the beginning, each player sees only the results of their choices. later, he has the opportunity to see the other players’ choices that affected the overall result. thus, an understanding is formed that the selfish interests of each individual can either improve or (most likely) worsen the overall result. the model integrated in the tool envisages a social dilemma – the balancing of selfish (economic) interests (e.g. savings, payback time, etc) with community interests (e.g. heat, electricity and transport emissions etc), influenced by heterogeneous consumer motivation, social interaction, and individual adoption decisions over time. players must evaluate their decisions and their impact over several rounds and adjust until a decision satisfies the wishes of the entire community (players involved). the developed model provides tracking and reflection of user behaviour in real time. as a potential tool, the target audience is residents of certain multi-apartment residential buildings who delegate house elders to represent their community within the game. when starting the game, the user creates his table 1: energy efficiency measures energy efficiency energy production transportation • insulation of roof, walls, and basement • window replacement • ventilation replacement • appliances replacement solar panels by indicating: • roof area used for production • proportion of solar panels from the area used for roof production • frequency of use • travel distance • vehicle sharing international journal of sustainable energy planning and management vol. 38 2023 5 vita brakovska, ruta vanaga, girts bohvalovs, leonora fila, andra blumberga username and joins a group created by a single lead player who has no additional privileges other than creating a group and giving it a name. before starting the game, users are familiar with the game annotation, which says that in this simulation game, players can search for different solutions to build their own energy community. each player can use different measures to reduce energy consumption, develop energy production, or switch from private to shared vehicles. the potential of energy communities increases in self-consumption of renewable energy, community sharing of private vehicles, and reduced investment payback time due to energy redistribution. the surplus energy produced is distributed among all the buildings in the community. to improve traceability and reduce the possibility of interpretation as much as possible, a video instruction on the execution of the tool is placed in the tool. if necessary, the user can watch it again, because the video is in a publicly available format on the youtube channel [45]. in the next step, the player enters data on the consumption of energy resources of his residential house the existing room temperature (based on which the tool calculates the required amount of heat energy), as well as the annual consumption of electricity and hot water per 1 person. the user also specifies the type of existing heating and the number of floors and staircases of the building, so that the model calculates the number of inhabitants of the building and the related amount of electricity and hot water consumption for the house. these data are the basis for the calculation of the existing energy consumption and provide the user with the first immediate feedback on the energy demand of the building he represents. in addition, the user also indicates transport usage habits the number of kilometres travelled per day and the frequency of car use per week. table 2: decision making indicators, including both individual and community interests specific financial percentages absolute heat consumption, kwh/m2 heating, kwh/m2 electricity, kwh/m2 energy, kwh/m2 investment, eur/m2 costs, eur/ year heat costs, eur/ year transportation costs, eur/ year transportation costs, eur/ 100km investment, eur savings, eur/ year payback time, years change in heat consumption, % change in electricity consumption, % change in electricity costs, % self-sufficiency share, % self-consumption share, % change in car usage, % heat consumption, kwh transport energy consumption, kwh heat emissions, t electricity emissions, t transport emissions, t surplus heat produced, kwh surplus electricity produced, kwh figure 1: registration of nickname and the session title figure 2: tutorial of the game 6 international journal of sustainable energy planning and management vol. 38 2023 multiplayer game for decision-making in energy communities after entering the initial data, by pressing the “ready” button, the user gets to the next level of the game, where he sees the first results about the energy efficiency of the building he represents, which is demonstrated by a series of calculated indicators heat and electricity consumption and balance, the proportion of cars represented in the car park, the structure of expenses, investment, payback time, and volume of issues. the first and the last should be mostly attributed to the interests of the community, while the other indicators reflect more the selfish, economy-based interests of the players, which, according to previous studies, are superior to the common interests of the community. under the data visualization window, various specific, financial, absolute and percentage indicators are visible, which the player can view and select the ones that are most relevant to him. after familiarizing with the visualization of the results, the player must make choices in 3 areas of energy efficiency measures: energy saving, energy production and transport usage habits. once the above decisions are made, the player presses the “ready” button and thus, without changing the visual layout of the tool, sees updated data reflecting the results of his choices at the level of his building. the player can press the “community” button, where they can see the choices made by all housing representatives in the game and their impact on the common goals of the community towards the achievement of various economic and environmental indicators. the use of this visualization also allows us to contribute to research on how well people can extract information from a graphical representation, such as a line chart or a bar chart, as this has been little studied so far [46]. this makes this game different from a single-player game the user sees not only his own, but also the decisions and consequences of other players and sees how it affects the overall scores. this forces him to evaluate his decisions and, knowing the goal, possibly sacrifice selfish interests. the structure of the tool allows you to track the participant’s decisions in each of the sessions and observe which parameter changes make him give up his interests in the name of the community. within the framework of the game, the participants delegated representatives of residents of various apartment buildings, using the possibilities offered by the tool (setting a common goal and a chat room as a real-time communication channel), cooperate by making choices about various energy efficiency practices. a communication panel can facilitate integrative decision-making, as this way players can not only easily communicate about common issues, but also share their ideas. this promotes player convergence and is a particularly appreciative format in real-world situations where physical contact is limited, such as during the covid-19 pandemic [47] or people are physically far from each other. figure 3: input values section figure 4: full functionality of the game interface figure 5: summary of community decisions international journal of sustainable energy planning and management vol. 38 2023 7 vita brakovska, ruta vanaga, girts bohvalovs, leonora fila, andra blumberga the game is divided into several rounds, which are separated from each other with the help of the “ready” function after pressing it, the participants immediately see the results of their decisions and, using the “community” functional button, see the collective effect of the decisions made by all players on the achievement of the common goal. if this is not satisfactory, the players can agree to play another round with the help of the chat room. the number of rounds of the game is not limited it can continue until everyone is satisfied with their and the collective choice. this approach is also based on research that cognitive information processing should be considered more in behavior change systems. common sense is strongly influenced by preexisting knowledge structures (i.e., mental models and energy literacy) and depends on the analytical skills of users, which can vary greatly between individuals [48]. the system dynamics model integrated in the tool foresees a social dilemma – the balance of selfish (economic) interests with community interests, which is influenced by heterogeneous consumer motivation, social interaction, and individual acceptance decisions over time. thus, a real-world scenario is included where, when one player makes selfish choices, the overall results move away from the goal set by the energy community. the goal of the players with their choices and communication is to achieve optimal decision-making based on the interests of the community. 3. results the results of the simulation show that the online tool prompts players to make decisions and encourages cooperation despite a complex set of parameters that require focus on the results of previous sessions. the tool allows players to experiment with their choices and see real-time results. the interactivity of the tool promotes social learning in an environment where players acquire new knowledge based on their actions. although the purpose of the study was to verify the functionality of the tool and within it representatives of the academic sector who are considered competent in the field of energy efficiency were selected as the testing group of the developed simulation tool, their feedback shows the potential of the tool’s application in real conditions. this can be explained by the fact that the selected target group identifies itself as apartment owners who must make decisions about the energy efficiency of their homes and the maintenance or increase of their value in the housing market. 29 participants took part in the testing, and at the end they also filled out evaluation forms, which allowed one to get players’ opinions about the functionality and usefulness of the tool. 3.1. results of the test the participants were divided into 6 teams of 4-5 players per team and joined the tool game by entering their (fictional, non-identifiable) username and their team name. the simulation took place after listening to the instruction, which explained the basic principles of the tool and the sequence of operations. 55% affirmed that the instruction is exhaustive for using the tool, 16% admitted that they were not familiar with the guidelines, while the rest indicated the need for several improvements, for example, it should be emphasized that the parts of the number are separated by a period instead of a comma, to give a separate mini-instruction at the beginning of each step (so that you don’t have to keep everything in mind) and the explanation should be given a little slower. as part of the test, the teams played 4-9 sessions, the number of which depended on the team’s goal and internal agreement. evaluating the obtained data, it can be concluded that, based on the initial setting, all teams aimed to reduce the co2 level, therefore it can be considered that the teams were able to cooperate with each other through the tool to achieve one of the goals of the energy community. 3.2. tracking users’ decisions the players agreed to reduce co2 emissions, which, by consistently making decisions, also succeeded after the 4th session, a reduction of co2 emissions from an average of 618t to 331t was achieved. the largest decrease was by 80% (from 604t to 123t) in a total of 9 sessions, figure 6: chat window for communication among players 8 international journal of sustainable energy planning and management vol. 38 2023 multiplayer game for decision-making in energy communities while the smallest was by 43% (from 889t to 506t) in a total of 4 sessions. as another basic parameter, the players put forward cost reduction it also decreased by 4 million after the fourth session. for 2.6 million eur. the largest decrease was by 98% (from eur 9.7 million to eur 0.2 million) in a total of 6 sessions, while the smallest was by 41% (from eur 0.65 million to eur 0.38 million) in a total of 6 sessions. data processing shows that both of the above indicators decreased with each session, except for one team, which saw an increase in pay-outs in the last session played. on the other hand, the total amount of investments increased with each session, on average starting from 1.2 million. in the 2nd session to 1.9 million in the 4th session. the largest increase was 91%, while the smallest was 25%. a team made choices that reduced the total amount of investment by 40% while still maintaining a positive trend in reducing co2 emissions and costs. the average payback time was 5-6 years, where at the end of the game, the highest was 11 years and the lowest was 2 years. three teams managed to finish the game with a payback period of 0 years, two in the ninth session, one in the sixth session. the study observed that the number of opportunities included in the tool to change their habits, for example, to lower the room temperature, is relatively minimal. the specified room temperature varied between 18 and 24 degrees celsius, indicating a low willingness of players to lower their daily comfort, instead choosing to take other measures to improve energy efficiency, while figure 7: cumulative emissions of co2 generated during the simulation figure 8: dynamics of reduction of costs during the simulation figure 9: investments to energy efficiency measures during the simulation figure 10: payback time of investments during the simulation international journal of sustainable energy planning and management vol. 38 2023 9 vita brakovska, ruta vanaga, girts bohvalovs, leonora fila, andra blumberga being aware that lowering the temperature can lead to a reduction in energy consumption. one team agreed to reduce the temperature by 1-2 degrees in the last session. one participant did this in round 5, reducing by one degree, and in the final round, another 3 players did it, resulting in a decrease in average temperature compared to the initial choices. players of all teams reduced the temperature by 27.5% with their choices. the results of the simulation show that the players changed their decisions based on the agreement on the achievement of a common goal (for example, co2 reduction) and that in the following sessions they got confirmation that the players are ready to sacrifice their own interests. 3.3. feedback of the online survey in general, 81% positively evaluated the tool as a tool for obtaining information, while the rest of the respondents indicated that the positioned format (game, competition) did not allow it to be perceived as applicable in real conditions, and if they gave confidence about the reliability of the processed data, then it could be evaluated more positively. in response to the question whether the displayed information was transparent, 70% answered in the affirmative, while the rest of the comments were basically related to the ease of use of the chat room and the desire to see several graphs at the same time. when commenting on the comprehensibility of the calculations received, 48% answered in the affirmative, 18% in the negative, while some indicated that they had not delved into the explanation of the calculations. similar answers were also given regarding the reliability of the calculations. 67% of participants assessed the information reflected in the tool as easy to understand, while 14% answered negatively, explaining it with the functionality of the chat room, not offering the opportunity to see the results of all community members at the same time, the need to visually see the common goal during the entire game, as well as the desire to see explanations of how individual parameters will change the community the results of decisions. as was additionally stated the desire to see current support mechanisms for energy communities to carry out joint activities. in response to the question whether this tool would potentially allow the residents of residential buildings in the block to make an optimal decision, 41% answered in the affirmative, 19% rejected, and the rest of the considerations were related to the players’ individual (selfish) interests (for example, the fiscal impact on the household budget) and the need to provide traceable data (results of the decisions made) during the entire play. when evaluating their main motives for engaging in the game, respondents mentioned the desire to reduce consumption, take actions to live in environmentally friendly conditions, create a dialogue with the community, achieve joint action and transform cooperation into real results that affect the quality of life. also, the spirit of competition could be observed in the answers, for example, by experimenting to conclude, how good results can be achieved or try as many different combinations as possible. at the end of the survey, respondents indicated that the developed tool is suitable for players with prior knowledge of energy efficiency issues who are motivated to take action to improve the situation, but after the first play (decisions made), the community should initiate a discussion about the results and how to improve them together. commenting on the impact of the tool on building an energy community, the respondents indicated that the tool helps to better understand the choices made and their impact on energy efficiency indicators, the diversity of player motivation and behaviour within the same community on the way to achieving a common goal, modelling different scenarios and seeing the overall results in real time, as well as enables communities to plan activities that improve the overall situation and promote energy independence. as an additional value, the respondents pointed out the figure 11: case of the temperature decrease decision within a team 10 international journal of sustainable energy planning and management vol. 38 2023 multiplayer game for decision-making in energy communities reflection of the real situation how the failure of one house can affect the community. certain players indicated that they were motivated to act by seeing themselves as one of the biggest consumers of energy. 4. discussion the developed model allows players to engage in a real decision-making process on various energy efficiency practices and try different options to achieve a common goal. compared to the first single-player game, which used fixed input data for a specific block in the historic centre of the city, the multi-player tool allowed for manual input of variable data, allowing the results to be closer to real conditions. however, several limitations arise during this study. 4.1. suitability of the model for a specific block of apartment buildings the findings of this study show that the “energy community game” is applicable for building energy communities, but the involvement of stakeholders in the system dynamics model in decision-making requires adjusting the calculations to the appropriate type of houses, climate conditions, the climate policy of the specific country, energy costs, as well as the mentality and level of awareness of the players, to result in progress towards jointly defined goals. this question will be addressed in the next development phase, but other serious game developers should also pay attention to the fact that more universal data needs to be separated from specific data, thereby improving the accuracy of the simulation tool’s performance. 4.2. suitability of the model to a specific profile of the target audience another limitation is users’ basic knowledge of energy efficiency and renewable energy technologies. on the other hand, the results of the simulation of the same tool among the population may differ due to the knowledge and mental behaviour model, because the daily priorities are not concerned with property value and making investments as efficiently as possible, even though because of the energy crisis, people’s interest in energy production and saving measures has increased significantly. the developers of the tool suggest involving apartment owners (not tenants) in energy community related simulation games the ones act as responsible and careful managers in their daily lives and take into account medium and long-term perspectives when making decisions. 4.3. preparation of basic information before simulation game the study shows that before participating in a tool with many players, it is recommended for homeowners to play a simplified, single-player game to understand the basic principles of the tool’s construction, improve knowledge about various energy efficiency practices, which they will also encounter in the game with many players. it is necessary that, at the time when the delegated representatives of the residents of multi-apartment residential buildings will participate in the simulation of the energy community tool, they will have gained the necessary understanding of energy efficiency measures, if necessary, they will have agreed with their community on the desired energy efficiency measures, as well as determine the possible limits in decision-making thus, he would be able to fully participate in a collective game with representatives of other residential buildings in his block. 4.4. factors influencing player behaviour within the framework of the research, one of the central issues of the discussion is the change of the players’ behaviour pattern based on the information they get during the game, for example, information about the choices of other players or the data obtained because of the player’s own choices. also the test of this particular simulation game proves that the player’s behaviour changes, depending on the information he gets during the game, because the principle of social dilemma works a conflict between selfish (economic) and community interests. the results shows that the players would have a different behaviour pattern if they did not obtain information about the choices of other players and their impact on the achievement of the common goal after each of the sessions. 4.5. aspects of socio-economic conditions during the testing of the tool, there was an in-depth interest in various parameters and their impact on such indicators integrated in the tool as the total energy consumption, the amount of energy produced, energy independence, the number of necessary investments and the payback period. it is assumed that the readiness of the players to go deeper and play the game as close to reality international journal of sustainable energy planning and management vol. 38 2023 11 vita brakovska, ruta vanaga, girts bohvalovs, leonora fila, andra blumberga as possible can be explained by the context of the specific circumstances the crisis of energy resources and the rapid rise in prices related to it. when summarizing the results of serious games, context analysis must be performed as it explains the players’ motivation and level of engagement, and therefore the achievable results. 5. conclusions and perspectives the research question was focused on analyzing the user experience of the developed simulation tool how easy and transparent it was for users to use the tool and how successful serious game developers were in understanding player efforts to achieve common goals, as well as analyzing the data obtained. the obtained results can be evaluated as practical and useful for the further improvement of the simulation tool, so that it can be passed on to a wider range of users who were interested in or familiar with energy efficiency issues daily. the insights gained within the scope of the study are a valuable source of information for serious game developers in the context of energy community development, as they provide insights into user experience and issues related to data acquisition, analysis, and further utilization. the tool developed as part of the research is useful for the residents of the block of apartment buildings to model their energy efficiency options, while for the administrators of the tool, to predict consumer behaviour patterns in making different decisions at different values of design parameters. the “black box” tool allows you to analyse useful information about the decision-making factors of each player. secondarily, the tool can be considered as a tool for promoting social learning, because during the game players review their decisions and improve them based on acquired knowledge and experience. in perspective, the tool can be positioned as an online platform for discussion and joint decision-making in situations faced by energy communities. this tool is being developed as a support tool for policymakers to make decisions about the diversity of business models in the context of energy community development, as it has the potential to test the socio-technical performance of systems over time, where system behaviour is subject to complex and dynamic individual human behaviour and social interactions. considering the further possible application in other disciplines, the potential of the tool is to use it for decision-making on wider areas, for example, solving social issues in the community, sustainable development of territories, balancing economic interests in local economies, where the interests of the community are regularly opposed to the interests of entrepreneurs (for example, active and leisure tourism development along with the quality of life of residents in their homes). the results obtained can potentially contribute to the development of effective energy policies and business models, which are useful for decision makers and policy makers, laying the foundation for radical technological changes and faster development of energy communities. acknowledgement this study has been funded by the latvian council of science, project ‘bridging the carbon neutrality gap in energy communities: social sciences and humanities meet energy studies (bridge),’ no. lzp-2020/1-0256. references [1] t. szép, t. pálvölgyi, and é. kármán-tamus, ‘indicator-based assessment of sustainable energy performance in the european union’, int j sustain energy plan manag, vol. 34, pp. 107–124, 2022, https://doi.org/10.54337/ijsepm.7055. 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https://doi.org/10.1016/j.energy.2020.117485 https://doi.org/10.54337/ijsepm.7478 https://doi.org/10.54337/ijsepm.7478 https://doi.org/10.2478/rtuect-2022-0046 https://doi.org/10.1016/j.solener.2018.05.058 https://doi.org/10.1016/j.solener.2018.05.058 https://www.youtube.com/watch?v=c4poi-xgdii (accessed may 23, 2023) https://www.youtube.com/watch?v=c4poi-xgdii (accessed may 23, 2023) https://doi.org/10.1109/tvcg.2014.2346984 https://doi.org/10.1016/j.scs.2022.104220 https://doi.org/10.1016/j.scs.2022.104220 https://doi.org/10.1007/s12053-017-9555-y/figures/2 https://doi.org/10.1007/s12053-017-9555-y/figures/2 04_927-3008-2-le.qxd 1. introduction increasing amounts of intermittent renewable energy sources (res) such as wind power and solar power are international journal of sustainable energy planning and management vol. 04 2014 31 being integrated into energy systems worldwide [1]. an example of this is the european union (eu), where the political goal is to increase res in the energy sector to * corresponding author e-mail: sorknaes@plan.aau.dk international journal of sustainable energy planning and management vol. 04 2014 31–42 small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve ��������� �� ����� �� ��� � ��� ��������� ����� ��� ��������������� ������� � ��� �������� � ��� ����� � ������������ �������������������� ���� � ������� ������������������ ���� !"��# ��� ���� ����$%��&'�#�%(�� (��������� �����������)���� ���� *!"����+��(,�� ��-�.��/�����(,�������β��0���!1*2����3�������-�� � �� abstract increasing amounts of intermittent renewable energy sources (res) are being integrated into energy systems worldwide. due to the nature of these sources, they are found to increase the importance of mechanisms for balancing the electricity system. small-scale combined heat and power (chp) plants based on gas have proven their ability to participate in the electricity system balancing, and can hence be used to facilitate an integration of intermittent res into electricity systems. within the eu electricity system, balancing reserves have to be procured on a market basis. this paper investigates the ability and challenges of a small-scale chp plant based on natural gas to participate in the german balancing reserve for secondary control. it is found that chp plants have to account for more potential losses than traditional power plants. however, it is also found that the effect of these losses can be reduced by increasing the flexibility of the chp unit. keywords: combined heat and power, balancing reserve, electricity market url: dx.doi.org/10.5278/ijsepm.2014.4.4 abbreviations chp = combined heat and power dh = district heating tso = transmission system operator ht = hochtarif nt = niedertarif mol = merit order list nhpc = net heat production cost pcr = primary control reserve scr = secondary control reserve tcr = tertiary control reserve res = renewable energy sources eu = european union entso-e = european network of transmission system operators for electricity 32 international journal of sustainable energy planning and management vol. 04 2014 small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve 20% of the gross final consumption by 2020 [2]. in 2012 res accounted for 14.1% of the consumption in the eu, increased from 8.3% in 2004 [3]. within the electricity sector especially intermittent res have experienced a large increase in the eu [4]. while intermittent res have shown promising results with respect to reaching the eu political goal, res also introduce different challenges to the electricity system. due to the more unpredictable nature of these sources, they are found to increase the importance of mechanisms for balancing the electricity system [5−7]. balancing of the electricity systems is paramount, as electricity production must always equal electricity consumption to ensure a stable electricity system. thus, those responsible for the electricity system balancing have kept reserves ready for balancing. within the eu, the task of balancing the electricity system falls to the transmission system operators (tsos). in accordance with the eu directive 2003/54/ec, the tsos have to obtain balancing reserves through market-based procurements that are transparent and non-discriminatory [8]. the specific organisation and utilization of the balancing reserves vary between countries; however, the european network of transmission system operators for electricity (entso-e) defines three types of balancing reserves [9]: − primary control reserve (pcr), used to gain a constant containment of frequency deviations. the activation time of units will generally be up to 30 seconds. this reserve is also known as frequency containment reserves. − secondary control reserve (scr), used to restore frequency after sudden system imbalances. the activation time of units will typically be up to 15 minutes. this reserve is also known as frequency restoration reserves. − tertiary control reserve (tcr), used for restoring any further system imbalances. the activation time of units will typically be from 15 minutes to one hour. this reserve is also known as replacement reserves. the pcr is set by entso-e at 3,000 mw for the synchronously interconnected system of continental europe [9], where each country contributes with an agreed amount of capacity. the practical utilization of the scr and the tcr, however, differs significantly between countries. the tcr is the primary balancing reserve in, e.g., denmark, whereas the scr is the primary balancing reserve in, e.g., germany [10]. the difference in balancing procurement occurs partly due to differences in planning procedures by the tsos in the two countries. both these countries have a relatively high integration of intermittent res in their electricity system. in denmark, wind power and solar power accounted for 33.8% of the total electricity production in 2012 [11], and in germany they accounted for 12.2% in 2012 [12]. as germany is the largest electricity consumer [1] and producer [13] within the eu and also an important transmission country for electricity, the development of the german electricity system is of particular importance to reaching the eu’s goals. besides the goals for res, the eu also has a goal of reducing the primary energy consumption by 20% by 2020 [2]. as a part of reaching this goal, the eu promotes combined heat and power (chp) production. in germany, the generation of electricity from chp plants has increased from 9.3% of the gross electricity generation in 2004 to 12.6% in 2012 [14]. a significant part of this increase is due to an increasing capacity of small-scale chp plants [15]. as argued by lund [16], the capacity of large inflexible production units, which traditionally have delivered balancing to the electricity system, is expected to be reduced alongside the increase in intermittent res. this in turn will make it increasingly more important for flexible units to help maintain the electricity system stability. small-scale chp plants based on gas have proven to be flexible, and have, in other countries, demonstrated their ability to participate in the electricity system balancing [17]. in germany, the scr is currently mostly provided by large-scale power plants [18]. it is therefore relevant to investigate how flexible smallscale chp plants can participate in the balancing of the german electricity system by participating in the market for scr. other papers deal with participation in the german scr. thorin et al. [19] describe a tool based on mixed integer linear-programming and lagrangian relaxation to simulate a district heating (dh) plant with steam turbines, gas turbines and fuel boilers participating in the german spot market and providing scr. thorin et al. do not include heat storage systems, and do only include a simple participation in the scr. koliou et al. [20] investigate the possibilities of having demand response participate in the german balancing markets. müsgens et al. [21] analyse the market design and behaviour of participants in the german tcr and scr, and in doing this develop a simple approach using the spot market prices for estimating the costs that a power plant could experience by offering capacity on either of these markets. however, müsgens et al. do not include chp plants in the discussion and do not use the method in simulations of the operation of a plant. no research has been found that directly deals with small-scale chp plants participating in the german scr. the goal of this paper is hence to fill this gap in the research by investigating and discussing the possibilities for smallscale chp plants to participate in the german market for scr using the current rules for this market. it is the goal to provide an understanding of the different challenges in the daily operation of traditional power plants and small-scale chp plants, respectively, highlighting how the rules for balancing reserves can limit or encourage the participation of small-scale chp plants. in this paper, a method for simulating a small-scale chp plants operation in the german scr is presented. the method is used to simulate a case plant. the potential gain for the plant from having an increase in the flexibility of the chp unit is also examined. 2. the german secondary control reserve the german scr receives payment for both capacity and activation, and the bids offered in one week cover all of the following week and are final after the clearing. capacity bids are eur/mwe/week and activation bids are eur/mwhe. the winning bids are cleared using the pay-as-bid principle, where each winning participant is settled according to that participant’s bid. the market is asymmetric, meaning that bids are separated into upward regulation, used when the system is short, and downward regulation, used when the system is long. two periods are used in the scr; hochtarif (ht) being the period from 08:00 to 20:00 on workdays, and niedertarif (nt) being all periods outside of ht. bids are separate for upward and downward regulation, and for ht and nt; as such four different products are traded in the scr. a bid has to be at least 5 mw; however, it is possible to pool units in order to reach this amount [18]. the scr is cleared every wednesday for the next week starting next monday. before the clearing day, the four german tsos publish the capacity needed for the coming week. the four german tsos are 50 hertz, amprion, transnet bw and tennet. the clearing day may in some weeks change due to german national holidays. on the clearing day, only the offered capacity payments are used to arrange the bids in a merit order list (mol) where the cheapest capacity bids are selected first, until the amounts needed by the german tsos are reached. an exemption to this rule is if a tso needs units in a specific area in order to ensure a stable grid; then a more expensive unit can be chosen before a less expensive unit. the most expensive winning bid is reduced in size, if the needed amount of capacity is surpassed by this unit. activations in the scr must start within 30 seconds and be fully activated within five minutes. similar to capacity bids, the activation bids are arranged in a mol where the cheapest activation price is activated first, until the needed amount is reached. again, conditions in the grid can result in a more expensive unit being activated before a less expensive unit [18]. in 2013, deviations from the activation mol occurred for periods totalling 2 days, 1 hour and 49 minutes [22]. 2.1. public data for the german secondary control reserve after the clearing day, the tsos publish all winning bids in anonymised form, alongside the bids that were not selected due to grid stability needs. for each bid, the capacity offered, the capacity price bid, the activation price bid and whether the bid was accepted are shown. the bids are separated into each of the four products, but not according to control area. the four german tsos continually publish the amount of scr activated in mw for both upward and downward regulation in 15-minute periods. within each 15-minute period, both upward and downward regulation can occur [23]. as the capacity payments for each week are publicly available, it is possible to use the data for capacity payments directly in the simulations. as described in section 1, other studies have investigated the potential income of distributed units in the scr, but these have only estimated the income from capacity payments. in this study, activations are included in the simulation in order to estimate the potential effect of activations. however, the german tsos do not publish the figures of payment for activation of the scr for each 15-minute period. thus, a method for estimating this is devised. 2.1.1. estimating activation prices in order to estimate activation prices in the scr, several assumptions must be made. firstly, it is assumed that all international journal of sustainable energy planning and management vol. 04 2014 33 peter sorknæs, henrik lund, anders n. andersen and peter ritter activations are chosen solely based on the price of activation, and activations of a more expensive unit due to grid restrictions are not included. secondly, it is assumed that activations cover the full length of each 15-minute period; however, activations do not necessarily follow these 15-minute periods. thirdly, if the activation amount in one direction in a 15-minute period is less than 5 mw, then this direction in that period is assumed to have no activations. this assumption is made to reduce the number of activations in periods in which there are clearly no new activations. the marginal activation price in each 15-minute period is then estimated by choosing the cheapest activations until the activated amount for the whole of germany is reached. the last activated bid is reduced in size, if by activating this bid the registered activated amount is surpassed. through this approach, the average and marginal activation prices for each 15-minute period are found. due to the uncertainties described for this method, the method cannot be used to estimate the potential income from an actual scr participation, but can be used to highlight how different technologies would operate differently in the scr. 3. simulation approach as a case, a natural gas fired small-scale chp plant has been simulated. the simulated period is 2013. as chp units will normally be built based on their feasibility in the wholesale market, a plant set-up is chosen based on its feasibility on the german wholesale market. the chosen plant set-up is based on the plant with one 4 mwe chp unit described by streckiene . . et al. [24]. streckiene . et al. analyse the feasibility of several chp plants with thermal storage systems traded on the german day-ahead wholesale market, epex spot, from here referred to as spot market. the chosen plant set-up was by streckiene . et al. found to be feasible on the spot market. as the plant is generic, the results are not affected by local conditions that could affect the results when specific plants are used, making it easier to see general tendencies in the results. the modelled chp plant has one natural gas fired 4 mwe chp engine with a thermal capacity of 4.7 mwth and an overall efficiency of 87%. besides the chp unit, the plant is also equipped with one natural gas fired boiler with a thermal capacity equal to the peak heat demand and an efficiency of 91%. besides the production units, the plant is also modelled with a thermal storage system of 650 m3 corresponding to 30 mwhth. the plant delivers ex plant 30,000 mwhth to a local district heating system, and must always cover the heat demand in the district heating system. the only differences between the plant described by streckiene . et al. [24] and the plant simulated for this paper is that the electricity market prices, the temperature data used for distribution of the space heat demand through the year, the subsidies and the costs have all been updated to 2013 figures. see table 1 for the economic assumptions for the plant described by streckiene . et al. and the 2013 version used in this paper. the updated natural gas price, co2 certificate price, net using bonus and starting cost are assumed values based on the experience of the authors. as can be seen in table 1, natural gas price and net using bonus are higher in the 2013 version, whereas co2 certificate price and starting cost are lower. the net using bonus is a payment for avoided grid costs where the size of the payment depends on the connections’ voltage level, connection point (substation or cable) and the grid costs of the distribution grid operator. this value varies quite significantly depending on where in germany the chp unit is connected; e.g., in schwäbisch hall in southern germany it is 4.7 eur/kwh [25], and in magdeburg in eastern germany it is 9.9 eur/mwh [26]. the value used here is an assumed value. it is assumed that the chp plant also receives the socalled kwk-zuschlag. the kwk-zuschlag is an electricity production subsidy given to owners of chp units for the first 30,000 hours of operation. the size of the subsidy depends on whether the unit went into operation before or after the 19th july 2012 and on the electric capacity of the chp unit. it is here assumed that the chp unit went into operation after this date, and it receives 54.1 eur/mwhe for the electricity production of the first 50 kwe of capacity, 4 eur/mwhe for the capacity between 50 and 250 kwe, 24 eur/mwhe for the capacity between 250 and 2,000 kwe and for the capacity above 2,000 kwe the subsidy is 18 eur/mwhe [27]. thus, the modelled 4 mwe chp unit will receive a kwk-zuschlag of 22.18 eur/mwhe for the first 30,000 hours of operation. the chp unit is simulated as traded both on the spot market and the german scr. as scr is traded several days before the actual delivery and the trade on the spot market is traded day-ahead, the chp unit will always be traded into the scr before it is traded 34 international journal of sustainable energy planning and management vol. 04 2014 small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve on the spot market. in order to estimate the gain of increased flexibility of the chp unit, two different capabilities for the technical flexibility of the chp unit is made. for the reference capability, it is assumed that the chp unit must be in operation in the periods where scr is won. in these periods, the chp unit is traded on the spot market with the lowest possible bid, meaning it will always win trade on the spot market in these periods. epex-spot is organised as a marginal price auction, where the market is cleared based on the most expensive winning bid [28]. trading the chp unit on the spot market is assumed to never affect the market price. if any non-usable or non-storable heat is produced when the chp unit is forced to operate to deliver scr, this heat is rejected. for the scr trading, it is assumed that the plant is part of a pool with the same bid as the plant, and the plant therefore only needs to offer part of the minimum requirement of 5 mwe. for the reference capabilities of the chp unit, it is assumed that the plant offers 1 mwe in the scr, meaning in periods where upward scr is won, the chp unit will trade 3 mwe on the spot market, keeping the remaining 1 mwe ready for activations in the scr. in periods where downward scr is won, all 4 mwe will be traded on the spot market; thus, in periods where the chp unit is activated, it will be part-loaded to 3 mwe. it is assumed that part-loading the chp unit does not affect its efficiency. it is assumed that the unit must always deliver the amount traded in the scr and it cannot rely on the other plants in its pool to deliver this amount. the plant is assumed not to have breakdowns of its units in the simulated period. for the increased flexible capability of the chp unit, it is assumed that the chp unit does not have to be in operation in order to deliver scr. currently, the german tsos require units delivering scr to be in operation in periods where scr is won. however, a simulation of the increased flexible capability of the chp unit shows the maximal potential gain from increasing the flexibility of the chp unit. with increased flexible capability of the chp unit, the full capacity of the chp unit, 4 mwe, will be traded on the scr. hence, the chp unit will not be traded on the spot market in periods where upward scr is won, and in periods where downward scr is won, the chp unit’s full capacity is traded on the spot market. the chp unit will be simulated as only trading in one direction at a time, resulting in a total of four scenarios: scenario 1: reference capability, where the chp unit is only traded as upward regulation on the scr. scenario 2: increased flexible chp unit, where the chp unit is only traded as upward regulation on the scr. scenario 3: reference capability, where the chp unit is only traded as downward regulation on the scr. scenario 4: increased flexible chp unit, where the chp unit is only traded as downward regulation on the scr. income from heat sales is not included as it is the same in all scenarios. in periods where scr is not won, the chp unit is traded on the spot market, if the resulting heat production can be either used or stored. outside won scr periods, the chp unit will be operated in blocks of at least 3 hours. the operation of the chp plant is simulated using energypro version 4.1. energypro is a simulation tool developed primarily for simulating district heating plants. the simulation objective of energypro is to minimize the net heat international journal of sustainable energy planning and management vol. 04 2014 35 peter sorknæs, henrik lund, anders n. andersen and peter ritter table 1: economic assumptions of the chp plant described by streckien et al. [24] and the updated 2013 version of the chp plant used in this paper. streckien et al. plant 2013 version of plant natural gas price [eur/mwh-fuel] 25 35 fuel tax for gas boiler [eur/mwh-fuel] 5.5 5.5 co2 certificate [eur/t co2] 20 6 gas boiler o&m costs [eur/mwhth] 1 1 chp unit o&m costs [eur/mwhe] 8 8 chp unit starting cost [eur/turn on] 32 20 average spot market price [eur/mwhe] 40.00 37.78 net using bonus (chp unit) [eur/mwhe] 1.5 6.7 production cost (nhpc). energypro was also used for simulating the plant in streckiene . et al. [24], and is hence usable for the simulations presented in this paper. 3.1. bidding strategy for the spot market the assumed goal of the chp plant is to produce the demanded heat as cheap as possible. the epex-spot is organised as a marginal price auction and the optimal bidding strategy on such markets is bidding with the short-term marginal costs of the unit [28]. thus, the spot market bid should be based both on the short-term marginal costs of operating the chp unit and the reduced costs related to reduced boiler operation. hence, the spot market bid of the chp unit (bspot) is calculated as shown in eq. (1). (1) where vhcchp is the short-term marginal costs in eur per mwhheat produced on the chp unit, vhcboiler is the short-term marginal costs in eur per mwhheat produced on the boiler, capchp-th is the thermal capacity of the chp unit in mw, and capchp-e is the electric capacity of the chp unit in mw. using the data for the chp plant shown in table 1, the spot market bid excluding start costs of the chp unit is found to be 15 eur/mwhe, rounded up. it is assumed that if the plant’s bid is less than the spot market price, then the plant wins spot market trade without affecting the spot market price. 3.2. participation in the secondary control reserve for trade simulation in the scr, it is assumed that if the plant’s bid is lower than the marginal scr bid, then the plant wins scr. this applies both to capacity and activation in the scr. due to the pay-as-bid principle, the winning participants in the scr are paid their asking price. nielsen et al. [28] indicate that the participants in recurrent pay-as-bid auctions are prone to gamble on the auction, e.g., by trying to estimate the highest possible winning bid of the coming auction in order to increase their income from auction participation. for the purpose of these simulations, it is assumed that the plant will not gamble on the scr. the bid will instead be calculated based on the plant’s own expected costs of participating in the scr. b vhc vhc cap cap spot chp boiler chp th chp e = −( ) ∗ − −/ the scr capacity payment is for the purpose of these simulations, seen as the payment that the plant needs in order to cover any costs related to the activation of scr. for the simulated chp plant, the following potential costs from scr participation are identified: 1. the plant has to produce non-useable or nonstorable heat by operating the chp unit in order to be able to deliver scr. (l1) 2. the spot market price in the won scr periods is lower than the normal spot market bid of the chp unit. meaning that it would be cheaper to operate the boiler instead of operating the chp unit. (l2) 3. in the case of upward scr, high spot market prices in the won scr periods can provide an opportunity loss, since the chp unit will only be offered in part-load on the spot market in order to be able to deliver upward activation in scr. (l3) 4. the scr participation reduces the spot market trading in high price periods outside of the won scr periods. this can occur due to the displacement of heat production using the thermal storage system. (l4) for plants where the activation price is not solely based on the plant’s own costs, as is the case of the simulated plant, a fifth potential cost could be included in the list. this fifth cost would be the opportunity to earn income from activations, and would normally be a negative cost. the optimal approach to calculating the sum of these costs is to compare the nhpc if the plant did not participate in the scr with the nhpc when participating in the scr. in other words, the comparison of nhpc would be between a scenario in which the chp unit is traded only on the spot market and another scenario in which the chp unit in the scr periods is traded on the spot market with the lowest possible bid price, as well as traded normally on the spot market in the remaining periods. the difference in nhpc between these two scenarios reflects the income needed from the capacity bid. though in principle comparing the nhpc of these two scenarios would be the optimal approach, in practice this approach is problematic. the reason for this is that the clearing day for scr is more than four days before the first day of potential scr operation, and forecasts of, e.g., spot market prices and heat demand for the period are very uncertain. to highlight this challenge it is relevant to include forecasts in the simulations. for the purpose of the simulations 36 international journal of sustainable energy planning and management vol. 04 2014 small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve presented in this paper, a simple approach to forecasting is used. the forecasts are produced based on the knowledge that a plant would have on the scr clearing day. the clearing day is assumed to be only on wednesdays. only heat demand and spot market price forecasts are included. the heat demand forecast is created for the scr trading period using the heat demand from the seven days before the clearing day, being the period from and including the former week’s wednesday up to and including the tuesday before clearing day. the heat demand from the former week’s wednesday is then used as a forecast for the following monday, etc. it is assumed that the chp plant aims to not reject any heat by participating in the scr. for each clearing day, three different simulations based on the heat demand forecast are carried out for the following scr trading period, representing an increasing amount of hours traded on the scr. in the first simulation, the chp unit operates at full load in all ht periods, as there in any given week will always be fewer hours of ht than nt. in the second simulation, the chp unit will be operated at full load in all nt periods. in the last simulation, the chp unit will be operated at full load in all periods. if in one of these simulations a rejection of heat is found, then no scr trading is carried out in that period. e.g., if based on the heat demand forecast a rejection of heat is found by operating the chp unit at full load in the nt periods, then scr trading is only done in ht periods. no spot market trading is done in these tests, and the heat storage system is assumed to be empty at the beginning and the end of the week. with this method, the rejection of heat can still occur, as the heat demand is based on a forecast; however, the heat demand is vastly reduced compared with not taking into account the heat demand before trading scr. in reality, a chp plant would be able to purchase heat forecasts more advanced than the one used in these simulations; however, more advanced forecasts have not been available for these simulations. to forecast spot market prices for the upcoming scr trading period, the seven days before the clearing day’s average spot market price in each of the two periods (ht/nt) are used as a forecast for the corresponding upcoming periods. it is assumed that spot market price averages covering these periods will provide a less uncertain spot market price forecast than when forecasting all price variations on the spot market. however, using this forecast approach removes the possibility of simulating a normal spot market trading, since the forecasted spot market will only have two prices, one for nt periods and one for ht periods. it is not possible in the simulations to estimate the potential loss, l4. however, the spot market price forecast is seen as a good approximation to how actual forecasting could occur for such a plant. with the economic loss from l1 reduced to a very small loss and the spot price forecast removing the potential for using the explained optimal approach to estimate l4, a simpler approach to calculating the capacity bids is used instead. for upward scr capacity bids, the simpler approach will be based on the one presented for power plants by müsgens et al. [21]. müsgens et al. calculate the capacity bid of a power plant delivering upward scr by using only the power plant’s own cost in the capacity bid. müsgens et al.’s approach to the upward capacity bid of a power plant is shown in eq. (2). (2) where bup-cap is the capacity bid for upward regulation in eur/mw/h, bspot is the spot market bid of the power plant, pspot is the average spot market price in the period, capop is the load in mwe at which the power plant operates to deliver upward scr, and capof is the capacity offered as upward scr. as seen in formula 2, müsgens et al. include the losses l2 and l3 in the capacity bid of the power plant, which is the only two of the listed four losses that a power plant could experience by providing upward scr. however, as a chp plant is simulated in this paper, the loss l4 should also be included in the capacity bid. ideally l4 should be found as shown in eq. (3). (3) where incspot is the period’s total spot market income in eur as gained if scr is not traded and pe is the electricity trade won on the spot market in mwhe if scr is not traded. bspot is the spot market bid for the chp unit as calculated in eq. (1). based on the earlier discussions, incspot and pe cannot be calculated using the spot market forecast utilized in this paper. therefore, l4 is instead fixed through the simulated period, and assumed to be 30 eur/mwhe. l inc b pspot spot e4 = − ∗( ) bup cap p b b spot spot sp − −= , if oot spot spot spot op of spo p b p cap cap b > −( ) ∗ , if tt spotp>⎧ ⎨ ⎪ ⎩ ⎪ international journal of sustainable energy planning and management vol. 04 2014 37 peter sorknæs, henrik lund, anders n. andersen and peter ritter this corresponds to the difference of the average spot market price for prices above bspot in 2013 and bspot, rounded up. l4 is added to the spot market bid of the chp unit, bspot. eq. (4) shows the changed eq. (2), and eq. (4) is the calculation method used in this paper for capacity bids for upward scr. (4) for downward scr, only the losses l2 and l4 need to be included in the capacity bid. the capacity bid for downward scr is calculated as shown in eq. (5). (5) where bdown-cap is the capacity bid for downward scr. capop is here equal to the full electric capacity of the chp unit, as the unit will be operated at full load when providing downward scr. bspot excluding start costs is found to be 15 eur/mwhe, assuming 8 hours of operation. bspot incl. start costs is 16 eur/mwhe, rounded up. with a l4 for the chp unit of 30 eur/mwhe, the capacity bid for a 4 mwe engine offering 1 mwe would be as shown in figure 1. on each graph, the chp unit is only offered in one scr direction. the capacity bids presented in eq. (4), eq. (5) and figure 1 are in eur/mw/h; however, scr capacity bdown cap b l p spot spot − + ≤= 0 4 , if bb l p cap cap b l spot spot op of spot + −( ) ∗ + >4 4, if ppspot⎧ ⎨ ⎪ ⎩ ⎪ bup cap p b l spot spot − − +( )= 4 , if bb l p b l p cap cap spot spot spot spot op of + ≤ + −( ) ∗ 4 4 ,, if b l p spot spot + >⎧ ⎨ ⎪ ⎩ ⎪ 4 bids are given in eur/mw/week. these capacity bids have to be multiplied with the number of hours of the respective scr period in the given week. for the purpose of the simulations in this paper, the activation bids are fixed through the simulated period. the bid for upward activation is fixed at 46 eur/mwhe, being bspot + l4, and the bid for downward activation is fixed at -16 eur/mwhe, being -bspot. l4 should not be included in the downward activation bid, as l4 is already covered for the full capacity of the chp unit through the downward capacity bid. 3.3. example of simulation approach figure 2 shows the simulated heat production of scenario 1 in the period from 21st to the 28th of october 2013. the clearing day for the period is the 16th of october. the forecasted heat demand for the period was 499.9 mwhth, and it was found that scr delivery in the nt periods would result in rejection of heat, and as such scr was only traded in the ht periods. the actual heat demand in the period is 364.7 mwhth as such the heat demand is significantly lower than expected. the forecasted average spot market price in the ht periods was 58.14 eur/mwhe. hence, the capacity bid was 728.4 eur/mw/week, corresponding to 12.14 eur/mw/h. the marginal capacity bid in the market is 1.054 eur/mw/week and hence the plant won upward scr in the ht periods. the actual average spot market price in the ht periods is 46.41 eur/mwhe. figure 2 shows three different graphs: the top graph being the spot market price, the middle graph shows the heat production of each production unit, heat demand and rejection of heat and the bottom graph shows the energy content of the thermal storage system. 38 international journal of sustainable energy planning and management vol. 04 2014 small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve 0 20 40 60 80 100 120 140 160 180 200 0 50 100 c a p a ci ty b id n e g a tiv e ( e u r /m w /h ) expected average spot price capacity bid negative 0 20 40 60 80 100 120 140 160 0 50 100 c a p a ci ty b id p o si tiv e ( e u r /m w /h ) expected average spot price capacity bid positive figure 1: capacity bids for downward scr and upward scr. as can be seen in figure 2, in the shown period the plant wins upward scr in ht periods. in the rest of the week the engine can be used for trading in the spot market, and spot market trading is won in several periods in the end of the week. the heat demand forecast did, however, underestimate the heat demand and in periods the 22nd and the 23rd non-useable and non-storable heat is produced resulting in rejection of heat. figure 3 shows the simulated heat production of scenario 2. the shown period is the same as in figure 2. as in figure 2, in the shown period the plant wins upward scr in ht periods, however, as the engine here is assumed to be able to deliver upward scr activation without being in operation beforehand, the engine is only in operation when being activated as upward scr, and when traded into the spot market outside of the ht periods. 4. results of the simulations each unit’s heat production is shown in table 2 alongside the rejection of heat in each scenario. as seen in table 2, the rejection of heat especially occurs when the chp unit has the reference flexibility, as in scenarios 1 and 3. the corresponding costs and revenues excluding income from the sale of heat in each scenario are shown in table 3. as seen in table 3, spot revenue is similar in every scenario except for scenario 2. the reason is that, in scenario 2, it is assumed that the chp unit does not have to be in operation in order to deliver upward regulation, and in periods where scr is won, the chp unit is not traded on the spot market. instead a high income from scr activation is found. the resulting total costs in each scenario are similar in size, which is due to the utilized bidding strategy reflecting the plant’s own costs. though a decrease in the total costs can be seen in scenarios in which the chp unit is modelled with increased flexibility. using a different bidding strategy could increase this difference. it should be noted that the income from activation is highly uncertain, since the data used for activation is created for this paper using public available data, as described in section 2.1.1. activation of scr is depended on where in germany the participant is located, and as such, the activation income for a specific participant can vary significantly from the activation income presented here. international journal of sustainable energy planning and management vol. 04 2014 39 peter sorknæs, henrik lund, anders n. andersen and peter ritter 80 60 40 20 p ri ce ( e u r /m w h ) 0 5 4 3 2 30 25 20 15 10 5 0 1 0 h e a t (m w ) t h e rm a l s to re ( m w h ) mon 21/10/13 tue 22/10/13 wed 23/10/13 thu 24/10/13 fri 25/10/13 sat 26/10/13 sun 27/10/13 mon 28/10/13 mon 21/10/13 tue 22/10/13 wed 23/10/13 thu 24/10/13 fri 25/10/13 sat 26/10/13 sun 27/10/13 mon 28/10/13 mon 21/10 tue 22/10 wed 23/10 thu 24/10 fri 25/10 sat 26/10 sun 27/10 mon 28/10 −20 epex spot storage capacity storage content gas engine spot trading gas engine scr trading heat consumption heat rejection boiler figure 2: example of one week’s simulated heat production in scenario 1. 40 international journal of sustainable energy planning and management vol. 04 2014 small-scale combined heat and power as a balancing reserve for wind – the case of participation in the german secondary control reserve table 2: heat produced and heat rejected in each scenario. [mwhth] chp unit boiler heat rejected scenario 1 26,770 3,337 107 scenario 2 25,358 4,731 89 scenario 3 26,631 3,629 260 scenario 4 23,118 6,917 35 table 3: costs and revenues excluding income from sale of heat in each scenario. [1,000 eur] scenario 1 scenario 2 scenario 3 scenario 4 fuel, taxes and co2-costs 2,230 2,185 2,233 2,112 o&m incl. start costs 194 208 195 188 spot trade revenue 961 507 1,009 1,026 scr capacity revenue 5 17 4 27 scr activation revenue 32 501 −10 −70 subsidy revenue 658 623 654 568 total costs 768 744 770 749 60 80 40 20 0 −20 mon 21/10/13 tue 22/10/13 wed 23/10/13 thu 24/10/13 fri 25/10/13 sat 26/10/13 sun 27/10/13 mon 28/10/13 mon 21/10/13 p ri ce ( e u e /m w h ) h e a t (m w ) t h e rm a l s to re ( m w h ) tue 22/10/13 wed 23/10/13 thu 24/10/13 fri 25/10/13 sat 26/10/13 sun 27/10/13 mon 28/10/13 25 30 40 15 10 5 0 mon 21/10 tue 22/10 wed 23/10 thu 24/10 fri 25/10 sat 26/10 sun 27/10 mon 28/10 5 4 3 2 1 0 boiler heat rejectionheat consumption gas engine spot trading gas engine scr trading storage capacity storage content epex spot figure 3: example of one week’s simulated heat production in scenario 2. the week is the same as in figure 2. 4.1. sensitivity analyses on l4 in order to estimate the effect of the chosen l4, a sensitivity analysis has been made for l4. l4 is in the reference set at 30 eur/mwhe. here l4 is tested for each 5 eur/mwhe increment from 15 eur/mwhe to 75 eur/mwhe. the resulting total costs for each scenario are shown in figure 4. as seen in figure 4, scenario 2 is mostly affected by a change in l4. the reason is the change in capacity bids, where in scenario 2 the bid for spot prices estimated at below bspot + l4 is zero, as the chp unit does not have to be in operation in order to deliver activation. in scenario 2, at a low l4, the chp unit wins upward scr in only a few hours and, at a high l4, the chp unit wins upward scr in many hours with a capacity bid of zero. scenario 2 provides lower total costs than scenario 1 with a l4 from around 30 eur/mwhe to 60 eur/mwhe. in the shown range of l4, scenario 4 provides lower total costs than scenario 3. 5. conclusion in this paper, an approach to simulating the participation of a small-scale chp plant in the german scr is discussed. part of the simulation approach is the bidding strategy of the chp plant, where the discussed strategy aims at making the bid reflect the plant’s own costs. the discussion of the bidding strategy takes its departure in the current research of bidding strategies for power plants as discussed by müsgens et al. [21], adjusting it to the special circumstances for small-scale chp plants. it is found that the chp plant’s participation in the german scr is affected by four potential losses that do not affect the participation of a traditional power plant. each of these losses should be included in a chp plant’s bid in order for the bid to be cost-reflective; however, the effect of these losses will, due to the time span between market clearing and actual operation, have to be estimated based on relatively uncertain forecasts. in order to make it more attractive for the small-scale chp plants to participate in the german scr, the rules for the scr should help minimize these losses and reduce the corresponding uncertainties. specific suggestions for changing the rules of the scr have not been presented in this paper; however, e.g. having the clearing day closer to the first delivery day and granting market participants the possibility to change activation bids after the clearing day, would result in reduced uncertainty for the small-scale cph plants. in this paper, it is also investigated how different capabilities for the technical flexibility of the chp unit affect the potential gain from participating in the german scr. an increased flexibility of the chp unit is found to increase the potential gain that the chp plant can attain in the german scr, especially when offering upward regulation in the scr. the results are especially sensitive to the bidding strategy utilized by the plant. acknowledgements the work presented is a result of the strategic research centre for 4th generation district heating technologies and systems (4dh) partly financed by the danish council for strategic research. thanks to arne jan hinz at stadtwerke schwäbisch hall for his comments on the method. references [1] international energy agency. key world energy statistics2013.paris: international energy agency; 2013. http://www.iea.org/publications/freepublications/publication/k eyworld2013.pdf [2] european parliament, council. directive 2009/28/ec of the european parliament and of the council of 23 april 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing directives 2001/77/ec and 2003/30/ec. vol. 2009/28/ec. 2009. http://eur-lex.europa.eu/legal-content/en/txt/html/?uri= celex:32009l0028&from=en [3] eurostat. share of renewable energy in gross final energy consumption [t2020_31] n.d. http://epp.eurostat.ec.europa.eu/ tgm/table.do?tab=table&init=1&plugin=0&language=en&pco de=t2020_31 (accessed september 5, 2014). international journal of sustainable energy planning and management vol. 04 2014 41 peter sorknæs, henrik lund, anders n. andersen and peter ritter 600 650 700 750 800 850 900 950 15 25 35 45 55 65 75 t o ta l c o st s (1 ,0 0 0 e u r ) l4 (eur/mwh) scenario 1 scenario 2 scenario 3 scenario 4 figure 4: total costs at different l4 in each scenario. http://www.iea.org/publications/freepublications/publication/keyworld2013.pdf http://eur-lex.europa.eu/legal-content/en/txt/html/?uri=celex:32009l0028&from=en http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=0&language=en&pcode=t2020_31 [4] eurostat. europe in figures eurostat yearbook renewable energy statistics 2014. http://epp.eurostat.ec.europa.eu/ statistics_explained/index.php/renewable_energy_statistics (accessed september 5, 2014). 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 32 2021 95 *corresponding author e-mail: cecilia.martin.del.campo@gmail.com (c. martin-del-campo) international journal of sustainable energy planning and management vol. 32 2021 95-110 abstract countries with emerging economies face a significant challenge when developing strategies to move towards a low emission energy system and also keep their economies growing. the power system plays a crucial role in these strategies and by correctly measuring its sustainability it is possible to identify which alternative improves the sustainability the most. this article proposes indicators for the assessment of the sustainability of the mexican power system planning scenarios that have been put forward by two government administrations, with a study horizon to 2030. the scenarios are characterized by the programming of additions and retirements of the generating capacity throughout the period of 2019 to 2030. eventually, the optimal dispatch was obtained to be able to accomplish the hourly demand. sustainability indicators were developed and calculated to evaluate the energy security, energy equity, and environmental sustainability dimensions. subsequently, the indicators were fed into the position vector of minimum regret analysis as a multicriteria decision analysis. by analyzing the results, it is highlighted that increasing the power transmission, as well as the hourly availability of hydro plants, improve the sustainability of the generation system. the comparison between both scenarios’ performance indicates that the current government’s planning is slightly more sustainable. a development of indicators for the sustainability assessment of the mexican power system planning ulises hernandez-hurtado and cecilia martin-del-campo* facultad de ingeniería, universidad nacional autónoma de méxico, ciudad universitaria, avenida universidad 3000, coyoacán, ciudad de méxico 04510, méxico; keywords minimal global regret analysis; energy trilemma; sustainability indicators; mexican power system; mexico indcs http://doi.org/10.5278/ijsepm.6572 1. introduction the economic development of a country, for most cases, is strongly correlated to its energy consumption, e.g., the country-members of the north american free trade agreement showed a causal relationship between energy consumptions and the increase of their gross domestic product for the period 1971-2015 [1], however, other countries such as taiwan or the philippines are fewer energy-dependent economies [2]. it is a given fact that an increase in energy consumption implies a greater demand for natural resources and therefore, the emission of a larger amount of greenhouse gases (ghg). these emissions are primarily responsible for climate change [3], which has become an essential concern for all countries worldwide since its consequences could have catastrophic global environmental impacts [4]. it is well-known that developed countries are more adapted to undesirable climate change effects than developing countries [5], for instance, poor nations suffer negative changes for agricultural production which is a crucial global economic activity [6]. energy systems that play a key role in human life are expected to undergo climate change consequences, particularly renewable energy that is envisaged to bear a relevant role in future low-carbon-mitigation [7]. this climate change concern has led to placing a more concentrated emphasis on the 96 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning tion targets by 2050, by analyzing the results obtained from different energy systems and economic models, focusing mainly on the environmental and economic aspects and slightly on the social aspects. nevertheless, to make a final decision about what strategy could have the best results it is substantial to develop tools to evaluate the sustainability of an energy system by adequately integrating environmental, economic and social dimensions. various methodologies that use indicators and multi-criteria analysis methods have been developed, for example, santoyo-castelazo et al. [16], chose ten indicators to assess the environmental dimension, three for the economic, and four for the social, and then they applied the “multi-attribute value theory” method to compare the performance of eleven different scenarios. bonacloche et al. [17] selected six indicators and a single-indicator-value-function was applied to compare two scenarios that aim to meet mexico’s goals by 2030. rodríguez-serrano et al. [18] used a multiregional input-output model applied to socio-economic and environmental impact assessment to evaluate the sustainability of a solar thermal power plant project in mexico. roldán et al. [19] used four dimensions to evaluate the sustainability of specific technological systems of electric power plants: economic, social, environmental, and institutional. the authors proposed the multi-criteria method of “analytic hierarchy process” to carry out the decision-making to qualify the technologies. however, despite many studies, the proposed indicators were not developed to evaluate a power system specifically, so, aspects of great relevance are not considered, such as the annual energy exchanges between interconnected regions. furthermore, the methodologies proposed in these studies are mostly limited to evaluating scenarios that include technology, share in annual gross generation and/or emission reduction targets, to determine the data that feeds the selected indicators. on the other hand, this article integrates the evaluation of scenarios which include only the annual installation and retirements of power plants. this led us to integrate it as part of the methodology used as an optimizer for the power dispatch to find the annual regional energy generation by technology, thereby proposing new indicators that more adequately evaluate the sustainability of other scenarios that involved in this sector. this paper aims to identify and develop indicators to assess the sustainability of the mexican power system planning of the two scenarios proposed by different government administrations by using the installation and retirement of capacity. development of strategies in order to maintain annual global emissions well below 40 gigatons of carbon dioxide equivalent, and thereby limiting the increase in global average temperature to 2 ºc, with aspirations of getting to 1.5 ºc in comparison with pre-industrial levels, as mentioned in [8]. the twenty-first session of the conference of the parties (cop21) to the united nations framework convention on climate change (unfccc) set a starting point to begin facing climate change, where nearly 200 countries joined the cause. however, developing countries face a bigger challenge implementing strategies to move towards reducing emissions, preserving economic growth, and carrying out sustainable exploitation of natural resources. this situation comes about because most of them do not yet count on low-emission technologies. the transfer of low carbon technologies to developing countries must perform a critical role in reducing carbon emissions [9], for example, carbon capture and storage are an attractive option for this purpose since these countries are heavier fossil fuel consumers [10]. mexico fit in this situation because its energy consumption is expected to increase over the next decades in order to serve the population and keep the economy growing [11]. additionally, mexico has important national and international commitments to reduce emissions in the medium and long-term. these goals are pointed out in the general climate change law, the energy transition law and mexico’s intended nationally determined contributions (indcs), issued in 2012, 2014 and 2016 respectively. according to the national emissions inventory of 2015, developed by the national institute of ecology and climate change [12], almost 50% of mexico’s emissions are produced from activities due to transport and energy sectors. these sectors are the largest room to reduce ghg emissions. there is a great collection of studies on the energy sector that propose different scenarios and strategies to decarbonize by the year 2050. however, only in some cases are the three pillars of sustainability considered, these being environmental, economic, and social. for example, grande-acosta et al. [13] analyze scenarios for the deep decarbonization of the mexican power sector with an aim towards the year 2035 through an environmental and economic approach. while elizondo et al. [14] use well-known tools such as “the mexico 2050 calculator” to evaluate political strategies in the energy sector by comparing four low carbon scenarios. veysey et al. [15] explore various pathways to hit the decarbonizainternational journal of sustainable energy planning and management vol. 32 2021 97 ulises hernandez-hurtado and cecilia martin-del-campo 2. characterization of the mexican power system planning scenarios the configuration of both administration’s planning is described in the national power system developed program or “programa de desarrollo del sistema eléctrico nacional (prodesen)”, which is a document release annually by the secretariat of energy of mexico (sener). among the most relevant information that the prodesen contains is the plan of addition and retirement of power plants and the fuel prices forecast for the future fifteen years period. the current administration developed a plan of addition and retirement of power plants with significant differences from the previous administration planning. figures 1 and 2 show addition and retirement of capacity for both of the administrations in the period of 20192030, where it is observable that the planning carried out by each administration clearly differs. however, the plan should be aligned in compliance with commitments of cop21 and move towards a more sustainable power system. the national center for energy control or “centro nacional de control de energía (cenace)”, which is the institution in charge of operating the electricity market in mexico, and developing the planning activities of the national transmission grid [20], segregate the country into ten control regions (figure 3). this partition is used to evaluate some indicators and to characterize the base year capacity; such information is detailed in [21] and [22]. 3. methodology this section describes the methodology employed to choose and develop the sustainability indicators. the main steps are set out briefly following. first, it was necessary to define the sustainability dimensions and the indicators corresponding to each one. secondly, the mathematical expressions to calculate every indicator were formulated. the following step corresponds to the operation of the power dispatch optimizer that allows getting the input data to feed the indicators’ equations 14000 12600 11200 9800 8400 7000 5600 4200 2800 1400 0 -1400 -2800 -4200 p ow er c ap ac ity a dd iti on s (m w ) thermal single gas turbine hydro solar pv nuclear coal fluidized bed geothermal co-generation combined cycle internal combustion wind bio-energy 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 1: addition and retirement of power plants capacity of government 2012-2018 for the period 2019-2030 [21]. 14000 12600 11200 9800 8400 7000 5600 4200 2800 1400 0 -1400 -2800 -4200 -5600 p ow er c ap ac ity a dd iti on s (m w ) thermal single gas turbine hydro solar pv nuclear coal fluidized bed geothermal co-generation combined cycle internal combustion wind bio-energy 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 2: addition and retirement of power plants capacity of government 2018-2024 for the period 2019-2030 [22]. 98 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning 8 bc 10 mulege 4 noroeste 5 norte 6 noreste 3 occidental 1 central 2 oriental 7 peninsular 9 bcs figure 3: mexican power system control regions used by cenace [20]. and finally, the multicriteria decision method was used to determine the best option using the indicators’ results. 3.1. criteria selection for the development of the sustainability indicators since the power system is a branch of the energy system, the indicators were based on the dimensions proposed by the world energy council (wec) in the energy trilemma. these dimensions describe the sustainability of an energy system and are defined as follows [23]. • energy security: reflects a nation’s capacity to meet current and future energy demand reliably, withstand and bounce back swiftly from system shocks with minimal disruption to supplies. • energy equity: assesses a country’s ability to provide universal access to affordable, fairly priced and abundant energy for domestic and commercial use. • environmental sustainability of energy systems: represents the transition of a country’s energy system towards mitigating and avoiding potential environmental harm and climate change impacts. this research utilizes seven indicators of which five were developed and two were selected from other studies. the aim in using seven indicators is to obtain a good assessment of the sustainability of a power system, even with only limited information about the strategies or scenarios. every indicator was developed or selected to provide relevant information about the dimension to be evaluated, thereby avoiding the use of the same input information for another indicator. subsection 3.2 describes each indicator and the mathematical equation developed or used for its calculation and table 1, detail the indicators, their units, and ultimate goal. when the indicator’s goal is “max”, then the scenario or alternative with the higher value will obtain the best performance. for a goal equal to “min” the opposite is true. 3.2. mathematical formulation of sustainability indicators in this subsection, the development of the mathematical formulation for each sustainability indicator is presented. table 1: quantitative indicators to evaluate the sustainability of the mexican power system. dimension indicator name unit goal energy security 1. average capacity diversification (h’) fraction max 2. natural gas importation (ngii) million cubic meters min 3. new clean power plants (ncppi) % max energy equity 4. total cost (ctot) usd2017 min 5. generationconsumption regional balance (cggi) fraction min environmental sustainability of energy systems 6. average emission factor (sef) kgco2eq/ mwh min 7. indcs goals met (ndcm) % max international journal of sustainable energy planning and management vol. 32 2021 99 ulises hernandez-hurtado and cecilia martin-del-campo table a1 in appendix 1.1 shows the sets included in the following equations. 3.2.1. average capacity diversification the diversification indicator represents an important piece of the energy security dimension, if a system is diversified, then it will possess the capability to better respond to problems induced from the shortage of a specific fuel or primary energy source. in this study, the shannon-wiener diversification index was decided on, which has been used in various fields of science such as communication or biology [24], however, it can also be applied in the estimation of the diversification of the capacity mix or generation of a power system. eq. (1) and (2) show the operation of the shannon-wiener index applied to the capacity mix. h' = ln� � �� �� f fi t i t i i t t , , ( ) 11 (1) f = t ti,t i,t i,ti= f f 1 i � � � (2) where h’ stands for the average diversification indicator of the mexican power system capacity during the study period, i for the total annual number of existing technologies in the system, t for the number of years of the period, and fi,t for the fraction of technology i of the total capacity in year t, which is calculated through (2) where fi,t is the capacity (mw) of technology i in year t. 3.2.2. natural gas importation the intention of this indicator is to evaluate the country’s dependence on the natural gas it will have in the coming years if either of the two scenarios studied were carried out, for which it is assumed that the generation with combined cycle technologies would be with imported fuel during the period, in such a way that this indicator was calculated using eq. (3): ngii = g,t g= g t= t hr eg ngahv g ��� 11 (3) where ngii is the natural gas imported indicator (million cubic meter) of the mexican power system during the study period, hrg is the heat-rate (gj/mwh) of gas technology g, g is the number of technologies that use natural gas as fuel, egg,t is the electricity produced (mwh) by technology g in year t, and ngahv is the natural gas average heat value (kj/m3). 3.2.3. new clean power plant according to the sixteenth transitory in the tenth title of the energy transition law, published in the federal official daily of mexico [25], a power generation technology is clean if its emission factor is no larger than 100 kgco2eq/mwh. this quantity was the reference used to define the status of the different technologies contemplated. the construction of new clean power plants contributes to an increase in the country’s energy security because most of them use the country’s natural resources as a primary source of energy, which was calculated by this indicator using eq. (4). the interval of possible results for this indicator is between 0% and 100%. 0% when no new clean power capacity is installed during the period, and 100% when all the new power capacity is clear. ncppi t cppc f = n,t tn=1 n t=1 t 100� �� � �� � � � � � ��� (4) where ncppi represents the (%) of new clean power technologies, cppcn,t represents the capacity (mw) of clean technology n in year t, ft represents the sum of all installed capacity (mw) in year t, n represents the number of clean technologies, and t is the number of years for the period. 3.2.4. total cost this indicator was calculated by adding the total investment, fixed and variable operation and maintenance (o&m), fuel, and unserved load cost, as presented in eq. (5), and every single cost was calculated through eq. (6), (7), (8) and (9) respectively. the value for each variable used in determining the total cost was obtained from the information pointed out in prodesen 2018-2032, prodesen 2019-2033, and the report “costos y parámetros de referencia: generación 2018” [26]. c c c c ctot inv o m com ul� � � �& (5) where ctot is the total cost (usd) for each scenario, cinv is the total investment cost (usd), co&m is the total fixed and variable o&m cost (usd), ccom is the total fuel cost (usd) and cul is the total unserved load cost (usd). 3.2.4.1. total investment cost cinv i= = 1 ic npv y tai t i t t i t . . ( ) , 11 � �� � (6) 100 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning where i is the number of technologies, t is the number of years, ici is the unitary investment cost (usd/kw) of technology i, npv is the net present value (fraction) at the start of the operation, tai,t is the added capacity (kw) of technology i in year t and y is the discount rate. for this research, the discount rate was 10%. 3.2.4.2. total o&m cost co&m i= = 1 fo m f y i i t i i t i t t vo m eg& ( ) , , &� � � � �� � 11 t (7) where fo&mi is the fixed o&m annual cost (usd/ mw) of technology i, vo&mi is the variable o&m cost (usd/mwh) of technology i and egi,t is the electricity produced by technology i in year t (mwh). 3.2.4.3. total fuel cost ccom i= = 1 hr fp y i i t i t i t t eg� � � �� � , , ( )11 t (8) where hri is the heat-rate (gj/mwh) of technology i, and fpi,t is the forecasted fuel price (usd/gj) of technology i in year t. 3.2.4.4. total unserved load cost cul = cf ult t t t t y � �� � ( )11 (9) where cft is the average cost per energy unit (usd/ mwh) of unserved load and ult is the amount of unserved load (mwh) in year t. for this study, the value of cft was 2610 usd2017/mwh over all the period. 3.2.5. generation-consumption regional balance the purpose of developing this indicator is to have knowledge of the divergence that exists between electricity generation and consumption in each control region. regions with over-generation, it will lead to important industrial development around the area. on the other hand, a region with the opposite situation could have low industrial development or dependence on the other regions to supply its own demand. furthermore, generally a wide gap between generation and demand in a region corresponds to poor use of natural resources. eq. (10) was used to calculate this indicator. the ideal value is the lowest possible value which means that the regions are importing little energy thus avoiding the dependence of transmission lines. cggi t r eg d r t r tr r t t � � � �� �� 1 1 11 , , (10) where cggi is the generation-consumption balance indicator, r is the number of regions, egr,t is the electricity produced (mwh) in region r in year t, and dr,t is the consumption (mwh) in region r in year t. 3.2.6. average emission factor to identify approximately what the equivalent amount of co2 emissions per unit of electricity is generated in a power system during a specific period, this indicator was proposed. by using this indicator, the linear relation between generation and emissions in one system or another is avoided. hence, the average emission factor of the mexican power system was calculated using eq. (11). sef = t ef eg eg i i,t ti= i t= t1 11 � �� (11) where sef is the average emission factor indicator (kgco2eq/mwh) of the mexican power system during the study period, efi is the emission factor (kgco2eq/ mwh) of technology i, and egt is the electricity produced (mwh) in the mexican power system in year t. 3.2.7. indcs goals met this indicator evaluates how well each scenario accomplishes the indcs proposed by mexico [27] using the proposed eq. (12). there are three possible ranges of values this indicator can show, zero, positive or negative. a zero value means the goals of indcs were accomplished. a positive value, the goals were achieved with outstanding performance, and a negative value the goals were not met. ndcm = ef eg ghge i i,i= i 1 100 20301 2030 � �� � � � � � � � � � (12) where ndcm is the indicator of compliance (%) of mexico’s indcs by the power sector, egi,2030 is the electricity produced (mwh) by technology i in the year 2030, and ghge2030 is the 2030 goal of emissions (139000 million of kgco2eq) by the electricity generation sector in the mexico’s indcs. international journal of sustainable energy planning and management vol. 32 2021 101 ulises hernandez-hurtado and cecilia martin-del-campo 3.3. models and data the scenarios considered in this study contain only information about the annual installation and the retirement of power plants by region and by technology. however, it is necessary to acquire extra information to calculate most of the indicators described previously, such as the annual energy generation by technology or the regional energy generation. this extra information can be obtained by estimating the operation of the mexican power system, since cenace operates the power system using economic criteria we decided to use optimization software that simulates this situation to fill this gap. to get some of the input information of the indicators, an optimization software of the annual energy dispatch by region was used, which is described in section 3.3.1. also, for the characterization of each scenario and to complete the input data of the indicators, information was taken from various official mexican government documents, as described in section 3.3.2. finally, section 3.3.3 shows the multi-criteria decision methodology used to evaluate each prodesen. 3.3.1. power dispatch optimizer the mc optimizer [28] is an optimization software developed by academics of the national autonomous university of mexico (unam) in support of the activities of the energy planning unit (upe) to create and analyse expansion scenarios for the power sector, as well as dispatch and transmission. this optimizer is based on linear programming and developed in matlab and seeks to satisfy the power demand in future years at a minimum cost. the optimizer was used to determine the optimal dispatch of each scenario studied. the objective function of the mc optimizer is the following: min z = c xi,r,t i,r,t i= i r= r t= t ���� 111 (13) where z is the dispatch cost of the mexican power system in the study period, and xi,r,t is the decision variable which can be the energy dispatched or transmitted by technology i in region r in time step t. subject to the next constraints: • supply hourly demand by region: xi,r,t i= i r= r t= t r,t r= r t= t = 111 11 ��� �� � �d i i (14) • maximum annual generation: x fd fi,r,t i,r,t i,r,t� � (15) • maximum annual added capacity: x fd mappai,r,t i,r,t i,r,t� � (16) • maximum power grid capacity: x matcai,r,t i= i r= r t= t = 111 ∑∑∑ (17) • annual clean energy generation percentage: x cegf xr,t r= r t= t r,t r= r t= t 11 11 �� ��� (18) • no negativity: x i ir,t � � �0 (19) where ci,r,t is the cost of energy dispatch or transmission by technology i in region r in time step t, fdi,r,t is the availability factor of technology i in region r in time step t, fi,r,t is the capacity (mw) of technology i in region r in year t, mappai,r,t is the maximum capacity addition of technology i in region r in year t, matca is the maximum electricity transmission capacity (mwh) between regions, and cegf is the clean electricity generation fraction. 3.3.2. input and output data for the development of the scenarios, the following assumptions were made: 1. the average annual growth rate of demand in each scenario was 3%. 2. the regions of baja california and baja california sur remain isolated. 3. the transmission capacity has an increase of 25% as of the year 2024 compared to the capacity of the year 2019. 4. the capacity of the occidental-oriental and norte-occidental transmission lines have an increase of 20% by the year 2029 compared to the capacity of the year 2024. 5. the capacity of the noroeste-occidental transmission line has an increase of 50% by the year 2029 compared to the capacity of the year 2024. 6. the hydro availability factor increases in peak load hours in the last two years of the period. 102 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning assumptions one and two were made using the data obtained from [21] and [22]. the cost of unserved energy was taken from [29]. the rest of the assumptions were constructed by analyzing the information and graphs from [20] and the weekly wholesale market reports made by cenace. the construction of assumption four corresponds to the fact that cenace takes as reference the year 2024 to complete some transmission lines which would support the new installed capacity in the period 2019-2024. the case of assumptions five, six, and seven are related to the need for meeting mexico’s indcs which is reflected in the expected reduction of ghg from the power sector by 2029 and 2030. the main characteristics of each scenario are listed in table 2, while the data of the technologies used in the optimizer are shown in table a2 and a3 in appendix 1.2. the main output data from the optimizer are the following: • the hourly dispatch of electricity by region and technology. • the hourly regional exchange of electricity by technology. • unserved energy 3.3.3. decision-making analysis the multi-criteria decision method called “position vector of minimum regret analysis” (pvmr) developed by martin-del-campo et al. [30] was used to evaluate the two scenarios considering all indicators aggregated in one global qualification. the idea is to find which scenario could improve sustainability the most by looking for the decision that could cause the table 2: input data of prodesen 2018-2032 and prodesen 2019-2033. characteristics prodesen 2018-2032 prodesen 2019-2033 capacity of the base year 2019 (mw) 79488 79272 additional capacity 20192030 (mw) 53149 55292 retirements of capacity 2019-2030 (mw) 10690 10690 number of technologies 13 13 clean energy restriction free free number of regions 9 9 number of transmission lines 10 10 minimum regret. this method has some relevant advantages in comparison with mini-max regret decision method because it allows to rank alternatives by finding a global score, making comparisons among alternatives by using all the criteria together. in the pvmr method it is possible to use relative weights for each criterion that it is not possible in the mini-max regret decision method based on pairwise comparison. the pvmr method is focused to make comparisons among more than two alternatives, however, in our case study we are comparing only two options, and the conventional normalization process creates extreme scores which do not adequately reflect the relative difference between two alternatives with similar scores. for this reason, we modified the step 2 of the pvmr method to overcome this situation. in the present case study, we have two alternatives k and seven indicators j. the method was adapted by following the next six steps: step 1: a weight (wj) was attributed to every indicator (j) satisfying the eq. (20). w j j � � � 1 1 7 (20) step 2: a linear normalization was carried out by dividing each value ckj by the highest value when the goal is to maximize, eq. (21) was applied. when the goal is to minimize each value ckj is divided by the lowest and eq. (22) was used. for the cases with negative values of ckj eq. (23) was used. u c c kj kj j kj � � max( ) 1 (21) u c c kj kj j kj � � min( ) 1 (22) u c c c c kj kj j kj j kj j kj � � � � min( ) max( ) min( ) 1 (23) step 3: a score equal to 0 (zero) was assigned to the value ckj of both alternatives k. step 4: through step 2 the normalized values (ukj) of both alternatives were obtained for each indicator j, and the ideal alternative was located in the coordinates (0,0,0,0,0,0,0) of the space solution. international journal of sustainable energy planning and management vol. 32 2021 103 ulises hernandez-hurtado and cecilia martin-del-campo table 3: indicators, and alternatives proposed. name of indicator (j) prodesen 2018-2032 (k=1) prodesen 2019-2033 (k=2) 1. average capacity diversification (j=1) u11 u21 2. natural gas importation (j=2) u12 u22 3. new clean power plants (j=3) u13 u23 4. total cost (j=4) u14 u24 5. generationconsumption regional balance (j=5) u15 u25 6. average emission factor (j=6) u16 u26 7. indcs goals met (j=7) u17 u27 step 5: the seven components (pkj) of the vector (pk), that represents the position of the alternative k in the seven-dimensional-space, were calculated for both alternatives using eq. (24). p = u wkj kj j ⋅ (24) step 6: for both alternatives k, the modulus of the position vector was obtained by using eq. (25) and (26). this modulus indicates the regret of have selected alternative k. p = p + p + p + p + p + p + p 1 11 2 12 2 13 2 14 2 15 2 16 2 17 2 (25) p = p + p + p + p + p + p + p2 21 2 22 2 23 2 24 2 25 2 26 2 27 2 (26) table 3 contains the parameters used in eq. (20) to eq. (24) and remember that alternatives 1 and 2 are the scenarios of prodesen that are being qualified. 4. results and discussion this section is divided into two main parts. the first corresponds to the single value attribute function obtained through the mathematical equation of each indicator, and the second contains the scenario’s ranking results generated by the application of the multicriteria decision method integrating all the indicators. 4.1. results for every indicator all information collected regarding to power plants, demand, regions and transmission grid were used into modelling the scenarios analysed, and by using the mc optimizer, optimal dispatch was obtained. the resulting data was used to calculate the magnitude of the position vector for each indicator and then for each scenario. according to the data collected, handing data and the output information of the optimal dispatch simulated with the mc optimizer, a slightly variation in the results for each indicator were found and are described following: 4.1.1. average capacity diversification as shown in figure 4, the annual diversification of both scenarios significantly decreases since 2023, mainly due to the fact that the added capacity is mostly composed of only three technologies: combined cycle, solar, and wind, which causes the other ten technologies to show a reduction in their contribution to the capacity mix over time. the prodesen 2018-2032 is more diversified than prodesen 2019-2033 along the period with an exception for the year 2023. moreover, by 2029 and 2030 the first scenario has nuclear added which increases diversification, especially by 2030. the retirement of capacities possibly played a role in obtaining these results since technologies such as conventional thermal share more than 50% during the first years of the period, causing a further decrease in the value of diversification. 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 1.98 1.96 1.94 1.92 1.9 1.88 1.86 1.84 1.82 1.8s ha nn on -w ie ne r a nn ua l a ve ra ge in de x prodesen 2018-2032 prodesen 2019-2033 figure 4: shannon-wiener annual average index. 104 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% a dd iti on s of c le an c ap ac ity prodesen 2018-2032 prodesen 2019-2033 figure 6: percentage of additions of clean capacity. prodesen 2018-2032 prodesen 2019-2033 a nn ua l n at ur al g as im po rta tio n (m ill io n cu bi c m et er s) 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 5: natural gas annual consumption. 4.1.2. natural gas importation as observed in figure 5 the results have an evident increasing trend in the importation indicator. this is probably because there is an important dependence on combined cycle technology and that it also helps to manage the energy balance properly. 4.1.3. new clean power plant figure 6 depicts the difference in clean technology investments contemplated in both scenarios. one can observe that prodesen 2018-2032 has a better distribution of additions considering that renewables must be accompanied by their corresponding support in order to maintain the reliability of the power grid. even when high percentages of investments are observed in the prodesen 2019-2033 by 2024 and 2026, the results do not favour it completely, since the average number of clean generating facilities in the prodesen 2018-2032 scenario is 60.70%, while in the prodesen 2019-2033 is 59.55%. 4.1.4. total cost the total cost is represented by each cost component (investment, fixed o&m, variable o&m, and fuel). this is detailed in figures 7 and 8 for each scenario. there is a descending pattern of the total annual cost, due to the gradual reduction of the investments considered. however, the prodesen 2019-2033 scenario has a very different distribution of the cost of its facilities, since the first two years of the period consider a large number of facilities, while the rest of the years the investments are very low. on the contrary, the prodesen 2018-2032 keeps a more uniform distribution of its facilities throughout the period, which could be considered more realistic because not all technologies can be built in the same period and possible delays must be considered at the start of operation of the plants. 4.1.5. generation-consumption regional balance by looking at graphs on figures 9 and 10, a reduction in the regional generation-consumption balance can be detected by 2023. this is due to the fact that the transmission capacity between some regions in the year 2023 will have a considerable increase of the addition of intermittent technologies. this increase, in turn, allows those regions that had the greatest transmission capacity to avoid congestion, in such a way that regions with international journal of sustainable energy planning and management vol. 32 2021 105 ulises hernandez-hurtado and cecilia martin-del-campo investment fixed o&m fuelvariable o&m a nn ua l t ot al c os t (m ill io n u s d 2 01 7) 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 7: annual total cost for scenario prodesen 2018-2032. investment fixed o&m fuelvariable o&m a nn ua l t ot al c os t (m ill io n u s d 2 01 7) 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 8: annual total cost for scenario prodesen 2019-2033. central noreste oriental peninsular occidental baja california noroeste norte baja california sur a nn ua l g en er at io nco ns um pt io n re gi on al b al an ce 2.00 1.75 1.50 1.25 1.00 0.75 0.75 0.25 0.00 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 9: generation-consumption regional balance of scenario prodesen 2018-2032. central noreste oriental peninsular occidental baja california noroeste norte baja california sur a nn ua l g en er at io nco ns um pt io n re gi on al b al an ce 2.00 1.75 1.50 1.25 1.00 0.75 0.75 0.25 0.00 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 10: generation-consumption regional balance of scenario prodesen 2019-2033. 106 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning deficits can import energy from other regions that had low export capacity. for this reason, the decrease in balance is mainly due to the oriental and noreste region. 4.1.6. average emission factor figure 11 contains information regarding the results of the annual average emission factor. the pattern of the previous indicator is maintained possibly due to the increase in capacity of transmission lines that allows greater generation from lower-cost technologies, which are technologies with lower emissions per megawatt-hour generated. additionally, the increase in the availability factor of hydroelectric plants, contributed to a further reduction in emissions in the last two years of the period. 4.1.7. indcs goals met the last indicator is focused on determining the scenario that would have the best performance in compliance with the indcs by 2030 corresponding to the electricity sector. figure 12 shows that the difference in emissions between the two scenarios is mainly due to the use of bio-energy technology, which is normally burned to generate electricity in mexico, and as such produces a high number of emissions which come from combined cycle plants. both scenarios met the goals. however, the total emissions of the first scenario were 128401 and the second one has a better score with 126155 million kgco2eq. table 4, compares an overview of all the indicators, where it confirms that results were very close. 4.2. decision-making analysis results for this study, the most relevant objective is that the three dimensions of sustainability have the same importance. as mentioned above, we selected three key indicators to assess the energy security dimension that have the same weight. likewise, for the dimensions of energy equity and environmental sustainability, we selected two key indicators with exactly the same importance for the dimension analyzed. table 5 contains the goal for each indicator, max for a maximum value and min for a minimum. the final weights for each indicator are also shown. prodesen 2018-2032 prodesen 2019-2033 a ve ra ge a nn ua l e m is si on fa ct or (k gc o 2e q/ m w h) 310.00 300.00 290.00 280.00 270.00 260.00 250.00 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 figure 11: average annual emission factor. prodesen 2018-2032 prodesen 2019-2033 nuclear co-generation bio-energy solar pv geothermal wind hydro fluidized bed internal combustion single gas turbine coal combined cycle e m is si on s by te ch no lo gy b y 20 30 (m ill io n of k g of c o 2e q) 140000 120000 100000 80000 60000 40000 20000 0 figure 12: co2eq emissions by technology to 2030. international journal of sustainable energy planning and management vol. 32 2021 107 ulises hernandez-hurtado and cecilia martin-del-campo as a sensitivity analysis, a second set of weights was applied to compare the results. in this case, exactly the same weight was assigned to each indicator regardless of the dimension to which it belongs. applying eq. (24), the component of the position vector of minimal regret for every indicator was calculated. finally, eq. (25) was applied for the scenario prodesen 2018-2032 obtaining 0.029403 and 0.025203 for the first and second set of weights. similarly, eq. (26) was applied to calculate the magnitudes of the regret for the scenario prodesen 20192033 obtaining 0.011642 and 0.010379 for the first and second set of weights. in both cases the last scenario results as the most sustainable. 5. conclusions in this investigation, the aim was to identify and develop indicators to assess the sustainability of the mexican power system planning for two scenarios proposed by different government administrations by using the installation and retirement of capacity. this paper adopts the energy trilemma and the pvmr as a basis to identify, develop and evaluate sustainability indicators applied to the mexican power system planning. an optimization software was used to determine the optimal energy dispatch by technology in each region studied, and the results showed that the prodesen 2019-2033 scenario is more sustainable than the prodesen 2018-2032 scenario. the first one performed better in three indicators: total cost, average emission factor, and indcs goals met, while the second one got better results for four indicators: average capacity diversification, natural gas importation, new clean power plants, and generation-consumption regional energy balance. however, the gap between the results in the last indicator “indcs goals met” made the difference in the final results. this situation could be discussed since both scenarios achieve, even exceed, the goals. in any case, we recommend a sensitivity analysis be performed to make a final decision. the relevance of the optimization software is clearly supported by the current findings, for example, the increasing transmission capacity of the power grid improves the generation-consumption regional balance, and the changes in the availability factor of hydro cause a greater impact on the results of indicators especially on emissions and consequently, on the sustainability of the power system. the results presented in this paper are subject to many uncertainties caused by input data as well as access to table 4: performance table. indicator (j) unit prodesen 2018-2032 (c1j) prodesen 2019-2033 (c2j) 1 fraction 1.94 1.92 2 million cubic meters 528205.99 536025.98 3 % 60.79 59.55 4 million usd2017 117980.06 117250.02 5 % 23.48 25.07 6 kgco2eq/mwh 292.35 285.79 7 % 7.63 9.24 table 5: normalized values for each indicator. indicators titles goal prodesen 2018-2032 (u1j) prodesen 2019-2033 (u2j) weight (wj) average capacity diversification max 0 0.008977 1/9 natural gas importation min 0 0.014804 1/9 new clean power plants max 0 0.020475 1/9 total cost min 0.006260 0 1/6 generation-consumption regional balance min 0 0.067530 1/6 average emission factor min 0.022951 0 1/6 indcs goals met max 0.174810 0 1/6 108 international journal of sustainable energy planning and management vol. 32 2021 a development of indicators for the sustainability assessment of the mexican power system planning public information from the official documents, so the results could change if alternate input data is considered or other assumptions are made. however, this work contributes to the formulation of mexico’s country-specific sustainability indicators to be used as an integrated methodology to assess and compare the power infrastructure plans under the trilemma energy vision. 6. acknowledgments the national council for sciences and technology (conacyt) provided a scholarship to ulises a. hernandez-hurtado as a student of the doctorate program in energy engineering of the unam. special thanks are given to the team of researchers at the upe for the support in providing the mc optimizer and data required to simulate the scenarios. thanks to the papiitunam project no. it102621 energy transition modelling for making it possible to evaluate the economic, environmental, and social benefits to mexico by 2030. appendix 1 appendix 1.1 nomenclature table a1 includes the description of the sets included in the different equations. appendix 1.2 input data for the optimization of the scenarios table a2 includes input data of technologies considered for this study, and table a3 contains the forecasted fuel prices to calculate some indicators and to determine the optimal cost dispatch. table a1: sets. index description g ∈ g the index for conventional generating units which use natural gas as fuel (g ⊆ i) i ∈ i the index for generating units (conventional and renewable) j ∈ j the index for indicator of the mgra methodology k ∈ k the index for alternative of the mgra methodology n ∈ n the index for clean generating units r ∈ r the index for supply region t ∈ t the index for year studied table a2: technology data used. technology fd ic npv fo&m vo&m hr ef fraction usd2017/kw fraction usd2017/mw usd2017/mwh gj /mwh kgco2eq/mwh thermal 0.80 2045 1.1281 35.83 3.0 9.353 680 combined cycle 0.85 1013 1.1130 18.95 3.3 7.032 346 coal 0.90 1425 1.1664 33.78 2.4 9.486 773 single gas turbine 0.75 813 1.0428 5.08 4.8 9.635 509 internal combustion 0.85 2877 1.1226 46.41 5.2 8.518 660 fluidized bed 0.90 1456 1.1664 35.00 2.5 9.486 509 hydro nd 1931 1.1499 24.39 0.0 0.000 15 wind nd 1423 1.0748 38.11 0.0 0.000 21 geothermic 0.95 1889 1.0907 105.06 0.1 20.556 38 solar nd 1120 1.0674 10.67 0.0 0.000 48 bio-energy 0.80 2588 1.1664 35.00 2.5 9.486 740 co-generation 0.80 882 1.1130 7.10 3.2 11.496 346 nuclear 0.90 3988 1.2821 101.08 2.4 11.229 65 international journal of sustainable energy planning and management vol. 32 2021 109 ulises hernandez-hurtado and cecilia martin-del-campo table a3: forecasted fuel prices (usd2017/gj) used. year thermal combined cycle coal single gas turbine internal combustion fluidized bed hydro wind geothermic solar bioenergy co generation nuclear 2019 6.99 4.14 2.54 4.14 12.76 2.54 0.00 0.00 0.00 0.00 0.00 4.14 0.53 2020 7.24 4.28 2.56 4.28 13.08 2.56 0.00 0.00 0.00 0.00 0.00 4.28 0.55 2021 7.50 4.42 2.58 4.42 13.40 2.58 0.00 0.00 0.00 0.00 0.00 4.42 0.56 2022 7.77 4.57 2.60 4.57 13.74 2.60 0.00 0.00 0.00 0.00 0.00 4.57 0.58 2023 8.05 4.73 2.62 4.73 14.08 2.62 0.00 0.00 0.00 0.00 0.00 4.73 0.59 2024 8.34 4.89 2.64 4.89 14.43 2.64 0.00 0.00 0.00 0.00 0.00 4.89 0.60 2025 8.64 5.06 2.66 5.06 14.79 2.66 0.00 0.00 0.00 0.00 0.00 5.06 0.62 2026 8.95 5.23 2.69 5.23 15.16 2.69 0.00 0.00 0.00 0.00 0.00 5.23 0.64 2027 9.27 5.41 2.71 5.41 15.54 2.71 0.00 0.00 0.00 0.00 0.00 5.41 0.65 2028 9.61 5.59 2.73 5.59 15.93 2.73 0.00 0.00 0.00 0.00 0.00 5.59 0.67 2029 9.95 5.78 2.75 5.78 16.33 2.75 0.00 0.00 0.00 0.00 0.00 5.78 0.68 2030 10.31 5.98 2.77 5.98 16.74 2.77 0.00 0.00 0.00 0.00 0.00 5.98 0.70 references [1] gómez m, rodríguez jc. energy consumption and financial development in nafta countries, 1971-2015. appl sci 2019;9. https://doi.org/10.3390/app9020302. 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http://dof.gob.mx/nota_detalle.php?codigo=5421295&fecha=24/12/2015 http://dof.gob.mx/nota_detalle.php?codigo=5421295&fecha=24/12/2015 https://www.gob.mx/cms/uploads/attachment/file/162974/2015_indc_esp.pdf https://www.gob.mx/cms/uploads/attachment/file/162974/2015_indc_esp.pdf https://doi.org/10.1002/cjce.23986 https://doi.org/10.1002/cjce.23986 https://www.cenace.gob.mx/docs/16_marcoregulatorio/senymem/(dof%202016-04-08%20cre)%20res-151-2016%20dacg%20c%c3%b3digo%20de%20red.pdf https://www.cenace.gob.mx/docs/16_marcoregulatorio/senymem/(dof%202016-04-08%20cre)%20res-151-2016%20dacg%20c%c3%b3digo%20de%20red.pdf https://www.cenace.gob.mx/docs/16_marcoregulatorio/senymem/(dof%202016-04-08%20cre)%20res-151-2016%20dacg%20c%c3%b3digo%20de%20red.pdf https://www.cenace.gob.mx/docs/16_marcoregulatorio/senymem/(dof%202016-04-08%20cre)%20res-151-2016%20dacg%20c%c3%b3digo%20de%20red.pdf https://doi.org/10.1080/15567249.2011.632808 https://doi.org/10.1080/15567249.2011.632808 _hlk75515102 _hlk74069099 _hlk74067642 _hlk75516372 _hlk75516475 _hlk74137555 _hlk74068857 _hlk74054724 _hlk74070588 _hlk74137242 _hlk74135065 _hlk74134828 _hlk74134858 _hlk74134873 _hlk67135488 _hlk74137267 _hlk74567910 _hlk76380208 _hlk75518118 _hlk74151656 _references _hlk72930513 _hlk72930656 _hlk72955008 _hlk72955501 _hlk72956519 _hlk72956974 990-3594-1-le.qxd 1. introduction energy is now widely recognized as a prerequisite for human development, as it has a multiplier effect on health, education, transport, water supply, agriculture, industry and other tertiary sectors of the economy [1,2]. hence, developing countries need to eradicate energy deprivation for its citizens. however, fossil fuelinduced climate change has thrown a unique challenge to developing countries. on one hand, these countries have to ensure adequate energy supplies for meeting the needs and aspirations of the growing population, and on international journal of sustainable energy planning and management vol. 05 2015 27 the other, have to reduce conventional energy use to limit emissions. hence, these countries should have sufficient supply of clean energy to meet the demand, at a cost which is affordable for its people. therefore energy security as well as sustainable energy is the need for the future. sustainable energy security (ses) can be defined as “provisioning of uninterrupted energy services in an affordable, equitable, efficient and environmentally benign manner [3]. traditionally the concept of energy security is related to ‘security of supply’ of energy. 1corresponding author e-mail: kapiln@igidr.ac.in international journal of sustainable energy planning and management vol. 05 2015 27-40 comparative assessment of energy sources for attaining sustainable energy security (ses): ��������� ��� ��������� ����������� � ������������������ ��������� ������ ����������������� �� ����� �� ������� ����� ��� ���� � � � ���� ����� ������� ����� �������� �! � " ���� �� � � ��#�� �$ �$%$����&� ��'� �� '��� ()*� +�� �,-� ������ ����� abstract attaining ‘sustainable energy security’ (ses) is a valid end goal of an energy policy. however, ses is a multidimensional concept which is difficult to evaluate. the aim of this paper is to undertake a comparative assessment of ses of various energy sources for the residential sector in india. the paper also intends to construct a ses index and rank the energy sources by assessing their performance in different dimensions. the end goal is to identify the energy sources which are relatively more secure and sustainable for india. the paper uses a scoring matrix and a weighting matrix to develop a ses index. this multidimensional index is constructed as a weighted sum of four indices representing various dimensions, viz. availability, affordability, efficiency and environmental acceptability. a comparative assessment of six energy sources for the residential sector for urban india reveals that, firewood has the highest rank followed by lpg and electricity while kerosene has the lowest rank. however in rural india, firewood has the highest rank followed by dung cakes while lpg has the lowest rank. sensitivity of the ses index to variation in weights reveals that the results are mostly insensitive to +/– 10% variation in allotted weights. it is therefore important that energy policy in india should be designed in a manner, so as to promote the use of firewood and dung cakes which are relatively more ‘available’ and ‘affordable’ in rural areas. along with this, emphasis should be given on design of better technologies to increase the ‘efficiency’ and ‘acceptability’ of these energy sources. keywords: sustainable energy security, indicators, multi-criteria analysis url: dx.doi.org/10.5278/ijsepm.2015.5.4 28 international journal of sustainable energy planning and management vol. 05 2015 comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india's residential sector however, security of energy supply is a one-sided approach where the implicit assumption is, that any energy demand can be met by increasing the supply of energy. however, ses acknowledges the ‘demand-side’ aspect of energy security. demand-side aspect of energy security implies universal provision of modern energy services, which is affordable and accessible to consumers [4]. apart from supply and demand side aspects of energy security, energy sustainability is equally important and the entire ‘energy system’ needs to be sustainable in the long run. keeping in view this need for attaining both, ‘sustainability’ and ‘security’ of energy, the concept of sustainable energy security (ses) was defined and targeted. the residential sector in india with an energy consumption of 182 million tonnes oil equivalent (mtoe) (7.6ej) accounted for approximately 37% of total final energy consumption (tfec) (512 mtoe) (21.4ej) in 2012 [5]. the final energy used in the residential sector (including lighting and cooking) is shown in figure 1 (in mtoe) and the predominant share (75%) of biomass which includes firewood, chips, dung cakes and agricultural waste is clearly evident. however, with a per capita total primary energy supply (tpes) of only 0.59 toe (ton oil equivalent) (24.7gj) india still lags behind the world per capita average of 1.86 toe (77.8gj) [6]. further, india has 289 million people who lack access to electricity and 836 million people who rely on traditional biomass for cooking [7]. this concern for lack of energy security from the household consumer’s perspective is evident in the indian governments’ approach to energy security, which is summarized as “the country is energy secure when we can supply lifeline energy to all our citizens as well as meet their effective demand for safe and convenient energy to satisfy various needs at affordable costs at all times with a prescribed confidence level considering shocks and disruptions that can be reasonably expected” [8]. in the light of the above background, there is a need to evaluate and compare various energy sources for the residential sector, which can contribute to increasing the ses for india. energy poverty and energy security issues at household level have been analysed in the indian context [9, 10]. cooking fuel use patterns and energy options for cooking have also been discussed in detail for india [11, 12]. a comparative and descriptive analysis of the household energy transitions in india has been undertaken to derive aggregate trends for identifying the key factors driving the household energy transition [11, 13, 14]. however, a comparative assessment and ranking of various energy sources for the residential sector in the indian context has not been undertaken till date. while the ‘energy ladder’ principle and ‘fuel stacking’ approaches have been observed in the indian context, it is acknowledged that there are variations in the way household consumers choose their energy sources [15]. while consumer preferences will always play a part, a country should endeavour to design policies to promote energy sources which enhance the ses of the country. multi criterion analysis and analytical hierarchy process (ahp) has been earlier used for sustainability evaluation of power plants [16]. the methodology is well defined and has been accepted as it aids the decision making process and has been used to evaluate the renewable energy resources in india [17]. in order to undertake such an assessment, various technologies are evaluated on some selected criteria. the choice of indicators can be made from a set of indicators and some of the indicators quantifying the physical and financial threats have been examined for evaluating household energy security [10]. different sustainability indicators can be used for evaluating the performance of the technologies and a few of them have been effectively used as an instrument to support decision making for renewable energy technologies [18] and for sustainable expansion of the electricity sector [19]. the aim of this paper is to undertake a comparative assessment of ses of various energy sources for the residential sector in india. the paper also intends to construct a ses index and rank the energy sources by assessing their performance in different dimensions. the 23 3 2.5 136.7 16.8 oil products coal gas biomass electricity figure 1: final energy consumption in the residential sector in 2012 (mtoe). end goal is to identify the energy sources which are relatively more secure and sustainable so that policy measures can be adopted to enhance the ses for india. 2. methodology creating energy security indexes with decision matrices and quantitative criteria was proposed and an adapted version of this methodology has been applied to evaluate the energy security of sweden [20, 21, 22]. this paper follows a modified approach and this section presents the methodology to construct a ses index. 2.1. assessment framework this study chooses an indicator based approach for the assessment and allows evaluation of ses in any sector of the economy. this framework is applied to the residential sector in this paper to undertake a comparative assessment of energy sources commonly used in the urban and rural households in india. different indicators are chosen to represent each dimension of ses and the performance of various energy sources are evaluated for these parameters. 2.2. model for constructing a ses index figure 2 shows the model which has been developed for formulating a ses index and subsequent ranking of energy sources. the model consists of a decision matrix, a weighting matrix and a ranking vector. a decision matrix is a 2-d matrix and consists of ‘n’ rows, for different energy sources to be evaluated, and ‘m’ columns, having different indicators representing the selected dimensions. the model used for constructing the decision matrix is shown in figure 3. each dimension (d) is represented by various indicators i(j). different types of energy sources e(i), which are used by the indian households, are evaluated for undertaking a comparative assessment. each element of the matrix has the ‘score’, s(ei, ij), which is the value for the indicator ij, for the particular energy source ei. the elements of the (n × m) decision matrix (shown in figure 2) are filled using these scores. as shown in figure 2, the weighting matrix, which is a column matrix, having ‘m’ rows, is assigned the values wj. the weights represent the contribution of each individual indicator to the overall index. there are various methods to allocate weights (w1 to wm) to indicators. some of these are equal weights, weights evaluated by applying multiple linear regression models, weights based on statistical models such as principal component analysis (pca), factor analysis (fa), budget allocation method etc. however, in this paper, weights have been appropriated to each indicator using an analytical hierarchy process (ahp) as explained further in section 2.5. the decision matrix and the weighting matrix are multiplied to obtain a (n × 1) ranking vector. the component, vi, of the ranking vector v, is an index and indicates the ses associated with the energy source e(i). the components of this ranking vector can be calculated as shown in eq. (1). (1) a larger value of the index implies higher ses and the energy source e(i), having the highest value (vi) is allotted the highest rank as it indicates the most sustainable and secure energy source. the weighted scores for a particular energy source e(i) can also be v w s w s v w s w m m n n m 1 1 1 1 1 1 1 = × + + × = × + + , , , ..... ..... ×× sn m, international journal of sustainable energy planning and management vol. 05 2015 29 kapil narula i1 e1 e2 e3 .. en s1,1 s1,m sn,1 sn,m im..energy sources indicators decision matrix (n × m) dimensional index, di (i) ses index of e (i) weighting matrix (m × 1) ranking vector (n × 1) weights w1 .. wm v1 .. .. vn σ figure 2: model for constructing a ses index for various energy sources. dimension, d (1..4) indicators, i (j) (j = 1..m) energy sub-system decision matrix (n × m) e (i) indicator score s (ei,ij),energy sources, e (i), i = 1..n i (j) figure 3: model for constructing a decision matrix. summed up under different dimensions to arrive at a dimensional index (di) as shown in eq. (2). (2) here, ‘p’ is the particular dimension which has ‘k’ indicators representing it and the di indicates the performance of the energy source e(i) in that dimension. 2.3. dimensions and indicators the dimensions of ses, which have been carefully selected after an extensive literature review, are availability (avl), affordability (aff), efficiency (eff) and environmental acceptability (acp). these dimensions closely follow the four a’s of energy security advocated by the asia pacific energy research centre [23]. the chosen dimensions have different interpretations, when applied to the residential sector and the indicators are suitably chosen to reflect these concerns. ‘availability’ dimension for the residential sector implies physical access of various energy sources and its quantity consumed by the household. ‘affordability’ for the residential sector refers to the ability of a household to pay for a unit of energy for a particular energy service and how important the cost of energy is, to the users. affordability is a function of retail price of energy and consumer’s income (or expenditure) and per capita consumption of energy has a direct correspondence with affordability. ‘efficiency’ dimension is one of the important pillars of ses and improvement in end use efficiency of appliances substantially increases the ses of a country. (environmental) ‘acceptability’ dimension for the residential sector relates to emissions produced from cooking when various energy sources are used. selection of indicators for each dimension is based on data availability and the indicators are carefully chosen to represent the respective dimension. further, the paper limits the number of indictors so that the relative comparison of indicators using the ahp is easier. 2.4. scores the decision matrix has to be populated with ‘scores’, s(i, e) for each energy source. the paper uses min-max normalisation and scale inversion to derive the scores from the raw values, as explained in the next subsections. di p e i s i k dimension s i w ( ), ( ) ( , ) ( ) .. ( , ) ( ) = × + +1 1 ×× w k( ) 2.4.1. min-max normalisation of raw values raw value (x) of each energy source for the particular indicator is gathered from various data sources and the minimum and maximum value of the indicator for various energy sources are identified as min(x) and max (x) respectively. in order to calculate the normalized value, norm (x), eq (3) is used. this transforms the values to a relative scale of 0–1, where 0 represents a relative minimum and 1, a relative maximum value. (3) 2.4.2. scale inversion the selected indicators can be grouped in two categories, those having a positive impact and those having a negative impact. positive impact indicators are those, where a high value contributes to high ses; while in negative impact indicators, a high value of the indicator will contribute to a low ses. while the normalized values of the positive impact indicators are unchanged and are transcribed as scores, the normalised values of negative impact indicators have to be inverted such that a low value of the indicator should contribute to a high value in the ses index. hence, the scale for this indicator is inverted by subtracting the normalised value from 1, i.e. its score will be (1– norm (x)). therefore the final score of a negative impact indicator with normalized score of 1 (norm (x) = 1) will be 0 (1–1 = 0); and a normalized score of 0 (norm (x) = 0) will be 1 (1 – 0 = 1). with this inversion, the scores can now be linearly added to create a ses index. 2.5. ahp approach for selection of weights 2.5.1. theoretical basis ahp which belongs to the family of multi criterion analysis techniques is used for deriving weights, which are allotted to various indicators. weights represent the trade-off across indicators and they measure the willingness to forego a given indicator in exchange for another. the core of ahp is an ordinal pair wise comparison of attributes. in the ahp process, comparisons are made between pairs of individual indicators, and decision-makers have to decide on how important one particular indicator is, relative to norm ( ) min( ) max( ) min( ) x x x x x = − − 30 international journal of sustainable energy planning and management vol. 05 2015 comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india's residential sector another. the preference is expressed on a semantic scale, and the paper uses the nine-point ratio measurement scale for making the comparisons as shown in table 1. table 2 lists the corresponding random index (ri) for various values of ‘m’ (where ‘m’ is the number of indicators) and is used to check the consistency of the judgment. vector which is to be derived. now, if ‘k’ is an eigen value of a, then w is the eigenvector associated with it. it has been shown that the solution of eq. (4), called the principal right eigenvector of a, consists of positive entries and is unique to within a multiplicative constant. in a general decision-making environment, where a respondent undertakes a qualitative assessment, one international journal of sustainable energy planning and management vol. 05 2015 31 kapil narula table 1: preference scale for pair wise comparison [24]. value definition value definition 1 equally important 7 very strongly more important 3 moderately more important 9 extremely more important 5 strongly more important 2,4,6,8 intermediate values table 2: scale for random index [24]. m ri m ri 2 0.00 5 1.12 3 0.58 6 1.24 4 0.9 7 1.32 the results are represented in a (m × m) pair wise comparison matrix [a], where ‘m’ is the number of indicators. in the pair wise comparison matrix all the diagonal elements are unity (a factor when compared with itself will be equally important) i.e aii = 1. the upper matrix entries need to be filled as per the given scale in table 1 and the lower matrix entries will be its inverse i.e aij = 1 / aji and are determined automatically. the elements of the matrix [a] are therefore on a ratio scale as shown in eq (4) and the paper uses this formulation of the problem [24] to derive the weights. [a] × [w] = k × [w], here, [a] is a pair wise comparison matrix which is a square and a reciprocal matrix and [w] is a column (4) w w w w w wn w w w w w wn wn w wn w wn wn 1 1 1 2 1 2 1 2 2 2 1 2 l l m m m l ⎛ ⎝⎝ ⎜ ⎜ ⎜ ⎜ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎟ ⎟ ⎟ ⎟ ⎟ × ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎟ ⎟ w w wn 1 2 . . == × ⎛ ⎝ ⎜ ⎜ ⎜ ⎜ ⎜ ⎞ ⎠ ⎟ ⎟ ⎟ ⎟ ⎟ k w w wn 1 2 . . cannot give the precise values to the ratio associated with the comparison, but can only estimate its value. hence, while undertaking pair wise assessment of a large number of values, the assessment may deviate from being consistent. saaty (1990) has as shown that the formulation of the problem as shown in equation (4) leads to an eigen value problem of the form [a] × [w] = λmax [w], where λmax is the principal eigen value of a and consistency ratio (cr) can be used to check the consistency of the judgment [24]. this is the theoretical basis of the procedure for calculation of weights and is listed below. 2.5.2. procedure for calculation of weights and checking the consistency of judgment (a) to calculate the weights, the following procedure is adopted. (i) perform pair wise comparison of indicators and fill the (m × m) judgment matrix, [a]. (ii) square the obtained matrix to calculate [a]2. (iii) divide each entry of the column by the column total and then average the rows to obtain the first eigen vector (ev1). (iv) calculate [a]4 and keep squaring the obtained matrix to give [a]8, [a]16 and subsequently obtain their respective eigen vectors (ev2, ev3 and so on) for each iteration as explained in (iii). (v) stop the iterations when the difference between the successive calculated ev’s is less than 0.0001 (e.g. (ev4 – ev3) < 0.0001) ). (vi) the obtained evn after the last iteration is the weighting matrix [w]. (b) to check the consistency of the judgment, the paper uses the following procedure. (i) calculation of (λmax)average by solving eq. (5) [a] × [w] = [x], [x] = λmax × [w]. (5) (ii) using this obtained value of λmax, calculate the consistency index (ci) by using eq (6) ci = (lmax – m) / (m – 1), (6) where, λmax is the principal eigen value and ‘m’ is the number of indicators. (iii) calculate the consistency ratio (cr) by using the eq (7) cr = ci / ri, (7) where, ri is the random index and is read out from table 2. (iv) the obtained value of cr should be less than 0.1 (thumb rule). if cr is greater than 0.1 (10 %), the assessment is inconsistent and the pair wise comparison process is repeated [24]. 3. application of the framework the proposed methodology is applied in this paper to undertake a comparative assessment of ses of various energy sources for the residential sector in india. six different types of energy sources which are most commonly used in indian households (‘n’ = 6) have been selected. these are firewood (including chips and biomass), dung cake, liquefied petroleum gas (lpg), kerosene, electricity and coal (including coke and charcoal). a total of seven indicators (‘m’ = 7) have been selected (i1 to i7), two each for avl, aff and acp dimensions while one indicator has been selected for eff dimension. the selected indicators along with their components which are considered in this paper are shown in table a. 1 at appendix 1. while three indicators have a positive impact, there are four negative impact indicators viz. aff1, aff2, acp1, and acp2 for which scale inversion is undertaken. the decision matrix is thereafter filled with scores as per the adopted procedure and is discussed below. 3.1. filling the decision matrix energy security issues for the residential sector in india have been analyzed and it has been found that there is a large difference in patterns of energy consumption in rural and urban india [14]. hence this paper undertakes the comparison of various energy sources for the residential sector in india separately for rural and urban areas. 3.1.1. raw values of indicators table 3 shows the raw values of various indicators for different energy sources for rural (r) and urban (u) india. however, as the indicators of acp1, acp 2 and eff are same for rural and urban india, only one value is shown. raw values of indicators have been calculated using data derived from various publications and secondary data sources (refer to table a. 1 for details of calculations). 3.1.2. calculating scores normalisation of raw values is undertaken and table 4 shows the scores after inversion of scale for negative impact indicators. 3.2. calculation of weights from ahp the basic theory and method of deriving weights from ahp has been outlined in section 2.5. this paper uses the ahp macro designed by goepl, which calculates the weights and also checks the consistency of the judgment [26]. this makes the process of comparison and calculation of weights much simpler and faster as it automates all calculations. 3.2.1. weights derived from ahp it is anticipated that if a household survey is conducted, each respondent will have a different response. this is because each household has a different perception of the relative importance of the dimensions. further, the choices are also dependent on the income levels, location, education levels and other such parameters. in terms of weights, it would imply the entire spectrum of weights from 0-100% for the selected indicators as well as for dimensions. however, if we take an average of the responses of various households, it is expected that the weights would converge to equal weights as the number of respondents’ increases. this paper therefore demonstrates the methodology by undertaking a pair wise comparison of the selected indicators according to author’s own assessment (from a policy maker’s perspective) and the filled matrix is shown in table 5. this process can also be administered to consumers and other stakeholders to gather their perceptions, for undertaking an exhaustive assessment. 32 international journal of sustainable energy planning and management vol. 05 2015 comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india's residential sector the above pair wise comparison matrix is then used to calculate the weights as explained in section 2.5.2 and the calculated weights after the sixth iteration are 0.132, 0.338, 0.072, 0.338, 0.044, 0.044 and 0.031 for indicators i1 to i7 respectively. the aggregated weights for avl, aff, acp and eff dimensions are 0.47, 0.41, 0.088 and 0.031 respectively. results of the ahp indicate that ‘availability’ and ‘affordability’ of energy sources emerge as dominant dimensions from a policy maker’s perspective who has an obligation to provide cooking and lighting energy services to the people. 3.2.2. checking the consistency of judgements eq. (6) – (7) is used to calculate the ci and cr and the calculations are shown in eq. (8) – (9). international journal of sustainable energy planning and management vol. 05 2015 33 kapil narula table 5: pair wise comparison matrix. 1 2 3 4 5 6 7 access to energy capital monthly co pm efficiency fuel consumption cost fuel cost emissions emissions of end use 1 access to fuel 1 1/3 3 1/3 5 5 7 2 energy consumption 3 1 5 1 7 7 9 3 capital cost 1/3 1/5 1 1/5 3 3 5 4 monthly fuel cost 3 1 5 1 7 7 9 5 co emissions 0.2 0.14 0.33 0.14 1 1 3 6 pm emissions 0.2 0.14 0.33 0.14 1 1 3 7 efficiency of end use 0.14 0.11 0.20 0.11 0.33 0.33 1 table 4: scores for different energy sources for rural and urban india. avl 1 avl 2 aff 1 aff 2 acp 1 acp 2 eff r u r u c r u c c c c 0.00 0.02 0.00 0.00 0.50 0.55 0.76 0.00 1.00 0.25 fw 1.00 0.26 1.00 0.88 1.00 0.91 0.65 0.45 0.86 0.00 dc 0.07 0.00 0.27 0.14 1.00 1.00 1.00 0.50 0.00 0.22 lpg 0.14 1.00 0.03 0.95 0.25 0.00 0.18 0.90 1.00 0.61 k 0.11 0.10 0.05 0.09 0.42 0.35 0.34 0.81 1.00 0.48 l 0.21 0.36 0.08 1.00 0.00 0.11 0.00 1.00 1.00 1.00 r: rural; u: urban; c: common for u & r energy sources; c:coal; fw: firewood; dc: dung cake; k: kerosene; l: electricity table 3: raw value of indicators for different energy sources for rural and urban india. avl 1 avl 2 aff 1 aff 2 acp 1 acp 2 eff r u r u c r u c c c c 0.64% 1.92% 3.92 8.12 8.33 147.83 180.06 42 0.02 23.2% fw 61.04% 14.00% 318.09 78.03 0.00 63.75 197.96 23 1.8 15.7% dc 5.04% 1.04% 87.36 19.08 0.00 41.82 140.74 21 13 11.1% lpg 9.20% 51.60% 13.75 83.63 12.50 276.09 273.03 4 0.01 60.4% k 7.32% 6.14% 19.54 15.31 9.72 193.32 247.26 8 0.02 50.4% l 13.22% 19.04% 28.53 87.36 16.67 249.56 302.21 0 0 71.3% r: rural; u: urban; c: common for u & r energy sources; c:coal; fw: firewood; dc: dung cake; k: kerosene; l: electricity λmax = 7.387; m = 7 ; ci = (λmax – m)/(m – 1), ci = 0.064 (8) ci = 0.064; ri = 1.32 (from table 2); cr = ci/ri, cr = 4.9%. (9) as cr is less than 10%, the decision is consistent. 4. results ‘scores’ when multiplied by ‘weights’ (as per eq. (1) – (2)), give us the di and the overall ses index, which are shown for rural and urban india respectively in figure 4. results of the assessment as shown in figure 4 reveal that firewood (in rural areas) and lpg (in urban areas) ranks the highest in the ‘availability’ dimension. in the ‘affordability’ dimension dung cake is ranked the highest in both rural and urban areas, while lpg in rural and electricity in urban areas is ranked lowest. electricity followed by lpg as an energy source is most ‘environmentally acceptable’ while dung cake has the lowest rank. in the ‘efficiency’ dimension electricity has the highest rank while firewood is ranked as the lowest. the overall rank obtained by the energy sources in rural india is as follows: firewood, dung cake, kerosene, coal, electricity, lpg while for urban india it is in the following order: firewood, lpg, electricity, dung cake, coal, kerosene. 5. discussions although firewood obtains the highest ses index in rural and urban areas, the paper does not implicitly assume and support the view that it is the most sustainable and secure energy source. the results present the comparative ranking of energy sources based on the actual consumption patterns, cost and technical data. this result is obtained, as a large weight is allotted to avl and aff dimension, on which firewood obtains a high score. therefore, despite firewood being inefficient and having highest co emissions, it still obtains the highest ses index for the residential sector. the results therefore merely establish that households ‘perceive’ firewood to be sustainable and secure, due to its easy availability and low affordability (relatively). it is evident that the results are in contradiction to the ‘desirability’ of energy source from the perspective of the energy policy planner who may want consumers to shift to cleaner fuels such as electricity and lpg rather than rely on dung cake and firewood. actually the choice of the energy source by a household is made according to the following hierarchy: avl, aff, acp and eff. this implies that if all sources of energy are available, households make their choice of energy source based on the affordability of energy. if the available energy sources are similarly priced, households make their choices based on acceptability and convenience of use. it is only at the very end that a choice of the energy source is made based on efficiency dimension. this hierarchy in dimensions is also reflected in the weights which emerge from the pair wise comparison process. notwithstanding the weights which have been used for this assessment, this paper has presented the framework and has demonstrated the methodology for ranking of energy sources. allocation of weights is always a ‘subjective’ criterion which depends on the perception of different stakeholders and therefore different results will be obtained when the process is 34 international journal of sustainable energy planning and management vol. 05 2015 comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india's residential sector 1.000 0.900 1.000 0.800 0.700 0.600 0.500 0.400 0.300 0.200 0.100 0.000 avl aff acp indexeff c fw dc rural lpg k l c fw dc lpg k l 0.90 1.00 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 avl aff acp indexeff urban figure 4: dimensional and ses index for various energy sources for rural and urban india. repeated using different weights. ses index is a function of ‘weights’ and ‘scores’. a participatory approach to gather the weights from a wider representation of the households may change the final results to an extent but that effect has been simulated by undertaking a sensitivity analysis of the ses index to a variation in weights allotted to different indicators. 5.1. sensitivity of ses index to variation in weights six scenarios, sc 1-6 have been simulated to evaluate the sensitivity of ses index to variation in weights. as the weights allotted to acp1, acp 2 and eff (from the ahp) are small, these are kept fixed at 4.5, 4.5 and 3 percent respectively. original (org) weights have been rounded off to the nearest whole number to obtain reference (ref) weights. the weights for other indicators are varied +/– 5 percent from the reference. various scenarios have thereafter been worked out by varying the weights allotted to avl and aff dimensions (aggregate variation +/– 10 percent), so as to generate a range of weights, which are shown in table 6. the ses index obtained for these scenarios are shown in figure 5 for rural and urban india respectively. as observed from figure 5, firewood is still the highest ranked energy source in rural india while lpg has the lowest rank in all scenarios. the ranking of sources for urban india are also similar to those obtained for the original run except in scenario 6, (when aff dimension is given less weight) where lpg emerges at the first rank. hence it can be concluded that the ranking of various energy sources for both rural and urban india is mostly insensitive (but may change in a few cases) to variation (+/– 10%) in weights for aff and avl dimension. 5.2. sensitivity of ses index to variation in indicator scores values of the selected indicators of acp and eff are dependent on the end use device for cooking (and lighting) and are unlikely to change significantly in the near future. on the other hand, avl of clean energy sources will increase steadily over the next few years as they become more aff. it is observed that there is a large variation in the score of the indicator aff 2 (i.e. cost of energy purchased per month) by different households, which varies from a minimum value of 0 (when firewood and dung cake are collected, with no cash payout for the household) to a maximum value (when these are bought at market price). it has been reported that only 27% of households buy firewood in rural areas while 69 % buy it in urban areas [11]. the corresponding values for dung cake are 21 % and 58% in rural and urban areas respectively [11]. the unit price of firewood and dung cake used in the paper for calculating the value of aff 2 is the weighted average price which has been calculated as: 0.27 × market price + 0.73 × 0 (no cash payout for collection of firewood) for rural areas and similarly for urban areas. in order to analyze the effect of different cash outflows on the overall ranking of energy sources, a scenario was simulated to calculate the value of indicator aff 2 using the minimum (0) and maximum (market price) unit price of firewood and dung cake. the minimum price assumed was zero (when they are collected) and the maximum unit price of firewood was assumed to be rs 1.86 per kg (3.1 cents/kg) in rural areas and rs 2.26 (3.76 cents/kg) in urban areas. for dung cake it was assumed to be rs 1.12 per kg (1.86 cents/kg) and rs 1.36 per kg (2.26 cents/kg) in rural and urban areas respectively. results using minimum prices for firewood and dung cake revealed that there is no change in the ranking of energy sources in the case of rural and international journal of sustainable energy planning and management vol. 05 2015 35 kapil narula table 6: weights allotted under different scenarios (in percentage). scenarios org ref sc1 sc2 sc3 sc4 sc5 sc6 avl 1 13.23% 13 8 13 13 8 18 18 avl 2 33.84% 34 29 34 34 39 29 39 aff 1 7.17% 7 12 12 2 7 7 2 aff 2 33.84% 34 39 29 39 34 34 29 acp 1 4.41% 4.5 4.5 4.5 4.5 4.5 4.5 4.5 acp 2 4.41% 4.5 4.5 4.5 4.5 4.5 4.5 4.5 eff 3.11% 3 3 3 3 3 3 3 urban india. however, when the maximum unit price of firewood and dung cake are used, lpg emerges as the highest ranked energy source in urban india and dung cake is ranked below coal. hence, it can be concluded that lpg may have a higher ses index than firewood in urban india, as firewood may have to be purchased at market price by many consumers. further, as affordability is a function of both, energy prices and household income, high income households both in rural and urban areas may prefer lpg which is more convenient, over other energy sources. 5.3. strategy to achieve ses for india in order to promote cleaner energy sources which rank high on eff and acp dimensions such as lpg and electricity, india needs to make them more aff. higher aff will result in more households switching to cleaner and efficient forms of cooking sources. additionally, in case of energy sources which rank high on aff and avl dimensions, such as firewood and dung cake, there should be a thrust on the adoption of newer technologies which may increase its eff and acp. these technologies can be in the form of clean cook stoves and decentralized electricity generation from biomass and also in the form of increased deployment of biogas (from dung) plants. careful attention therefore needs to be given to energy policy design which needs to promote the use of biomass and dung cakes in rural areas instead of pushing lpg as a cooking source. 6. conclusion the paper has undertaken a comparative assessment of various energy sources for attaining ses for india’s residential sector. the generic framework has been applied to evaluate the ses index for ranking of energy sources commonly used in rural and urban india. results reveal that firewood has the highest rank followed by dung cake and kerosene in rural areas, while lpg has the lowest rank. it is therefore important that the energy policy should be designed in a manner, so as to promote the use of firewood and dung cakes which are relatively more ‘available’ and ‘affordable’ in rural areas. however, emphasis should be given on design of better technologies to increase the ‘efficiency’ and ‘acceptability’ of these energy sources. in urban area, the ranking of energy sources is in the following order: firewood, lpg, electricity, dung cake, coal and kerosene. however if firewood has to be purchased at the market price and is not collected, lpg displaces firewood to obtain the first rank. based on the sensitivity analysis it can be concluded that these rankings are mostly insensitive to (+/– 10%) variation in the weights allotted to different dimensions. lastly, this study has presented the results of a quantitative assessment of various energy sources for the residential sector which will be helpful for energy planners in designing appropriate policies for attaining ses for india. acknowledgments this work has been carried out a part of the author’s phd thesis under the supervision of dr b sudhakara reddy at igidr whose guidance and support is gratefully acknowledged. abbreviations: ses: sustainable energy security ahp: analytical hierarchy process 36 international journal of sustainable energy planning and management vol. 05 2015 comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india's residential sector 0.900 1.000 0.800 0.700 0.600 0.500 0.400 0.300 0.200 0.100 0.000 c fw dc lpg k l org sc1 sc2 rural sc3 sc4 sc5 sc6 0.900 1.000 0.800 0.700 0.600 0.500 0.400 0.300 0.200 0.100 0.000 c fw dc lpg k l urban org sc1 sc2 sc3 sc4 sc5 sc6 figure 5: ses index of energy sources for different scenarios for rural and urban india. di: dimensional index lpg: liquefied petroleum gas avl: availability aff: affordability eff: efficiency acp: acceptability aff: affordability ahp: analytical hierarchy process avl: availability ci: consistency index cr: consistency ratio di: dimensional index eff: efficiency fa: factor analysis hh: household lpg: liquefied petroleum gas mtoe: million tonne oil equivalent org: original pca: principal component analysis ref: reference ri: random index sc: scenario ses: sustainable energy security sfc: specific fuel consumption tfec: total final energy consumption toe: tonnes oil equivalent tpes: total primary energy supply references [1] modi v, mc dade s, lallement d, sagir j, energy services for the millennium development goals report, new york, energy sector management assistance 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http://www.sciencedirect.com/science/article/pii/s1364032109001841 http://lh.ece.dal.ca/enen/2009/erg200906.pdf http://lh.ece.dal.ca/enen/2010/erg201002.pdf http://aperc.ieej.or.jp/file/2010/9/26/aperc_2007_a_quest_for_energy_security.pdf http://www.sciencedirect.com/science/article/pii/s0301421510000224 http://bpmsg.com http://www.sciencedirect.com/science/article/pii/s030142159600105x http://www.cicero.uio.no/workshops/nfu-12p/9_panel.session_5c_2711_1_lk.grimsby.pdf international journal of sustainable energy planning and management vol. 05 2015 39 kapil narula source coal firewood dung cake lpg kerosene electricity unit kg kg kg kg lt kwh energy content (mj/unit) 18 15 12 46 33 3.6 coal firewood dung cake lpg kerosene electricity capital cost (rs) (lower limit) 150 0 0 1200 250 790 capital cost (rs) (upper limit) 300 0 0 2500 500 3000 capital cost (rs) (estimated) 200 0 0 1500 350 2000 life of stove (months) 24 12 12 120 36 120 monthly capital cost (calculated) (rs/month) 8.33 0 0 12.5 9.72 16.67 table a.1: list of selected dimensions, indicators and components. dimension name indicator components unit avl1 % of hh using ___as primary 80 % weight: cook/water heating % physical energy source1 availability 20 % weight: lighting (access and avl2 average qty of energy consumption) (includes cooking and lighting) qty of energy1 × energy content unit × (mj/unit) consumed per month per capita per unit of energy source2 =mj affordability aff1 monthly capital cost of end capital cost of cook stove/life of rs/month use device for cooking * stove 3 aff2 cost of fuel purchase per month for average unit price of energy rs per hh meeting requirement of cooking **4 consumed per month 1 × specific per month fuel consumption5 × cooking work reqd per hh per month6 acp1 co emissions from end use co emissions from cook stove mg/m3 environmental device for cooking using ___ energy source7 acceptability acp2 pm emissions from end use pm emissions from cook stove mg/mg3 device for cooking using ___ energy source7 efficiency eff efficiency of end use (energy output/energy input)8 × 100 % device for cooking *capital cost of end use device for lighting has not been accounted for as cost will be incurred only if there is access to electricity connection. discount rate has not been considered. **efficiency of end use device for lighting has not been accounted for as it is not applicable to all energy sources and use of electricity for lighting is dependent on access to electricity connection appendix 1 1 data source: [27] 2 assumed energy content per unit of energy source: 3 assumptions for cost and life of cook stove 40 international journal of sustainable energy planning and management vol. 05 2015 comparative assessment of energy sources for attaining sustainable energy security (ses): the case of india's residential sector energy source coal firewood dung cake lpg kerosene electricity stove traditional 3 stone fire traditional 3 pan superflame nutan /perfect hotplate double burner per cent heat 23.2 15.7 11.1 60.4 50(40.4-60.4) 71.3 utilization data source: [28] source coal firewood dung cake lpg kerosene electricity unit kg kg kg kg lt kwh sfc 95 217 305 20.1 26.5 0.18 data source: [28] data source: author’s own assessment based on market survey 4cost of fuel purchase per month (rs) = monthly fuel consumption per hh × average unit price of energy (rs/unit); where monthly fuel consumption per hh (g) = sfc (g fuel/kg cooked food) × cooking work required per hh per month 5specific fuel consumption is the fuel used per unit of product produced. the unit of product produced for cooking is kg of cooked food. sfc values in units of (g fuel/kg cooked food) which are used for various energy sources are as follows: 6cooking work required per hh per month (kg cooked food) = (1.3 kg per capita per meal)x(3 meals per day)x (5 members per hh) 7 data source: author estimates based on [29] 8 efficiency of cook stove (in %) data source: [28] << 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice au_35.indb international journal of sustainable energy planning and management vol. 35 2022 65 *corresponding author – e-mail: sasongko@ugm.ac.id international journal of sustainable energy planning and management vol. 35 2022 65–82 abstract greenhouse gas emissions produced by the energy sector, including the transportation sector, are a problem that must be resolved. one way to solve this problem is to provide energy in the transportation sector in a sustainable way, by using renewable energy. an integrated renewable energy system has been implemented through an optimization model for the supply of electricity and hydrogen energy for road transportation. the proposed model is in the form of mixed-integer linear programming with two objective functions: planning costs and greenhouse gas emissions. the multi-objective model was solved using the linear weighted-sum method. in this article, three scenarios are developed, namely the business-as-usual scenario, the renewable energy scenario, and the renewable energy with energy storage system scenario. the business-as-usual scenario is used to analyze the supply of electricity and hydrogen by prioritizing the objective function of planning costs. the renewable energy scenario prioritizes the objective function of greenhouse gas emissions in the optimization calculation, but without an energy storage system. the optimization calculation with the renewable energy with energy storage system scenario prioritizes the objective function of greenhouse gas emissions by including the energy storage system. the proposed model in a multi-objective form is implemented in a case study of road transportation in the province of yogyakarta, indonesia. the results obtained indicate that the renewable energy with energy storage system scenario produces the lowest emission level of 56.55 mt co2 equivalent, but with the highest planning cost of 192.13 billion usd. an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes greenhouse gas emissions rahmat adiprasetya al hasibia, sasongko pramono hadib1 adepartment of electrical engineering, universitas muhammadiyah yogyakarta, jl. brawijaya, bantul, 55183, indonesia bdepartment of electrical engineering and information technology, universitas gadjah mada, jl. grafika no. 2, yogyakarta, 55281, indonesia keywords renewable energy; optimization model; ghg emission; transportation sector; electricity; hydrogen http://doi.org/10.54337/ijsepm.7039 1. introduction demand for energy is increasing along with the growth in economic activity. this growth in energy demand causes a negative impact on the environment and has now become a global problem. one sector with a large energy demand is the transportation sector. globally, the transportation sector has 23.3% of the total energy demand [1]. in particular, the energy demand for the transportation sector in indonesia reached 41.1% of overall energy demand [2] and in yogyakarta province it reached 57.9% of overall energy demand [3]. energy demand in the transportation sector in indonesia is met by using two main types of fuel: gasoline and diesel. in terms of supplying energy for the transportation sector, meeting energy demand at a minimum cost is a very challenging goal to achieve. it is increasingly facing greater challenges when taking into account the impact of energy use on the environment. the negative impact in the form of exhaust emissions from the combustion of fossil fuels will increase along with the increase in demand for fossil energy. thus, minimizing the cost of 66 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… providing energy and minimizing the impact on the environment from the use of fossil fuels are two goals that must be achieved simultaneously by energy providers. strategies that combine aspects of energy planning costs and total emissions must be developed in an integrated manner. several energy supply strategies that can be applied in the transportation sector while taking into account the impact on the environment are changes in transportation modes, application of fuel switches, and use of more efficient technology. the combination of these three strategies can reduce energy demand and greenhouse gas emissions in the transportation sector by 20.5% and 24.8%, respectively [4]. in particular, the fuel switch strategy in the transportation sector has been comprehensively described to reduce emissions [5]. from the point of view of technological developments in the transportation sector, alternative technology is expected to produce a transportation system that is environmentally friendly as a result of the use of different energies, namely hydrogen and electricity. there are two types of hydrogen-fueled vehicles: hydrogen fuel cell (h2fc) and hydrogen internal combustion engine (h2ice). h2fc has a higher average performance compared with h2ice [6] based on the parameters of emissions, social costs, and energy efficiency. the battery electric vehicle produces 35%– 50% fewer emissions with current technology compared with the internal combustion engine vehicle [7] to obtain maximum benefits from an environmental perspective, the supply of electrical and hydrogen energy must be carried out in a sustainable way, namely with a renewable energy system (res). many studies have been conducted to analyze the supply of electricity based on res. despite higher costs, the provision of electricity with res can significantly reduce greenhouse gas (ghg) emissions [8]. the implementation of wind turbines and photovoltaics can provide 77% of energy demand per year, according to a case study of a village in switzerland [9]. in the provision of electricity, res shows a good sustainability index, especially for environmental and social indicators [10]. hydrogen can be produced using several methods, including electrochemical water splitting, thermochemical water splitting, and biomass gasification. for electrochemical water splitting, hydrogen is produced by using electricity to separate the hydrogen components from water. electrochemical water splitting with high-temperature electrolysis technology has good efficiency, but there are structural and environmental challenges [11]. hydrogen production can be carried out more sustainably with catalysts made from chemical waste from the pulping industry [12]. for hydrogen produced from biomass, efficiency can be increased using the solar thermal electrochemical process [13]. although many studies have been conducted on the design and analysis of res in the supply of energy, there are still some shortcomings in previous research, namely how to provide support to decision makers to develop an integrated res, especially for the transportation sector. most research focuses on processes that consist of one direction, i.e., res to produce electricity and hydrogen production to meet hydrogen demand (including h2fc). several optimization models have been developed to produce sustainable energy in the transportation sector based on res [14]. another study has produced a model of energy supply for the transportation sector by integrating carbon capture and sequestration technology [15]. the two studies did not provide information on how much capacity must be built to meet the demand per year. planning for energy supply to meet energy demand in the transportation sector must be able to determine optimally the capacity of the facilities that must be built. in addition, the optimal value of the planning costs and the resulting emissions must be calculated simultaneously. to achieve both these goals simultaneously, one approach is to develop an optimization model that is solved by a multi-objective method. in energy planning, the optimization model calculated by the multi-objective method has been shown to be effective in planning power generation capacity while taking into account the potential of renewable energy [16], [17]. in addition, a combination of multi-objective methods and the calculation of the sustainability index is applied in power generation capacity planning [18] and expansion of the electricity distribution network [19] taking into account the load in the form of electric vehicles. this article aims to produce an integrated optimization model in the supply of electricity and hydrogen for the transportation sector by maximizing profits from an environmental point of view. the resulting optimization model is mixed-integer linear programming (milp) with two objective functions. furthermore, the two objective functions are solved by using the linear weighted-sum method. the innovative methods proposed in this article are: (i) representation of res using a network-based, and (ii) an integrated model to optimize renewable energy sources in the supply of electricity and international journal of sustainable energy planning and management vol. 35 2022 67 rahmat adiprasetya al hasibia, sasongko pramono hadi hydrogen in the transportation sector while taking into account planning costs and emissions. the optimization model design is based on res with various energy conversion technologies. the optimization model is designed based on the general constraint functions (i.e., energy demand fulfillment, energy balance, and available capacity), which also include res-related constraint functions. finally, the model is applied using energy demand data in the transportation sector for the province of yogyakarta, indonesia to illustrate the effectiveness of the model design 2. an integrated energy supply system figure 1 shows the integrated renewable energy system (res) developed in this article. in this figure, renewable energy sources consist of wind energy, solar radiation, and biomass. wind energy and solar radiation are classified as variable renewable energy, whereas conversion technology, namely wind turbine and photovoltaics, is a non-dispatchable power plant. biomass energy sources are converted into electricity with power generation technology using biomass fuel, which is categorized as a dispatchable power plant. the electricity produced by the technology of converting renewable energy into electricity is then used to meet the demand for electricity in the transportation sector, in this case electric vehicles. in addition, electricity is also used as input for the electrochemical water-splitting process to produce hydrogen. the electrochemical process used in this model is water electrolysis technology. electricity needs for the transportation sector and water electrolysis are supplied through res. if the potential for renewable energy is insufficient, the need for electricity will be supplied by electricity imported from the grid. in the same way, electricity from the grid is used to meet the demand for electricity in the transportation sector, and electricity is also used for hydrogen production. in the model, electricity obtained by importing from the grid is modeled using a dispatch rule in the form of process share. this approach has been taken because the development of the existing power generation capacity has been determined by the electricity grid planning. 3. model description this section consists of two parts. the first part describes the res model, and the second part describes the f igure 1: integrated energy supply system. 68 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… optimization model used in this study. the res model, consisting of wind turbines, photovoltaics, and biomass generators, is described in detail in the first section. the second section describes in detail the objective functions and constraint functions used in the optimization model. 3.1 renewable energy system there are three renewable energy technologies that are included in the integrated res to produce electricity, namely wind turbines (wt), photovoltaics (pv), and biomass power plants (bp). the production of electricity for these three technologies is expressed as , , , ,8760 e n t o g o g t gw pα= × × (1) where , , e t o gw is the electricity (mwh) produced by generating technology g, at operating time o, and in year t. ,o gα is the availability factor (percent) for each generation technology g at operating time o. , n t gp is the generation technology g installed in year t in mw. the constant 8760 is the number of hours in a year. energy from hydrogen fuel is obtained from the electrochemical water-splitting process using water electrolysis technology. energy production from hydrogen fuel is determined by ,, , h h e we t h h t hw hhv wη= × × (2) where , h t hw is the energy produced (mwh) by technology h (in this case, water electrolysis) in year t. parameters hhhv and hη are the higher heating value of hydrogen in mwh/t and the efficiency of the water electrolysis process in producing hydrogen as a percent, respectively. , , e we t hw is the electricity required by technology h in year t in mwh. wt and pv are variable renewable energies, so the energy storage system (ess) needs to be included in the integrated res model. the ess used is a battery. the battery operation in the integrated res is expressed by , d c c t o init od p soc soc p tη η   = + × − ×∆    (3) where ,t osoc is the state of charge of the battery (percent) at operating time o in year t. the initsoc parameter is the state of charge in the initial state. cη and dη are efficiency parameters when the battery is charging and discharging, respectively. cp and dp are battery charging power and discharging power, respectively. ot∆ is a time step (1 hour). in the designed integrated res, when the potential for renewable energy has reached its maximum limit, the electricity demand for both road transportation and water electrolysis is provided through the import of electricity from the grid. the electricity imported from the grid is modeled using the process share dispatch rule stated by , , e imp c t i i t ii i w wβ η ∈ = × ×∑ (4) where ,e imptw is the electricity imported from the grid in year t in mwh, iβ is the process share of power generation technology i in the grid system as a percent, iη is the efficiency of power generation technology i, and c iw is the amount of energy consumed by generating technology i in year t in mwh. ciw is generated from , , c t i i t iw hhv fuel= × (5) where ihhv is the higher heating value of the fuel used by power generation technology i in mwh/fuel units. ,t ifuel is the amount of fuel required by generating technology i in year t in fuel units. the fuel unit is tonne for coal, liter for diesel, and mmbtu for natural gas. 3.2 optimization model in this section, the optimization model is formulated based on the integrated res described in sections 2 and 3.1. the optimization model is a mixed-integer linear programming (milp) model with a single node approach. with the single node approach, the transmission system of electricity and hydrogen is not included in the model. this model consists of two objective functions and the constraint functions, which will be explained later. the purpose of the optimization model is to determine the res capacity that must be built in year t to meet the demand for electricity and hydrogen energy while minimizing the impact on the environment. in this model, the planning interval runs from 2020 to 2050. 3.2.1 constraint functions the first constraint function is energy balance, which states that energy production, both generated by integrated res and imported from the grid, must be able to meet energy needs in the transportation sector. for electricity, the energy balance is expressed by ( ) ( ) ( ) ( ) , , , , , , , , , e e imp e we d t o g t t h og g ed c t o m om m w w w p t w p t t t o o ∈ ∈ + − + ×∆ ≥ + ×∆ ∀ ∈ ∀ ∈ ∑ ∑ (6) international journal of sustainable energy planning and management vol. 35 2022 69 rahmat adiprasetya al hasibia, sasongko pramono hadi where , , ed t o mw is the demand for electricity in the transportation sector (mwh) in each operating hour o, for each mode of transportation m, and in year t. this constraint function states that the amount of electricity produced by res, imported electricity, and electricity produced by the ess must be more than or equal to the total electricity needs of the transportation sector, electricity used for the water electrolysis process, and electricity stored in the ess. for energy derived from hydrogen, the energy balance constraint function is expressed as ( )2 2, , , h h dt h t mh h m mw w t t∈ ∈≥ ∀ ∈∑ ∑ (7) where 2, h d t mw is the demand for hydrogen energy (mwh) for transportation mode m in year t. the electricity used for the water electrolysis process cannot exceed the total production of integrated res electricity and electricity imported from the grid. this is expressed by the function constraint ( ) ( ), ,, , , , , e we e e impt h t o g tg gw w w t t o o∈≤ + ∀ ∈ ∀ ∈∑ (8) where this constraint function applies to every hour of operation o in year t. the purpose of the constraint function in equation (8) is to relate the electricity requirements of the water electrolysis process to the production and import of electricity, as shown in figure 1. the power generation capacity added in a given year is determined by ( ) ( ),, , , ,added e avail et g g t gp p n t t g g= × ∀ ∈ ∀ ∈ (9) where , added t gp is the capacity of generating technology g added in year t in mw and , e t gn is an integer variable representing the number of generating technology g in year t. parameter ,e availgp is a parameter that indicates the addition size (mw) that can be added for each type of technology g. the total generating capacity for each type of technology installed is the total generating capacity in year t and previous years. this is stated by ( ), ,| , ,g n added t g t gt t t t t t l p p t t′′ ′∈ ≤ − ≤′= ∀ ∈∑ (10) where , n t gp is the installed generating capacity (mw) for each type of technology g in year t. the same applies to the total capacity of hydrogen facilities where hydrogen energy production cannot exceed the capacity established in year t. this is stated by ( )2 2, 2, ,| , ,h h h avail h t h h t ht t t t t t l w p n t t ′ ′∈ ≤ − ≤′ ≤ × ∀ ∈∑ (11) where 2,h availhp is the capacity of the hydrogen facility that can be added and 2, h t hn is an integer variable that represents the number of hydrogen facility. the capacity of the hydrogen production facility is expressed in mw, which is the conversion result of t/day. the constraint function for ess, which states that the electricity that can be stored in the battery does not exceed the amount of available capacity, is expressed as ( ) ( ) ,| | , , ess min t t ot t t t t t t t ess max t oc n s soc soc n t t o o ′′ ′∈ ∈ ≤′ ′≤ ′ × ≤ ≤ × ∀ ∈ ∀ ∈ ∑ ∑ (12) where esstn is the number of batteries installed in year t. furthermore, the installed power generation technology capacity cannot exceed the available renewable energy potential. this constraint function is represented by ( ), , n ret g gp p t t≤ ∀ ∈ (13) where regp is the technical potential for any renewable energy (mw) used as primary energy in the generation of electricity. 3.2.2 objective functions the proposed optimization model has two objective functions: planning costs and impact on the environment. the objective function of planning costs consists of investment costs and operating costs of electricity and hydrogen energy production facilities. the objective function of the impact on the environment expresses the amount of greenhouse gas (ghg) emissions produced by electricity imported from the grid. ghg emissions consist of non-biogenic carbon dioxide (co2), methane (nh4), and nitrogen oxide (nox) gases. both objective functions must be minimized in the optimization calculation. the objective function of planning costs is expressed as 1min ic voc foc impf f f f f ∆ = + + + (14) where icf , vocf , and focf are total investment costs, total variable operating costs, and total fixed operating costs for electricity and hydrogen energy production facilities, respectively. impf is the total cost of electricity imported from the grid. variables in set 70 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… { }2 2 ,, , , , , , , ,, , , , , , , ,added n e ess h e h n e impt g t g t g t h t o g t h t g tp p n n n w w p w∆ = are the optimization decision variables of the cost-related objective function. the investment cost of energy production facilities is expressed as , 2 , c e ess ess g t gt t g g t tic c h h t ht t h h i n i n f i n ∈ ∈ ∈ ∈ ∈  × + ×  = γ  + ×  ∑ ∑ ∑ ∑ ∑ (15) where parameters cgi , essi , and chi are investment costs for electricity production facilities, investment costs for ess units, and hydrogen, respectively, in usd/mw. γ is the capital recovery factor expressed as ( ) ( )1 / { 1 1}n nr r rγ = + + − (16) where r is the interest rate and n is the technology lifetime. the variable operating costs of energy production facilities are expressed as 2 , , , voc v e v h g t o g h t ht t o o g g t t h h f c w c w ∈ ∈ ∈ ∈ ∈ = × + ×∑ ∑ ∑ ∑ ∑ (17) where parameters vgc and v hc represent the operating costs of electricity and hydrogen energy production facilities, respectively, expressed in usd/mwh. fixed operating costs, focf , applied only to power generation technology and ess, are expressed as , foc f n ess ess g t gt t g g t t f c p c n ∈ ∈ ∈ = × + ×∑ ∑ ∑ (18) where fgc and essc are fixed operating cost parameters for each type of power generation technology g and ess units, respectively, in usd/mw. the last part of the objective function of planning costs is the cost of electricity imported from the grid, impf , which is expressed as ,imp imp e imptt tf c w∈= ×∑ (19) where impc is the cost of electricity imported from the grid in usd/mwh. the objective function of the impact on the environment is expressed as 2 , ,ùmin c e i e t it t i i e e f wγ ε ∈ ∈ ∈ = × ×∑ ∑ ∑ (20) where eγ is the externality cost of pollutant e in usd/t, ,i eε is the emission factor for each type of pollutant e (t/mwh) generated from fuel combustion of the grid system power generation technology i. the variable in set { },ct iwω = is the optimization variable related to the emission objective function. 3.2.3 proposed scenarios of the multi-objective model the multi-objective model that has been developed is solved by using the linear weighted-sum method. using this method, the two objective functions can be expressed as min kkk kf fω∈= ∑ (21) where kω is the weight for each objective function k that satisfies 1, 0k kk kω ω∈ = ≥∑ (22) and kf is the kth objective function. in this model, there are two objective functions and both objective functions have the same unit, namely usd. thus, the objective function can be written as 1 21 2min f f fω ω= × + × (23) based on the formulation of the multi-objective optimization model in equation (23), three scenarios are used to analyze the role of renewable energy sources in the supply of electricity and hydrogen in the transportation sector. the first scenario is the business-as-usual (bau) scenario, which focuses on the objective function of planning costs. the second scenario is a renewable energy (re) scenario, which focuses on providing electricity and hydrogen energy by minimizing the impact on the environment. the second scenario is divided into two, namely the re scenario without ess and the re scenario with ess. the scenarios are summarized in table 1. table 1: proposed scenario for optimization. scenario code scenario remarks bau business as usual 1 21, 0ω ω= = re renewable energy without ess 1 20, 1, 0 essnω ω= = = re-ess renewable energy with ess 1 20, 1, 0 essnω ω= = ≠ international journal of sustainable energy planning and management vol. 35 2022 71 rahmat adiprasetya al hasibia, sasongko pramono hadi 4. application to the future road transportation sector in yogyakarta province the proposed optimization model is applied to anticipate changes in the energy structure of the transportation sector in yogyakarta province, indonesia. this province does not have fossil energy resources. all energy demands, including those for the transportation sector, are met by importing energy from outside the province. however, there are several potential renewable energy sources in yogyakarta province. the proposed model is used to analyze the role of available renewable energy sources in providing electricity and hydrogen in the transportation sector while minimizing the impact on the environment. 4.1 energy demand projections road transportation in yogyakarta province consists of passenger transportation and freight transportation. passenger transportation consists of passenger cars, buses, and motorcycles, while the mode of freight transportation is trucks. table 2 shows road transportation activities in yogyakarta province in 2020, based on indonesia’s national energy roadmap [20]. the fuel used for the transportation sector in 2020 consists of gasoline and diesel, with an energy consumption of 19.81 x 106 gj and 4.48 x 106 gj, respectively. table 3 shows the energy intensity of each mode of road transportation. the energy demand projection in the transportation sector is calculated using , , ,i t i t i ted ei a= × (24) where ,i ted is the energy demand for mode i in year t (in gj or gwh), ,i tei is the energy intensity for transportation mode i in year t, and ,i ta is the activity for transportation mode i in year t. energy demand projections carried out in national energy roadmap [20], energy intensity is assumed to be constant during the projection period. meanwhile, activity for each mode of transportation is determined using ( ), , 1 1i t i t ta a g−= × + ∆ (25) where , 1i ta − is the activity of the transportation sector for mode i in the previous year and tg∆ is gdp growth in year i (as %). in the same document, gasoline and diesel are no longer used as fuel in the transportation sector at the end of the projection year. both fuels are replaced with electricity and hydrogen. in 2050, the target of using electricity and hydrogen in the transportation sector is 85% and 15% of total energy consumption, respectively. figure 3 shows the results of the projected energy demand for road transportation for yogyakarta province based on the type of energy (a) and the type of road transportation mode (b). this figure shows an optimistic projection of energy demand in the transportation sector. the results of this projection show that fossil energy will no longer be used to support road transportation activities in 2050. fossil fuels, namely gasoline and diesel, will be replaced with energy derived from electricity and hydrogen. figure 3 shows the demand for electricity and hydrogen through 2050. the energy demand for road transportation will reach 11.99 twh in 2050. this energy demand consists of 9.95 twh of electricity and 2.04 twh of energy from hydrogen fuel. in general, energy demand for road transportation has increased by an average of 2.0 % per year. the proposed optimization model is used to analyze the potential role of available renewable energy in the energy supply as shown in figure 3. for electric vehicle loads, the load pattern used is shown in figure 4 [21]. this load pattern is used to determine the operating hours of renewable energy generation technology, which is 24 hours. 4.2 energy sources as previously explained, yogyakarta province does not have fossil energy sources to meet energy demand. however, it has several renewable energy sources that can be used to partially meet this demand. three renewable energy sources are used in the optimization calculations with the proposed model, namely solar radiation, wind power, and biomass. power plants with table 2: activity level of road transportation in 2020. mode activity in 2020 unit passenger car 4,612.40 million passenger-km bus 5,897.15 million passenger-km motorcycle 16,599.00 million passenger-km truck 3,836.74 million tonne-km table 3: energy intensity of road transportation in 2020. mode energy intensity in 2020 unit passenger car 1,711.38 gj/passenger-km bus 149.67 gj/passenger-km motorcycle 744.75 gj/passenger-km truck 914.42 gj/tonne-km 72 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… figure 2. energy demand for road transportation based on (a) fuel and (b) transportation mode. figure 3: project ions of electricity and hydrogen energy demand. figure 4: electric vehicle load shape. international journal of sustainable energy planning and management vol. 35 2022 73 rahmat adiprasetya al hasibia, sasongko pramono hadi primary energy from solar radiation and wind power are non-dispatchable variable renewable energy power plants. figure 6 shows the daily availability factor for these two types of power generation technologies in yogyakarta province. power plants with biomass as their primary energy source are categorized as dispatchable power plants. table 4 shows the potential for the three renewable energy sources [20]. 4.3 system component characteristics the integrated res component consists of components for generating electricity and hydrogen production facilities. these two components have economic and technical characteristics. economic characteristics include investment costs and operating costs. technical characteristics include production capacity, efficiency, and lifetime. table 5 summarizes the technical characteristics for the components of electricity generation with renewable energy [22] and hydrogen production facilities [23]. for the hydrogen production facilities, the production capacity expressed in t/day is then converted into mw using the higher heating value (hhv) of hydrogen value of 33.27 mwh/t. in calculating the capital recovery factor, the interest rate used is 5%. the environmental characteristics of electricity generation are applied to the grid system. the grid system is an interconnected system in java, madura, and bali which is known as the java-madura-bali (jamali) system. figure 7 shows the composition of the power plant in the jamali system [2]. it is estimated that coal-fired power plants will still dominate in generating electricity in the jamali system. renewable energy potentials, such as hydro, pv, wind, and geothermal, are developed in the generation of electricity to replace part of the need for natural gas. based on the composition of power plants in the jamali system, ghg emissions are generated by coal, natural gas, and diesel power. table 6 summarizes the ghg emissions for these three power plants [24]. the ghg emissions shown in table 6 are then converted into units of global warming potential (t co2 equivalent) using coefficients for co2, ch4, nox of 1, 30, and 265, respectively. 5. results and discussion the data described in section 4 are used as parameters in the proposed optimization model for electricity and hydrogen energy production, capacity of facility figure 5: availabil ity factor of solar and wind energy. table 4: technical renewable energy potential. renewable energy technical potential (mw) solar radiation 996 wind power 1,079 biomass 224 74 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… table 5: economic and technical parameters of the electricity and hydrogen production facilities. type additional capacity investment cost (m usd) fixed om cost (usd/mw) variable om cost (usd/mwh) efficiency (%) electricity production photovoltaics (pv) 150 mw 1.31 $15.25/mw wind turbine (wt) 50 mw 1.67 $35.14/mw biomass power plant (bp) 50 mw 4.09 $125.72/mw $4.83/mwh battery 50 mw 1.39 $24.8/mw 85 hydrogen production water electrolysis 3 t/day 70.4 $270/t-h2 59 figure 6: process share of the jamali power system. table 6. environmental characteristics of power generation technology. type co2 (t/mwh) ch4 (g/mwh) nox (g/mwh) diesel 0.26 10.79 719.99 coal 0.33 9.88 13.8 natural gas 0.18 7.07 9.9 expansion analysis, and cost and emission analysis. the analysis is carried out for three predetermined scenarios, namely the bau scenario, the re scenario without ess, and the re scenario with ess. 5.1 energy production figure 7 and figure 8 show the production of electricity and hydrogen for the three scenarios. the three scenarios produce the same amount of electricity and hydrogen to meet the demand for both electricity and production of hydrogen energy for road transportation. based on the bau scenario shown in figure 7, imports of electricity and production of hydrogen energy in 2050 will reach 12.50 twh and 2.04 twh, respectively. the results from the bau scenario show that importing electricity is more cost-effective compared with producing international journal of sustainable energy planning and management vol. 35 2022 75 rahmat adiprasetya al hasibia, sasongko pramono hadi electricity from renewable energy sources. figure 8 (b) shows the electricity generated by each generation technology in the jamali system if the electricity imported from the grid is aggregated. the re scenario, which focuses on minimizing the impact on the environment, results in the production of electricity and hydrogen as shown in figure 8. the re scenario consists of two scenarios: without ess and with ess. the re scenario without ess is shown in figure 8 (a). when compared with the bau scenario, the re scenario prioritizes the production of electricity using renewable energy technology. it is also seen that the renewable energy potential in yogyakarta province cannot meet demand during the simulation period. in 2050, imported electricity is 5.79 twh and energy produced from renewable energy technology is 6.53 twh. of this total electricity, 2.55 twh is used as input for water electrolysis to produce hydrogen. in 2050, the amount of energy obtained from hydrogen will be 2.28 twh. in the re scenario, imports of electricity constitute only 47.8% of the total electricity demand. the impact of ess implementation in integrated res is shown in figure 8 (b). with the implementation of ess, res can generate more electricity compared with the scenario without ess. in 2050, the electricity produced from the integrated res is 7.61 twh and the electricity that must be imported is 4.97 twh. the electricity used by water electrolysis to produce hydrogen is the same as that produced in the scenario without ess, which is 2.55 twh. thus, the implementation of ess in the integrated res resulted in imports of electricity which constitute only 39.5% of the total electricity demand. in particular, in figure 8 (b) in 2044 and 2045, the production of electricity by pv increases compared with the scenario without ess. this is due to the use of batteries, which have an impact on the addition of higher pv capacity for the scenario with ess compared with the scenario without ess. f igure 7: energy production based on the bau scenario: (a) total grid electricity and (b) aggregated based on process share of grid electricity. fi gure 8: energy production based on (a) the re scenario and (b) the re-ess scenario. 76 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… fig ure 9: daily electricity generation based on (a) the re scenario and (b) the re-ess scenario. figu re 10: sankey diagram of electricity and hydrogen in 2050 based on the re-ess scenario (in twh). international journal of sustainable energy planning and management vol. 35 2022 77 rahmat adiprasetya al hasibia, sasongko pramono hadi the difference between the re scenario and the re-ess scenario in electricity generation based on operating hours is shown in figure 9 (a) and (b). it can be seen that the implementation of ess produces a different pattern of electricity generation compared with the re scenario. electricity generated in the re-ess scenario is greater than in the re scenario. ess stores electricity during the day and will be used at night. the difference in electricity production with ess is due to the addition of battery capacity in the integrated res. figure 10 is a sankey diagram showing the flow of electricity from the grid and the integrated res. this diagram was produced based on the flow of electricity in 2050 using the re-ess scenario. it can be seen that the amount of electricity imported from the grid and electricity produced from the integrated res meet the demand for electricity for road transportation and for water electrolysis in 2050. furthermore, the hydrogen produced by water electrolysis meets the energy demand in 2050 for road transportation. 5.2 capacity of facility expansion the energy production described in the previous section results from the construction of energy production facilities. for electricity, the capacity that must be built during the optimization interval is shown in figure 11. the addition of power generation capacity will reach its maximum value in 2044 with the total capacity for pv, wt, and bp of 900 mw, 1,050 mw, and 200 mw, respectively. the re-ess scenario results in additional battery capacity of 50 mw from 2031, reaching the highest capacity of 150 mw in 2035. the re-ess scenario results in additional pv capacity starting in 2042, reaching the highest value in 2044. figure 12 shows the required additional capacity for water electrolysis. it can be seen that the addition of water electrolysis capacity occurs gradually with an average capacity increase of 9 t/day. overall, the total water electrolysis capacity required until 2050 is 235 t/day. 5.3 emission and cost analysis figure 13 shows the impact on the environment represented by ghg emissions for each scenario. it can be seen that the bau scenario produces the largest emissions compared with the other scenarios. this is due to the overall demand for electricity being met by importing from the grid, where the composition of power generation in the grid system is dominated by coal and natural gas. in 2050, the cumulative value of ghg emissions based on the bau scenario will reach 394.95 mt co2 equivalent. compared with the bau scenario, the other two scenarios, the re and re-ess scenarios, produce lower ghg emissions. the ghg emissions produced by the re and re-ess scenarios in 2050 are 91.55 mt co2 equivalent and 56.55 mt co2 equivalent, respectively. the percentage reduction in ghg emissions from the re and re-ess scenarios compared with the bau scenario is 76.8% and 85.7%, respectively. in terms of planning costs, the opposite phenomenon occurs, where the bau scenario results in lower planning costs compared with the re and re-ess scenarios (figure 14). in the bau scenario, the cumulative planning costs in 2050 only reach 125.30 billion usd. for the re and re-ess scenarios, the planning costs only have a slight difference as the two lines in figure 14 almost overlap. the minor differences between the re and re-ess scenarios lie in externality costs, operation and maintenance costs, and investment costs. the externality costs in the re scenario are 1.11 million usd higher than in the re-ess scenario. operation and maintenance costs for the re-ess scenario are lower by figur e 11: capacity addition of renewable energy power plants based on (a) the re scenario and (b) the re-ess scenario. 78 international journal of sustainable energy planning and management vol. 35 2022 an integrated renewable energy system for the supply of electricity and hydrogen energy for road transportation which minimizes… figure 12: additional capacity for water electrolysis. figure 13: cumulative global warming potential based on the scenarios. 3.72 million usd compared with the re scenario. the investment costs generated by the re-ess scenario are 14.78 million usd lower than the re scenario. in 2050, the cumulative planning costs for the re and re-ess scenarios are 191.74 billion usd and 192.13 billion usd, respectively. compared with the bau scenario, the planning costs for the re and re-ess scenarios are higher by 53.0% and 53.3%, respectively. the bau scenario simulates the state of road transportation based on the results of energy planning carried out by the indonesian ministry of energy and mineral resources for the province of yogyakarta [20]. without the intervention of renewable energy-based power generation technology, the environmental impact that occurs is far greater than the optimization of renewable energy sources in the provision of electricity for road transportation. although there are shortcomings in terms of planning costs, utilizing local energy sources will increase the independence of the energy supply in yogyakarta province. international journal of sustainable energy planning and management vol. 35 2022 79 rahmat adiprasetya al hasibia, sasongko pramono hadi 6. conclusion the mixed-integer linear programming optimization model was developed to analyze the potential of locally available energy in supplying electricity and hydrogen for road transport. the model was applied to a case study in yogyakarta province, which is one of the smallest provinces in indonesia and which does not have fossil energy sources. the optimization model is used to analyze the role of available renewable energy sources in providing electricity and hydrogen in this province. the results obtained show that renewable energy sources can reduce dependence on imported electricity for road transportation. in the re scenario without ess, less electricity is generated for road transportation and there is a higher percentage of electricity imports. in the integrated res scenario with implementation of ess, more electricity is generated but with a lower percentage of electricity imports. from the perspective of the impact on the environment, the integrated res with ess scenario produces lower ghg emissions than the bau scenario. however, the cost of planning an integrated res with ess is higher than that of the bau scenario. the analysis can be developed to include sustainability indices, from an economic, environmental, and social point of view. by including sustainability indices, the implementation of integrated res in the provision of electricity for the transportation sector or other sectors can be carried out more comprehensively. in addition, the proposed model can be further developed with a larger implementation scale and consist of several areas with diverse energy potentials. thus, energy exports and imports can be analyzed more thoroughly. furthermore, the impact of the penetration of electric vehicles needs to be analyzed in terms of power system planning and operation. acknowledgement this research was conducted with the support of direktorat penelitian ugm dan tim peningkatan reputasi ugm menuju world class universitas-kantor jaminan mutu ugm. contract number: 6282/un1.p.iii/ sk/hukor/2021. references [1] eia, “international energy 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[online]. available: https://www.ipcc. ch/site/assets/uploads/2018/02/wg1ar5_all_final.pdf http:/doi.org/10.1016/j.apenergy.2020.115063 http:/doi.org/10.1016/j.apenergy.2020.115063 https://www.ipcc.ch/site/assets/uploads/2018/02/wg1ar5_all_final.pdf https://www.ipcc.ch/site/assets/uploads/2018/02/wg1ar5_all_final.pdf blank page international journal of sustainable energy planning and management vol. 38 2023 65 international journal of sustainable energy planning and management vol. 38 2023 65–82 *corresponding author – mattia.pasqui@unifi.it 1. introduction based on the european directive 2008/2001 [1], the italian government has recently published the technical rules for accessing the service for valorisation and incentive of shared electricity [2]. the concepts of renewable energy community (rec) and collective-self-consumption (csc) have been introduced by the regulatory authority for energy networks and environment [3], the ministry of economic development [4] and the ministry of justice [5]. a rec is defined as a legal entity composed of users belonging to the same heat pumps and thermal energy storages centralised management in a renewable energy community mattia pasqui*, guglielmo vaccaro, pietro lubello, adriano milazzo, carlo carcasci unifi università degli studi di firenze, department of industrial engineering, via di santa marta 3, 50139 firenze, italy abstract this paper examines a renewable energy community (rec) made up of 10 dwellings that collectively self-consume energy produced by a photovoltaic field connected to a water purifier. each dwelling heat demand is satisfied by means of heat pump (hp) coupled with thermal energy storage (tes), which can be managed to perform load shifting and increase collectiveself-consumption (csc). techno-economic analyses are performed accounting for hps’ cop variation with temperature and part load operations, as well as tes heat dispersion. a new centralised control strategy for hps is proposed and a sensitivity analysis is performed to assess the impact of varying tes system capacity. the results show that the centralised strategy can increase the csc by 12-30%, with tes sizes of 100-1000 litres respectively. but the electricity consumption of hps increases by 2-5% due to higher storage system temperatures causing worse average cops by 2.3-0.6% and higher thermal losses by 29-58%. as a result, rec’s energy independence rise, as does the amount of csc incentives, but electricity bills also increase. comparing these trends shows that csc incentives should be adjusted according to energy prices to ensure cost-effective outcomes for all stakeholders and encourage the adoption of similar centralised control strategies. keywords renewable energy community; collective self-consumption; load shifting; heat pump management; thermal energy storages http://doi.org/10.54337/ijsepm.7625 abbreviations cop coefficient of performance csc collective-self-consumption dh district heating hp heat pump lv low voltage mv medium voltage pv photovoltaic rec renewable energy community sc self-consumption tes thermal energy storage 66 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community low-voltage (lv) grid that decide to share the electricity produced by one or more systems powered by renewable energy sources. this “shared electricity” is called csc (see 2.2), and the higher it is, the less dependent the rec is from the medium-voltage (mv) grid. this article presents a method for increasing the csc by centrally managing a group of heat pumps (hps) and thermal energy storage (tes) devices. the aim of this management strategy is to shift the load and make use of surplus energy from a photovoltaic (pv) field. in simpler terms, we propose to manage everything from a central location to store and distribute heat more efficiently, using surplus energy from a pv. this article analyses an italian residential rec consisting of 10 dwellings that are powered by a combination of the national grid and a centralized pv field. the rec uses a decentralized heating system, where each dwelling has its own air-to-water hp and tes system. these technologies can be managed through a centralized monitoring and management system that tracks real-time data such as power production, demand, and tes temperature. given the growing importance of recs, pvs, and hps in the future energy system, this paper’s findings are relevant not only to researchers but also to industry players, including manufacturers and operators. in addition, it should be noted that the management strategy proposed in this paper can be easily replicated for other energy communities beyond the case study presented here. the following literature review will start from district heating (dh) concepts and move on to the use of decentralised hps and their management. finally, the emerging recs will be discussed and the role of this paper in research will be clarified. 1.1. literature review this paper does not deal specifically with district heating (dh); however, the technologies examined in this study are widely studied and used in dh systems. therefore, it is appropriate to begin the discussion by framing it in relation to the district heating sector. indeed, according with figure 1 the system analysed in this study can be compared to a high efficiency 5gdh system. the obvious difference is that the decentralised air-to-water hp systems considered do not use the heat in the pipeline as in dh systems, but the heat available in the ambient air. for more on the classification and evolution of dh systems, see [7]. dh systems are more efficient than individual heating solutions in areas with high heating demand, especially in central and northern europe and north america.[8]. figure 1: evolution of dh systems over time [6] and case study placement. international journal of sustainable energy planning and management vol. 38 2023 67 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho however, conventional dh networks often suffer from high thermal losses through the pipelines due to high operating temperatures [9,10]. in case of low heat demand densities, losses in the distribution system are about 15% of the heat generated [11]. to address this issue, fifth generation dh (5gdh) systems operate at lower temperatures and integrate decentralized components, reducing thermal losses and enabling the use of renewable sources at low temperatures [6]. there are currently many studies on innovative solutions for dh [12]: one such solution is the integration of air-to-water heat pumps (hps) and thermal energy storage (tes) systems with photovoltaic (pv) panels [13]. with smart management systems, tes can be heated during production peaks and the stored heat used during periods of high demand, contributing to load shifting and peak shaving [14]. while decentralized tes systems may offer better energy efficiency, they have higher investment costs [15], which can be offset through smart management systems that consider co2 emissions and increase energy independence from the grid [16]. the increasing use of hps for heating homes [17] has led to a rise in the electrical load in the lv distribution grid [18] and put pressure on the grid’s stability [19] and capacity [20]. the impact of a high penetration of hps has been shown to be more problematic than a massive introduction of pv [21]. to address this, there is a need for greater flexibility in demand [22], which can be achieved through tes [23] or demand-side response schemes [24]. hps can be used to heat the tes when energy is cheaper, which can significantly reduce operation costs [25]. to find the best strategy, factors like energy prices, cop, and thermal dispersion of the tes must be considered [26]. hp management strategies can be optimized based on daily forecasts [27], and the interaction between the hp, tes, and electrical storage should also be taken into account [17]. when comparing electricity and heat storage based on tariffs, there is a trade-off between prosumer benefits and grid impacts [28]. both heat storage and batteries can have positive or negative effects on peak demand depending on the presence of capacity-based tariffs [29]. while research has shown that hps can provide stability to the electrical grid in form of ancillary services and deliver cost savings, large-scale implementation is limited by the lack of aggregate control models [30]. the installation of a pool of hps in a group of dwellings, as a rec, can significantly contribute to the reduction of issues connected to the extensive electrification of residential heating systems and will also make pv installation more cost-efficient [31]. in addition to pvs, hps for recs coupled with solar thermal or solar collectors [32] and hybrid systems with boilers [33] have been studied. however, the installation of a centralised heat pump management system requires accurate data collection and reliable weather forecasts, as well as smart hps capable of receiving and implementing scheduling commands provided by a central supervisor [34]. such a supervisor could be the manager of the rec itself, but currently, there is a lack of literature on methods that a manager of a rec could use to efficiently operate the rec and about the technical solutions that could be implemented. studies on recs are focused on assessing the benefits that the establishment of a rec provides to all stakeholders, considering different rec configuration [35], different installed technologies [36] and business models [37]. the paper on the first rec created in italy [38] merely shows the economic benefits to the rec participants provided by the current regulation, but concludes that the integration of rec can enhance energy efficiency and provide flexible services, which could be managed synergistically with the overall electricity system. a study [39] of a multi-criteria dimensioning of photovoltaics and batteries for rec was developed, taking into account different entities working together. in the conclusions it is suggested a potential benefit from thermal load management in a rec. another study [40], deals with the impact of demand side management on rec as its composition varies. and again, the conclusions emphasise the importance of studying the electrification of thermal loads in recs, in particular with a focus on the role of hps. it has been demonstrated that centralised control of hps can effectively address the challenges associated with the widespread adoption of electric heating in residential buildings and an optimisation algorithm for coordinating the operations of a pool of hps has also been proposed [34]. however, this only aims to reduce peak absorption and does not perform an economic analysis that considers the point of view of individual stakeholders. such an analysis was only conducted for the management of batteries in a rec, considering both role based method [41] and optimization method [42]. 1.2. paper novelty and structure to the authors knowledge, no studies focused on the possibility to manage a pool of hps through a 68 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community centralised management system to increase recs performances in both energy and economic terms. the aim of this paper is to evaluate such solution and to propose a centralised hp management system through the analysis of a real rec at the design stage. this study wants to prove that hps and tess can be used to store the surplus of pv production inside the rec, to increase csc and decrease the dependence from the mv grid. this is a service for the national grid and so the grid operator should incentive it. the study is structured as follows. section 2 deals with the methodology and tools used to conduct the analysis. firstly, a description of the case study (2.1) is provided, while the focus of subsection 2.2 is the italian regulation on recs and csc. load forecasting techniques (2.3) and the simulation tools employed (2.4) are then described. a specific focus on hp modelling is given in subsection 2.5 and on two different management strategies in subsection 2.6. results are presented in section 0. subsection 3.1 shows the effects on rec energy balances of the two control strategies, while a sensitivity analysis is performed by varying the tes sizes in subsection 3.2, and the results of the economic assessment are presented in subsection 3.3. finally, results are discussed, and conclusion is drawn in the last section. 2. materials and methods in this chapter the reference study case is first presented (paragraph 2.1), followed by an explanation of the italian regulations concerning collective self-consumption figure 2: case study: areal photo and installed technologies. international journal of sustainable energy planning and management vol. 38 2023 69 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho (paragraph 2.2). next, a methodology for generating hourly load profiles in the absence of actual data is presented, using aggregated information from utility bills and surveys (paragraph 2.3). paragraph 2.4 illustrates the tool used for the simulation of energy balances, while 2.5 focuses on hp modelling. finally, paragraph 2.6 describes the two types of control strategies used to manage hps and tess: the standard one and the centralised one, which allows load shifting and the increase of csc. 2.1 reference cases study the rec studied consists of 10 single-family homes in the florence countryside and water purifier system, which provides clean water for houses (see figure 2 and table 1). the electrical demand of the water purifier is 34.4 mwh per year and can be shifted to daylight hours by rescheduling the activity of the water pumping and purification systems. for these reasons, the homeowners decided to invest together in a centralised 50 kwp pv system connected behind the meter of the water purified. the pv production is used primarily by the water purifier, yet the surplus of electricity can be used to cover the power demand of the dwellings. in each house, an air-towater hp coupled to a tes system is installed for heating and domestic hot water, to cover the thermal demand which was previously satisfied with a gas boiler (table 1 second column). a centralized hp management system is installed to better exploit the pv surplus and increase rec independence from the grid by increasing its csc. 2.2. collective-self-consumption under the italian regulation figure 3 shows how rec works and what csc is according to the italian regulation. the rec is composed by 11 users: 10 residential buildings and the water purifier. each user is connected via a meter to the lv grid and pays the bill for the electricity it withdraws from it (red arrow). dwellings take all the energy they need from the grid. the water purifier, on the other hand, only withdraws part of the energy it needs from the grid because a good part of it is produced and self-consumed thanks to the photovoltaic panels installed behind its meter (green arrow). in order for the electricity to be considered self-consumption, the consumption must be simultaneous to the table 1: case study: electrical demand building electric demand home appliances [mwh/year] thermal demand heating and dhw [mwh/year] residential 1 2.4 8.7 residential 2 5.1 21.4 residential 3 1.5 8.8 residential 4 6.2 15.9 residential 5 4.5 14.7 residential 6 2.6 21.3 residential 7 1.8 22.8 residential 8 9.2 5.2 residential 9 9.8 33.9 residential 10 5.5 18.6 water purifier 34.4 total 74.8 171.4 figure 3: case study: simplified electrical diagram to explain the italian regulation. 70 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community production. when this does not happen or the production is greater than the consumption, the surplus of energy is fed into the grid via the meter and the italian grid operator remunerates it (blue arrow) [43]. part of the electricity fed into the grid does not leave the lv grid if there are users under the same lv grid who are withdrawing it (in this case study, the residential buildings). only the electricity that is not consumed at the lv level is fed into the mv grid (orange arrow). according to the italian regulation, if the user that feds electricity into the grid and the users that withdraw the electricity are part of the same rec, the part of electricity that remains within the lv grid is defined as csc (yellow arrow). for each kilowatt-hour of csc, an incentive of about 120 €/mwh is paid by the grid operator to the rec representative, who then redistributes the money among rec members according to the rules that each rec defines during its constitution [44]. csc is incentivised because the higher the csc, the lower the electricity exchanged between the lv and mv grids. converting electricity from mv to lv and vice versa, as well as the transport through the grid, involves losses. in addition, the feed-in of pv-generated electricity might cause grid instability issues, due to the natural discontinuity of generation from this source. for these reasons, the possibility of increasing csc must be studied. 2.3. load profiles generation load profiles are one of the main inputs for an energy system simulation. for this analysis, one-year hourly load profiles of the 10 detached houses and of the water purifier are needed, electrical and thermal for the first, and only electrical for the second. these are not available, because the installed meters are old generation, so they must be simulated. techniques to generate load profiles can be divided in two typologies: bottom-up and top-down approaches. bottom-up methods are based on modelling all the appliances of a building and simulating their use through stochastic algorithms [45–47]. these approaches have the advantage of reproducing detailed load profile and allow to assess load shifting impact of each single appliance [48]. on the other hand, they require a large amount of input data, which must be hypothesized or collected through surveys. this makes the results of simulations dependent on the quality of the collected data or on the researcher’s assumptions [36]. in addition, using this approach for many buildings can be unpractical and time-consuming. top-down methods start from aggregated data, such as monthly energy consumptions, which can be read from electric and gas bills, and proceed to redistribute the consumption over different days and hours. the advantage is that the total demands are real, while the reliability of the daily profiles depends on the technique chosen to redistribute consumptions. this redistribution can be done by assumptions on the hours when people are present in the buildings or by using typical curves and existing bench-mark building energy profiles, which are then scaled to total consumptions [49,50]. using typical curves to simulate multiple buildings could lead to a poor representation of the non-contemporaneity of the consumption of the members of a rec, which is what guarantees csc. for this reason, a new top-down simulation method is proposed for this study and summarised in figure 4. figure 4: load profiles generation workflow diagram. international journal of sustainable energy planning and management vol. 38 2023 71 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho this method consists of gathering one-year electricity and gas bills from each rec member and to have each of them fill out a survey. from the electricity and gas bills it is possible to read the consumptions for each month. for the electricity they are also divided into three timeslots, and the maximum power withdrawn is available. electricity demand is in kwh, while gas demand is in sm3 and has been converted to thermal kwh considering a conversion factor of 10.69 kwh/sm3. the survey is used to collect data about occupants age and job status, which is then used as input for “strobe” [51], an open-source tool using markov chains to simulate occupancy profiles. these hour-by-hour profiles tell if people in the building are awake, sleeping or outside. “lobi” (load profiles from bills [52]) generates hourly load profiles. monthly electricity demand is redistributed on hourly base considering time slots and using occupancy profiles as weights. randomness is added by extracting values from a distribution that has as minimum the refrigerator power, as maximum the maximum power withdrawn from the grid, and an average that matches the total amount read on the bill. to estimate heat demand, average hourly air temperature from a typical meteorological year (tmy) [53] is used as weight to redistribute consumption. thermal and electrical load profiles of each building are then used as input for the simulation tool. some examples of the generated profiles (electricity and heat demand of one of the ten dwellings) are shown in figures 5 and 6. since thermal demand was estimated from gas bills, it is not possible to know the exact breakdown of demand between heating and domestic hot water. however, a rough idea can be observed in figure 6 considering that in summer the heating systems are turned off. cooling demand is not considered in this study because deals with hilltop country cottages which do not need it. load shifting for heat demand can be achieved using tes, which increases the temperature from 40°c to 60°c. however, load shifting for cooling demand is not feasible in residential applications due to the limited temperature range. the cooling system requires 12°c, while the minimum achievable temperature by the hp is 5°c. this would require more powerful and costly hps, as well as the use of glycol. 2.4. simulation tool mess (multi energy system simulator) is an opensource simulation software [54–56] that allows to assess the potential of an energy system by simulating hour by hour its energy balances. in a previous study [36] the model was validated by comparing its results with those of the model developed by vrije universiteit brussel [31]. mess inputs are the load profiles of each building, rec composition, geographical position and technical parameters. in this study mess is used to calculate the rec energy independence from the mv grid by considering pv production, water purifiers and dwellings’ demand, amount of sc, csc, the electricity withdrawn figure 5: hourly electricity demand of a residential building: a ppliances. 72 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community from the mv grid and the one fed into it (figure 7). hourly balances are then aggregated to evaluate the annual amount. 2.5. heat pump modelling a function with one-minute time step, which simulates an air-water hp coupled with an tes, is introduced within mess. the function inputs are the user’s heat demand and the pv surplus and returns hp’s electrical consumption. two different control strategies are implemented: the hp follows the heat load, or the hp follows the pv production (paragraph 2.6). regardless of which strategy is used, the coefficient of performance (cop) is calculated as a function of ambient temperature, temperature of input water and load condition. figure 6: hourly heat demand of a residential building: heating and dhw. figure 7: one day water purifier energy balance. international journal of sustainable energy planning and management vol. 38 2023 73 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho the hp model is developed starting from the performance of a scroll compressor from the danfoss catalogue [57]. a compressor designed to produce 10 kw of thermal energy at nominal condition is taken as a reference. the danfoss software gives the compressor performance as function of the evaporation and condensing temperature. a pinch point of 3°c on the water side and of 10°c plus 5°c of superheat on the air side have been assumed. cop f t t loadevap cond� � �, , (1) t tevap amb� � �15 c (2) t tcond w� � �3 c (3) figure 8 shows the operating range. these values are implemented within the code in order to calculate the maximum water temperature achievable by the hp, given the ambient temperature. the requested water temperature, at each time step, is compared with the maximum allowable and the cop at design condition (6000 rpm) is hence calculated from regression curves supplied by the producer of the compressor (figure 9). in this way the design conditions of the machine are calculated for a size of 10 kw thermal. a corrective coefficient is then applied to the electric and thermal power, in order to consider hp of different sizes. indeed, each dwelling in this case study has a different hp, sized according to its peak heat demand. the hp can be regulated thanks to the inverter between 900 and 6000 rpm, allowing the hp to be used following thermal demand or pv surplus. in the former case, part load is defined as the ratio between thermal demand and the heat the hp provides at 6000 rpm, while in the latter, as the ratio between the electricity it uses and the electricity it would use at 6000 rpm. cop figure 8: hp operating range. figure 9: design cop trend at 6000 rpm for the reference compressor. 74 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community correction under these conditions is estimated according with [58] as shown in figure 10. this curve is the result of considering the effect of load regulation on the main hp components: heat exchangers, inverter, and compressor. the reduced flow rate causes the exchangers to be oversized, thus causing a reduction in the pinch points and therefore a benefit in terms of cop. on the other hand, when further decreasing the load, the efficiency of the inverter decreases. therefore, the compressor has an optimal behavior in the middle of the machine’s operating range. for high power, friction losses are high, while, for low power, leakage losses prevail. there is a limit below which the machine cannot operate, approximately 15% of nominal load. 2.6 heat pump and tes control strategies tes is modelled considering u-values of 0.36 w/ m2k [29], corresponding to rigid polyurethane insulated commercial tanks. a stratification of 5°c between top and bottom is imposed to calculates the dispersing surface a geometry of a cylinder with a height three times its diameter is considered. the above are the only heat losses as the dispersion inside the pipes has been neglected, since these are inside the dwellings. interaction between hp, tes, heat demand and pv surplus is implemented in mess. two different control strategies are simulated and compared. figure 11 shows a schematic representation of the system. standard strategy: hp follows heat demand. when the building is to be heated or domestic hot water is required, hot water inside the tes circulates in the heat exchangers to heat return water from the heating system or cold water from underground. demand flow temperature depends on the heating system type (fan coil, floor heating or radiator). for the simulation in this study a temperature of 40° is considered, but the results can be generalised to other working temperatures. figure 10: cop variation under partial load conditions. figure 11: simplified diagram of the heating system. international journal of sustainable energy planning and management vol. 38 2023 75 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho hp switches on to maintain a constant temperature inside tes, so hp must produce at each time step the same heat required by the heating system and by domestic hot water: hp follows heat demand. if the heat required is lower than the heat generated by the hp at minimum load, the excess of heat produces an increase in the tes temperature. so, thanks to the tes the hp does not have to be switched off. if the temperature inside the tes reaches the maximum temperature that the hp can provide (above 60°, but depending on ambient temperature), the hp switches off. before switching on again the hp, the heat demand is satisfied by the thermal energy stored inside the tes. this strategy uses the tes only as inertial tes to reduce the number of hp switch-on events. doing so, its efficiency and life-time increase [59]. centralised strategy: hp follows rec pv surplus. tes can also be used to store the energy produced by a pv system, which would otherwise end up on the grid. in this case the control strategy follows the pv surplus instead of thermal demand. if the thermal demand is lower than the thermal energy produced by the hp, the tes temperature increases. this mechanism goes on as long as there is a pv surplus or until maximum temperature is reached. afterwards, the hp switches off and, if heat energy is required, it is taken from the tes. if the tes is properly sized, this strategy allows to shift the load from evening to daily hours increasing sc. this study deals with rec and csc, one pv field and ten hps. therefore, to implement a control strategy able to harness rec pv surplus using hps and tes, a centralised management is needed. the mess operates as follows: if there is pv surplus, the hp with tes at the lowest temperature is switched on, in order to use the surplus and charge the tes. if there is more surplus, another hp is used. using this selection criteria, the average temperature of all tess is kept low. consequently, cop are higher and heat dispersion lower. 3. results in this chapter the effect of using a centralised management on csc and rec independence from the grid are shown in comparison with the standard management strategy. a sensitivity analysis is then carried out as the volume of tess varies, followed by an economic assessment. 3.1. centralised vs standard heat pump management the following simulation considers tess of 200 l, that is a standard size that can be found in market for residential applications. the three graphs in figure 12 are the monthly balances of energy production (p) and demand (d). the former is in part self-consumed by the water purifier, and in part collectively self-consumed by the dwellings. the remaining part ends out of the rec, likely fed into the mv grid (it is assumed for simplicity that there are not utilities in the same lv grid of the rec that are not part of it). on the other hand, the demand is met by energy produced by pv which is sc or csc and by energy withdrawn from the mv grid. it is clear how production and demand have an opposite trend over the year, the first is higher during summer while the second in winter, when heat demand is higher. because of this, the surplus of energy that could be valued by a centralised hp management system is limited, yet should be considered. figure 12: rec monthly energy balances: standard (above) vs centralised (under) management. 76 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community looking at the winter months, it is possible to see that the energy fed into the mv grid with the standard strategy decreases and becomes csc using centralised strategy. the same happens for the energy withdrawn from the mv grid, also if the total demand slightly increase. effect on summer months is small because the hps are used only for domestic hot water. table 2 summarise the rec annual balances comparing results of the two control strategies. the centralised one leads to a rise of csc by 2.4 mwh. this amount of energy is produced and consumed inside the lv grid, so that the annual energy fed into the mv grid decrease by exactly 2.4 mwh. charging the tess using this energy, means not having to switch the hps on again using energy from the mv grid when heat is required. nevertheless, the reduction in electricity withdrawn from the mv grid (–1.0 mwh) is smaller than the reduction in the fed in one, due to the total demand increment (+1.4). this is caused by the increase of average temperature inside tes and the resulting deterioration in cops and increase in heat losses. 3.2 sensitivity analysis the previous paragraph has proven that a centralised management strategy can boost the rec energy independence from the mv grid, providing a service to the grid operator. this paragraph deals with a sensitivity analysis varying tes size from 100 litres to 1000 litres. figure 13 shows that increasing storage capacity, the possibility to perform load shifting using pv production surplus raises. in this way csc grows decreasing the amount of energy the rec exchanges with the mv grid. from this point of view, the grid operator should promote the purchase of large tess. moreover, without a centralised system, hps could not be switched on when there is a pv surplus of energy inside rec. in this case, it does not make sense to invest in large tes. indeed, inertial tes of up to 200 litres are currently used and not larger tes useful for load shifting. figure 14 shows that heat generated by hps is not dependent on tes size if no heat dispersions are considered (green lines). this is true for both the control strategies because the heat generated must be equal to the heat required by the users. but in real condition a higher tes means larger dispersing surface. for that reason, heat generated by hps raises with tes size. comparing standard with centralised management, the latter leads to higher medium temperatures inside tes and a consequently increase of losses and thermal energy needed. table 2: rec annual energy balances: standard vs centralised hp management. standard centralized production [mwh/year] 72.9 72.9 water purifier sc [mwh/year] 21.5 21.5 cottages csc [mwh/year] 21.1 23.5 + 2.4 into mv grid [mwh/year] 30.3 27.9 – 2.4 from mv grid [mwh/year] 82.0 81.0 – 1.0 demand [mwh/year] 124.6 125.0 + 1.4 figure 13: rec energy balances varying tes size. international journal of sustainable energy planning and management vol. 38 2023 77 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho looking at yearly average cop (figure 15), it is higher with the standard management because temperatures remain lower. with both strategies cop raises with thermal storage capacity because the medium temperature over the year inside tes goes down, but the trend is different. this happens because as the thermal storage capacity increases, so does the possibility to harness the energy produced by the pv with the centralised strategy. doing so, tes temperatures rise. in the standard case, dispersion promotes cop by decreasing temperature. with the centralised control strategy, this consideration is no longer true because thermal losses involve more energy to be produced at high temperature and low cops. the consequence of thermal energy and cop trends is shown in figure 16: without dispersion electricity consumed by hps decrease with tes size because of the cop increase. considering dispersion and standard control strategy, a minimum can be found. this is the result of two opposite effects: increasing tes volume, the cop increases due to decreased temperatures, but heat losses also increase due to increased surface area. with the centralised management the cop improvement is not sufficient to cope with the increase in thermal energy figure 14: heat produced by hps varying tes size. figure 15: average cop at which hps work over year. 78 international journal of sustainable energy planning and management vol. 38 2023 heat pumps and thermal energy storages centralised management in a renewable energy community required due to heat losses. therefore, the demand for electricity rises. analyses conducted thus far have shown that using a centralized management and increasing the size of tess allows for increased collective self-consumption and energy independence of the energy community. unfortunately, doing so also increases the electricity consumed by the hps. the economic impact of these consequences is evaluated in the next section. 3.3 economic assessment previous paragraphs have shown that the centralised hps management allows to increase csc, but at the same time increases electricity consumed by hps. the pv field it is not under the same meter of the dwellings in which hps are installed but is connected to the meter of the water purifier. for that reason, all the energy used to power the hps has to be withdrawn by the grid and paid (doesn’t matter if it comes from the lv or from the mv grid). this means that an increase in the energy consumed generates an increase in the electricity bill of the members of the rec which depends on the price of energy (see [60,61] to observe energy prices in the italian market). this increase is offset by incentives on csc of 120 €/mwh [44]. as figure 17 shows, not to have an economic loss requires a scenario with low energy prices and large tes. the latter, by the way, costs more. considering that, a member of a rec would allow the rec manager or the grid operator to centrally manage its hp in order to increase rec energy independence from the mv grid only in scenario with low energy price. hence, it’s clear that, in order to make such system become real, an update of the regulation is needed to provide specific incentives for those who buy a tes and decide to make it available to provide a grid service. 4. conclusions this study assesses the possibility to use hps and thermal energy storages inside a renewable energy community to increase its collective-self-consumption and its independence from the medium voltage grid. a rec consisting of ten dwellings sharing electricity generated by a 50 kwp photovoltaic field connected behind a common water purifier is considered. their hourly load profiles are generated using a top-down simulation method from electricity and gas bills. demand profiles are then used as inputs to an energy simulation software to perform techno-economic analysis. an hp model is used that considers the variation of cop as a function of ambient temperature, water temperature, and part-load conditions. thermal losses within the tes are also considered. two different control strategies for managing the hps of the ten cottages are compared. in the standard one, the hps follow the thermal demand without considering whether the electricity used is produced by pv or must be withdrawn from the medium-voltage grid. on the other hand, a centralized strategy is proposed that allows the hps to use the pv surplus to store energy within the tess and use it when it is required later. figure 16: electricity consumed by hps varying tes size. international journal of sustainable energy planning and management vol. 38 2023 79 ana paula valente de jesus, marta ferreira dias, and margarida c. coelho the centralized strategy leads to an increase in rec csc, which corresponds to an equal decrease in energy fed into the mv grid. it also allows the energy withdrawn from the mv grid to decrease, but to a lesser amount. this happens because the total energy required by hps increases, as the centralized strategy causes an increase in the average temperature of tess over the year. as a result, cops decrease, and thermal losses increase. by increasing the size of tess, both collective self-consumption and electricity demand further increase. economic analyses show two opposing effects of using centralized management: an increase in electricity bills and an increase in incentives on collective self-consumption. the first is a cost, while the second is a revenue. the former depends on energy prices while the latter does not, since it is considered to be fixed. in a scenario with high electricity prices, centralized hp management is not competitive, yet it becomes so with low costs and large tess. in conclusion, the proposed solution can provide a service to the grid, but for its deployment to be favoured, it would be advisable to revise the incentives on csc according to energy prices. alternatively, or additionally, the purchase of large tess with low dispersion coefficients could be incentivized. the results of this study should be of interest not only to researchers, but also and especially to hps developers, who could provide them with smart remote control systems, and to those who develop and use management systems for recs. implementing the solutions proposed would help the stability of the grid and also the earnings of rec members. future research could address centralized strategies for managing hps that consider limiting values on temperatures and integration with other storage systems, such as latent heat technologies or electrochemical storage. cold storage for cooling demand could also be investigated by introducing the use of heat pumps for sub-zero degree cooling. in addition, the results simulated in this study will be compared with data collected from monitoring of the rec under study, which will be established soon. references [1] european parliament. directives directive (eu) 2018/2001 of the european parliament and of the council of 11 december 2018 on the promotion of the use of energy from renewable sources (recast) (text with eea relevance). 2018. 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[61] gme. gme gestore dei mercati energetici spa 2022. https:// www.mercatoelettrico.org/it/. https://github.com/pielube/messpy https://doi.org/10.3390/en14185724 https://doi.org/10.1016/j.jclepro.2021.129753 https://www.danfoss.com/it-it/service-and-support/downloads/dcs/coolselector-2/#tab-overview https://www.danfoss.com/it-it/service-and-support/downloads/dcs/coolselector-2/#tab-overview https://www.danfoss.com/it-it/service-and-support/downloads/dcs/coolselector-2/#tab-overview https://doi.org/10.1016/j.ijrefrig.2016.02.015 https://doi.org/10.1016/j.ijrefrig.2016.02.015 https://www.arera.it/it/dati/eepcfr1.htm https://www.arera.it/it/dati/eepcfr1.htm https://www.mercatoelettrico.org/it/ https://www.mercatoelettrico.org/it/ international journal of sustainable energy planning and management vol. 37 2023 95 international journal of sustainable energy planning and management vol. 37 2023 95–108 abstract there is a problem in estimating renewable energy’s impact on regional economies of developing countries, owing both to the lack of disaggregated data on these renewable energy sources at the subnational level and a method to address its share in the energy matrix (in a context where oil and gas are yet hegemonic). we apply a method to solve both problems and to the case of santa fe province, argentina, an important producer of biofuels (biodiesel from soybean and ethanol from maize). to disaggregate the biofuel sector, we combine aggregated sector information with subsector surveys. once the share of biofuels is established in the economy and their potential to create jobs, it is possible to generate statistics on the input-output relationships. with the latter, we estimate a hybrid input-output model and calculate the effects of shocks (defined as policies as well as the effect of exogenous elements impacting the performance of the sector) on production and employment stemming from the full utilization of existing idle capacity, as well as from new investments in the sector. the results, allow us to policy evaluations, for instance, the consequences of acceleration of the energy matrix transition to renewables through regulations, to study the effect of changes in relative prices of energy, determine the effect on potential employment creation of subsidies to promote the activity, etc. the sector we analyze empirically had an important idle capacity plus delayed investment projects because of external shocks. in the event of overcoming transient problems to export biofuels (and to attain full capacity utilization of current infrastructure), from expanding supply with new investments, the employment effect is proportionally much larger since transient jobs would be created in the construction phase. keywords regional economics; bioenergy; employment; input-output analysis. http://doi.org/10.54337/ijsepm.7474 bioenergy and employment a regional economic impact evaluation carlos adrián romeroa, christoph ernstb, daniele epifaniob, gustavo ferroc,a* aconicet universidad de buenos aires. instituto interdisciplinario de economía política de buenos aires. avenida córdoba 2122, (1113) buenos aires, argentina binternational labor organization. (ilo), 4 route des morillons, ch1211 genève 22, switzerland cuniversidad del cema (ucema) and conicet, avenida córdoba 374, (1044) buenos aires, argentina *corresponding author – e-mails: gaf97@ucema.edu.ar, gferro05@yahoo.com.ar 1. introduction within a sustainable growth strategy and the ‘agenda 2030’ of sustainable development goals of the un, clean and affordable energy has received considerable attention worldwide. however, it is challenging to estimate its impact on regional economies owing both to the lack of disaggregated data at subnational levels and a methodological approach to address its share in the economy as well as in the energy matrix [1]. in developing countries sometimes official statistics do not have the disaggregation level (both at sectors or regions), the periodical up-to-date (to open classifications for new sectors or activities), or the degree of detail to differentiate into productive structures that can be very different between the national and the subnational levels. the reasons can be diverse: lack of budget, absence of technical capacities to survey the economy outside the capital or important cities, the informality of http://doi.org/10.54337/ijsepm.7474 mailto:gaf97@ucema.edu.ar mailto:gferro05@yahoo.com.ar 96 international journal of sustainable energy planning and management vol. 37 2023 bioenergy and employment a regional economic impact evaluation the economy, macroeconomic disturbances, etc. in our case study, the periodic macroeconomic crises, generated budget constraints and difficulties to have complete and modern economic statistics, which in turn impedes detailed analysis of policy interventions besides the macro level. we offer an alternative -technically feasible and affordableto building an input-output matrix which includes the biofuel sector to analyze its potential for job creation. we make two contributions. the first contribution is methodological, showing how hybrid methods can reasonably provide information to study an economy where only national (or highly aggregated) social accounting matrices (sams) are available. by combining secondary data on biofuels with primary results of specific sectoral surveys, hybrid techniques allow us to estimate the regional input-output tables (io tables) and sams with the needed degree of detail. the second contribution is empirical: we collect sparse and sometimes incomplete, inconsistent, or outdated information on biofuel production; thus, we process all that information, applying said hybrid methodology to trace increases in biofuel production and investments, output, and employment within the economy. input-output analysis and computable general equilibrium (cge) models are the most common tools to measure in detail bioenergy expansion impacts. their use is widespread by governments and international organizations [2, 3, 4, 5, 6, 7, 8], to study their effects on the economy (production), the environment (emissions), and society (employment) [4, 3, 9, 10,11]. we present a hybrid methodology for overcoming the lack of information while maximizing the utility of the existent data. we develop io tables and sams and thus examine the chain of consequences. because these instruments are costly, they are often built only at the national level. regional models face problems with data availability and the disparate structure of the regional economy concerning the national one [12]. we study the santa fe province to quantify the regional impact of an increase in both biofuel production and biofuel plants’ investment. with a surface like greece, populated by 3.5 million inhabitants and generating 7.5% of national gdp in constant 1993 prices, it concentrates 79% of biofuel production in argentina. for our empirical objective, we require detailed information on supply and demand in the biofuel sector, input-output relationships in the province, and household employment and expenditure information by activity branch. we make compatible diverse sources of information, often poor, sparse, outdated, collected on a non-regular basis, and sometimes inconsistent. after this introduction, section 2 reviews the literature to provide context. section 3 describes the biofuel sector and green jobs in santa fe province. section 4 develops the method to estimate a regional io table, section 5 presents the scenarios and simulation outcomes, and section 6 concludes. 2. literature review 2.1 biofuels several thermochemical conversions of biomass into fuels are possible from fermentative and biological processes [13]. the most common first-generation or conventional biofuels are bioethanol and biodiesel, produced through processes of transesterification, distillation, and fermentation. the main feedstock is food crops, starch, and vegetable oil [14, 15]. these biofuels convert biomass through chemical, biochemical, and thermal conversion processes [16]. we do not discuss here the second, thirdand fourth generation of biofuels, which are not produced in the area under analysis. the second generation of advanced biofuels uses lignocellulosic feedstocks as the main substrate [17, 13], requiring higher capital expenditures than first-generation biofuels [16, 18, 19]. in the third-generation biofuels, the need for agricultural land is eliminated [13]. fourth-generation biofuels convert optimized biomass feedstock [17]. bioethanol (ethylic alcohol) is the most common biofuel, being used in gasoline engines in different blends. it can save net ghg emissions from 87% to 96% concerning regular gasoline. the other most common biofuel is biodiesel, used in regular diesel engines, either pure or blended. other biofuels include biogas, other bio alcohols, firewood, vegetable oil, bio ethers, dried manure, and agricultural waste [16]. 2.2 importance the conversion from fossil fuels to biofuels can have several impacts on the economy (income, development, energy security, and trade balance), society (employment, equity, poverty, food security, and access to land), and the environment (on water and arable land availability and quality, erosion, ghg emissions, and biodiversity) [15, 19]. the issue of conversion from fossil fuels to biofuels is of high relevance. [20] find a significant inverse international journal of sustainable energy planning and management vol. 37 2023 97 carlos adrián romero, christoph ernst, daniele epifanio and gustavo ferro connection between the tech industry, renewable energy consumption, urbanization, and environmental degradation. that indicates ways bioenergy that can help reduce environmental degradation. organizational, communication and technical factors positively and significantly interact, as [21] states, when analyzing the relationship between critical success factors and the sustainable project success of bioenergy projects in pakistan. adding value to agricultural production, increasing the level of female employment, and increasing the share of bioenergy consumption, help reduce carbon dioxide according to [22] a pakistan study. increasing education expenditure, the number of female employers, and bioenergy consumption share use will help reduce co2 emissions, according to an empirical analysis made by [23] with china data. in a study of five countries [24], india, the philippines, egypt, pakistan, and bangladesh, there is evidence that an increase in received remittances, economic growth, and value-added agriculture help in mitigating carbon emissions. results for seven south asian countries reveal the existence of a long-term relationship between energy poverty, employment, education, per capita income, inflation, and economic development [25]. this study suggests that in financing the green and lowcarbon economy concept, the economies need to make efforts to use modern, energy-efficient, and green technologies for economic and environmental reasons. recent research had been focused on different biomass resource utilization, studying cost, ghg emissions, and employment impacts at the regional level [26, 27]. in addition, it is observed research efforts applied to investment in renewable energy sources, as well as energy efficiency in different developing countries, considering social, environmental, technical, and economic criteria [28]. concerning economic and social impacts, biofuel production competes for natural resources (land or water), with food production. demand for biofuel cropping may induce food price increases [18, 15]. these price rises have led to discussions about food security, especially in developing countries. distributional effects would occur within and between countries. besides, government budgets and trade balances are also affected [19]. 2.3 impact because biofuel crops use atmospheric carbon dioxide, biofuels may contribute to mitigating greenhouse gas (ghg) emissions [18]. however, it is not clear whether policies promoting biofuel use result in lower ghg emissions: the net impact depends on how they are generated [19]. for instance, the large use of monoculture for biofuel production increases the use of fertilizers and pesticides [15]. to assess the environmental effects of ghg reductions, one should consider the combined net effects of the energy technology associated with biofuels, carbon emissions, land conversion, and agricultural production [29]. while direct ghg emissions can be computed ex-post using life cycle analysis, indirect ghg emissions need to be computed ex-ante using multimarket or general equilibrium models [18]. 2.4 policies promotion policies can be made of incentives to increase productivity in food production. other measures are investments grants; fuel-excises tax credits for biofuels blenders; the use of tariffs on imported biofuels goods; tax incentives for switching-fuel engine cars; or quality standards on fuels, regulating the blending of ethanol or biodiesel to fossil fuels [29]. 2.5 modeling there are different ways of modeling biofuels’ economic and environmental impacts and assessing the policies’ role. [1] provides a survey of the literature, concluding that the typical approach in the partial equilibrium literature is to extend existing models of the agricultural sector, by incorporating the demand for biofuels via an exogenous increase in feedstock demand. less explored until now, are regional cge (computable general equilibrium) models, which analyze the consequences of regulatory, subsidization, or taxation policies, among others. several cge models study biofuels at the national level [15, 30]. most literature uses input-output modeling to estimate the effects on production, employment, and emissions [31]. 3. bioenergy and green jobs in santa fe province santa fe province was responsible for 79% of the national biofuels (generated in 1 bioethanol and 28 biodiesel plants) and 27% of the national biogas production in 2016 (generated in 8 biogas and 3 biomass plants) [32, 33, 34]. several regulations promote argentina’s bioenergy production: national law 26,093, enacted in 2006 [61], 98 international journal of sustainable energy planning and management vol. 37 2023 bioenergy and employment a regional economic impact evaluation establishes a system for regulating and promoting the production and sustainable use of biofuels for 15 years. it sets a mandatory floor blending of biofuels with fossil fuels set in 2010 at 5% for biodiesel and bioethanol with diesel and gasoline, respectively, and increased up to 10% for biodiesel and 12% for bioethanol in 2016. moreover, it grants tax benefits to companies carrying out biofuel production projects. additionally, national law 27,191 [62] enacted in 2016, grants tax benefits for electricity generation from projects embracing renewable sources. in addition to its adherence to national regulations, santa fe passed its own provincial law 12,692 [63] in 2006, which provides exemptions, breaks, or deferred provincial taxes to non-conventional renewable energy production projects in its territory. national, provincial, municipal, or private information sources in developing countries in general and in argentina in particular, generally lack data about relatively small, scattered economic sectors, such as bioenergy production. [32] made a quantitative assessment of the impact on the existing bioenergy sector production and employment (and on new ongoing or planned projects) based on a survey of the sector. we mixed that primary detailed source with aggregated secondary sources. the “fao survey” [32, 10] identified different processes of bioenergy production with disparate labor requirements both in quantitative and qualitative terms. once identified, we could draw up a directory of the establishments to project the nonsurveyed ones. table 1 shows all the surveyed bioenergy activities and their respective production capacity organized by category. the 28 establishments generated 833 jobs of which 88 were female. the biodiesel subsector produced 2,092,488 tons in 2016 and employed 671 workers of which 79 were female. the bioethanol subsector generated 58,000 m3 in the same year and employed 76 persons (7 females). biogas and biomass electricity generation, complete the information in the table. 4. method to estimate the regional io tables and multipliers to address some problems, a top-down model can solve the attribution of the effects and measure with relative simplicity the direct and indirect consequences arising from exogenous shocks or policies. it can be the case of a standard input-output model at the national level. nevertheless, difficulties appear when the objective of the analysis is at a regional level (when the economic structure differs from the national one) and/or at specific sectors, which can be important in the region, but very small at the national level, not deserving resources and effort at the national level to go deep in detail. suppose the context is one of a developed country, and there is interest in studying one region with specific sectors. it is very possible that regional adaptations of the national model do exist, and that opening new sectors is not big deal. the latter happens because resources (institutions, money, and data) are available. since it can be not the case in developing countries, the shortcut you can use table 1: bioenergy supply surveyed in santa fe in 2016 type size # plants capacity (1) production (2) employment (3) biodiesel large 8 2,990,000 1,833,303 433 (43) medium 5 160.000 226,032 205 (30) small 3 21,600 33,153 33 (6) bioethanol large 1 60,000 58,000 76 (7) biogas large 1 53,000 409 1 (0) medium 4 20,800 3,626 25 (1) small 3 245 13 1 (0) biomass electricity medium 1 10.80 5.40 16 (1) small 2 3.00 2.75 43 (0) (1) in tons of biodiesel, m3 of bioethanol, tons of biomass processed in biogas, mw of electricity generation. (2) in tons of biodiesel, m3 of bioethanol, thousands m3 of biogas, mwh of electricity. (3) full-time equivalent yearly. female workers between parenthesis, source: [32] international journal of sustainable energy planning and management vol. 37 2023 99 carlos adrián romero, christoph ernst, daniele epifanio and gustavo ferro consists of complementing the top-down model by adding bottom-up information to the former. the process in the developed country’s contexts follows three principal activities: recollection and adequation of the information, calibration of the model and design of scenarios, running of the simulations, and analysis of results. instead, in developing countries, you cannot assume the first stage is solved, and that is the main contribution of this paper: if you can overcome the information problem, there is no model, no calibration, no scenarios, no simulations, and no results. the bottom-up addition should be technically feasible, and affordable, and make creative use of each piece of available information. to estimate the size of the biofuel sector and its costs and sales structures, we use information from specific surveys at the firm level, we estimate the io table that represents inter-industry relationships in the province based on national information and open the bioenergy sectors according to those surveys using indirect methods [35, 36]. there is no published io table for santa fe province. we applied a hybrid method to estimate it: the “fao survey” was used for bioenergy-related sectors and location quotients (explained below) were applied for the remaining ones. finally, we apply employment information from the provincial statistics office and estimate the provincial expenditure structure from the national household expenditure survey. once the io table and the bioenergy and employment database have been constructed, we estimate the direct, indirect, and induced effects of increased production and investments in the biofuel provincial sector using open and closed input-output models. we concentrate on the impact of sector changes on output and the labor market (including their multipliers in the value chains). this section presents a hybrid method to estimate regional io tables, explains the santa fe province io table we develop, and makes considerations on regional i-o models. 4.1 a hybrid method to estimate regional io tables there are three main approaches to regionalizing io tables, depending on the statistics used to create them: 1. direct techniques employing mainly surveys and specific sectoral data, are usually expensive and time-consuming. 2. indirect or statistical techniques resting mainly on available secondary sources, sometimes inaccurate. 3. a hybrid approach mixing previous methods, useful when the analysis points to a few sectors from which information can be obtained directly. the availability of an io table, in turn, makes it possible to develop sams, showing more detail on final consumption and value-added. they are matrices in which rows (incomes) and columns (outflows) represent markets and institutions, and whose elements represent the transactions between government, firms, households, and the rest of the world [37]. the “fao survey” allows us to improve location quotients (lq) using ras or cross-entropy techniques [36, 37, 38]. in addition to the national io tables, lqs use available statistics on employment or gross geographic product (ggp). regional and national data should be compatibilized, updated, and aggregated at the same level. there are many applications of such regional indirect methods for mexico [41], finland [42, 43], greece [44], germany [45], and argentina [46, 12], among others. [47] presents an extensive survey of location quotient methods. the lq method is based on [35] assumption, that intraregional technical coefficients (arrij ) only differ from national ones (aij ) by their regional trade participation (lqij). thus, arrij = lqij a  ij , (2) where subscripts i and j refer to the seller and buyer sectors, respectively; arrij (“regional purchase coefficient”) is defined as the necessary quantity of input produced in the region to generate a unit of product . lqs’ techniques assume that regional technologies have the same structure as national ones but admit that interregional coefficients differ from national ones by a shared factor in regional trade, assuming the greater the region, the lower its import propensity. the chosen lqs make it possible to distinguish between regional selfsufficient sectors (with no imports) and net importer sectors from the rest of the country. when the lq falls below 1, the region is considered a net importer, otherwise, the region is considered self-sufficient. [34, 46] propose the flegg location quotient (flq), which takes the region’s size explicitly into account. flq postulates an inverse relationship between the region’s size and its propensity to import from other regions. flqij = ggpi,r/gdpi ggpj,r/gdp . λ * = cilqij . λ * (2) 100 international journal of sustainable energy planning and management vol. 37 2023 bioenergy and employment a regional economic impact evaluation λ* = [log2(1 + ggpr/gdp )] δ , 0 ≤ δ °≤ 1, (3) where λ* weighs the size (importance) of the region in the country. the essence of the base 2 logarithm is that λ* should always fall between 0 and 1. if the region has the same size as the entire country, λ = 1; if it did not exist in the region, λ* = 0. the calculation of λ* adds a new parameter, δ, related to interregional imports. the closer δ is to 1, the greater the interregional imports. if δ = 0, then flq = cilq. we use flq because its theoretical ground is more plausible than other lq methods [47]. additionally, [49] evaluation of lq techniques highlights that flq and augmented flq (aflq) are preferable quotients, providing satisfactory results even for small regions. in addition, although the aflq is theoretically improved compared to the flq, they perform similarly [50, 43, 51]. the information from lq is used jointly with a regional transaction matrix estimated via indirect methods. to ensure consistency between both sets of data, we use matrix balancing methods (ras and/or cross-entropy) for the final adjustment. ras or method of bi-proportional adjustment is an iterative process that implies knowing row and column totals to adjust an initial matrix [52]. cross-entropy method, instead, minimizes a distance measure between an initial matrix and different calculated matrices meeting technological and transactional restrictions [53, 54]. 4.2 the io table for santa fe we estimated the io table and their relevant direct, indirect, and induced coefficient matrices. the eight main sources of information were the 2004 economic census, the 2004 supply and use charts, the ggp (gross geographic product, that is the value added or gross production value minus inputs value) disaggregated by sector, employment by sector in the 2010 santa fe census, jobs by sector in the national annual survey of urban households (eahu), argentina’s 1997 inputoutput matrix, crops data per province from the ministry of agroindustry, and argentina’s 2015 sam from the ministries of production and energy. the ggp information is very aggregated. we disaggregate by using national intra-chapter weights according to national sams, corresponding to bioenergy output branches: biodiesel, bioethanol, and biogas, from surveys of provincial productive companies. to capture the main inputs in the biofuels value chain, we could identify the primary production activities related to corn, soybean, vegetable oils, and oil refineries using the grain exchange price information, provincial production data, and the 2008 agricultural input-output matrix [55]. since the gross production value (gpv) of the agricultural sector is presented as aggregated data in the national accounts and bearing in mind the importance of the provincial soybean and corn crops for biofuel production, we estimated the gpv of these crops based on the structure of costs and sales from the supply and use tables and the input-output matrix designed by the ministry of agroindustry for 2008. we use the total soybean and corn tons produced in 2015, and the mean prices of the rosario grain exchange for the gpv estimation. we estimated the transaction matrix following the flq method for all sectors except bioenergy ones, using the optimal parameters for argentina from [46] for the latter, cost structures were derived directly from the surveys [32]. regarding employment, the job allocation by sector comes from eahu, resulting from the ongoing “permanent household survey – 31 urban conglomerates” [56]. the household consumption vector was estimated from large expenditure items data in the engho (national household expenditures survey) and santa fe’s consumer price index weights. we applied the flq coefficient to determine which part of consumption is attributed to provincial production. as a consistency criterion, exports of provincial origin were used, and consumption was adjusted to match intra-sectoral supply and demand with the usual io tables balancing techniques. we estimated technologies for the biodiesel and bioethanol sectors in terms of technical coefficients, following the input-cost structures and factors [32]. the aggregation was made by activity. the technical coefficients of the biofuel sectors were escalated to 2015 production. to estimate sales by destination, we extracted internal sales for gasoline blending from the data provided by the provincial ministry of energy and mining and allocated the rest to power generation and exports using national io tables. sales from the biomass sector were allotted to each sector (when selfconsumption was declared), and the rest was allocated to the market according to the declared use of energy, mostly electric power. table 2 shows santa fe’s production structure opened into 28 productive sectors [57]. international journal of sustainable energy planning and management vol. 37 2023 101 carlos adrián romero, christoph ernst, daniele epifanio and gustavo ferro 4.3 regional input-output models to carry out the impact study, we used an input-output model based on regional coefficients. in this way, we could achieve a more comprehensive and detailed analysis of the effects of a given policy directly on a sector, as well as on other sectors, which might indirectly benefit or be harmed by it. the resolution is identical in both the regional and the national models [37]. according to the “open model”, all final demand is exogenous: private consumption, public expenditure, investment, and exports. it means that the increase in household income because of greater output does not cause additional (“induced”) demand due to greater consumption. the regional “open model” is as follows: xr = (i – arr)–1f r = lrr f r, (4) where xr is the production vector of the region, i is the identity matrix, arr is the matrix of the region’s technical coefficients, f r is the region’s final demand vector, including purchases from other regions, r is the number of sectors, and lrr is the requirement coefficients’ leontief matrix, both direct (initial) and indirect (secondary). table 2: shares of local and imported inputs, value-added structure, and employment by sector description intermediate inputs from santa fe gross value added (%) jobs (%) agriculture, forestry, and fishing 24% 55% 2.45% corn 22% 55% 0.11% soybeans 20% 55% 0.49% mining, and non-metallic minerals 73% 24% 0.16% food, beverages, and tobacco 58% 34% 3.15% vegetable oil 62% 34% 0.51% textiles and leather 44% 45% 1.28% paper, wood, and editions 38% 45% 1.90% biodiesel 64% 28% 0.06% bioethanol 44% 44% 0.01% biogas 11% 87% 0.01% oil refineries 2% 55% 0.05% rubber, chemicals, and petrochemicals 83% 12% 1.76% basic metals and metallic products 28% 40% 3.89% machinery & equipment 25% 41% 0.88% automobiles and transportation equipment. 41% 30% 0.71% other manufactures 2% 97% 1.17% maintenance of machinery & equipment 20% 60% 0.50% electricity generation and distribution 12% 23% 0.68% gas distribution 13% -34% 0.06% water distribution 25% 56% 0.06% construction 22% 48% 10.56% commerce, restaurants, and hotels 40% 55% 26.38% transportation 35% 45% 5.96% communications 38% 49% 1.19% financial and business activities 22% 72% 10.28% public administration and education 16% 76% 15.57% health and social services 29% 63% 10.22% total 35% 50% 100.00% source: own compilation. 102 international journal of sustainable energy planning and management vol. 37 2023 bioenergy and employment a regional economic impact evaluation to find a solution, we “close” the model by making household income and spending endogenous, i.e., including households as just another sector of the model. the “closed model” thus changes to: �xr = (i – �arr)–1�f r = �lrr �f r (5) where �xr is the region’s production vector including household income in the last row, i is the identity matrix, �arr is the technical coefficient matrix showing household income in the last row, and household expenditure in the column on the right, �f r is the vector for the remaining final demand (without household consumption in the region), r is the number of sectors, and �lrr is leontief matrix for direct, indirect and induced (tertiary) requirement coefficients. in addition to the simple product multipliers resulting from the “open model” (type 1 multipliers) and total product multipliers resulting from the “closed model” (type 2 multipliers), we also estimated job multipliers. job multipliers are obtained by changing the measurement unit of the coefficients in matrixes lrr and �lrr, using, for instance, the number of persons employed per product unit [37]. they allow us to approach the problem from a different angle: instead of concentrating on the monetary values of production increase, these employment multipliers compute the number of jobs that the production increase generates. 5. scenarios and simulation results simulation scenarios are described as follows: 1. prod scenario: it simulates the increase in bioenergy production led by a demand increase which needs to be fulfilled through the full utilization of idle capacity plus ongoing investments, both measured at the survey date. the initial idle capacity was different for disparate reasons in each sub-sector: biodiesel, the biggest, sells its products locally and abroad and was suffering from transient restrictions to accessing markets of developed countries; bioethanol was a small sector; and biogas depended heavily on self-consumption, experiencing the same problems their sectors had. the demand push in the prod scenario which would lead to full capacity utilization can be understood as a remotion of external access to markets. 2. inve scenario: it simulates demand increases motivating the expansion of production capacity due to a set of new investment projects (under a business-as-usual situation, that is without the impediments to access export markets which guarantee that current capacity is fully utilized) identified by fao in consultation with social actors in the province, also encompassing the transient effects of the construction stage (plus the fact that the machinery is produced outside the province). we considered three types of plants: 1) cogeneration, 2) biodigesters, and 3) biofuels. for each plant type, we use the expenditure information as a percentage of gpv presented in [58, 59, 60], respectively. given the reduced size of the shocks to the province economy, we should not expect any migration of households from other provinces attracted by the growth in bioenergy sectors. therefore, the induced effect stems from the average household expenditure within the province. 5.1 production increase scenario (prod) we applied an increase in production equal to the new capacity minus the existing capacity ratio (idle/total) for each bioenergy category, plus the impact on the production of ongoing investment projects of new capacity, assuming their full utilization, both at the “fao survey” date. the biodiesel sector is much larger than the bioethanol and biogas sectors. initially, they produce, taken together, ars 6.774 billion (or 744.4 million dollars in 2015; ars 9.10 = usd 1), and their initial effect registers ars 7.084 billion production increase (778.46 million dollars of 2015; 105% increase). table 3 shows how the results are built. the gpv expansion, in turn, creates 1,186 direct jobs, 3,191 direct plus indirect jobs, and 1,716 induced jobs, resulting in an overall employment effect of 6,093 new jobs. the biodiesel sector has the largest total employment multiplier: an impressive 8.58 if induced employment is computed. this can be explained by the high labor productivity (units produced per worker) in the biodiesel sector, compared to the bioethanol and biogas sectors. the direct employment coefficient of biodiesel is relatively low; hence, its job multiplier is high. the weighted average employment multiplier for the three subsectors is 5.14 (adding the induced effects). all the information on gpv increase, output multipliers, international journal of sustainable energy planning and management vol. 37 2023 103 carlos adrián romero, christoph ernst, daniele epifanio and gustavo ferro job creation, and employment multipliers is presented in table 4. 5.2 investment increase scenario (inve) in this scenario, we considered a 50% increase over the existing capacity of 75 mw for cogeneration and 81 thousand m3 capacity for biodigesters, which we then multiplied by a usd 5000 cost per mw and a usd 2000 cost per m3. for biofuel plants we consider costs estimated at 2015 ars for the construction of a 50 thousand tons/year plant, re-escalated at the expected capacity. we assumed all expenditure on machinery and equipment was imported from outside the region, based on survey responses. table 5 shows simulation results for the inve scenario, reflecting a direct increase in gpv of ars 1.697 billion, and a total effect of ars 3.832 billion. direct employment, in turn, climbs to 3,618 new jobs, mainly employed in the cogeneration plant construction, and 5,684 once all effects are computed. indeed, note that employment timing differs from the prod scenario. in the inve case, most of the employment ends once the works have been completed, whereupon the prod multiplier effect will last during a certain period depending, all other things being equal, on the service life of such plants. direct and indirect job creation is greater in the case of inve than in the prod scenario (with the caveat of the persistent character of the latter concerning the transient nature of the former). total job creation is 5,684 in the inve scenario compared to 6,093 in the prod scenario. again, the biofuel industry has the largest multipliers, as in the prod scenario. 5.3 gender and age group impacts on employment in this subsection, we analyze the impact of the “open model” and “closed model” on employment in the prod scenario. the results in table 6 present job creation and job multipliers by gender and age group. in the open model, consolidating direct and indirect effects, even when jobs created are overwhelmingly for males (3,560 of 4,377 or 81.33%), note the significant impact on female job creation in biodiesel, both in table 3: prod scenario energy type potential gpv (full capacity) in 2015 billion ars (qf) current gpv in billion 2015 ars (q) idle capacity gpv in 2015 billion ars (qf-q) percentage of idle capacity (qf-q)/qf gpv surveyed projects adding new capacity in 2015 ars (δk) percentage of gpv increase in planned new capacity (δq) total gpv increase (δq + δk) or direct effect in 2015 billion ars gpv increase in percentage [(δq + δk) / q] a b c = a-b d = c/a e f = e/a g = c + e h = g/b biodiesel 10.360 6.216 4.144 40% 1.241 12% 5.385 87% bioethanol 0.373 0.336 0.037 10% 0.127 34% 0.165 49% biogas 0.443 0.222 0.222 50% 1.312 296% 1.534 692% total 11.177 6.774 4.403 61% 2.681 24% 7.084 105% source: own compilation (based on fao survey). table 4: gpv increase in 2015 billion ars and employment increase in # persons (prod scenario) initial direct + indirect induced total total multiplier biodiesel 5.385 6.427 1.933 13.745 2.55 bioethanol 0.165 0.100 0.061 0.326 1.98 biogas 1.534 0.234 0.398 2.166 1.41 total gpv 7.084 6.761 2.392 16.237 2.29 biodiesel 581 3,018 1,387 4,986 8.58 bioethanol 37 57 44 138 3.71 biogas 567 116 286 969 1.71 total jobs 1,186 3,191 1,716 6,093 5.14 source: own compilation. 104 international journal of sustainable energy planning and management vol. 37 2023 bioenergy and employment a regional economic impact evaluation absolute and in relative terms (775 on 3,600 or 21.52%). the female job creation multiplier is far greater in both biodiesel and total (in the latter, influenced by the weight of the biodiesel sector on the total). youth employment (15–25 years of age) represents slightly more than 10% of total job creation (448 out of 4,377), and this proportion is almost the same in the three subsectors. multipliers for job creation for older workers are slightly higher than those for younger ones. in the closed model, computing additionally induced effects, total job creation amounts to 6,093 jobs, of which 1,398 are for female workers (or 23%). jobs for young workers are about 10%. 6. conclusions the transition of an energy matrix based on fossil fuels to one based on renewables implies both changes in the productive structure as well as in the number and type of jobs each form of energy production generates. for instance, industries such as oil and gas are capitalintensive, in the sense the direct employment they generate needs a certain investment per job unit, while other forms of energy generation require fewer dollars per job created. however, direct jobs are only part of the story since each activity has indirect and induced effects both on production and employment. thus, the introduction of a renewable energy sector in an economy will create direct and indirect employment and will destroy direct and indirect employment in the sector its products replace. in the same vein, qualitative aspects of the jobs would be different: both sectors (the growing and the replaced) can employ people of different ages, genres, or qualifications, or the jobs can be in different places in a country. all those issues can and should be measured to analyze the impact of spontaneous and table 6: effects of increases in production on employment (prod scenario), open and closed models open model jobs # multipliers category gender: female gender: male age < 25 age > 25 total gender: female gender: male age < 25 age > 25 total biodiesel 775 2,825 363 3,237 3,600 11.33 5.51 5.26 6.32 6.19 bioethanol 13 82 9 86 95 3.81 2.41 1.96 2.61 2.54 biogas 29 654 76 607 683 2.09 1.18 1.13 1.21 1.2 total 817 3,560 448 3,930 4,377 9.53 3.24 3.18 3.76 3.69 closed model jobs # multipliers category gender: female gender: fale age < 25 age > 25 total gender: female gender: male age < 25 age > 25 total biodiesel 1,244 3,742 518 4,468 4,986 18.18 7.3 7.51 8.72 8.58 bioethanol 28 110 14 125 138 8.12 3.26 3.06 3.8 3.71 biogas 126 843 108 861 969 9.07 1.52 1.6 1.72 1.71 total 1,398 4,696 640 5,454 6,093 16.31 4.27 4.54 5.22 5.14 source: own compilation. table 5: gpv increase in 2015 billion ars and employment increase in # persons (inve scenario) initial direct + indirect induced total total multiplier power plants 1.355 0.448 1.223 3.026 2.23 biogas plants 0.035 0.013 0.032 0.080 2.28 biofuel plants 0.306 0.098 0.321 0.725 2.37 total gpv 1.697 0.559 1.576 3.832 2.26 power plants 2,821 753 877 4,452 1.58 biogas plants 91 22 23 135 1.49 biofuel plants 706 161 231 1,097 1.55 total jobs 3,618 936 1,131 5,684 1.57 source: own compilation. international journal of sustainable energy planning and management vol. 37 2023 105 carlos adrián romero, christoph ernst, daniele epifanio and gustavo ferro policy-induced changes in economic sectors. an inputoutput matrix traces the direct and indirect nexuses allowing the attribution of each effect. sometimes, as in the case of several developing countries, the information is not available, not published, or does not have the needed degree of detail or modernity as is needed to simulate and evaluate policies. our first objective is methodological, showing how hybrid methods can reasonably provide information to study any developing economy where only highly aggregated social accounting matrices are available, lacking data about relatively small, scattered economic sectors. the hybrid method, mixing sectoral (and affordable) surveys with more aggregated information based on location quotients (a non-survey method), yields reasonable substitutes for otherwise nonexistent regional io tables and sams. the second objective is empirical: we collect sparse and sometimes incomplete, inconsistent, or outdated information on biofuel production; thus, we process all that information, applying said hybrid methodology to trace the effect of policies. we apply it to increases in biofuel production and investments, explaining changes in output and employment within the economy. however, our method is intended to perform different simulations of policies and other exogenous shocks and can determine economic (production), social (employment), and environmental (emissions) consequences of a variety of measures (regulations, subsidies, taxes, etc.). sometimes, policies are advocated with partial equilibrium arguments, pointing to job creation, output expansion, or emissions saved. however, those methods are insufficient since every policy could impose costs or benefits in another part of the economy linked to the sector under analysis. the method we apply tries to address net effects on the whole economy, tracing unintended or not-so-visible influences in other sectors. we apply our hybrid methodology to a rich soybean and maize producer, which concentrates four-fifths of argentina’s biofuel production. in addition, we also evaluate job creation potential, disaggregating its effect by gender and age. this kind of model allows us to address “qualitative” (referred to attributes of the jobs, such as age, gender, skills, etc.) as well as “quantitative” changes in net jobs, giving policymakers tools for planning if the objective is to promote certain employment. two scenarios consider an increase in bioenergy production (using existent idle capacity plus ongoing investments at the survey date), and in bioenergy investments (based on expenditure needed to install new plants.). the sector has an initial value added of 745 million dollars and employs near to 1200 persons, and an important idle capacity plus delayed projects because of external shocks. under full capacity utilization plus ongoing investments, production more than doubled, and employment grow 414%. on the other hand, a 50% additional increase in new capacity implies a total valueadded increase of 421 million dollars (56% increase) and a 378% increase in jobs. the second scenario accounts for the employment effect of temporary investments until the construction stage is over, while the job effect of production increases tends to last until the end-of-life of the plant. two policy implications derive from the analysis: first, the relevance of measuring exhaustively the effects of renewable energy in the economy, environment, and society; second, the distinction between transient and more permanent effects of alternative policies. also, we highlight the importance of the instrument we 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(2016). https://www.santafe.gov.ar/index.php/web/estructura-degobierno/ministerios/produccion/normas/ley-provincial12692-biocombustibles https://doi.org/10.1080/09535310120026247 https://doi.org/10.1016/j.ecolecon.2014.12.007 https://doi.org/10.1016/j.rser.2011.02.027 https://doi.org/10.1016/j.rser.2011.02.027 https://www.argentina.gob.ar/normativa/nacional/ley-26093-116299 https://www.argentina.gob.ar/normativa/nacional/ley-26093-116299 http://servicios.infoleg.gob.ar/infoleginternet/anexos/250000-254999/253626/norma.htm http://servicios.infoleg.gob.ar/infoleginternet/anexos/250000-254999/253626/norma.htm https://www.santafe.gov.ar/index.php/web/estructura-de-gobierno/ministerios/produccion/normas/ley-provincial-12692-biocombustibles https://www.santafe.gov.ar/index.php/web/estructura-de-gobierno/ministerios/produccion/normas/ley-provincial-12692-biocombustibles https://www.santafe.gov.ar/index.php/web/estructura-de-gobierno/ministerios/produccion/normas/ley-provincial-12692-biocombustibles au_35.indb international journal of sustainable energy planning and management vol. 35 2022 45 *corresponding author – e-mail: yudha-irmansyah.siregar@studierende.uni-flensburg.de international journal of sustainable energy planning and management vol. 35 2022 45–64 abstract an evaluation of energy sources for electricity generation should consider manifold aspects of the sustainable development concept. the evaluation also needs active participation from all involved stakeholders. the objective of this paper is to rank energy sources for sustainable electricity generation in indonesia. a multi-criteria decision analysis using the analytic hierarchy process method was applied to deal with multiple aspects of the sustainable development in the ranking of selected energy sources. four criteria, twelve sub-criteria and nine energy source alternatives (three fossil fuels and six renewables) were defined. relevant indonesian energy stakeholders from government institutions, universities, think tanks, the energy industry, civil society and international organisations participated in this research. they gave judgements on pair-wise comparisons of the criteria and sub-criteria and a performance evaluation of the alternatives against four sub-criteria. the performance of the alternatives against the other eight sub-criteria was evaluated using data from relevant literature. this paper indicates that solar is the top ranked alternative for sustainable electricity generation in indonesia, followed by hydro and oil as the top three. to fulfil the solar energy potential, the indonesian government should consider policies that focus on the strengths of solar in the economic and social criteria. ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis yudha irmansyah siregar* department of energy and environmental management, europa-universität flensburg, munketoft 3b, 24937 flensburg, germany keywords sustainable energy systems; sustainable energy planning; sustainable electricity generation; analytic hierarchy process; energy stakeholder participation; http://doi.org/10.54337/ijsepm.7241 1. introduction the sustainable development concept has emerged over the past three decades and now plays a vital role in our daily life. introduced in 1987 by the world commission on environment and development, sustainable development is defined as “a development which meets the needs of current generations without compromising the ability of future generations to meet their own needs” [1]. in 2015, the united nations adopted 17 sustainable development goals (sdgs) as a global plan of action for people, the environment, and economy. sdg 7, a goal for the energy sector, aims to ensure access to affordable, reliable, sustainable, and modern energy for all [2]. this can only be achieved by promoting energy efficiency, reducing the use of fossil fuels that produce harmful emissions to people and the environment, and at the same time by increasing renewable energy penetration into energy systems. renewable energy is not only better for people and the environment than fossil fuels but also good for the global economy. the international renewable energy agency concludes that a renewables-based energy system will, on average, increase global gdp growth until 2050 [3]. formulating energy plans that consider the sustainable development concept has become a main concern for all governments in the world. negative impacts of energy projects, such as health problems and land-use change, are becoming increasingly important in energy planning. maulidia et al. [4] believe that indonesian energy planning is short-sighted and does not consider longterm benefits to people and the environment, such as 46 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis energy security and environmental sustainability. moreover, energy planning in indonesia lacks transparency and inclusiveness. the indonesian government needs to apply a thorough analysis and participatory process in energy planning. against this background, the present research selected indonesia as the case study focusing on energy planning in the electricity sector. since the early 2000s, electricity generation has increased substantially in indonesia. between 2010 and 2020, it almost doubled from 156 twh to 291 twh [5], as shown in figure 1. the rise corresponds to an average gdp growth of 4.74 % over that period. nevertheless, the electricity consumption per capita was still only 1,090 kwh in 2020 [6], significantly below the national target of 2,500 kwh by 2025 [7]. current official indonesian documents [8–10] predict an accelerating trend of electricity generation and consumption. several international institutions have made similar projections [11,12]. the asia-pacific economic cooperation estimates that indonesian electricity generation will be approximately 1,050 twh in 2050 [13]. fossil fuel–based sources have dominated indonesia’s electricity generation over the past two decades, as shown in figure 1, and they are expected to remain the main sources. coal, oil and natural gas–fired power plants accounted for almost 85.5% of the total installed capacity in 2020 [5]. the latest indonesian electricity supply business plan [10] sets the share of coal, natural gas and oil in the total installed capacity by 2030 at 45%, 23% and 4%, respectively. coal-fired power plants will continue to dominate electricity generation in indonesia. renewables development in the electricity sector has experienced slow progress in indonesia. from 2000 to 2020, the share of renewables in the country’s total electricity generation increased by just 2% [5,14]. in 2020, the installed capacity from renewables was approximately 10.5 gw or 14.5% of the total installed capacity [5]. hydro, geothermal and biomass contributed 6.1 gw, 2.1 gw and 1.8 gw, respectively. other renewables solar, wind and biogas only accounted for around 0.5 gw [5]. the current increase seems contradictory, considering that indonesia has abundant renewable energy potential in various forms [14–21], and numerous indonesian studies [23–26] conclude that renewables can compete technically and economically with fossil-based sources. figure 1: total electricity generation in indonesia from 2000 to 2020 [5,14] international journal of sustainable energy planning and management vol. 35 2022 47 yudha irmansyah siregar an evaluation of energy sources for electricity generation in energy planning should be based on the sustainable development concept. social, economic, and environmental aspects should be simultaneously assessed when prioritising alternative sources of energy [27]. the evaluation should also include various limitations, such as conflicting interests, economic constraints and technological challenges [28]. multicriteria decision analysis (mcda) methods are suitable in dealing with these limitations and the manifold aspects of sustainable development in the energy sector. the mcda methods can accommodate opposing interests and objectives from diverse backgrounds of stakeholders in the energy sector. various mcda methods have been applied in indonesian sustainable energy studies. tasri and susilawati [29] employed an mcda method to select the most appropriate renewable energy sources for electricity generation. miraj and berawi [30] utilised two mcda methods to evaluate the best solar pv alternative for electricity access on tomia island. a combination of spatial analysis and mcda methods was employed by ruiz et al. [31] to select the optimal location of solar plants. however, it is believed that an evaluation using mcda methods to rank all energy sources for electricity generation in indonesia has not been conducted. this evaluation could be an alternative approach that is needed to consider multiple aspects of sustainable development concept in energy planning. this paper attempts to fill this literature gap by combining the use of mcda and the active participation of relevant energy stakeholders for an evaluation of sustainable electricity generation in the country. it could benefit policymakers, planners and other relevant energy stakeholders in the development of sustainable energy plans, particularly in the electricity sector. this paper suggests an approach for the ranking of energy sources for electricity generation in energy planning in indonesia. the aim of the paper is to rank energy sources for sustainable electricity generation in the country. this paper applies mcda employing the analytic hierarchy process method. a total of 23 indonesian energy stakeholders from five different groups representing various interests and objectives participated in the present research. four criteria and twelve sub-criteria were developed to rank the energy sources. this research evaluated a selection of all existing energy sources, both fossil fuels and renewables, which could be used in energy planning in indonesia. the paper lays out a research hypothesis that renewable energy sources have higher ranks than fossil fuels to generate sustainable electricity generation in indonesia. the proposed approach that combines qualitative and quantitative data analyses could capture renewables’ competitiveness in generating electricity against fossil-based power plants. 2. methods and data this section explains the multi-criteria decision analysis applications in energy planning, and the analytic hierarchy process method and the associated data used in this research. 2.1. multi-criteria decision analysis in energy planning energy planning is a multi-dimensional process that has to deal with a broad range of qualitative and quantitative variables. a one-dimensional process that only uses quantitative variables, such as net present value or costbenefit analysis, cannot comprehensively solve current energy planning issues. qualitative variables, such as public acceptance and political risk, have been found to play a vital function in energy planning [32]. competing interests and purposes amongst energy stakeholders should be captured in an analysis process that accommodates all involved variables. multi-criteria decision analysis (mcda) is well suited for this as it can be applied to determine trade-offs, co-benefits, and consensus results of complicated planning problems [33]. mcda can increase the quality of decisions by creating them more explicitly, efficiently and rationally [34]. stakeholders, such as government institutions, industry associations and civil society organisations, who actively engage in the energy planning process, need a structured framework, and this is possible with the mcda method. mcda methods have been used globally as an alternative to traditional one-dimensional evaluation as they can handle many issues in energy planning, such as the ranking of energy sources or energy technologies for electricity generation. some mcda methods that are widely used in sustainable energy studies are elimination and choice translating reality (electre), preference ranking organization methods for enrichment evaluation (promethee), technique for order preference by similarity to ideal solution (topsis) and analytic hierarchy process (ahp). the electre method was utilised by martínez-garcía et al. [35] to select the most sustainable technology for electricity 48 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis generation in the united kingdom. seddiki et al. [36] utilised promethee to rank renewable energy technologies for electricity generation in a residential building. alidrisi and al-sasi [37] employed topsis to rank the g20 countries with respect to their energy selection for electricity generation. the ahp method was adopted by shaaban et al. [38] to rank electricity generation technologies in egypt. al garni et al. [39] and ahmad and tahar [40] utilised the ahp method for the ranking of renewables in the electricity sector in saudi arabia and malaysia, respectively. several extensive literature reviews [41–43] on mcda applications in the sustainable energy field found that the analytic hierarchy process is the most used method. 2.2. analytic hierarchy process for ranking alternative energy sources the ahp method was introduced by thomas l. saaty in the 1970s and has been used to structure and model complex problems [44,45]. this method provides a thorough and logical framework for constructing a decision problem and solving it. the ahp method enables the ranking of different alternatives by offering a framework that can manage interests and provide solutions for conflicting aims. it transforms the decision problem into a hierarchy tree of a goal, criteria (and if needed, sub-criteria and further lower levels of subcriteria) and alternatives. the alternatives are a group of options to be ranked based on the given criteria and subcriteria. figure 2 depicts the hierarchy tree for this research. the ahp method permits decision analysis processes to integrate quantitative data and qualitative judgements. this method matches a need to consider multifold aspects in the sustainable development concept. another advantage of the ahp method is that it does not require complicated mathematical calculations [46]. users can follow simple formulas and compute them. figure 3 illustrates the main steps to rank energy sources for sustainable electricity generation in indonesia using the ahp method. a broad range of indonesian energy stakeholders from the indonesian government, universities, think tanks, the fossil fuel and renewable industry, civil society and international organisations participated in this research. these groups of stakeholders were chosen to reflect diverse interests in the indonesian energy sector. a total of 52 stakeholders (indonesian government: 9 stakeholders; universities and think tanks: 13; fossil n. gascoal oil hydro geothermal solar wind biomass biogas ranked energy sources for sustainable electricity genera�on in indonesia social public acceptance job crea�on local development co2 emission land requirement waste management environmental electric efficiency & capacity factor tech. maturity industry readiness technical investment cost o&m costs resource availability economic goal criteria job sub-criteria coaalterna�ves figure 2: hierarchy tree for ranking energy sources for sustainable electricity generation in indonesia international journal of sustainable energy planning and management vol. 35 2022 49 yudha irmansyah siregar fuel industry: 7 and renewable industry: 7; civil society and international organisations: 16) were invited to participate in the research. twenty-three stakeholders (details in appendix 1) replied to the invitation. data collection from the stakeholders took place between july and august 2021. the 23 indonesian energy stakeholders gave their judgements in two different questionnaires. the first questionnaire (appendix 2) requested pair-wise comparisons of the criteria and sub-criteria, using saaty’s nine-integer importance scale, as shown in table 1. the second questionnaire (appendix 3) determined the performance of alternatives against four qualitative sub-criteria. stakeholders evaluated the performance of each alternative on a 1-9 performance scale, as shown in table 2. the two questionnaires in indonesian were provided online and sent via email. the stakeholders had the opportunity to ask their own questions or clarify questions in the questionnaires. 2.3. defining criteria, sub-criteria and alternatives the ranking of energy sources for sustainable electricity generation requires a comprehensive process of defining selected criteria and sub-criteria, which should accommodate the sustainable development aspects. an extensive literature review was undertaken to obtain a list of possible criteria and sub-criteria. the list was modified to provide the most suitable ones in the context of the indonesian electricity sector. literature reviews by [32,41,42,47,48] on mcda applications in the sustainable energy field found that social, environmental, technical and economic criteria were commonly used in these applications. sub-criteria, such as job creation, co2 emission, electric efficiency, and investment cost, were also found to be commonly used. table 3 summarises the most common criteria and sub-criteria used in sustainable energy research. this present research applied a subjectivity method based on own opinion in selecting and classifying criteria and sub-criteria. this method depends on preferences of people who are responsible for conducting the research and the goals set in the research design [48]. the criteria selected in this research are social, environmental, technical, and economic. each of these four criteria has three sub-criteria. the social criterion covers social dimensions of the development of a power plant in a specific location and contains the sub-criteria public acceptance, job creation and local development. the environmental criterion considers environmental impacts of a power plant on the environment and people and contains the sub-criteria co2 emission, land requirement and waste management. the technical performing pair-wise comparisons of criteria and sub-criteria based on stakeholder judgements – step 1a performing pair-wise comparisons of alterna�ves against subcriteria based on their performance evalua�ons – step 1b eight sub-criteria using relevant literature four sub-criteria using stakeholder judgements compu�ng weight of each criterion, sub-criterion and alterna�ve at their own level – step 2 integra�ng all weights of different levels of hierarchy tree – step 3 applying ahp method to rank energy sources for sustainable electricity genera�on in indonesia calcula�ng weight of criteria, sub-criteria and alterna�ves ranking of energy sources for sustainable electricity genera�on defining sustainable criteria and sub-criteria and alterna�ve energy sources figure 3: main steps to rank energy sources for sustainable electricity generation in indonesia using the ahp method 50 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis table 1: importance scale for pair-wise comparison [44] intensity of importance (variable a to variable b) definition 1 variable a and variable b are equally important 3 variable a is weakly more important than variable b 5 variable a is strongly more important than variable b 7 variable a is very strongly more important than variable b 9 variable a is absolutely more important than variable b 2, 4, 6, 8 intermediate intensities table 2: performance scale for an alternative against qualitative sub-criteria performance score definition 1 worst performance 3 bad performance 5 adequate performance 7 good performance 9 best performance 2, 4, 6, 8 intermediate performances table 3: popular criteria and sub-criteria used in sustainable energy research criterion sub-criterion source social public acceptance [29,39,40,49–51] job creation [29,40,50–54] local development [49,52,53,55,56] health impact [49,52,56] political acceptance [39,57,58] environmental co2 emission [29,39,49,50,52–54] land requirement [29,39,49,50,52,53] waste management [29,49,54,57,59] ecological impact [49,51,53] particles emission [60–62] technical electric efficiency [38,39,50,53,54,63,64] capacity factor [49,50,52,53,63] technology maturity [39,40,53,64] industry readiness [29,49,53,54] flexibility [49,50,52] economic investment cost [29,39,49,51,53,54,63] o&m costs [39,49,51,53,63,64] resource availability [39,40,49,52,55] fuel cost [49,63] payback period [65,66] international journal of sustainable energy planning and management vol. 35 2022 51 yudha irmansyah siregar criterion considers the main technical aspects of a power plant and its technological development and contains the sub-criteria electric efficiency and capacity factor, technology maturity and industry readiness. finally, the economic criterion discusses economic factors concerning power plant construction and operation, and energy source availability for electricity generation. this criterion has investment cost, operation and maintenance (o&m) costs and resource availability as its sub-criteria. the current research considered all of the energy sources currently being used in the indonesian electricity sector as alternatives. these include the fossil fuels coal, natural gas, and oil, and the renewable energy sources hydro, geothermal, solar, wind, biomass (including sources from waste), and biogas. several official energy plan documents [8–10] also use the same selection of energy sources in relation to energy planning in indonesia. these nine energy source alternatives capture the current status of the indonesian electricity sector and the plans for the ranking of energy sources in the future. the selection of alternatives excluded sources, such as nuclear, tidal and wave energy, as they are not used commercially in indonesia at present. all of the alternatives were evaluated with respect to the sub-criteria. energy stakeholders gave their judgements on the performance of alternatives against the qualitative sub-criteria public acceptance, local development, waste management, and industry readiness. these alternative performances were ranked based on the geometric mean of all stakeholder judgements in each sub-criterion. the technology maturity sub-criterion used qualitative information from literature. the remaining sub-criteria of job creation, co2 emission, land requirement, electric efficiency and capacity factor, investment cost, o&m costs, and resource availability are quantitative and based on relevant literature. the source selection for these sub-criteria was carried out for their reliability and applicability, i.e., indonesian government publications or peer-reviewed articles. it is important to note that each quantitative sub-criterion used only one source except for resource availability, which used three sources. the decision to use one source per sub-criterion provided a uniform methodology for evaluating nine different energy sources against each sub-criterion. table 4 presents the data sources for each sub-criterion. the following sub-sections provide detailed definitions and explain the sources used for each subcriterion in this research. public acceptance. this indicates the satisfaction level of the general public for the development of a new power plant. public acceptance directly and indirectly affects the progress of power plant development. the performance of each alternative for this sub-criterion was evaluated qualitatively by stakeholders. the best performance indicates the public’s most welcomed energy source for a new power plant. stakeholders indicated that coal is the least welcome alternative and that solar is the most welcome one. the complete evaluation for this sub-criterion can be seen in table 5. table 4: sub-criteria in this research and the sources of relevant data sub-criterion source public acceptance stakeholder judgement job creation [67] local development stakeholder judgement co2 emission [68] land requirement [69] waste management stakeholder judgement electric efficiency and capacity factor [69] technology maturity [69] industry readiness stakeholder judgement investment cost [69] operation and maintenance (o&m) costs [69] resource availability [5,9,12] 52 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis job creation. this sub-criterion indicates the opportunities for creating new jobs by building a new power plant. jobs can be associated with direct employment during the stages of both construction and operation. this primarily generates development and prosperity in local communities. job creation is the most used sub-criterion in the social criterion [32]. for this sub-criterion, the performance of the alternatives is taken from a recent study by ram et al. [46], which investigated the number of jobs created by all types of power plants across the globe. until now, no such comprehensive study has been carried out in indonesia. ram et al. [67] specify job creation factors for different regions. the current research applied the job creation factor of the southeast asia region. the job creation sub-criterion contains two different performances, which were evaluated for the stages of building a power plant. first, there is the construction and installation (c&i) stage with the unit job-years/mw. second, it is the operation and maintenance (o&m) stage with the unit jobs/mw. these two performances equally evaluated alternatives and are listed in table 5. local development. this expresses social progress in a region where a power plant has been built. in the indonesian context, the power plant could affect either one or several cities and regencies, or at a broader level, provinces. quantifying the full indirect impact of a new power plant is extremely difficult. this research used qualitative judgements of stakeholders to rank the performance of alternatives for this subcriterion. hydro is ranked as having the highest impact on local development, and oil is ranked as having the lowest impact. table 5 shows the full evaluation for this sub-criterion. co2 emission. this sub-criterion evaluates the direct impact of alternatives on the environment by assessing the volume of co2 emitted into the air in the process of generating electricity. the sub-criterion is taken from quantitative data, in the unit co2 ton/gj, from the indonesian ghg inventory data for energy sector [68]. only fossil fuel sources are assumed to be co2 emitters. renewable energy sources do not produce co2 in electricity generation. this assumption also applies in indonesian energy planning documents [8–10]. table 5 shows the performance of alternatives with regard to the co2 emission sub-criterion. land requirement. this requirement quantifies the area of land needed to build a power plant and its supporting facilities. it is a quantitative sub-criterion with data taken from the newest technological data catalogue for power sector in indonesia [69]. it is worth mentioning that the catalogue is predominantly based on power plant projects in indonesia. this can ensure the country-specific nature of land requirement for each energy source. the land requirement for each alternative is shown in table 5. waste management. this sub-criterion assesses all processes of waste disposal from the construction phase to the decommissioning of a power plant. the subcriterion indicates that every energy source needs specific waste treatment, which can be harmful to people and the environment if not managed properly. each performance of the alternatives against this sub-criterion was evaluated qualitatively by stakeholders. the best performance is associated with the alternative that requires the least effort to manage its waste. the worst performance of an alternative is associated with the greatest effort required. stakeholders ranked hydro as table 5: performance of the alternatives for selected sub-criteria alternative public accept-ance job creation local develop-ment co2 emission (ton/gj) land require-ment (1000 m2/mw) waste manage-mentc&i stage (job-years/mw) o&m stage (jobs/mw) coal 1 24.64 0.31 2 0.096 0.04 1 natural gas 3 2.86 0.31 5 0.056 0.02 3 oil 2 2.86 0.46 1 0.074 0.05 2 hydro 8 16.28 0.44 9 0 62 9 geothermal 7 14.96 0.88 7 0 30 6 solar 9 28.6 1.54 8 0 14 8 wind 6 7.04 0.66 4 0 14 7 biomass 5 30.8 3.30 6 0 35 4 biogas 4 30.8 4.95 3 0 70 5 international journal of sustainable energy planning and management vol. 35 2022 53 yudha irmansyah siregar the best alternative and coal as the worst in this subcriterion. the complete ranking is shown in table 5. electric efficiency and capacity factor. this subcriterion provides data on two separate performances: electric efficiency and capacity factor and shares an equal portion in the evaluation of alternative performance. the performance of electric efficiency is the ratio between the total amount of electricity delivered to the grid and fuel consumption. the capacity factor is the ratio of the average net annual electricity generation to its theoretical annual generation if the power plant were operating at full capacity all year round. this quantitative sub-criterion used electric efficiency and capacity factor data from the indonesian technological data catalogue for power sector [69]. data for this sub-criterion are shown in table 6. technology maturity. this sub-criterion evaluates the maturity of the technology used for each alternative. it also reflects its commercial viability at national and international levels. the performance of each alternative for this sub-criterion was evaluated qualitatively, referring to the technological data catalogue for power sector in indonesia [69]. the nine energy source alternatives were grouped into two category levels: level 3 (moderate deployment) and level 4 (large deployment). level 3 indicates that the maturity level of the technology is well known, and that it is likely that there will be major improvements in the technology in the future. level 4 indicates that there is a high level of maturity and that only incremental improvements are likely. technology maturity for each alternative is shown in table 6. industry readiness. this sub-criterion assesses the readiness of indonesian industry to actively develop the power plant technology of each alternative. the subcriterion also indicates the availability of national and local workforce to produce and install the equipment and to operate and maintain the power plant facilities. the performance for each alternative was evaluated qualitatively using stakeholder judgements. the best performance indicates the most established industry associated with an energy source in indonesia. oil has the highest performance, and wind energy the lowest. table 6 shows the full evaluation for this sub-criterion. investment cost. this sub-criterion consists of mechanical and plant equipment costs, and installation costs. the former expenditure covers all physical equipment costs, while the latter contains equipment installation, building construction and grid connection expenses. investment cost is the most commonly used sub-criterion in the economic criterion [42]. this subcriterion used data from the indonesian technology catalogue for power sector [69]. the full list of investment costs for each alternative is provided in table 6. operation and maintenance (o&m) costs. both fixed and variable costs of operating a power plant are included in this sub-criterion. the fixed costs include payments for administration, salaries, service and network charges, property tax, and insurance. the variable costs comprise auxiliary material costs, such as lubricant and fuel additives, waste treatment costs, spare part expenses, and output-related repair and maintenance costs. these fixed and variable costs share equal weighting in the evaluation of the performance of the alternatives. the fuel cost for thermal power plants is not part of the o&m costs. this quantitative subcriterion used data from the indonesian technological data catalogue for power sector [69]. the stated o&m table 6: performance of the alternatives for selected sub-criteria alternative electric efficiency (%) capacity factor (%) technology maturity (level) industry readiness investment cost (million usd/mw) o&m costs resource availabilityfix cost (usd/ mw/ year) variable cost (usd/mwh) coal 42 87 4 8 1.52 56,600 0.11 972 ej natural gas 56 90 4 6 0.69 23,500 2.30 66 ej oil 45 98 4 9 0.80 8,000 6.40 24 ej hydro 95 36 4 7 2.08 37,700 0.65 94.3 gw geothermal 15 80 3 4 4.00 50,000 0.25 28.5 gw solar 100 19 3 5 0.79 14,400 0 207.8 gw wind 100 34 3 1 1.50 60,000 0 9.3 gw biomass 31 88 3 3 2.00 47,600 3.00 32.3 gw biogas 34 90 3 2 2.15 97,000 0.11 0.5 gw 54 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis costs in this data catalogue are the average o&m costs during the whole lifetime of a power plant. o&m costs for each alternative are shown in table 6. resource availability. this indicates how much of each energy source is available to generate electricity in indonesia. because of their infinite characteristics, all six renewable energy sources were prioritised first before fossil fuels. resource availability for renewables represents their theoretical potential for producing electricity in a gw unit. the renewables data were drawn from two sources: [9] and [12]. for fossil fuels, resource availability refers to the total energy reserves in a unit exa joule (ej) based on the indonesian annual statistics of energy and economic data [5]. table 6 provides the performance of the alternatives for the resource availability sub-criterion. 2.4. calculating criteria, sub-criteria and alternative weights to calculate the weights of the criteria, sub-criteria and alternatives, the current research used the ahp method in three steps (see figure 3). in the first step, pair-wise comparisons for all variables in each level of the hierarchy tree were made using saaty’s nine-integer value of importance scale, as shown in table 1. at the criteria and sub-criteria level, the pair-wise comparisons were performed by stakeholders, who gave their judgements on the importance intensity of one variable to another. at the alternatives level, pair-wise comparisons were made based on the performance of alternatives against each sub-criterion, using rank number of alternatives as suggested by garni et al. [39]. in the second step, the maximum eigenvalue, consistency index, consistency ratio and normalised eigenvector were computed to obtain the weight of each criterion, sub-criterion and alternative at their own level. a consistency check of pair-wise comparisons was performed in this step. because the pair-wise comparisons are subjective, the ahp method utilises a consistency ratio (cr) to check for inconsistent judgements by stakeholders. the cr checking can be calculated using following equations: ci = (λmax – n) / (n – 1) (1) where, ci is the consistency index, λmax is the maximum eigenvalue of a pair-wise comparison and n is the number of variables used in a pair-wise comparison. cr = ci / ri (2) where, ri is the random consistency index, a given value suggested by saaty [44] depending on the size of n. the cr attribute is considered to be an advantage of the method. saaty [44] suggests that the cr value should be less than 0.1. all calculations in this step were performed using an online ahp calculator tool [70]. in the third step, all of the weights were integrated over different levels of the hierarchy tree. [70] was also employed in this step. this step determines the weight of each criterion, sub-criterion and alternative with respect to the goal. the ranking of the energy sources for sustainable electricity generation in indonesia is defined by each alternative weight with respect to the goal. 3. results and discussion the result of the criteria weight with respect to the goal in this research is depicted in figure 4. the economic criterion has the highest weight at this level. technical comes the second, followed by environmental and social. as the economic criterion constitutes almost one-third of the total criteria weight, it is evident that it is the most important aspect to be considered for sustainable electricity generation in indonesia. the ranking of the energy sources mainly depends on their performances in this criterion. the social criterion, however, with the lowest weight, receives a lower importance level from the indonesian energy stakeholders than of the other criteria. figure 5 shows the weights of sub-criteria with respect to the goal. the top three sub-criteria represent the most weighted sub-criteria in the economic, technical and environmental criteria. resource availability from the economic criterion is the highest weighted subcriterion, indicating a primary priority to use the most readily-available energy source in indonesia for electricity generation. from the technical criterion, industry readiness comes as the second most weighted sub-criterion, which could imply a high importance to prioritise the national industry for electricity generation. waste management, as the third most weighted subcriterion, is considered the most important aspect of the environmental criterion. it is notable that all social subcriteria have similar low weightings. it could be interpreted that each sub-criterion has equal importance in the social criterion. based on the criteria and sub-criteria weights, alternative weights with respect to the goal were computed, and the results are shown in table 7. the cr international journal of sustainable energy planning and management vol. 35 2022 55 yudha irmansyah siregar of conducted pair-wise comparisons at all levels was less than 0.1. detailed cr values from pair-wise comparisons made by stakeholders are in appendix 4. this research concludes that solar is the highest ranking alternative, which should be prioritised as the energy source for sustainable electricity generation in indonesia. hydro is ranked second followed by oil. it should be noted that the weight for solar is much higher than other energy alternatives. solar has a wide gap weight with hydro as the second rank (0.0475, the biggest one between two consecutive ranks, e.g. second and third rank or third and fourth rank) that emphasises a paramount priority to use this alternative for electricity generation in the country. the rankings of the remaining alternatives in high-low rank order are natural gas, wind, coal, biogas, geothermal, and biomass. this ranking result supports the stated research hypothesis that overall, renewable energy sources have higher ranks than fossil fuels. top three and top five ranks are dominated by the renewables. there is not an alternative which completely dominates each criterion. solar performs as the best alternative in the social and economic criteria but not in the environmental and technical criteria, as can be seen in figure 6. hydro has the highest weight in the environmental criterion but not in the other three criteria. oil has the lowest weight in the social criterion but the highest weight in the technical criterion. the remaining figure 4: weights of the criteria w ith respect to the goal figure 5: weights of the sub-criteria with respect to the goal 56 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis six alternatives have a range of relatively low and high weights in one or more criteria. this could be explained by the fact that each alternative has its own strong and weak criteria. a combination of solar, hydro and oil as the top three alternatives for all four criteria appears to be the optimal mix for sustainable electricity generation in indonesia. however, more work needs to be done, particularly with respect to technical and economic aspects of integrating different energy sources into the grid before finally concluding the optimal mix. another significant result is that coal is only ranked sixth as an energy source for sustainable electricity generation in indonesia (see table 7), although the current electricity generation is mainly from this alternative and this will continue to remain the case in the future. the present research raises the possibility of revisiting the existing planning process in the indonesian electricity sector that puts coal as the primary energy source for electricity generation. even though coal has a high weight (the second highest) for the technical criterion, its weights for the social and environmental criteria are low, the second lowest and lowest, respectively (see figure 6). sourcing coal as the primary source for electricity generation would not be sustainable. indonesia table 7: weight and rank of alternative energy sources alternative weight rank coal 0.0912 6 natural gas 0.1013 4 oil 0.1184 3 hydro 0.1519 2 geothermal 0.0815 8 solar 0.1994 1 wind 0.0949 5 biomass 0.0775 9 biogas 0.0840 7 figure 6: alternative weights for each criterion with respect to the goal international journal of sustainable energy planning and management vol. 35 2022 57 yudha irmansyah siregar needs a transition in its sustainable electricity generation planning, which reduces its dependency on coal. if indonesia’s dependence on coal continues for years to come, it would put its sustainable development at risk. stakeholder judgements make subjective evaluations based on their interests and objectives. these subjective evaluations could change the criteria and sub-criteria weights and subsequently alter the ranking of alternatives. performing various sensitivity analyses could help to better understand the ranking results. this research conducted a sensitivity analysis based on the groups of stakeholders that they represent. the results of the criteria weight in this sensitivity analysis are shown in table 8, and their rankings are provided in table 9. solar is ranked the highest by the five groups of stakeholders. the results confirm this alternative as the top ranked energy source across the different backgrounds of the stakeholders. overall, these sensitivity analysis results indicate a similar order for the different groups with solar, hydro and oil as the top alternatives. one interesting result in table 9 is that oil is ranked in second place by the government stakeholder group. at the criteria level, government stakeholders give a much higher importance to the technical criterion (see table 8). as a result, fossil-based alternatives generally have a higher weight than renewables in the technical criterion (see figure 6) and are ranked higher by the government group than others. this might be explained by the fact that all government stakeholders are from technical institutions. it makes sense that their institutions’ interest is reflected in their preference for the technical criterion. furthermore, as they have strong technical expertise, they put the technical criterion at a higher level of importance than other criteria. another interesting result from table 9 is that fossil fuels are ranked low (oil is ranked fifth; natural gas, eighth; and coal, ninth) in the fossil fuel industry group. a possible explanation for this is that the stakeholder in this group prefers to give a proportional weight for all criteria (see table 8). as a result, fossil fuel alternatives that have lower weights for the social and environmental criteria (see figure 6) have lower total weights when these two criteria have a bigger portion. the fossil fuel industry stakeholder might believe that the same weight for the four criteria could reflect the fossil fuel industry’s interests. table 8: criteria weight with respect to the goal based on stakeholder group criterion stakeholder group all groups government fossil fuel industry renewable industry university-think tank civil society-international organisation social 0.152 0.092 0.250 0.145 0.182 0.186 environmental 0.254 0.162 0.250 0.244 0.297 0.314 technical 0.287 0.500 0.250 0.210 0.260 0.172 economic 0.307 0.246 0.250 0.402 0.260 0.329 table 9: ranking of alternatives based on stakeholder group alternative stakeholder group all groups government fossil fuel industry renewable industry university-think tank civil society-international organisation coal 6 4 9 6 6 7 natural gas 4 5 8 4 5 4 oil 3 2 5 3 3 3 hydro 2 3 2 2 2 2 geothermal 8 8 6 8 8 6 solar 1 1 1 1 1 1 wind 5 6 4 5 4 5 biomass 9 9 7 9 9 9 biogas 7 7 3 7 7 8 58 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis 4. conclusion the mcda method enables a thorough analysis that considers multiple aspects and is a participatory process that involves various stakeholders. the method is ideal for use in energy planning in indonesia. first, it can consider multifold aspects simultaneously in the design of energy plans. second, by involving different groups of stakeholders in the energy sector, the credibility and acceptability of the planning results can be increased. the use of the analytic hierarchy process in the mcda method has been used here for the first time to rank nine energy sources for sustainable electricity generation in indonesia. solar is found to be highest ranked alternative. the sensitivity analysis results show solar to be the highest ranked alternative for all groups of stakeholders. this analysis also shows that different groups of stakeholders put different level of importance to the four criteria and in doing so represent their group’s interests. it is suggested that the indonesian government should consider policies that can optimise the strength of solar in the economic and social criteria. for example, policies to maximise its resource availability can be implemented by promoting roof-top solar panels in big cities or by utilising reservoir dams as locations for solar farms. the latest ministerial regulation on roof-top solar utilisation [71] is a good starting point in accelerating solar use in the indonesian electricity sector. to obtain a significant deployment of new rooftop solar users, the implementation of the regulation should be supported by the promotion of benefits to all electricity end-users [72]. future work in the ranking of energy sources for sustainable electricity generation in indonesia can be conducted in different ways, based on spatial and temporal research. considering that indonesia has a vast land area, specifying research locations and tailoring their criteria and sub-criteria accordingly could be one approach in future spatially-orientated research. conducting a number of sensitivity analyses based on the forecasted performance of alternatives against subcriteria could be a temporally-orientated future study. acknowledgements the author acknowledges a doctoral scholarship from the daad (german academic exchange service). the author would like to thank prof. dr bernd möller and dr jonathan mole for their valuable comments on the earlier drafts of this paper. the author would also like to thank the indonesian energy stakeholders who participated in this research and adven f. n. hutajulu for his support during the questionnaire collection. appendix 1 details of participated stakeholders table a1: list of participated stakeholders stakeholder job title age (years) government 01 electricity programme analyst 34 government 02 policy analyst 43 government 03 policy analyst 42 government 04 renewable energy cooperation analyst 36 government 05 renewable energy programme analyst 33 government 06 director 51 government 07 senior researcher 61 fossil fuel industry 01 -na53 renewables industry 01 vice chairman independent consultant 58 renewables industry 02 technical manager 59 renewables industry 03 executive director 55 renewables industry 04 group head corporate affair 46 university – think tank 01 executive director 42 university – think tank 02 professor senior lecturer 69 international journal of sustainable energy planning and management vol. 35 2022 59 yudha irmansyah siregar stakeholder job title age (years) university – think tank 03 chairperson 41 university – think tank 04 deputy programme director -nauniversity – think tank 05 professor senior lecturer 61 civil society – international organisation 01 executive director 48 civil society – international organisation 02 team eader 34 civil society – international organisation 03 manager 38 civil society – international organisation 04 researcher 30 civil society – international organisation 05 programme manager 36 civil society – international organisation 06 executive board member 52 appendix 2 first questionnaire example please rate the importance intensity of the below four criteria with respect to the goal of ranking energy sources for sustainable electricity generation in indonesia. table a2: pair-wise comparison amongst criteria criterion importance scale of 1-9 criterion social environmental social technical social economic environmental technical environmental economic technical economic please rate the importance intensity of the below three sub-criteria with respect to the social criterion. table a3: pair-wise comparison amongst social criterion sub-criterion importance scale of 1-9 sub-criterion public acceptance job creation public acceptance local development job creation local development appendix 3 second questionnaire example please rate the performance score of the below alternatives against the qualitative sub-criteria. table a4: alternative performance scoring against qualitative sub-criteria alternative public acceptance local development waste management industry readiness performance score of 1-9 coal natural gas oil hydro geothermal solar wind biomass biogas 60 international journal of sustainable energy planning and management vol. 35 2022 ranking of energy sources for sustainable electricity generation in indonesia: a participatory multi-criteria analysis appendix 4 cr values of pair-wise comparisons made by all stakeholders table a5: cr values from pair-wise comparisons by stakeholders stakeholder amongst four criteria amongst social criterion amongst environmental criterion amongst technical criterion amongst economic criterion stakeholder 01 0.086 0.080 0.098 0.098 0.080 stakeholder 02 0.073 0.080 0.080 0.090 0.090 stakeholder 03 0.090 0.080 0.000 0.098 0.000 stakeholder 04 0.000 0.030 0.000 0.000 0.000 stakeholder 05 0.087 0.056 0.077 0.090 0.090 stakeholder 06 0.076 0.077 0.000 0.000 0.000 stakeholder 07 0.089 0.090 0.080 0.000 0.056 stakeholder 08 0.043 0.056 0.040 0.056 0.000 stakeholder 09 0.064 0.098 0.098 0.056 0.098 stakeholder 10 0.000 0.098 0.000 0.074 0.056 stakeholder 11 0.023 0.098 0.026 0.034 0.090 stakeholder 12 0.066 0.098 0.010 0.000 0.004 stakeholder 13 0.000 0.000 0.084 0.000 0.019 stakeholder 14 0.099 0.019 0.019 0.056 0.056 stakeholder 15 0.057 0.056 0.000 0.000 0.000 stakeholder 16 0.057 0.000 0.000 0.000 0.056 stakeholder 17 0.098 0.084 0.039 0.000 0.084 stakeholder 18 0.000 0.056 0.089 0.000 0.056 stakeholder 19 0.099 0.080 0.074 0.098 0.000 stakeholder 20 0.000 0.056 0.000 0.056 0.098 stakeholder 21 0.093 0.098 0.098 0.098 0.000 stakeholder 22 0.057 0.019 0.056 0.000 0.000 stakeholder 23 0.002 0.000 0.056 0.000 0.068 references [1] world commission on environment 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[72] gunawan janti, alifia t, fraser k. achieving renewable energy targets: the impact of residential solar pv prosumers in indonesia. international journal of sustainable energy planning and management 2021;32:111–24. https://doi.org/10.5278/ ijsepm.6314. https://doi.org/10.1016/s0960-1481(03)00102-2 https://doi.org/10.1016/s0960-1481(03)00102-2 https://doi.org/10.1016/j.energy.2006.01.024 https://doi.org/10.1016/j.energy.2006.01.024 https://doi.org/10.1016/j.rser.2013.02.001 https://doi.org/10.1016/j.rser.2013.02.001 https://doi.org/10.1016/j.ejor.2006.08.037 https://doi.org/10.1016/j.ejor.2006.08.037 https://doi.org/10.1016/j.techfore.2019.06.008 https://doi.org/10.1016/j.techfore.2019.06.008 https://doi.org/10.13033/ijahp.v10i3.590 https://doi.org/10.13033/ijahp.v10i3.590 https://doi.org/10.5278/ijsepm.6314 https://doi.org/10.5278/ijsepm.6314 09_ 7269-article text-23729.indd international journal of sustainable energy planning and management vol. 34 2022 1 *corresponding author e-mail: poul@plan.aau.dk international journal of sustainable energy planning and management vol. 34 2022 1–4 abstract this 34th volume of the international journal of sustainable energy planning and management includes papers from the 2021 conference on sustainable development of energy, water and environmental systems (sdewes) held october 10-15, 2021, in dubrovnik, croatia as well as the 7th international conference on smart energy systems held september 21-22 in copenhagen, denmark and two normal papers. a focus area of this issue is district heating and district cooling systems, with articles addressing resources for district heating and cooling systems, impacts of having individual district heating metres for consumers and approaches to analysing district heating systems. another focus area is stakeholder involvement where two groups of researchers focus on stakeholders from an energy island perspective as well as from a positive energy district perspective. both groups note the importance of factoring in stakeholders when devising transition plans. plans for increasing the penetration of renewable energy sources for the estonian, latvia and lithuanian systems are analysed using the backbone model, finding modest increases in system costs. lastly, an article sets up an indicator system for assessing environmental performance of european union member states ranking, e.g., estonian, latvia and lithuanian as moderate (estonia and latvia) to weak (lithuania) in terms of sustainable energy performance score, based on 2019 data. sustainable development of energy, water and environmental systems and smart energy systems poul alberg østergaarda*, rasmus magni johannsena, neven duicb and henrik lunda a department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark b department of energy, power engineering and environment, faculty of mechanical engineering and naval architecture, university of zagreb, lučićeva 5, 10000 zagreb, croatia keywords district heating; district cooling; stakeholders; sustainability indicators; energy system transition; http://doi.org/10.54337/ijsepm.7269 1. sdewes special issue in the first article of the sdewes special issue, delbusto & mainar-toledo [1] focus on european union islands tackling climate change targets within a complex stakeholder arena. based on experience from málaga and cádiz (both spain) and sète (france) the authors forward a suggested participatory process protocol. they apply their methodology to four clusters of islands and use the experience for improving their approach. rygg et al. previously assessed social acceptance of small hydropower station finding that local ownership is important for local acceptance and participation. this is also in line with extensive previous work by hvelplund [2–4] showing the merits of local ownership when dealing with implementation and acceptance of energy technologies. marczinkowski also previously emphasized the importance of island studies in the energy transition[5]. district heating is seen as a key-component of decarbonised energy systems in balen & maljković [6]. using croatia as an example, the authors investigate the impact of having individual meters for measuring district heating usage as opposed to shared metres. the authors assess that individual meters can affect a reduction in heat usage of about 40% compared to apartment buildings with shared or common metres. 2 international journal of sustainable energy planning and management vol. 34 2022 sustainable development of energy, water and environmental systems and smart energy systems 3. ordinary articles rankinen et al. [21] focus on stakeholders involved in the transition toward renewable energy-based energy systems. focusing on positive energy districts, the authors address the diversity of stakeholders engaged in the process of implementing such systems, concluding amongst others that “management needs to incorporate a stakeholder mindset” – i.e. keep a focus on the stakeholders affected by the process. previous work in this journal includes butu’s [22] with a focus on stakeholders’ engagement in rural community energy projects as well as the work on small hydro plants mentioned in section 1. proimakis also addressed stakeholders – here from a marine energy perspective[23] and krogh et al. looked into the stakeholders of 4th generation district heating[24] and bishoge[25], tricarico [26] and tomc [27–29] explored various constellations of community energy schemes with a focus on stakeholders. szép [30] takes a starting point in covid 19, the energy crisis and decarbonisation effort and developed a set of indicators to assess the performance of nations. applying it to the european union member states, they rate denmark, sweden, austria and france as robust – whereas at the other end of their scale, bulgaria, hungary, poland and lithuania are rated as weak. indicators have previously been explored in this journal by hernandez-hurtado and martin-del-campo[31]. references [1] del-busto f, mainar-toledo md, ballestín-trenado v. participatory process protocol to reinforce energy planning on islands: a knowledge transfer in spain. int j sustain energy plan manag 2022. http://doi.org/10.54337/ijsepm.7090. [2] hvelplund f, djørup s. consumer ownership, natural monopolies and transition to 100% renewable energy systems. energy 2019;181:440–9. http://doi.org/10.1016/j. energy.2019.05.058. [3] hvelplund f, möller b, sperling k. local ownership, smart energy systems and better wind power economy. energy strateg rev 2013;1:164–70. http://doi.org/10.1016/j. esr.2013.02.001. [4] hvelplund f, østergaard pa, meyer ni. incentives and barriers for wind power expansion and system integration in denmark. energy policy 2017;107. http://doi.org/10.1016/j. enpol.2017.05.009. [5] marczinkowski hm. rethinking islands and their models in sustainable energy planning: how inclusive local perspectives district heating is also the focal point for pieper et al. [7], who look into the identification of heat sources of large heat pumps using geographical information system (ghis) software. they investigate both natural sources such as lakes and rivers and man-made sources like industries considering quantities, temperature levels and location with respect to demand areas. applying their approach to estonia, latvia and lithuania, the authors found twh-scale industrial excess heat potentials in each country – large proportions even within existing district heating areas. the energy systems of estonia, latvia and lithuania are also in focus by putkonen et al. [8] who address the phase-out of fossil-based electricity generation for renewable energy sources as well as a desynchronisation from the russian electricity grid. already planned measures would increase renewable energy exploitation from 45% to 92% with only a moderate impact on costs. the analyses by putkonen and co-authors are based on the backbone energy systems analysis model developed by helistö and colleagues [9]. 2. smart energy systems special issue volkova et al. [10] set up an approach to assess district cooling and applied it to tallinn as a case. through an assessment of cooling demands, distribution grid requirements and heat cooling supply options, the authors devised a district cooling system. the provision of cooling came from a mixture of natural cooling, waste heat-driven absorption heat pumps and electrical chillers. this is what a new article describes as a fourth-generation district cooling system [11]. volkova has previously assessed district heating regions in estonia [12] and presented an app for the promotion of 4th generation district heating [13] in this journal. fallahnejad et al. [14] investigate the differences in applying two distinct district heating system assessment approaches the effective width approach versus a more detailed optimisation-based approach with the aim of identifying challenges from using the two approaches. results from the two are to some extent similar, so a main determinant for the decision on approach is the data availability, where the former requires less data. district heating assessment methods in general is a recurring theme[15–20] in this journal, emphasizing the importance of the technology in the transition towards renewable energy-based energy systems. http://doi.org/10.54337/ijsepm.7090 http://doi.org/10.1016/j.energy.2019.05.058 http://doi.org/10.1016/j.energy.2019.05.058 http://doi.org/10.1016/j.esr.2013.02.001 http://doi.org/10.1016/j.esr.2013.02.001 http://doi.org/10.1016/j.enpol.2017.05.009 http://doi.org/10.1016/j.enpol.2017.05.009 international journal of sustainable energy planning and management vol. 34 2022 3 poul alberg østergaard, rasmus magni johannsen, neven duic and henrik lund improve energy planning globally. int j sustain energy plan manag 2022;33. http://doi.org/10.5278/ijsepm.6970. 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[31] hernandez-hurtado u, martin-del-campo c. a development of indicators for the sustainability assessment of the mexican power system planning. int j sustain energy plan manag 2021;32. http://doi.org/10.5278/ijsepm.6572. http://doi.org/10.5278/ijsepm.2018.17.3 http://doi.org/10.54337/ijsepm.7055 http://doi.org/10.54337/ijsepm.7055 http://doi.org/10.5278/ijsepm.6572 ijsepm.2019.20.4 international journal of sustainable energy planning and management vol. 36 2022 33 international journal of sustainable energy planning and management vol. 36 2022 33–52 *corresponding author – e-mail: alaize.orsoletta@gmail.com abstract the problem of techno-economic approaches to evaluating energy transition pathways has been constantly reported in the literature, while existing research recognises the critical role played by social aspects in energy systems models. system dynamics (sd) has been pointed out among modelling techniques as a suitable tool to evaluate the interdisciplinary nature of energy transitions. this paper explores how energy system-related sd models have incorporated social aspects through a literature review. models were assessed based on their geographical resolution, time horizon, methodological approach, and main themes: supply-demand, energy-economyenvironment (3e), energy-transport, water-energy-food (wef) nexus, and consumer-centric and socio-political dynamics. social aspects considered include behaviour and lifestyle changes, social acceptance, willingness to participate, socio-economic measures, among others. as expected, the representation of social aspects was not standard among the papers analysed. socioeconomic aspects were most commonly included in supply-demand and 3e models. energytransport and wef models mainly incorporated changes in travel and consumption habits, respectively. the last theme had a more diverse approach to social aspects that deserves further attention, especially for energy access and justice issues. other research lines include modelling approaches combination, enhanced participatory and transparent processes during model development, and use of sd models in policy-aiding and stakeholders’ information processes. a review of social aspects integration in system dynamics energy systems models alaize dall-orsolettaa , mauricio uriona-maldonadob , géremi drankaa,c, and paula ferreiraa aalgoritmi research center/lasi, university of minho, campus azurém, 4800-058 guimarães, portugal bdeparment of industrial and systems engineering, federal university of santa catarina (ufsc), campus universitário – trindade, 88040-900 florianopolis, brazil cdepartment of electrical engineering, federal university of technology – paraná (utfpr), via do conhecimento km 1, 85503-390 pato branco, brazil keywords system dynamics; energy systems models; social aspects; energy transition; causal loop diagrams; http://doi.org/10.54337/ijsepm.7478 1. introduction considering the urgent need to reduce co2 emissions and achieve a net-zero economy, consumption patterns, energy technologies and manufacturing processes must change toward sustainable practices. as energy systems are at the core of the global economy, producing energy from low-emission sources, consuming it more efficiently, and lowering demand are key aspects of a successful transition. nevertheless, the complexity of energy systems has required quantitative modelling techniques to support decision-makers in the challenging task of developing short and long-term transition pathways. thanks to computational capabilities, the number of energy system models (esms) and the complexity captured by them has increased significantly over the last decades [1]. likewise, review works of mailto:alaize.orsoletta@gmail.com http://doi.org/10.54337/ijsepm.7478 34 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models esms have assessed and categorised developed models while aiding modellers and decision-makers in selecting appropriate tools. one of the most common classifications separates models into bottom-up and top-down models. bottom-up or engineering models stress the technical characteristics of energy systems, whereas top-down approaches focus on price and market influences [2]. models can also be classified according to their modelling technique [2], spatial (regional, national, and global) and time dimension (short, medium, and long-term) [3]. they also have different purposes (e.g., forecasting, exploring, or backcasting) and require or include combinations of quantitative, qualitative, disaggregated, or aggregated data elements [4]. another category of models that has become popular to inform large-scale and global climate mitigation pathways [5] is the integrated assessment models (iams). iams have been used in the intergovernmental panel on climate change (ipcc) [6] and european commission’s [7] assessments and include a wider set of modules than energy systems models alone, such as land use, agriculture, energy, industry, forestry, and climate modules [8]. regarding underlying methodology, lopion et al. [9] differentiated esms in optimisation, simulation, and hybrid models. optimisation models refer to all linear, mixed-linear and non-linear programming, and equilibrium models solved to optimality (e.g. [10,11]). on the other hand, simulation models consist of dynamic and stochastic approaches that do not seek optimality [9] but are concerned with representing overall systems structure and generating insights from policy scenario analysis. on the differences between simulation and optimisation archetypes, lund et al. [12] compared the two approaches in technical, decision-making, and political terms. the authors argued that optimisation models are well-suited for forecasting and prescribing the optimal future, whereas simulation models are fit for backcasting and debating the desired future. hybrid models combine optimisation and simulation methodologies. some works also classify as “hybrid” those models that integrate bottom-up and top-down models [1] or use more than one modelling technique (e.g., macro-economic modelling, general economic equilibrium, linear optimisation, partial equilibrium, and system dynamics (sd)) [2]. concerning previous review studies, prina et al. [1] reviewed bottom-up esms and classified them as shortterm or long-term models, while kotzur et al. [13] and ridha et al. [14] reviewed esms in terms of their complexity. ringkjøb et al. [15] reviewed and classified modelling tools for energy systems with a large share of renewable energy sources (res). connolly et al. [16] considered 68 and further analysed 37 computer tools used to evaluate the integration of re into energy systems. later, the same methodology was employed in chang et al. [17], who surveyed similar review studies and 54 esms, including models’ application aspects. alternatively, fodstad et al. [18] took a different approach as it reviewed modelling frameworks according to the main challenges faced by esms, namely, (i) the handling of several energy carriers, (ii) the integration of different time and spatial scales, (iii) uncertainty, and (iv) the integration of energy transition dynamics. also, fattahi et al. [19] analysed nineteen iams used at national levels and unfolded an interesting discussion on current and future low-carbon energy system modelling challenges and how to address them. moreover, this last work also recognized how social aspects are commonly neglected in esms, given their predominant techno-economic nature [19]. the latter aspect was also highlighted by süsser et al [20] who argued for the relevance of integrating social and environmental factors into energy models. the authors showed how ignoring these aspects could lead to misleading policy recommendations in terms of the speed of the energy transition and technological options. particularly, sd is a simulation-based modelling technique that has been successfully used for energy system modelling [21] since the seminal works of sterman [22] and fiddaman [23]. in contrast with linear models, sd captures the complex dynamics of energy systems through feedback loops and endogenously models system behaviours commonly absent from other modelling techniques [2]. sd modelling can account for market failures, delays in feedback loops, the absence of complete information and deal with several uncertainties present in energy systems, such as human behaviour and perceptions [24]. reddi et al. [25] reviewed sd modelling on res and combined heat and power generation. leopold [26] extensively reviewed energy-related sd models from 2000 to 2015 in terms of their general purpose, time horizon, regional frame, and main conclusion. the author underscored that sd models have been applied to diverse situations within the energy sector, but gaps in transformation processes and transition research through consumer-centric perspectives remained [26]. international journal of sustainable energy planning and management vol. 36 2022 35 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira nonetheless, papachristos [27] emphasised the potentiality of sd simulations for the study of sociotechnical energy transitions (stet) as a way to catalyse learning and decision making in complex systems. also, li et al. [28], when reviewing stet models, stated that, even though agent-based models (abms) are the most employed when it comes to incorporating the heterogeneity of actors, dynamics simulation approaches seem to be as successful as abms in representing key characteristics of socio-technical systems. additionally, bolwig et al. [21] stressed the potential of sd to “capture the co-evolution of economic, policy, technology, and behavioural factors over sufficiently long periods, which is necessary for the analysis of transition pathway dynamics”. the authors also presented how sd models integrate sustainable transition concepts, such as strategic niche management (snm) [29], learning effects, consumer behaviour and values [21]. a broad number of frameworks and theories have been used to conceptualise the social processes behind the energy transition, such as multi-level perspective (mlp), the technological innovation system (tis), snm, and transition management (tm), with some of these frameworks being well represented in sd models [30]. moreover, recent debates on just energy transitions and energy justice have shed light on the preoccupation of how to transition to a low-carbon system without reinforcing current socio-economic inequalities but rather diminishing them. this leads to the question of how to incorporate social aspects and metrics into quantitative esms appropriately, which has contributed to the development of frameworks and indicators within a trend towards further incorporation of social sciences into energy analysis [20]. even though this is not a new problematic, as social metrics have been a source of discussion since the rise of sustainability and welfare concepts, it is still subject to improvement. krumm et al. [31], for instance, reviewed how different types of energy models (i.e., iams, abms, esms, and computable general equilibrium models) represent social factors. the authors concluded that 13 out of the 23 reviewed energy models incorporated social aspects, mainly public acceptance, and behavioural and lifestyle choices, being abms the only ones to partially address public participation and the heterogeneity of actors [31]. however, none of the reviewed models consisted of sd models. from this background on esms reviews, sd, and the incorporation of social aspects into modelling, the present work aims to identify how sd energy systemrelated models incorporate social aspects without placing a particular focus on the literature about stet. to the best of the authors’ knowledge, this is the first work in the literature to approach this gap. a review of energysystem related sd models available in the peer-reviewed literature was conducted and main social aspects incorporated in models were identified. within ‘social aspects’, it was considered socio-economic, demographics, behavioural, socio-political, wellbeing, and social acceptance aspects, as described in section 2.2. henceforth, these aspects are simply referred to as “social” for the sake of simplicity. ultimately, we aim to contribute to the research on social perspectives of energy transitions and a better representation of social dynamics in sd models. 2. methodological approach this work was based on a literature review of sd energy system-related models conducted in three databases, scopus, science direct, and web of science, on the 12th of september 2022. the search string consisted of a combination of the words “energy system”, “model” or “modelling”, and “system dynamics”. considering works published after 2012, this search string led to 240, 92 and 73 results on scopus, science direct, and web of science databases, respectively. books, book chapters, conference papers, review articles, and documents other than research articles, as well as non-english documents, were excluded. after abstract screening and duplicates removal in the reference manager mendeley, 69 works remained. most works excluded in the abstract screening stage consisted of research on power control systems. in the full-paper screening stage, only papers that (i) could be retrieved, (ii) contained a representation of the sd model (e.g., model structure, causal loop diagrams (cld), stock and flow diagrams (sfd)), (iii) applied the model to real case studies, and (iv) made future simulations were considered. this led to the exclusion of 24 other works and a final portfolio containing 45 works. the literature review process is presented in figure 1. 2.1. main themes of models the final collection of 45 works was assessed based on the location of case studies, geographical resolution, time horizon, methodological approach, and main themes. concerning main themes, supply-demand 36 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models models were concerned with representing the feedback processes that affect production, mainly from specific sources (e.g., natural gas, hydrogen, biomass), and energy consumption. models in the energy-economyenvironment (3e) topic were concerned mainly with macro-economic aspects, energy production, and emissions, and include iams (e.g., [32]). energytransport models integrated energy and transport sectors. the water-energy-food nexus (wef) evaluated the dynamics across the water, energy, and food spheres. sometimes, the analysis was restricted to two aspects (e.g., water-energy [33]) or extended to others (e.g., society [34]). finally, consumer-centric and socio-political dynamics models were more diverse and mostly incorporated feedback focused on consumer behaviour, technology adoption, and household-level dynamics. 2.2. social aspects as it is beyond the scope of this study to systematically review energy-related social aspects, we framed as ‘social aspects’ the concepts commonly linked to the energy transition. since ‘limits to growth’ [35], economic and biophysical models have underscored the dangers of unstoppable economic and population growth [36]. this motivated us to consider population and gross domestic product (gdp) growth in the search for socioeconomic aspects representation. next, given concerns over a just energy transition [37] and the dynamics of job creation and destruction from fossil fuels phase out [38], employment and income were also pondered. particularly, employment impacts can be perhaps deemed as the socio-economic aspect most commonly incorporated in esms, regardless of the modelling approach (e.g., [39,40]). behavioural aspects have also figure 1: literature review process. international journal of sustainable energy planning and management vol. 36 2022 37 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira been commonly investigated in energy research [41], and include individual consumption habits, sociocultural preferences, and lifestyle changes [42]. social acceptance and perception of renewable energy (re) and energy efficient technologies are also key determinants of the adoption of alternative technologies and the pace of low-carbon transition [43–45], being linked to levels of public awareness [46]. there is also reference to the public participation and ownership of energy transitions, and the potential of inclusive perspectives [47]. when not taken into consideration, the absence of these aspects can negatively affect investments in re, especially in rural communities [48]. next, there are socio-political factors such as institutional structures [49], trust in infrastructures and services, as well as the heterogeneity of actors involved in energy systems [31]. last but not least, we looked into well-being issues in light of how energy systems affect people's lives. these include quality of life and health and environmental hazards as a result of technology choices and consumption habits [50]. given the growing concern on achieving sustainable development goal 7 (sdg7), energy justice, and these effects on socio-economic development, we also assumed energy access as a social aspect [51]. these aspects are represented in figure 2. therefore, by assessing models’ structures and looking for the aforementioned aspects, it was possible to identify which and how they were modelled in sd. main social dynamics that included these social aspects were then represented in clds for each modelling theme. clds were chosen as a visualisation tool because, together with sfds, they are the most common and easiest way to visualise sd models and represent feedback processes [52]. nonetheless, it is worth having in mind that presented clds are simple representations of much more complex models. 2.3. limitations the literature review process was not based on the review of sd models themselves, being entirely based on secondary information published in the peer-reviewed literature. therefore, even though the most relevant feedback loops and variables were commonly discussed in papers, identifying social aspects and describing dynamics could be different. different search strings would have different results (e.g., “energy” and “system” instead of “energy system”). however, an overlapping ‘system dynamic’ concept in the electric and electronic fields required initial search restrictions to avoid a large number of unrelated works. the search string and inclusion criteria were used to filter a diverse and broad literature on the topic that is far from being extensively reviewed in this paper. however, this is not considered an impediment to fulfilling this research’s objectives. while the location, geographical resolution, time horizon, and methodological approach are objective classifications, works could have been grouped into different main themes. nonetheless, we carefully considered the identified problems and hypotheses mentioned in the studied models to select appropriate categories aligned with existing literature. figure 2: social aspects related to the energy transition. 38 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models 3. descriptive results concerning the methodological approach, out of the 45 reviewed works, two [53,54] combined sd with a geographic information system (gis) in order to evaluate results both temporally and spatially. in pakere et al. [54], the gis model provided data on land suitable for wind turbines, which was used as a limiting input in the sd model. in wu and ning [53], gis software was used to visually analyse the results of the sd model representing beijing’s districts. five other works [55–59] combined sd to multi-objective optimisation modelling to evaluate supply-demand and 3e dynamics. among them, the anemi model [60] consists of an integrated optimisationsimulation model that solves an optimal allocation problem within each simulation time step without considering future projections (i.e., it generates an endogenous path for energy supply). also, daneshzand et al. [58], wu and xu [56], and eker et al. [61] considered multi-objective optimisation methods to find optimal values of policy variables. karunathilake et al. [59] employed a fuzzy optimisation approach to find optimal energy mixes according to different performance objectives, which were used as input in their life-cyclebased sd model. lastly, blanco et al. [62] bidirectionally soft-linked the sd model pttmam of the passenger transport sector with times to simulate the development of fuel cell vehicles in europe. the remaining 37 works employed pure sd models. in terms of spatial resolution, one model was global [55], three papers [43,53,54] evaluated a group of countries, 27 models had a national scope, and nine other papers analysed regions within countries. most models were simulated up to 2050, given the year’s relevance for climate action plans as a landmark for achieving a net-zero global economy [38]. regarding model development, only blumberga et al. [65] and strapasson et al. [66] mentioned the performance of workshops to gather insights on systems structures and stakeholders’ expectations. concerning the employment of models to aid policy-making, only blumberga et al. [65] reported on the development of an open internetbased policy-aiding tool. 4. social aspects and dynamics this section brings which and how social aspects have been incorporated in sd models concerning energy systems according to the main identified themes. first, social aspects found in models are synthesized in tables for each theme, after, the ways by which these aspects were influenced in the models are discussed along with visual representations in simplified clds. in clds, variables are related by causal links (arrows). links can have positive (+) or negative (-) polarity that shows how the dependent variable changes with the dependent one. a positive link means that if the cause increases, the effect also increases; and if the cause decreases, the effect also decreases. on the other hand, a negative link means that if the cause increases, the effect decreases; and if the cause decreases, the effect increases [52]. particularly, clds do not differ between stocks (i.e., accumulations in the system), flows (i.e., rates of change in and out stocks), and converters, which are all components of sd models. important feedback loops are also shown in clds, and they can be denoted as balancing or reinforcing. balancing or negative loops counteract a change, pushing in the opposite direction. conversely, reinforcing or positive loops sustain and “reinvest” in a change. in terms of behaviour, balancing feedback loops bring stability to the system, while reinforcing feedback loops produce behaviours such as exponential growth. 4.1. supply-demand table 1 displays the works reviewed in this category, their investigation topic, and considered social aspects. models targeted re, natural gas, electricity generation and flexibility, and whole energy systems. economic and population related aspects were most commonly included in models, followed by income and employment, social acceptance of technologies and human health. while some models incorporated different social concepts through exogenous and endogenous variables and policy levellers, other technology-based models did not include any social aspects [67,72]. these models were very technical and considered exogenous energy demand projections together with technological availability, efficiency, energy sources, and associated costs in the supply side. gdp and population growth were represented as drivers of energy demand in [64,68,70]. residential energy demand, in particular, was calculated through exogenous urbanisation rates and household income [58]. from a technological perspective, demand was also influenced by the share of energy efficient and inefficient consumers [65]. energy efficiency interventions are presented in figure 3 as a international journal of sustainable energy planning and management vol. 36 2022 39 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira table 1: supply-demand thematic and considered social aspects. reference topic gdp population growth urbanisation rates income employment social acceptance environmental awareness human health consumption habits [67] re development [68] electricity generation x [57] bioenergy x [69] bioenergy x x [70] natural gas x x [71] bioenergy x x x [58] natural gas x x x x [59] re development x x x x [72] electricity generation [64] electricity generation and flexibility x x [73] hydrogen production [65] energy system x x x figure 3: representative cld of social dynamics influencing energy demand in supply-demand models (r – reinforcing loop). adapted from: [58,65,67,72]. 40 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models result of technological development and behaviour changes [65]. information campaigns influenced the latter. as it can be seen, social aspects were commonly represented exogenously. there are four reinforcing (r) feedback loops in figure 3. r1 and r3 demonstrate how higher gdp levels lead to higher energy demand, investment, and production, which in turn positively affect gdp growth [70]. r2 represents the relationship between energy capacity depreciation and new installed capacity [72], while r4 indicates the cause-and-effect relationship between gdp, household income, energy demand, up to energy production. variables in a grey ellipse indicate social aspects. moreover, given the pursuit of a less carbon-intense energy matrix, overall energy demand was commonly split into fossil fuel and res. re development was dependent on the social acceptance of technologies [57] and the effects of policies [69], whereas re project suitability was seen as a consequence of lifecycle impacts on human health and emissions [59]. increasing energy demand requires a matching production capacity, which can offer employment opportunities across project lifecycles [71]. if re capacity increases, a reduction in co2 emissions is expected, which can be linked to the social cost of carbon (i.e., non-commercial impacts of emissions on health and the environment) and consequent savings [71], as shown in figure 4. the reinforcing feedback loops, r1 and r2, link gdp and energy demand to investment in fossil fuels and re, respectively. the other two reinforcing feedback loops, r3 and r4, refer to how investment in re can reduce emissions and lead to more re investment while reducing health and environmental hazards through the social cost of carbon. 4.2. energy-economy-environment commonly, 3e models observed socio-economic aspects, as it can be seen in table 2. the relative absence of other social aspects can be explained by the underlying purpose of these models in representing top-down system structures and their particular concern with emissions resulting from energy systems and other sectors. in particular, 3e-sd models that did not emphasise any social dynamics [63,74] were again technical-based models concerned with the investments figure 4: representative cld of social dynamics influencing re in supply-demand models (r – reinforcing loop). adapted from: [57,59,69,71]. international journal of sustainable energy planning and management vol. 36 2022 41 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira and depreciation of capacities under different policy scenarios. similar to supply-demand models, 3e systems considered population growth and economic development as drivers of energy demand. distinctly, population growth was modelled endogenously as a result of fertility and death rates resulting from climate change in the anemi model [55,77]. economic development was also linked to employment opportunities [76]. in some cases, labour dynamics were understood as a demandsupply feedback, in which households provided labour to the market, and the resulting household income led to an average consumption of goods [55,62,77]. in another approach, laimon et al. [74,79] considered employment table 2: 3e thematic and considered social aspects. reference topic gdp population growth income employment consumption habits life expectancy [55] climate-biosphere-economy-energy x x x x x x [56] energy-economy-emissions x x [75] energy-economy-emissions x x [63] energy-emissions [76] energy-economy-emissions x x [53] energy system x x [77] climate-biosphere-economy-energy x x [78] development scenarios x x [32] iam x x [62] energy-economy-emissions x x x x [74] energy system figure 5: cld representing the relationship between gdp, employment, emissions, and energy consumption. (r – reinforcing loop; b – balancing loop). source: adapted from [55,56,74,77,79]. 42 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models opportunities generated by increasing energy production capacity as a driver of immigration and, therefore, population growth. population growth drove energy demand and, consequently, energy production, creating a reinforcing feedback loop. moreover, conflicting objective functions have been reported, in which there is no common solution for maximising gdp or minimising energy consumption, pollution and emissions [53,56]. figure 5 represents the aforementioned 3e dynamics together with four table 3: energy-transport thematic and considered social aspects. reference topic gdp population growth travel demand social acceptance heterogeneity of actors [81] low-carbon transport development x x x [82] alternative fuels market x x x [83] alternative fuels market x x x x [84] supply-push strategies for biofuel vehicles x x x [85] cost-effectiveness of low-carbon transport x x x [86] hydrogen and electricity fuelled vehicles x x x [8] soft-linking sd transport and optimizationbased energy systems x x [80] geothermal electricity production and transport demand x x x figure 6: cld representing the relationship between change in travel habits and vehicle adoption (r – reinforcing loop). source: adapted from [80,83]. international journal of sustainable energy planning and management vol. 36 2022 43 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira reinforcing (r1, r2, r3, and r4) and two balancing feedback loops (b1 and b2). b1 and b2 refer to how gdp growth leads to higher investment in science and technology, resulting in technological progress towards more efficient technologies. this reduces energy consumption linked to gdp in b2 and to energy demand, capacity expansion, employment, and gdp in b1. r1 indicates that gdp growth brings employment opportunities and, r2, higher energy consumption. r3 links gdp and population through emissions and global temperature, while r4 shows how gdp growth can be reinforced through investment in more efficient technologies even when economic development restrictions are in place. 4.3. energy-transport table 3 summarizes the social aspects within energytransport sd models. gdp and population were modelled exogenously as drivers of energy and transport demand [80]. behavioural aspects, such as vehicle use (i.e., travel demand) and the social acceptance of alternative options, were also commonly considered. seven out of eight works on energy-transport dynamics were based on the unisyd model [87]. this model incorporates social aspects related to consumers' travel behaviour and perceived utility of a particular modal choice and alternative fuel vehicles. shafiei et al. [83] particularly pointed to assessing social network strength on consumers’ consumption and further technological adoption but did not consider its effects in the modelling. these aspects can be seen in figure 6, where three reinforcing loops (r1, r2, and r3) are identified. besides r1 and r2 linking energy production and capacity, there is a potential loop (r3) between the social network strength, the attractiveness of a particular technology, and its actual adoption. especially, blanco et al. [62] softly linked pttmam [88], a simulation model that considers the major stakeholders (i.e., users, authorities, infrastructure providers, and manufacturers) in the light-duty passenger transport, to times [89], a widely known optimisation model. therefore, the heterogeneity of actors was also incorporated into the sd model (i.e., socio-political-technical). 4.4. water-energy-food nexus wef models were concerned with the macro-economic and population dynamics driving water, energy, and food demands, and how changes in consumption habits and lifestyle could impact these demands. in two instances, quality of life [33] and environmental awareness [33,34] were also considered, as shown in table 4. within wef models, economic and population growth influenced the demand for food, energy, and water [90]. the relationship between these resources supply and demand was labelled as ‘security’ [91] or ‘shortage’ [34]. water, energy, and food shortages influenced the population’s environmental awareness [34]. food security affected agricultural development, the area under cultivation and, consequently, food supply. the cultivated area also impacted the amount of water needed for agriculture, which, along with urban, industrial, and energy sector demand for water, composed the water demand variable. while agricultural water demand is also linked to energy requirements in irrigation systems, water is also required for hydroelectric energy generation. life quality was modelled as a result of water, energy, and water-energy end uses in urban systems [33]. quality of life, in turn, affected population growth, which then impacted demand for energy and water along with pressure to reduce consumption. behavioural aspects were also considered through diet habits [66], more specifically, meat consumption and overall calories. the latter was represented in figure 7 through ‘lifestyle and consumption changes’ along with the main dynamics influencing social aspects in the wef nexus. table 4: water-energy-food thematic and considered social aspects. reference topic gdp population growth consumption habits quality of life environmental awareness [33] water-energy x x x x [66] energy-food-climate-land x x [90] energy-food x x x [91] wef x x x [34] water-energy-food-society x x x x 44 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models in figure 7, we can notice the following feedback loops. in r1, lifestyle and consumption habits change with environmental awareness, decreasing food demand, and raising food security and awareness. the other three balancing feedback loops, b1, b2, and b3, show how population growth increases demands for water, energy, and food, respectively, which decreases security indicators. lesser life quality lowers population growth levels. 4.5. consumer-centric and socio-political dynamics in general, models within this category incorporated the largest number of social aspects given their underlying representation of consumer-centric and socio-political dynamics, as it can be seen in table 5. clean and re technology adoption at household levels was represented through the bass innovation diffusion model [52] in [92,96,99], where, besides reinforcing feedback loops (r1 and r2) among adopters (figure 8), external influences included environmental awareness and social acceptance of technologies [92]. concerning effects on demand, energy efficiency takes place through technological development and more efficient technologies, which are influenced by investment in r&d, and behaviour changes in energy consumption [95]. this can be affected by the level of consumers' environmental awareness and social acceptance [95]. these two aspects could be influenced by information campaigns and governmental policies, which could also affect inconvenience costs [97], describing social aspects affecting production costs, such as lack of knowledge and trust in re technologies. inconvenience costs of re technology expansion were also included as ‘public awareness’ influencing consumers’ reliance on contractors [98] and perceived utility [94]. moreover, demand for more sustainable technologies was represented as a result of several other aspects, such as income, educational levels, sociocultural differences and preferences, household size, urban-rural adoption, environmental and health hazards, and cost subsidies [99]. notably, there is a reinforcing effect on education, income, and socio-economic impacts represented by r3 (figure 8). the further installing and re expansion capacity processes was modelled as influencing employment opportunities and rural-urban migrations [98]. considering the heterogeneity of actors involved in the energy transition, socio-political factors’ influence on the feasibility of the uk’s carbon budgets was also represented using sd in [96]. social political factors included political capital, policy ambition, public figure 7: cld representing the relationship between economic and population growth and wef demand. source: adapted from [33,90]. international journal of sustainable energy planning and management vol. 36 2022 45 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira ta bl e 5: c on su m er -c en tr ic a nd s oc io -p ol iti ca l d yn am ic s an d co ns id er ed s oc ia l a sp ec ts . r ef er en ce to pi c g d p po pu la tio n gr ow th u rb an is at io n ra te s in co m e an d e m pl oy m en t e nv ir on m en ta l aw ar en es s h um an he al th so ci al pe rc ep tio n c on su m pt io n ha bi ts w ill in gn es s to pa rt ic ip at e h et er og en ei ty o f ac to rs e ne rg y su ff ic ie nc y [9 2] te ch no lo gy a do pt io n x [9 3] e le ct ri ci ty s av in gs x x x x [9 4] d is tr ib ut ed g en er at io n x x [9 5] b ui ld in g re no va tio n x x x x [5 1] e ne rg y su ff ic ie nc y x x x [9 6] so ci opo lit ic al -t ec hn ic al fe ed ba ck s x x x [9 7] r e d ev el op m en t x x x [9 8] d is tr ib ut ed g en er at io n x [9 9] te ch no lo gy a do pt io n x x x x x 46 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models willingness to participate, and pushbacks. pushback is an information feedback that notifies governments about the public acceptance of governance and influences the political capital for the energy transition and the ambition of policies [96]. consumer behaviour choices were also modelled as a result of the willingness to undertake energy efficiency measures, environmental awareness, electricity and income ratio, and changes in consumption habits as a result of the use of electrical appliances [93]. this is shown in figure 9, along with a balancing loop (b1) between electricity consumption and changes in habits and appliances. lowand high-income households were considered given different perceptions, consumption behaviours, and disposable income [93]. apart from behavioural and socio-economic aspects, the concept of ‘energy sufficiency’ was also defined and modelled to evaluate urban and rural household electricity provision in sub-saharan africa [51]. energy sufficiency corresponds to “a maximum desired amount of energy per capita to be produced and consumed” and is linked to energy justice and sdg7 [51]. 5. main findings and conclusion as pointed by lund et al. [12] when reviewing simulation versus optimisation models, each modelling approach has its own advantages and disadvantages. therefore, each problem must be carefully evaluated before a methodological choice is made. in any case, challenges will follow. particularly, this paper reviewed how flexible and resourceful sd energy system-related models are, as they have been applied to a diverse range of topics and case studies from regional to global levels. these results are in agreement with those obtained by bolwig et al. [21]. additionally, different actors (e.g., households, infrastructure investors and providers, energy suppliers, and governments) and sectors (e.g., residential, industrial, and agricultural) were represented in the models, which highlights the potential of sd models to incorporate the heterogeneity of actors in the energy transition [31]. nevertheless, as blumberga et al. [65] discusses, it is necessary to pay attention to the political dimension of models and policy processes. still, the underlying top-down approach of sd as a figure 8: cld representing the relationship between policy effects and clean cooking demand (r – reinforcing loop). source: adapted from [99]. international journal of sustainable energy planning and management vol. 36 2022 47 alaize dall-orsoletta, mauricio uriona-maldonado , géremi dranka and paula ferreira simulation model seems also fit to represent the socioenvironmental-energy nexus and approach the problem of integrated sustainability [100]. the combination of sd with other modelling techniques, even though minority, seemed capable of symbiotically approaching the energy transition from more than one front: bottom-up and top-down, geographically and timely, simulation and optimisation. the potential of methodological combinations has been already highlighted in the literature as they forward to overcome some of the obstacles in the path towards more realistic quantitative modelling of transitions [21]. the participatory development of models considered in a few works [65,66] and the conversion of models into accessible policy-aiding tools [65] can help develop inclusive pathways and enhance the public sense of ownership and participation while acknowledging the variety of actors affecting and affected by the energy transition. even though minority, participatory development and decision-making approaches could contribute to co-creation initiatives [100], reducing the chances of atomistic approaches leading to increased social inequality and environmental injustice [101]. regarding social dynamics incorporated in sd models, supply-demand models have mainly integrated gdp, population, and the social acceptance of technologies. 3e models focused on population and economic growth, labour and consumption aspects, whereas energy-transport models included behaviours in relation to travel and the utility of vehicle choices. wef models considered population and gdp as food, energy, and water consumption drivers, while environmental awareness and lifestyle changes balanced it. in consumercentric and socio-political models, many social aspects were considered, including urbanisation rates, household income and employment, social acceptance, willingness to participate, environmental awareness, and behavioural aspects. in contrast with socio-economic factors, wellbeing aspects (e.g., environmental and health hazards, quality of life) were less often considered, which can be explained by the challenges of representing social welfare and well-being and its various dimensions through quantitative metrics [102]. the incorporation or not of social aspects remains subject to the modellers’ choice of how to approach a certain problem within each model’s purpose and focus. as for future avenues of research in sd modelling, we would like to highlight (i) the combination of sd with other modelling techniques and (ii) the participatory development of models and conversion of models into figure 9: cld representing the relationship between gdp and electricity consumption parameters (b – balancing loop). source: adapted from [93]. 48 international journal of sustainable energy planning and management vol. 36 2022 a review of social aspects integration in system dynamics energy systems models accessible policy-aiding tools. our review indicated that incorporating social metrics in sd energy systems models is far from being standard, as also concluded by krumm et al. [31] when reviewing other types of energy-related models. selecting appropriate social indicators and shifting from a techno-centric perspective remains a challenge in quantitative energy modelling but indeed a requirement for successful transitions [20]. we underpin the importance of further and bridging research on social and engineering sciences as well as sociotechnical transitions. the array of models targeting consumer-centric dynamics and the different incorporated social variables suggest there are research opportunities on the use of sd models to quantitatively assess the impacts of energy access and the (in)justice of energy transitions. moreover, the offset of job opportunities from fossil fuels to renewables as a result of the energy transition could be further explored through sd models as well as dynamics involving disposable income, energy prices, and energy poverty issues. given the richness of models and topics, we argue for further and in-depth reviews of sd models in each one of the main identified themes so conclusions about the real influence of social aspects and their exogenous or endogenous nature can be captured. acknowledgements this work has been supported by fct – fundação para a ciência e tecnologia within the r&d units project scope: uidb/00319/2020. references [1] m.g. prina, g. manzolini, d. moser, b. nastasi, w. sparber, classification and challenges of bottom-up energy system models a review, renew. sustain. energy rev. 129 (2020) 109917. https://doi.org/10.1016/j.rser.2020.109917. 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https://doi.org/10.1016/j.segy.2022.100081 https://doi.org/10.1016/j.seta.2021.101706 https://doi.org/10.1016/j.seta.2021.101706 https://doi.org/10.1016/j.jpolmod.2022.03.004 https://doi.org/10.1016/j.jpolmod.2022.03.004 https://doi.org/10.5278/ijsepm.3339 https://doi.org/10.5278/ijsepm.3339 https://doi.org/10.5278/ijsepm.3616 02_684-2037-2-le.qxd 1. introduction and overall methodology the design of future sustainable energy solutions including 100 per cent renewable systems is described in a number of recent reports and studies including [1−7]. such systems are typically based on a combination of renewable energy sources (res) such as wind, geothermal and solar, together with residual resources such as waste and biomass. in order to ease the pressure on biomass resources and investments in renewable energy in future sustainable energy systems, feasible solutions typically involve a substantial focus on energy conservation and energy efficiency measures. one of the important issues to address is, in some countries, the heating and, in others, the cooling of buildings. thus, the issue of reducing heat demands through the implementation of low-energy buildings and how to heat these buildings becomes essential. different methodologies have been used to address this question for different countries around the world. international journal of sustainable energy planning and management vol. 04 2014 3 one example is thermo-economic analysis with a focus on the relation between capital costs and thermodynamic losses, which has been applied to, e.g., turkey [8]. another example is bioclimatic architecture, which has been applied to the hellenic building sector [9]. a third example is energy retrofit simulation, which has been applied to italy [10]. the latter also emphasizes the relation between the energy performance of a building and its value on the real estate market [11]. the design and perspective of low-energy buildings have been analysed and described in many recent papers [12,13], including concepts like energy efficient buildings [14,15], zero emission buildings, and plus energy houses [16−18]. however, these papers mostly deal with future buildings and not as often the existing building stock which, due to the long lifetime of buildings, is expected to constitute the major part of the heat demand for many decades to come. some papers address the reduction of heat demands in existing * corresponding author e-mail: lund@plan.aau.dk international journal of sustainable energy planning and management vol. 04 2014 3–16 heat saving strategies in sustainable smart energy systems ������� ��� ��� ��������������� ���� ������������������������� ����!�""������� �"������#������ ����� ��$ ��% "������� ���������%&���� ��������� � �� �� ������ � � � ��� � �� ������� � � ������� ������ �� ������ ��� �� ���� �������� �� ���� ��� ��� � ���� � !�����"� # ���� ��� ������� � � ������ $��� ���� � �%$% &����� �' �� ()� *+)� ,-�� �� .�� �� ���� "�������� � �� �� ������ � � � ��� � �� ������� � � ������� �%$% &����� �' �� ()� *+)� ,-�� �� .�� �� ���� a b s t r a c t this paper investigates to which extent heat should be saved rather than produced and to which extent district heating infrastructures, rather than individual heating solutions, should be used in future sustainable smart energy systems. based on a concrete proposal to implement the danish governmental 2050 fossil-free vision, this paper identifies marginal heat production costs and compares these to marginal heat savings costs for two different levels of district heating. a suitable least-cost heating strategy seems to be to invest in an approximately 50% decrease in net heat demands in new buildings and buildings that are being renovated anyway, while the implementation of heat savings in buildings that are not being renovated hardly pays. moreover, the analysis points in the direction that a least-cost strategy will be to provide approximately 2/3 of the heat demand from district heating and the rest from individual heat pumps. keywords: energy efficiency, renewable energy, heating strategy, heat savings, district heating, smart energy url: dx.doi.org/10.5278/ijsepm.2014.4.2 4 international journal of sustainable energy planning and management vol. 04 2014 heat saving strategies in sustainable smart energy systems buildings and conclude that such an effort involves a significant investment cost [19, 20]. consequently, an important question is to which extent least-cost heating strategies should involve such an investment. another essential question for heating strategies is how to provide the remaining heat. for example, how much should one invest in infrastructures such as district heating? district heating comprises a network of pipes connecting the buildings in a neighbourhood, town centre or whole city, so that they can be served from centralised plants or a number of distributed heat producing units. this approach allows the use of any available source of heat. the inclusion of district heating in future sustainable cities allows the wide use of combined heat and power (chp) together with the utilisation of heat from waste-to-energy and various industrial surplus heat sources as well as the use of geothermal and solar thermal heat [21−27]. in the future, such industrial processes may involve various processes of converting solid biomass fractions into bio(syn)gas and/or different sorts of liquid biofuels for transport purposes, among others [28, 29]. to complicate matters even more, heating strategies should, however, not be designed for the present energy system but for the future system. further, one of the future challenges will be to integrate heating and cooling with the electricity sector as well as the transport sector [30−32]. in [33−35], such a future system is referred to as a smart energy system, i.e., an energy system in which smart electricity, thermal and gas grids are combined and coordinated to identify synergies between them and to achieve an optimal solution for each individual sector as well as for the overall energy system. a transition from the current fossil fueland nuclear-based energy systems into future sustainable energy systems requires the large-scale integration of an increasing level of intermittent renewable energy. this also entails the rethinking and redesign of the energy system. in smart energy systems, focus is on the integration of the electricity, heating, cooling, and transport sectors, and on using the flexibility in demands and various shortterm and longer term storage options across the different sectors. to enable this, the smart energy system must coordinate a number of smart grid infrastructures for the different sectors in the energy system, which includes electricity grids, district heating and cooling grids, gas grids, and different fuel infrastructures. a number of recent studies [36−48], including heat roadmap europe [36, 43], come to the conclusion that district heating plays an important role in the implementation of future sustainable energy systems. however, the same reports also emphasise that the present district heating system must undergo a radical change into low-temperature district heating networks to interact with low-energy buildings and become an integrated part of smart energy systems. the aim of this paper is to present a methodology to identify least-cost strategies of reductions in the heat demand of buildings as a part of implementing sustainable smart energy systems. the basic assumption is that these reductions have an important impact but are also very investment intensive. the important point which is emphasised in this paper is that the size of the investment costs strongly depends on whether energy conservation is done in existing buildings or as additional investments in new buildings. and it depends on whether investments are made solely for the purpose of reducing heat demand or as an integrated part of renovation which will take place anyway. moreover, the identification of proper strategies depends on the marginal alternative production of the energy system, and the cost of this marginal production again depends on which system one addresses. in the following, the context used is the case of denmark, in which the government has formulated a strategy for transforming the whole energy system into a system based on 100% renewable energy by year 2050. the purpose of this paper is to analyse and answer the following three questions: 1. to which extent should heat for space heating and hot water be reduced by saving measures and investments and to which extent should it be produced/supplied? 2. which is the best combination of investments in heat savings, divided into new houses and existing houses? 3. which share of the supply should come from district heating and which share from individual solutions? 2. marginal production cost in a future sustainable smart energy system 2.1. definition of future sustainable smart energy system the identification of a least-cost heating strategy highly depends on the context; i.e., on the one hand, which kind of sustainable energy system one expects to have, and on the other hand, how one expects the building sector to develop. here, the analyses have been carried out in the context of the decision of the danish government to transform the danish energy supply to be fossil-free by 2050. a specific proposal on how to implement this goal has been defined in a research project financed by the danish council for strategic research in 2011 (ceesa) [49], which again is based on a proposal put forward by the danish society of engineers (ida) in 2006 [49] and 2009 [39]. the ida study is based on the technical inputs of the members and is the result of the organization’s “energy year 2006,” during which 1600 participants at more than 40 seminars discussed and designed a model for the future energy system of denmark. the ceesa scenario is the result of the collaboration of researchers from five danish universities, performing a coherent energy and environmental systems analysis (ceesa) of the transformation into 100 per cent renewable energy systems. the study might be seen as a follow-up on the first ida plan, in which an important further step was taken with regard to the smart energy systems analysis and the integration of the transport fuel pathways. among others, hour-by-hour analyses of electricity and district heating are supplemented with similar hour-byhour calculations for gas. both the ida and ceesa scenarios involve the design of coherent and complex renewable energy systems, including the suitable integration of energy conversion and storage technologies. furthermore, both studies are based on detailed hour-by-hour simulations carried out in the energyplan software. the ceesa study is an example of the design of a 100% renewable energy system based on the principles outlined in the paper “renewable energy strategies for sustainable development”[7]. this involves a combination of 1) energy savings in consumption such as investments in better buildings and appliances, 2) energy efficiency measures in production such as the expansion of chp and better efficiencies, and 3) the replacement of fossil fuels by renewable energy. the main assumption is that a fossil fuel-based supply is replaced by a renewable system through investments in energy efficiency and renewable energy sources. in ceesa, energy savings and direct electricity consumption are given high priority, and all scenarios rely on a holistic smart energy system approach as explained in [33]. this includes the use of heat storages, district heating with chp plants, and large heat pumps as well as the integration of transport fuel pathways with the use of gas storage. these smart energy systems enable a flexible and efficient integration of large amounts of fluctuating electricity production from wind turbines and photovoltaics. the gas grids and liquid fuels allow long-term storage, while the electric vehicles and heat pumps provide shorter-term storage and flexibility. the ceesa project includes a careful examination of the pathways to provide biomass resources. the starting point is an overview of the available amount of residual resources in terms of straw, wood, and biogas from manure, etc., summing up to approximately 180 pj/year. a shift in forest management practices and cereal cultivars could increase the potential further to approximately 240 pj/year by 2050. the 180 pj/year could also be increased to 200 pj by enacting dietary changes. this potential represents the use of residual resources only. this means that the ceesa 2050 scenario is kept within the boundaries of residual resources. it should be noted that a target of 240 pj/year by 2050 implies a number of potential conflicts due to many different demands and expectations from ecosystem services; it requires the conversion of agricultural land otherwise allocated to food crop production to energy crop production, potentially reducing food and feed production. all crop residues must be harvested, potentially reducing the carbon pool in soils. a way to reduce these potential conflicts is to reduce the demand for biomass for energy or to further develop agriculture and forestry to increase the biomass production per unit of land. one important learning outcome from the hourly analysis of the complete system including both electricity and gas balances is that relatively cheap gas storage capacities (which in the danish case are already there) can be used to balance the integration of wind power into the electricity grid. consequently, in the ceesa 2050 scenario, it is possible to decrease excess electricity production to nearly zero at the same time as high fuel efficiencies are achieved by using heat and gas storages rather than electricity storages. both the ida and the ceesa scenarios are comprehensive in the way that they provide a 100% renewable solution to the complete system, i.e., including all transport also ships and aeroplanes. moreover, as already explained, they have a focus on international journal of sustainable energy planning and management vol. 04 2014 5 henrik lund, jakob zinck thellufsen, søren aggerholm, kim bjarne wittchen, steffen nielsen, brian vad mathiesenc and bernd möller identifying the best solution for the whole system while taking into consideration all kinds of synergies between the individual sectors, i.e., taking a smart energy systems approach. 2.2. methodology, software and assumptions to identify the marginal cost of heat production, this study has applied the same software and model as in the ida and ceesa scenarios. the energyplan software makes hourly calculations of the complete smart energy system as described above for countries like denmark. for other countries, the model can also include the integration with district cooling and desalination [50]. the model is publicly available and further described on www.energyplan.eu. ceesa has been evaluated on the basis of the fuel prices shown in table 1. in this study, the important assumption is the natural gas price of 10.4 eur/gj, since it illustrates the cost of changes between the scenarios in the use of less or more synthetic gas similar to natural gas. in ceesa, the low price scenario is based on assumptions from the danish energy agency in 2008; medium fuel prices from 2011, and high fuel costs for fossil fuels are based on actual prices in the summer of 2008. to form a high biomass fuel cost level, twice the biomass price difference assumed by the danish energy agency from 2008 and 2010 is added to the medium biomass prices. the high fuel cost level is constructed for biomass and stated in italics. with regard to buildings, the ceesa scenario includes an expansion of heated areas of approximately 40% by 2050 and a cut in the space heating demand per unit of 50%. moreover, the scenario includes an expansion of the district heating share from the current level of approx. 50% to 66% in 2050. in this study, the ceesa scenario has been used to determine the marginal cost of changing the heat demand as well as the share of district heating in the following way. a matrix has been designed for the investigation consisting of the two different levels of district heating share and four different levels of annual heat demand reductions in the buildings, i.e. 25%, 50%, 75% and 100% of current space heating demand per unit. in ceesa, the reference start heat demand was from 2008, while in this study, it has been adjusted to the statistics of 2010. according to these statistics, the net heat demand (space heating and hot water) in 2010 (after climate corrections) was a total of 50 twh/year divided into 94.6 tj/year (equal to 26.28 twh/year) of district heating and 85.4 tj/year (equal to 23.72 twh/year) of individual heating. thus, the share of district heating was 52.5%. with a 40% increase and no savings, the heat demand increases to 70 twh in 2050. table 2 shows the development in the heated area in denmark for the past 40 years and four 10-year growth rates have been identified. as can be seen, growth rates have a tendency to fall and have for the past 30 years been in the order of magnitude of 10%. in this study, an increase of the heated area is assumed equal to a 40 per cent increase by 2050 compared with 2010. table 2 also shows the development in specific heat demands illustrating a decrease from 147 kwh/m2 in 1970 to 122 kwh/m2 in 2010 equal to a 17% decrease over a 40-year period. this historical development emphasizes the fact that the implementation of, e.g., a 50% decrease during the next 40 years will require an active policy [51]. moreover, in the present situation, 15% of the heat demand is assumed to be hot water and 85% is for space heating. based on these assumptions, the heat demands of the matrix have been calculated and divided into district and individual heating. in the hourly modelling of the ceesa scenarios, the current hourly duration of heat demand and grid losses 6 international journal of sustainable energy planning and management vol. 04 2014 heat saving strategies in sustainable smart energy systems table 1: fuel price assumptions in the ceesa scenario which have also been applied to this study. all prices are real prices expressed in 2010 value. ceesa diesel straw / wood eur/gj crude natural fuel fuel/gas wood pellets energy (2010 costs) oil coal gas oil oil petrol/jp chips (general) crops low fuel costs 9.3 2.1 5.8 6.5 11.6 12.4 4.3 9.6 5.4 medium fuel 15.0 3.3 10.4 13.6 17.0 17.6 5.6 11.1 7.5 costs high fuel 21.2 5.6 14.7 19.2 23.7 21.2 8.3 13.6 11.7 costs (real as well as the cost of expanding the district heating grid have been adjusted on the basis of the detailed study “varmeplan danmark (2008) [41, 53, 54]. the same source has been used to determine the cost of individual heat pumps for the areas outside district heating. the investment cost of expanding the district heating grid from 46% in 2006 to 63% has in [54] been identified as 4.4 billion eur. here, it is considered to expand from 52% to 66%, which is a little less. on the other hand, the expansion concerns a higher level which increases the marginal costs. consequently, it seems fair to use the same investment cost as an appropriate approximation. in the same source [53], it is discussed in detail how to benefit from heat savings either by reducing the capacity of the grid and/or reducing district heating temperatures and thereby the grid loss. this study assumes a reduction in temperatures and, as a consequence, the grid costs have not been changed for different levels of heat savings; only according to the different amounts of houses connected to the grid. in the calculations, a lifetime of 40 years and annual operation and maintenance costs of 1% of the investment are used. then, based on the ceesa scenario as explained above and using the energyplan model, the total annual costs of the different scenarios in the matrix have been calculated. the following changes in input between the scenarios have been made in the modelling: heat demands and shares of district heating are as specified above the cops of individual heat pumps depend on the heat demand and vary between 2.8 and 3.2 on average for both space heating and hot water. in scenario b compared to scenario a, a cost of 4.4 billion eur is added for the extra district heating grid the capacity of district heating boilers is calculated as the maximum district heating demand plus 10 per cent the use of biomass is fixed so that any change in fuel demands becomes import/export of synthetic gas (except from scenario 25% in which some biomass is also saved). power plant capacities are adjusted compared to the ceesa scenario to compensate any changes in individual heat pump electricity peak demands plus 20% reserve. as described above, the ceesa scenario has been designed as a 100% renewable energy scenario using only available residual biomass resources. when changing the heat demand, the need for biomass and other renewable sources will consequently either increase or decrease. here, the changes have been calculated in terms of changes in the need for net import/export of fuel equivalent to natural gas or similar gasses made on biogas/biomass. since this is an economic assessment, the important aspect here is the price which has been set to 10.4 eur/gj as previously mentioned. more details can be found in [55], appendix 1. 2.3. results the resulting annual costs of the different scenarios are shown in figures 1 and 2. basically (as illustrated in figure 1), reductions in heat demands decrease the total costs of the complete energy supply. however (as illustrated in figure 2), the marginal benefits of one unit of saved energy are reduced as more savings are implemented. this has to do with the low-temperature waste heat available in the system from industrial surplus, chp (thermal or fuel cell power production), and biomass conversion processes. these resources are relatively low-cost resources and once they have been used, any additional heat demand gradually requires increased heat pump and/or boiler productions as well as additional investments in production capacity. moreover, solar thermal and geothermal can better be exploited with an hourly distribution of a low energy demand than a high energy demand due to the seasonal differences being more severe with a high heat demand. international journal of sustainable energy planning and management vol. 04 2014 7 henrik lund, jakob zinck thellufsen, søren aggerholm, kim bjarne wittchen, steffen nielsen, brian vad mathiesenc and bernd möller table 2: historical development in the main parts of the danish building stock. based on the heat atlas described in [53]. year (primo) 1970 1980 1990 2000 2010 total heated area (million m2) 185.1 246.7 278.0 298.3 331.7 total heat demand (twh/year) 27163 34155 36793 38466 40327 specific demand (kwh/m2) 147 138 132 129 122 10-year growth factor 1.33 1.13 1.07 1.11 in summary, the results in terms of changes in the total costs are as illustrated in figure 1. the total cost has been converted to marginal cost per unit as illustrated in figure 2 under the assumption that the 2010 level corresponds to 122 kwh/m2 as listed in table 2. marginal costs are here found as the change in total cost related to the change in heat demand. in the conversion, it has been considered that hot water in the current level accounts for 15% equal to approx. 18 kwh/m2. this level has been kept constant. figure 2 illustrates the fact that the marginal heat production cost per unit of the overall energy system decreases from approx. 0.1 eur/kwh to approx. 0.07 eur/kwh with decreasing heat demands. moreover, figure 1 illustrates how an expansion of district heating will decrease the total (and per unit) costs as long as the average heat demand is above a level of 30% of the current specific heat demand. the ceesa scenario of 66% district heating and a 50% cut in heat demands is marked in figure 2. 3. marginal saving cost the next step has been to identify the marginal cost curve when increasing the energy saving activities for new and existing buildings, respectively. for new buildings, the marginal cost represents an increased investment in all new buildings, since the least-cost solution is to be found when all new buildings are insulated to the same level. however, for existing buildings, this is not the case, because the investment in conservation is mainly relevant in the cases in which renovation is being carried out anyway. therefore, the least-cost solution (within a certain number of years, i.e. till 2050) is identified as a scenario in which the buildings being renovated include all energy conservation measures, while the buildings not being renovated are left more or less as they are. consequently, for existing buildings, the marginal cost has been identified in such a way that it represents investments in an increasing number of buildings. 3.1. new buildings when increasing the energy saving activities in new buildings, a marginal cost curve has been made based on the report “cost-optimal levels of minimum energy performance requirements in the danish building regulations” [56, 57] and data related to the study described in the report; see [55 ], appendix 2. the report identifies the costs of different levels of energy savings in new single-family houses of 150 m2. by creating a marginal cost curve from this data and combining it with the supply costs of energy from the previous section, an optimal level of savings can be identified. not all future buildings will be single-family houses. however, due to time and data restrictions, this study is limited to this type. when calculating such a marginal cost curve, one issue turned out to be very important: how to treat the marginal cost of mechanical ventilation? the abovementioned report indicates that, at a certain point of increasing saving measures, mechanical ventilation must be installed in buildings to reach lower heat reductions than what is possible with natural ventilation. this creates two problems. the first problem is that a change from natural to mechanical ventilation leads to an increase in the electricity demand due to the operation of the ventilation system. in principle, this electricity demand should be 8 international journal of sustainable energy planning and management vol. 04 2014 heat saving strategies in sustainable smart energy systems 23.5 total energy systems costs 20 04060 kwh/m2 80100120 23 22.5 22 21.5 e u r /k w h 21 20.5 20 19.5 19 dh share 66% dh share 52% figure 1: total annual cost of different energy solutions in denmark 2050 as a function of the percentage of heat savings per unit. 100% is equal to the current level of 122 kwh/m2. 0.1 marginal heat production costs 20 04060 kwh/m2 80100140 120 0.08 0.06 e u r /k w h 0.04 0.02 0 dh share 66% ceesa dh share 52% figure 2: marginal heat production cost as a function of specific heat demand. treated as a change to the smart energy system. however, for practical reasons and since this paper defines least-cost solutions, the electricity demand has been treated as a cost of 0.13 eur/kwh. in principle, this cost reflects the marginal cost of producing one more unit of electricity in the smart energy system. however, due to the size of the electricity demand the exact value of this price is not essential. the second problem is connected to the identification of the investment and operation costs of adding mechanical ventilation. this issue is discussed further in [55]. based on this discussion, the following assessment is based on the assumption that mechanical ventilation is implemented independently from energy measures, since most new buildings require mechanical ventilation to maintain a certain level of indoor climate. in figure 3, the marginal cost of decreasing the heat demand in new buildings is shown alongside the production curves from the previous section. as can be seen, investments in heat reductions are feasible up to a level of approx. 57 kwh/m2. hereafter, the marginal costs of heat supply will be lower. 3.2. existing buildings the second part of increasing the energy performance of buildings involves the refurbishment of the existing building stock. when determining the marginal cost curve for current buildings, the renovation of each building is assumed to take the building from the current energy use level to the most cost-efficient low energy use level. this means no “step-by-step” improvement, as was the case of the new buildings. the analysis includes two scenarios. one that shows the costs of improving the buildings under the assumption that they were to be refurbished anyway (marginal costs), and one that shows the total costs including the expenses related to initializing the refurbishment. this means that existing houses being refurbished anyway only include the costs of materials and marginal labour force in the same way as is the case of new houses. the numbers come from studies relating to the report “heat demand in danish buildings in 2050” [58]. the previous section analysed only one type of building, but here multiple types of buildings with different construction years are included. combining the different building types and the construction period involves 27 different categories, which to a certain extent show the variation in the danish building stock. it is important to include this variation within the building stock because each category is different in terms of specific heat demand as well as the savings potential. however, the data does not include apartment blocks and office buildings since the numbers for these indicate too large efficiency increases. this means that the analysis only looks at the building types that would be the most expensive to refurbish; thus, for the total building mass, more buildings are most likely feasible to renovate. the potential energy savings in newer buildings are not as high as in the older buildings and the costs of implementing the savings also differ. this means that for some building categories, higher heat savings can be achieved by implementing less expensive measures than in other building types. for each building category, five heat saving measures are implemented; these are roof, floor, outer wall, window, and ventilation. based on data shown in [55] appendix 2, it is possible to identify the costs of renovating each house. the marginal cost and total cost are plotted on the y-axis, with the corresponding x coordinate being the average between the former building type and the latter building type. the points therefore illustrate an increase in the buildings renovated. the plot looks as shown in figure 4. 4. results and discussion figure 5 shows the combination of the previous analyses and calculations. the following can be learned from the diagram: the least-cost heating strategy seems to be found with 35% to 53% savings; i.e., when the average heat demand per unit is decreased to international journal of sustainable energy planning and management vol. 04 2014 9 henrik lund, jakob zinck thellufsen, søren aggerholm, kim bjarne wittchen, steffen nielsen, brian vad mathiesenc and bernd möller 0.3 0.25 0.2 0.15 0.1 e u r /k w h 0.05 0 4045505560 kwh/m2 65707580 new houses (mv) current prices production (dh share 66%) production (dh share 52%) figure 3: marginal cost of improving the energy efficiency in a new house compared with marginal costs of heat supply. the marginal cost of heat savings is represented by new single-family houses in which the price of mechanical ventilation (mv) is not included. 35−53% of the current level, equal to a decrease in the net heat demand per unit from the current 122 kwh/m2 to approx. 58−80 kwh/m2. however, because the graph only takes into account the single-family houses, farmhouses and terrace houses, and more cost-efficient savings are expected in apartment blocks and offices, the least-cost strategy is expected to be closer to 50% than 35%. savings should primarily be implemented in new buildings and only in existing buildings in combination with renovation being carried out anyway. otherwise the marginal costs are substantially higher than the heat production costs. moreover, based on the total cost shown in figure 5, a least-cost heating strategy points in the direction of increasing the district heating share to approx. 2/3 rather than maintaining the current share. the results of the analysis highlight the importance of identifying long-term heating strategies since the identified least-cost solution can best be implemented with a long time horizon. thus, savings should mostly be implemented when renovations are being carried out anyway and a suitable district heating infrastructure should be developed over a long period. as previously explained, the marginal cost of energy conservation has been identified in two different ways for new and existing buildings, respectively. for new buildings, the marginal cost represents an increased investment in all new buildings, since the least-cost solution is to be found when all new buildings are insulated to the same level. however, for existing buildings this is not the case, because investments in conservation are only relevant when renovation is being carried out anyway. therefore, the least-cost solution (within a certain number of years, i.e. till 2050) is identified as a scenario in which the buildings being renovated include all energy conservation measures, while buildings not being renovated are left more or less as they are. consequently, for existing buildings, the marginal cost represents investments in an increasing 10 international journal of sustainable energy planning and management vol. 04 2014 heat saving strategies in sustainable smart energy systems 40 0 e u r /k w h 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 marginal and total costs of savings in existing buildings 5060708090 kwh/m2 100110120130140 marginal costs total costs figure 4: the marginal and total costs of energy renovating existing buildings represented here as single-family houses, farmhouses and terrace houses. 130 120 110 100 90 80 70 kwh/m2 60 50 40 30 20 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 marginal cost of heat production (dh share 52%) marginal cost of heat production (dh share 66%) new buildings (current prices mv) existing buildings (total costs) existing buildings (marginal costs) e u r /k w h figure 5: marginal cost of heat production in the overall energy system in year 2050 compared to the marginal cost of improving the energy efficiency in a new building, an existing building (total costs) and an existing building being renovated anyway (marginal costs). new buildings are here represented by a 150 m2 single-family house and existing buildings as the total m2 of single-family houses, farmhouses and terrace houses. both are shown as a function of the average heat demand per unit in the buildings. number of buildings. the increased marginal cost illustrates the fact that in old and not renovated buildings, one can achieve more savings for the same money than in new and/or renovated buildings. this also corresponds well with the fact that the old buildings are likely to be the ones that will be renovated first. for the same reason, the diagram includes the phenomenon that the marginal cost of new buildings ends up being higher than that of existing buildings when measured in eur/kwh. thus, for the existing buildings, this part of the curve still includes energy conservation of the full spectrum of buildings, from the existing level to the level of low energy buildings. in principle, some of the “expensive” measures in existing buildings are already part of the mix in the beginning of the curve, leaving a small portion of the “cheap” measures to the end of the curve and therefore the ability to become cheaper than new buildings. in principle, this is a contradiction since, theoretically, one would then be able to identify a cheaper solution in which only the “cheaper” measures were implemented. however, the curve shows that in practice this is not possible, since the “cheap” measures can only be implemented when the building is being renovated, and not all buildings are being renovated during the period of time in question. therefore, some “cheap” measures can still be introduced in the existing buildings (and not the new) after implementing the optimal least-cost strategy. figure 5 shows demands per unit (kwh/m2). however, the identification of least-cost strategies also has to do with the share of existing versus new buildings in the 2050 scenario. consequently, to supplement figure 5, a calculation has been made on the basic assumption of a 40% expansion of new buildings from 2010 to 2050. the results are shown in figure 6 as a function of absolute heat demand (twh/year). again production costs are shown for two district heating shares. savings in existing buildings concern 50 twh/year and can decrease by approx. 32 twh/year, while new buildings concern 20 twh/year and can decrease by approx. 14 twh/year. merging the curves of existing and new buildings into one, the curve concerns 70 twh/year and can decrease to 25 twh/year. however, as can be seen, the least-cost solution is to be found with a 42% cut from 70 twh/year to approx. 40 twh/year. again, since the data only takes into account buildings accommodating only one family, the cut should be expected to be closer to 50% than the shown 42%. the shade in figure 5 highlights the difference between feasible savings in existing buildings and new international journal of sustainable energy planning and management vol. 04 2014 11 henrik lund, jakob zinck thellufsen, søren aggerholm, kim bjarne wittchen, steffen nielsen, brian vad mathiesenc and bernd möller 70 60 50 40 twh/year 30 20 10 0 0 0.05 0.1 e u r /k w h 0.15 0.2 0.25 0.3 joint curves for current and new buildings new buildings marginal cost of heat production (dh share 52%) existing buildings marginal cost of heat production (dh share 66%) figure 6: marginal cost of heat production in the overall energy system in year 2050 compared to the marginal cost of improving the energy efficiency in buildings in a scenario in which the building stock is increased by 40% from 2010 till 2050. new buildings are here represented by a 150 m2 single-family house and existing buildings as the total m2 of single-family houses, farmhouses and terrace houses. both are shown as a function of the total net space heating and hot water heat demand in the buildings. buildings. this could indicate that the result might be a little sensitive to the future mix of new and existing buildings, because of the difference between 58 kwh/m2 and 80 kwh/m2. however, since the analysis does not include apartments and offices, the cut off for existing buildings should be lower; thus minimizing the sensitivity of the future mix between existing and new buildings. the above-mentioned calculation has been carried out with a real interest rate of 3%. sensitivity analyses of 1% and 5%, respectively, show that both total costs and marginal cost are sensitive to the interest rate, since a significant part of the costs are investments. the analysis is not particularly sensitive to a decrease in the costs of investing in saving measures in the buildings. a sensitivity analysis has been carried out with potential future cost reductions. however, due to the steep rise in marginal costs related to savings, the potential lower costs will have only a minor influence of around 3% on the least-cost optimal point. however, one issue was found to be of outmost importance, namely the issue of mechanical ventilation. the cost of mechanical ventilation as well as the condition whether or not this cost is considered part of the energy saving cost highly influence the results. 5. conclusion this paper has presented a methodology to identify least-cost strategies for reducing the heat demand of buildings as a part of implementing sustainable smart energy systems. the methodology has then been applied to the case of denmark. based on the detailed hourly modelling of a proposal to implement the danish governmental strategy of an energy system based on 100% renewable energy by year 2050, the future marginal costs of producing heat have been identified. the marginal heat production costs have then been compared to similar marginal heat savings costs. the important point which is emphasised in this paper is that the size of the investment costs strongly depends on whether energy conservation is done in existing buildings or as additional investments in new buildings. furthermore, it depends on whether investments are made solely for the purpose of reducing the heat demand or as an integrated part of a renovation which will take place anyway. moreover, the identification of proper strategies depends on the marginal alternative production of the energy system, and the cost of this marginal production again depends on which system one addresses. for existing buildings, the data includes all types of buildings, while new buildings have been represented by single-family houses. further, the analysis highlights the importance of identifying long-term heating strategies since least-cost solutions require a long period of implementation. first, savings should mostly be implemented when buildings are being constructed or when renovations are being carried out anyway, which requires several decades to cover the building stock. second, a suitable district heating infrastructure should be developed and adjusted to low-energy buildings, which also calls for a long time horizon. for denmark, a suitable least-cost heating strategy seems to be to implement savings in new buildings and buildings which are being renovated anyway. savings should be implemented to an extent that will decrease the net heat demand of space heating and hot water by approximately 50% compared to the present level, while heat savings in buildings which are not being renovated hardly pay. moreover, the analysis points in the direction that a least-cost strategy will be to provide approx. 2/3 of the heat demand from district heating and the rest from individual heat pumps. it should be emphasized that such a future heat saving strategy is very ambitious compared to previous years. thus, a similar development in specific heat demands for the previous 40 years shows only a 17% per cent decrease from 147 kwh/m2 in 1970 to 122 kwh/m2 in 2010. this historical development emphasizes the fact that the implementation of a 50% cut during the next 40 years is very ambitious and will require an active policy. acknowledgement the work presented in this 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice ijsepm-7586.indd international journal of sustainable energy planning and management vol. 36 2022 1 international journal of sustainable energy planning and management vol. 36 2022 1–2 *corresponding author – e-mail: poul@plan.aau.dk abstract this 36th volume of the international journal of sustainable energy planning and management starts at the global scale with a survey of the economy of the oil industry. limitations of singlesector analyses of chile is the focal point of a commentary on a previously published study in the journal energies. the authors of the commentary find that limitation in literature survey, methodology, and data result in a signification underestimation of, e.g., the potential for photo voltaics. the potential for hydro power is affected by changes in water flows as analysed by melo, which brings some level concern as hydro power is a key element in brazil’s renewable energy exploitation effort. lasty, dall-orsoletta et al. look into system dynamic models and whether they include social aspects in the modelling. this is only found in a minority of system dynamic models. editorial international journal of sustainable energy planning and management vol 36 poul alberg østergaard*, rasmus magni johannsen department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark keywords oil sector revenues; single vs multi sector optimisation; hydropower projections; social aspects in modelling; http://doi.org/10.54337/ijsepm.7586 1. contents oil and gas usually fall beyond the scope of the international journal of sustainable energy planning and management, however it is a near given that the transition towards renewable energy-based energy systems must take the current fossil reality in consideration. thus we have previously presented work on natural gas in cyprus [1], and fossil fuel consumption in sub-saharan africa [2,3]. in this issue, we expand the focus further as verbruggen [4] looks into the global oil exploitation with a focus on profits and links to geopolitics. a 2021 paper on the chilean electricity system [5] is the starting point for osorio-aravena and co-authors’ commentary [6] in this issue of the international journal for sustainable energy planning and management. osorio-aravena and co-authors point to a lack of consideration for previous work in the commented paper, and that due to methodological limitations and age of data, e.g., the contribution of photovoltaics is “2.7 to 16 times less than other existing studies for the region”. a boundary issue in the work is for instance the focus on the power sector, where a significant body of contemporary work address integrated or smart energy systems. such an approach was suggested already a decade ago [7], so papers not applying this approach do not manage to fully capture the potential energy system transition options. in 2020, osorio-aravena et al. [8] published a study in this journal also focusing on chile – however applying this more holistic approach. while smart energy systems typically address the integration of energy sectors, energy system transition must also be seen in the context of other areas of society. in hydro power-rich countries, there is a link to water usage and precipitation changes coming from, e.g., climate change. taking the brazilian state of minas gerais as a case, melo and co-authors find a reduction in inflow and thus concerns of future prospects [9]. this journal has previously published a number of studies where hydropower is one of the elements in the energy 2 international journal of sustainable energy planning and management vol. 36 2022 editorial international journal of sustainable energy planning and management vol 36 transition, however more focused studies have addressed hydropower from an acceptance perspective [10], a planning perspective [11,12], a market integration perspective [13], and from a perspective of electricity access [14]. dall-orsoletta et al. [15] present a survey of modelling approaches in system dynamic models with a focus on model representation within spatial resolution, simulation horizon, and main themes covered including supply, demand, economy, environment, transport, water, food, consumers and socio-political dynamics. among the main findings are that social aspects are not prevalent in system dynamic modelling. a new article by chang adds to this discussion by focusing on a tendency of coupling energy systems models to better encompass different aspects of energy systems [16]. references [1] taliotis c, howells m, bazilian m, rogner h, welsch m. energy security prospects in cyprus and israel: a focus on natural gas. int j sustain energy plan manag 2014;3:5–20. http://doi.org/10.5278/ijsepm.2014.3.2 [2] kwakwa pa, adu g, osei-fosu ak. a time series analysis of fossil fuel consumption in sub-saharan africa: evidence from ghana, kenya and south africa. int j sustain energy plan manag 2018;17. http://doi.org/10.5278/ijsepm.2018.17.4 [3] nyasha s. oil price and economic growth in kenya: a trivariate simulation. int j sustain energy plan manag 2019;19. http:// doi.org/ 10.5278/ijsepm.2019.19.2 [4] verbruggen a. the geopolitics of trillion us$ oil & gas rents. int j sustain energy plan manag 2022;36. http://doi. org/10.54337/ijsepm.7395 [5] babonneau f, barrera j, toledo j. decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies. energies 2021;14. http://doi. org/10.3390/en14164768 [6] osorio-aravena jc, haas j, aghahosseini a, breyer c. commentary and critical discussion on ‘decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies.’ int j sustain energy plan manag 2022;36. http://doi.org/10.54337/ijsepm.7392 [7] lund h, andersen an, østergaard pa, mathiesen bv, connolly d. from electricity smart grids to smart energy systems a market operation based approach and understanding. energy 2012;42:96–102. http://doi. org/10.1016/j.energy.2012.04.003 [8] osorio-aravena jc, aghahosseini a, bogdanov d, caldera u, muñoz-cerón e, breyer c. transition toward a fully renewablebased energy system in chile by 2050 across power, heat, transport and desalination sectors. int j sustain energy plan manag 2020;25. http://doi.org/10.5278/ijsepm.3385 [9] melo lb, costa al, estanislau fbgl, velasquez ce, fortini a, moura gnp. water-energy-emissions nexus – an integrated analysis applied to a case study. int j sustain energy plan manag 2022;36. http://doi.org/10.54337/ ijsepm.7349 [10] rygg bj, ryghaug m, yttri g. is local always best? social acceptance of small hydropower projects in norway. int j sustain energy plan manag 2021;x. http://doi.org/10.5278/ ijsepm.6444 [11] singh mk. a planning perspective on hydropower development in the indian himalayan region. int j sustain energy plan manag 2020;28. http://doi.org/10.5278/ ijsepm.4304 [12] putranto lm. generation expansion planning for high-potential hydropower resources: the case of the sulawesi electricity system. int j sustain energy plan manag 2020;28:37–52. http://doi.org/10.5278/ijsepm.3247 [13] alnæs en, grøndahl rb, fleten s-e, boomsma tk. insights from actual day-ahead bidding of hydropower. int j sustain energy plan manag 2015;7:37–58. http://doi.org/10.5278/ ijsepm.2015.7.4 [14] ebhota ws. power accessibility, fossil fuel and the exploitation of small hydropower technology in sub-saharan africa. int j sustain energy plan manag 2019;19. http://dx.doi. org/10.5278/ijsepm.2019.19.3 [15] dall-orsoletta a. a review of social aspects integration in system dynamics energy systems models. int j sustain energy plan manag 2022;36. http://doi.org/10.54337/ ijsepm.7478 [16] chang m, lund h, thellufsen jz, østergaard pa. perspectives on purpose-driven coupling of energy system models. energy 2022:126335. http://doi.org/ 10.1016/j.energy.2022.126335 932-3595-1-le.qxd 1. introduction development growth and human prosperity are heavily dependent on adequate supply, security, and efficient use of energy. with the growth, there is an ever rising demand for energy and challenges of ensuring adequate resources of the energy. equally important is the need to ensure that the energy is obtained and used responsibly with low or minimal impacts on lives and nature. progress in general therefore makes it necessary to constantly reform energy sectors in an effort to meet the energy demand and challenges. the oil shocks of the 1970s, which brought about unprecedented threats to energy security worldwide, are a particular example of challenges that can be faced. the challenge of oil shocks was in fact so critical that it forced a worldwide re-evaluation of the dependency on fossil fuels as a dominant energy source. similarly, concern for environmental degradation and climate change arising from use of fossil fuels, has been another challenge international journal of sustainable energy planning and management vol. 05 2015 41 forcing search for alternative energy options from the late 1970s. electricity being the most versatile, efficient, and widely used form of energy has so far been given greatest attention in energy reforms. therefore, electricity reforms have been almost synonymous with energy reforms, and for this reason approaches to electric power reforms are of particular interest in this paper. for decades, debate has been going on in respect of approaches and impacts of electricity supply industry reforms that have been taking place since the 1980s (see, for example, pollitt [1], uneca and unep [2], and wamukonya [3]). as noted by williams and ghanadan [4], a major contention has been the applicability of models of reforms that are basically driven by economics, without sufficient attention to other critically important dimensions of inclusive development. the development envisaged here is one that is essential for sustainable growth of economies, especially for developing countries. specifically, the 1 corresponding author email address: s.m.abdallah@utwente.nl international journal of sustainable energy planning and management vol. 05 2015 41–56 energy reforms in the developing world: sustainable development compromised? �������� ������ ���������������������������������� ����������� �� � ��� ������������������������ �������������������������������������� ���������������� ��� �������!���� ������ ��������"#$#�%�&�'()�)*++�,-��-�������������.���� ����� abstract energy sector reforms with an emphasis on electricity growth have been taking place extensively and rapidly worldwide particularly, motivated chiefly by classical economics’ standpoint of efficiency and market considerations, reforms have been made in the developed north. models of reforms in the north have in turn been replicated in developing countries. however, questions arise as to whether the models used are suitable for the mostly rural and socioeconomically disadvantaged economies in the south. it is argued in this paper that a sustainability focused mode of reforms guided by futures studies is needed for such economies. reforms taking place in kenya and neighbouring countries are in particular examined from a sustainable future perspective; and appropriate improvements and further research are recommended. keywords: sustainable growth; electricity reforms; energy future; developing economies; kenya; url: dx.doi.org/105278/ijsepm.2015.5.5 42 international journal of sustainable energy planning and management vol. 05 2015 energy reforms in the developing world: sustainable development compromised? reforms being undertaken need to satisfy the requirements of sustainable development, which according to drummond and marsden [5], davidson [6], holling [7], and roseland [8], balances economic, social, and environmental interests of economies. for developing countries, economic growth is undoubtedly of great importance as it is for developed economies. electricity reforms specifically targeting the economic dimension of development are therefore of special significance for industrialized and nonindustrialized countries. however, it should be borne in mind that poverty, uneven distribution of national income, and other social ills are some of the challenges facing developing countries that require critical attention alongside economic pursuits. for example, in comparison to affluent urban populations, rural and poor urban residents suffer high poverty levels and overpopulation ([9], [10] and [11]) reforms need to recognize and make provision for such social imbalances; and social considerations that are important in institutional structuring need to be taken into account (see e.g. roy [12], helm [13, reddy [45], and dubash [14]). reforms in energy sectors require not only technological (economic) transformations but also institutional restructuring that take into full account social inclusion, as pointed out by hvelplund and lund [15]. in addition, the technological innovations that take place in the reforms should fully cater for present and long term (future) social needs ([16] and [17]). from the works of byrne and mun [18], bouille et al. [19], and florio and florio [20] among others, early power sector reforms largely ignored the considerable electricity supply related environmental degradation. this is despite the increasing environmental impacts associated with dominant fossil fuel and nuclear power generation. interest in the use of renewable energy and energy efficiency technologies which could reduce environmental degradation was secondary to the pursuit of economic efficiency—achievable by use of any technologies regardless of environmental consequences. most notably, in developed economies there was wide availability of non-renewable resources like coal. this made it very attractive financially to generate power with non-renewable technologies. following the same trend, fossil-fuel technologies were used to a large extent in developing countries as part of reforms that were replicated from the developed world {see e.g.karkia et al. [21], reddy [22] and mwasumbi and tzoneva [23]}. the replication was done notwithstanding the fact that fossil-fuel resources have to be imported in most developing economies. the relatively high abundance of renewable energy resources in the economies was also not taken into account. as energy reforms with a sustainable development focus are considered, it is important to bear in mind that the development is concerned about inter-generational equity. therefore, the reforms like the development need to be informed by a futures philosophy. this derives from the brundtland commission report (wced [24]) conception of sustainable development, which was supported by among others simon [25], mebratu [26] and jabareen [27]. according to the conception, sustainable development ensures that the needs of present generations are met without compromising the ability of future generations to meet their own needs. from this standpoint, a futures pathway is important for guiding energy sector reforms. taking this into account, futures studies would be especially useful for the energy reforms. it is noted by futures scholars including bell [28] and inayatullah [29]), and wangel [30] that the studies systematically explore probable and desirable future positions and pathways from the present to those positions. other futures analysts like dreborg [31], and vergragt and quist [33] see sustainable development as an optimum form of development for the world, and in particular for underdeveloped societies. initial electricity reforms models were largely designed with industrialized economies in mind; and the countries that pioneered in the reforms include england and wales, some states in the usa, and norway. chile which is a developing country was also a pioneer and stands out among the early reformers [34]. the most common models entailed restructuring power sectors through vertical and horizontal unbundling, takeover of some or all the unbundled units by the private sector, deregulation, and encouraging competition among players in the sector. from an economics perspective, reforms that were undertaken had generally positive impacts in industrialized countries; including freedom of choice of suppliers, and better overall quality of services [35]. on the other hand, the dominant models were introduced to developing nations and some countries in transition, mostly by the world bank as part of their power sectors strengthening strategies. the main objectives of reforms in these countries were to tackle poor management of power utilities, contain perverse shortages of investment that led to severe power shortages and poor infrastructure maintenance, and address failure to recover costs arising from electricity under-pricing [36]. as such, the reforms were broadly aimed at improvement of economic performance, and at the inception of first reforms economic efficiency was uppermost in the reform agenda. issues like social and environmental wellbeing that are key for sustainable development in low income developing countries were not given much attention [37]. resulting from the reforms that were applied in developing countries there were indeed recorded gains in efficiency of operations and financial soundness of some power utilities; and in a few cases electricity access expansion was realized as part of a social equity goal [38]. however, at the same time there were significant negative impacts. as mebratu and wamukonya [39] and uneca and unep [40] observe, the latter impacts included deterioration of socioeconomic conditions through:1) raising of prices and making power increasingly unaffordable to large sections of populations which are made up of the poor, 2) focusing more attention on urban power supplies and not giving necessary priority to electricity access to rural areas where majority of people in developing countries live 3) job losses for power utility employees, 4) increase in the use of power generation plants running on fossil fuels with resulting increases in greenhouse gas emissions. overall, the people most affected by the adverse consequences of the reforms were the dominant populations in developing countries –largely made up of the poor in rural areas and economically deprived urban dwellers. similarly, it was recognized that social factors require attention in developed economies’ energy sector reforms. for example, studies by lund and hvelplund [41] have underscored the need for employment creation as a social contribution to economic reforms taking place in developed world energy sectors. therefore, for all countries involved in electricity reforms, and particularly in developing economies, it became evident that the initial approach to reforms had to be reconsidered. factors other than economics, including to a large extent social considerations, were given more weight in later versions of reforms. one critical aspect of electricity supply policy that could ensure social inclusion is the design of electricity tariffs at end-user (retail) and bulk supply (generation or transmission) levels. this is as shown in studies by e.g. cecelski et al. [42], waddle [43], and cunha j. and p. pereira [44]. the tariffs need social protection mechanisms that could cushion poorer members of society from pricing that makes electricity unaffordable to the members. to achieve the protection, tariff levels should not be left entirely to market forces as expected in full liberalization that comes from ideal electricity reforms. in this scenario, a regulator is needed for regulation of the tariffs. such regulators have been increasingly established as part of energy reforms undertaken by national governments or sub-national governments especially in developing countries (see e.g. rygg-[45] and bouille et al. [46]) an extensive examination of the wide subject of electricity reforms is outside the scope of this paper. the focus here is on those aspects of the reforms having a bearing on the development of energy that could improve the socio-economic conditions of the large populations in rural and poverty-laden urban areas, particularly with regard to provision of electricity to the populations. towards this end, kenya has been selected for study, and the main questions that will be addressed by the paper are: 1) do electricity supply industry reforms and energy policies guiding the reforms in kenya give due recognition to importance of energy provision for sustainable development? , and 2) what elements of reform require strengthening for enhancement of sustainability?. it is recognized that electrification leading to sustainable development can only succeed when undertaken as part of integrated energy growth, including non-electrical forms of sustainable energy. therefore sustainable rural energization (holistic provision of energy), where electrification is a major component, is the broad vision targeted by this paper. case study evidence that is examined in the paper is especially drawn from kenya, and partial evidence is obtained for comparison purposes from tanzania, rwanda and malawi. these countries were selected by purposive sampling to fit in with other work that the main author of the paper did in africa. through a qualitative approach, the evidence was collected and analyzed during field research that the author undertook. the research was mainly carried out in the indicated international journal of sustainable energy planning and management vol. 05 2015 43 said m. abdallah, hans bressers, joy sheila clancy east-central african countries; and it involved data obtained from a broad spectrum of stakeholders including actors involved in policy, commercial, professional, research, and community development. personal interviews were the main means for data acquisition, and further data was obtained through text analysis from academic and grey literature, as well as from other information dissemination sources. based on an interpretive research approach, the data collection and analyses were informed by a desire to avoid reductionism as much as possible, and attain wholesomeness generally targeted by the interpretive research tradition. quantification as used widely in reductionistic methods has therefore been largely circumvented. by keeping the size of the unit of analysis small it has been possible to carry out valid qualitative evaluations without the aid of quantitative methods. 2. why rethinking of reforms and rural electrification is imperative for a clearer understanding of why a new approach to reforms in developing countries is needed, and the key role of rural electrification in the required reforms, three main theoretical perspectives are examined: institutional change for economic enhancement, incorporation of social and environmental elements in reforms for balanced development, and fostering sustainable development through appropriate rural electrification. a futures study perspective for energy policies that could support suitable electricity reforms is also considered. 2.1. institutional change for economic enhancement the primary goal of the institutional transformation behind the reforms was a gearing up of economic or productive efficiency within the electricity sectors. following newbery [47], in the developed economies, the need for raising the level of efficiency was acutely felt in the wake of the oil crises of the 1970s. as a result of the crises, there were huge increases in energy prices and there was requirement for better deployment of the excess capacity that was invested in fossil fuel facilities. at the time, the electricity supply industry was dominated by vertically integrated state-controlled utilities, the performance of which was increasingly found wanting. the same arguments apply to developing nations, where the power industry was fashioned along the lines of the industrialized counterparts. however, in addition to the problems faced in the advanced economies, utilities in developing countries faced problems of outright mismanagement; shortage of investments for system expansion, operations and maintenance; and uneconomic pricing of electricity leading to under-recovery of costs and shortage of revenue. from an economics theory point of view, it was reckoned that necessary reforms in the power sectors could be achieved through privatization, competition and regulation; as noted by among others, dubash [48], byrne and mun [49], and florio and florio [50]. by privatizing power utilities, it was expected that among other improvements private sector level of discipline would be introduced, dependence of the utilities on public funding would be removed, political controls would be minimized, and electricity users would have greater freedom of choice of suppliers. furthermore, competition would increase efficiency by providing incentives for better performance and survival in the market, and a clear beneficiary of the competition would be the electricity user through better prices and quality of services. overall, efficiencies in the power sectors would be stepped up by enhanced regulation, as better standards and quality of power supply would be formulated and enforced by regulators. this would be especially important due to entry into the sectors of a greater number of players, and more diversified interests among the players. regulation would be particularly necessary for two groups of players: power utilities and electricity consumers. while on one hand power utilities would require regulatory protection for their large and sunken investments, and would need guarantees of fair competition; on the other hand electricity users would require fair pricing, quality of services assurance, and a general first line of electricity related arbitration. it is from the above ideals that electricity reforms models were designed, and the models were applied across the board in most countries, starting with the industrialized ones, and then with little modification to countries in transition and developing ones. it is easily understandable that the reforms worked well in the industrialized economies, as the advanced level of market dynamics there could easily fit it in with models that are narrowly focused on free market principles. the reality is however different in developing countries, where public interest is still way above private interest. this is why in most african countries, and generally in developing countries, no single case of electricity reforms has been fully implemented according to this model [3]. 44 international journal of sustainable energy planning and management vol. 05 2015 energy reforms in the developing world: sustainable development compromised? 2.2. incorporation of social and environmental elements in most developing countries, public interest is synonymous with the welfare of the majority who are generally poor people or low income earners. for instance, in the case of sub-saharan africa and south east asia where there is the highest concentration of least-developed economies, the percentage of people living below 2 us dollars (usd) per day is close to 80 per cent [51]. therefore, for such countries the social equity dimension of development is critical and any reforms that have a bearing on development need to address the plight of the socially disadvantaged bulk of their populations. with this in mind, electricity reformers have increasingly incorporated regulatory mechanisms for enabling creation of safety nets for the poor, to cushion them against the impacts of power sector reforms [52]. as issues of the poor are addressed, the fact that there are strong inter-linkages between the poor and the environment requires attention [53]. the environment is one of the most important resources for poor people. for example, from the environment the people can and do obtain most of their basic energy requirements; for example woody biomass and its bi-products constitute the leading source of energy for cooking in developing countries. from the environment, some key renewable energy sources like hydro-power, wind-power, and bioenergy could be obtained. with this in mind, by proper design of electricity and energy reforms generally, optimization could be achieved in the use of the environment for the benefit of the poor and whole economies. simultaneously, negative impacts that occur with wrong use of the environment could be redressed by for example finding alternatives to traditional biomass energy use and lessening pressure on forest and other biomass resources. sustainable or alternative forms of energy would not only be a relief for the environment, but their production could provide a major input into employment opportunities that could alleviate poverty among rural and similar populations. overall, sustainable development potential could be realized with small people-centered sustainable energy sources like small-hydro power facilities in decentralized grids [54]. in view of the importance of incorporating social and environmental elements into electricity reforms, there is concurrence with dubash [55] that a sustainable development approach to the reforms should be adopted. acosta et al. [56] and nilsson et al. [57] also argue from a futures studies perspective that a desirable future is where energy policies target achievement of sustainable development; and indirectly they advocate for electricity reforms guided by such policies. the context of sustainable development envisioned is where proportionate attention is given to economic growth, social advancement, and environmental soundness. this is as envisaged by theorists like drummond and marsden [58], davidson [59], and atkinson et al. [60]; and from their theoretical works sustainable development is understood synonymously with sustainability. the view of electricity or energy in purely economic terms is contested by david nye [61], who stated: electrification is not an implacable force moving through history, but a social process that varies from one time period to another and from one culture to another. 2.3. rural electrification for sustainable development low income developing countries generally have scanty availability of electrical power and other forms of modern energy, with rural and poor urban sections of the countries being most severely affected. while rapidly industrializing countries like china have electrification levels of nearly 100 per cent, the low income ones that are mostly in sub-saharan africa have national averages of about 30 per cent and less than 14 per cent in rural areas [62]. this is in spite of the fact that the largest proportion of populations in the low income economies is rural. therefore, rural electrification, especially using off-grid renewable energy sources could be a major input into socio-economic development in the economies. as such, meaningful electricity reforms should have service to rural residents as a key objective. one of the main reasons why rural electrification in poor countries is so grossly inadequate is the common tendency of providing power from central grids, even when such a supply approach is clearly uneconomical due to the large distances involved. because of the concentration of economic activities in urban centres, first priority in electricity provision is usually given to these centres. as a result, the central grid has good coverage of areas where the centres are located; and conversely, the farther the distance from the urban setups the lower the level of supply of power. the level of access to electricity is therefore very low in rural areas and the large populations in these areas international journal of sustainable energy planning and management vol. 05 2015 45 said m. abdallah, hans bressers, joy sheila clancy substantially have no electricity services. additionally, similar populations living in impoverished urban habitats are equally affected. the low availability of electricity in rural areas has particularly been noted by the world bank [63] which also indicates that where off-grid supplies have been given there has been a tendency of generating power from oil-based fuels like diesel, which are imported into the countries and transported to generation sites at very high costs. overall, therefore, the feasibility of electrifying rural areas through off-grid systems and energy resources available within rural localities is being increasingly sought; and in addition use of other rural resources like human and industrial capital is being explored. electricity reforms that aim at sustainable development accordingly need to take these considerations into account. when considering rural electrification for developing countries, account should be taken of the fact that rural dwellers are mostly poor and form the majority of national populations. these rural residents have therefore low electricity requirements of the order of less than one kw per household on average (see e.g. zomers [64], and barnes [65]). the electric power that the residents need is mostly for lighting and for powering small appliances like radios and battery chargers. only in a few cases are the residents able to afford electricity for productive uses (e.g. pumping of water for domestic purposes and irrigation, and chaff or fodder cutting). because of the low power requirements it is possible to utilize low-level technologies such as solar pv for meeting the requirements. off-grid solutions are therefore appropriate for the residents, and costly central grid extensions are unnecessary. it is noteworthy that studies by e.g. cust et al. [66] have shown a high willingness to pay (wtp) for off-grid energy technologies among the residents, compared to wtp for central grid extensions —which could in any case be unthinkable due to very long distances to nearest points to the grid. the alliance for rural electrification [67], among others, observes that the pursuit of localized electrification can be largely directed towards exploitation of renewable energy sources, chiefly solar energy, wind power, small hydropower, bio-energy, and geothermal energy. given that these renewable forms of energy (renewables) have minimal local and global environmental impacts, they are useful for not only providing energy that can be perpetually replenished, but also for ecological protection; thus ensuring overall sustainability. as such, the renewables are where possible deployed for rural electrification together with local labour and management. rural industrial resources that include for example manufacture of power supply equipment, and power produced by local industries, could also be used. ultimately, electrification carried out with such use of local or rural resources contributes considerably to sustainable development; and electricity reforms aligned to the development require a strong energy localization element. sustainable development in rural areas requires adequate energy inputs not only from electricity, but also from other sources as well. electricity is important for enabling productive uses such as water pumping, irrigation and grain milling which spur socio-economic development. however, heat and mechanical forms of energy have greater priority especially for basic livelihoods in homes. from this standpoint, for achievement of sustainability rural electrification should be part of an integrated energy intervention strategy — embracing all important forms of energy. recognizing this need for total energy provision, development analysts (e.g. bawakyillenuo [68]) advocate for rural energization rather than rural electrification. at the national policy level, some countries have also seen the need for carrying out electricity reforms as part of national energy policy reforms where rural energization is targeted. the level of success of electricity reforms towards attaining sustainability could therefore be gauged through the extent to which non-electricity energy reforms complement electricity reforms. 2.4. pursued versus ideal energy policy futures corporate and institutional development strategies are increasingly employing futures studies methodologies in their planning processes. the strategies have gradually shifted to back-casting from forecasting methods that rely on probable scenarios for facilitation of selection of the most likely future, and taking action on the basis of the selection, (see e.g. robinson [69]). according to dreborg [70], and vergragt and quist [71], among others, back-casting is a futures study process that aims at minimizing uncertainties of possible futures. instead of leaving the future to chance, in the back-casting method decisions are made on what a desirable future should be, then strategies are systematically worked out to achieve the future. therefore, it can be seen that the method provides the genesis of what is popularly 46 international journal of sustainable energy planning and management vol. 05 2015 energy reforms in the developing world: sustainable development compromised? referred to as a corporate vision —a future goal that the corporate entity strives to achieve through strategic planning. furthermore, as sardar [72] and vergragt and quist [73] argue, futures studies such as back-casting are strongly anchored on current actions for shaping the near or distant future. therefore, the methods can achieve better results since actions that can be taken at present are relatively within human control, and sustainability or sustainable development which is premised on long time horizons would be easier to attain. energy policies and investment projects have long planning horizons and considerable complexities which make them amenable to back-casting processes ([74] and [75]). as a result, there is an increasing number of energy policies with visions and planning processes based on the back-casting concept. in addition, incorporation of a sustainability objective in energy policies is a growing practice. ostergaard and sperling [76] have especially noted that at the global scale unsustainable energy demand and carbon emissions need to be addressed, through among other things an appropriate planning framework. back-casting which is becoming increasingly common could provide the required framework. however, nilsson et al. [77] and others have noted that political factors in energy policymaking have been responsible for policy designs and implementations that are not fully in conformity with back-casting expectations. major aspects of energy policies like electricity reforms have consequently been less than ideal seen from a futures studies viewpoint. evidence of this is provided in the next section, specifically in the case of kenya. 3. reform approaches in specific countries and enabling energy policies 3.1. electricity reforms in kenya and other african countries although as indicated by karekezi and kimani [78] low income countries of africa have adopted electricity reforms differently, common trends have been observed. following gratwick and eberhard, [79]; uneca and unep [80] and wamukonya [81] it has been noted that the general pattern of reforms includes components implemented in different sequences according to national preferences; and in certain cases some components or elements are omitted the elements to a large extent include: energy policy establishment or review; enactment of enabling electricity legislation, setting up an energy or electricity regulatory body and framework; restructuring of national power utility (usually vertically integrated) and a management contractor may be involved; entry of private participation into the power supply industry, especially in power generation (by independent power producers or ipps); upward adjustment of power tariffs; and setting up a rural electrification or energy body. depending on which elements are implemented and the extent of implementation, the reforms undertaken can contribute proportionately to sustainable electrification and development, or sustainability. in the remainder of this section, implementation of reforms in the study countries is analyzed with a focus on finding out how well the reforms could contribute to sustainability. tables 1 and 2 give a summarized picture of the electricity reforms that have been undertaken by kenya, which is the main study country; and the three other east-central african countries that are included for comparison purposes. the latter three countries are malawi, rwanda, and tanzania. in the tables, approximate comparisons are made of the levels of measures taken towards the reforms. specifically in table 1, a breakdown of the electricity reform elements is given, and it is seen that kenya has implemented the highest number of elements, while malawi has the least number. although rwanda and tanzania have done less than kenya, they have elements that are likely to foster rural energy sustainability to a greater degree than kenya has. examples of these elements are: 1) integration of electricity regulation with regulation of utilities in other economic sectors, for example water; and 2) having an independent body responsible for electricity and other forms of energy in rural areas. to a small extent, rwanda’s rural energy sustainability is likely to be eroded by relatively high power tariffs, which are highest among the four countries studied. absence of an independent body for rural electrification or energy is also a downside for rwanda (see note 2 in table 1 for an explanation of this factor). on the specific aspect of sustainability, the four countries are compared in table 2. in these comparisons, it is evident that kenya has had the best achievements in measures for national power capacity expansion and reduction of capacity deficits. the country has also done best in promotion of large-scale renewable energy use for national power demand fulfillment, in part employing a feed-in tariff strategy. international journal of sustainable energy planning and management vol. 05 2015 47 said m. abdallah, hans bressers, joy sheila clancy 48 international journal of sustainable energy planning and management vol. 05 2015 energy reforms in the developing world: sustainable development compromised? table 1: key elements of electricity supply industry reforms (authors compilation) kenya malawi rwanda tanzania 1. energy policy formulation a. original made within the last ten years x x x x b. revised once in the last ten years x c. revised twice in the last ten years x 2. legislative framework setting x x x x a original made within the last fifteen years x b. revised at least once in the last fifteen years 3. restructuring of national power utility x x x x a. internal reorganization done x b. unbundling to separate bodies done x x x x c. private sector allowed in power supply x x x d. private power generation achieved x x x e. management contract established 4. regulatory framework setting (note 1) x a. solely for electricity x b. for energy generally x c. for water and electricity x d. for utilities generally 5. rural electrification and sustainable energy (note 2) a. rural electrification in energy ministry x b. rural electrification by national utility x c. separate body for rural electrification x x d. large-scale renewables (less large hydro) x x e. rural electrification with renewables x x x 1. where regulatory reforms involve as many energy forms as possible, and where non-energy utilities are included as the regulators' mandate, higher levels of sustainability could be expected 2. rural electrification in a government ministry could suffer from bureaucratic barriers; and if included in national power utilities commercial interests of the utilities could override electrification efforts. standalone bodies for electrification are therefore more desirable. similarly, electrification would lead to greater sustainability if renewables are used and small-scale technologies are given priority alongside the large-scale ones. table 2: levels of attainment from measures towards sustainable electrification and development (authors compilation) magnitude achevement of policy measures kenya malawi rwanda tanzania power capacity deficits reduction xxx x xx x electricity tariffs increase xx x xxx xx electricity access expansion in rural areas xx x xxx xx off-grid power development xx x xx xx inclusion of renewable energy in total electricity supply mix* xxx x xx x application of renewables feed-in tariffs xxx n/a xx xx deployment of rural people and resources for power provision xx x xx xx development of complementary non-electricity renewables xx x xxx xx key: x = low, xx = medium, xxx = high *besides large hydropower contribution however, the renewable energy sources are to a very large extent used for power fed into the central grid. if the same level of attention had been given to small-scale renewable resources, the highest power benefit would have been gained by rural areas where the resources are largely found. for rwanda and tanzania, there are also intensive efforts to meet national power demand needs, but rwanda is more successful in this respect. use of renewable resources is additionally more pronounced in rwanda. overall, specific stimulus for sustainable rural electrification and development is indicated by a) achievements of measures towards electricity access expansion; b) use of rural people and resources for direct benefit of rural dwellers; and c) development of nonelectricity forms of renewable energy. in all these respects rwanda has the best rating followed by kenya and tanzania at nearly the same level, and malawi trails all the other countries. 3.2. enabling energy policies with specific reference to kenya the study done for this paper revealed that for kenya and east-central african countries, substantial energy policies for enabling electricity reforms were largely absent when the reforms commenced. as indicated at the beginning of this paper, the reforms were mainly informed by dictates of external influences, such as world bank prescriptions for energy sector reforms in developing countries. increasingly comprehensive energy policies were designed and implemented in the course of electricity reforms, in part to anchor the reforms in a policy framework. this is why energy policy reviews are included as part of electricity reforms described in the preceding subsection of the paper. energy policies have continued to grow as reforms have progressed. after start of kenyan electricity reforms in 1997, the first fully fledged energy policy was enacted in 2004 [82] and the latest (2014) policy is in the last stages of formulation [83]. as the kenyan energy policies have evolved, they have gradually embraced a vision with a growing sustainable development objective, and from analysis of their intent they seem to have been guided by a futures studies perspective. however, the sustainability aspect of energy policy visions appears to be partially blunted, largely by some continuing outdated planning practices that do not conform to futurist (futures studies’) ways of thinking, and political distortions. evidence in support of this contention includes: 3.2.1. the right vision followed by a slow or skewed implementation characterized the 2004 kenya energy drawing from the 2004 government of kenya policy document [84], the vision was: to promote equitable access to quality energy services at least cost while protecting the environment. even without explicitly saying so, the vision had a sustainability focus, through intention of pursuing integrated social (equitable), environmental, and economic goals. however, two years after the enactment of the policy (in 2006), a report that reviewed planning for implementation of the policy had a statement from the minister in-charge of national planning saying: “while we are proud of the progress that has been made, we are aware that our policies and planning processes have not been able to fully integrate all the dimensions of sustainable development. there has been a tendency to focus more on economic development and comparatively less on social and environmental dimensions. yet, if we are to achieve the millennium development goals (mdgs), an adequate level of integration is critical” (unep [85]). another part of the unep report implicitly indicates that traditionally there has been an absence of a futures studies perspective of planning, especially in relation to energy policy. in particular, the revelation was in the statement: “there are considerable weaknesses in kenya’s energy planning with no systematic attempts to undertake integrated processes. most energy projections in kenya, with the exception of electricity have relied on historical growth” (unep [86]). 3.2.2. some sustainability focus gains were lost in the 2014 incoming energy policy, and in other government strategies. according to the policy document [87] the vision is: affordable quality energy for all kenyans. although the vision is strong on the economic dimension of development, and has an element of social equity, it is silent on the environmental aspect of development. it may be rightly argued that the mission statement and body text of the policy have important considerations for strengthening sustainability and a futures study perspective. for example, the policy underscores stakeholder participation in policy making. additionally, decentralized planning and development processes are emphasized, and use of more environment-friendly technologies is targeted. international journal of sustainable energy planning and management vol. 05 2015 49 said m. abdallah, hans bressers, joy sheila clancy however, the policy’s main thrust is accelerated expansion of energy supply, with its key objective being provision of adequate electricity for industrial development. large-scale renewable energy and fossilfuel technologies are expected to be the main source of power. little consideration is given to sources of energy that could spur socio-economic development for the underprivileged majority of people, who heavily rely on biomass and other small-scale technologies. environmental concerns are also given low level priority. while the 2014 energy policy is undergoing finalization processes, a short-term strategy for rapidly up-scaling the current national power production by three-folds is underway. the politically-driven strategy, like the proposed 2014 energy policy, is substantially economics-centred; and aims at raising the national power capacity by 5000 mw within the period 2013 to 2016 [88]. importantly, the additional capacity is expected to be installed during the term of the current government, while implementation of the major national projects for which the capacity is designed will take much longer. critics therefore argue that there will be stranded capacity and investments immediately after completion of installation of the additional power. what has become clear is that no systematic studies have been done for the strategy. furthermore, the futures studies’ approach to energy planning and policy making that has been gaining ground in the country is in this strategy largely disregarded for political expediency. 4. discussion in summary, the analysis done indicates that initially electricity reforms in developing countries were largely based on market considerations and were mostly prescribed in the context of international development assistance. during implementation of electricity reforms in under-developed countries it was found necessary to reshape the reforms to cater for sustainable development requirements that have a much lower priority level in the developed world. elements of the reforms such as rural electrification with a strong social focus and that are mindful of environmental concerns were gradually but in a limited way prioritized. at the same time, need was appreciated for energy policies for guiding sustainability targeted reforms for energy generally and electricity in particular. therefore, as electricity reforms progressed, design and implementation were done for energy policies that follow a path to sustainability, as advocated by futures and other studies. in the particular case of kenya, electricity reforms have been undertaken as part of wider energy sector reforms and have progressed relatively rapidly. most attention has, however, been directed towards meeting the fast rising national power demand, and significant electricity price rises have been implemented as part of electricity reforms. nonetheless, the price increments have not been sufficient to meet power investment demands. upward adjustments in prices to cater for the required investments have generally been opposed by stakeholders. power users and those concerned about their wellbeing, have particularly been apprehensive of reduced power affordability and resulting erosion of socio-economic standards for the general population. implicitly, there has been concern that the reforms would have negative consequences for sustainability, especially in the social dimension of sustainable development. again for kenya, rural electrification and renewable energy have been given increasing attention in efforts towards expanding electricity access. however, gridbased electricity supply has been the main means of electrification delivery, requiring large investment capital at the expense of off-grid electrification. additionally, renewable energy has been promoted, but with low priority being placed on small-scale technologies. low prioritization of the technologies which are appropriate for sustainable rural electrification and development has been a significant factor in slow growth of sustainability. overall, the electric power reforms in kenya which have been implemented and are ongoing are certainly comprehensive. this is particularly true in respect of fulfillment of power capacity needs for industrial development. from this perspective, kenya provides important lessons for other countries of sub-saharan africa and specifically for tanzania, rwanda, and malawi considered in this paper. the importance being placed by kenya on rural electrification and renewable energy is also noteworthy. nonetheless, the kenyan energy policies and strategies that are shaping electricity reforms are heavily skewed towards the economic aspect of sustainability. energy policies and strategies could benefit significantly through reforms’ lessons from the other countries that have been studied. in particular, the countries have addressed social and environmental concerns of sustainability, and there are useful lessons for kenya in this regard. 50 international journal of sustainable energy planning and management vol. 05 2015 energy reforms in the developing world: sustainable development compromised? it is also evident that in kenya small-scale renewable technologies, and off-grid electrification, are of secondary importance despite their capacity for accelerating sustainable development. therefore, kenyans could learn from countries like rwanda which have prioritized the technologies and the off-grid approach to electrification. the lessons include: i) a proportionate mix of on-grid and off-grid electrification approaches; ii) a wide application of small-scale renewable energy sources that are available in rural areas and compatible with off-grid electrification; and iii) concrete strategies for government supported biomass technology application strategies. it is acknowledged that rwanda’s example is not yet a best practice case, but the example is an indicator for kenya to seek and apply electricity reforms that more soundly support sustainable development. kenya’s electricity supply industry reforms provide a good indication of attempts at replicating models of such reforms as found in many countries of the developed world. the kenyan reforms also serve as an example for those seeking to make models focused on economic efficiency more compatible with sustainable development. clearly, the endeavour to align the models with sustainability is not an easy one and many trade-offs are required. to a large extent, due to challenges of the alignment, kenya is still way behind in achieving electrification that can spur sustainable development. for achievement of the sustainability goal, the country will need to elevate the level of priority of sustainability-driven rural electrification and related energy enhancement strategies. this will require a scale-down of the current high prioritization of national power capacity expansion, which is at the expense of sustainable electrification that could serve the majority population residing in rural and poorer parts of urban areas. rwanda, which has a modest level of electricity reforms, has some lessons that could benefit kenya in the reorientation of the prioritization. it is also evident from the findings of this paper that there is critical need for policies and institutions that could support energy growth with a sustainable development end-goal. in the case of kenya, there is a dynamic growth of energy policies and institutions generally. however, sustainability seems to be a peripheral consideration in pursuit of the growth. a similar situation exists for the other countries explored in this paper, but rwanda is doing better than all the others. in all cases, it is deemed important for a clear strategy for creation and implementation of sustainability targeted policies and institutions. national governments with support from the international development community and local ngos should spearhead the strategy at country level. then, where there are sub-national governments, such as in kenya, the national strategies could be replicated at the local government level. in the latter case, local ngos and grass-roots organizations should be deeply involved in the strategy making and implementation. 5. conclusion of great importance is the need for kenya energy policy makers to fully adopt and keep on the track of a policy making approach informed by futures studies. political pursuits that are forcing the policy making away from the approach would need avoiding or minimization. in the work done for this paper, the scope was not wide enough to cover energy policy practices in a sufficiently large number of countries to facilitate generalization of findings. nonetheless, from anecdotes that the authors have encountered in their work, it can be surmised that political distortions in energy policy making process are not unique to kenya. further research is recommended for confirmation or giving other observations about the assumption; and subject to the confirmation, what has been suggested for kenya could be extrapolated to the general case. on the other hand, we agree with nilsson et al. [89] that futures studies should also be developed sufficiently to be able to take into account unavoidable political interests in the policy making. policies and strategies guided by the studies would be more robust if inevitable political factors are duly acknowledged and internalized. this paper has mostly been based on evidence of successes and failures in electricity industry reform measures that have been undertaken in the study countries. it is recommended that further research is done to fully evaluate impacts of the measures. outcomes of the research could give a stronger indication of successes and failures of the reforms and modifications needed to achieve a higher level of sustainability, and appropriately inform energy policy making. nevertheless, the pointers provided in the paper could provide important inputs for policy and academic work relating to electricity supply industry reforms in a kenyan and sub-saharan africa context. furthermore, energy policy making needs to be studied more broadly to find out the extent to which futures studies’ perspectives have been adopted. such international journal of sustainable energy planning and management vol. 05 2015 51 said m. abdallah, hans bressers, joy sheila clancy research could enable advancement of adoption of futures studies’ approaches to a greater extent than is the case at present. the research could also facilitate adjustment of analytical processes in the studies to take into account unavoidable factors like political influences in energy policy making. acknowledgement this paper has benefited from inspiration and encouragement from professor frede hvelplund of aalborg university, denmark; todd ngara, phd, of unep-risoe dtu, denmark; and jorge rogat, phd, of unep-risoe dtu, denmark. the authors highly appreciates the contributions. references [1] pollitt m, energy liberalization in historical context, presentation at spanish association of energy economists conference, pamplona 27 january 2012, http://www.eprg.group.cam.ac.uk/wp-content/uploads/ 2012/01/pamplonatalkpollitt.pdf accessed 3rd march 2013. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice international journal of sustainable energy planning and management vol. 36 2022 11 international journal of sustainable energy planning and management vol. 36 2022 11–18 *corresponding author – e-mail: juan.osorio@uach.cl abstract this paper is a commentary on ‘decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies’ –an article published by babonneau et al. in the energies journal. on the one hand, our aim is to point out and discuss some issues detected in the article regarding the literature review, modelling methods and cost assumptions, and, on the other hand, to provide suggestions about the use of state-of-the-art methods in the field, transparent and updated cost assumptions, key technologies to consider, and the importance of designing 100% renewable multi-energy systems. furthermore, we end by highlighting suggestions that are key to modelling 100% renewable energy systems in the scientific context to contribute to expanding the knowledge in the field. commentary and critical discussion on ‘decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies’ juan carlos osorio-aravenaa,b*, jannik haasc, arman aghahosseinid, and christian breyerd ainnovative energy technologies center, universidad austral de chile, campus patagonia s/n, 5950000 coyhaique, chile buniversity of jaén, campus las lagunillas s/n, 23071 jaén, spain cdepartment of civil and natural resources engineering, university of canterbury, christchurch 8041, new zealand dlut university, yliopistonkatu 34, 53850 lappeenranta, finland keywords 100% renewable energy, energy system modelling, chile, sector coupling, literature review, energy transition, energy planning http://doi.org/10.54337/ijsepm.7392 1. introduction we would like to thank the authors babonneau et al. [1] of “decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies” for their efforts into understanding alternatives to decarbonize and reach a 100% renewable-based electricity system in chile, which is essential for mitigating climate change. in summary, babonneau et al. [1] simulate the evolution of the power system using a long-term planning model that identifies investments and operation strategies to meet demand and co2 emissions reductions at minimum cost. the used model considers representative days to simulate operations and analyse scenarios with different renewable energy (re) and emission reduction targets by 2050, including carbon capture and storage (ccs) technologies. the authors conclude that it is preferable to invest in ccs technologies rather than to aim for a 100% re scenario. however, we would like to point out some issues detected, in order to avoid misinforming the readers, which we assume had been unintended. concretely, we think their literature review and modelling methods deserve attention (see sections 2 and 3 below). we would also like to take the opportunity to give suggestions about the use of state-of-the-art methods in the field, transparent and updated cost assumptions, key technologies to consider, and the importance of designing 100% renewable multi-energy systems (see sections 3, 4, 5, and 6). mailto:juan.osorio@uach.cl http://doi.org/10.54337/ijsepm.7392 12 international journal of sustainable energy planning and management vol. 36 2022 commentary and critical discussion on ‘decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies’ 2. literature review and discussion in general, a comprehensive and critical literature review of available methods and case studies in the field is fundamental not only for providing an appropriate background to the readers but also to have a solid foundation on which to discuss and build new knowledge. babonneau et al. [1] did include several articles on 100% re system models applied to different parts of the world, namely europe [2], france [3], germany [4], canary islands [5], japan [6], and columbia [7]. however, they failed to identify all previously published articles on 100% re analyses for chile, which we count to be at least seven. refer for example, to the planning exercises on chile’s electricity system [8–12] and the work that also addressed the power, heat, transport, and desalination sectors [13, 14], while an even more comprehensive study investigating different scenario options and utilising sector coupling features [15] has been published in the same month that babonneau et al. [1]. comparing the findings of babonneau et al. [1] to this existing body of literature would have been essential to show whether the obtained results were in line to the published ones, or if they shed light on new findings that might have not been previously reported. 3. use of state-of-the-art methods using state-of-the-art methods is key in science, especially in modelling 100% re scenarios, which has seen several hundreds of studies in the last years (for example each of these reviews [16–22] have dealt with dozens of studies). one of the drawbacks of the study in question, is its low temporal resolution: eight typical days corresponding to weekday and weekend of the four seasons. this introduces errors, as two out of the three big challenges of integrating renewables (variability, location-specificity, and uncertainty) are structurally not captured by the model. these errors have been analysed in the literature, for example by prina et al. [23]. in this sense, kotzur et al. [24, 25] have found resolution deviations in seasonal variations of time-slices that are used in 100% re modelling, and pursiheimo et al. [26] point out that a full hourly modelling of 100% re would be better suited. this is mainly because an overly simplistic timeresolution, like an annual energy balance or time-slices, is incapable of quantifying the real need for flexibility; neither is such a resolution able to model the competition and complementarity of the diverse flexibility options (such as grids, flexible generation, storage, sector coupling, demand response). another issue is that timeslices do not allow for the use of consistent weather data (e.g. wind flows and weather patterns of days and weeks, but also representative days impact the real complementarity between solar and wind resources and flow and dynamic of real weather development), thus hurting the meaningfulness of the results. this becomes significantly more important since weather data has an impact on the economically optimal design of re systems [27]. in short, using typical days is outdated, compared to the now-standard fully-resolved, hourly and sequential year for analysing re systems. this is due to various related issues such as: (i) being incapable of describing the variability of renewable generation and the resulting requirements for shortand long-term flexibility that could trigger investments in storage infrastructure [24, 25]; (ii) the increasing difficulty of defining “typical” days: what sets or conditions of load, solar, and wind are actually representative and how are critical operating conditions being considered [18]; (iii) the impossibility of representing climate-spacetime correlations needed to capture persistent weather conditions (like multi-week droughts which show to be critical condition for highly renewable systems [28]); and (iv) being incapable of capturing the advantages of hydroelectricity, especially in regards to buffering energy unbalances beyond the daily horizon in a region that is rich in hydro dams. according to brown et al. [29], hansen et al. [20], prina et al. [23], and breyer et al. [22], state-of-the-art in 100% re modelling use full hourly-time resolution, especially with the objective of capturing the various forms of flexibility, in order to achieve optimized energy system solutions, which is complemented by a broad portfolio of energy technologies. 4. usage of transparent and up-to-date cost projections technology cost projections are key parameters for expansion planning exercises, as these are technoeconomic models. babonneau et al. [1] mention two refences regarding cost assumptions, but do not list those cost projections used by technology in the paper. given their critical relevance for the tractability and reproducibility of the study, we suggest that in future international journal of sustainable energy planning and management vol. 36 2022 13 juan carlos osorio-aravena, jannik haas, arman aghahosseini, and christian breyer works, technology cost assumptions to be expressly shown. a good way to assess the quality and transparency in modelling energy scenarios is to use the checklist suggested by the german aerospace center [30]. this is also important because of rapidly falling technology costs and how energy modelers tend to underestimate them. in this sense, xiao et al. [31] and victoria et al. [32] found how outdated assumptions about cost lead to stark distortions in the results of energy scenarios. concretely, as can be observed from table 1, babonneau et al. [1] reported 10% of concentrated solar power (csp), 22% of solar photovoltaic (pv) and 45% of wind energy of the total installed capacity by 2050. the levelized cost of electricity (lcoe) of the system table 1. installed capacity for key technologies and lcoe in the 100% re scenarios applied to chile (results for 2050). sectors technology installed capacity (gw) lcoe of the system (€/mwh) babonneau et al. [1] power csp 6.17 not given solar pv 14.1 wind onshore 28.9 total (system) 63.4 gaete-morales et al. [10] power csp 2.1–5.5 67.8–72.4 solar pv 15.1–25.8 wind onshore 12.4–13.1 total (system) 53.4–62.1 haas et al. [8] power csp not included 35.8–44.0 solar pv 38.0–62.0 wind onshore 38.0–20.0 total (system) 82.0–88.0 haas et al. [9] power csp not included 34.6–38.5 solar pv 49.5–57.2 wind onshore 26.6–30.4 total (system) 82.3–93.8 osorio-aravena et al. [14] power, heat, transport and desalination csp 0.44 36.0 solar pv 43.6 wind onshore 24.8 total (system) 87.2 osorio-aravena et al. [15] power, heat, transport and desalination csp 0.00 25.7–26.0 solar pv 216–233 wind onshore 3.1–3.8 total (system) 238–254 14 international journal of sustainable energy planning and management vol. 36 2022 commentary and critical discussion on ‘decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies’ was not informed. these results seem to be in line with gaete-morales et al. [10] (that used 2010–2014 learning curves for estimating future capital costs based on 2015 costs), who reported a 4–9% of csp, 28–42% of solar pv and 21–23% of wind onshore of the total installed capacity by 2050, and 67.8–72.4 €/mwh as the lcoe of the system. however, these results differ significantly from current articles on 100% re applied to chile. in these studies, for instance, csp is not considered or resulted in negligible amounts due to its higher costs. and solar pv and wind onshore play a much more important role, ranging from 46–92% and 1–46% of the total installed capacity by 2050, respectively. the found lcoe of the system is significantly lower in these studies with a range of 25.7–44.0 €/mwh [8, 9, 14, 15], where the lower end comes from the most recent study with the most up-to-date cost assumptions [15]. perhaps most importantly, solar pv is today seen as predominant technology in most state-to-the-art studies and by industry deployment, even more so in sunny regions, such as chile, as documented in breyer et al. [21]. however, babonneau et al. [1] found 2.7 to 16 times less solar pv installed capacity by 2050 as other 100% re studies applied to this country. this issue underlines the criticality of using not only transparent but also up-to-date cost assumptions, to avoid distorted results. for instance, the use of simplified methods and outdated cost assumptions that involve ccs technology with fossil fuel-based electricity generation can mislead the readers into thinking that perhaps this technology is a choice for the energy transition, which favours the fossil fuel industries. according to the recently published world energy outlook report [33], fossil ccs has higher levelized cost of electricity than all relevant renewable power technologies. this is also mirrored by the other studies applied to chile [8, 9, 14, 15]. they have shown that a 100% re system could be substantially lower in cost than a base-generation fossil ccs. in fact, green renewable hydrogen was expected to become competitive during the 2020s based on 2021 natural gas prices, but based on 2022 natural gas prices reached that target by now in becoming significantly cheaper than blue hydrogen –from natural gas with ccs– in major markets [34] and in chile will be cheaper than any other option before 2030 [35]. in addition to fossil ccs being a costly technology, it only captures 90% of the co2, thus not adequate for zero co2 emissions without further net-negative options. 5. key missing technologies the market today offers a manifold of flexible technologies that can buffer the variability from renewable generation. it is important to include these flexible technologies in the model, going far beyond a single-generic storage option [18]. chile in particular, offers a breath of options going from existing hydropower dams (their turbines could be upgraded), a great geothermal potential for electricity and heat purposes [36], a vast potential for pumped hydro energy storage (phes) [37], existing and future battery projects, the currently discussed hydrogen strategy (which would likely have national storage) with indirect power sector balancing from electrolysers [15]. as previously mentioned, the results of babonneau et al. [1] differ significantly from other 100% re articles applied to chile [8, 9, 14, 15]. these studies at least have included phes and h2 storage in the analysis. therefore, for more credibility in the results based, in addition to considering the existing hydropower dams and batteries, we strongly recommend involving phes and h2 storage in the energy system modelling. in fact, the inclusion of different storage technologies is key for modelling and planning flexible multi-energy systems with a high share of variable renewable sources [38, 39]. 6. broaden the analysis from the power sector to the entire energy system most of the research articles on 100% re have focused on the power sector, with the extension towards crosssectoral analysis becoming state-of-the-art in the literature [20]. this trend of multi-sector planning started in the 2010s [18] and has been gaining ground ever since [20]. in fact, out of the 30 peer-reviewed articles on 100% re systems that have reported a share of solar pv greater than 50% by 2050, 14 of them have been carried out including all sectors in the analysis [21]. power sector analyses are starting to become increasingly limited in meaning, because massively integrating lowcost electricity from solar pv and wind is rather direct. instead the open questions relate to how to transmit this cheap electricity to all energy sectors, either by electrification of demand or by green e-fuels [22, 40]. acknowledging these other sectors in turn impacts the electricity sector design, not only in terms of generation but also in terms of flexibility technologies [41]. international journal of sustainable energy planning and management vol. 36 2022 15 juan carlos osorio-aravena, jannik haas, arman aghahosseini, and christian breyer 7. concluding remarks in this paper, we have pointed out some issues detected in babonneau et al. [1] regarding the literature review, modelling methods and cost assumptions. we have also taken the opportunity to provide suggestions in the research field on 100% re systems. firstly, we have detected that the study in question neglected all previous works on the modelling of the 100% re system applied to chile. secondly, we have shown differences in technology recommendations between the commented paper with most of the previous work. for instance, the study in question found a share of solar pv (which is the predominant technology already today) by 2050 that is 2.7 to 16 times less than other existing studies for the region. we argue that the differences can be attributed to not using state-of-the-art methods, using outdated cost assumptions, limited modelling of flexibility technologies, and addressing only the power sector. we also described the main problems arising from these issues. finally, to contribute to expanding the knowledge in the field, we would like to highlight some suggestions that are key to modelling 100% re systems in the scientific context: 1. apply state-of-the-art methods with special attention to the time resolution, i.e. use an hourly time resolution for a fully-resolved sequential year to capture the variability of renewables across the different time-scales. 2. utilize transparent and up-to-date cost assumptions. a helpful guide on transparency in modelling energy scenarios is provided in reference [30]. 3. include multiple flexibility technologies with a focus on the diverse storage solutions that already exist today, including at least diurnal (like batteries and pumped hydro) and seasonal storage (like hydrogen and hydropower dams). 4. address the energy system (electricity, heat, transport, water) as a whole, as the open challenges mainly refer to the sectors beyond electricity, but planning for these sectors also impacts the electricity sector. references [1] babonneau f, barrera j, toledo j. decarbonizing the chilean electric power system: a prospective analysis of alternative carbon emissions policies. energies 2021, vol 14, page 4768 2021;14:4768. https://doi.org/10.3390/en14164768. 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[12] probe into industrial energy savings as an important element in the energy transition. the authors studied energy efficiency measures, applied multi-criteria assessment for the prioritisation and developed a tool for these promethee ii, which was subsequently applied to a case company. a key element in the transition of the industrial sector is the electrification of the sector as explored by sorknæs [13] and for which johannsen and co-authors [14] developed european pathways. appiah investigated the uptake of renewable energy sources in the ghanese industry [15], tötzer investigated urban manufacturing [16] and østergaard and co-authors [17] investigated the energy system effects of changing compositions of industry and sustainable energy planning and management vol 37 poul alberg østergaard*, rasmus magni johannsen department of planning, aalborg university, rendsburggade 14, 9000 aalborg, denmark mailto:poul@plan.aau.dk http://doi.org/10.54337/ijsepm.7715 2 international journal of sustainable energy planning and management vol. 37 2023 sustainable energy planning and management vol 37 other sectors and derived effects on temporal demand patterns. barkhordar [18] investigated the rebound effect with a focus on industry. in this volume, szép et al. [19] investigate the usage of solid fuels in residential heating in central and eastern europe, finding that many households are in a dual trap; trapped between biomass and natural gas. natural gas provides a better local environment but makes residents susceptible to market changes – while the biomass alternative provides poorer local air quality but without the strong market exposure. szép has previously reported analyses on residential savings in hungary [20] and more broadly on the european union [21] in this journal. biomass usage is a recurring theme in 100% renewable energy transition studies (see e.g. [22]), thus while it is a renewable energy source for house heating, as a restricted source, it has better potential uses where it can provide flexibility [23]. local air polution has also previously been a motivation for the study of alternatives [24]. kumar et al. [25] investigate the prospects of rooftop solar installations in india with a focus on the residential sector, finding financial feasibility. previous work in this journal in india has presented analyses on hydropower [26] and energy efficiency [27]. in addition, several analyses have investigated photo voltaics. this includes analyses from a spatial perspective [28–30] and analyses focusing on acceptance and adaption [5,31–33]. finally, in this volume, romero and co-authors [34] investigate the effects of biofuel usage in developing countries on the regional economy and employment. the authors stress amongst others “the relevance of measuring exhaustively the effects of renewable energy in the economy, environment, and society” and “the distinction between transient and more permanent effects of alternative policies”. a previous study in this journal has focused on employment effects in portugal [35]. abdallah stressed the inclusion of employment effects in his work on kenya [36] and bishoge did the same from a tanzanian perspective [37]. references [1] edomah n. who triggers change? social network mapping, stakeholder analysis and energy systems interventions in nigeria’s electricity sector. int j sustain energy plan manag 2023;37. http://doi.org/10.54377/ijsepm.7246. 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economic growth, climate change and the lack of consistent and continuous energy planning are some of the problems related to planning and monitoring energy supply systems. due to the lack of regional studies on expansion planning considering the water-energy-emissions nexus and its consequences, this work presents an integrated analysis of a case study on how changes in water supply and economic growth can impact hydropower and electricity generation in the state of minas gerais. the main results include the reduction in hydropower generation at the end of the study horizon (2019 – 2049) between (-16.8%) and (-7.8%) considering water restriction scenarios. the final electricity demand, in the reference scenario, increased by 40.8% and in alternative scenarios there was an increase between 63.6% and 89.5% when reductions in the rainfall regime were considered. water-energy-emissions nexus – an integrated analysis applied to a case study leonardo barrouin meloa, antonella lombardi costaa, fidellis bitencourt gonzaga louzada estanislaua*, carlos eduardo velasqueza, angela fortinia, gustavo nikolaus pinto mourab adepartment of nuclear engineering, universidade federal de minas gerais, av. antônio carlos, 6627, pampulha, cep 31270-901, belo horizonte, mg, brazil bdepartment of production engineering, universidade federal de ouro preto, campus morro do cruzeiro, s/n, bauxita, cep 35400-000, ouro preto, mg, brazil keywords water-energy-emissions nexus; energy planning model; carbon emissions; power system; hydropower production; http://doi.org/10.54337/ijsepm.7349 abbreviations ana – agência nacional de águas – brazilian water agency aneel – agência nacional de energia elétrica – brazilian electric energy agency ben – balanço energético nacional – brazilian energetic balance cemig – companhia energética de minas gerais – minas gerais energy company hgd – hydro gen dry scenario hgp – hydroelectric generation plants hgvd – hydro gen very dry scenario hgw – hydro gen from weap scenario hpp – hydroelectric power plant ibge – instituto brasileiro de geografia e estatística – brazilian institute of geography and statistics ipcc – intergovernmental panel on climate change leap – low emissions analysis platform ons – operador nacional do sistema elétrico – brazilian electricity grid operator p.a – per annum pvp – photovoltaic plant sei – stockholm environment institute shp – small hydroelectric plant thp – thermoelectric plant weap – water evaluation and planning mailto:fidellis01@gmail.com http://doi.org/10.54337/ijsepm.7349 20 international journal of sustainable energy planning and management vol. 36 2022 water-energy-emissions nexus – an integrated analysis applied to a case study 1. introduction the brazilian power system is based on hydropower production, a very different situation in relation to several others countries where the participation of fossil fuels in electricity generation is dominant. according to the brazilian electricity regulatory agency (aneel) [1], there are three types of hydropower plants in the country: hydroelectric generating plant (hgp): with up to 5 mw of installed capacity; small hydroelectric power plants (shp): between 5 mw and 30 mw of installed capacity and reservoir area up to 13 km²; hydroelectric power plant (hpp): between 5 mw and 50 mw of installed capacity as long as they are not classified as shp, or with more than 50 mw of installed capacity. in 2020, the hydropower plants were responsible for 60.7% of electricity generation in brazil [2]. for instance, the scarcity of rains in 2021 caused a reduction in the level of the reservoirs of the main brazilian hydroelectric power plants and the consequent reduction in the supply of hydroelectricity by 8.5%. this drop was offset by the increase in the supply of other sources, such as steam coal (+47.2%), natural gas (+46.2%), wind (+26.7%) and solar photovoltaic (+55.9 %) [2]. therefore, achieving a stable and reliable electricity supply throughout the years has been a challenge for the power system operators, due to seasonal fluctuations and a significant change in the rainfall regime. studies have shown the fragility and risks to which the socioeconomic and energy systems are susceptible. firstly, those fragilities related to the irregularity of natural water distribution. secondly, the persistence of drought [3]. thus, despite relatively abundant water availability in brazil, some concepts are changing, among them the outdated perception that this resource will never end. protecting water resources means a permanent challenge for governments since their demand grows steadily in the development models considered by policymakers. the total amount of water withdrawn for human use increased by approximately 80% from 1997 to 2017. additionally, projections show another increase of 30% by 2030 based on the year 2017 [4]. brazil had a power crisis that led to compulsory consumption reductions in 2001, due to the lack of planning of the electricity sector during liberalization reforms in the power sector and due also to restrictions related to transmission capacity among regions. several actions have been implemented since the crisis to increase power security, such as the construction of new transmission lines and increased interconnection between distant regions [5]. in 2014, a serious water supply crisis affected mainly the southeast of the country, diminishing water availability for human consumption and impacting this region that has the highest population concentration [6]. the state of minas gerais is located in the southeast region and it is of paramount importance for the brazilian hydropower system due to the existence of large power plants in its territory. in the following years, there was some increase in the rainfall precipitations, but at the end of 2017, the hydroelectric reservoir levels in the southeast region still reflected the drought crisis of 2014/2015. figure 1 shows the hydroelectric and thermoelectric generation in minas gerais, according to the brazilian electricity grid operator (ons) in the period between 2000 to 2018. a drop in hydropower generation can be observed from 2012 onwards due to the drought and in compensation the increase in the electricity generation by thermoelectric plants [7]. figure 2 shows electricity imports and exports data from the state of minas gerais [8]. traditionally, minas gerais is a net power exporter to other states, but from 2013 onwards, electricity imports have exceeded exports, as mainly consequence of the drop in hydropower production. considering this challenging scenario, this study aims to assess how changes in the water supply and economic growth could impact hydropower generation in minas gerais between 2019 and 2040 based on five different scenarios. more specifically, the results allow one to observe the behaviour of the electric production of the 22 largest hydroelectric power plants in the state of minas gerais in the horizon of 30 years; to identify opportunities for penetration or expansion of the supply from other energy sources that can contribute to electric generation; to identify the behaviour of greenhouse gas (ghg) emissions for the analysed scenarios. the verification of the continuous loss of the capacity to export electric energy by the state of minas gerais shows probable future consequences for the planning of the electric operation in the country, given the role of the state in this context. thus, the originality of this work lies in the planning of the expansion of electric generation, which considers the state dimension of the international journal of sustainable energy planning and management vol. 36 2022 21 leonardo barrouin melo, antonella lombardi costa, fidellis bitencourt gonzaga louzada estanislau, carlos eduardo velasquez, angela fortini, gustavo nikolaus pinto moura 0 10 20 30 40 50 60 70 80 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 tw h thermoelectric hydroelectric figure 1: power generation: hydroelectricity and thermoelectricity in minas gerais. adapted from [7]. figure 2: data of energy imports and exports from minas gerais state. adapted from [8]. 22 international journal of sustainable energy planning and management vol. 36 2022 water-energy-emissions nexus – an integrated analysis applied to a case study water-energy nexus and its consequences, in the context of economic development and climate change. this type of study has not yet been carried out for minas gerais. to this end, the water evaluation and planning system weap [9] and the low emissions analysis platform leap [10] models were used. both models were developed by the stockholm environment institute sei for integrated planning and analysis of water resources policies and analysis of energy policies, and assessment of climate change mitigation, respectively. 1.1. the resource nexus the meaning of the resource nexus, the categorization of energy systems and the modelling tools that can support decisions to design policies have been explored in the study of smertzidis, 2015 [11]. the author has provided an overview of various tools used to address the resource nexus. the starting point was the worldwide increase in resource consumption as billions of people are moving towards a better lifestyle while one billion people will remain in poverty. these are complex topics to be assessed and quantified; the leap model is mentioned as a tool which performs an analysis of energy systems of a city, a state, a country, between countries and globally. in another work, the authors presented models dealing with the water-energy-food nexus to better understand what is already known, looking for what may be missing and identifying opportunities and challenges for modelling this nexus [12]. they have identified the following challenges and considerations: the complex interactions and dynamics of the systems constitute the biggest challenges in modelling the nexus; the complexity in collecting detailed input data for a spatial-temporal model; incorporating spatial distribution into the planning approach is an important consideration for nexus modelling; incorporating temporal variation in weather patterns is another important assumption. according to [13] there are three motivators for the emergence of the resource nexus concept: the interdependence of resources, stimulated by their growing scarcity; increased frequency of resource supply crises; and failures of sector-driven management strategies. an important contribution of this study was the synthesis of the importance of the nexus concept, by clarifying that this concept represents the most recent change in scientific and political thinking towards integrative thinking to face global changes and challenges. almulla et al., (2018) have considered the role of energy-water nexus on the impacts that would occur for the countries in the drina river basin with improvement of cooperation and energy efficiency. they used the open source energy modeling systemosemosys to develop a multi-country model with a simplified hydrological system to represent the cascade of hpps in the considered basin [14]. moreover, the impact that climate change could have on hydropower generation and the consequences for the expansion of the electricity system in the zambezi basin region, africa, have been investigated by [15]. the authors also considered the pressure exerted on the demand for resources, resulting from the population increase in the south african region, from 260 million people in 2012 to approximately 500 million in 2042. hydropower generation, which accounts for 40% of total capacity in southern africa, is critical to ensuring the region’s energy security and stability. when interferences related to the climate change affect hydropower production, several countries in the region may experience difficulties in power generation. the methodology used by the authors involved the use of integrated models (water and energy), tested in future development scenarios, using the leap and weap models, considering the supply and demand of energy and water. the “nexus concept” and the leap and weap tools were also addressed by other researchers whose studies considered the water-energy relationship in the chinese port city of xiamen [16]. the challenge pointed out by the authors lies in the enormous pressure on the environment and on resources, including water and energy, due to population growth, especially in urban areas. they considered that the analysis of the waterenergy nexus, using computational tools, was little explored from the perspective of demand and even less on a municipal scale. thus, the authors presented a dynamic, quantitative and synergistic framework for modelling the water-energy nexus at the urban scale based on leap and weap models. the scenario analysis was applied to examine the cross-sectoral impacts of different future policy choices, including changes in industry structure, conservation and water and energy supply alternatives, both considering the supply and the demand aspects. international journal of sustainable energy planning and management vol. 36 2022 23 leonardo barrouin melo, antonella lombardi costa, fidellis bitencourt gonzaga louzada estanislau, carlos eduardo velasquez, angela fortini, gustavo nikolaus pinto moura 1.2. challenges and limitations this work consists of modelling the supply and demand of electric energy using constructive data from the largest hydroelectric power plants located in the state of minas gerais, as well as the average flow data in these power plants. the scenarios of changes in the water regime through hypotheses of water scarcity and economic growth allow for verifying the probable consequences in the hydroelectric generation in the horizon of study, estimating the impacts of the ghg emission and identifying externalities. the main limitations of the research developed are related to the use of weap and leap. all models are data-limited and have difficulties in dealing with multiple scales of interaction and even an inability to capture complex ecological and social implications. the choice of these models was supported by the following reasons: • reliability, technical and scientific breadth based on published works; • availability of enough data for the models to work properly; • models known in the academic environment; • availability of instructional material, including international discussion forums to clarify doubts and exchange experiences on the website of each program. in addition, the elaboration of a computer modelling work requires the availability of a large number of data and definitions, to portray the existing physical reality as faithfully as possible. at this point lies a known difficulty, the lack of updated data for what it proposes to do. this problem was partially overcome through the search for related scientific and academic works, as well as the adoption of premises for the construction of scenarios. the technical and restricted data of the hydroelectric power plants were also made available by the energy concessionaire of the state of minas gerais cemig (minas gerais energy company). because it is a prospective research and it analyses the variations of certain characteristics, or parameters, for a long period, it is difficult to project such parameters in the future. therefore, the hypothesis and assumptions already represent a limitation of the study. another limitation comes from the lack of data related to the effective influences of climate change on short-term precipitation regimes – short when compared to ipcc study periods (50, 70, 100 or more years) –, which makes it difficult to correlate between hot and dry years and the reduction of flows in the reservoirs of the hydropower plants. therefore, the ceteris paribus condition was used to verify the changes caused by different stimuli in the system’s inflows and also to quantify the hydroelectric generation. 2. methodology in previous work, the authors drew attention to the fact that the reduction in rainfall levels may increase in the coming years and result in a probable change in the energy matrix configuration of the brazilian state of minas gerais [17]. to deepen the studies, this work use weap and leap models to assess water scarcity scenarios. the results of hydropower generation, with the creation of assumptions and scenarios, are obtained in the weap model. the results of the changes in the production of energy from hydroelectric sources in these scenarios are sent directly to the leap model, where the representation of supply and demand of the current electricity matrix of the state of minas gerais is modelled and where the future evolution of the installed capacity will be projected. 2.1. weap model for modelling in weap, the following input data are required, depending on the applications desired by the user. the data required can be seen in table 1: the data used in this work are in the reference [18] including the data about the plants located in minas gerais, provided by the cemig, and the average data of the flows obtained from the ons. the calculation method that the weap algorithm uses to obtain power production can be checked in the weap user’s guide [19]. the weap model was used to simulate the electricity generation in the horizon from 2019 to 2049 of the 22 largest hydroelectric power plants (hpp) located in the state of minas gerais, in a deterministic approach. these 22 most representative hpp in terms of granted capacity are identified in table 2. 2.2. leap model the leap modelling operates on two basic conceptual levels. at one level, built-in calculations of the leap handle energy, emissions, and cost-benefit accounting operations. at the second level, the users enter 24 international journal of sustainable energy planning and management vol. 36 2022 water-energy-emissions nexus – an integrated analysis applied to a case study table 1: input data required by weap input data reservoirs total storage capacity; initial reservoir volume (amount of water stored); volume/elevation curve (relationship between the volume and the elevation of the reservoir); evaporation (monthly net evaporation rate: evaporation minus precipitation on the reservoir surface); groundwater “losses” (reservoir infiltration into groundwater). operation maximum volume of water in the reservoir; maximum security level (below this level, water releases will be restricted); maximum level of inactivity (reservoir volume not available for allocation). hydroelectricity maximum turbine flow (in m³/s); water elevation (maximum water level over the turbine); plant availability factor (percentage of time per month of the hydroelectric plant’s operation); generation efficiency (ratio between the electrical energy generated and the hydraulic energy that enters the system). water courses historical series of flow at the points of the hydroelectric plants. climate precipitation (historical series, monthly average); temperature (historical series, monthly average). table 2. hydroelectric power plants (hpp) in minas gerais [20]. hpp (names in portuguese) start of operation (day/month/year) power (mw) itumbiara 24/04/1980 2082.0 marimbondo 25/10/1975 1440.0 água vermelha (old josé ermírio de moraes) 22/08/1978 1396.2 furnas 04/09/1963 1216.0 emborcação 02/08/1982 1192.0 nova ponte 01/01/1994 510.0 marechal mascarenhas de moraes (old peixoto) 01/04/1957 492.1 miranda 30/05/1998 408.0 irapé 20/07/2006 399.0 três marias 01/01/1962 396.0 simplício 05/06/2013 333.7 aimorés 30/07/2005 330.0 porto colômbia 29/06/1973 320.0 amador aguiar i (old capim branco i) 21/02/2006 243.7 amador aguiar ii (old capim branco ii) 09/03/2007 210.0 funil 30/12/2002 180.0 baguari 09/09/2009 140.5 guilman amorim 02/11/1997 140.0 risoleta neves (old candonga) 07/09/2004 140.0 porto estrela 04/09/2001 112.0 queimado 16/06/2004 105.5 salto grande 01/01/1956 102.0 total: 11888.7 international journal of sustainable energy planning and management vol. 36 2022 25 leonardo barrouin melo, antonella lombardi costa, fidellis bitencourt gonzaga louzada estanislau, carlos eduardo velasquez, angela fortini, gustavo nikolaus pinto moura expressions which can be used to specify time-varying data or to create a wide variety of sophisticated multivariate models, allowing econometric approaches and simulation to be incorporated into the overall leap accounting framework. leap is designed around the concept of scenario analysis. the scenarios consider distinct assumptions of how an energy system might evolve over time. using leap, it is possible to create and evaluate alternative scenarios, comparing their energy requirements, their social costs and benefits, and their environmental impacts. in order to model in leap, the following data are required, depending on the application desired by the user: demographic data; economic data; general energy data (data contained in the energy balance such as production and consumption, by sector, national energy policies and plans, annual statistical reports for each energy source, emissions, and others); demand data; transformation sector data; environmental data; fuels data. the data required for the leap model were obtained from several references, such as data about the state energy matrix [8], population data [21], energy supply technologies [22] and restricted data about the hpps in the state of minas gerais [23]. in this work, characteristic parameters of generation technologies were used, obtained from the [24], as shown in table 3. there is no forecast for the entry of new hydroelectric plants in the study horizon. for the other sources, growth rates obtained from the granted capacities were adopted, according to aneel data [25]. 2.3. leap-weap connection the weap and leap programs are very similar tools in design and operation. both were developed at sei stockholm environment institute, with mutual collaboration between the development teams of each program, so they share some technical characteristics. after selecting the scenarios that will be developed in each model, the configuration data that describe the weap model are read by the leap, based on the choices of elements that will be mapped between them. an error check button makes it possible to verify any connection problems. it is necessary to observe four restrictions that apply to the connection between models: 1. both models must have the same base year and study horizon; 2. in leap, there must be only one year specified for data entry in current accounts mode; 3. the leap model must have only a single region; 4. leap and weap must have exact correspondence in terms of time slices, usually monthly. table 3. characteristic parameters of generation technologies [24]. technology investment cost us$/kw fixed cost us$/kw variable cost us$/gj capacity factor % efficiency % lifetime years biogas 2449 50 1.8 85 40 25 biomass incineration 1905 13 0.5 66 35 25 photovoltaics 1944 40 0 25 25 25 photovoltaics distributed 3000 40 0 32 25 25 fuel oil 1400 25 1.7 85 15 20 hydro large 2939 45 1 na 100 60 hydro small 3499 35 1 na 100 60 hydro strategic large 2351 26 0 na 100 60 natural gas combined cycle 1260 20 2.5 85 57 30 natural gas open cycle 583 10 2.5 85 38 40 nuclear (plwr and phwr) 7200 115 3.1 85 35 40 wind on-shore 1620 36 0 31 100 30 na = not available 26 international journal of sustainable energy planning and management vol. 36 2022 water-energy-emissions nexus – an integrated analysis applied to a case study 2.4. scenarios the modelling aims to investigate and quantify the behaviour of hydropower generation in plants located in the state of minas gerais, according to the definition of the assumptions, as well as pointing out the needs for expanding the generation capacity of the electricity supply system. to this end, five scenarios were established; they are presented and classified in table 4. the hgw is the reference scenario. in this scenario, the current data of the variables are based on the year 2019; there is no forecast of changing parameters influenced by policies or regulations. the monthly averages of the last 20 years for the flow recorded by ons, data from the plants and the considerations for the energy demand are the necessary information to start the study of this scenario. the energy intensity increases 1.0% per annum based on the previous year. the lack of data related to the effective influences of climate change on short-term precipitation regimes – short when compared to intergovernmental panel on climate change (ipcc) study periods (50, 70, 100 or more years) – makes it difficult to correlate hot and dry years and the reduction of flows in the plants’ reservoirs. thus, the ceteris paribus condition was used to verify the changes caused by different stimuli in the system’s inflows and also to quantify the hydropower generation, as it was explained earlier in the section 1.2. thus, in the first scenario of water restriction, hgd, an average reduction of 0.5% p.a. was defined in the inflow of hydroelectric plants. for a sequence of very dry years, the hgvd scenario was designed, with the adoption of the index of 1.0% p.a. of water restriction. for both scenarios of water restriction, the increase of energy intensity is the same as for the reference scenario, hgw. such reductions for river inflows, 0.5% and 1%, could even be considered as optimistic reductions. however, they serve the purpose of shedding light on how the substitution of the hydropower source would have an additional environmental burden. more pessimistic forecasts indicate that between 2007 and 2040 these reductions in the river inflows located in basins in the southeast region may reach 59% and 63% [26, 27]. this equates to an average reduction in flow rate of 1.4% to 1.5% per year. the energy scenarios defined in leap were designed to observe responses to demand growth under different assumptions and assume economic growth reflected in energy intensity – ei (kwh/inhabitant). the d1 scenario imposes a growth of 1.5% p.a. for this parameter and, in the d2 scenario, the growth rate is 2.0% p.a. these indexes follow the initial assumption for this parameter, adopted in the hgw scenario, plus 0.5% and 1%, respectively, for scenarios d1 and d2, in order to quantify the interference in the values of electricity for demand and supply. the growth assumption for ei is based on the recorded history of the energy balance of minas gerais (beemg), since the beginning of the series in 1978, an average annual growth rate of 2.97% p.a. until 2017 [8]. thus, for the hgw, hgd and hgvd water scenarios, the value of 1% p.a. was adopted for this parameter, in order to maintain a conservative pattern of growth in relation to that calculated (2.97% p.a.). 3. results the ei growth for the hgw reference scenario is shown in figure 3, being 4100 kwh/inhabitant in 2019 table 4. definition of the scenarios classification scenario abbreviation premises reference hydro gen from weap hgw no policies or regulations (ei: +1.0% p.a.) climatic (flow rate) hydro gen dry hgd dry scenario (flow rate: -0.5% p.a.) climatic (flow rate) hydro gen very dry hgvd very dry scenario (flow rate: -1.0% p.a.) energetic (ei) demand 1 d1 economic growth (ei: +1.5% p.a.) energetic (ei) demand 2 d2 strong economic growth (ei: +2.0% p.a.) ei = energy intensity (kwh/inhabitant) international journal of sustainable energy planning and management vol. 36 2022 27 leonardo barrouin melo, antonella lombardi costa, fidellis bitencourt gonzaga louzada estanislau, carlos eduardo velasquez, angela fortini, gustavo nikolaus pinto moura figure 3: energy intensity in energy scenarios in kwh/inhabitant. table 5. energy generation from hpps in water scenarios, in twh scenario 2019 2020 2025 2030 2035 2040 2045 2049 hgw 43.5 43.5 43.5 43.5 43.5 43.5 43.5 43.5 hgd 43.5 43.4 42.9 42.4 41.8 41.2 40.6 40.1 hgvd 43.5 43.3 42.3 41.1 39.9 38.6 37.3 36.2 table 6. electricity generation in energy scenarios, in twh. scenario 2019 2020 2025 2030 2035 2040 2045 2049 hgw 86.8 103.7 111.8 119.6 126.9 133.6 139.6 144.0 d1 86.8 104.2 115.1 126.3 137.3 148.2 158.8 167.0 d2 86.8 104.7 118.6 133.3 148.5 164.3 180.4 193.5 until the end of the period, when it will reach 5526 kwh/ in habitant in 2049 considering that this index is the total consumption of electricity of the state of minas gerais per inhabitant and encompass all economic sectors. the ei growth is the same observed in the hgw scenario for the hgd and hgvd water restriction scenarios. in fig. 3, the hgw reference scenario is compared to scenarios d1 and d2, when applying the ei growth indices to the energy scenarios. at the end of the study period in 2049, the ei growth in scenarios d1 and d2 will be higher than in the hgw reference scenario, demonstrating the growth in electricity demand per inhabitant, of 1.5% p.a. in d1 and 2.0% p.a. on d2. energy generation, exclusively from the hpp in the hgd and hgvd water scenarios, is presented in table 5 related to the water restriction in the inflows of the hpp. these are results from the weap and which are later used by leap for the composition with the other energy sources to meet the final energy demand. 28 international journal of sustainable energy planning and management vol. 36 2022 water-energy-emissions nexus – an integrated analysis applied to a case study in the leap energy scenarios, the results of power generation are presented in table 6, in twh. total electric energy losses in transmission and distribution, including technical losses those inherent to the distribution processes and non-technical losses were estimated at 15%, an index close to the average calculated (14%) by utilities [28]. this results in a difference between the results in table 6 and figure 4. it can be considered that the value of electricity demand of 86.8 twh, in the base year 2019, already considers the index of technical and non-technical losses. the year 2020 was the first year of the projection calculated by leap and considers the discount of these losses from then on in the study horizon, according to the specific field for inserting this parameter (losses) in the leap software. this explains why the same value appears in table 6 and figure 4 for the year 2019. in the water scenarios, there is a reduction in electricity generation in the study horizon, according to the assumptions. as it is possible to verify in table 7, in the hgd scenario, the annual generation value of the hpp is decreasing over the study period, while the electricity production by photovoltaic plants (pvp) and thermoelectric plants (thp) increase. figure 4: final electricity demand in energy scenarios, in twh. table 7. electricity generation hgd scenario, in twh. source 2019 2020 2025 2030 2035 2040 2045 2049 pvp 1.2 1.8 2.4 3.0 3.4 3.8 2.8 4.1 thp biomass 3.2 6.5 8.6 10.6 12.2 13.5 9.8 14.6 thp fossil 1.8 8.8 11.5 14.1 16.3 18.1 25.4 20.7 electricity import 32.4 35.4 38.1 41.1 44.2 47.6 51.3 54.5 shp 4.0 6.4 6.7 7.1 7.4 7.8 8.2 8.5 hgp 0.8 1.4 1.4 1.4 1.4 1.5 1.5 1.5 hpp 43.5 43.4 42.9 42.4 41.8 41.2 40.6 40.1 total (twh): 86.9 103.7 111.8 119.6 126.9 133.6 139.6 144.0 international journal of sustainable energy planning and management vol. 36 2022 29 leonardo barrouin melo, antonella lombardi costa, fidellis bitencourt gonzaga louzada estanislau, carlos eduardo velasquez, angela fortini, gustavo nikolaus pinto moura table 8 shows a more severe reduction for hpp electricity generation in the hgvd scenario, which implies a greater share of generation and dependence on pvp and thp sources to meet the demand. as table 9 shows, in the energy scenarios in which there is greater growth of the ei and with the limitation of the hpp source, the largest growths of the other sources are observed. the total demand in the d1 scenario is almost 16% higher than in the hgw scenario. in the scenario d2, there is the greatest variation in ei in the study horizon when it reaches 7426.6 kwh/in habitant in 2049, as it can be seen in the table 10, according to the initial assumption for this scenario. the result of this modelling points to a growth of 34% in relation to the hgw scenario; it is a scenario especially more intensive in the use of the fossil source. the predictions for the ghg emissions considered only the two more significant sources, thp biomass and thp fossil; the results are shown in figure 5 for all scenarios. the estimated ghg emission results presented in the figure 5 have significant growth in all scenarios. the model shows a decrease for two renewable sources, pvp and thp biomass, from 2040 to 2045. this decrease is filled by thp fossil, what increases ghg emissions in 2045. on the other hand, these renewable sources grow again in 2049, regaining their place at the expense of thp fossil. consequently, a reduction in ghg emissions can be observed. these values indicate the possibility of the growth of externalities associated with emissions. the way to mitigate these externalities may occur through the implementation of policies to encourage the increase of energy efficiency with greater rigor, as well as making solar energy effectively important in the state energy matrix, eventually subsidising the dissemination of this technology. the state of minas gerais has excellent conditions for expanding the distributed generation of photovoltaic solar energy, through microgeneration systems (up to 75 kw) and minigeneration (above 75 kw up to 5 mw) implemented in homes, businesses, industries, public buildings and rural properties, although they were not considered in this work. as it was the first time these scenarios were evaluated, there are no other results to compare. however, considering that the results obtained followed the table 8. electricity generation hgvd scenario, in twh. source 2019 2020 2025 2030 2035 2040 2045 2049 pvp 1.2 1.8 2.5 3.1 3.6 4.1 3.0 4.6 thp biomass 3.2 6.6 8.9 11.0 12.9 14.5 10.7 16.0 thp fossil 1.8 8.8 11.9 14.8 17.3 19.4 27.7 22.7 electricity import 32.4 35.4 38.1 41.1 44.2 47.6 51.3 54.5 shp 4.0 6.4 6.7 7.1 7.4 7.8 8.2 8.5 hgp 0.8 1.4 1.4 1.4 1.4 1.5 1.5 1.5 hpp 43.5 43.3 42.3 41.1 39.9 38.6 37.3 36.2 total (twh): 86.9 103.7 111.8 119.6 126.9 133.6 139.6 144.0 table 9. electricity generation scenario d1, in twh source 2019 2020 2025 2030 2035 2040 2045 2049 pvp 1.2 1.9 2.7 3.6 4.4 5.2 4.2 6.2 thp biomass 3.2 6.7 9.7 12.7 15.5 18.2 14.7 21.7 thp fossil 1.8 9.0 13.0 16.9 20.8 24.4 35.3 31.1 electricity import 32.4 35.4 38.1 41.1 44.2 47.6 51.3 54.5 shp 4.0 6.4 6.7 7.1 7.4 7.8 8.2 8.5 hgp 0.8 1.4 1.4 1.4 1.4 1.5 1.5 1.5 hpp 43.5 43.5 43.5 43.5 43.5 43.5 43.5 43.5 total (twh): 86.9 104.2 115.1 126.3 137.3 148.2 158.8 167.0 30 international journal of sustainable energy planning and management vol. 36 2022 water-energy-emissions nexus – an integrated analysis applied to a case study expected behaviour, and that the programs used in the simulations are widely used by the academic community to perform these types of predictions, we can say that the model was qualitatively validated. the next step would be to redo the scenarios using other tools to enrich the found results. 4. conclusions in this work, an integrated analysis of the water-energyemissions nexus was presented. computational models developed on leap and weap were used to predict scenarios considering cases of decreasing in the rainfall regime in the brazilian state of minas gerais and increasing energy intensity. final electricity demand, in the reference scenario, increased by 40.8% and, in alternative scenarios, there was an increase between 63.6% and 89.5% when reductions in the rainfall regime were considered. hydroelectric power generation reduces by 7.8% if the flow rate reduction is 0.5% per year according to the hgd scenario. on the other hand, a reduction of 16.8% table 10. electricity generation scenario d2, in twh. source 2019 2020 2025 2030 2035 2040 2045 2049 pvp 1.2 1.9 3.1 4.3 5.6 6.9 6.1 8.9 thp biomass 3.2 6.9 11.0 15.3 19.8 24.3 21.5 31.3 thp fossil 1.8 9.2 14.7 20.5 26.5 32.6 48.3 45.3 electricity import 32.4 35.4 38.1 41.1 44.2 47.6 51.3 54.5 shp 4.0 6.4 6.7 7.1 7.4 7.8 8.2 8.5 hgp 0.8 1.4 1.4 1.4 1.4 1.5 1.5 1.5 hpp 43.5 43.5 43.5 43.5 43.5 43.5 43.5 43.5 total (twh): 86.9 104.7 118.6 133.3 148.5 164.3 180.4 193.5 figure 5: ghg emissions results for all scenarios. international journal of sustainable energy planning and management vol. 36 2022 31 leonardo barrouin melo, antonella lombardi costa, fidellis bitencourt gonzaga louzada estanislau, carlos eduardo velasquez, angela fortini, gustavo nikolaus pinto moura in hydroelectric power generation occurs when the flow rate reduction is 1.0% per year according to the hgvd scenario. these reductions in hpp were supplied by the expansion of pvp and thp. the scenarios of increased energy intensity, d1 and d2, showed an increase in demand, in 2049, 16% and 34% higher than in the base scenario, hgw, respectively. since hydroelectric plants have restrictions on increasing their installed capacity, this increase in demand was almost entirely supplied by thp. about the estimation of ghg emissions, two energy sources, thp biomass and thp fossil have significant growth in all scenarios, indicating the possibility of the externalities increasing associated with emissions. a possible way to mitigate these externalities is directly connected with policy implementation to encourage the increase of energy efficiency with greater rigour and also with the possible insertion of other energy sources, for example, solar and nuclear energy in the state energy matrix, eventually subsidising the dissemination of these technologies. the results found are important when discussing the planning of the expansion of the electrical system. the characteristic of reliability is a fundamental condition to guarantee the supply of future energy demand. therefore, it is necessary to plan the expansion of the energy system, since the environmental restrictions for the construction of new large hydroelectric projects are even more restrictive. furthermore, it is necessary to discuss the technical availability for the viability of these projects since the complementation of these projected capacities falls on the other energy sources. therefore, such results are extremely important for decisionmaking about the future of the energy matrix of the state of minas gerais and its influence on the national energy matrix. future work could: evaluate the importation of electricity to the state of minas gerais, considering the impacts of water restrictions in other regions of the country; study the water balance of hydroelectric plants, carry out projections and evaluate the issue of energy security in the state of minas gerais in the long term, considering the age of the plants in operation; consider the assessment of the resource nexus between water and energy, and quantify the flow of hydrographic basins for different uses, under adverse conditions; use other planning programs to verify the results found. acknowledgments the authors are grateful to brazilian research funding agencies: comissão nacional de energia nuclear (cnen), conselho nacional de desenvolvimento científico e tecnológico (cnpq), coordenação de aperfeiçoamento de pessoal de nível superior (capes) and fundação de amparo à pesquisa do estado de minas gerais (fapemig). references [1] aneel agência nacional de energia elétrica. resolução normativa n° 875, de 10 de março de 2020. diário oficial da união, brasília, 16 mar. 2020, ed. 51, seção 1, pp 60. https:// www.in.gov.br/web/dou/-/resolucao-normativa-n-875-de-10de-marco-de-2020-248070610 (accessed april 24, 2022). 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https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 https://app.powerbi.com/view?r=eyjrijoinjc4ogyyyjqtywm2zc00yjlllwjlymetyzdkntq1mtc1njm2iiwidci6ijqwzdzmowi4lwvjytctndzhmi05mmq0lwvhngu5yzaxnzblmsisimmiojr9 _hlk114071698 _hlk114224151 _hlk114140118 _hlk114069845 au_35.indb international journal of sustainable energy planning and management vol. 35 2022 83 *corresponding author – e-mail: kofikarikari@yahoo.com international journal of sustainable energy planning and management vol. 35 2022 83–96 abstract although, the renewable energy act 2011 (act, 832) was enacted to facilitate development and investment in the renewable energy sources in ghana as part of the efforts to achieve sustainable development goal 7,the actual impacts of the policy are yet to be felt as manifested in the amendment act 2020 (act, 1045).there is the need to develop alternative model to enhance investment in the renewable energy sector. drawing from the resources based view (rbv) and porter’s five forces this paper is aimed to develop a simplified model to explain small and medium enterprises (smes) investment determinants in the renewable energy sources in ghana. we argued that the simplified integrated model provides robust predictability and wider generalization. our paper is anchored on the positivists’ epistemology and quantitative methodology. our hypotheses have been tested using a cross sectional data from the ghanaian smes. variance based partial least squares (pls) method has been used to analyze the survey data. our results indicate that entrepreneurial competency, financial resource, marketing capability and technological usage significantly relate to investment in renewable energy. moreover, the results have showed that competitive rivalry, threat of entry and bargaining power of customers significantly relate to investment in renewable energy. these results substantiate the well-known argument that industry forces and resource competitive strategies are significant determinants of firm’s competitiveness and behavioural intentions. overall, these results have theoretical and practical implications to facilitate the capacity of smes and create enabling renewable energy local content policy to enhance sme’s participation in the sector. a simplified model to enhance smes’ investment in renewable energy sources in ghana michael karikari appiah* department of sustainable energy and resources, university of environment and sustainable development, pmb, somanya, eastern region, ghana keywords porter’s five forces; renewable energy sources; resource based view; small and medium enterprise investment http://doi.org/10.54337/ijsepm.7223 1. introduction amidst its priorities, the ghana energy sector development and strategic plan called for renewable energy to account for 10% of the country’s energy production by 2020 [1]. to achieve this goal, the ghanaian parliament enacted the renewable energy act (act no. 832 of 2011), which provides the legal and regulatory framework for the development and expansion of the renewable energy sub-sector in ghana [2]. the act aims to establish a favorable regulatory and fiscal regime and attractive tariff incentives for the development and deployment of renewable energy [3], [4]. its provisions will support the development, deployment, and efficient management of renewable energy in the country, while contributing to climate change mitigation [5]. the act provides for the establishment of a renewable energy framework, the creation of an enabling environment for renewable energy investments, the development of indigenous capacity in renewable energy technologies, the training of the public sector in the production and use of renewable energy, and the regulation of the production and supply of fuels and biofuels [4], [6]. although, the 84 international journal of sustainable energy planning and management vol. 35 2022 a simplified model to enhance smes’ investment in renewable energy sources in ghana renewable energy act 2011 (act, 832) was enacted to facilitate development and investment in the renewable energy technologies in ghana as part of the efforts to achieve sustainable development goal 7, and paris climate agreement, but the actual impacts of the policy are yet to be felt as manifested in the amendment act 2020 (act, 1045)[1], [2]. there is the need to develop alternative model to encourage indigenous investment in the sector. prior studies [7], [8] have argued that modeling investment strategy for smes will not only expedite stability and growth in the industry, unarguably it will also ensure dynamics and strategic positioning for sustainability. existing competing theories such as the porters’ five-forces model and rbv have become imperative in the formulation of business strategies due to mainly competitiveness brought about by globalization. developing a winning strategy has however become very challenging especially when only a single model or theory is relied upon. recent studies [3,9] averred that effective strategic process is built through integrations of many theories or models. with respect to the external factors, [10] forces are employed by smes to formulate effective competitive strategy of which [11] avowed those competitive strategies as measures, plans and patterns employed by an organization to achieve business goals and objectives usually in a turbulent and dynamic business environment. as explained, an organization can develop competitive strategy by relying on only the internal resources of the firm likewise, a firm can base on external favorable conditions to formulate a business strategy [12]. nevertheless, it is very appropriate for firms to ensure that there is an integration of multiple theories and models to develop fierce competitive strategies that could stand the test of time [13], [14]. the paper thus, suggest that combining both internal and external factors together overtime can win competitive advantage for smes and can also strengthen smes to invest in emerging industries such as the renewable energy sources in a low resource context. drawing from the rbv and porter’s five forces this paper is aimed to develop a simplified model to explain smes investment in renewable energy sources in ghana. the paper argued that the integrated model provides robust predictability [15] and wider generalization of results [16]. this paper is expected to contribute immensely towards investment in the renewable energy sector: foremost, previous studies [17], [18] argued that the internal resource approach was the best way to develop investment strategy wherein internal resources such as entrepreneurial competency, financial resource, knowledge sharing marketing capability and technological usage were utilized in modeling business strategy. moreover, the available evidence [9], [19] further suggests that environmental approach with a focus on industry forces such as competitive rivalry, threat of entry, bargaining power of customers, degree of substitutes, and bargaining power of suppliers as determinants of business strategy and survival. in the present paper the researcher has modelled a simplified model by integrating the both the internal determinants and environmental determinants into a simple model to enable smes conduct quick assessments of the investment environment to enhance their investment propensity in the sector. secondly, this paper is among the very few studies in ghana to develop a simplified model to enhance smes investment participation in the renewable energy sources in order to ensure access to affordable, reliable and modern and sustainable energy. besides, most previous studies [15], [18] concentrated mostly in developed and high-income economies, there is the need to conduct a paper which focus on the emerging economy to address this knowledge gap. it is against this backdrop that the present paper is conducted to ascertain how smes competitive resources and the industry forces affect its investment behaviour in the renewable energy sector with a focus on the ghanaian smes. the reminder of the report is organized as follows: the review of pertinent literature has been presented in the next section, which is followed by the methodology adopted for the paper, then the results of the paper, discussions, conclusions and implications. 2. theoretical framework this paper is anchored on two main competing theories namely; rbv theory and porter’s five forces model. rbv theory is based on the proposition that a firm drives its sustained competitive advantage from inimitable, rare, valuable and non-substitutable resources [12], [13]. that is the ability of smes to create or acquire these resources will exert influences on their investment behaviour. apparently, given the highly competitive nature of the renewable energy sector, a robust theoretical model was needed to explain the extent to which ghanaian smes can use their internal resources, skills and capabilities to gain a competitive international journal of sustainable energy planning and management vol. 35 2022 85 michael karikari appiah the overall investment landscape of a given industry [19], [20]. the five forces include; competitive rivalry, threat of entry, bargaining power of customers, degree of substitutes, and bargaining power of suppliers [21], [22]. using porter’s five forces framework, smes are able to assess the renewable energy sector and take investment decision. the application of porter’s model in this study is justified on the basis that, given the inherent competitive nature of the renewable energy sector, applying porter’s five forces analysis to ghana’s renewable energy sector is crucial to enable sme owners to identify threats and opportunities facing their business and focus their resources on developing unique opportunities that could give them a competitive advantage in the renewable energy sector [20]. such an assessment is important because it helps smes understand the market conditions in the re sector [21]. besides, porter’s model helps to predict supply and demand and thus the economic performance of companies [22]. again, porter’s five forces help to assess the threat of new entrants, the threat of substitution, the bargaining power of suppliers and the bargaining power of buyers [21]. all these factors contribute to the competitiveness of an industry. this will help smes to understand the current competitive situation in the industry so that they can adapt their business strategy accordingly. porter’s model provides information on the strengths of suppliers and buyers, as well as the risks of advantage and invest in renewable energy. this paper presents a resource-based theory of competitive advantage as a framework to describe, understand and predict the traditional adoption and diffusion of renewable energy technology investments by smes. the inclusion of rbv theory in this study is justified on the basis that sustainability of a firm’s innovation (e.g., renewable energy technology) is based on (1) the internal resources of the firm providing the innovation, (2) the firm’s ability to exploit these resources, (3) the competitive advantage provided by the firm’s resources and capabilities [8], [14], (4) the attractiveness of the market in which the firm competes [16], and (5) the impact of the innovation on the firm’s financial performance [7]. this paper argues that resource-based competitive advantage theory provides a framework for comparing the results of different research frameworks and studies in the context of renewable energy investments and business models. it is asserted that the resource-based approach is a sound strategy and that it is still necessary for a company to achieve sustainable competitive advantage by focusing on its resources, capabilities and competences. the researcher therefore argues that, ghanaian smes that are able to acquire and maintain these unique resources would be able to take investment opportunities in the renewable energy sector. as a compliment to the rbv theory, porter’s five forces model has been utilized as a framework to assess explanatory variables investment behaviour dependent variables compe��ve resources (rbv) industry forces (porter’s forces) threat of entry competitive rivalry power of buyers entrepreneurial competency financial resources marke�ng capability technological usage figure 1: simplified research framework 86 international journal of sustainable energy planning and management vol. 35 2022 a simplified model to enhance smes’ investment in renewable energy sources in ghana new entrants and substitutes. it helps sme owners and managers understand their strengths and potential threats. take proactive measures against threats and continue to improve strengths. it is argued in this paper that, there is the need to integrate these two theories to provide robust predictability and wider generalization. inferring from the ongoing arguments the integrated model is developed as showed in the figure 1. 2.1 hypotheses development drawing from the rbv theory and porter’s five forces model, the following seven (7) hypotheses have been formulated to guide the study. 2.1.1 effect of competitive rivalry on smes investment in re sources the level of competition within a given industry has effect on investment decisions of prospective investors, growth and survival. competition between existing firms depends largely on the extent to which direct competition adds value to the industry [23]. competition between firms results from distortions in the structure of the industry, i.e., structural factors such as many or the same competitors, low growth in the industry, high fixed or inventory costs, lack of differentiation or switching costs, high incremental capacity and a large number of competitors [24]. in the renewable energy sector, fierce competition is driven by firm growth, the introduction of new products and the introduction of non-traditional products [25]. rather, competition is the result of competitors recognizing the need to improve the quality of products in order to seize new opportunities [26]. in the renewable energy sector, competition arises when prices, market segments and proximity are similar [27]. according to [27], competition in the renewable energy sector cannot be attributed to any single factor and firms are not independent but rather driven by the actions of other firms. it is influenced by situational effects. this implies that renewable energy companies should not treat their competitors in the same way, as they may affect renewable energy companies differently. inferring from the ongoing argument, the paper proposes that hi: competitive rivalry has positive and significant influence on smes investment in re sources 2.1.2 effect of bargaining power of buyers on smes investment in renewable energy sources in any given industry the extent of customers bargaining power affect investment behaviour. an industry’s growth and success mostly depend on the choices made by the buyers. if buyers fail to procure certain products of a particular industry, the business turns to collapse since the market yields of the industry determines its profitability margins. buyers always compete with the industry by making quest of price reduction whether or not if the industry will run loss [24]. most renewable energy companies counteract the power of customers by introducing loyalty programmes that reward customers for regular purchases of products and services [26]. from the ongoing argument, the paper proposes that: h2: bargaining power of buyers has positive and significant influence on smes investment in re sources 2.1.3 effect of new market entrants on smes investment in re sources the entry requirements of a given industry has effect on the investment decisions. market entrant is the process whereby new competitors enter into an existing industry. most firms face the following barriers to entry: product differentiation, economies of scale, switching costs, capital requirements, access to distribution channels, cost barriers and government policies [24]. the renewable energy sector has high upfront costs, including high capital expenditure and the need to build electricity grids. there is threat of investment in the renewable energy sector by those companies with less experience in the industry [25]. we therefore postulate that: h3: new entrants has positive and significant influence on smes investment in re sources 2.1.4 effect of entrepreneurial competency on smes investment in re sources there are numerous studies that regard entrepreneurial competencies as firm specific strategy [16], [28]. companies have different levels of control over resources, which are unique from one another in terms of their product and services. organizational assets like the human capital, employee capabilities and managerial policies are employed to develop and implement innovative strategies. when the human resource of a company possesses much skill, which is aligned to the company’s requirement, this has positive effect on the performance of an organization [29]. this claim substantiates the argument that, the growth and success of a company emanates from within the organization. hence, organizations that have superior resources coupled with enhanced employee capability lay the international journal of sustainable energy planning and management vol. 35 2022 87 michael karikari appiah bases for companies to gain and sustain a competitive edge over their competitors. we postulate based on the above that: h4: entrepreneurial competency has positive and significant influence on smes investment in re sources 2.1.5 effect of financial resource on smes investment in re sources the next factor considered by researchers [30] include financial resources. there are number of studies that have touched on the influence of financial resources on smes [8], [19]. smes that have regular adequate financial resources or have access to finances are likely to survive and expand. likewise, smes with the lease financial resources risk survival in the event of fierce competition. this preposition has been supported by researchers like [31]. we hypothesize that: h5: financial resources has positive and significant influence on smes investment in re sources 2.1.6 effect of marketing capability on smes investment in re sources the marketing domain is regarded as important to penetrate the local as well as the international markets [13]. number of businesses also considers the failure experienced by smes to mean the lack of marketing capabilities [32]. the marketing domain is regarded as important to penetrating the local market as well as the international market [18]. the reasons why smes from the international front poses much power is because they have enough marketing resources but the local smes have fewer resources to conduct market research, lacks large and readily accessible market and have brands that are difficult to recognize [33], [34]. we hypothesize from the ongoing that: h6: marketing capability has positive and significant influence on smes investment in re sources 2.1.7 effect of technological usage on smes investment in re sources nonetheless, there are studies that have recognized the significance of smes in the promotion of new and emerging ideas, skills, knowledge, innovations and others through analytical perspectives to enhance their market leadership in their industries [30],[33]. in this regard, technology also play significant role in amassing resource strength. we postulate based on the above that: h7: technological usage has positive and significant influence on smes investment in re sources 3. data and methods 3.1 profile of smes in ghana in ghana, qualitative and quantitative [8], [19] indicators are usually used to classify smes. quantitative indicators include; number of employees and total asset whiles qualitative indicators include; ownership structure, legal status, technological usage and industrial type (agric, industry and services) [35], [36]. ghanaian smes were chosen due to their immense contribution in terms of gross domestic products (gdp) growth, employment, innovation and human resources development to the ghanaian economy in general [37]. we argue that development and growth in the smes sector affect every other aspect of the ghanaian economy. these make ghanaian smes ideal location for the present paper. although individuals answered the survey questionnaires the unit of analysis for the paper is firm level. 3.2 research design the paper employed a quantitative design, which focuses on the use of numerical measures to estimate the degree of occurrence. the quantitative design was chosen due to the following attributes; numerical data collection, it uses a positivism and objectivism approach to address real social situation [38]. quantitative data was collected to develop a simplified model to explain smes investment in renewable energy sources in ghana. the paper also used explanatory research because due to the cause-and-effect relations between the variables. survey strategy was used since, the paper was based on pool of opinions, perceptions and attitudes. these methods were employed due to their consistencies with the positivists’ epistemology and objectivist ontology 3.3 population and sampling procedure the target population of the paper comprised of smes that were registered with ghana enterprise agency (gea) formerly known as (national board for small scale industries (nbssi)) with active membership of six years or better were given priority. the registrar general department is the main agency in-charge of business registration and incorporations in ghana. according to the ghana statistical service report, as low as one percent of all registered business survives within every five years [7]. besides, appiah et al. [8] 88 international journal of sustainable energy planning and management vol. 35 2022 a simplified model to enhance smes’ investment in renewable energy sources in ghana reported that business stability is a major challenge facing formal smes in ghana. a recent report by the ghana enterprise agency (formerly known as national board for small scale industry) reported that, although there are over 1.7 million businesses in ghana, only 2825 formalized smes can be boosted. therefore, this formalized smes formed the population of the study. as part of the selection criteria only smes within kumasi and accra metropolises were selected for the paper due to their respective administrative and commerce positions. according to the records of the nbssi, most registered smes operates in the urban centers due to factors such as large market, different ethical background and diverse customer groups. the sample size used in the paper was extraverted from [39] rule of ten (10) criterion. the minimum sample size of 160was required for the paper based on the number of paths. however, the paper used 475 sample sizes. prior studies [1], [8] have argued that the larger the sample size the better the results. stratified sampling technique was used for the selection of the participants. the industrial type was used as strata, then within each stratum the smes were randomly selected for the paper. this sampling technique was used to reduction in sampling errors and enhancement in representativeness. 3.4 constructs measurement the constructs measurements have been presented in this section. as showed in table 1, the name of the subconstructs, number of items, scale type, and sources of the measurement constructs have been provided. table 1: constructs measurement constructs descriptions (number of items) scaletype sources threat of entry “it is difficult for new sme to enter into re resources” likert’s scale [40] “economic of scale have impact on new entrant in re resources” “access to distribution channels can affect new entrant in re resources” “specialized knowledge can affect new entrant in re resources” “large capital requirements affect new entrant in re resources” “brand loyalty makes it difficult for new entrant to enter re resources” competitive rivalry “the re resources has fewer competitors” likert’s scale “the competition in my area is less fierce” “high barriers lead to competition in re resources” “high product differentiation leads to competition in re resources” bargaining power of buyers “buyer’s abilities to force down prices will affect investment in re resources” likert’s scale [40] “buyer’s demand for high quality product will affect investment in re resources” “buyer’s abilities to switch to competing brands will affect investment in re resources” “the rise in consumer right protection activities will affect investment on re resources” entrepreneurial competency “i have an ambitious goal with clear vision and mission” likert’s scale [40] i have leadership managerial skills and decision-making skill” “i am autonomous, competitive aggressor and risk taker” “i am motivated and have high confident to run my business” “i am innovative and proactive” financial resource “our company has a good financial base and cash resources” likert’s scale [41] “we have accounting systems to manage our operations” “we make use of public financial support and grants” “we keep reports on the sales, purchase and income statement” table 1 continued international journal of sustainable energy planning and management vol. 35 2022 89 michael karikari appiah 3.5 data collection instrument structured questionnaire was the main data collection instrument employed for the paper. the questionnaire instrument was adopted because of its cost effectiveness, and time saving potentials. the questionnaire was structured into three sections comprising of industry forces, internal competitiveness as well as profile of smes with emphasis on firm age, firm size, industry types, location, and legal status. the paper adopted 7-point likert’s type scale due to its predictability effectiveness. to address the issue of non-response, 500 questionnaires were distributed to the targeted participants out of which 488 were received. to obtain accurate data, all suspicious responses were evicted from the original data to ensure accuracy. by this approach, 13 questionnaires were removed. the overall useful questionnaires received were 475.the questionnaires were mostly administered using in-person approach given the low educational profile of majority of the ghanaian smes. in some cases, the questionnaires were interpreted in the local language (twi) for ease understanding. only few of smes requested for drop and pick. these explained why a whopping 95% response rate was attained for the survey. 3.6 data analysis our hypotheses have been tested using a cross sectional data from the ghanaian smes. variance based partial least squares (pls) method has been used to analyze the survey data. the paper concurrently employed smart-pls version 3.0 and statistical package for social science version 23 for the data analyses. construct validity of the measurement scale has been assessed using discriminant and convergence validities. cronbach alpha scores were used to assess the reliability of the measurement scales. the details have been provided in the result and discussion sections. 4. results of the study 4.1 results on exploratory factor analysis (efa) as showed in the table 2, the main purpose of the efa was to explore the underlying factors within the dataset that were appropriate and the suitable for modelling. exploratory factor analysis (efa) is a prerequisite for structural equation model as part of the quality control (validity measure) [1]. appiah et al. [7] have reported that efa is a vital tool for earlier stage of sem analysis. accordingly, meyer-oklin score (kmo) must be > 0.50, constructs descriptions (number of items) scaletype sources marketing capability “we can continuously scan emerging market trends and events” likert’s scale [42] “we are quite alert to changing market conditions” “everyone in our company is sensitized to listen to latent problems and opportunities relating to re resources” “we can anticipate market trends and events accurately before they are fully apparent” “we can triangulate market information from different re resources” “we can effectively listen to, understand and rapidly respond to relevant re resources conversation” technological usage “the use of technology brings along high-tech image” likert’s scale [43] “the use of technology helps us to profile and keep up to date records on our customers” “the use of technology improves working relationship with our suppliers” “the use of simplify operation processes” behavioral intentions to invest “our company will invest in oil and gas due to high probability” likert’s scale [7,8] “our company plan to invest in the re resources” “our company want to invest in the re resources” “our company intend to invest in the re resources” “our company is likely to invest in the oil and gas business” “our company would like to invest in the re resources” author’s compilation table 1 continued 90 international journal of sustainable energy planning and management vol. 35 2022 a simplified model to enhance smes’ investment in renewable energy sources in ghana the bartlett’s tests of sphericity (bts) tests must be significant i.e p<0.05, measures of sampling adequacy must be greater 0.50 (msa > 0.50) and eigenvalue must be >. inferring from the table 1, the results have showed that kmo scores were greater than 0.50 in all cases, the bts showed significant chi-square values in all the cases, eigenvalues were >1 and msa exceeded 0.50, establishing suitability for loading. 4.2 convergent validity and discriminant validity as clearly showed in the table 4, the validity of the model had been assessed using convergent and discriminants validity which respectively replied what measures that were theoretically expected to relate to one another indeed related to each other whiles those that were expected to depart from each other indeed departed from each other. convergent accuracy was assessed using the average variance extracted (ave ≥ 0.5) and composite reliability (c.r ≥ 0.70) drawing from the [44] guidelines. as shown in the table 4, all the ave scores were higher than 0.50, i.e., in the range 0.57-0.87. cr values were higher than the acceptable minimum score (0.70), i.e., in the range 0.84-0.97, suggesting satisfactory ave and cr scores. contrariwise, discriminant validity was accessed by comparing the square root of the aves scores with the scores of the intra-construct correlations. to achieve discriminant validity in the paper the square root of the ave should be greater than the inter-construct correlation which has been showed in the diagonal with italic in the table 4. having satisfied the conditions of convergence and discriminant validity, we proceeded with the path estimation. 4.3 construct reliability as indicated in the table 5 we have again conducted cronbach alpha (α)to validate cr scores. for cronbach alpha to be acceptable a minimum recommended value of 0.70 was required [39]. as indicated in the table 4 the table 2: exploratory factor analysis (efa) construct mean std. d skewness kurtosis loading eigenvalue marketing capability (mc) mc1 5.33 0.69 -0.55 -0.80 0.837 4.41(73.56) mc2 5.25 0.78 -0.47 -1.22 0.964 mc3 5.19 0.74 -0.32 -1.14 0.944 mc4 5.39 0.72 -0.73 -0.74 0.716 mc5 5.45 0.72 -0.92 -0.52 0.930 mc6 5.45 0.72 -0.92 -0.52 0.718 kmo=0.837, x2=2958.020, df=15, p-value=0.000 financial resources (fr) fr1 5.80 0.64 -1.22 2.03 0.950 3.26(81.55) fr2 5.75 0.58 -1.86 2.89 0.885 fr3 5.86 0.61 -1.60 3.66 0.892 fr4 5.87 0.60 -1.68 4.02 0.883 kmo=0.745, x2=1837.162, df=6, p-value=0.000 entrepreneurial competency (ec) ec1 5.53 0.81 -1.24 -0.32 0.970 4.53(90.67) ec2 5.60 0.70 -1.46 0.59 0.956 ec3 5.66 0.69 -1.76 1.41 0.961 ec4 5.47 0.79 -1.06 -0.58 0.944 ec5 5.53 0.79 -1.23 -0.28 0.929 kmo=0.834, x2=3690.582, df=10, p-value=0.000 technology usage (tu) tu1 6.22 0.51 -0.18 2.74 0.827 2.79(69.75) tu2 6.05 0.45 0.23 1.93 0.784 tu3 6.14 0.49 0.28 0.65 0.845 tu4 6.13 0.49 0.30 0.81 0.882 kmo=0.792, x2=856.549, df=6, p-value=0.000 table 2 continued international journal of sustainable energy planning and management vol. 35 2022 91 michael karikari appiah construct mean std. d skewness kurtosis loading eigenvalue threat of entry (te) te1 5.76 0.78 -0.63 0.22 0.837 4.50(74.94) te2 5.70 0.77 -0.66 0.20 0.850 te3 5.67 0.76 -0.56 0.07 0.891 te4 5.58 0.71 -0.84 0.14 0.876 te5 5.57 0.72 -0.81 0.04 0.857 te6 5.58 0.71 -0.86 0.15 0.883 kmo=0.735, x2=2556.020, df=15, p-value=0.000 competitive rivalry (cr) cr1 5.49 0.71 -1.04 -0.29 0.871 2.71(67.85) cr2 5.48 0.71 -0.99 -0.36 0.809 cr3 5.57 0.71 -1.11 0.22 0.839 cr4 5.67 0.65 -1.68 1.49 0.773 kmo=0.815, x2=2253.111, df=6, p-value=0.000 power of buyers (pb) pb1 5.56 0.73 -0.75 -0.03 0.948 3.28(81.95) pb2 5.44 0.68 -0.77 -0.48 0.929 pb3 5.54 0.66 -1.06 0.06 0.851 pb4 5.59 0.65 -1.31 0.47 0.890 kmo=0.775, x2=1873.020, df=6, p-value=0.000 investment behaviour in renewable energy (ib) ii1 6.80 0.40 -1.51 0.27 0.802 4.37(72.79) ii2 6.74 0.44 -1.08 -0.84 0.795 ii3 6.73 0.57 -1.98 2.78 0.897 ii4 6.66 0.61 -1.63 1.47 0.854 ii5 6.86 0.34 -2.12 2.51 0.957 ii6 6.80 0.40 -1.51 0.27 0.802 kmo=0.837, x2=2445.155, df=15, p-value=0.000 table 4: convergent validity and discriminant validity fornell-larcker criterion cr ave bp cr ec fr tu ii mc te te 0.900 0.751 0.193 -0.005 -0.020 0.266 0.106 0.199 0.138 0.816 mc 0.841 0.572 0.821 0.356 0.540 0.297 0.371 0.748 0.827 ib 0.926 0.762 1.053 0.315 0.533 0.505 0.374 0.823 tu 0.972 0.879 0.366 0.060 0.163 0.082 0.836 fr 0.922 0.749 0.493 -0.096 -0.202 0.865 ec 0.867 0.698 0.537 0.519 0.938 cr 0.925 0.684 0.318 0.756 bp 0.913 0.666 0.867 note: square root of average variance extraction (ave) shown on diagonal in italic table 2 continued table 5: construct reliability with cronbach’s alpha construct no. of items cronbach’s alpha mc 6 0.924 fr 4 0.924 ec 5 0.974 tu 4 0.855 te 6 0.933 cr 4 0.841 ib 6 0.924 92 international journal of sustainable energy planning and management vol. 35 2022 a simplified model to enhance smes’ investment in renewable energy sources in ghana cronbach alpha values were greater than the minimum recommended value i.e., cronbach alpha values were of the range 0.841 to 0.974. these results further confirmed the suitability of the internal consistencies of the measurement instruments. 4.4 hypotheses testing – effect of industry forces on investment in re energy as presented in the table 6 we tested our hypotheses on the relationship between industry forces and behavioral intention to invest in renewable energy using the path coefficients. we found that our model had a strong predictive power (81%). thus, industry forces can accurately predict 81% of smes investment in renewable energy sector. for instance, h1 assumed that competitive rivalry significantly related to investment behaviour in renewable energy(β = 0.245, p < 0.05 and t-statistics = 18.671), h2 assumed that threat of entry significantly related to investment behaviour in renewable energy (β = 0.096, p < 0.05 and t-statistics = 5.941), and h3 assumed that power of customers significantly related to investment behaviour in renewable energy(β = 0.106, p < 0.05 and t-statistics = 3.635). all the three (3) hypotheses in this section of the simplified model have been confirmed fully. all the relationships were positive. 4.5 hypothesis testing – effect of competitive resources on investment in re energy as showed in the table 7, we have tested our hypotheses on the relationship between competitive resources on investment in renewable energy using the path coefficients and found that our model had a strong predictive power (70%). thus, competitive resources accurately predicted 70% of smes investment behaviour in renewable energy. for instance h4 assumed that entrepreneurial competency significantly relate to investment behaviour in renewable energy (β = 0.105, p <0.05 and t-statistics = 5.899), h5 assumed that financial resource significantly relate to investment behaviour in renewable energy (β = 0.095, p < 0.05 and t-statistics = 4.006), h6 assumed that technological usage significantly relate to investment behaviour in renewable energy (β = 0.059, p < 0.05 and t-statistics = 6.170) and h7 assumed that marketing capability significantly relate to investment in renewable energy (β = 0.113, p < 0.05 and t-statistics = 5.426). all the relationships were positive. 5. discussion of results this paper drawn on rbv theory and porter’s 5 forces to develop a simplified model to explain smes investment behaviour in renewable energy sources in ghana. the implications of the results have been discussed below. 5.1 effect of industry forces on investment behaviour in renewable energy inferring from porter’s 5 forces the paper hypothesized that porter’s forces such as threat of entry, competitive rivalry and power of buyers have significant relationships with investment behaviour in renewable energy sources. the paper has revealed that threat of entry, competitive rivalry and power of buyers have significant industrial table 6: hypotheses testing – effect of industry forces on investment in re energy hypothesized path path coefficient (β) t statistics r2(adj.r2) results h1: cr->ib 0.245 18.671* confirmed h2: te-> ib 0.096 5.941* 0.86 (0.81) confirmed h3: pb->ib 0.106 3.635** confirmed *p<0.01, **p<05, ***p<0.1 table 7: hypotheses testing – effect of competitive resources on investment in re energy hypothesized path path coefficient (β) t statistics r2(adj.r2) results h4: ec->ib 0.105 5.899* confirmed h5: fr->ib 0.095 4.006* 0.73(0.70) confirmed h6: tu->ib 0.059 6.170* confirmed h7: mc -> ib 0.113 5.426* confirmed *p<0.01, **p<05, ***p<0.1 international journal of sustainable energy planning and management vol. 35 2022 93 michael karikari appiah influence on smes investment behaviour in the renewable energy sources. these results are consistent with porter’s assumption that the five forces provide a framework to assess the overall investment landscape of a particular sector of given business. using porter’s five forces framework, smes are able to assess the renewable energy sector and take investment decision. competition between existing firms depends largely on the extent to which direct competition adds value to the industry [23], [54]. competition between firms results from distortions in the structure of the industry, i.e., structural factors such as many or the same competitors, low growth in the industry, high fixed or inventory costs, lack of differentiation or switching costs, high incremental capacity and a large number of competitors [24], [50]. in the renewable energy sector, fierce competition is driven by firm growth, the introduction of new products and the introduction of non-traditional products [25]. rather, competition is the result of competitors recognizing the need to improve the quality of products in order to seize new opportunities [26]. in the renewable energy sector, competition arises when prices, market segments and proximity are similar [27]. accordingly, [27], [45] asserted that competition in the renewable energy sector cannot be attributed to any single factor and firms are not independent but rather driven by the actions of other firms. an industry’s growth and success mostly depend on the choices made by the buyers. if buyers fail to procure certain products of a particular industry, the business turns to collapse since the market yields of the industry determines its profitability margins [48]. buyers always compete with the industry by making quest of price reduction whether or not if the industry will run loss. as a result, customers demand better quality and service, which causes competitors to fight each other [24], [51]. most renewable energy companies counteract the power of customers by introducing loyalty programmes that reward customers for regular purchases of products and services [26]. market entrant is the process whereby new competitors enter into an existing industry. most firms face the following barriers to entry: product differentiation, economies of scale, switching costs, capital requirements, access to distribution channels, cost barriers and government policies [24], [53]. the renewable energy sector has high upfront costs, including high capital expenditure and the need to build electricity grids [46]. there is threat of investment in the renewable energy sector by those companies with less experience in the industry [25], [55]. 5.2 effect of competitive resources on investment behaviour in renewable energy inferring from the rbv theory, the paper hypothesized that competitive resources of smes such as entrepreneurial competency, financial resource, marketing capability and technological usage significantly relate to investment behaviour in renewable energy sources. the paper has revealed that competitive resources of smes such as entrepreneurial competency, financial resource, marketing capability and technological usage have significant influence on investment behaviour in renewable energy sources. these results are consistent with rbv which stipulate that a firm drives its sustained competitive advantage from inimitable, rare, valuable and non-substitutable resources [12], [13]. we therefore, argue that ghanaian smes that are able to acquire and maintain these unique resources would be able to take investment opportunities in the renewable energy sector. there are numerous studies that regard entrepreneurial competencies as firm specific strategy [16], [28] which has been supported by the present paper. the next factor considered by researchers [30] include financial resources. smes due to their ability to have access to funding resort to family and friends and personal funds, which are woefully limited [47], [52]. limited access to finances invariably restricts large amount of investment, which hinders growth and development within an organizational setting [15,16]. the marketing domain is regarded as important to penetrating the local market as well as the international market [18]. the reasons why smes from the international front possess much power is because they have enough marketing resources but the local smes have fewer resources to conduct market research lacks large and readily accessible market and have brands that are difficult to recognize [34], [49]. nonetheless, there are studies that have recognized the significance of smes in the promotion of new and emerging ideas, skills, knowledge, innovations and others through analytical perspectives to always be the market leader in the industry [30,33]. in this regard, technology also play significant role in amassing resource strength. this suggestion has been supported by researchers like [31]. 6. conclusions and implications the main objective of this paper was to draw on rbv theory and porter’s 5 forces to develop a simplified model to explain smes investment behaviour in 94 international journal of sustainable energy planning and management vol. 35 2022 a simplified model to enhance smes’ investment in renewable energy sources in ghana renewable energy sources in ghana using a cross sectional survey. the key findings emanating from the paper are that threat of entry, competitive rivalry and power of buyers have significant industrial influence on smes investment behaviour in the renewable energy sources. besides, the paper has revealed that competitive resources of smes such as entrepreneurial competency, financial resource, marketing capability and technological usage have significant influence on investment behaviour in renewable energy sources. these results have theoretical and practical implications. theoretically this paper is to the best of the researchers’ is the first of kind to develop a simplified model to enhance investment participation in the ghanaian renewable energy sector. the emergency of the integrated model will enhance predictability and generalization of critical determinants of smes investment behaviour in the renewable energy sector. the rbv and porter’s five forces could be combined to form a new model to be called “rbv-plus 5”. the newly developed simplified model provides empirical evidence on applicability of such theories in modeling investment strategy within emerging economy (ghanaian) context. practically, the paper has provided useful determinants to explain smes investment intentions in the renewable energy sources. these results may encourage the judicious use of the following critical success factors; entrepreneurial competency, marketing capability, financial resources, knowledge sharing, threat of entry, competitive rivalry, power of buyers, technological used and human resources to maximize chances of investing in the renewable energy sector. another important contribution is that smes have not actively participated in the renewable energy sector investment due to lack of investment strategies. these results confirm previous literature on barriers to sme investment. for example, [36] find that despite the significant contribution of smes, their growth and expansion is still hindered by certain challenges such as lack of standardization and lack of access to credit. they also provide data on factors that may influence smes’ decision to participate in the renewable energy industry. this information is important for smes to participate in the development of comprehensive investment strategies and effective policies and to remain internationally competitive, thereby increasing their chances of participating in ghana’s renewable energy sector. this paper is therefore a guide for investors, researchers, policy makers and practitioners. with the active support of the government of ghana, the world bank group and the international monetary fund (imf), it will also enable small and medium enterprises to successfully participate in renewable energy development. areas for further studies this paper has number of limitations that should be taken to account by future researchers. foremost, generalizability of the paper findings is limited to the ghanaian smes specifically within the manufacturing, service and retailing industries. this article refers only to small and medium-sized enterprises. the paper recommends that future researches should focus on large companies. in particular, a comparative analysis of differences in investment readiness between large companies and smes in the 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https://doi.org/10.5278/ijsepm.2017.14.5. https://doi.org/10.1016/j.energy.2021.122029 https://doi.org/10.1016/j.energy.2021.122029 https://doi.org/10.17576/jem-2018-5203-17 https://doi.org/10.17576/jem-2018-5203-17 https://doi.org/10.1016/j.indmarman.2010.08.005 https://doi.org/10.1016/j.indmarman.2010.08.005 http://doi:10.1108/ebr-10-2013-0128 http://doi:10.1108/ebr-10-2013-0128 https://doi.org/10.54337/ijsepm.7055 https://doi.org/10.54337/ijsepm.7055 https://doi.org/10.5278/ijsepm.6474 https://doi.org/10.5278/ijsepm.6474 international journal of sustainable energy planning and management vol. 37 2023 61 international journal of sustainable energy planning and management vol. 37 2023 61–74 abstract energy convergence, the decoupling of economic growth and energy use, and sustainable energy transition are all desirable objectives in the european union. however, there are many contradictions and conflicts in the energy and climate policy that slow down the energy transition. in this paper, we focus on some of these barriers. the main research objective is to measure the changes in the household energy mix in central and eastern europe (cee) and infer the degree of the energy transition in the household sector. for this purpose, moore, mli and the nav index, as well as the delinking factor are applied. the results shed light on the slowness of the just energy transition in cee between 2006 and 2020 and confirm the presence of the dual fuel trap. the households in cee have been stuck in the traditional biomass trap and beyond it, the natural gas consumption also contributes to higher exposure and vulnerability of households. we conclude that territorial differences and spatial characteristics of household energy use need more attention to achieve the energy and climate policy agenda of the european union. based on our results, energy efficiency and deep renovations must be prioritized to achieve sustainable and just energy transition in the studied countries. keywords household energy use; dual fuel trap; traditional biomass trap; energy poverty; just energy transition http://doi.org/10.54337/ijsepm.7503 “landscape” of energy burden: role of solid fuels in central and eastern european residential heating tekla szépa, tamás pálvölgyib, éva kármán-tamus*b afaculty of economics, institute of world and regional economics, university of miskolc, 3515 miskolc-egyetemváros, hungary bdepartment of environmental economics and sustainable development, budapest university of technology and economics, 3. műegyetem rkp., 1111 budapest, hungary *corresponding author – e-mail: tamus.eva@gtk.bme.hu 1. introduction due to the high share of energy expenditure, household energy consumption is a mutual challenge to energy security and human development in europe [1]. the economic implications of the covid-19 pandemic and the war in ukraine highlighted that energy affordability is the major driver of social welfare and justice in central and eastern europe (shortly cee). affordable energy services are interlinked by sustainable and just energy transition, mainly by households’ energy efficiency performance and dependence on heating fuels [2]. one of the most critical issues in the social dimension of household energy consumption is energy poverty. it is a key pillar of energy justice that upholds social rights to access affordable energy services. the use of conventional biomass is closely linked to energy poverty, which is no longer a problem only for the lowest income deciles but also for the middle class, as a result of the energy crisis of 2021-2022. to reduce it, more attention should be paid to the residential energy mix. traditional biomass is the fuel for the poor, and it must be distinguished from modern renewables in all cases. the sustainable energy transition must be based on the latter to avoid the firewood trap. however, fuel switching for the households is not a simple task. the theory of energy ladder and energy stacking highlights these challenges that may further slow down the energy transition. http://doi.org/10.54337/ijsepm.7503 mailto:tamus.eva@gtk.bme.hu 62 international journal of sustainable energy planning and management vol. 37 2023 "landscape" of energy burden: role of solid fuels in central and eastern european residential heating the article aims to measure the changes in the household energy mix (i.e. electricity, natural gas, solid fuels, district heating) with special regard to solid fuels and natural gas. the nexus of energy affordability and social security policies are significant in the cee; therefore, six eu member states (austria, czechia, hungary, poland, slovakia and slovenia) were selected for further assessment. these countries have similar cultural backgrounds and socio-economic structures (see more about energy cultures in [3]), and austria can serve as a reference. two research questions are developed to examine the energy transition trends in the residential sector of cee: q1: can the degree of the energy transition in the household sector be measured? if yes, do the changes confirm the energy ladder or the energy stacking theory? q2: can a rapid reduction in energy poverty be expected? the remainder of this paper is organized as follows. the theoretical background section reviews relevant literature building on the theory of energy ladder and energy stacking and highlights some spatial aspects of energy poverty in cee. the data and methodology section introduces the applied data and methodology; (i) structural change indices (moore, nav and mli index) are used for measuring the changes in the residential energy mix; (ii) the delinking factor is used to analyze whether the households in austria, czechia, hungary, poland, slovakia and slovenia still heavily rely on solid fuels and whether the natural gas dependency decline. the following section presents the results, including our main findings on the degree of energy transition in the household sector and on delinking, both connected to the dual fuel trap. finally, the paper provides some policy recommendations and presents the conclusions. 2. theoretical background energy use still plays a critical role in human well-being and determines the quality of life in the long term. lack of energy, or using not appropriate heating and cooking devices and stoves can cause serious health issues, like respiratory illness, lung disease, stress, cardiovascular conditions, etc. [4,5]. it strongly affects, among other things, the regional gdp per capita, unemployment, or even life expectancy at birth. there is still a long-lasting debate around the proper definition and measurement of energy poverty. energy poverty is a cultural issue too, the interpretations are varied in different world regions and we can distinguish objective, subjective and composite approaches [6]. one of the most widely accepted definitions is that energy poverty is “households’ inability to secure a socially and materially necessitated level of energy services in the home” [7,8]. as bouzarovski and tirado herrero (2017) argue, between the spatial formations and the energy transition a bidirectional relationship can be identified. however, it is quite novel because the spatial approach is still not widely used in energy economics. the energy poverty literature and research often neglect the spatial characteristics of the energy mix. in our interpretation, it means that usually one lead energy source determines the residential energy use of an area. as many scholars point out the geographical energy poverty divides the eu and it still does exist [8–10]. labelle (2020) presents it in more detail regarding poland, lithuania and hungary [3]. for example, in the podkarpackie region in poland, or northern hungary and southern transdanubia regions in hungary, it is clearly the case. it can be stated that solid fuels (mainly firewood, coal and coke) are typical energy sources for heating in cee, and a high level of energy poverty is connected to them. however, the use of solid fuels raises more questions. they still have a major role not only in household heating but in the achievement of climate change mitigation goals. in many eu regions, the traditional biomass is still used in its basic format (as fuelwood) for heating, water heating and cooking. open roaring log fires in homes are not uncommon, nor are low-efficiency thin-walled iron stoves. traditional biomass largely contributes to the eu member states meeting the renewable energy targets. although it is counted as a renewable energy source its household use raises serious sustainability issues [11,12]. we must not forget the initiatives to change the content of biomass (as a concept), questioning its carbon neutrality (namely that firewood should no longer be considered a renewable energy source) [13]. beyond the environmental issues, solid fuel use is tightly connected to energy affordability that became a central part of social policies in numerous member states. according to eurostat (2021) 6.9% of the population (eu-27) was unable to keep their home adequately warm in 2019, which indicates that this year around 30 million people lived in energy poverty in the european union (in 2020 this number increased further up to 35.8 million). especially in the post-communist international journal of sustainable energy planning and management vol. 37 2023 63 tekla szép, tamás pálvölgyi, and éva kármán-tamus not exist, ‘eat or heat’ dilemma is typical [20]. residents are typically under-educated without stable income [8]. they need serious financial and professional support, otherwise, the fuel switch does not happen. to highlight the risk of traditional biomass trap and the difficulty of fuel switching, we use the energy ladder and energy stacking theory. the energy ladder model presents the energy transition in the residential heating and cooking activities as a linear and unidirectional way in which the households switch from lower quality energy sources (e.g. traditional biomass or other solid fuels) to modern fuels as a result of their growing income and higher quality of life [21,22] (figure 1). the elements of the classical 4a concept, namely availability, affordability, accessibility, and acceptability play also an important role in fuel choice. as you move up the energy ladder, your well-being increases too. this is closely related to the theory of consumption, which says that as our income increases, not only do we consume more, but also higher quality goods. the theory assumes that households use one type of fuel for one household activity. based on the energy stacking theory, it is not expected that households in need may entirely give up their lowerquality energy sources and switch to modern energy sources quickly. multiple fuel use is more likely, and it may slow down the energy transition. a research gap is identified regarding the nexus of energy poverty, traditional biomass trap and energy transition in the household sector. we confirm the presence of the traditional biomass trap in cee and provide some explanation based on the energy stacking theory. we connect it to the progress of the energy transition in the household sector highlighting its obstacles and challenges. we raise the attention to the importance of the energy mix and to the fact that the traditional biomass is the fuel for the poor. our hypotheses are the following: h1: the progress of the sustainable energy transition is measurable but its’ degree is stagnating or even declining. h2: the households in cee are stuck in a solid fuel trap and neither relative nor absolute delinking of household expenditure on solid fuel and natural gas heating energy sources can not be identified. 3. data and methods to measure the changes in the household energy mix in cee and infer the degree of the energy transition in the economies the bad combination of high energy costs, inadequate household income and obsolete housing stock results in a high level of energy poverty [1,9,16,17]. this social group is highly exposed to the changes in energy prices or even to the changes in the current legislation and in their case the home-heating energy poverty risk is high [6]. they do not have any choice but to use cheap dirty energy sources for heating or underconsuming energy [18]. shielding policies for energypoor households are critically important, however, the new social climate fund maybe not provide enough support. already the ‘fit for 55’ states that biomass consumption has to be kept within the limits of sustainability, but it neglects to reveal the connection between traditional biomass use and energy poverty. as bajomi, feldmár, and tirado-herrero (2021) conclude traditional biomass and other solid fuel users are more exposed to energy vulnerability and they are the most affected by energy poverty [19]. solid fuels are typical fuel sources for poor households (i.e., lowest income groups). achieving the energy transition and meeting the target of making europe the first carbon neutral continent go hand in hand with the higher share of renewable energy sources in final energy consumption. however, not only the importance of renewables should be highlighted but the renewable energy mix too. the use of modern and clean renewable energy sources should be emphasized instead of traditional biomass. even if traditional biomass is used, higher added value is needed. this could mean several solutions including more efficient technologies. for example, the widely used thin-walled iron stoves have to be replaced by modern, more efficient brick stoves or ovens [19]. burning fuelwood can be sustainable and efficient (both cost-effective and environmentally friendly) but only with proper heating equipment. as cutz et al. (2017) conclude the use of traditional biomass for heating has to be replaced by modern energy sources, or at least more efficient stoves are preferred and the biomass has to be processed in dedicated biomass power plants to reduce the co2 emission. however, it is important to consider the social side of this policy recommendation and highlight the difficulties around fuel switching. these households mainly live in rural areas with low disposable income. the dwellings are in bad condition, low efficiency, leaking roof and mould are widely present too. many times even the windows, and proper doors are missing, insulation does 64 international journal of sustainable energy planning and management vol. 37 2023 "landscape" of energy burden: role of solid fuels in central and eastern european residential heating figure 1: energy ladder theory for households heating and cooking. source: own compilation based on [23,24] household sector structural change indices (moore, nav and mli index) and delinking factor are applied. to achieve this, we introduce a fuel-specific indicator of energy burden, the share of household energy expenditure (shee). in addition, the methodology of these indicators and the sources of data used are detailed in this section. 3.1. data sources our main data source for the energy consumption expenditure of private households and income was eurostat [25]. the “consumption expenditure of private households” indicator is based on surveys carried out at a national level with the aim to determine the weights of the basket of goods and services used for the calculation of the harmonized index of consumer prices (hicp). data were collected via the national household budget surveys (hbs) in the participating countries. the results of the survey were data sets of mean consumption expenditure of private households along with the structure of mean consumption expenditure and household characteristics. household final consumption expenditure is measured in pps (purchasing power standard). consumption expenditure information is collected according to the classification of individual consumption by purpose (coicop). the income indicator in eurostat is a part of the data collection about income distribution and monetary poverty. the total disposable income of a household is calculated by adding together the personal income received by all household members plus income received at a household level and includes all income from work, private income from investment and property, transfers between households and all social transfers received in cash, including old-age pensions. the definition of household is based on the criteria of coresidence and sharing of expenditures for the purpose of the hbs. in the case of both indicators, private household is defined as “a person living alone or a group of people who live together in the same private dwelling and share expenditures, including the joint provision of the essentials of living”, according to eurostat. here we note, that similar to cutz et al. (2017) in this paper we distinguish two main types of biomass, such as traditional and modern biomass based on the end-use and burning technology [12]. in our research, solid fuels include firewood, coal and briquettes. it should be noted that the eurostat database does not contain differentiated expenditure indicators of solid fuels, therefore detailed information on household use of coal, fuelwood and illegal fuels (separately) is not available. however, for the structural change indices we apply the share of fuels in final energy consumption of the household sector (%) indicator provided by the eurostat. it is based on the final energy consumption of the households by energy sources, such as solid fossil fuels, oil and petroleum products, natural gas, electricity, heat, renewables and biofuels and other fuels (pj). international journal of sustainable energy planning and management vol. 37 2023 65 tekla szép, tamás pálvölgyi, and éva kármán-tamus 3.2. introducing fuel-specific indicators of energy burden: share of household energy expenditure (shee) in order to quantify the energy affordability of the investigated cee countries, a households’ energyrelated welfare index is introduced, as a ratio of household energy expenditures and their incomes. although the literature on energy poverty deals with the financial indicator of energy consumption) [26,27], we did not find an indicator that would identify the cost burden of individual energy carriers in proportion to their income. the novelty of our research is determining indicators that characterize the household’s expenditures in fuel-specific dimensions. countries have a significantly different mix of household energy sources; therefore, the welfare aspects of family’s energy use should adequately reflect the expenditure on electricity, gas, liquid and solid energy carriers. the welfare dimensions of household energy use also depend on household income. considering this evidence, the share of household energy expenditure (shee) index is defined as: ( ) ( ) ( ) = j ij i j c t shee t i t (1) where shee is the share of household energy expenditure, c is the annual fuel-specific energy costs per household (pps/households), i is the annual household income (pps/households), (i = electricity, natural gas, liquid fuels, solid fuels, district heating), j=austria [at], czechia [cz], hungary [hu], poland [pl], slovakia [sk] and slovenia [si]). the shee index can be produced relatively accurately from eurostat statistical data for each energy carrier and is suitable for spatial and temporal comparisons. 3.3. structural change indices – moore, nav and mli index a number of indicators can be used to measure structural change, including moore index (the degree of industrial structure upgrading), the nav index (norm of absolute values, also known as michaely or stoikov index), the lilien and the modified lilien index (mli index) [28]. the moore index measures the degree of structural change. the index (eq. 2) was developed by moore (1978) and it is “based on the fact that the structure of output in any period can be described by a vector whose coordinates are the quantities of outputs which form the basis for calculating the index numbers” [28–31]. n n n 2 1/ 2 2 1/ 2 t i,t i,t 1 i,t i,t 1 i 1 i 1 i 1 m w *w / ( w ) *( w )+ + + = = =   =     ∑ ∑ ∑ (2) where mt+ is the moore value of structural change; wi,t is the share of fuels in final energy consumption of the household sector (i = solid fossil fuels, oil and petroleum products, natural gas, electricity, heat, renewables and biofuels and other fuels) in t period; wi,t+1 is the share of fuels in final energy consumption of the household sector in t+1 period. the change in the energy mix is shown by the cosine of the angle between vectors cosα = mt +, α = arc cos mt +. the higher the α, the higher the rate of the change in the energy mix. the unit of measure is degree. the formula of the nav index based on dietrich (2012) and louhenapessy (2021) is the following: n i,t 1 i,t i 1 1 nav w w 2 += = −∑ (3) the modified lilien index (mli) based on dietrich (2012) is: 2 n i,t 1 i,t i,t 1 , , 1 i 1 i,t w mli w *w * , 0, 0 w + + + =   = > >     ∑ i t i tln w w (4) all three indices can take values between 0 and 1. the closer the value is to 1, the more intense the restructuring. for example, if any index is 0.1, it means that 10% of energy resources have been affected by reallocation. 3.4. delinking of household expenditure on solid and natural gas heating energy sources achieving the sustainable energy transition has to be reflected in the household energy expenditures too. the structure of energy expenditure changes and the importance of solid fuels declines, giving more space to higher quality energy sources. here we note that according to the energy ladder theory the primary substitute for solid fuels is natural gas in heating and cooking (figure 1). delinking the household expenditure on solid fuels and household energy expenditure may provide appropriate information about it. however, based on our previous study [2] we highlight the slowness of the energy transition. to measure the delinking we use the decoupling indicators created by the oecd (2002) and the unep (2011): 66 international journal of sustainable energy planning and management vol. 37 2023 "landscape" of energy burden: role of solid fuels in central and eastern european residential heating 1 1 1 1− − − − = = −t t t t t exsolid exsolid exsolid e exsolid exsolid (5) where e is the growth rate of the share of household expenditure on solid fuels, exsolid is the share of household expenditure on solid fuels, and t is the current year. 1 1 1 1− − − − = = −t t t t t exgas exgas exgas g exgas exgas (6) where g is the growth rate of the household energy expenditure on natural gas. measuring the delinking we introduce an intensity indicator: 1 1 1 1 1 1 / 1 − − − − − −     −       = = − t t t t t t t t t t exsolid exsolid exgas exgas exsolid exsolid i exsolid exgas exgas exgas (7) to measure the delinking, two indicators are introduced, the delinking ratio and delinking factor. following the pioneering work of the oecd (2002), here the delinking factor is determined as follows [34]: 1 1 / /− − = t t t t exsolid exgas delinking ratio exsolid exgas (8) the delinking factor is the following: 1 1 1 1 / − − = − = − t t t t exsolid exsolid delinking factor delinking ratio exgas exgas 1 1 1 1 / − − = − = − t t t t exsolid exsolid delinking factor delinking ratio exgas exgas (9) so: delinking factor = –i (10) hereinafter we denote the delinking factor as d: d = –i (9) if d > 0, the trends of the examined indicators are separated (the intensity decreases, which means that the growth rate of the household expenditure on solid fuels is lower than the growth rate of household energy expenditure) so the delinking is fulfilled. the maximum value of d is 1. if d ≤ 0, the delinking does not occur (the growth rate of household expenditure on solid fuels exceeds the growth rate of household energy expenditure), and this is a case of linking. table 1: possible cases of delinking indicators case e g i d = –i specific cases of delinking 1 >0 >0 >0 <0 linking expansive linking 2 >0 >0 <0 >0 delinking weak delinking 3 <0 >0 <0 >0 delinking strong delinking 4 <0 <0 >0 <0 linking recessive linking 5 >0 <0 >0 <0 linking expansive linking 6 <0 <0 <0 >0 delinking weak delinking note: white signifies cases of linking; grey signals cases of delinking source: own edition based on conte grand (2016, p. 653) table 1 allows for a deeper interpretation of the possible results (including six different cases). we avoid interpreting the cases where the value of g or e is equal to zero. we distinguish two linking (expansive and recessive) and two delinking (strong and weak) cases (figure 2). cases 1, 4 and 5 show linking, and cases 2, 3 and 6 are delinking. in case 1, the rate of household expenditure on solid fuels fluctuation and the household energy expenditure growth is positive, and moreover, the household expenditure on solid fuels increases more than the actual increase in household energy expenditure (it results in positive i). the term expansive linking refers to the absence of delinking. in case 5 despite the reduction in household energy expenditure the household expenditure on solid fuels increases (expansive linking). recessive linking can be observed in case 4. regarding affordability, it is a more favorable situation, both the household expenditure on solid fuels and household energy expenditure decrease, but the latter to a greater extent. cases 2 and 6 are delinking situations, but their extent is quite weak. in case 2, both the household expenditure on solid fuels and the household energy expenditure note: dark grey marks expansive linking, light grey – recessive linking, light green – weak delinking, dark green – strong delinking figure 2: delinking cases international journal of sustainable energy planning and management vol. 37 2023 67 tekla szép, tamás pálvölgyi, and éva kármán-tamus increase; however, i is negative. case 6 is like case 4, both the growth rate of household energy expenditure and the household expenditure on solid fuels are negative, but the drop rate of the household expenditure on solid fuels is higher. case 3 shows absolute or strong delinking when household energy expenditure increases with declining household expenditure on solid fuels. 4. results and discussion to assess the results of our research, we first describe the household energy mix and the energy burden in cee. this section is followed by the assessment of the dynamics of energy transition in the region, where we discuss the results of structural change indices and the delinking analysis. 4.1. description of household energy mix and energy burden in central and eastern europe in cee household energy use accounts for approx. 25-30% of the final energy consumption, which highlights its primary importance both from the perspective of climate change mitigation, energy security and social justice. figure 3 shows the residential energy mix (i.e. electricity, gas, oil and petroleum products, primary solid fuels, heat and other renewables) in cee for 2020. the household per capita electricity consumption reflects the welfare effects; therefore, the families in advanced economies (austria and slovenia) have higher per capita electricity consumption. in these countries, the ratio of the households’ electrification (share of electricity in household energy consumption) exceeds 25%, while in czechia, hungary and slovakia is around 18%. in the case of poland, the households’ electrification is 12%. it is possible that electricity also serves as a primary heating source in austria and slovenia or supplementary technology in household heating in czechia and hungary. there are significant differences in the per capita use of natural gas among the investigated countries. hungarian and slovakian households strongly depend on natural gas, which exceeds 40% of the household energy mix. in the case of austria and czechia, the weight of natural gas is moderated and reflects a well-balanced mix of household heating sources. in the case of poland and slovenia, natural gas represents a minor share of household heating, less than 17% of the total household energy consumption. the share of household use of natural gas highlights the importance of structural differences in the buildings’ stock, their heating modes and energy performances. it can be concluded that natural gas and solid fuels represent 65-70% of the households’ total energy consumption; therefore, their role should jointly be analyzed in the context of energy poverty. the shares of household energy expenditure (shee) for natural gas and solid fuels are assessed between 2005 and 2020 in the selected countries (figure 4). as outlined in the section methodology, the ratio of energy expenditure and incomes reflects the social welfare related to heating fuel use. the main results are as follows. figure 3: household energy consumption (hec) per capita in central eastern europe (2020, gj/capita). data based on [25] 68 international journal of sustainable energy planning and management vol. 37 2023 "landscape" of energy burden: role of solid fuels in central and eastern european residential heating • in austria, the share of energy expenditure is less than 1% for both natural gas and solid fuels resulting in a negligible impact on a household’s budget. there is long-term stability and no significant differences in shee of natural gas and solid fuels, which means successful pricing and energy taxation policies to moderate social inequalities of different household heating resources. • in czechia, there is a significant difference in the shee of natural gas and solid fuels. the share of household energy expenditure on solid fuels (almost 75% fuel wood and 25% coal) is longlasting low (less than 1%), similar to austria. however, the share of energy expenditure related to the consumption of natural gas is between 3-5%, reflecting the market prices of natural gas. • in hungary, the shares of energy expenditure on natural gas and solid fuels are significantly higher than in austria and czechia, mainly due to the lower living standards. in the case of household consumption of natural gas, a positive, longlasting social welfare impact has been presented since 2014, mainly due to state intervention (introduction of price cap). however, no similar welfare benefit is shown in the case of solid fuels, indicating growing energy-related inequalities in hungarian society. • in the case of poland, the share of energy expenditure is declining in the longer term and has no significant differences in shee between natural gas and solid fuels. it should be noted that more than 50% of the solid fuels are coal and lignite from domestic sources. • slovakia has significant differences between the share of household energy expenditure for natural gas and solid fuel. while the shee for natural gas has been around 4.5-5% since 2010, the share of expenditure for solid energy sources figure 4: share of household energy expenditure (shee index) in cee (2005-2020) international journal of sustainable energy planning and management vol. 37 2023 69 tekla szép, tamás pálvölgyi, and éva kármán-tamus is about 1.5%. similar to hungary, it highlights inequity between the gas and solid-consuming social groups. • in slovenia, the share of natural gas expenditure is similar to austria. the value is declining in the long-term and less than 2%, which means a welfare advantage for gas-consuming households. nevertheless, the shee values for solid fuels are almost double that of the gas ones, which present certain energy-related inequalities in slovenian society. 4.2. assessment of the dynamics of energy transition in central and eastern europe – results of structural change indices and delinking analysis from the point of view of the sustainable energy transition, the current way of using natural gas and traditional biomass results in a dual trap situation. switching from natural gas to firewood may alleviate energy security challenges and be affordable, but it causes serious environmental and health risks. at the same time, replacing the use of biomass with natural gas increases exposure to the energy crisis and does not contribute overcome energy poverty. it is impossible to escape this dual trap in the current technological and policy circumstances. breaking out of the dual fuel trap requires the acceleration of the energy transition. the electrification of the households, more intensive use of renewable energy sources (other than solid biomass) and energy efficiency improvements are the key pillars [37]. table 2 shows the moore, nav and mli values of structural change providing information about the speed of the change in the energy mix for the examined cee countries. we break the results down into 5-year periods, always comparing each period with the previous one (chain base index numbers). in the european union, the period of 2006-2010 shows a rather accelerating trend compared to the previous 5 years. however, in cee, the results are much more controversial pointing out a slowdown in energy transition. this indirectly highlights the inadequacy of support and incentive schemes. the transition from fossil to renewable energy sources takes a long time, the energy mix is very rigid and changes only slowly. in the case of household expenditure on solid fuels and household energy expenditure, the assessed countries mostly show mixed results in the time period of 20062020 (table 3). from the 90 examined cases, 56 showed a case of linking, which means 62.2% of all cases. 27 was expansive linking and on the other side, there are 34 cases of delinking, of which 9 is strong delinking, which is 10% of all cases. there is no connection between these cases in time or from a geographical point of view (austria: 2011, czechia: 2009, 2012, poland: 2006, slovakia: 2011, slovenia: 2008, 2012). delinking didn’t become permanent in any of the assessed countries. according to the energy ladder theory, it is a natural process and basically, there is no obstacle to the sustainable energy transition. as a result of growing income and higher human well-being, the households carry out deep renovations, improve their heating systems and switch to modern and high-quality energy sources. however, the energy stacking theory shows a very different picture, and it cannot guarantee the disappearance of solid fuels (including traditional biomass, charcoal, and coke) in household heating. there is a serious risk that especially the energy-poor households are stuck in the traditional biomass trap. the delinking results show that the role of solid fuels in table 2: changes of the household energy mix (moore, nav and mli index) between 2000 and 2020, 5-years periods – results of structural change indices 2001-2005 2006-2010 2011-2015 2016-2020 moore nav mli moore nav mli moore nav mli moore nav mli eu-27 3.795 0.033 0.031 7.734 0.054 0.063 4.415 0.039 0.036 1.965 0.019 0.017 at 9.534 0.072 0.076 8.902 0.066 0.072 6.495 0.057 0.053 2.474 0.021 0.02 si 4.274 0.036 0.040 7.365 0.06 0.067 12.028 0.103 0.118 8.368 0.069 0.083 sk 9.690 0.103 0.119 3.515 0.034 0.039 6.718 0.071 0.076 24.4 0.224 0.212 cz 6.500 0.058 0.078 5.859 0.053 0.05 10.761 0.077 0.088 6.647 0.052 0.057 hu 5.215 0.061 0.031 11.802 0.108 0.125 8.124 0.072 0.081 10.471 0.087 0.107 pl 10.537 0.071 0.039 6.281 0.047 0.055 4.783 0.041 0.042 16.927 0.119 0.134 note: red slowing change, green accelerating change compared to the previous 5-year period 70 international journal of sustainable energy planning and management vol. 37 2023 "landscape" of energy burden: role of solid fuels in central and eastern european residential heating household energy expenditure is still significant, and the households could not break out of this fuel trap. in the case of household expenditure on solid fuels and household expenditure on natural gas, the examined cee countries show an overall transition from delinking in 2006 to mostly recessive or expansive linking in 2020 (table 4). out of the 90 cases, 54 show the linking of household expenditure on solid fuels and natural gas (60%). out of the linking cases, 25 show expansive linking, which is 27,8% of the total cases. on the other hand, the number of delinking cases is 36 (40%), of which 11 show strong delinking, which is 12,2% of all examined cases. strong or weak delinking was mostly a characteristic of the time period between 2006 and 2012, with an outlier case of strong delinking in poland, in 2014. however, delinking of solid fuels and natural gases household expenditure didn’t become permanent in any of the assessed countries, and the years after 2012 show mostly linking cases in the examined countries. the results show that both solid fuels and natural gas still play a significant role in the household energy mix confirming the presence of a dual fuel trap. in the case of household expenditure on solid fuels and household expenditure on natural gas, the examined cee countries show an overall transition from delinking in 2006 to mostly recessive or expansive linking in 2020 (table 4). out of the 90 cases, 54 show the linking of household expenditure on solid fuels and natural gas (60%). out of the linking cases, 25 show expansive linking, which is 27,8% of the total cases. on the other hand, the number of delinking cases is 36 (40%), of which 11 show strong delinking, which is 12,2% of all examined cases. strong or weak delinking was mostly a characteristic of the time period between 2006 and 2012, with an outlier case of strong delinking in poland, in 2014. however, delinking of solid fuels and natural gases household expenditure didn’t become permanent in any of the assessed countries, and the years after 2012 show mostly linking cases in the examined countries. the results show that both solid fuels and natural gas still play a significant role in the household energy mix confirming the presence of a dual fuel trap. 5. policy implications and recommendations profound changes in the amount and composition of household heating energy carriers would be necessary to achieve a sustainable and fair energy transition and carbon neutrality in cee. the priority of getting out of the dual fuel trap is to reduce household heating energy table 3: delinking the household expenditure on solid fuels and total household energy expenditure (2006–2020) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 at 1 2 6 4 2 3 2 1 4 5 4 4 1 5 1 cz 2 5 1 3 1 2 3 4 4 6 4 5 4 3 3 hu 4 2 2 1 1 6 1 5 4 4 4 1 5 4 4 pl 3 4 4 1 2 4 2 4 6 6 4 5 1 4 6 sk 6 4 4 6 4 3 4 1 4 5 4 1 5 6 2 si 1 1 3 6 1 2 3 2 6 6 4 2 1 4 4 note: dark grey marks expansive linking, light grey – recessive linking, light green – weak delinking, dark green – strong delinking table 4: delinking the household expenditure on solid fuels and household expenditure on natural gas (2006-2020) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 at 2 2 6 3 5 3 2 5 4 5 4 4 5 5 5 cz 2 5 2 3 1 3 3 4 4 6 4 5 4 6 4 hu 6 2 2 1 2 6 2 5 4 4 4 1 5 4 4 pl 3 6 4 5 2 4 2 4 3 4 4 5 5 6 4 sk 3 4 4 4 4 3 4 1 4 5 4 1 5 6 2 si 2 5 3 4 1 2 3 5 6 6 4 1 1 4 6 note: dark grey marks expansive linking, light grey – recessive linking, light green – weak delinking, dark green – strong delinking international journal of sustainable energy planning and management vol. 37 2023 71 tekla szép, tamás pálvölgyi, and éva kármán-tamus demands, i.e., deep renovation of residential buildings. technologies for improving a building’s energy performance are commercially available, but targeted grant schemes and innovative financing tools are needed. it is advisable to initiate special measures to support the renovation of family houses built in the 1970s and 1980s in rural, less developed regions. local heat supply systems (e.g., heat pumps, smallscale, central, local or mini district heating plants based on biomass or geothermal energy), which produce heat with higher efficiency and less environmental impact than individual heating, may also contribute to sustainable energy transition in rural regions. however, these investments' capital requirements are relatively high and mitigating their business risks is only possible with substantial state involvement (e.g., guarantee fund). the spread of modern, low-emission biomass burning (e.g., wood gasification boilers and stoves), which should be linked to social measures to deal with energy poverty, can also help solve the dual trap situation. the switch from traditional to modern biomass is a desirable objective. it may reduce energy poverty and local environmental pollution and move toward a more sustainable energy mix. it can also positively affect regional economic development, resulting in higher human well-being. keeping the biomass in the energy mix but using and burning it more efficiently would help the countries achieve the energy and climate targets and at least keeping the share of renewable energy sources in the final energy consumption. another adequate policy response could be the establishment of multifunctional heating energy communities, which do not merely supply energy but provide complex building energy services to community members. the range of non-profit services may include fuel switching, building renovation, financing and investment consulting, resource transfer and energy awareness rising, as well. social innovations by institutional approaches should be emphasized. ngos, local actors, and policymakers should come together to develop local multifunctional heating energy communities. in the field of household heating, the sustainable energy transition can be achieved by integrating the following national or municipal level policies: • social policies: in particular, grant schemes for housing, energy and poverty eradication; • housing policies: measures to support the development of deprived areas, rural development, investment support for housing quality and home renovation; • energy and climate policies: grant schemes for energy efficiency improvements in residential buildings, fuel switch to higher quality energy sources (with special regard to renewables), decarbonization in spatial and urban planning. sustainable energy transition may strengthen the regional and local governance mechanisms through decentralization. typical measures of good governance practice are, among others, targeted education, training, awareness-raising, and housing-related information exchange based on broad public involvement. we note that sub-national public administrations can play an essential role in addressing the necessary policy integration toward sustainable rural energy transition. the strategic integration of these policies should ideally include the harmonization of goals and tools as well as the coordinated allocation of financial resources. energy poverty and regional social and economic inequalities are tightly connected, and a not adequately planned energy transition may make it deeper. energy transitions are heterogeneous, which means that different policies, local solutions, and actions are needed. new vulnerabilities have to be avoided. shielding policies for energy-poor households and the energy alleviation potential of the energy transition should be used (bajomi, feldmár, and tirado-herrero 2021). the energy transition without a serious and well-thought support system may exacerbate existing vulnerabilities or create new vulnerabilities. these vulnerabilities are present not only in the case of the lowest income deciles, but the bottom middle-income class may also be concerned. in their case switching to less polluting and higher quality energy sources may also cause problems. 6. conclusion the first research question established if the degree of the energy transition in the residential sector was measurable. the results show that based on the household energy mix conclusions can be drawn about changes in the energy transition. examining the household energy mix in the selected central and eastern european countries, we found that there has been no significant structural change in energy carriers over the past two decades. the only significant change is that the use of coal was partially replaced by biomass and natural gas. 72 international journal of sustainable energy planning and management vol. 37 2023 "landscape" of energy burden: role of solid fuels in central and eastern european residential heating this indicates that neither the market processes nor the policy instruments have significantly influenced the structure of household energy consumption. the structural change indices shed light on the slowness of the energy transition in the household sector. the degree of change is decreasing. the delinking factor also confirms the significant presence of solid fuels in household energy expenditure. answering the second part of q1, our results confirm the energy stacking theory. it means that households do not give up entirely their lower quality energy sources, even if they switch to higher quality energy sources. it slows down the energy transition and it requires much more focused actions (e.g. energy efficiency investment programs, support of vulnerable households, etc.). related to q1 we may accept the first hypothesis (h1). while there are no significant, long-lasting trends in the structure of household energy consumption, characteristic tendencies and spatial differences can be observed in the shares of household energy expenditure (shee index) for natural gas and solid fuels. in austria, czechia and slovenia, there is no trend-like change in natural gas and solid fuel costs relative to family incomes. in slovakia and especially in hungary, the shee index of natural gas has decreased significantly, while that of solid fuel (mainly firewood) has increased, which indicates the strengthening of energy poverty in rural areas. in poland, similar to austria, the ratio of energy expenditure on natural gas and solid fuel (mostly coal) to incomes is permanently the same, indicating the state's harmonizing role in regulating energy prices. the results confirm the dual trap of domestic heating as a significant barrier to a sustainable energy transition and social justice in the central and eastern european countries. in the trap, the natural gas-heated households remain permanently dependent on fossil fuels, and they are exposed to price volatility. h2 is accepted too. in parallel, households using solid fuels face with serious health and environmental risks. traditional biomass accounts for a high share of solid fuels. it is considered as a renewable energy source, but significant material and energy demands are associated with the production and transport of biomass. firewood can come from forestry logging or energy plantations. the extraction of forest biomass raises various sustainability issues concerning biodiversity and ecosystem services. we also need to consider the scarcity of spatial opportunities for cultivation and the importance of carbon sequestration. if firewood comes from energy forests, it must be considered that energy tree plantations are an intensively cultivated monoculture, which also raises several nature conservation and ecological issues by eradicating biodiversity in large areas. referring to q2, it would be optimistic approach to expect the rapid decline of energy poverty. households, especially those living in obsolete family houses in rural areas are locked in heating fuels (natural gas and/ or solid fuels). they have no financial resources to save energy and no flexibility to change their energy mix. based on energy consumption data, the phenomenon affects 25-30% of the population of central and eastern european countries, especially those living in rural and suburban regions, as well as social groups affected by energy poverty. there is a serious risk that not only the energy-poor households but even the middle-income class sticks in the dual trap. member states with high energy intensity, a higher share of fossil fuels and traditional biomass in the household energy mix and lower well-being (lower disposable income) need special attention and strategies. the dual trap situation is closely related to rural energy poverty and local energy policies that do not sufficiently consider social aspects. policies supporting a sustainable energy transition should respond to this dual trap situation. revision of national energy policies is also urgent because, during the european energy crisis unfolding in 2022, the uncertainties in natural gas supply may force the fuel switch to locally available energy carriers. without effective and quickly implemented policy responses, the use of solid fuels (e.g., biomass, coals, illegal heating materials) will likely propagate in rural areas. if the national energy policies do not offer a feasible alternative to reduce and replace the domestic use of natural gas, then the solid fuel side of the dual trap situation will continue to deepen. further research is needed to harmonize energy supply security and rural development for all eu member states. it is necessary to introduce new energy indicators to monitor rural areas' just and sustainable energy transition. in this context, it is suggested to investigate the dual trap of natural gas-solid fuel use in various income groups in the case of all eu member states. international journal of sustainable energy planning and management vol. 37 2023 73 tekla szép, tamás pálvölgyi, and éva kármán-tamus references [1] weiner, c.; szép, t. the hungarian utility cost reduction 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geographical information system us = united states ghg = greenhouse gases co2e = carbon dioxide equivalent usepa = the united states environmental protection agency usda = the united states department of agriculture mip = mixed integer programming 1. introduction improved planning and management of earth’s energy resources is highly desirable to ensure a sustainable energy future [1] in view of climate change induced from anthropogenic activity and fossil fuel depletion. agriculture is increasingly gaining policy attention for its dual role in climate change. on the one hand, a substantial portion of global greenhouse gas (ghg) international journal of sustainable energy planning and management vol. 08 2015 3 international journal of sustainable energy planning and management vol. 08 2015 3-16 optimal location of centralized biodigesters for small dairy farms: a case study from the united states �������� � ���� �� ����� ��� ������ ��� ���� � � ������� ���� ��� ! ���� � �������� �� �� ��� ��� ������������������������������������������ ���������������� � � ��� ������������ ������� ������!"#"$%������� &������� �� �� �'����������(��)���� ��� �*����� ��� ��� �����"%!%+��(�, �������� �� �� �,������ ���������-������������� �����(��)���� ��� �*����� ��� ��� �����"%!%+��(�, �������� �� �� �,������ ���������� �����(��)���� ��� ���������������./%""""��*���� abstract anaerobic digestion technology is available for converting livestock waste to bio-energy, but its potential is far from fully exploited in the united states because the technology has a scale effect. utilization of centralized anaerobic digesters (cads) could make the technology economically feasible for smaller dairy farms. an interdisciplinary methodology to determine the cost minimizing location, size, and number of cad facilities in a rural dairy region with mostly small farms is described. this study employs land suitability analysis, operations research methodology and geographical information system (gis) tools to select appropriate sites for cads in windham county, connecticut. results indicate that overall costs are lower if the cads are of larger size and are smaller in number. keywords: dairy; methane; biodigester; fixed-charge location problem url: dx.doi.org/10.5278.ijsepm.2015.8.2 1 corresponding author e-mail: deepm@iitk.ac.in emissions come from agriculture related activities such as fertilizer use, livestock production, rice cultivation, and biomass burning, while on the other hand the sector has potential to contribute towards attaining a sustainable energy future. although the demand for livestock products might double by 2050 and enhancing livestock farming could be a developmental strategy for rural economies, growth of livestock farming poses a trade-off between development and the environment and hence it has been in the focus of public policy debate [2]. among the negative externalities of the sector, the most global one is its contribution to climate change. according to most recent estimates released by the food and agriculture organization, the world’s livestock sector contributes approximately 14.5% of total global anthropogenic ghg emissions [3]. averaged over the period 2001–2010, china, united states (us), and india 4 international journal of sustainable energy planning and management vol. 08 2015 optimal location of centralized biodigesters for small dairy farms: a case study from the united states are top three emitters of methane and nitrous oxide produced from manure management activities [3]. the global dairy sector contributes 4.0% [±26%] to the total world-wide anthropogenic ghg emissions [4]. methane emission from dairy farms in the us has risen steadily over the last two decades. in 2009 the agricultural sector was responsible for 6% of total us ghg emissions [5] in co2e units, and methane from dairy farms contributed around 14% of that total. the us environmental protection agency (usepa) also reported that the share of manure management relative to enteric fermentation has also gone up in the last two decades, accounting for approximately 42% of dairy methane in 2009. these facts and figures provide clear evidence of the importance of manure management in global warming mitigation and in making dairy farming environmentally sustainable. the international dairy community is under pressure from policymakers around the world to reduce its carbon footprint. under these circumstances, the international dairy federation – an organization that represents the dairy sector globally, places high priority on handling the environmental challenges at the farm level. in the first ‘dairy farming summit’ of the international dairy federation, a consensus was reached that dairy farmers need to address the environmental sustainability issue while promoting output growth [6]. the summit identified that two of the best available solutions at present are anaerobic digesters (ad) or biodigesters and energy audits [6]. anaerobic digestion technology has been used widely in many countries over the past decades to convert manure to heat and/or energy with other side benefits. biogas produced in anaerobic digesters consists of methane (50% to 80%), carbon dioxide (50% to 20%) and small amounts of other gases (such as carbon monoxide). the methane produced is then burned off or used to power an engine that produces electricity and heat. technical details of waste to bioenergy generation opportunities and types of digesters are available in the published literature [7]. of late, the us has seen some growth in biodigester operations. new technical designs and business models are being put forward, but a huge potential remains untapped [8]. the usepa in conjunction with the us department of agriculture (usda) runs the ‘agstar’ program to promote ads for green energy generation and cut down on methane emission. a recent study models the potential contribution of ads towards this aim [9]. according to results of that study, by 2050 ads could contribute 5.5% of the total domestic energy generation while mitigating 151 million metric tons of co2e, mostly from methane abatement [9]. one obstacle faced by this ‘cow to power’ ghg mitigation strategy is the required scale of operation. only a small percentage of dairies with potential for bioenergy generation are currently utilizing ads probably due to the associated high capital cost and size economies embedded in the technology. small and medium sized dairies may not find it profitable to set up individual ads due to high capital costs and long payback periods. according to the usepa calculations, an ad may be profitable only for the larger farms (e.g. for dairy farms milking more than 500 cows) as it involves scale economies [10]. other researchers also report a similar size threshold requirement for an economically viable ad [11]. with utilization of centralized or community anaerobic digester (cad) systems, however, more farms can be brought under the umbrella of a large ad plant and economies of scale can be achieved. such a solution could be a win-win situation, as farmers would stand to benefit by earning extra money and not be burdened by future taxes that might be imposed on them, while society at large would also enjoy better environmental quality. yet, only a few dairy based cads are either proposed or operational in the us. since 2000, however, several cad feasibility studies for commercial dairies in the us have been conducted, showing increasing appeal of the cad model (see [12] for a review). for instance, researchers from the cornell university have conducted a couple of feasibility studies for cad in the new york state: one for a group of 10 dairy farms with a total of 3,700 cows [13]; and one for a group of 25 dairy farms with a total of 4,199 cows [14]. quite surprisingly, most available feasibility studies concerning the location of a cad ignore spatial optimization criteria. very few researchers have addressed the location component of bioenergy facility planning, even though biomass transportation is the main operating cost [15, 16]. one should expect the siting decision to be based on several criteria and use of an economic optimization framework should improve its financial viability. therefore, this paper attempts to make an empirical contribution to that aspect of the literature. our specific objectives are to: 1. conduct a resource mapping of dairy manure and other possible sources of bio-wastes that are useful for co-digestation, in a region dominated by small dairy farms; 2. find suitable locations for placing cad plants; and 3. select the optimal number, size, and location of cad plants in the region. the remainder of this chapter is structured as follows: section 2 provides information on the case study area for which the empirical investigation is carried out; section 3 presents the optimization model and other methods used in the research; section 4 discusses the data sources and results from a geographical information system (gis) analysis; section 5 describes numerical optimization models and results; and section 6 concludes. 2. area of study as this paper focuses on the siting of cad(s) for small sized dairy operations, the state of connecticut is chosen for an empirical application of the proposed model. despite a constant decline in farm and cow numbers, dairy farming remains an integral part of the connecticut state economy and the dairy industry contributes approximately 40% of connecticut’s manure [17]. due to rapid farmland loss in the state, there is no longer sufficient land available for sustainable agronomic application of manure and connecticut currently faces a nutrient surplus problem [17]. biodigesters can be a solution to the manure management issues. however, the smaller size of connecticut dairy farms, in comparison to the national average, can be a major obstacle for having ads in individual farms. for example, the average number of milk cows per connecticut farm was 85 in 2002 and 84 in 2007 [18]. although, the usepa list [19] shows that the state has two operational ads, personal communication reveals that one has been shut down and the other is malfunctioning. on the other hand, there is rising demand for manure management and renewable energy in the state. the connecticut climate change action plan (2005) notes that manure, though it contributes less than 0.5% of the state’s annual ghg emission, can be utilized through cads for energy generation. although, the plan calls for building at least one cad by 2010 and two by 2015, no such plant exists in connecticut to date. some initiative has been taken, however, and a feasibility study – to assess the possibility of alternative manure management technologies including biodigesters is now available. that feasibility study observes that there are four clusters of farms in the state with a high density of dairy cattle. the identified areas are located in litchfield, tolland, windham, and new london counties [17]. however, the study does not carry out a formal location analysis to set up cad plants. thus, our study aims to fill that knowledge gap. windham county is chosen as the focal area of study, as it is the most important dairy county in the state based on dairy sales [18], and it also houses the highest number of dairy cows in the state [18]. furthermore, a recent study examines the economic feasibility of a farm based ad business center plan in the town of woodstock [20], which reveals that local stakeholders are also interested in this issue. 3. methodology and related literature this work draws from models developed for the classic plant location problem, which has been studied for decades. in summary, a model developed to analyze plant location decision would optimize one or more objectives subject to various constraints in a static framework. the objective of conventional private sector location models is to minimize cost which has two components: (i) transportation; and (ii) the cost of building and operating plants, known as ‘fixed charge’ in the operations research literature. location models find their use in the field of waste management [21, 22, 23] among others. a more complex approach is used to model annual manure flow logistics (transport, storage, treatment, and processing) and locations of landfills and municipal solid waste facilities in [24] and [25], respectively. another variety of mathematical optimization model to address the questions related to our stated research objective (3) has been developed for italian farming districts [26]. the optimization problem in that work is presented as a net present value maximization problem, while plant capacities and presence or absence of a plant in particular locations are treated as auxiliary variables in the model. values of these two auxiliary variables can be determined from optimal values of decision variables, which are the fractions of biomass at some source assigned to a destination plant. two more recent applications of location-allocation models in the context of bio-energy facility location planning are found in [27] and [28]. the methodology of this study is based on locationallocation modeling frameworks following recent literature [27, 28]. it addresses the four fundamental questions listed by location geographers [29]: (i) how many plants should be built? (ii) where should they be international journal of sustainable energy planning and management vol. 08 2015 5 deep mukherjee, robert cromley, farhed shah, and boris bravo-ureta located? (iii) which farms should they serve? and (iv) what should be their size? what follows next is a description of the modeling steps. suppose a private agency is willing to set up a system of cad(s) to utilize the dairy waste generated in a defined region. also suppose that there are m sources of manure and p potential locations to choose from for siting one or more cad plants. assume that for each chosen site, s possible sizes of biodigesters are available. the private digester firm wants to minimize the daily cost of operation by trading off transportation cost against fixed charge. the problem is defined as follows: ... (1) ... (2) ... (3) ... (4) ... (5)x b j mji i p j = ∑ = ∀ = 1 1,..., y i pik k s = ∑ ≤ ∀ = 1 1 1,..., x a y i pji j m ik k s = = ∑ ∑≥ ∀ = 1 1 1min ,..., x a y i pji j m ik ik k s = = ∑ ∑≤ ∀ = 1 1 1,..., min c t d m x f yji ji j m i p k s k i p i= × × ×( ) + == == ∑∑ ∑∑ 11 11 kk ... (6) all symbols are defined in table 1. eq. (1) presents the objective function to be minimized. equations (2)–(5) represent various constraints. eq. (2) specifies the capacity constraint of the cad if opened at site i. the total number of cows allocated from m sources to the i-th cad site must not exceed the capacity of the plant (aik), defined in terms of the number of cows. eq. (3) characterizes a threshold constraint suggesting that only if the total number of cows to be served at any site i is greater than amin (i.e. the minimum size which is chosen to be 1,000 cows), a cad could be opened there. eq. (4) imposes another restraint stating that only one size is permitted in a given site. eq. (5) constrains the optimization by requiring that all cows at m sources must be allocated to any of p possible cad sites. here the above model is solved using a mixed integer programming (mip) formulation. to solve the model, it is necessary to find out the number of manure sources (m) and the number of potential locations (p) to site cads. regarding potential sites, two strategies can be pursued: (a) cads can be sited in suitable places outside dairy farms; and (b) cads can be placed in large dairy farms so that transportation of large volumes of manure could be avoided. thus, before undertaking the optimization exercise it is essential to carry out resource mapping and land suitability analysis. advanced gis tools are becoming increasingly useful to undertake the resource mapping and land suitability analysis. for example, researchers have employed spatial modeling techniques using gis software to assess solar energy potential [30, 31], which will be of great help in energy planning and policy. researchers have also utilized the versatility of gis to design webx y are binaryji ik≥ 0 0 1, ( , ) 6 international journal of sustainable energy planning and management vol. 08 2015 optimal location of centralized biodigesters for small dairy farms: a case study from the united states table 1: nomenclature of model symbols variable definition c total cost of biodigester operation for a day t unit transportation cost dji distance between manure source point j and plant location i m volume of daily manure generation per cow xji number of cows from manure source j assigned to a plant at location i fk cost of building, machineries, installation, and operating a plant of size k for a day yik whether a plant of size k is opened (= 1 if yes) or not at location i (= 0 if no) aik capacity (in terms of number of cows) of plant size k at location i amin minimum size (in terms of the number of cows) of a biodigester bj number of cows at manure source point j international journal of sustainable energy planning and management vol. 08 2015 7 deep mukherjee, robert cromley, farhed shah, and boris bravo-ureta based spatial decision support systems that map the sources of biomass available in a region and suggest potential locations of digesters [e.g. 11, 32, 33]. these tasks are done in a number of steps as described below. the first step is to create a geo-spatial database to identify and locate the sources of organic waste. recent research shows that a higher volume of biogas generation and greater profits are obtained if food wastes are added to dairy manure [34]. therefore not only information on locations of dairy farms but also food waste sources is to be collected. the locations of these potential contributors to a cad in the targeted region have to be geocoded in the arcgis 10.0 software using their addresses and a layer of roads in that region. the second step is to create a land suitability map for potential sites to set up cad plants. as researchers in this field suggest, locating potential sites is a complex task involving many environmental, economic, and social constraints. for example, suppose an energy company building a new biodigester is looking for potential sites. it will take into consideration distance to major highways and the grid system, and combine such information with physical characteristics of the land, land use, livestock density, and regulatory data to decide on the best site for that plant. land suitability analysis is the methodology to be used here. this methodology has its root in multicriteria evaluation (mce), which is later integrated with gis [35]. suitability analysis is a gis based process used to evaluate the appropriateness of a given piece of land for a particular use, given some factors and/or constraints. in this case, a set of criteria to assess suitability of cad at a given site is developed following previous literature [e.g. 11, 33, 36]. table 2 provides the list of criteria used in this research. each criterion could be modeled as either a factor in which suitability values vary continuously over the landscape or constraints in which there is a zero/one dichotomization of the landscape [37]. for factors each location has a degree of suitability whereas for a constraint each location is either suitable or not suitable. the choice of how to model a criterion has additional considerations. from a gis modeling perspective, factors are most easily implemented in a raster based system whereas constraints are as easily implemented in a vector system as in a raster system. a more important modeling difference is that in an mce, each factor has an associated weight so that factor trade-offs can be evaluated whereas constraints have no weights because they are absolute either yes or no. factor weights are always subjective and can be determined by different schemes involving expert opinion [37]. a constraint does not have this problem but its cut-off value (a distance value or thematic value) used to determine whether a location is suitable or not is also subjective unless there is a specific mandated value such as a zoning setback. the analyst makes a choice based on the information available. in our case, no expert opinions regarding factor weights were available. more importantly, the suitability analysis is used here to determine a set of potential discrete sites rather than the final sites. each potential site also has a requirement that it must be larger than a certain area. in the continuous factor approach an arbitrary suitability cut-off value would be needed in order to determine the area of any potential site. this research therefore follows a constraint and thus a vector data based approach to gis suitability analysis rather than a raster based, factor approach. the esri spatial analyst toolbox in arcgis 10.0 is utilized to combine the different buffer layers associated with the constraint criteria of the suitability analysis. what follows is a brief explanation of some of the constraint criteria used in land suitability studies for biodigesters and listed in table 2. in cad siting analysis it is a convention to assume that the plant needs to be sited within close proximity of the farms to reduce transportation cost. previous studies report that in the united kingdom and denmark dairy slurry is transported from within a 10 km radius of the site [33]. for the cad in california, manure is trucked to the plant from farms within a six mile (~9.65 km) radius. another concern is objection from the public if this type of facility is to be built near residential areas. evidence exists for community objections against siting such plants in close proximity of residential areas [38]. as transportation of manure is a critical component of cad operations, and construction of new roads is expensive, proximity to an existing main road network is preferred. if the main output of the cad is bioenergy, it has to find potential buyers such as energy companies so the plant has to be connected to the grid. such connection can be costly so it is also prudent to consider locations as close as possible to existing transmission lines or grid substations [33]. the buffer tool in arctoolbox has been used to demarcate the area that is within some distance of the input features. however, it must be mentioned that choices for radius to draw buffers are subjective. 4. data and gis analysis the first task is to collect data on biomass availability in the study region and location of other waste sources. the connecticut farms database is the most useful resource for the purpose of locating and obtaining information on the farms in the state. this search starts with a list of 132 operating dairy farms in 2009, obtained from the connecticut department of agriculture through personal communication. this data set contains names and addresses of these farms, and approximate number of dairy cattle as reported by farmers. thirty-one dairy farms in the windham county are found. the farm population, as expected, is dominated by small herds with an average of 254 dairy cows per farm and a range going from 10 to 800. four farms (ids: f10, f16, f19, f24) are big enough that they satisfy the minimum herd size requirement for an economically viable ad, as set by the epa. for this research, only academic institutions and health facilities are considered as co-digestable biomass sources. they generate much less waste than dairy farms, but constitute a steady source of food waste, which can be utilized as a complement input in digesters. address information on public schools, colleges, universities, hospitals, and nursing homes are collected from various online sources. to derive coordinates from addresses, the geocoding tool in arcgis 10.0 software is used. addresses of three dairy farms cannot be matched and hence they are dropped from the analysis. to match with the other gis data files, the coordinate system of these geocoded points are converted to a projected coordinate system (north american datum of 1983 connecticut state plane, unit: feet). none of the waste sources identified and mapped, have any measured and reported data for waste generation. hence, other published information have been utilized to construct proxies for actual waste generation. estimates are available on manure generation by a mature dairy cow. an epa report says that on an average a 1,400 lbs holstein dairy cow produces 112 lbs of manure per day [39] while another study reports an average of 115 lbs or 13.8 gal from the midwest us [40]. this latter figure is used here as the value for m in eq. (1). daily food waste volumes are calculated using formulae shown in a previous study [41]. however, the generated food waste volumes are small and also not much is known about its transport. thus, food waste is not utilized in the modeling exercise. it is assumed that tanker trucks are to be used for hauling manure from farms to cad(s). assuming 35 miles per hour speed for a 5,000 gal truck to transport manure, and custom hauling charges for such a vehicle based on pennsylvania figures [42], the per gallon per mile transportation cost t is estimated. the distances dji between waste sources and potential digester locations are computed as euclidian distances. capital cost of the fixed charge component can be in millions of dollars depending on the capacity or size of the ad unit. there are several figures available on the web for the capital cost, but most of them are not suitable for this study. however, the ‘agstar’ program has collected data on various types of digesters and modeled the relationship between capital cost (cost of the digester, the engine-generator set, engineering design, and installation) and size (number of dairy cows) through linear regression [43]. a plug-flow digester 8 international journal of sustainable energy planning and management vol. 08 2015 optimal location of centralized biodigesters for small dairy farms: a case study from the united states table 2: a list of criteria to evaluate land suitability attribute specification dairy farms sites falling outside 7 km buffer zone to be avoided developed land sites falling within developed land and 200 m buffer zone to be avoided airport sites falling within such areas and 500 m buffer zone to be avoided aquifer sites falling on aquifer tables and within 100 m buffer zone to be avoided water sites falling within such areas and 100 m buffer zone to be avoided private open space sites falling within such areas and 200 m buffer zone to be avoided federal open space sites falling within such areas and 200 m buffer zone to be avoided protected area sites falling within such areas and 200 m buffer zone to be avoided agricultural area sites falling within such areas and 100 m buffer zone to be avoided railway track sites falling within such areas and 100 m buffer zone to be avoided roads sites falling within 30 m and outside 300 m buffer zone to be avoided transmission lines sites falling within 200 m and outside 1 km buffer zone to be avoided type is chosen as this is the most widely used ad technology in the us [8], and the most technically suitable for connecticut conditions according to a feasibility study [17]. the regression equation capital cost ($) = 566006 + 617 × number of cows (n = 19, r2 not reported) is used to compute approximate capital costs for several digester sizes [43]. the other part of fixed charge – annual operating cost is assumed to have five components (opportunity cost of land, repairs/ maintenance, property tax, insurance, and salary of an operator/manager). average rental rate for cropland in new york state for the year 2009 [44] is used to compute opportunity cost of three acres of land that will host a digester. the other components are estimated using the guidelines of a recent feasibility study conducted for a windham county based dairy digester business plan [20]. as the optimization model is set for a day, first the capital cost is annualized using an annuity factor and then expressed in per day basis. for conversion to annualized cost: (i) the life of the digester is assumed to be 15 years (16 years in [20]; 20 years in [13]); and (ii) a 7% rate of discount is assumed as advised in the federal guidelines for a cost-benefit analysis [45]. all monetary variables are expressed in 2009 constant us dollars. the most recent land use map of connecticut (for the year 2006) is available from the website of the center for land use education and research at the university of connecticut [46]. this raster data-based map illustrates 12 land cover categories. the categories utilized in this research are: (i) developed (commercial, industrial, residential, and transportation routes); (ii) agricultural field (crop and/or pasture land); and (iii) utility rights-of-way. county and town boundary and road maps are obtained from the website of the university of connecticut’s map and geographic information center [47]. the maps on other environmental attributes are collected from the gis data repository of the connecticut state department of energy and environmental protection [48]. buffers of a 7 km radius are drawn around geocoded waste sources (dairy farms) to put a first round of constraint on plant location. figure 1 depicts the union of buffer zones (area with long dash shade), which provides the initial set of feasible locations. then various overlay tools in arcgis are utilized to impose other location constraints (listed in table 1) one at a time on this initial set and reduce the number of potential sites. figure 1 also illustrates an intermediate stage of this location search task. imposing all constraints but the last one (proximity to transmission line), results in a much smaller subset (black polygons) than the initial set of locations. then, the transmission line constraint is imposed and only those sites that fall within the buffer (shaded with gray in figure 2), are considered for further search. the final overlay analysis ended with 68 polygons as potential sites. however, siting a cad plant requires a minimum land area. personal communication with the hooley digester (at tillamook bay, oregon) guides us to choose international journal of sustainable energy planning and management vol. 08 2015 9 deep mukherjee, robert cromley, farhed shah, and boris bravo-ureta legend initial feasible candidate set imposing all constraints except proximity to electricity grid n figure 1: an intermediate look of the land suitability map buffer around utility right of way imposing all constraints except proximity grid n legend figure 2: imposing the transmission line constraint three acres as a threshold so only polygons exceeding three acres are considered. after imposing this threshold area constraint, the candidate set is further reduced to 22. figure 3 shows these 22 candidate locations along with the dairy farms. however, six of these sites are extremely close to other locations (within one-third of a mile) and hence discarded in the final analysis. the final set of feasible digester locations is {d-1, ..., d-16}. most of the dairy farms are so small that it is not cost effective to send a truck to collect manure individually. it would be more cost effective if the nearby farms can be thought of as a cluster and a big truck is sent to collect manure from each farm within a cluster. waste management type location-allocation models used a similar aggregation concept to reduce the dimensions of the model [24]. our research considers a farm to be a potential member of a cluster, if that farm is located within a 5 km radius of the focal farm of that cluster. the 28 dairy farms are grouped in various clusters as shown in table 2. these clusters are slightly different under the two location strategies. in strategy a, digester location(s) would be chosen from the 16 off-farm candidate sites {d-1, ..., d-16}. under strategy b, digester locations will be selected from four large farms. similar strategy is followed in a feasibility study for regional digesters in california, where it is assumed that a cad would be located on one of the participating dairies’ site [49]. in our case, farm f24 is one such candidate to have a cad and hence it is appropriate to separate it out from fellow farms in the same cluster. thus, cluster c-13 under strategy a is broken down to two clusters, c13 and c14, under strategy b. the farm clusters contain 6,820 cows for the modeling exercise. thus, this study finally covers approximately 96% of dairy cattle population of windham county. 5. numerical models and results several variations of the mip model are formulated and solved. table 3 describes all the modeling scenarios. scenarios i-iii are linked with strategy a. in scenario i, a small size cad (with capacity to handle manure from 2,000 cows) is considered. scenarios ii and iii are more flexible as they allow the model to choose from two sizes (small and medium) and three sizes (small, medium, and large with capacities to handle 2,000, 3,500, and 7,000 cows) respectively. scenarios iv-vi, on the other hand, refer to strategy b, i.e. on-farm cads. in scenario iv the model is asked to choose from two cad sizes (small and medium) and four farm locations. scenario v forces all four large farms to have a cad and allows the mip to decide which farm clusters would support each of these cads. this scenario allows seven size possibilities ranging from 1,000 to 7,000 cows to choose from. scenario vi relaxes the constraint imposed on the location in scenario v, and allows the mip to choose the optimal location. eight more scenarios are also considered, for the purpose of sensitivity analysis. these scenarios examine the impact of 25% and 50% increases in unit transportation cost (t), and a 10% higher or lower volume for manure generation (m). all scenarios/models are executed using gams software and cplex solver. tables 4 and 5 display the mip optimization results for the various off-farm digester location scenarios. there d-i represents i-th off-farm candidate location for cad, c-j and cj denote j-th farm cluster, fi symbolizes i-th onfarm candidate location for cad, and the numbers in italics are number of cows. what follows next is a discussion of the mip results and sensitivity analysis. scenario i results in opening four 2,000 cow digesters to handle all the cows in the sample. under scenario ii, when the model is allowed to choose between the same size and a medium one (3,500 cows), it chooses two medium size cads. scenario iii further supports the notion that due to a large margin between low transportation costs and high fixed charges, fewer 10 international journal of sustainable energy planning and management vol. 08 2015 optimal location of centralized biodigesters for small dairy farms: a case study from the united states dairy farms twenty two candidate locations building cad n legend figure 3: set of candidate locations which satisfy all criteria for cad(s) numbers of plants with higher capacities are always cost effective compared to a relatively decentralized cad network. scenario iii results in the minimum cost under strategy a, although transportation cost is higher compared to scenarios i-ii. very similar results are also obtained for scenarios those are under strategy b. scenario iv replicates the results for scenario ii. when the model is allowed to choose between a small size and a medium size, it chooses two medium size cads. when, the model is forced to set up cads at all four farms (scenario v) and three size choices are allowed for (1,000 cows, 2,000 cows, and 3,000 cows), transportation cost falls but the rise in the fixed charge component is high enough to negate that international journal of sustainable energy planning and management vol. 08 2015 11 deep mukherjee, robert cromley, farhed shah, and boris bravo-ureta table 3: farm clusters and scenarios explored in location analysis scenarios specification scenario i: farm clusters c-1 ... c-13; locations to choose from: d-1 ... d-16; cad size: 2000 cows scenario ii: same clusters and locations as in i; cad sizes: 2000 & 3500 cows scenario iii: same clusters and locations as in i; cad sizes: 2000, 3500 & 7000 cows scenario iv: farm clusters c1 ... c14; locations to choose from farms: f10, f16, f19, f24 ; cad sizes: 2000 & 3500 cows scenario v: farm clusters c1 ... c14; locations to choose from farms: f10, f16, f19, f24; cad sizes: 1000, 2000, 3000, 4000, 5000, 6000 & 7000 cows scenario vi: farm clusters c1 ... c14; locations to choose from farms: f10, f16, f19, f24 ; cad sizes: 1000, 2000, 3000, 4000, 5000, 6000 & 7000 cows sensitivity analysis scenario iii/vi a: unit transportation cost is 25% higher scenario iii/vi b: unit transportation cost is 50% higher scenario iii/vi c: manure generation is 10% higher scenario iii/vi d: manure generation is 10% lower table 4: optimized results for alternative location scenarios (i-iii) capacity utilization scenario i: c-1 c-2 c-3 c-4 c-5 c-6 c-7 c-8 c-9 c-10 c-11 c-12 c-13 d-1 145 658 342 855 2,000 d-6 315 460 715 510 2,000 d-13 350 500 290 1,140 d-16 450 160 370 700 1,680 minimized cost/day: $ 3,940 fixed charge/day: $ 3,488 transportation cost/day: $ 452 scenario ii: c-1 c-2 c-3 c-4 c-5 c-6 c-7 c-8 c-9 c-10 c-11 c-12 c-13 d-1 460 658 460 715 342 10 855 3,500 d-12 450 160 370 350 500 700 790 3,320 minimized cost/day: $ 3,090 fixed charge/day: $ 2,530 transportation cost/day: $560 scenario iii: c-1 c-2 c-3 c-4 c-5 c-6 c-7 c-8 c-9 c-10 c-11 c-12 c-13 d-6 450 160 460 370 658 350 460 715 342 500 700 800 855 6,820 minimized cost/day: $ 2,849 fixed charge/day: $ 2,181 transportation cost/day: $ 668 benefit and the net impact is a higher cost. when the locational restriction is withdrawn from scenario v, the new scenario vi delivers the minimum cost under strategy b. the largest size cad (capacity: 7,000 cows) is chosen to handle all manure at one place. again, transportation cost rises, but not enough to dominate the gains arising from a much lower fixed charge. these results on size and location of cads, and allocation of cows to cads are robust to small changes in objective function parameter values. eight sensitivity scenarios examine the effect of such changes in parameters t and m on location-allocation results. only the minimized cost and transportation cost figures change from scenario iii and scenario vi results. the gams output also gives information on the sensitivity of the optimal solution, c*, to changes in the right-hand side (rhs) coefficients. marginals (∂c*/∂aik, ∂c*/∂bj) are reported for the capacity constraint set (eq. 2) and the waste utilization constraint set (eq. 5) in the gams output. a marginal represents a shadow cost, which quantifies the impact of a one unit change in the rhs of the constraint on the optimal value of the objective function. the shadow cost of capacity constraints are either negative or zero, implying that relaxing the size constraint would further reduce c* in most of the cases due to economies of size. on the contrary, all the shadow costs of waste utilization constraints are positive, implying that an increase in number of cows in the cluster would raise c* due to increased transportation cost. a final question that arises is: which scenario/strategy is to be chosen for the sample of farms at hand? the results show that one big cad will be the cost minimizing solution whether it is built within a farm (strategy b) or on other suitable sites (strategy a). interestingly, the results also indicate that in this case siting the cads at the farm is preferred, as c* in scenario vi is significantly lower than c* in scenario iii. in the absence of uncertainty or risk, scenario vi is clearly the optimal choice. however, shipping and storing a large volume of manure in one place may be risky. although the degree of risk cannot be quantified at present, a failure of such large manure storage could cause havoc in the local environment [50]. with that consideration in mind, scenario iv (two medium sizes) may be more desirable to a social planner, depending on the extent of risk and the planner’s degree of risk aversion. 12 international journal of sustainable energy planning and management vol. 08 2015 optimal location of centralized biodigesters for small dairy farms: a case study from the united states table 5: optimized results for alternative location scenarios (iv-vi) capacity utilization scenario iv: c1 c2 c3 c4 c5 c6 c7 c8 c9 c10 c11 c12 c13 c14 f16 450 160 370 350 715 75 500 700 3,320 f24 460 658 460 267 800 225 630 3,500 minimized cost/day: $ 2,888 fixed charge/day: $ 2,530 transportation cost/day: $ 358 scenario v: c1 c2 c3 c4 c5 c6 c7 c8 c9 c10 c11 c12 c13 c14 f10 150 30 350 670 800 2,000 f16 130 370 500 1,000 f19 300 700 1,000 f24 460 658 460 45 342 225 630 2,820 minimized cost/day: $ 3,419 fixed charge/day: $ 3,228 transportation cost/day: $ 191 scenario vi: c1 c2 c3 c4 c5 c6 c7 c8 c9 c10 c11 c12 c13 c14 f10 450 160 460 370 658 350 460 715 342 500 700 800 225 630 6,820 minimized cost/day: $ 2,745 fixed charge/day: $ 2,181 transportation cost/day: $ 564 6. concluding remarks the dairy community in many parts of the world is under pressure from policy makers to improve manure management and make dairy farming more sustainable. anaerobic digestion (ad) is a tried and tested technology available to convert manure (a bad) to energy (a good). however, to exploit this technology in an economically viable way, a minimum scale of operation (often defined in terms of the herd size supplying manure for the ad facility) is required. european countries (denmark, germany, and united kingdom) have shown how centralized anaerobic digesters (cad) can be a solution to this problem. a thorough review of the feasibility analysis literature on cad reveals that most of the time cad locations are chosen based on non-economic considerations. this study integrates gis based resource mapping and land suitability analysis with an already existing rich class of facility location models. four fundamental location-allocation questions are addressed in the context of a given region: (i) how many cads should be built? (ii) where should they be located? (iii) which farms should supply manure to them? and (iv) what is the optimal size of each cad? a location-allocation model (a.k.a. fixed charge transportation model) is applied in this study to small and medium sized dairy farms in windham county, connecticut. several mixed integer programming type location-allocation models under different assumptions are solved. model results suggest that one big cad facility handling all the manure would be the cost minimizing solution. however, these results need to be interpreted with caution because they are dependent on the criteria used to determine suitable locations for the cads. modification of these criteria would change the set of possible sites. the choice of euclidean distance rather than the road network distance and use of fixed constraint buffers (instead of a continuous, factor approach) are other methodological limitations of our exercise (although the factor approach has its own limitations as previously discussed). use of other gis techniques may yield better solutions to these problems and a comparative analysis deserves attention in future work. also, the mathematical model relies mostly on synthetic data, whereas the collection of actual farm data would be desirable. keeping in mind the dearth of cad related economic analysis and growing business and policy interests in such green energy and pollution abatement activities, the economic optimization exercises presented in this article should also be developed further conceptually before deriving policy recommendations. the conceptual advances needed are along two dimensions. first, some of the simplifying assumptions made in the cost minimization model could be relaxed. for example, a more realistic scenario could be assumed in transporting the manure to the cad by bringing additional constraints on the capacity of the manure hauling vehicles. similarly, partial allocation of manure to one of the cads is another way to achieve an optimum as farmers do apply manure on cropland as well. second, the modeling could be transformed from a cost minimization to a profit maximization framework. that transformation would allow one to carry out a broader benefit-cost analysis to determine the optimal cad capacity (and locations) for any given region. such an analysis would involve the comparison of benefits and costs (farm level, local, regional, and global) associated with pollution controls, thereby helping to determine the socioeconomic contribution of cads to a region. we conclude the paper by highlighting the role of local town management bodies and municipalities as facilitators and consumers, creating a local market for biogas based energy [51]. 7. references [1] østergaad pa, sperling k. towards sustainable energy planning and management. international journal of sustainable energy planning and management 1 (2014) pages 1–6. journals.aau.dk/index.php/sepm /article/download/ 559/476 [2] herrero m, thornton pk, gerber p, reid, rs. livestock, livelihoods and the environment: understanding the trade-offs. current opinion in environmental sustainability 1 (2009) pages 111–120. http://www.sciencedirect. com/science/ article/pii/s1877343509000335 [3] gerber pj, steinfeld h, henderson b, mottet a, opio c, dijkman j, falcucci a, tempio g. tackling climate change through livestock: a global assessment of emissions and mitigation opportunities. food and agriculture organization of the united nations (fao). rome. 2013. http://www.fao.org /docrep/018/i3437e/i3437e00.htm [4] food and agriculture organization. greenhouse gas emissions from the dairy sector: a life cycle analysis. rome. 2010. http://www.fao.org/docrep/012/k7930e/k7930e00.pdf [5] the united states environmental protection agency. inventory of u.s. greenhouse gas emissions and sinks: international journal of sustainable energy planning and management vol. 08 2015 13 deep mukherjee, robert cromley, farhed shah, and boris bravo-ureta http://www.sciencedirect.com/science/article/pii/s1877343509000335 http://www.fao.org/docrep/018/i3437e/i3437e00.htm http://www.fao.org/docrep/012/k7930e/k7930e00.pdf 1990–2009. epa 430-r-11-005. 2011. http://www.epa.gov / c l i m a t e c h a n g e / d o w n l o a d s / g h g e m i s s i o n s / u s g h g inventory-2011-complete_report.pdf [6] international dairy federation. environmental issues at dairy farm level. international dairy federation bulletin no. 443/2010. brussels. 2010. http://www.idf-lca-guide.org/files /media/pdf/443-2010.pdf [7] cantrell kb, ducey t, ro ks, hunt pg. livestock waste-tobioenergy generation opportunities. bioresource technology 99 (2008) pages 7941–7953. http://www. sciencedirect.com/ science/article/pii/s0960852408002769 [8] costa a, voell c. farm digester industry in america. biocycle 53 (2012), pages 38–40. http://www.biocycle.net /2012/02/27/farm-digester-industry-in-america/ [9] zaks, dpm, winchester n, kucharik cj, barford cc, paltsev s, reilly jm. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 07_945-3125-1-le.qxd 1. introduction in europe, the residential sector accounts for 27% of the final energy consumption [1], and therefore contributes significantly to co2 emissions. in the context of mitigation of climate change, roadmaps towards energy-efficient buildings have been proposed [2] and detailed characterizations of residential building stocks and end-user consumption are of major importance. 1.1. building stock models review swan and ugursal [3] identified two methods in their review of modeling techniques of end-use energy consumption in the residential sector: top-down and bottom-up. in the top-down approach, the residential sector is seen as an energy sink. the consumption is based on widely available macroeconomic variables as well as on climate conditions, appliances ownership and international journal of sustainable energy planning and management vol. 04 2014 71 so on. no attention is given to the end-uses and to possible improvements at that level. bottom-up approaches, on the other hand, focus on the modeling of end-use consumptions and extrapolate them to larger sets of buildings (districts, regions...). one can distinguish the inverse and forward methods: the former refers to statistical methods, based on historical information and data regressions, and the latter is based on a physical description of the components and envelope of the building. the higher level of details of forward models makes them suitable for the identification of technological improvements at the building level. so far, most estimations of the amount of energy use per sector are derived from statistical analysis of energy consumption data, but a few bottom-up approaches are also available in the literature. kavgic et al. [4] identified 1 corresponding author email: sgendebien@ulg.ac.be international journal of sustainable energy planning and management vol. 04 2014 71–88 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium ������� � ��� � ������� �� �������������� �������� �� ��� ��� �� �������� �������� �� �������������������������������������������������� ��� ��������� ������������� �� ������� �� � ���� �!����"� abstract in the last ten years, the development and implementation of measures to mitigate climate change have become of major importance. in europe, buildings account for about 40% of the final energy consumption. within this context, the detailed characterization of residential building stocks in terms of age, type of construction, insulation level, energy vector, and of evolution prospects appears to be a useful contribution to the assessment of the impact of implementation of energy policies. in this work, a methodology to develop a tree-structure characterizing a residential building stock is presented in the frame of a bottom-up approach that aims to model and simulate domestic energy use. the methodology is applied to the belgian case for the current situation and up to 2030 horizon. 992 cases are distinguished for the 2012 tree-structure description. this building stock model has been used and updated to illustrate the impact of heavy retrofit scenarios by 2030. up to 13% reduction in primary energy consumption were estimated for the entire residential building stock. insights regarding prospects for required installed power capacity for space heating per type of buildings are presented as well as potential penetration of given hvac technologies such as heat pumps and μ-chp. keywords: bottom-up modeling, building stock description, residential, building simulation url: dx.doi.org/10.5278/ijsepm.2014.4.7 72 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium different bottom-up building physics residential stock models which present different levels of complexity, data input requirements, and structure. huang and brodrick [5] used a so called engineering bottom-up approach to conduct an estimation of the aggregate heating and cooling loads of the u.s. building stock (residential and commercial). sixteen multi-family and forty-five single family prototypical buildings were identified and their envelope and hvac (heating, ventilation and airconditioning) systems were modeled in order to develop hourly load profiles that could be used for future energy efficiency or pricing scenarios. in canada, farahbakhsh et al. [6] conducted a study over residential end-use consumption and the impact of an upgrade of existing dwellings. however, only single-detached and singleattached houses built after 1967 (which represents 60% of the residential buildings) were considered in the model. in the uk, several studies were conducted on physics-based energy models. the brehomes model was developed by shorrock and dunster [7], and considered over 1000 different categories of buildings according to the type, age and heating systems. the model was used to derive scenarios of evolution of consumption and co2 emissions. with regards to previous works, it appears that the choice of the set of representative buildings highly impacts the results and conclusions drawn from such bottom-up methods. cyx et al. [8] make a distinction between two different identifiable approaches: “the representative dwelling types approach involves modeling a set of fictional buildings based on average values. this set of fictional buildings is used to model the entire building stock. the established parameters are then iteratively adjusted to correspond to energy consumption for the total building stock known e.g. from energy balances. the typical dwellings approach involves composing a set of typical dwellings closely related to existing buildings and existing building components, chosen for their reference value compared to the examined stock. considering that actual buildings and building characteristics are used as a basis, it is possible to examine the impact of various saving measures on a specific individual dwelling type.” 1.2. literature review in the belgian context a large amount of studies in the field of the residential building stock has been carried out in belgium but a lack of homogeneity is observed between the different developed methodologies. the most recent belgian national census related to residential buildings was performed in 2001 by vanneste et al. [9]. most of the studies published during the last decade considered it as a starting point. hens et al. [10] presented a study of the belgian residential building stock up to 1990. for the first part, 960 cases were investigated characterized by the type of dwelling (individual, double, terraced and flat), the floor area, the energy vector, and heating system. four construction periods were considered for which average heat transfer coefficients for façades, floors, roofs and windows were estimated. evolution perspectives in terms of retrofit were investigated up to 2015. more recently, the flemish institute for technological research (vito) was involved in the tabula project [8], which consists in the establishment of residential building typologies for 24 european countries. the typologies are based, among others, on the following criteria: age, size, envelope characteristics and energy vectors. the project also proposed showcase calculations of the possible energy savings and provided statistical data for buildings and heating and cooling system types. the purpose of the lehr project [11] aimed at identifying successful refurbishment case studies and systematically collecting information on the design, realization and operation of such refurbished buildings. within the frame of the lehr project, kints et al. [12] analyzed the potential of retrofit options and identified the most suitable ones for the walloon building stock. the stock is divided into approximately ten typologies, for which potential retrofit measures are explored. this analysis is mainly based on the national census of 2001 (vanneste et al. [9]), the study on the walloon energy balance [13] and the enquiry on the walloon dwelling stock quality [14]. relevant information about belgian housing typology also comes from the sufiquad project [15]. this project analyses the complex interrelations between housing typology, lifestyle, spatial characteristics, technical solutions for building elements and related financial and ecological aspects. to the best knowledge of the authors, the most recent study in the field of residential sector in brussels-capital region is the one carried out by thielemans et al. [16]. it consisted in evaluating the potential of passive housing techniques for new and refurbished buildings in brussels-capital region. on the flemish region level, briffaerts et al. [17] investigated the impact of various energy policy scenarios up to 2020 on the household energy consumption associated to space heating and domestic hot water production. the present work supplements the studies from hens et al. [10] and cyx et al. [8] by adding detailed characterization of the building geometry and distinguishing different insulation levels within a sub period of time, allowing for a better identification of the potential of retrofit options, and of the disparities specific to the belgian residential building stock. 2. objectives in this paper, a methodology to develop a comprehensive tree-structure characterizing the belgian residential building stock is presented. each end of the tree represents a type of building characterized by design features (wall, window, roof areas and corresponding thermal performance factor), heating system as well as energy vector dedicated to domestic hot water production (dhw) and space heating (sh). in a very diverse building stock such as in belgium, decisions made to reduce the set of representative buildings to a reasonable and manageable number while preserving a sufficient level of details and accuracy are of major importance. one final objective of this work is to simulate domestic energy use for the current situation and up to 2030 horizon in belgium. for this purpose, the developed treestructure can easily be coupled to building simulation models with various levels of details. it also allows quick estimations of the percentage of penetration of new heating, ventilation and air-conditioning (hvac) technologies and the cumulative distribution of the required installed power according to the type, age and envelope characteristics of the buildings. the development of this tree-structure responds to a growing need for researchers, decision makers and actors from the private sector to investigate the impact of energy policies at national scales as well as future market trends and needs in building energy sectors. 3. methodology : design steps of the housing tree-structure this section presents the steps and assumptions to carry out the description of the belgian residential housing stock in the frame of a bottom-up approach. in the particular case of belgium, significant disparities are observed in terms of construction methods, dwelling types and ages of construction between the three regions (flanders, wallonia and brussels). the main difference between the walloon and the flemish housing stock is that walloon housing stock is globally older compared to the flemish one: half of the residential building stock dates from before 1945 and 75% dates from before 1980, whereas most of the buildings dates from after 1945 in flanders. the question of considering one or three different typologies to characterize the belgian residential building stock then naturally arises. cyx et al. [8] chose to develop only one typology for belgium, which was a simplifying assumption due to the lack of statistical data for each region regarding dwelling types, constructions methods and thermal performance. within the frame of the creation of the whole belgian housing stock dedicated to a bottom-up approach, it has been decided not to differentiate the three regions and to determine one single typology for belgium. outlines of the creation of the housing stock are given in the following sections. the employed methodology consists in starting from a “large” tree-structure incorporating many cases and then, reducing the number of investigated cases by making simplifications/repartition assumptions to obtain a simplified tree structure, so called final tree structure. 3.1. choice of the approach the proposed approach is qualified as “hybrid” which is a mix between “typical” and “representative” approach (as defined in the introduction section), for the following reasons: the typical approach extends the characteristics of a typical dwelling to a set of buildings, as already mentioned by hens et al. [8], cyx et al. [9] and allacker [10]. in the proposed tree structure, the geometry characteristics of one specific building have been extended to a set of building to represent the different typologies and age classes. as an example, the same geometry characteristics of a single freestanding house constructed before 1945 is extended to all freestanding houses constructed before 1945. this type of approach is clearly typical. for the same construction time-period and associated building geometry, the tree-structure developed here further differentiates different international journal of sustainable energy planning and management vol. 04 2014 73 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort cases based on the insulation level, the type of energy vector for sh and dhw and the type of heating system (decentralized vs centralized). the final definition of each case combine existing typical geometries to average u values, different energy vectors and average efficiencies of the heating system, leading to a set of representative but fictional buildings. this type of approach is thus clearly representative. the hybrid approach permits to combine the strength of each approach. the main weakness of the typical approach is to only investigate one case for a type of building. the hybrid approach counterbalances this weakness by taking into account a set of several u values for the different construction (depending on the insulation level) for each type of building. moreover, a hybrid approach has been previously validated for the walloon housing stock (comparison with the annual energy use from top down results) by gendebien [18]. the same methodology has been extended to the belgian level and a greater number of cases have been investigated. 3.2. large tree structure the largest building stock tree-structure can be created by taking into account all possible cases from the available statistical data. as observed in table 1, this leads to a very high number of investigated cases and involves a significant number of assumptions. such a high number of cases is prohibitive to combine the branching structure with dynamic building simulations. indeed, by assuming a very optimistic calculation time of one second to simulate one year (which is unrealistic for building dynamic simulation), it would take more than 2 days to compute all the cases. from this fact, simplifications have to be introduced. 3.3. database reduction and simplifying assumptions reducing the number of investigated cases of the “large” building stock tree-structure can be realized in two steps: consolidating some cases of the large branching structure. making some repartition assumptions which are unavoidable in the creation of the tree-structure due to the lack of available statistical. most of the released studies present a global repartition (as an example, there are x% of houses with double glazed windows in belgium) and not a detailed repartition (for instance, amongst the 4 frontages houses constructed before 1945, y% has totally insulated windows and roofs, z% has ...). 3.3.1. consolidation of cases based on past studies, it has been decided to correlate the type of building, the inhabitable area and the year of construction by extending geometric characteristics of one house to a same type of building. 74 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium table 1: large building stock arborescence. type of building (separated, semi-detached and row houses + apartment) 4 area (small, medium, large and very large) 4 year of construction (<1919, 1919-1945, 1946-1960, 1961-1970, 1971-1980, 1981-1990, >1990) 7 wall (insulated, partially insulated, not insulated) 3 roof (insulated, partially insulated, not insulated) 3 window (insulated, not insulated) 2 floor (insulated, partially insulated, not insulated) 3 heating production system (centralized, not centralized) 2 type of combustible (gasoil, natural gas, electricity, wood, butane/propane, coal, unknown) 7 domestic hot water (gasoil, natural gas, electricity, others) 4 total number of cases 338 688 allacker [19] proposed a division of the housing stock as proposed hereafter: “four dwelling types are selected: a detached house, a semi-detached house, a terraced house and an apartment. dwellings of different ages are chosen since these occur in the current dwelling stock. four construction periods are differentiated: the period before 1945, 1945 – 1970, 1971 – 1990 and 1991 – 2007.” matrix defined within the frame of the tabula project [8] and the sufiquad [15] project are quite similar even if two main differences can be observed: four construction periods are differentiated within the frame of sufiquad [15] instead of five construction periods within the frame of tabula [8], characteristics of the whole multi family houses (entire building) are presented in the tabula project [8] instead of characteristics related to single apartment within the frame of the sufiquad project [15]. the sufiquad project [15] proposes a repartition of each typical case for the three regions and also for the whole belgium. however, the repartition for belgium is only given until 2007. the website of the national institute of statistical gives the official number of delivered building permissions after 2007 for apartments and single family houses. the repartition between types of building is unfortunately not given by the national institute of statistics website (single houses are not differentiated). however, this allows to update the repartition of the housing stock by assuming the same repartition of detached, semi-detached and terraced houses as for the period 1991–2007. the updated building stock distribution (in function of year of construction and type of building) is given in figure 1. according to this updating procedure, the total number of dwellings in belgium in 2012 was equal to 4 675 433. simplifications concerning the wall, roof and floor characteristics consist in neglecting the partially insulated cases, which are quite negligible (kints et al. [12]). parts relative to the partially insulated cases have been equally distributed between not insulated and totally insulated cases. walloon statistical repartition (kints et al. [12]) by year of construction about wall insulation has been extended to the national level. no simplifications can be made concerning the type of heating production system (the latter is described as centralized or decentralized). the simplification concerning the energy vector used for space heating and domestic hot water production is to focus only on the main combustible used in belgium: heating oil, natural gas and electricity. because of their low incidence in belgium, coal, wood and butane have been consolidated in one case called “others”. moreover, another simplification consists in assuming that production of domestic hot water can be done only by the same type of combustible as the one used for space heating or by electricity. houses with “others” as fuel source for space heating are assumed to only use “others” for dhw production. this was assumed since these cases are negligible. the simplified building stock tree-structure is given in table 2: 3.3.2. repartition assumptions the creation of this comprehensive tree-structure requires the use of some repartition hypotheses. the following repartition assumptions have been made: obviously the attic and basement for apartment are not taken into account (not considered as an external area). partition walls dimensions are given in the tree-structure but they have not been considered as an external area either. for buildings constructed after 2007, no distinction between “insulated” and “not insulated” is made for walls, windows, floors international journal of sustainable energy planning and management vol. 04 2014 75 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort 18 16 14 12 10 o cc u re n ce ( % ) freestandings semidetached terraced flats 8 6 4 2 0 <1945 1971–1990 1991–2007 2008–2011 1946–1970 figure 1: distribution of the belgian dwelling types differentiating the five considered construction period. and roofs as well. the chosen u values are the ones provided by epb 2010, the walloon region transposition of the european directive for energy performance of buildings [20]. the global repartition of windows (considered as insulated or not) is the one given by kints et al. [12]. it has been assumed that the time-evolution of occurrence of windows insulation follows that of the walls insulation. the global repartition of roofs (considered as insulated or not) is the one given by kints et al. [12]. it has also been assumed that the evolution of roofs insulation follows the same timeevolution as the walls insulation. the global repartition of floors (considered as insulated or not) is the one given by kints et al. [12]. given the high global proportion of not insulated floors, it has been decided to only assume insulated floor for houses with walls, windows and roofs insulated. energy vectors (coal, wood and butane) gathered in the case called “others” are considered as negligible for building constructed after 1970. 3.4. relative share of each end of the tree-structure a very schematic representation of the tree-structure is given in figure 2. a, b, c... are the building occurrence of the branches. occ1, occ2... are the final share of a specific type of building. the developed tree-structure follows the same rules as the probability tree ones: the sum of the building occurrence of the branches from the same vertex is 1 (i.e. a + b = 1; c+d = 1; e + f + g = 1...) the final share of a specific type of building is the product of the occurrences of the branches that compose it (i.e. occ1 = a.c.e; occ2 = a.c.f; occ1 = a.c.g...); 76 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium table 2. simplified building stock arborescence. type of building correlated with mean inhabitable area (separated, semi-detached and row houses + apartment) 4 year of construction (<1945, 1946-1970, 1971-1990, 1990-2005) 4 wall (insulated, not insulated) 2 roof (insulated, not insulated) 2 window (insulated, not insulated) 2 floor (insulated, not insulated) 2 heating production system (centralized, not centralized) 2 energy vector for sh and dhw (gasoil + gasoil, natural gas + natural gas, gasoil + electricity, natural gas + electricity, others + others, electricity + electricity) 6 total number of cases 3072 occ1 occ2 occ3 e f d a c b g figure 2. schematic representation of the tree structure for the relative share determination. 3.5. building characteristics 3.5.1. geometric characteristics of investigated cases each building is divided into five zones: living room, bedrooms, kitchen, bathrooms, unheated and corridor zones. based on architects plan given by allacker [19] each geometry is detailed in terms of walls, floor, windows, roof, doors, adjacent (in contact with adjacent houses) and internal (in contact with another internal zone) areas related to each zones of the building. 3.5.2. constructive elements characteristics the determination of constructive elements characteristics, namely material thickness, heat transfer coefficient and thermal capacity, is explained hereafter. for uninsulated elements, their composition was provided by tabula [8]. for additional insulation level of walls, roofs and floors, the insulation thickness was determined thanks to a weighted average of values provided by kints et al. [12]. it has been assumed that this insulation layer was added to the existing wall of buildings built before 2007. the determined weighted average insulation thickness for the walls and roofs are given in table 3. coefficients of heat transmission have been calculated for each investigated external area, as recommended by iso 13789 [21] and based on the following equation: (1) where hcond represents the heat transfer coefficient in conduction of a wall. as recommended by iso 13790 [22], the outdoor and indoor combined radiationconvection heat transfer coefficients are assumed to be respectively equal to 25 w/m2k and 7.5 w/m2k. for newly constructed buildings (after 2007), the values are provided by epb 2010 [20] and summarized in table 4. for retrofitted windows of buildings constructed before 1990, the methodology followed is similar to the case of walls, roofs and floors. however in this u h h h element comv out cond comv ind = + + 1 1 1 1 ; , particular case, it was more appropriate to consider the u value for each type of windows. the u value dedicated to triple, double and double super insulating corresponds to typical values [23] and are gathered in table 5 with their weighted average value for buildings from before 1990. once again, for windows of buildings constructed after 2007, the value is provided by epb 2010. the overall coefficients of heat transmission determined for each case are summarized in table 6. in the case of a bottom-up approach involving dynamic simulation, total capacities for each element have been determined by means of constructive characteristics and as recommended in the iso 13786 standard [24]. capacity of windows and doors were neglected (light external area). values are summarized in table 7. 3.5.3. thermal bridging janssens et al. [25] conducted a study on the development of limits for the linear thermal transmittance of thermal bridges in buildings. they provided typical u-values increase to be added to the average thermal transmittance per type of dwelling for belgium to be used in a pragmatic approach to incorporate the effect of thermal bridging within the epbd-regulation [26]. the following assumptions are made to apply them to the different buildings: for buildings with totally uninsulated walls (before 1970) thermal bridging were not taken into account. for retrofitted buildings, values of 0.15, 0.10, 0.08 and 0.07 w/m2k were applied respectively for apartments, terraced houses, semi-detached houses and detached houses [25]. for buildings built or retrofitted after 2012, values of 0.04, 0.02, 0.01 and 0.005 w/m2k were applied respectively for apartments, terraced houses, semi-detached houses and detached houses [25]. 3.5.4. infiltrations and ventilation tabula [8] provides infiltration rates at 50 pa in m3/hm2 for the various dwelling types per construction years. values from epb 2010 have been added for walls externally insulated after retrofit. they are summarized in table 8. conversions between ach (air change per hour) values at 50 pa to values for 2 pa pressure international journal of sustainable energy planning and management vol. 04 2014 77 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort table 3: weighted average insulation thickness. wall 0.05 m roof 0.079 m difference were obtained using a conversion exponent of 0.66 determined for belgian dwellings by [27]: (2) for houses heavily retrofitted between 2012 and 2030 and new buildings from after 2007, air-tightness is assumed to be greatly improved, and use of mechanical ventilation systems becomes mandatory. in new buildings, mechanical air supply and extraction systems with heat recovery are installed. 80% heat exchanger efficiency is assumed. for retrofitted buildings, air extraction systems are installed. in both cases, the renewal air flow rate is imposed to 0.6 volume per hour based on en 15251 standard [28] category ii, which corresponds to a normal level for new and refurbished buildings. ach achpa pa2 50 0 66 2 50 = ⎛ ⎝⎜ ⎞ ⎠⎟ * . 3.6. 2030 horizon the 2030 horizon is particularly important for electricity and gas suppliers for mid-term planning and estimation of the global modification of the residential sector energy demand. 2030 prospective study could also give hvac manufacturers indications about the potential introduction of an innovative system on the market. moreover, this horizon is particularly suitable for the determination of an energy policy at a national level. the final tree-structure of 2012 was turned into a so called “evolutionary” tree-structure to simulate possible evolutions of the building stock by taking into account a yearly demolition rate, a yearly construction rate, a yearly heavy retrofit rate and a yearly light retrofit rate. the first step consists in creating a tree-structure by only taking into account the constructed and the demolished buildings between 2012 and 2030. the total number of building for the year 2030 can be deduced from equation 3: (3) with: n2012, the total number of building in 2012; n2030, the total number of building in 2030; xcon, the yearly construction rate; xdem, the yearly demolition rate; t, the number of year considered (i.e. t = 18 years). n n x xcon dem t 2030 2012 1= + −* ( ( )) 78 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium table 4: epb 2010 u values. conduction coefficient of heat uwall uwindows uroof ufloor udoor transmission [w/m2k] [w/m2k] [w/m2k] [w/m2k] [w/m2k] epb 2010 yoc* > 2008 0.4 2 0.3 0.4 3.3 * yoc: year of construction table 5: u values for glazing. double glazing 2.9 w/m2k super insulating double glazing 1.4 w/m2k triple glazing 0.5 w/m2k weighted average value (<1990) 2.75 w/m2k table 6: coefficient of heat transmission. conduction uwall uwindows uroof ufloor udoor coefficient of heat [w/m2k] [w/m2k] [w/m2k] [w/m2k] [w/m2k] transmission ———————— ———————— ———————— ———————— ———— insulation ni** wi** ni wi ni wi ni wi mean source tabula (value before renovation), lehr (added insulation thickness for renovated elements of houses constructed before 1990), epb 2010 (for renovated elements of houses constructed after 1990) yoc* < 1945 2.25 0.59 5 2.75 4.15 0.44 3.38 0.77 3.3 3.3 45−70 1.56 0.53 5 2.75 3.33 0.43 3.38 0.77 3.3 70−90 0.98 0.44 3.5 2.75 0.77 0.3 1.14 0.43 3.3 90−07 0.49 0.4 3.5 2 0.43 0.3 0.73 0.4 3.3 > 08 0.4 2 0.3 0.4 3.3 * yoc: year of construction ** ni/wi: not insulated/with insulation concerning the repartition, the total amount of constructed houses is added to the tree structure. conversely, the total amount of demolished building is removed from the tree structure. when removing these cases, the assumption made is that priority is given to the totally not insulated buildings before 1945, then between 1945 and 1970... this assumption may not realistically represent the real estate market, since it may imply the destruction of historically classified buildings for instance. the second step consists in introducing the heavily refurbished buildings in the tree structure. heavy renovation corresponds to the insulation of all the elements of the buildings (walls, windows, roofs and floors) according to epb 2010 [20]. priority is given to the totally not insulated buildings constructed before 1945, then to those with only windows insulated and constructed before 1945. once all these buildings built before 1945 have been refurbished, retrofit of buildings built between 1946 and 1970 can be considered, and so on. the third step focuses on the introduction of the lightly refurbished building. light renovation corresponds to the insulation of roofs and windows according to epb 2010. the fourth step consists in defining the new occurrence of each building based on the updated absolute number of buildings. 4. results as already mentioned, the proposed hybrid approach is thought more accurate for the building stock consumption predictions than approaches previously presented in the literature. combination of data coming from several studies allows for a better representation of the heterogeneity of the current belgian building stock. the developed tool can be freely downloaded by the bottom-up modeling community. the so-called “evolutionary” tree-structure can be used for a quick assessment of a wide variety of evolution scenarios of the residential building stock and to assess the impact on the energy consumption of different penetration rates for various hvac technologies. for instance, the tree-structure can be used to estimate the impact of retrofit strategies on the whole building stock consumption. a forecast of the required installed heating capacity can be provided. penetration rates for heat pumps and μ-chp or their possible evolution by 2030 can also be obtained. international journal of sustainable energy planning and management vol. 04 2014 79 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort table 7. elements total thermal capacity. capacity kwall kroof kfloor [kj/m2-k] [kj/m2-k] [kj/m2-k] insulation ni wi ni wi ni wi source tabula (wall composition), lehr (added insulation thickness for renovated elements of houses constructed before 1990) < 1945 453.6 472.1 30.9 43.8 235.2 236.4 1945−1970 483.9 502.4 42.6 55.5 235.2 236.4 yoc 1970−1990 394.2 412.7 44.7 57.5 347.5 348.7 1990−2007 396.2 414.8 46.7 50.9 348.1 349.2 < 2008 397.3 50.3 348.4 table 8: infiltration rate at 50pa per time period and type of dwelling [9]. infiltration rate at 50pa [m3/hm2] walls insulated initial walls after retrofit freestanding semi-detached terraced time period house house house apartment all type <1971 18 18 14.9 14.9 6 1971–1990 17.1 16.3 14.1 14.1 6 1991–2007 12 12 10 10 6 2008–2002 6.1 6.3 6 6 6 >2012 / / / / 2.5 for the sake of clarity, it is important to note that the results presented in the sections below are expressed per average dwelling, i.e. a weighted average of the results obtained for each typical dwelling. to obtain numbers for the overall residential building stock, this average value should be multiplied by the number of dwellings (4 675 433 for the year 2012). this number is assumed to evolve by 2030, depending on the imposed construction and demolition rates. 4.1. final tree-structure of 2012 the final tree-structure is illustrated in figure 3 for the particular case of semi-detached houses constructed between 1946 and 1970. the entire housing stock is divided in 992 cases: the number of investigated cases is 282 for freestanding, semi-detached and terraced houses and 146 for apartments. used references are also given in figure 3. based on this tree-structure description, average uvalues for walls and windows and their relative share in the building stock is illustrated in figure 4 for walls and windows. 4.2. impact of retrofit strategies of the building stock an estimation of the average annual heating needs per dwelling can be obtained by the “heating degree day” (hdd) method. for the belgian context, the latest are defined on a 15°c/15°c base and assumed identical for all types of buildings. this means that, for an average daily outdoor temperature below 15°c, indoor air is assumed to be heated up to 15°c, given that external and internal gains bring it to reach thermal comfort of 18°c. a supplementary condition is introduced to determine the beginning and end of the heating season, based on the maximum temperature of the day (respectively above or below 18°c) and whether a minimum of 2 hdd have been counted for the day [29]. 1914 real heating degree days were reported for uccle (belgium) for year 2012. in addition to the reference year 2012, two evolution scenarios up to horizon 2030 are investigated: a “business-as-usual scenario” (bau): expected demolition and construction rates are set respectively to 0.075% and 0.9% per year, and the renovation rates to 0.8%/year for light renovation and 0.5%/year for heavy renovation. an optimistic retrofit scenario: expected demolition and construction rates are set respectively to 0.075% and 0.9% per year, and the renovation rates to 0.5%/year for light renovation and 1.5%/year for heavy renovation. it should be noted that, given the assumption chosen for the destruction of existing buildings, the results presented hereafter give optimistic views in terms of energy savings. global heat transfer losses through building envelope (htotal) combine transmission losses (htr) and ventilation losses (hinfiltrations & ventilation). transmission losses are obtained by multiplying the average heat transfer coefficient by the heat transfer area, whereas the ventilation losses are the product of the ventilation mass flow rate by the air thermal capacity. values for the different scenarios are listed in table 9. based on these data, the average space heating needs (i.e. not including the production system efficiency) reached 18.8 mwh per average dwelling. this value is in agreement with the average values for space heating consumption provided by [12] for example. domestic hot water needs are estimated to 50 liters at 50°c per day per adult equivalent ( [29] & [30]) which represents 1.67 mwh per year per dwelling for 1.97 adult equivalents. in 2030, a business-as-usual scenario leads to annual total energy needs for space heating and domestic hot water of 14.4 mwh per dwelling. in the optimistic scenario, the average annual total energy needs for space heating and domestic hot water per dwelling is 12.1 mwh. the respective shares of free-standing houses, semidetached houses, terraced houses and apartments are illustrated in figure 5-left. it can be noted that the relative share of domestic hot water in the energy needs increases (figure 5-right). the same analysis can be presented in terms of primary energy consumption per energy vector for the whole building stock (figure 6). average production systems efficiencies, expressed based on lower heating values (lhv), are now taken into account (values are given in table 10 [31]) as well as final to primary energy conversion factor. the final to primary energy conversion factor for electricity is 2.5 for belgium in 2012, and is assumed unchanged in 2030. energy savings per average dwelling reach up to 22%. with the imposed destruction and construction rates, the number of dwellings increases up to 5.2 million in 2030, leading to 13% reduction in terms of primary energy consumption at the residential building stock scale for the business as usual scenario. 80 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium 4.3. forecast of the required installed heating capacity the tree-structure also allows to determine the required installed heating capacity according to the type, age and envelope characteristics of the buildings. sizing of the heating system can be carried out at –10°c outdoor temperature and an air change rate of one volume per international journal of sustainable energy planning and management vol. 04 2014 81 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort building stock freestanding semi-detached <45 46-70 walls not ins. windows ins. roofs not ins. floors not ins. floors not ins. gasoil cent. decent. cent. decent. cent. others others othersnatural gas gasoli elec. gasoli elec. elec.ng elec.ng elec. dhw electricity space heating decent. decent. floors not ins. floors not ins. floors ins. roofs not ins. roofs ins. roofs ins. windows ins.windows not ins. walls ins. 71-90 91-07 08-12 terraced apartment reference sufiquad/allacker (2010) type vs year of construction nis (2012) actualization 2008 to 2012 kints et al. (2008) same repartition for each period vector for dhw = vector for sh or elec tabula (2012) tabula (2012) (space heating) kints et al. (2008) ins. floor only for houses with walls, windows and roofs ins. kints et al. (2008) same time evolution as of wall kints et al. (2008) same time evolution as for wall kints et al. (2008) walloon energy balance (2007) figure 3: belgian building stock tree structure. 28% 32% 22% 18% 20% 62% 18% u_wall > = 2 w/m2 k 1< = u_wall < 2 w/m2 k u_wall < = 0.5 w/m2 k0.5 < u_wall < 1 w/m2 k u_window > = 3.5 w/m2 k u_window > = 2.75 w/m2 k u_window > = 2 w/m2 k figure 4: u values repartition for walls and windows. hour. figure 7a represents the required installed capacity as a function of the cumulative distribution in the building stock for three different scenarios: 2012 situation, the bau scenario and a heavy renovation scenario defined above. in 2012, the average largest installed capacity is around 31 kw. for the bau scenario, this number only drops to 30 kw. in the optimistic scenario for 2030, contrariwise, the largest consuming houses are either demolished or heavily retrofitted, leading to a decrease of the maximum installed capacity to 20.5 kw. indeed, figure 7b shows that houses with the largest installed power are those constructed before 1970. the latter are retrofitted in priority as explained in the section devoted to the methodology of implementation of the 2030 scenarios. this figure also points out that newly constructed houses (>2007) require in average an installed capacity of 8 kw. the same analysis can be carried out per type of building. indeed, the required installed capacities are rather different for single family and multi-family buildings. in 2012, around 45% of the heating systems of single family houses present an installed power higher than 15 kw, whereas all the apartments require installed capacities below 9 kw, and 50% below 4.5 kw. 4.4. assessment of the penetration rate of heat pumps and μ-chp other potential uses of the developed tree-structure are: the assessment of the maximum penetration rate of a given hvac technology (available power, technical constraints...) 82 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium table 9: transmission and ventilation losses coefficient for 2012 reference case, 2030 bau scenario and an optimistic retrofit scenario by 2030. 2012 2030 – bau 2030 – optimistic htr, without, thermal, bridging [w/k] 279 195 151 htr, with, thermal, bridging [w/k] 290 205 161 hinfiltrations, ventilation [w/k] 82 72 65 htotal [w/k] 372 277 226 20 18 16 14 12 10 8 6 4 2 0 2012 2030 bau a n n u a l f in a l e n e rg y n e e d s p e r a ve ra g e d w e lli n g (m w h ) 2030 heavy retrofit 14.2% 21.9% 23.6% 40.3% 38.8% 22.8% 19.6% 20.1% 21.1% 37.3% 18.8% 21.5% 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2012 2030 bau 2030 heavy retrofit 11.6% 8.9% 13.8% 86.2% 88.4% 91.1% freestanding semi-detached terraced apartment sh dhw figure 5: annual energy needs per average dwelling for space heating and domestic hot water. 120 100 80 60 40 2012 3.6%15.3% 4.4% 2030 bau 20 0 39.5% 40.8% 37.6% 41.2% 17.6% a n n u a l p ri m a ry e n e rg y co n su m p tio n ( t w h ) gas fuel electricity other figure 6: annual primary energy consumption for belgian residential building stock by energy vector for space heating and domestic hot water. the assessment of the impact of a given penetration rate of hvac technology on the overall building stock energy use. the latter scenarios can be considered for the year 2012 or for the 2030 horizon. as a first illustration, a heat pump manufacturer could compute the maximum penetration rate on the residential market of a given heat pump technology and maximum installed power. the latest has been defined as required installed power to cover 80% of heating needs for -10°c outdoor temperature, 20°c indoor temperature and an air change rate of 1 volume per hour at 2pa. for example, in 2012, a single 10 kw heat pump could potentially be installed in 57% of the dwellings. this number rises to up 75% and 85% respectively for bau and optimistic scenarios in 2030. if indeed 57% of air-to-water heat pumps were installed, the impact on the electricity consumption for the entire building stock would correspond to the share represented in figure 8(right). assuming an average seasonal coefficient of performance (cop) of 2.75 for space heating and 2.62 for domestic hot water production [32], the annual primary energy savings reach only 5% per average dwelling. the reason for such a small decrease can be found in the fact that, with the aforementioned assumptions, the dwellings likely to be equipped with heat pumps are amongst the least consuming of the overall stock. these numbers can provide useful information for heat pump manufacturers, regarding the current and future expected heat pump markets. a similar analysis can be conducted for μ-chp units. in this case, two criteria have been used to determine if a μ-chp of 1kw electrical power (kwel) could be installed in a specific building. the first one is related to the actual energy vector. it was chosen that μ-chp could only be installed in buildings supplied by gas. the second is based on an economic criterion: the user can enter a given thermal power and a number of working hours required to be cost-effective. for this example, the number of hours was set to 4000 [33], including partload working periods, leading to a maximum penetration rates of 10.3% for 2012, 3.8% for bau scenario and 1% for the optimistic retrofit scenario. these figures only account for single separated housing equipped with their own μ-chp (1kwel). deeper investigations should also consider bigger units for apartment’s buildings and cluster of dwellings. 5. discussions as for any simulation model, the results are strongly dependent on the assumptions made. as emphasized by international journal of sustainable energy planning and management vol. 04 2014 83 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort table 10: production system efficiency based on lower heating values (lhv) [31]. construction energy energy vector efficiency efficiency year vector sh dhw sh [−] dhw [−] gas gas 0.85 0.85 <2007 fuel fuel 0.8 0.8 gas electricity 0.85 1 fuel electricity 0.8 1 other other 0.8 0.8 centralheating system gas gas 1 1 fuel fuel 0.97 0.97 gas electricity 1 1 >2007 fuel electricity 0.97 1 other other 0.97 0.97 gas gas 1 0.9 gas electricity 1 1 fuel fuel 1 0.9 decentralized system / fuel electricity 1 1 other other 1 0.9 electricity electricity 1 1 the results presented in section 4, the developed treestructure constitutes a powerful and flexible tool. first, the analysis devoted to envelope retrofit confirms the large potential for energy savings through improvement of building envelope insulation level. in a business-asusual scenario by 2030 horizon, primary energy savings at the national scale reaches 13%, taking into account the simultaneous increase in the number of dwellings. more optimistic scenarios have to be implemented to meet european energy policy roadmaps by 2030. secondly, a massive introduction of heat pumps (57%) amongst low-consuming houses in 2012 (installed thermal power inferior to 10 kw in design conditions) brings only 5% primary energy saving for the current electricity production energy mix. the share of electricity consumption increases from 15 to 40%. in the coming years, this electricity consumption increase could be satisfied by renewable energy sources. the 84 international journal of sustainable energy planning and management vol. 04 2014 methodology to characterize a residential building stock using a bottom-up approach: a case study applied to belgium 0% 0 5 10 15 20 25 in st a lle d p o w e r (k w ) % of the building stock 30 35 20% 40% 60% 80% 100% 0% 0 5 10 15 20 25 in st a lle d p o w e r (k w ) % freestanding houses 30 35 20% 40% 60% 80% 100% 0% 0 5 10 15 20 25 in st a lle d p o w e r (k w ) % of the building stock for a given time period 30 35 20% 40% 60% 80% 100% 0% 0 5 10 15 20 25 in st a lle d p o w e r (k w ) % of terraced houses 30 35 20% 40% 60% 80% 100% 0% 0 5 10 15 20 25 in st a lle d p o w e r (k w ) % of semi-detached houses 30 35 20% 40% 60% 80% 100% 0% 0 5 10 15 20 25 in st a lle d p o w e r (k w ) % of apartments 30 35 20% 40% 60% 80% 100% 2012 2030 bau 2030 heavy renovtion 2012 2030 bau heavy renovtion 2012 2030 bau heavy renovtion 2012 2030 bau heavy renovtion 2012 2030 bau heavy renovtion <1945 1991-2006 1946-1970 1971-1990 2007-2012 figure 7: a) installed capacity for heating needs for 2012, 2030 bau scenario and 2030 heavy renovation scenario for the belgian residential building stock – b) installed capacity for heating needs for 2012 building stock according to the construction age of the buildings – c) installed capacity for heating needs for 2012, 2030 bau scenario and 2030 heavy renovation scenario for freestanding houses – d) installed capacity for heating needs for 2012, 2030 bau scenario and 2030 heavy renovation scenario for semi-detached houses – e) installed capacity for heating needs for 2012, 2030 bau scenario and 2030 heavy renovation scenario for apartments. international journal of sustainable energy planning and management vol. 04 2014 85 samuel gendebien, emeline georges, stéphane bertagnolio, vincent lemort impact of such high penetration rate on the electricity grid has to be investigated. for example, increase in peak power demand should be quantified, which is possible by combining this tool to dynamic building simulation models. 6. conclusions and perspectives the present paper proposes a tree-structure of the belgian residential housing stock. the first part presents the state of art in the field of the characterization of the belgian residential housing stock and introduces some concepts related to the creation of a housing typology and more precisely the belgian housing typology. the final tree-structure for the period up to 2012 presents 992 typical buildings, each of them being characterized in terms of age, type, building envelope characteristics and used energy vectors. the tree-structure is then extended for the period 2012–2030. scenarios of envelope retrofit have been investigated for 2030 horizon: a business-as-usual scenario (0.5 % heavy renovation/year) and an optimistic scenario (1.5% heavy renovation/year, 0.5% light renovation/year). reductions of respectively 23% and 36% in final energy needs per dwelling for space heating and domestic hot water production were obtained compared to year 2012. conclusions differ in terms of primary energy savings at the national scale; business-as-usual scenario leads to 13% overall reduction. the developed tree-structure also allows quick estimations of the cumulative frequency of the required installed power according to the type, age and envelope characteristics of the buildings, up to year 2030. in 2012, around 45% of the heating systems of single family houses present an installed capacity higher than 15 kw. newly constructed houses (>2007) require in average an installed capacity of 8 kw. finally, the impact of the penetration of innovative technologies such as heat pumps on the electricity consumption can be assessed. if for example 57% or the housing stock was equipped with air-to-water heat pumps of maximum 10 kw thermal power, the annual primary energy savings reach only 4% per average dwelling. in a future work, this tree-structure will be coupled to a dynamic building simulation model, allowing the derivation of aggregated gas and electricity load profiles of the belgian residential building stock for a given time step (quarter hour, hour). the impact of the penetration of different hvac technologies on these profiles will be assessed. this simulation model represents a valuable tool for grid management system operators in the context of integration of decentralized renewable energy sources. indeed, buildings can potentially become key systems for smart energy management at the distribution grid level. modulation strategies of the load profiles for demand side management purposes will be investigated. acknowledgment the authors acknowledge the financial support of electrabel. list of abbreviations ach: air changer per hour bau: business as usual cop: coefficient of performance dhw: domestic hot water hdd: heating degree day hvac: heating, ventilation and air conditioning total annual primary energy consumption: 23 mwh/avg dwell total annual primary energy consumption: 23 mwh/avg dwell 15.3% 40.8% 39.9% 29.4% 27% 3.7% gas 2012 2012 57% hp fuel other electricity39.5% 4.4% gas fuel other electricity figure 8: impact of introduction of 60.02% heat pumps on the total annual primary energy consumption per average dwelling. lhv: lower heating value μ-chp: micro combined heat and power sh: space heating references [1] eurostat, may 2011. 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